BILL ANALYSIS �
AB 2620
Page 1
Date of Hearing: April 23, 2012
ASSEMBLY COMMITTEE ON NATURAL RESOURCES
Wesley Chesbro, Chair
AB 2620 (Achadjian) - As Introduced: February 24, 2012
SUBJECT : Tidelands and submerged lands: granted public trust
lands
SUMMARY : Requires, by September 1, 2013, the State Lands
Commission (Commission) to prepare a workload analysis and
implementation plan to ensure that it is able to fulfill its
oversight responsibilities with respect to all legislatively
granted public trust lands.
EXISTING LAW :
1)Protects, pursuant to the common law doctrine of the Public
Trust (Public Trust Doctrine), the public's right to use
California's waterways for commerce, navigation, fishing,
boating, natural habitat protection, and other water oriented
activities. The Public Trust Doctrine provides that filled
and unfilled tide and submerged lands and the beds of lakes,
streams, and other navigable waterways (public trust lands)
are to be held in trust by the state for the benefit of the
people of California.
2)Requires the Commission to be the steward and manager of the
state's public trust lands. The Commission has direct
administrative control over the state's public trust lands and
oversight authority over public trust lands granted by the
Legislature to local governments.
3)Grants, in trust, state public trust lands to over 80 local
public agencies (local trustees) to be managed for the benefit
of all the people of the state and pursuant to the Public
Trust Doctrine and terms of the applicable granting statutes.
4)Requires that all revenues received by a local trustee from
its trust lands and trust assets be expended only for those
uses and purposes consistent with the public trust for
commerce, navigation, and fisheries, and the applicable
statutory grant or grants. Requires each local trustee to
file with the Commission a detailed statement of all revenues
and expenditures relating to its trust lands and trust assets,
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including obligations incurred but not yet paid, covering the
fiscal year preceding submission of the statement. The
statement shall be prepared in accordance with generally
accepted accounting principles and may take the form of an
annual audit prepared by or for the local trustee.
THIS BILL :
1)Defines "local trustee of granted public trust lands" as a
county, city, or district, including water, sanitary, regional
park, port, or harbor district, or any other local political
or corporate subdivision that has been granted public trust
lands through a legislative grant.
2)Defines "gross public trust revenues" as those gross revenues
that are subject to public trust use restrictions.
3)Requires Commission to prepare a workload analysis and
implementation plan to ensure that it is able to fulfill its
oversight responsibilities with respect to all legislatively
granted public trust lands. The workload analysis and
implementation plan shall be prepared by September 1, 2013,
and shall include all of the following:
a) An assessment of the oversight and audit methodologies
by which Commission could most effectively and efficiently
monitor the activities of a local trustee of granted public
trust lands.
b) The existing and historic gross public trust revenues
that would be subject to the commission's oversight.
c) An estimate of the financial cost of the implementation
plan.
d) Strategies to fund the estimated financial cost of the
implementation plan.
e) Potential alternative strategies or reporting
requirements that could be taken by local trustees of
granted public trust lands that would avoid or mitigate
costs to the Commission associated with the workload
analysis and implementation plan.
f) Implementation measures and timetables.
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4)Requires the Commission, in preparing the workload analysis
and implementation plan, to conduct at least one public
hearing and consult with local trustees of granted public
trust lands and users of granted public trust lands.
FISCAL EFFECT : Unknown
COMMENTS :
1)Background. For over 100 years, the Legislature has granted
public trust lands to local trustees so the lands can be
managed locally for the benefit of the people of California.
There are over 80 trustees in the state, including the ports
of Los Angeles, Long Beach, San Diego, San Francisco, Oakland,
Richmond, Benicia, and Eureka. While these trust lands are
managed locally, Commission has oversight authority to ensure
those local trustees are complying with the Public Trust
Doctrine and the applicable granting statutes.
Generally, revenues, such as rent income, that are generated
from granted public trust lands are also managed by the local
trustee and are restricted by the Public Trust Doctrine and
the applicable granting statutes. An example of a public
trust granting statute is the City of Pittsburg's grant that
was adopted in 2011 pursuant to SB 551 (DeSaulnier). This
statute specifically restricts the spending of public trust
revenues to uses that benefit all the people of the state for
purposes consistent with the Public Trust Doctrine and, in
certain cases, consistent with an approved trust lands use
plan.
