BILL ANALYSIS
AB 444
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 444 (Caballero)
As Amended September 1, 2009
Majority vote
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|ASSEMBLY: |79-0 |(June 1, 2009) |SENATE: |34-0 |(September 2, |
| | | | | |2009) |
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Original Committee Reference: W., P. & W.
SUMMARY : Clarifies that funds set aside for long-term
management of mitigation lands conveyed to a nonprofit
organization may also be conveyed to the nonprofit, 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.
The Senate amendments :
1)Authorize a state or local agency that is required, as part of
its own project, to protect real property as mitigation for
adverse environmental impacts, to provide funds to a nonprofit
organization to acquire land or easements to meet the agency's
mitigation obligations.
2)Provide that the provisions of this bill authorizing funds set
aside for long-term management of lands or easements to be
conveyed to a nonprofit organization shall become operative on
July 1, 2010.
3)Provide that this bill shall not apply retroactively to
endowment funds held by the state in the Pooled Money
Investment Account as of July 1, 2010.
4)Add a sunset clause providing that the changes enacted by this
bill shall remain in effect only until January 1, 2014, after
which the provisions of existing law would become operative.
EXISTING LAW :
1)Allows a state or local agency to authorize a nonprofit
organization to hold title to and manage an interest in real
property that the agency requires a property owner to transfer
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to the agency to mitigate for adverse impacts on natural
resources caused by a project permitted by the agency, or
which the agency itself is required by law to transfer to
mitigate an adverse impact upon natural resources caused by
the agency's own project.
2)Requires funds under certain circumstances to be set aside to
cover costs of long term management of mitigation lands.
3)Requires funds received by the Department of Fish and Game
(DFG) for management of mitigation lands to be deposited in
the Fish and Game Mitigation and Protection Endowment Account
(Endowment Account) or the Fish and Game Mitigation Expendable
Funds Account (Expendable Funds Account), which are held in
the State Special Deposit Fund. Requires interest generated
on endowment funds deposited in the Endowment Account to be
made available to DFG, upon appropriation by the Legislature,
to fund long-term management of habitat lands. Funds other
than endowment funds received by DFG and deposited in the
Expendable Funds Account are continuously appropriated to DFG
for expenditure for management of lands set aside for
mitigation.
AS PASSED BY THE ASSEMBLY , this bill authorized funds set aside
for long-term management of lands or easements conveyed to a
nonprofit organization to also be conveyed to the nonprofit
organization, and allowed the nonprofit 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. A
state or local agency would be required to exercise due
diligence in reviewing the qualifications of a nonprofit
organization to both effectively manage and steward the land or
resources and the accompanying funds. The state or local agency
could require the nonprofit to submit an annual report, review
accounting documents, and require an audit of the funds. The
state or local agency would be required to determine that the
holder of the funds has the capacity to manage the funds, to
achieve reasonable rates of return similar to those of other
prudent investors, utilizes generally accepted accounting
practices, and has adopted an investment policy that is
consistent with other specified laws relating to funds
management.
FISCAL EFFECT : According to the Senate Appropriations
Committee, unknown potentially significant shift of special
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funds from the state to nonprofit organizations for management
of mitigation lands. Estimated costs to DFG for regulations and
ongoing administrative costs of $100,000 in 2009/10 and $200,000
annually thereafter.
COMMENTS : This bill seeks to clarify and affirm that
nonprofits, 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 hold and
manage these lands, current law does not expressly address
whether the nonprofit may also hold and manage the endowment
funds set aside for management of the property. 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
agencies to allow third parties to hold and manage mitigation
funds. Legislative Counsel concluded in 2006 that existing law
allows a state agency to authorize nonprofit organizations to
hold and manage funds set aside for the purpose of long-term
management of mitigation lands. This bill's sponsor also
reports that it is common practice among some public agencies to
transfer endowment funds to nonprofit agencies for the
management of mitigation properties.
The Senate version retains the content of the Assembly version
and adds language clarifying the authority of a state or local
agency to transfer lands or funds to a nonprofit organization
for management of lands the public entity is required to protect
in order to mitigate for adverse impacts to natural resources
caused by the agency's own project. In addition, the amendments
provide for a delayed operative date of July 1, 2010, on certain
provisions and add a 4four-year sunset.
Analysis Prepared by : Diane Colborn / W., P. & W. / (916)
319-2096
FN: 0002801