Bill Text: CA AB1799 | 2013-2014 | Regular Session | Amended
Bill Title: Land use: mitigation lands.
Spectrum: Partisan Bill (Democrat 6-0)
Status: (Introduced - Dead) 2014-05-23 - In committee: Set, second hearing. Held under submission. [AB1799 Detail]
Download: California-2013-AB1799-Amended.html
BILL NUMBER: AB 1799 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MAY 1, 2014
INTRODUCED BY Assembly Member Gordon
(Coauthors: Assembly Members Alejo, Campos, and Wieckowski)
(Coauthors: Senators Beall and Correa)
FEBRUARY 18, 2014
An act to amend Sections 65965 and 65966 of the Government Code,
relating to land use.
LEGISLATIVE COUNSEL'S DIGEST
AB 1799, as amended, Gordon. Land use: mitigation lands.
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
and 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. Existing law
requires a conservation easement created as a component of satisfying
a local or state mitigation requirement to be perpetual in duration,
and sets forth the requirements for long-term stewardship of
property by various entities, including, among others, local
governmental entities and nonprofit organizations.
The Planning and Zoning Law authorizes a state or local agency,
where that agency requires a project proponent to transfer property
to mitigate adverse project impacts upon natural resources, to in
turn authorize a government entity, special district, or any of
certain types of parties to hold title to, and manage, the
transferred property. Existing law also allows a state or local
agency that has required such a transfer of property for mitigation
purposes to identify the funding needs for the long-term stewardship
of the property, and establishes various requirements with respect to
the amount and management of any endowment conveyed or secured for
purposes of funding the protection of the property.
This bill would eliminate the requirement of an endowment
or other financial mechanism for long-term stewardship where a
governmental entity or special district is the entity required to
provide the long-term stewardship, where a
governmental entity or specified district is the transferee of the
property, specify that an endowment or other financial mechanism is
not required if the governmental entity or special district
provides evidence to the local or state agency that it possesses an
investment-grade , as defined, credit rating by a
nationally recognized statistical rating organization, and
provides either a resolution adopted by the legislative body of the
governmental entity or special district or
organization or other equivalent evidence of financial reliability,
and enters into a contractual agreement , containing
certain elements, with the local or state agency enforcing the
mitigation requirements , as specified . This
bill would require a participating governmental entity or special
district to submit an annual report to the Department of Fish and
Wildlife of the governmental entity's or special district's accounts
receivables and discharged accounts, as specified.
Vote: majority. Appropriation: no. Fiscal committee: no
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) "Endowment" means the funds that are conveyed solely for the
long-term stewardship of a mitigation property. Endowment funds are
held as charitable trusts that are permanently restricted to paying
the costs of long-term management and stewardship of the mitigation
property for which the funds were set aside. Endowments shall be
governed by the underlying laws, regulations, and specific
governmental approvals under those laws and regulations pursuant to
which the endowments were exacted, 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). Endowments do not include funds
conveyed for meeting short-term performance objectives of a project.
(b) "Community foundation" means any community foundation that
meets all of the following requirements:
(1) Meets the requirements of a community trust under Section
1.170A-9(f)(10)-(11) of Title 26 of the Code of Federal Regulations.
(2) Is exempt from taxation as an organization described in
Section 501(c)(3) of the Internal Revenue Code.
(3) Is qualified to do business in this state.
(4) Is a "qualified organization" as defined in Section 170(h)(3)
of the Internal Revenue Code.
(5) Has complied with National Standards for U.S. Community
Foundations as determined by the Community Foundations National
Standards Board, a supporting organization of the Council on
Foundations.
(6) Is registered with the Registry of Charitable Trusts
maintained by the Attorney General pursuant to Section 12584.
(c) "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.
(d) "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.
