BILL NUMBER: SB 1094 INTRODUCED
BILL TEXT
INTRODUCED BY Senator Kehoe
FEBRUARY 16, 2012
An act to amend Sections 65965, 65966, 65967, and 65968 of the
Government Code, relating to land use, and declaring the urgency
thereof, to take effect immediately.
LEGISLATIVE COUNSEL'S DIGEST
SB 1094, as introduced, Kehoe. Land use: mitigation lands:
nonprofit organizations.
The Planning and Zoning Law provides that if a state or local
agency requires a person to transfer to that agency an interest in
real property to mitigate the environmental impact of a project or
facility, that agency may authorize specified entities to hold title
to, and manage that interest in, real property, as well as any
accompanying funds, provided those entities meet specified
requirements. Existing law requires that if accompanying funds, as
defined, are conveyed at the time the property is protected, then the
holder of those accompanying funds must meet specified requirements.
Existing law requires a state or local agency to exercise due
diligence in reviewing the qualifications of a special district or
nonprofit organization to effectively manage and steward land, water,
or natural resources, as well as the accompanying funds.
This bill would authorize an agency, in connection with the
provisions described above, to also permit a governmental entity to
hold title to, and manage that interest in, real property, as well as
any accompanying funds. This bill would remove the requirement that
a state or local agency exercise due diligence in reviewing the
qualifications of a special district or nonprofit organization to
effectively manage the accompanying funds. This bill would also
modify the requirements that the holder of accompanying funds must
meet, and would provide that those requirements also apply to
accompanying funds that are secured at the time the property is
protected.
Existing law generally requires that the accompanying funds
described above be held by the agency that requires the mitigation or
by the special district or nonprofit organization that holds the
property. Existing law excepts certain situations from this
requirement, including, among others, if the accompanying funds are
held by another entity pursuant to a natural community conservation
plan or a safe harbor agreement that is executed on or before January
1, 2012.
This bill would require that, in order to qualify for that
exception, the natural community conservation plan or safe harbor
agreement be at a recognized initial, interim, or final stage on or
before January 1, 2012. This bill also would add 2 additional
exceptions to that requirement.
This bill would authorize a state or local agency to allow the
accompanying funds to be temporarily held in an escrow account until
a specified date, after which time the bill would require the state
or local agency to transfer the accompanying funds to the entity that
will permanently hold them.
This bill would also make technical, nonsubstantive changes to
those provisions.
This bill would declare that it is to take effect immediately as
an urgency statute.
Vote: 2/3. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 65965 of the Government Code is amended to
read:
65965. For the purposes of this chapter, the following
definitions apply:
(a) "Accompanying funds" means the funds that may be conveyed
solely for the long-term stewardship of a property. Also known as
"endowments," these funds are held and managed consistent with
subdivision (b) of Section 65966 and with the Uniform Prudent
Management of Institutional Funds Act (Part 7 (commencing with
Section 18501) of Division 9 of the Probate Code). Accompanying funds
do not include funds conveyed for meeting short-term performance
objectives of a project.
(b) "Conservation easement" means a conservation easement created
pursuant to Chapter 4 (commencing with Section 815) of Title 2 of
Part 2 of Division 2 of the Civil Code.
(c) "Department" means the Department of Fish and Game.
(d)
(c) "Direct protection" means the permanent protection,
conservation, and preservation of lands, waters, or natural
resources, including, but not limited to, agricultural lands,
wildlife habitat, wetlands, endangered species habitat, open-space
areas, or outdoor recreational areas.
(d) "Governmental entity" means any state agency, office, officer,
department, division, bureau, board, and commission, and any city,
county, or city and county.
(e) "Mitigation agreement" means a written agreement between a
public agency, the project proponent, and the governmental
entity, special district, nonprofit organization, for-profit
entity, or other entity that holds the property. A mitigation
agreement governs the long-term stewardship of a property and
accompanying funds, and shall specify any reporting requirements or
elements, including due dates of reports.
(f) "Project proponent" means an individual, business entity,
agency, or other entity that is developing a project or facility and
is required to mitigate any adverse impact upon natural resources.
(g) "Property" means fee title land or any partial interest in
real property, including a conservation easement, that may be
conveyed pursuant to a mitigation requirement by a state or local
agency.
(h) "Special district" means any special district formed pursuant
to Article 3 (commencing with Section 5500) of Chapter 3 of Division
5 or Division 26 (commencing with Section 35100) of the Public
Resources Code, or any resource conservation district organized
pursuant to Division 9 (commencing with Section 9001) of the Public
Resources Code.
