BILL ANALYSIS
AB 444
Page 1
Date of Hearing: April 22, 2009
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
Anna Marie Caballero, Chair
AB 444 (Caballero) - As Amended: April 15, 2009
SUBJECT : Land use: natural resources: transfer of long-term
management funds.
SUMMARY : Clarifies that funds that are set aside for the
long-term management of any lands or easements conveyed to a
nonprofit organization be conveyed to the nonprofit
organization, and authorizes the nonprofit to hold, manage,
invest, and disburse the funds for management and stewardship of
the land or easement for which the funds were set aside.
Specifically, this bill :
1)Allows funds set aside for the long-term management of any
lands or easements conveyed to a nonprofit organization to
also be conveyed to the nonprofit organization.
2)Allows 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.
3)Requires a state or local public agency to exercise due
diligence in reviewing the qualifications of a nonprofit
organization to effectively manage the accompanying funds.
4)Requires the nonprofit entity to comply with prudent investor
standards, file an annual report as required by the
authorizing agency, authorize the agency to require an audit,
and provide a process for a successor if necessary.
EXISTING LAW :
1)Allows a state or local public agency to authorize a nonprofit
organization to hold title to and manage an interest in real
property, 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,
provided that the nonprofit organization:
a) Is a 501(c)(3) organization, and qualified to do
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business in California;
b) Meets the definition of a "qualified organization" as
defined in the Internal Revenue Code; and,
c) Has its principal purpose and activity to 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.
2)Allows a state or local public agency to transfer the interest
in real property to a nonprofit organization, if a state or
local public agency, in the development of its own project, is
required to transfer an interest to mitigate an adverse impact
upon natural resources.
FISCAL EFFECT : Unknown
COMMENTS :
1)The author and sponsor, the California Council of Land Trusts,
have introduced this bill to clarify and affirm that
nonprofits and special districts, if authorized to do so by a
state or local agency, may hold funds dedicated for the
long-term management of land or easements the organization has
accepted through the mitigation process. While existing law
allows nonprofits to manage the lands, current law does not
expressly address whether the nonprofit or special district
may also hold and manage the endowment funds set aside for
management of the property. According to the sponsor, while
it is a common practice of many public agencies to allow the
nonprofit or special district to hold the funds, there is no
existing statute proving explicit affirmation of this
practice.
2)Legislative Counsel opined in a written opinion requested by
the Assembly Water, Parks, and Wildlife Committee in 2006 that
existing Government Code Section 65965, which AB 444 amends,
already allows the state to authorize nonprofit organizations
to hold and manage funds set aside for the purpose of
long-term management of mitigation lands.
Legislative Counsel reached this conclusion by analyzing both
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Government Code Section 65965 and Fish and Game Code Section
13014. Counsel concluded that the authority to "manage"
property under the existing language of Section 65965
implicitly includes the authority to control and direct funds
set aside for those management purposes. Second, they
concluded that Section 13014, which requires mitigation funds
received by the Department of Fish and Game (DFG) to be
deposited in the Special Deposit Fund, only requires that
mitigation funds actually received by DFG be deposited in the
Fund, but that DFG may enter into an agreement authorizing a
third party to hold and manage the funds as long as the funds
are not actually "received" by DFG. Therefore, in Legislative
Counsel's opinion, existing law already allows a state agency,
including DFG, to enter into an agreement authorizing a
nonprofit organization to hold and manage mitigation funds set
aside for the long-term management of the property.
Nevertheless, the lack of express authorization in the
statute, and the lack of clarity in the existing codes has led
to reluctance on the part of some state agencies to allow
third parties to hold and manage mitigation funds.
Requiring that the funds be held in the State Deposit Fund has
also created challenges to effective stewardship of
conservation lands for a number of land managers. The monies
in these accounts are invested through the State's Pooled
Money Investment Account. Since endowment funds are designed
to be non-wasting accounts, where only the interest earned is
available for expenditure, the inability of the Pooled Money
Investment Account to earn higher rates of return has in the
past limited the amount of funds available for land
management. Land managers have also experienced delays in
reimbursement payments of up to six months to a year in some
cases.
3)In 2006, the Assembly Water, Parks and Wildlife Committee
sponsored a similar bill,
AB 2916, that would have authorized DFG to enter into agreements
with eligible nonprofit organizations to hold and manage
endowment accounts, subject to specified standards and
conditions, including annual audit and reporting requirements.
AB 2916 passed the Assembly on a vote of 79-0, but was
ultimately held in the Senate Appropriations Committee.
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In 2007, SB 1011 (Hollingsworth) similarly proposed to allow
DFG to authorize a local public entity or a nonprofit to hold
and manage mitigation endowment funds, subject to specified
conditions. SB 1011 was held in the Senate Appropriations
Committee.
AB 2746 (Blakeslee), Chapter 577, Statues of 2006, and AB 1246
(Blakeslee), Chapter 330, Statutes of 2007, clarified the
authority of state and local agencies to allow nonprofit land
trusts to accept and hold mitigation lands. Both of these
bills were enacted with unanimous bipartisan support.
4)This bill has been double-referred to the Committees on Water,
Parks and Wildlife, where it passed with a 13-0 vote on April
14th, and to Local Government.
REGISTERED SUPPORT / OPPOSITION :
Support
CA Council of Land Trusts [SPONSOR]
CA Coastal Coalition
CA League of Conservation Voters
CA Outdoor Heritage Alliance
CA State Parks Foundation
Defenders of Wildlife
Green CA
Planning and Conservation League
Trust for Public Land
Opposition
None on file
Analysis Prepared by : Debbie Michel / L. GOV. / (916)
319-3958