Existing law, the Humboldt Bay Harbor, Recreation, and Conservation District Act, regulates the use of specified tide and submerged lands within Humboldt Bay and provides for the fill, improvement, and reclamation of those tidelands, as prescribed. The act further requires that all grants, franchises, leases, permits, rights, or privileges be made in accordance with those rules and regulations as the board of commissioners of the district prescribes by resolution, and prohibits irrevocable grants of fee title from being granted or issued.

This bill would eliminate that provision prohibiting irrevocable grants of fee title, thereby authorizing these grants subject to the other provisions of the act.

The act authorizes the district to acquire, hold and enjoy, and lease and dispose of real and personal property of every kind, within the district, necessary to the full or convenient exercise of its powers. The act requires that all money received or collected by the district be deposited in the Humboldt Bay Harbor, Recreation, and Conservation District Fund, and prohibits money in the fund from being appropriated or used for any purpose except those purposes enumerated in the act.

This bill would prohibit the district from making an expenditure of trust moneys from the fund to purchase or otherwise acquire any real property without first having provided at least 90 days written notice, containing specified information, of the proposed expenditure to the State Lands Commission. The bill would authorize the district to proceed with the purchase or acquisition if the commission does not object within 90 days of the commissions receipt of the notice. The bill would also require the district to give the commission at least 90 days written notice, containing specified information, of a proposed disposition of any interest in real property held in trust by the district.

Existing law, the Humboldt Bay Harbor, Recreation, and Conservation District Act, regulates the use of specified tide and submerged lands within Humboldt Bay and provides for the fill, improvement, and reclamation of those tidelands, as prescribed. The act further requires that all grants, franchises, leases, permits, rights, or privileges be made in accordance with those rules and regulations as the board of commissioners of the district prescribes by resolution, and prohibits irrevocable grants of fee title from being granted or issued.

This bill would eliminate that provision prohibiting irrevocable grants of fee title, thereby authorizing these grants subject to the other provisions of the act.

The act authorizes the district to acquire, hold and enjoy, and lease and dispose of real and personal property of every kind, within the district, necessary to the full or convenient exercise of its powers. The act requires that all money received or collected by the district be deposited in the Humboldt Bay Harbor, Recreation, and Conservation District Fund, and prohibits money in the fund from being appropriated or used for any purpose except those purposes enumerated in the act.

This bill would prohibit the district from making an expenditure of trust moneys from the fund to purchase or otherwise acquire any real property without first having provided at least 90 days written notice, containing specified information, of the proposed expenditure to the State Lands Commission. The bill would authorize the district to proceed with the purchase or acquisition if the commission does not object within 90 days of the commissions receipt of the notice. The bill would also require the district to give the commission at least 90 days written notice, containing specified information, of a proposed disposition of any interest in real property held in trust by the district.

Existing law, the Humboldt Bay Harbor, Recreation, and Conservation District Act regulates the use of specified tide and submerged lands within Humboldt Bay and provides for the fill, improvement, and reclamation of those tidelands, as prescribed. The act further requires that all grants, franchises, leases, permits, rights or privileges be made in accordance with those rules and regulations as the board of commissioners of the district prescribes by resolution, and prohibits irrevocable grants of fee title from being granted or issued.

This bill would eliminate that provision prohibiting irrevocable grants of fee title, thereby authorizing these grants subject to the other provisions of the act.

The act authorizes the district to acquire, hold and enjoy, and lease and dispose of real and personal property of every kind, within the district, necessary to the full or convenient exercise of its powers. The act requires that all money received or collected by the district be deposited in the Humboldt Bay Harbor, Recreation, and Conservation District Fund, and prohibits money in the fund from being appropriated or used for any purpose except those purposes enumerated in the act.

This bill would prohibit the district from making an expenditure of trust moneys from the fund to purchase or otherwise acquire any real property without the prior written approval of first having provided at least 90 days written notice, containing specified information, of the proposed expenditure to the State Lands Commission. The bill would require the district to provide the commission with 90 days written notice of the proposed purchase or acquisition of real property, containing specified information, and would provide that the commission shall have 90 days after receipt of the written notice to approve the proposed expenditure. This bill would authorize the district to proceed with the purchase or acquisition if the commission does not object within 90 days of the commissions receipt of the notice. The bill would also require the district to give the commission at least 90 days written notice notice, containing specified information, of a proposed disposition of any interest in real property held in trust by the district.