(i) "Stewardship" encompasses the range of activities involved in
controlling, monitoring, and managing for conservation purposes a
property, or a conservation or open-space easement, as defined by the
terms of the easement, and its attendant resources.
SEC. 2. Section 65966 of the Government Code is amended to read:
65966. (a) Any conservation easement created as a component of
satisfying a local or state mitigation requirement shall be perpetual
in duration, whether created pursuant to Section 51075
Chapter 6.6 (commencing with Section 51070) of Part 1
of Division 1 of Title 5 of this code or Section 815
Chapter 4 (commencing with Section 815) of Title 2 of
Part 2 of the Civil Code.
(b) Any local or state agency that requires property to be
protected pursuant to subdivision (a) or (b) of Section 65967 may
identify how the funding needs of the long-term stewardship of the
property will be met. If accompanying funds are conveyed or
secured at the time the property is protected, all of the
following shall apply:
(1) The accompanying funds shall be held, managed, invested, and
disbursed solely for the long-term stewardship of the specific
property for which the funds were set aside.
(2) The accompanying funds shall be calculated to include a
principal amount that, when managed and invested, will
produce revenues that are reasonably sufficient is
reasonably anticipated to cover the annual stewardship costs of
the property in perpetuity.
(3) The principal amount shall be defined and managed as
permanently restricted funds.
(4) Any one-time payment, as defined by subdivision (f), and
earnings from the principal shall be managed as temporarily
restricted funds.
(5) The accompanying funds shall be held, managed, invested, and
disbursed consistent with the Uniform Prudent Management of
Institutional Funds Act (Part 7 (commencing with Section 18501) of
Division 9 of the Probate Code).
(c) If a local agency holds the accompanying funds, the local
agency shall do all of the following:
(1) Hold, manage, and invest the accompanying funds consistent
with subdivision (b) to the extent allowed by law.
(2) Disburse funds on a timely basis to meet the stewardship
expenses of the entity holding the property.
(3) Utilize accounting standards consistent with standards
promulgated by the Governmental Accounting Standards Board.
(d) A governmental entity, special district ,
or a nonprofit organization that holds funds pursuant to this
chapter, including, but not limited to, accompanying funds, moneys to
acquire land or easements, or moneys for initial stewardship costs,
shall provide the local or state agency with an annual fiscal report
that contains at least the same information as required by Internal
Revenue Service Form 990 regarding the funds.
(e) If a state or local agency authorizes a governmental
entity, special district , or nonprofit
organization to hold property pursuant to subdivision (a) or (b) of
Section 65967, the agency may require an administrative endowment
from the project proponent, as a one-time payment for reasonable
costs associated with reviewing qualifications, approving holders,
and regular oversight of compliance and performance. The
administrative endowment shall be held, managed, and invested to
produce an annual revenue sufficient to cover the costs of reviewing
qualifications, approving holders, and ongoing oversight.
(f) A local agency may require a project proponent to provide a
one-time payment that will provide for the initial stewardship costs
for up to three years while the endowment begins to accumulate
investment earnings. The funds for the initial stewardship costs are
distinct from the funds that may be conveyed for long-term
stewardship, construction, or other costs. If there are funds
remaining at the completion of the initial stewardship period, the
funds shall be conveyed to the project proponent.
(g) The local agency may contract with or designate a qualified
third party to do any of the following:
(1) Review the qualifications of a governmental entity,
special district , or nonprofit organization to
effectively manage and steward natural land or resources pursuant to
subdivisions (c) and (d) of Section 65967.
(2) Review the qualifications of a nonprofit to hold and manage
the accompanying funds that are set aside for long-term stewardship
of the property.
(3) Review reports or other performance indicators to evaluate the
stewardship of lands, natural resources, or funds, and compliance
with the mitigation agreement.
(h) If a property conserved pursuant to subdivision (a) or (b) of
Section 65967 is condemned, the net proceeds from the condemnation of
the real property interest set aside for mitigation purposes shall
be used for the purchase of property that replaces the natural
resource characteristics the original mitigation was intended to
protect, or as near as reasonably feasible. Any accompanying funds
held for the condemned property shall be held for the long-term
stewardship of the replacement property.
(i) Unless prohibited by law, no provision in this chapter is
intended to prohibit for-profit entities from holding, acquiring, or
providing property for mitigation purposes.
