BILL ANALYSIS �
AB 982
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Date of Hearing: May 2, 2011
ASSEMBLY COMMITTEE ON NATURAL RESOURCES
Wesley Chesbro, Chair
AB 982 (Skinner) - As Amended: April 26, 2011
SUBJECT : Energy: land exchange for renewable energy-related
projects
SUMMARY : Requires the State Lands Commission (SLC) to make best
efforts to execute a land exchange with the federal government
to consolidate state lands for the purpose of renewable energy
related projects.
EXISTING LAW :
1)Grants administrative control of school lands to SLC. School
lands are lands granted to the state from the federal
government and held in trust to generate revenues that benefit
public schools.
2)Authorizes SLC to take all action necessary to fully develop
school lands into a permanent and productive resource base for
the benefit of the California State Teachers' Retirement
System (CalSTRS).
3)Declares that the consolidation of school land parcels into
contiguous holdings is essential to sound and effective
management of school lands.
4)Establishes the School Land Bank Fund, which SLC may use to
invest in real property with the objective of facilitating
management of school lands for the purpose of generating
revenue. SLC may also use the School Land Bank Fund to pay
for costs and expenses attributable to land acquisitions.
THIS BILL:
1)Requires SLC to make best efforts to enter into a memorandum
of agreement (MOA) by April 1, 2012 with the United States
Secretary of the Interior to facilitate land exchanges that
consolidate school land parcels into contiguous holdings for
renewable energy-related projects.
2)Requires that if an MOA is entered into pursuant to this bill,
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SLC shall make best efforts to consolidate all school land
parcels in the California desert into contiguous holdings for
renewable energy-related projects.
3)Requires that within 240 days of the execution of the MOA, SLC
shall prepare and submit to the United States Secretary of the
Interior a proposal for land exchanges that consolidate all
school land parcels in the California desert into contiguous
holdings for renewable energy-related projects.
4)Requires SLC, in developing the land exchange proposal, to
give priority to land exchanges that will facilitate the
development of large-scale commercial renewable energy
projects.
5)Requires the land exchange proposal to be based on an
acre-for-acre exchange with the United States unless SLC
reasonably believes, based on existing and reliable
information, that an acre-for-acre exchange would not provide
the state with compensation that is equal to or greater than
fair market value.
6)Requires SLC to consult with the California Energy Commission
(CEC) to identify areas that are best suited for renewable
energy projects.
7)Requires SLC to consult with the Department of Fish and Game
(DFG) to obtain information regarding sensitive environmental
habitat and potential mitigation areas in the California
desert.
8)Requires SLC to report to the Legislature by January 1 of each
year on the status of the MOA and school land consolidation
efforts in the California desert.
FISCAL EFFECT : Unknown
COMMENTS :
1)Background. On March 3, 1853, Congress granted the 16th and
36th section of each township in California to the state for
public school purposes. These lands are referred to as
"school lands." For lands that were already reserved for
public use or taken by private land claims in 1853, the state
was given the opportunity to select replacement lands.
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Overall, the state received almost 5.5 million acres of school
lands as a result of this congressional action.
A township is 36 square miles, containing 36 sections. Each
section within a township is one square mile or 640 acres.
Because Congress granted the 16th and 36th section of each
township to the state, school lands are generally scattered
throughout the state in a checkerboard pattern.
Over time, the state sold several millions of acres of school
lands. The revenue from these lands should have been
reinvested to provide fiscal support for the public school
system, but much of it remained unused in the School Land
Fund. In 1984, through the School Land Bank Act (commencing
with Section 8700 of the Public Resources Code), the
Legislature put an end to school land sales and declared that
"it is essential that all remaining school lands and attendant
interests be managed and enhanced to provide an economic base
for support of the public school system." Unfortunately, most
of the state's valuable school lands were already sold. The
school lands that remained were mostly desert and forest lands
with little value for revenue generating purposes. Today, the
state retains surface and mineral ownership to approximately
468,600 acres of school lands and retains the mineral rights
to an additional 790,000 acres. Approximately 370,000 acres
of school lands are located in the California desert and are
landlocked, remote, and non-revenue generating.