Existing law, the Humboldt Bay Harbor, Recreation, and Conservation District Act regulates the use of specified tide and submerged lands within Humboldt Bay and provides for the fill, improvement, and reclamation of those tidelands, as prescribed. The act further requires that all grants, franchises, leases, permits, rights or privileges be made in accordance with those rules and regulations as the board of commissioners of the district prescribes by resolution, and prohibits irrevocable grants of fee title from being granted or issued.

This bill would eliminate that provision prohibiting irrevocable grants of fee title, thereby authorizing these grants subject to the other provisions of the act.

The act authorizes the district to acquire, hold and enjoy, and lease and dispose of real and personal property of every kind, within the district, necessary to the full or convenient exercise of its powers. The act requires that all money received or collected by the district be deposited in the Humboldt Bay Harbor, Recreation, and Conservation District Fund, and prohibits money in the fund from being appropriated or used for any purpose except those purposes enumerated in the act.

Existing law, the Humboldt Bay Harbor, Recreation, and Conservation District Act regulates the use of specified tide and submerged lands within Humboldt Bay and provides for the fill, improvement, and reclamation of those tidelands, as prescribed. The act further requires that all grants, franchises, leases, permits, rights or privileges be made in accordance with those rules and regulations as the board of commissioners of the district prescribes by resolution, and prohibits irrevocable grants of fee title from being granted or issued.

This bill would eliminate that provision prohibiting irrevocable grants of fee title, thereby authorizing these grants subject to the other provisions of the act.

UNFINISHED BUSINESS  

Bill No: SB 141

Author: McGuire (D), et al.

Amended: 6/22/15

Vote: 21

SENATE NATURAL RES. & WATER COMMITTEE: 9-0, 3/24/15

AYES: Pavley, Stone, Allen, Fuller, Hertzberg, Hueso, Jackson, Monning, Wolk

SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8

SENATE FLOOR: 38-0, 5/22/15 (Consent)

AYES: Allen, Anderson, Bates, Beall, Berryhill, Block, Cannella, De León, Gaines, Galgiani, Hall, Hancock, Hernandez, Hertzberg, Hill, Hueso, Huff, Jackson, Lara, Leno, Leyva, Liu, McGuire, Mendoza, Mitchell, Monning, Moorlach, Morrell, Nguyen, Nielsen, Pan, Pavley, Roth, Runner, Stone, Vidak, Wieckowski, Wolk

NO VOTE RECORDED: Fuller

ASSEMBLY FLOOR: 54-25, 8/17/15 - See last page for vote

SUBJECT: Humboldt Bay Harbor, Recreation, and Conservation District Act: land grants, acquisitions, and dispositions

SOURCE: Author

DIGEST: This bill clarifies that the Humboldt Bay Harbor, Recreation & Conservation District (District) is authorized to sell or transfer certain property, and makes several other changes to the District's Act.

Assembly Amendments allow the District to proceed with a purchase or acquisition of real property within 90 days of providing notice to the State Lands Commission (SLC) of an intended purchase if the SLC does not object.

ANALYSIS:

Existing law:

1. Establishes the District under the Humboldt Bay Harbor, Recreation, and Conservation District Act. The Act:

1. Regulates the use of specified tide and submerged lands within Humboldt Bay and provides for the fill, improvement, and reclamation of those tidelands, as prescribed.

2. Requires that all grants, franchises, leases, permits, rights or privileges be made in accordance with those rules and regulations as the board of commissioners of the District prescribes by resolution, and prohibits irrevocable grants of fee title from being granted or issued.

3. Authorizes the District to acquire, hold and enjoy, and lease and dispose of real and personal property of every kind, within the district, necessary to the full or convenient exercise of its powers.

