BILL ANALYSIS �
SENATE GOVERNANCE & FINANCE COMMITTEE
Senator Lois Wolk, Chair
BILL NO: SB 436 HEARING: 5/4/11
AUTHOR: Kehoe FISCAL: No
VERSION: 5/2/11 TAX LEVY: No
CONSULTANT: Detwiler
MITIGATION OF LAND USE DECISIONS
Allows public agencies to provide funds to nonprofit
organizations for mitigation duties.
Background and Existing Law
When cities and counties approve land use projects, they
can require builders to set aside resource land or
easements to mitigate the conversion of other property to
development. Sometimes public agencies impose mitigation
conditions to offset the effects of other agencies' public
works projects. Rather than own and manage the mitigation
land or the easements themselves, public agencies can turn
over the property interests to nonprofit organizations that
meet statutory criteria (SB 2746, Blakeslee, 2006; AB 1246,
Blakeslee, 2007).
In addition to requiring project sponsors to set aside
resource lands for mitigation purposes, sometime public
agencies also require applicants to set aside money to pay
for managing the land or easements. A 2006 Legislative
Counsel opinion explained that the 2006 Blakeslee bill
allows the State Department of Fish and Game to authorize a
nonprofit corporation to hold and manage funds for the
operation and maintenance of the resource lands or
easements. In 2010, the State Department of Fish and Game
set up a one-year pilot program with the National Fish and
Wildlife Foundation. The Foundation will hold and manage
the mitigation lands which the Department required when
issuing permits under the California Endangered Species
Act.
Land trusts want explicit statutory authority to hold and
manage the funds needed to manage resource lands set aside
for mitigation purposes.
SB 436 -- 5/2/11 -- Page 2
Proposed Law
Senate Bill 436 allows state and local agencies to convey
to nonprofit organizations funds that have been set aside
for the long-term management of land or easements that have
been conveyed to those organizations. SB 436 allows
agencies to provide funds to nonprofit organizations to
acquire land or easements to meet the agencies' mitigation
obligations. The bill requires the nonprofit organizations
to manage those funds to further the managing and
stewarding of those lands or easements. The agencies must
determine that the nonprofit organizations meets four
criteria involving managerial capacity, investment
capacity, accounting practices, and investment policies.
State or local agencies can contract with or designate
independent third parties to review nonprofit
organizations' land management qualifications, financial
management qualifications, adherence to statutory criteria,
and other performance indicators. Agencies can require
administrative endowments to pay for these reviews.
Agencies can also require project proponents to provide for
initial management costs while the endowment matures.
State or local agencies can require nonprofit organizations
to provide annual financial reports. If a state or local
agency determines that there is a concern over the funds'
management, the bill allows the agency to review accounting
documents or require an audit report. The funds held by
the nonprofit organization revert to the agency if the
nonprofit organizations stops operating, dissolves, becomes
bankrupt or insolvent, or fails to perform. SB 436 allows
agencies to adopt guidelines for their financial reviews.
The bill prohibits agencies from applying its provisions to
endowment funds held by the state in the Pooled Money
Investment Account on January 1, 2012.
The bill's provisions automatically terminate on January 1,
2022, unless the Legislature extends that date.
State Revenue Impact
No estimate.
SB 436 -- 5/2/11 -- Page 3
Comments
1. Purpose of the bill . Just as public agencies can turn
over mitigation property and easements to nonprofit
organizations, they should be able to turn over the funds
that are needed to manage those properties. SB 436 extends
the Legislative Counsel's view that the State Department of
Fish and Game has this authority and explicitly allows any
state or local agency to send endowment dollars to help pay
for their mitigation duties.
2. What he said . SB 436 is similar in intent but
different in details to AB 444 (Blakeslee, 2010) which
passed with no "no" votes. Nevertheless, Governor
Schwarzenegger vetoed last year's bill. His veto message
supported allowing non-governmental groups to manage
mitigation funds, but said that the lack of adequate fiscal
assurances was "unacceptable." The Governor directed the
State Department of Fish and Game to work with interested
parties to develop an alternative with sufficient
protections.
3. Recent amendments . The Senate Natural Resources and
Water Committee heard SB 436 at its April 26 hearing. That
committee approved the bill by the vote of 9 to 0, after
discussing and accepting amendments. The recent amendments
added financial oversight provisions, removed extraneous
limits on state agencies, and inserted the sunset clause.
4. Related bill . SB 436 is similar to AB 484 (Alejo)
which passed both the Assembly Water, Parks & Wildlife
Committee and the Assembly Local Government Committee. The
Alejo bill is now in the Assembly Appropriations Committee.
Support and Opposition (4/28/11)
Support : California Council of Land Trusts; Amargosa
Conservancy; American Land Conservancy; American River
Conservancy; Bay Area Open Space Council; Bay Area Ridge
Trail Council; Big Sur Land Trust; Catalina Island
Conservancy; Center for Natural Lands Management; Eastern
Sierra Land Trust; Elkhorn Slough Foundation; Lake County
Land Trust; Land Conservancy of San Luis Obispo County;
SB 436 -- 5/2/11 -- Page 4
Land Trust for Santa Barbara County; Land Trust of Santa
Cruz County; Marin Agricultural Land Trust; Mendocino Land
Trust; Pacific Forest Trust; Palos Verdes Peninsula Land
Conservancy; Placer Land Trust; Redlands Conservancy;
Redwood Coast Land Conservancy; Sacramento Valley
Conservancy; Sanctuary Forest; San Joaquin River Parkway
and Conservation Trust; Save Mount Diablo; Sequoia
Riverlands Trust; Sierra-Cascade Land Trust Council; Solano
Land Trust; Southern California Open Space Council; The
Nature Conservancy; Transition Habitat Conservancy;
Tri-Valley Conservancy; Trust for Public Land; Wildlife
Heritage Foundation.
Opposition : Unknown.