(j) Nothing in this section shall prohibit a state agency from
exercising any powers described in subdivisions
subdivision (c), (e), (f), or (g).
SEC. 3. Section 65967 of the Government Code is amended to read:
65967. (a) If a state or local agency requires a project
proponent to transfer property to mitigate any adverse impact upon
natural resources caused by permitting the development of a project
or facility, the agency may authorize a governmental entity,
special district, a nonprofit organization, a for-profit
entity, a person, or another entity to hold title to and manage that
property.
(b) If a state or local agency, in the development of its own
project, is required to protect property to mitigate an adverse
impact upon natural resources, the agency may take any action that
the agency deems necessary in order to meet its mitigation
obligations, including, but not limited to, the following:
(1) Transfer the interest to a governmental entity
special district , or to a nonprofit
organization that meets the requirements set forth in subdivision
(c).
(2) Provide funds to a governmental entity nonprofit
organization, a special district, a for-profit entity, a person, or
other entity to acquire land or easements that satisfy the agency's
mitigation obligations.
(c) If a state or local agency authorizes a nonprofit organization
to hold title to and manage the property, that nonprofit
organization shall meet all of the following requirements:
(1) The nonprofit organization shall be exempt from taxation as an
organization described in Section 501(c)(3) of the Internal Revenue
Code.
(2) The nonprofit organization shall be qualified to do business
in this state.
(3) The nonprofit organization shall be a "qualified organization"
as defined in Section 170(h)(3) of the Internal Revenue Code.
(4) The nonprofit organization shall have as its principal purpose
and activity the direct protection or stewardship of land, water, or
natural resources, including, but not limited to, agricultural
lands, wildlife habitat, wetlands, endangered species habitat,
open-space areas, and outdoor recreational areas.
(d) A state or local agency shall exercise due diligence in
reviewing the qualifications of a governmental entity,
special district , or nonprofit organization to
effectively manage and steward land, water, or natural resources
, as well as the accompanying funds . The local
agency may adopt guidelines to assist it in that review process,
which may include, but are not limited to, the use of or reliance
upon guidelines, standards, or accreditation established by a
qualified entity that are in widespread state or national use.
(e) The state or local agency may require the g
overnmental entity, special district , or
nonprofit organization to submit a report not more than once every 12
months and for the number of years specified in the mitigation
agreement that details the stewardship and condition of the property
and any other requirements pursuant to the mitigation agreement for
the property.
(f) The recorded instrument that places the fee title or partial
interest in real property with a governmental entity,
special district, nonprofit organization, or for-profit entity,
pursuant to subdivision (a) or (b) shall include a provision that if
the state or local agency or its successor agency reasonably
determines that the property conveyed to meet the mitigation
requirement is not being held, monitored, or stewarded for
conservation purposes in the manner specified in that instrument or
in the mitigation agreement, the property shall revert to the state
or local agency, or to another public agency, governmental
entity, special district, or nonprofit organization pursuant to
subdivisions (c) and (d) and subject to approval by the state or
local agency. If a state or local agency determines that a property
must revert, it shall work with the parties to the mitigation
agreement, or other affected entities, to ensure that any contracts,
permits, funding, or other obligations and responsibilities are met.
SEC. 4. Section 65968 of the Government Code is amended to read:
65968. (a) Notwithstanding Section 13014 of the Fish and Game
Code, if accompanying funds are conveyed pursuant to Section 65966
for property conveyed pursuant to Section 65967, the accompanying
funds may be held by the same governmental entity, special
district , or nonprofit organization that holds the
property pursuant to this section.
(b) Except as permitted below, the accompanying funds shall be
held by the agency or agencies that requires
require the mitigation or by the
governmental entity, special district , or nonprofit
organization that holds the property or holds an interest in
the property for conservation purposes . The exceptions to this
requirement are the following:
(1) Accompanying funds that are held by an entity other than the
state or holder of the mitigation property as of January 1, 2012.
