BILL ANALYSIS �
AB 1054
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Date of Hearing: January 19, 2012
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 1054 (Skinner) - As Amended: January 4, 2012
Policy Committee: Natural
ResourcesVote:6-3
Urgency: No State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill delays the effective date of a quitclaim deed for a
lease with the State Lands Commission (SLC) until the lessee
reclaims or restores the land. Specifically, this bill:
1)Makes the quitclaim provisions applicable to any land lease
with the commission, regardless of the size of the land in
question or the type of resources extracted from that land.
2)Applies quitclaim provisions only to new commission leases.
FISCAL EFFECT
1)Minor, absorbable costs to SLC to monitor and review
reclamation and restoration activities of lessees who have
filed quitclaims.
2)Modest revenues, perhaps in the hundreds of thousands of
dollars annually, principally to the California State
Teachers' Retirement Fund.
COMMENTS
1)Rationale. According to the commission-the sponsor of this
bill-the proposed changes are necessary to give the commission
greater administrative control of lands leased from the
commission during the time that those lands undergo
reclamation and restoration. Existing law authorizes the
commission to lease state sovereign and "school lands"-land
ceded to the state by the federal government for the benefit
of public education-for mining and other purposes. During a
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mine's operation, the lessee pays rent and royalties on the
leased land per the terms of the lease. In addition, the
lessee is required to maintain insurance and bonding for the
land.
Current law allows a lessee to file a quitclaim at any time,
at which point the lessee is no longer obligated to pay rent
on the land. However, the lessee may reclaim and restore the
mined land for many years after it has filed its quitclaim,
during which time the state is unable to collect rent on the
land or authorize the land for other use. In addition, the
lessee is not required to maintain insurance and bonding once
the quitclaim is filed, exposing the state to financial risk
from personal injury and property damage during the
reclamation period.
The commission has claimed that extending the effective date
of the quitclaim until after completion of reclamation and
restoration of the leased land, per commission approval, would
allow the state to continue to generate revenue from the
leased land during reclamation and restoration. The extension
would also extend a lessee's obligation to maintain insurance
and bonding for the leased land throughout reclamation and
restoration, thereby lessening the state's financial risk.
2)Revenue from leased lands mainly benefits teachers. In 1853,
congress passed the School Land Bank Act, which ceded certain
lands to the states for the benefit of public education. The
act requires the commission to manage these school lands-in
California today, mainly isolated tracts of desert land-to the
economic benefit of the public school system. All revenue
generated by school lands is deposited in the California State
Teachers' Retirement System.
Revenue generated on sovereign state lands-mainly state
coastal lands-goes to the General Fund. However, the
commission has claimed that lessees on sovereign lands
generally have not quitclaimed until after reclamation is
complete, and so expects little change in the amount of
General Fund revenue as a result of this bill.
3)Related Legislation. This bill is very similar to AB 368
(Skinner), which was vetoed by Governor Schwarzenegger who
decried the bill as unnecessary.
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4)Support . This bill is supported by the State Lands
Commission. There is no opposition formally registered to
this bill.
Analysis Prepared by : Jay Dickenson / APPR. / (916) 319-2081