(e) "Governmental entity" means any state agency, office, officer,
department, division, bureau, board, commission, public
postsecondary educational institution, city, county, or city and
county, or a joint powers authority formed pursuant to the Joint
Exercise of Powers Act (Chapter 5 (commencing with Section 6500) of
Division 7 of Title 1) that meets either of the following
requirements:
(1) The joint powers authority was created for the principal
purpose and activity of 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.
(2) The joint powers authority was created for the purpose of
constructing, maintaining, managing, controlling, and operating
transportation infrastructure, such as major thoroughfares and
bridges.
(f) (1) "Mitigation agreement" means either of the following:
(A) A written agreement between the project proponent and the
entity qualified to hold the property and the endowment pursuant to
this chapter, which is submitted to the state or local agency for the
purpose of obtaining any permit, clearance, or mitigation approval
from that state or local agency.
(B) A written agreement between the project proponent and the
entity qualified to hold the property pursuant to this chapter,
including any agreement with an entity qualified to hold the
endowment pursuant to this chapter, which is submitted to the state
or local agency for the purpose of obtaining any permit, clearance,
or mitigation approval from that state or local agency.
(2) A mitigation agreement shall govern the long-term stewardship
of the property and the endowment.
(g) "Congressionally chartered foundation" means a nonprofit
organization that meets all of the following requirements:
(1) Is chartered by the United States Congress.
(2) Is exempt from taxation as an organization described in
Section 501(c)(3) of the Internal Revenue Code.
(3) Is qualified to do business in this state.
(4) Is registered with the Registry of Charitable Trusts
maintained by the Attorney General pursuant to Section 12584.
(5) Has as a purpose the conservation and management of fish,
wildlife, plants, and other natural resources, which includes, but is
not limited to, the direct protection or stewardship of land, water,
or natural wildlife habitat, wetlands, endangered species habitat,
open-space areas, and outdoor recreational areas.
(h) "Investment grade" means a credit rating provided by
a nationally recognized statistical rating organization that
indicates a relatively low risk of default. For purposes of this
subdivision, "nationally recognized statistical rating organization"
means a rating agency designated by the Securities and Exchange
Commission as being nationally recognized.
based on securities rated by Standard & Poor's
Rating Services as AAA, AA, A, or BBB, or by Moody's Investors
Service as Aaa, Aa, A, or Baa, including a rating with a "+" or "-"
designation or other variations that occur within these ratings.
(i) "Nonprofit organization" means any nonprofit organization that
meets all of the following requirements:
(1) Is exempt from taxation as an organization described in
Section 501(c)(3) of the Internal Revenue Code.
(2) Is qualified to do business in this state.
(3) Is a "qualified organization" as defined in Section 170(h)(3)
of the Internal Revenue Code.
(4) Is registered with the Registry of Charitable Trusts
maintained by the Attorney General pursuant to Section 12584.
(5) Has 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.
(j) "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.
(k) "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.
(l) "Special district" means any of the following special
districts:
(1) A 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.
(2) A resource conservation district organized pursuant to
Division 9 (commencing with Section 9001) of the Public Resources
Code.
(3) A district organized or formed pursuant to the Metropolitan
Water District Act (Chapter 209 of the Statutes of 1969).
(4) A county water district organized under Division 12
(commencing with Section 30000) of the Water Code, that has more than
5,000 acres of mitigation lands.
(5) A special district formed pursuant to Chapter 2 (commencing
with Section 11561) of Division 6 of the Public Utilities Code that
provides water and wastewater treatment services.
(6) A district organized or formed pursuant to the County Water
Authority Act (Chapter 545 of the Statutes of 1943).
(7) A local flood control district formed pursuant to any law.
(m) "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 Chapter 6.6 (commencing
with Section 51070) of Part 1 of Division 1 of Title 5 of this code
or 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. Nothing in this chapter shall be construed as
otherwise precluding other methods of funding for the long-term
stewardship of the property. If an endowment is conveyed or secured
at the time the property is protected, all of the following shall
apply:
(1) The endowment shall be held, managed, invested, and disbursed
solely for, and permanently restricted to, the long-term stewardship
of the specific property for which the funds were set aside.
