BILL NUMBER: AB 444	AMENDED
	BILL TEXT

	AMENDED IN SENATE  SEPTEMBER 1, 2009
	AMENDED IN SENATE  JUNE 23, 2009
	AMENDED IN ASSEMBLY  APRIL 15, 2009

INTRODUCED BY   Assembly Member Caballero
   (Coauthor: Assembly Member Blakeslee)
   (Coauthor: Senator Wolk)

                        FEBRUARY 24, 2009

   An act to  amend   amend, repeal, and add
 Section 65965 of the Government Code, relating to land use.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 444, as amended, Caballero. Land use: natural resources:
transfer of long-term management funds.
   (1) Existing law allows a state or local public agency to
authorize a nonprofit organization to hold title to, and manage an
interest in, real property that the state or local public agency
requires a property owner to transfer to the agency to mitigate any
adverse impact upon natural resources caused by permitting the
development of a project or facility, provided the nonprofit
organization meets certain requirements.
   This bill would  , on and after July 1, 2010,  authorize
funds set aside for the long-term management of any lands or
easements conveyed to a nonprofit organization pursuant to the above
provisions to also be conveyed to the nonprofit organization. The
bill would also require the nonprofit organization to hold, manage,
invest, and disburse the funds in furtherance of managing and
stewarding the land or easement for which the funds were set aside.
The bill would authorize the state or local agency to impose certain
requirements on the nonprofit organization and impose on the state or
local agency specified due diligence requirements.
    (2) Existing law also authorizes a state or local public agency
that, in the development of its own project, is required to transfer
an interest in real property to mitigate an adverse impact upon
natural resources to transfer the interest to a nonprofit
organization that meets the specified requirements.
   This bill would instead authorize a state or local public agency
that, in the development of its own project, is required to protect
an interest in real property to mitigate an adverse impact upon
natural resources to transfer the interest to a nonprofit
organization that meets the specified requirements or to provide
funds to a nonprofit organization to acquire land or easements that
satisfy the agency's mitigation obligations.  The bill would
prohibit retroactive application of its provisions to endowment funds
held by the state in the Pooled Money Investment Account.  

   (3)  This bill would provide that these changes to existing law
would remain in effect until January 1, 2014, after which the
provisions of existing law would become operative. 
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 65965 of the Government Code is amended to
read:
   65965.  (a) For the purposes of this section, the following
definitions apply:
   (1) "Direct protection" means the protection and preservation of
natural lands or resources, including, but not limited to,
agricultural lands, wildlife habitat, wetlands, endangered species
habitat, open-space areas, or outdoor recreational areas.
   (2) "Stewardship" encompasses the range of activities involved in
controlling, monitoring, and managing for conservation purposes a
property, or a conservation or open-space easement, as defined by the
terms of the easement, and its attendant resources.
   (b) Notwithstanding any other law to the contrary, if a state or
local public agency requires a property owner to transfer to the
agency an interest in real property to mitigate any adverse impact
upon natural resources caused by permitting the development of a
project or facility, the state or local public agency may authorize a
nonprofit organization to hold title to and manage that interest in
real property, provided that the nonprofit organization is all of the
following:
   (1) Exempt from taxation as an organization described in Section
501(c)(3) of the Internal Revenue Code, and qualified to do business
in the state.
   (2) A "qualified organization" as defined in Section 170(h)(3) of
the Internal Revenue Code.
   (3) An organization that has as its principal purpose and activity
the direct protection or stewardship of natural land or resources,
or cultural or historic resources, including, but not limited to,
agricultural lands, wildlife habitat, wetlands, endangered species
habitat, open-space areas, and outdoor recreational areas.
   (c) If a state or local public agency, in the development of its
own project, is required to protect an interest in real property to
mitigate an adverse impact upon natural resources, the agency may
 ;   do the following: 
   (1) Transfer the interest to a nonprofit organization that meets
the requirements set forth in paragraphs (1) to (3), inclusive, of
subdivision (b).
   (2) Provide funds to a nonprofit organization to acquire land or
easements that satisfy the agency's mitigation obligations.
   (d) (1) Funds set aside for the long-term management of any lands
or easements conveyed to a nonprofit organization pursuant to
subdivisions (b) and (c) may also be conveyed to the nonprofit
organization. The nonprofit organization shall hold, manage, invest,
and disburse the funds in furtherance of managing and stewarding the
land or easement for which the funds were set aside.
   (2) The state or local public agency may require the nonprofit
organization to submit a report not more than every 12 months and for
a specified number of years that details the management and
condition of the property or easement and the accompanying funds. The
mitigation or funding agreement shall specify the reporting due
dates and elements of the report.
   (3) If, after submission of the report described in paragraph (2),
the agency determines there is cause to consider that the terms of
the mitigation or funding agreement may have been violated, the
agency may review the accounting documents involving the funds or
require an audit of the funds to be performed and the audit report
submitted to the agency. 
   (4) This subdivision shall become operative on July 1, 2010. 