(2) Accompanying funds that are held by another entity pursuant to
the terms of a natural community conservation plan (Chapter
10 (commencing with Section 2800) of Division 3 of the Fish and Game
Code) or a safe harbor agreement (Article 3.7
(commencing with Section 2089.2) of Chapter 1.5 of Division 3 of the
Fish and Game Code) that is executed on or before January 1, 2012
. In order for this paragraph to apply, on or before
January 1, 2012, a natural community conservation plan or a safe
harbor agreement shall be at a recognized initial, interim, or final
stage as reflected in the completion of planning agreements,
framework plans, subarea plans, implementing agreements, or other
documents that are part of the recognized natural community
conservation plan process as described in Chapter 10 (commencing with
Section 2800) of Division 3 of the Fish and Game Code, or a safe
harbor agreement as described in Article 3.7 (commencing with Section
2089.2) of Chapter 1.5 of Division 3 of the Fish and Game Code
.
(3) Where If existing law prohibits
the holder of the mitigation property to hold the endowment,
including for-profit entities.
(4) If the mitigation property is held or managed by a federal
agency.
(5) If a federal agency objects to the qualifications of the
proposed endowment holder.
(c) The governmental entity, special district ,
or nonprofit organization shall hold, manage, invest, and
disburse the funds in furtherance of the long-term stewardship of the
property for which the funds were set aside.
(d) The holder of accompanying funds shall meet all of the
following requirements:
(1) The holder has the capacity to effectively manage the
mitigation funds.
(2) The holder has the capacity to achieve reasonable rates of
return on the investment of those funds similar to those of other
prudent investors.
(3) The holder utilizes generally accepted accounting practices as
promulgated by either of the following:
(A) The Financial Accounting Standards Board for nonprofit
organizations.
(B) The Governmental Accounting Standards Board for public
agencies, to the extent those practices do not conflict with any
requirement for special districts in Article 2 (commencing with
Section 53630) of Chapter 4 of Part 1 of Division 2 of Title 5 of the
Government Code.
(4) The holder will be able to ensure that funds are accounted
for, and tied to, a specific property.
(5) If the holder is a nonprofit organization, it has an
investment policy that is consistent with the Uniform Prudent
Management of Institutional Funds Act (Part 7 (commencing with
Section 18501) of Division 9 of the Probate Code).
(e) Except for a mitigation agreement prepared by a state agency,
the mitigation agreement that authorizes the funds to be conveyed to
a governmental entity, special district , or
nonprofit organization pursuant to subdivision (a) shall include a
provision that requires the accompanying funds held by a
governmental entity, special district , or a
nonprofit organization to revert to the local agency, or to a
successor organization identified by the agency and subject to
subdivision (d), if any of the following occurs:
(1) The governmental entity, special district ,
or nonprofit organization ceases to exist.
(2) The governmental entity, special district ,
or nonprofit organization is dissolved.
(3) The governmental entity, special district ,
or nonprofit organization becomes bankrupt or insolvent.
(4) The local agency reasonably determines that the accompanying
funds held by the governmental entity, special district
, or nonprofit organization, or its successor entity, are
not being held, managed, invested, or disbursed for conservation
purposes and consistent with the mitigation agreement and legal
requirements. Any reverted funds shall continue to be held, managed,
and disbursed only for long-term stewardship and benefit of the
specific property for which they were set aside. If the funds revert
from the governmental entity, special district ,
or nonprofit organization, the special district or nonprofit
organization may choose to relinquish the property. If the property
is relinquished, the local agency shall accept title to the property
or identify an approved governmental entity, special
district , or nonprofit organization to accept title to
the property.
(f) Nothing in this section shall prohibit a state or local agency
from determining that a governmental entity, special
district , or nonprofit organization meets the
requirements of this section and is qualified to hold the
accompanying funds, or including a provision in the mitigation
agreement as described in subdivision (e).
(g) A state or local agency may allow the accompanying funds to be
held temporarily in an escrow account until December 31, 2012, after
which time the funds shall be transferred to the entity that will
permanently hold the accompanying funds.
(g)
(h) Subject to subdivision (e), any accompanying funds
that are conveyed to and held by a governmental entity,
special district , or nonprofit organization pursuant to
this section shall continue to be held by the entity if this section
is repealed and those funds are conveyed prior to the date this
section is repealed.
(h)
(i) This section shall remain in effect only until
January 1, 2022, and as of that date is repealed, unless a later
enacted statute, that is enacted before January 1, 2022, deletes or
extends that date.
SEC. 5. This act is an urgency statute necessary for the immediate
preservation of the public peace, health, or safety within the
meaning of Article IV of the Constitution and shall go into immediate
effect. The facts constituting the necessity are:
In order to ensure that mitigation projects are approved in a
timely manner, particularly in relation to desert renewable energy
projects, it is necessary that this act take effect immediately.