California courts frequently cite by analogy private trust law
in connection with a local trustee's management of trust
assets. For example, in Long Beach v. Morse (1947), the City
of Long Beach tried to use public trust moneys for general
municipal improvements. This was problematic because general
municipal improvements are mostly focused on benefiting the
residents of Long Beach, not the beneficiaries of the trust,
which are the people of California. The California Supreme
Court declared, upon the basis of private trust law, that a
municipality which is the trustee of a tidelands' trust may
not appropriate the income from that trust for its own
municipal purposes. The private trust law invoked by the
state Supreme Court is commonly referred to as the "duty of
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loyalty," which requires that the trustee administer the trust
solely in the interest of the beneficiaries and not act in its
personal interest if such conduct might conflict with the
interests of the beneficiaries.
There are other private trust laws that are applied to the
management of granted trust lands and revenues, such as the
"duty to take and keep control of trust property," which
prohibits the comingling of trust funds with non-trust funds.
The City of Pittsburg's grant, for example, requires the City
to "provide for the segregation of funds derived from the use
of the trust lands by the trustee from other city municipal
funds, so as to ensure that trust revenues are only expended
to enhance or maintain the trust lands in accordance with the
uses and purposes for which the trust lands are held."
2)State Auditor's Audit. In August 2011, the State Auditor
released a report on the State Lands Commission. In this
report, the State Auditor concluded that "�t]he Commission
does not?adequately oversee granted lands." Specifically, the
report "found that the Commission does not ensure that funds
generated on lands granted to local governments are spent in
accordance with the public trust, because it only responds to
allegations of improper use of funds rather than identifying
and preventing the misuse through periodic monitoring."
The State Auditor recommended that the commission establish a
monitoring program to ensure that the funds generated from
granted lands are expended in accordance with the public
trust.
The Commission responded with the following statement:
Commission staff agrees with this recommendation,
however, Commission staff currently lacks the staff
resources necessary to establish and implement such a
program. There are more than 300 statutes granting
public trust lands to approximately 85 local
governments throughout the State. These statutory
trust grants include some of the State's most
important major contributors to the local, state and
national economies, including the Ports of Long Beach,
Los Angeles, Oakland, San Francisco and San Diego. The
Commission currently has one staff position assigned
to overseeing the management of these state lands and
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revenues by these local entities.
3)Purpose of the Bill and Suggested Amendments. The purpose of
this bill is to have the Commission prepare a workload
analysis and implementation plan focused on improving its
oversight responsibilities with respect to all legislatively
granted public trust lands. While this bill is consistent
with the State Auditor's recommendation, it is questionable
that the Commission has the resources to comply with the bill.
The author and committee may wish to consider amendments that
will improve the Commission's oversight through measures that
are not resource intensive. For example, amendments can
codify a standardized reporting form that local trustees must
annually file with the Commission. Local trustees are already
required to file detailed statement of all revenues and
expenditures relating to its trust lands and trust assets.
However, these statements come in all different types of
formats, which make it difficult for Commission staff to
analyze. Additionally, if these statements were made public
(through, for example, the Commission's website) the
beneficiaries of the trust (i.e. the people of California)
could conduct their own review of the statements. The author
and committee may also wish to consider amendments that
organize, list, and describe all of the trustee's existing
fiduciary duties, such as the duty of loyalty and duty to take
and keep control of trust property, which are referenced in
case law, granting statutes, and the Public Resources Code.
This organized list of duties will help local trustees
understand their obligation to the trust and hopefully act as
a preventative measure against any inadvertent trust
violations. Lastly, the author and committee may wish to
consider amendments that authorize (rather than require) the
Commission to prepare a workload analysis regarding its
granted lands program. This will give the Commission, if
resources are available, an opportunity to explain to the
Legislature how the granted lands program should be staffed to
ensure proper oversight.
REGISTERED SUPPORT / OPPOSITION :
Support
Pacific Merchant Shipping Association
Opposition
AB 2620
Page 6
None on file
Analysis Prepared by : Mario DeBernardo / NAT. RES. / (916)
319-2092