(2) The endowment shall be calculated to include a principal
amount that, when managed and invested, is reasonably anticipated to
cover the annual stewardship costs of the property in perpetuity.
(3) The endowment shall be held, managed, invested, disbursed, and
governed as described in subdivision (a) of Section 65965 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 nonprofit corporation holds the endowment, the nonprofit
shall utilize generally accepted accounting practices that are
promulgated by the Financial Accounting Standards Board or any
successor entity.
(d) If a local agency holds the endowment, the local agency shall
do all of the following:
(1) Hold, manage, and invest the endowment 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 or any
successor entity.
(e) (1) Unless the mitigation agreement provides that another
person or entity shall prepare the annual fiscal report described
below, a governmental entity, community foundation, special district,
a congressionally chartered foundation, or a nonprofit organization
that holds funds pursuant to this chapter, including an endowment or
moneys for initial stewardship costs, shall provide the local or
state agency that required the endowment with an annual fiscal report
that contains at least the following elements with respect to each
individual endowment dedicated and held by that entity:
(A) The balance of each individual endowment at the beginning of
the reporting period.
(B) The amount of any contribution to the endowment during the
reporting period including, but not limited to, gifts, grants, and
contributions received.
(C) The net amounts of investment earnings, gains, and losses
during the reporting period, including both realized and unrealized
amounts.
(D) The amounts distributed during the reporting period that
accomplish the purpose for which the endowment was established.
(E) The administrative expenses charged to the endowment from
internal or third-party sources during the reporting period.
(F) The balance of the endowment or other fund at the end of the
reporting period.
(G) The specific asset allocation percentages including, but not
limited to, cash, fixed income, equities, and alternative
investments.
(H) The most recent financial statements for the organization
audited by an independent auditor who is, at a minimum, a certified
public accountant.
(2) If an entity is required to submit an identical annual fiscal
report pursuant to paragraph (1) to the Department of Fish and
Game Wildlife and any other state or
local agency, then that report shall be provided only to the
Department of Fish and Game Wildlife .
In that instance, the Department of Fish and Game
Wildlife shall provide a copy of that annual fiscal report
on its Internet Web site for a minimum of five years.
(f) If a state agency authorizes a governmental entity, special
district, or nonprofit organization to hold property pursuant to
subdivision (a) or (b) of Section 65967 in connection with a
development project, the agency may require the project proponent to
pay a one-time fee that does not exceed the reasonable costs of the
agency in reviewing qualifications of potential holders of the
property and approving those holders. This one-time fee shall be
collected only if the agency can demonstrate its actual review of
qualifications and approval of holders.
(g) If a local agency authorizes a governmental entity, special
district, or nonprofit organization to hold property or an endowment
pursuant to this chapter, the agency may require the project
proponent to pay a one-time fee that does not exceed the reasonable
costs of the agency in reviewing qualifications of the parties
identified in the mitigation agreement, approving those parties, and
any regular oversight over those parties to ensure that the parties
are complying with all applicable laws. This one-time fee shall be
collected only if the agency can demonstrate its actual review of
qualifications, approval of parties, or regular oversight of
compliance and performance.
(h) 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.
(i) 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 subdivision (c) of Section
65967.
(2) Review the qualifications of a governmental entity, community
foundation, or nonprofit organization to hold and manage the
endowment that is 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.
(j) 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 endowment held for
the condemned property shall be held for the long-term stewardship of
the replacement property.
(k) 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.
(l) Nothing in this section shall prohibit a state agency from
exercising any powers described in subdivision (d), (g), or (h).
(m) A governmental entity, special district, or nonprofit
organization may contract with a community foundation or
congressionally chartered foundation at any time to hold, manage, and
invest the endowment for a mitigation property and disburse payments
from the endowment to the holder of the mitigation property
consistent with the fund agreement.
(n) Except as expressly authorized in paragraph (1) of subdivision
(e), the mitigation agreement shall not include any provision to
waive or exempt the parties from any requirement, in whole or part,
of this chapter.
