BILL ANALYSIS �
AB 982
Page 1
ASSEMBLY THIRD READING
AB 982 (Skinner)
As Amended May 10, 2011
Majority vote
NATURAL RESOURCES 9-0 APPROPRIATIONS 17-0
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|Ayes:|Chesbro, Knight, |Ayes:|Fuentes, Harkey, |
| |Brownley, Dickinson, | |Blumenfield, Bradford, |
| |Grove, Halderman, | |Charles Calderon, Campos, |
| |Huffman, Monning, Skinner | |Davis, Donnelly, Gatto, |
| | | |Hall, Hill, Lara, |
| | | |Mitchell, Nielsen, Norby, |
| | | |Solorio, Wagner |
|-----+--------------------------+-----+--------------------------|
| | | | |
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SUMMARY : Requires the State Lands Commission (SLC) to make best
efforts to execute a land exchange with the federal government
to consolidate state lands in the California desert into
contiguous holdings that are suitable for renewable energy
related projects. Specifically, 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
(U.S.) Secretary of the Interior to facilitate land exchanges
that consolidate school land parcels into contiguous holdings
that are suitable for renewable energy-related projects. The
MOA shall be tailored, to the extent feasible, to prioritize;
and, exchanges that are best suited for large-scale commercial
renewable energy projects.
2)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 that are suitable for renewable energy-related
projects.
3)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.
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4)Requires the land exchange proposal to be based on an
acre-for-acre exchange with the U.S. 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.
5)Requires SLC to consult with the California Energy Commission
(CEC) to identify areas that are best suited for renewable
energy projects.
6)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.
7)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.
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 (SLBF), 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 SLBF to pay for
costs and expenses attributable to land acquisitions.
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FISCAL EFFECT : According to the Assembly Appropriations
Committee:
1)One-time costs to SLC in 2011-12 in the range of $250,000 to
$500,000 (equivalent to two-to-four positions), to coordinate
with the federal government to develop and enter into an MOA
and to process land exchanges (SLBF). These costs would be
reimbursed by applicants to develop the land, should such
applicants come forward.
2)Absorbable costs to CEC and DFG to consult with SLC.
3)Potential ongoing revenue of an unknown amount, but possibly
in the millions of dollars, from fees and royalties on
developed lands, which would be used to benefit CalSTRS
(SLBF).
COMMENTS : 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. 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 SLBF. In 1984, through the School
Land Bank Act (commencing with Public Resources Code Section
8700), 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
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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 SLBF. SLC is required to use this
money to make investments that produce revenue for CalSTRS. In
2008, the state borrowed $59 million from the SLBF to deal with
the state's budget issues. The loan is technically scheduled to
be paid back into the fund by fiscal year 2012-2013.
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
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: 1) the appraisal
process is time consuming, contentious, and expensive; and, 2)
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BLM has generally not been willing to offer lands that have
revenue generating potential.
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.
This 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
that are suitable 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 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.
This bill requires the federal government's cooperation.
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.
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Analysis Prepared by : Mario DeBernardo / NAT. RES. / (916)
319-2092
FN: 0001092