BILL ANALYSIS �
Bill No: AB
982
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Roderick D. Wright, Chair
2011-2012 Regular Session
Bill Analysis
AB 982 Author: Skinner
As Amended: June 23, 2011
Hearing Date: June 28, 2011
Consultant: Paul Donahue
SUBJECT : State land exchange for renewable energy projects
SUMMARY : Directs the State Lands Commission to arrange
land exchanges with the federal government in order to
consolidate non-contiguous parcels owned by the state for
development of large-scale renewable energy projects.
Existing law :
1) Designates administrative control of specified state
lands to the State Lands Commission (SLC), including
property the federal government granted to the state to be
held in trust for the benefit of California public schools.
2) Vests the SLC, as a trustee, with the exclusive
jurisdiction and authority to administer the School Land
Bank Fund and the interest in land acquired pursuant to
that act.
3) The School Land Bank Act authorizes the SLC acting as a
trustee, to acquire interest in real property for the
purposes of facilitating the management of school lands to
generate income, for the benefit of the California State
Teachers' Retirement System.
This bill :
1) Requires SLC to enter into a memorandum of agreement
(MOA) by April 1, 2012, with the U. S. Secretary of the
Interior to facilitate land exchanges that consolidate
school land parcels into contiguous holdings that are
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suitable for renewable energy-related projects, contingent
upon the cooperation of Interior.
2) States that, to the extent feasible, the MOA shall be
tailored to prioritize land exchanges that are best suited
for large-scale commercial renewable energy project
development, including for mitigation of its effects.
3) Requires that within 240 days of the execution of the
MOA, SLC shall prepare and submit to the Dept. of 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.
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 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.
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 identify areas that are best suited for
renewable energy projects because they do not support
direct habitat or habitat corridor values or that serve as
potential mitigation area to offset environmental impacts
of renewable energy projects.
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.
COMMENTS :
1) Rationale : The author states that large-scale renewable
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projects are a primary source of renewable energy that can
be used to meet California's renewable portfolio standard,
which requires retail sellers of electricity to procure at
least 33% of electricity delivered to retail customers from
renewable energy resources by the year 2020. The author
notes that, according to the U.S. Department of Energy,
California has some of the best locations on which to
produce renewable energy, but much of this public land is
not contiguous. This bill is intended to help consolidate
some of this land so that large-scale renewable projects
can be built on the lands.
2) Background : After California achieved statehood, the
federal government granted approximately 5.5 million acres
of land to California to be used for the support of
schools. This land consisted of the sixteenth and
thirty-sixth section of each township.<1> Approximately 90
percent of the school lands were sold prior to the creation
of the State Lands Commission (SLC) in 1938. Proceeds were
used primarily to pay for school construction.
In 1984, the California Legislature directed that school
lands be retained and managed by the SLC to generate
revenue to provide COLAs for retired teachers. The school
lands are difficult to manage because they are broken up
into noncontiguous, square-mile parcels. The Legislature
found the "consolidation of school land parcels into
contiguous holdings is essential to sound and effective
management."<2> The law authorizes SLC to sell the
isolated, non-economic school lands and use the funds from
the sales to purchase real property that will generate
additional revenues to benefit California's retired
teachers. Proceeds from sales are required to be held in
trust by the Commission for the teachers and are deposited
in the School Land Bank Fund (SLBF).
Over time, the state sold several millions of acres of
school lands, but the state owns surface and mineral rights
on approximately 468,600 acres of school lands, and retains
the mineral rights to an additional 790,000 acres.
Approximately 370,000 acres of these state lands are
-------------------------
<1> A township is 36 square miles, containing 36 sections.
Each section within a township is one square mile, or 640
acres.
<2> Pub. Res. Code � 8702
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located in the California desert and are landlocked,
remote, and non-revenue generating.
Under the School Land Bank Act, the SLC may take all action
necessary to fully develop school lands into a permanent
and productive revenue source. Revenues generated 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.
3) Desert Protection Act : The federal California Desert
Protection Act (CDPA) became law in 1994. The CDPA
designates 3.6 million acres in southern California as
wilderness lands, administered primarily by the Bureau of
Land Management (BLM), and designated an additional four
million acres in southern California as national park
lands.
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.
4) Purpose of the bill : This bill requires SLC to enter
into a 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 and the associated mitigation.
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.
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This bill requires SLC to make every effort to consolidate
school land parcels in the California desert into
contiguous holdings for use in developing renewable energy
related projects. 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.
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.
5) Support : Supporters believe that large-scale renewable
projects are an essential component to satisfying the
state's renewable energy procurement mandate. They believe
that AB 982 will help to establish renewable energy parks
on government land on parcels that are large enough for
developers to build, and provide meaningful mitigation
lands in the process.
6) Related legislation :
SB 1272 (Harman) Chapter 701, Statutes of 2005 authorizes
the sale of school lands trust mineral rights beneath a
proposed landfill in Riverside County at full market value.
SUPPORT:
BrightSource Energy
California Retired Teachers Association
OPPOSE:
None on file
DUAL REFERRAL: Senate Energy, Utilities and Communications
Committee
FISCAL COMMITTEE: Senate Appropriations Committee
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