(o) Subdivisions (b) to (e), inclusive, shall not apply to funds,
including funds from mitigation fees, held for the long-term
management and stewardship of property pursuant to either an interim
or approved habitat conservation plan pursuant to Chapter 35
(commencing with Section 1531) of Title 16 of the United States Code
or an interim or approved natural community conservation plan
pursuant to Chapter 10 (commencing with Section 2800) of Division 3
of the Fish and Game Code, if, in the interim or approved plan
documents, the permitting agency determines the endowment to be
established with those funds will be adequate and provides a schedule
for funding the endowment.
(p) (1) If a governmental entity or special district is the
project proponent required to provide long-term stewardship of
property pursuant to subdivision (b), an endowment or other financial
mechanism for long-term stewardship shall not be required if the
governmental entity or special district provides evidence to the
local or state agency that it possesses an investment-grade credit
rating by a nationally recognized statistical rating organization or
other equivalent evidence of financial reliability, and
provides one of the following:
(A) A resolution to fund the long-term stewardship of the property
adopted by the board or legislative body of the governmental entity
or special district.
(B) A
enters into a contractual agreement with the state or
local agency enforcing the mitigation requirements to fund the
long-term stewardship of the property.
property that includes all of the following:
(2) A resolution or contract provided pursuant to paragraph (1)
shall include all of the following:
(A) A summary of the governmental entity or special district's
current and projected financial state.
(B) A finding regarding a financial analysis conducted on annual
management costs.
(C) An annual pledge of revenue to cover the annual mitigation
requirements.
(D) An annual pledge of revenue to cover the annual management
costs.
(E) Use of accounting standards consistent with standards
promulgated by the Governmental Accounting Standards Board or its
successor entity.
(F) An annual fiscal report.
(G) An agreement to post collateral for performance of the
long-term stewardship in the form of a performance bond, escrow
account, casualty insurance, or letter of credit. The instrument
shall include, at a minimum, a contingency fund equivalent to five
years of long-term management costs for the mitigation lands.
(3)
(2) If the governmental entity or special district is
subsequently downgraded below an investment-grade credit
rating rating, as described in subdivision (h) of
Section 65965, by a nationally recognized statistical rating
organization or fails to maintain an equivalent standard of financial
reliability, the state or local agency enforcing the mitigation
requirement may provide written notice thereof and require the
governmental entity or special district to post collateral
for performance of the long-term stewardship in the form of a
performance bond, escrow account, casualty insurance, letter of
credit, or other appropriate instrument. The obligation to maintain
collateral shall end, and all unused collateral shall be canceled or
refunded, upon the governmental entity or special district providing
evidence of its return to an investment-grade credit rating by a
nationally recognized statistical rating organization or other
equivalent evidence of financial reliability. provide
an endowment for the long-term stewardship of the property.
(4)
(3) If the governmental entity or special district
fails to adequately fund the long-term stewardship by
revoking, failing to comply with, or otherwise rendering ineffective
the board resolution described in paragraph (1), or
or, after being provided written notice, fails to cure within
the remedy period set forth in the contractual agreement, the state
or local agency enforcing the mitigation requirement may, in addition
to any contractual remedies, require the governmental entity or
special district to post collateral for performance of the
long-term stewardship in the form of a performance bond, escrow
account, casualty insurance, letter of credit, or other appropriate
instrument. provide an endowment.
(4) (A) A participating governmental entity or special district
shall submit to the Department of Fish and Wildlife an annual report
of the governmental entity's or special district's accounts
receivables and discharged accounts.
(B) The Department of Fish and Wildlife shall inform the
governmental entity or special district, not less than 60 days before
the annual report is required to be submitted, of both of the
following:
(i) The format of the annual report.
(ii) The submission date for the annual report.
(5) This subdivision shall become inoperative on January 1, 2020,
unless a later enacted statute deletes or extends that date.