   (e) The recorded instrument that places title with a nonprofit
organization pursuant to subdivision (b) shall include, at a minimum,
a provision that if the state or local public agency that authorized
the nonprofit organization to hold the title, or its successor
agency, determines that the interest in real property that is held by
the nonprofit organization is not being held, monitored, or managed
for conservation purposes in the manner specified in that instrument
or in the mitigation agreement between the state or local public
agency and the nonprofit organization, the interest in real property
shall revert to the state or that local public agency, or to another
public agency or nonprofit organization qualified pursuant to
subdivision (b), approved by the state or local public agency.
   (f) The funds of a nonprofit organization holding funds for the
long-term management of property shall revert to the state or local
public agency or to another public agency or nonprofit organization
approved by the state or local agency and qualified under subdivision
(b) if the nonprofit organization does any of the following:
   (1) Ceases operations.
   (2) Is dissolved.
   (3) Becomes bankrupt or insolvent.
   (4) Fails to perform its duties for any reason.
   (g) (1) A state or local public agency shall exercise due
diligence in reviewing the qualifications of a nonprofit organization
to effectively manage and steward natural land or resources, as well
as the accompanying funds.
   (2) In furtherance of its exercise of due diligence:
   (A) The state or local public agency may adopt guidelines to
assist the agency in the review process.
   (B) With regard to accompanying funds, the state or local public
agency shall determine that the holder of the funds does all of the
following:
   (i) Has the capacity to effectively manage the mitigation funds.
   (ii) Has the capacity to achieve over the life of the agreement
reasonable rates of return on investment of those funds similar to
those of other prudent investors.
   (iii) Utilizes generally accepted accounting practices, and will
be able to ensure that funds are accounted for, and tied to, a
specific property or project.
   (iv) Has an adopted investment policy that is consistent with the
Uniform Management of Institutional Funds Act (Part 7 (commencing
with Section 18501) of Division 9 of the Probate Code) with regard to
endowment funds and that is consistent with Sections 18505 and 18506
of the Probate Code with regard to nonendowment funds. 
   (h) This section shall not apply retroactively to endowment funds
held by the state in the Pooled Money Investment Account as of July
1, 2010.  
   (i) This section shall remain in effect only until January 1,
2014, and as of that date is repealed. 
   SEC. 2.    Section 65965 is added to the  
Government Code   , to read:  
   65965.  (a) For the purposes of this section, the following
definitions apply:
   (1) "Direct protection" means the protection and preservation of
natural lands or resources, including, but not limited to,
agricultural lands, wildlife habitat, wetlands, endangered species
habitat, open-space areas, or outdoor recreational areas.
   (2) "Stewardship" encompasses the range of activities involved in
controlling, monitoring, and managing for conservation purposes a
property, or a conservation or open-space easement, as defined by the
terms of the easement, and its attendant resources.
   (b) Notwithstanding any other provision of law to the contrary, if
a state or local public agency requires a property owner to transfer
to the agency an interest in real property to mitigate any adverse
impact upon natural resources caused by permitting the development of
a project or facility, the state or local public agency may
authorize a nonprofit organization to hold title to and manage that
interest in real property, provided that the nonprofit organization
is all of the following:
   (1) Exempt from taxation as an organization described in Section
501(c)(3) of the Internal Revenue Code, and qualified to do business
in the state.
   (2) A "qualified organization" as defined in Section 170(h)(3) of
the Internal Revenue Code.
   (3) An organization that has as its principal purpose and activity
the direct protection or stewardship of natural land or resources,
or cultural or historic resources, including, but not limited to,
agricultural lands, wildlife habitat, wetlands, endangered species
habitat, open-space areas, and outdoor recreational areas.
   (c) If a state or local public agency, in the development of its
own project, is required to transfer an interest in real property to
mitigate an adverse impact upon natural resources, the agency may
transfer the interest to a nonprofit organization that meets the
requirements set forth in paragraphs (1) to (3), inclusive, of
subdivision (b).
   (d) The recorded instrument that places title with a nonprofit
organization pursuant to subdivision (b) shall include, at a minimum,
a provision that if the state or local public agency that authorized
the nonprofit organization to hold the title, or its successor
agency, determines that the interest in real property that is held by
the nonprofit organization is not being held, monitored, or managed
for conservation purposes in the manner specified in that instrument
or in the mitigation agreement between the state or local public
agency and the nonprofit organization, the interest in real property
shall revert to the state or that local public agency, or to another
public agency or nonprofit organization qualified pursuant to
subdivision (b), approved by the state or local public agency.
   (e) A state or local public agency shall exercise due diligence in
reviewing the qualifications of a nonprofit organization to
effectively manage and steward natural land or resources. The state
or local public agency may adopt guidelines to assist the agency in
that review process.
   (f) This section shall become operative on January 1, 2014.