Bill Text: CA SB436 | 2011-2012 | Regular Session | Amended
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Land use: mitigation lands: nonprofit organizations.
Spectrum: Partisan Bill (Democrat 4-0)
Status: (Passed) 2011-10-08 - Chaptered by Secretary of State. Chapter 590, Statutes of 2011. [SB436 Detail]
Download: California-2011-SB436-Amended.html
Bill Title: Land use: mitigation lands: nonprofit organizations.
Spectrum: Partisan Bill (Democrat 4-0)
Status: (Passed) 2011-10-08 - Chaptered by Secretary of State. Chapter 590, Statutes of 2011. [SB436 Detail]
Download: California-2011-SB436-Amended.html
BILL NUMBER: SB 436 AMENDED BILL TEXT AMENDED IN SENATE MAY 31, 2011 AMENDED IN SENATE MAY 2, 2011 AMENDED IN SENATE MARCH 24, 2011 INTRODUCED BY Senator Kehoe FEBRUARY 16, 2011 An act to amend, repeal, and add Section 65965 of the Government Code, relating to land use. LEGISLATIVE COUNSEL'S DIGEST SB 436, as amended, Kehoe. Land use: mitigation lands: nonprofit organizations. The Planning and Zoning Law authorizes a state or local public agency, if the agency requires a property owner to transfer to the agency an interest in real property to mitigate an adverse impact upon natural resources caused by permitting the development of a project or facility, to authorize a nonprofit organization to hold title to and manage that interest in real property, provided that the nonprofit organization meets specified requirements. This bill would, until January 1, 2022, authorize a state or local public agency to provide funds to a nonprofit organization to acquire land or easements that satisfy the agency's mitigation obligations, including funds that have been set aside for the long-term management of any lands or easements conveyed to a nonprofit organization if the nonprofit organization meets certain requirements. This bill would require a nonprofit organization that holds funds on behalf of the Department of Fish and Game for the long- term management of land to comply with certain requirements, including certification by the department, and oversight by the Controller. The bill would also state the findings and declarations of the Legislature with respect to the preservation of natural resources through such mitigation, and would state that it is in the best interest of the public to allow state and local public agencies and nonprofit organizations to utilize the tools and strategies they need for improving the effectiveness, cost efficiency, and durability of mitigation for California's natural resources. Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. The Legislature finds and declares all of the following: (a) State and local laws protect a variety of natural resources, and also require permits to be issued for the development of certain projects or facilities. (b) In furtherance of these laws, state or local public agencies may require a property owner to transfer an interest in real property to mitigate any adverse impact upon natural resources caused by permitting the development of a project or facility. (c) Funds may be simultaneously set aside for the long-term management of the property transferred for mitigation purposes. (d) Lands and real property interests transferred to achieve the mitigation may be held by nonprofit organizations. (e) Many state and local agencies work with nonprofit organizations in valuable and cost effective public-private partnerships to identify properties that meet the mitigation requirements and to hold and provide long-term management of the real property interests. (f) There are tools and strategies available for improving the effectiveness, cost efficiency, and durability of mitigation for California's natural resources. (g) Identifying mitigation needs on a regional basis may expedite the planning and mitigation processes, as well as result ultimately in consolidated mitigation areas that can be managed more cost-effectively. (h) It is in the interest of the public, project proponents, and local communities to ensure that the public benefits of mitigation are achieved. (i) It is in the best interest of the public to allow state and local public agencies and nonprofit organizations to utilize the tools and strategies they need for improving the effectiveness, cost efficiency, and durability of mitigation for California's natural resources. SEC. 2. Section 65965 of the Government Code is amended to read: 65965. (a) For the purposes of this section, the following definitions apply: (1) "Department" means the Department of Fish and Game.(1)(2) "Direct protection" means the protection and preservation of natural lands or resources, including, but not limited to, agricultural lands, wildlife habitat, wetlands, endangered species habitat, open-space areas, or outdoor recreational areas.