Under the School Land Bank Act, the Legislature directed SLC
to take all action necessary to fully develop school lands
into a permanent and productive revenue source. Revenues
generated from school lands (e.g. rent and royalties) are
deposited in the State Treasury to the credit of the Teachers'
Retirement Fund. The money collected from the Pre-1984 sale
of school lands was deposited into the School Land Bank Fund.
SLC is required to use this money to make investments that
produce revenue for CalSTRS. In 2008, the state borrowed $59
million from the School Land Bank Fund to deal with the
state's budget issues. The loan is technically scheduled to
be paid back into the fund by the 2012-2013 fiscal year.
2)California Desert Protection Act. On October 31, 1994,
Senator Diane Feinstein's California Desert Protection Act
(CDPA) was signed into law (Public Law 103-433). The CDPA
designated 3.6 million acres in southern California as
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wilderness to be administered primarily by the Bureau of Land
Management (BLM) within the United States Department of the
Interior, and designated an additional four million acres in
southern California to be included in the national park
system. The purpose of the CDPA is to preserve areas in the
California desert to protect its natural, cultural, scenic,
and historical values and to provide for public enjoyment.
Four hundred forty-two parcels (approximately 251,000 acres)
of fee-owned school lands and more than 100 parcels encumbered
by the state's reservation of mineral interests were initially
identified to be within the boundaries of the CDPA.
The CDPA authorizes BLM to enter into land exchanges with SLC.
The CDPA envisioned BLM acquiring school lands located within
federal protection areas in exchange for other federal lands
located outside of these areas. BLM and SLC entered into
several MOAs during the 1990s to facilitate these land
exchanges. To date, there have been five CDPA land exchange
transactions that have resulted in the transfer of more than
66,000 acres of school lands to the BLM. Two major reasons
why more land exchanges have not taken place are because (1)
the appraisal process is time consuming, contentious, and
expensive and (2) BLM has generally not been willing to offer
lands that have revenue generating potential.
3)Purpose of the Bill. There are large sections of the desert
that are optimal for large-scale commercial renewable energy
related projects. Renewable energy developers are interested
in leasing desert school lands for their projects, but school
lands are generally scattered across the desert in 640 acre
sections- large-scale commercial renewable energy projects
generally require thousands of acres. Several school land
parcels are surrounded by BLM lands that are not protected by
the CDPA. Land exchanges with BLM could consolidate school
land parcels into large contiguous holdings that would be
useful for substantial renewable energy development.
The bill requires SLC to make best efforts to enter into an
MOA with the Secretary of the Interior to facilitate land
exchanges that consolidate school land parcels into contiguous
holdings for renewable energy related projects. The Secretary
of the Interior is currently authorized to enter into an MOA
with SLC pursuant to the CDPA; however there is no current MOA
between the parties that focuses on renewable energy related
projects. If an MOA is entered into for purposes related to
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this bill, SLC will be required to make best efforts to
consolidate all school land parcels in the California desert
into contiguous holdings for renewable energy related
projects. To avoid the issues associated with appraisals, the
bill authorizes an acre-for-acre exchange unless SLC
reasonably believes, based on existing and reliable
information, that an acre-for-acre exchange would not provide
the state with compensation that is equal to or greater than
the fair market value of a parcel . Additionally, SLC will be
required to work with CEC and DFG to establish a state
coordinated effort to obtain desert lands that are optimal for
renewable energy projects without significantly impacting the
environment.
4)Federal Participation. This bill requires federal
participation. Senator Diane Feinstein has introduced the
California Desert Protection Act of 2011 that includes
provisions to facilitate land exchanges between SLC and BLM
for renewable energy related projects. Additionally, there
appears to be an increased willingness on the part of BLM to
engage in a land exchange process with SLC that will help
achieve the goals of this bill.
5)Suggested Amendments. The author and the committee may wish
to consider amendments that (1) eliminate unnecessary findings
and declaration language, (2) clarify that the MOA should be
tailored, to the extent feasible, to prioritize land exchanges
that are best suited for large-scale commercial renewable
energy projects, and (3) fix minor drafting errors.
REGISTERED SUPPORT / OPPOSITION :
Support
BrightSource Energy (sponsor)
Opposition
None on file
Analysis Prepared by : Mario DeBernardo / NAT. RES. / (916)
319-2092
AB 982
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