(2)(3) "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. (b) Notwithstanding any other provision of law to the contrary, if a state or local public agency requires a property owner to transfer to the agency an interest in real property to mitigate any adverse impact upon natural resources caused by permitting the development of a project or facility, the state or local public agency may authorize a nonprofit organization to hold title to and manage that interest in real property, provided that the nonprofit organization is all of the following: (1) Exempt from taxation as an organization described in Section 501(c)(3) of the Internal Revenue Code, and qualified to do business in the state. (2) A "qualified organization" as defined in Section 170(h)(3) of the Internal Revenue Code. (3) An organization that has as its principal purpose and activity the direct protection or stewardship of natural land or resources, or cultural or historic resources, including, but not limited to, agricultural lands, wildlife habitat, wetlands, endangered species habitat, open-space areas, and outdoor recreational areas. (c) If a state or local public agency, in the development of its own project, is required to protect an interest in real property to mitigate an adverse impact upon natural resources, the agency may do either of the following: (1) Transfer the interest to a nonprofit organization that meets the requirements set forth in subdivision (b). (2) Provide funds to a nonprofit organization to acquire land or easements that satisfy the agency's mitigation obligations. (d) (1) Funds set aside for the long-term management of lands or easements conveyed to a nonprofit organization pursuant to subdivisions (b) and (c) may also be conveyed to the nonprofit organization , subject to the limitations in paragraph (2) . The nonprofit organization shall hold, manage, invest, and disburse the funds in furtherance of managing and stewarding the land or easement for which the funds were set aside. (2) (A) A nonprofit organization may not hold funds on behalf of the department for the long-term management of lands unless that nonprofit organization is certified by the department. The department shall adopt regulations for a process to certify nonprofit organizations to hold funds on behalf of the department for the long-term management of land. The department shall certify no more than 10 nonprofits to hold funds for the long-term management of mitigation lands under this section. (B) A nonprofit organization that holds funds on the behalf of the department for the long-term management of land shall be subject to oversight by the Controller. The Controller shall annually review independent audit statements, tax filings, or any other documents or reports the Controller determines necessary to verify the sound financial management of funds held by a nonprofit organization on behalf of the department for the long-term management of land. All costs incurred by the department or the Controller under this subdivision shall be reimbursed by the nonprofit organization. (e) (1) The state or local public agency may require the nonprofit organization to submit a report not more than every 12 months and for a specified number of years, that details the management and condition of the property or easement and the accompanying funds. The mitigation or funding agreement shall specify the reporting due dates and the elements of the report. (2) The funds of a nonprofit organization holding funds for the long-term management of property shall revert to the state or local public agency that required the mitigation if the nonprofit organization does any of the following: (A) Ceases operation. (B) Is dissolved. (C) Becomes bankrupt or insolvent. (D) Fails to perform its duties for any reason, as determined by the state or local public agency. (f) The recorded instrument that places title with a nonprofit organization pursuant to subdivision (b) shall include, at a minimum, a provision that if the state or local public agency that authorized the nonprofit organization to hold the title, or its successor agency, determines that the interest in real property that is held by the nonprofit organization is not being held, monitored, or managed for conservation purposes in the manner specified in that instrument or in the mitigation agreement between the state or local public agency and the nonprofit organization, the interest in real property shall revert to the state or that local public agency, or to another public agency or nonprofit organization qualified pursuant to subdivision (b), approved by the state or local public agency. (g) (1) A state or local public agency shall exercise due diligence in reviewing the qualifications of a nonprofit organization to effectively manage and steward natural land or resources, as well as the accompanying funds. The state or local public agency may adopt guidelines to assist the agency in that review process, which may include guidelines or standards established by a qualified entity. (2) The state or local public agency shall determine that the holder of accompanying funds meets all of the following requirements: (A) The holder has the capacity to effectively manage the mitigation funds. (B) The holder has the capacity to achieve reasonable rates of return on investment of those funds similar to those of other prudent investors over the life of the agreement. (C) The holder utilizes generally accepted accounting practices, and will be able to ensure that funds are accounted for, and tied to, a specific property or project. (D) The holder has an adopted investment policy that is consistent with the Uniform Management of Institutional Funds Act (Part 7 (commencing with Section 18501) of Division 9 of the Probate Code) with regard to endowment funds and that is consistent with Sections 18505 and 18506 of the Probate Code with regard to nonendowment funds. (3) The department may contract with the Controller to provide fiscal expertise for the evaluation of nonprofit organizations that hold funds on behalf of the department for the long-term management of mitigation lands. (h) The state or local public agency may contract with or designate an independent third party to do any of the following: (1) Review the qualifications of a nonprofit organization to effectively manage and steward natural land or resources. (2) Review the qualifications of a nonprofit organization to hold and manage the funds set aside for long-term management associated with the property. (3) Determine whether the holder of the funds meets the requirements set forth in paragraph (2) of subdivision (f). (4) Review reports or other performance indicators to evaluate the management of lands, resources, or funds. (i) (1) If a state or local agency authorizes nonprofit organizations to hold lands or natural resources created for mitigation purposes, the state or local agency may require an administrative endowment from the project proponent for costs associated with reviewing qualifications, approving holders, and regular oversight of compliance and performance. (2) The state or local public agency may also require project proponents to provide a separate account that will provide for initial management costs while the endowment matures. (j) This section shall not apply retroactively to endowment funds held by the state in the Pooled Money Investment Account as of January 1, 2012. (k) A property that has been previously protected for conservation purposes, including the placement of a conservation easement on the property, may not be used for mitigation purposes. (l) This section is not intended to interfere with or prevent the existing authority of an agency or department to carry out its programs, projects, or responsibilities to identify, review, approve, deny, or implement any mitigation requirements, and nothing in this section shall be construed as a limitation on mitigation requirements for the project, or a limitation on compliance with requirements under this division or any other provision of law. (m) This section shall remain in effect only until January 1, 2022, and as of that date is repealed, unless a later enacted statute, which is enacted before January 1, 2022, deletes or extends that date. SEC. 3. Section 65965 is added to the Government Code, to read: 65965. (a) For the purposes of this section, the following definitions apply: (1) "Direct protection" means the protection and preservation of natural lands or resources, including, but not limited to, agricultural lands, wildlife habitat, wetlands, endangered species habitat, open-space areas, or outdoor recreational areas. (2) "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. (b) Notwithstanding any other provision of law to the contrary, if a state or local public agency requires a property owner to transfer to the agency an interest in real property to mitigate any adverse impact upon natural resources caused by permitting the development of a project or facility, the state or local public agency may authorize a nonprofit organization to hold title to and manage that interest in real property, provided that the nonprofit organization is all of the following: (1) Exempt from taxation as an organization described in Section 501(c)(3) of the Internal Revenue Code, and qualified to do business in the state. (2) A "qualified organization" as defined in Section 170(h)(3) of the Internal Revenue Code. (3) An organization that has as its principal purpose and activity the direct protection or stewardship of natural land or resources, or cultural or historic resources, including, but not limited to, agricultural lands, wildlife habitat, wetlands, endangered species habitat, open-space areas, and outdoor recreational areas. (c) If a state or local public agency, in the development of its own project, is required to transfer an interest in real property to mitigate an adverse impact upon natural resources, the agency may transfer the interest to a nonprofit organization that meets the requirements set forth in paragraphs (1) to (3), inclusive, of subdivision (b). (d) The recorded instrument that places title with a nonprofit organization pursuant to subdivision (b) shall include, at a minimum, a provision that if the state or local public agency that authorized the nonprofit organization to hold the title, or its successor agency, determines that the interest in real property that is held by the nonprofit organization is not being held, monitored, or managed for conservation purposes in the manner specified in that instrument or in the mitigation agreement between the state or local public agency and the nonprofit organization, the interest in real property shall revert to the state or that local public agency, or to another public agency or nonprofit organization qualified pursuant to subdivision (b), approved by the state or local public agency. (e) A state or local public agency shall exercise due diligence in reviewing the qualifications of a nonprofit organization to effectively manage and steward natural land or resources. The state or local public agency may adopt guidelines to assist the agency in that review process. (f) This section shall become operative on January 1, 2022.