This bill enacts several changes to the District's Act, including the following:

1. Deletes language requiring that irrevocable grants of fee title be granted or issued, thereby deleting an inconsistency in the District's Act;

2. Clarifies the responsibilities of the chief executive officer and the Treasurer of the District;

3. Prohibits the District from making an expenditure of trust moneys from the Humboldt Bay, Harbor, Recreation, and Conservation District Fund (Fund) to purchase or otherwise acquire real property without first having provided at least 90 days' written notice of the proposed expenditure to the SLC;

4. Requires the notice to include the total amount of the proposed expenditure from the Fund, the location of the real property, the purpose of the purchase or acquisition, and an explanation of how the purchase or acquisition is consistent with the terms of the trust grant;

5. Provides, in the event that the SLC does not object within 90 days of receipt of the notice, the District, may proceed with the purchase or acquisition; and,

6. Requires the District to give the SLC at least 90 days' written notice of a proposed disposition of any interest in real property if the interest was acquired by the District with revenue generated from the granted lands, and requires the notice to include the proposed consideration to be received by the District, the location of the real property, and the purpose of the disposal.

Background

The District is a trustee of sovereign lands granted to it by the Legislature in the 1970s. These lands are considered "granted lands" by the SLC which maintains oversight authority. The District is governed by the specific granting statute(s), the common law Public Trust Doctrine and other applicable law.

Revenues generated by a trustee arising out of the use or operation of its granted lands are public trust assets of the state and must be reinvested back into the trust. These revenues must be kept separate from the general funds of a local government and may not be used for any purpose unconnected with the trust. Expenditures of trust funds by a trustee must be consistent with the common law Public Trust Doctrine and the statutory trust grant.

While granted public trust lands and assets are managed locally, the Legislature delegated the state’s residual and review authority for granted lands to the SLC. The SLC is responsible for monitoring administration of each statutory grant by the trustee to ensure compliance with provisions of the granting statute and the Public Trust Doctrine. The SLC has the authority to investigate, audit, and review the administration of all statutory trust grants. The SLC also has the authority to investigate specific allegations of maladministration, to seek corrective measures by trustees, and make recommendations to the Legislature; the ultimate trustee of public trust lands.

In the course of conducting a review of a mismanagement allegation against the District (which the SLC did not find), SLC staff discovered an ambiguity in the granting statutes relative to the District’s authority to dispose of property acquired after the initial grant ("after-acquired property"). Existing law bars any grantee from transferring, selling or otherwise alienating sovereign tide and submerged lands. However, the statute governing the District restricts its ability to dispose of any lands ("Irrevocable grants of fee title shall not be granted or issued." (see Section 23, c. 1040, Statutes of 1976)).

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

According to the Assembly Appropriations Committee, the state fiscal impact of this bill is negligible.

SUPPORT: (Verified 8/19/15)

Board of Commissioners of the Humboldt Bay Harbor Recreation and Conservation District

Humboldt County Board of Supervisors

State Lands Commission

OPPOSITION: (Verified 8/19/15)

None received

ARGUMENTS IN SUPPORT: According to the State Lands Commission, “SB 141 eliminates the prohibition on transferring irrevocable grants of fee title as it related to after-acquired lands. Eliminating this restriction is intended to provide helpful clarification and assist the District in managing trust assets of the state. This clarification is beneficial to the District and to the state because the sale of after-acquired lands provides funds that the District can reinvest into administering and improving its trust lands within Humboldt Bay for the statewide public’s use and enjoyment.”

ASSEMBLY FLOOR: 54-25, 8/17/15

AYES: Achadjian, Alejo, Bloom, Bonilla, Bonta, Brown, Burke, Calderon, Campos, Chau, Chiu, Chu, Cooley, Cooper, Dababneh, Daly, Dodd, Eggman, Frazier, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Roger Hernández, Holden, Irwin, Jones-Sawyer, Levine, Lopez, Low, Maienschein, McCarty, Medina, Mullin, Nazarian, O'Donnell, Perea, Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago, Mark Stone, Thurmond, Ting, Weber, Williams, Wood, Atkins

NOES: Travis Allen, Baker, Bigelow, Brough, Chang, Chávez, Dahle, Gallagher, Grove, Hadley, Harper, Jones, Kim, Lackey, Linder, Mathis, Mayes, Melendez, Obernolte, Olsen, Patterson, Steinorth, Wagner, Waldron, Wilk

NO VOTE RECORDED: Beth Gaines

Prepared by: Angee Doerr / N.R. & W. / (916) 651-4116

8/19/15 21:10:57

**** END ****

SENATE THIRD READING

STR Bill Id:SB 141

Author:(McGuire)

As Amended Ver:June 22, 2015

Majority vote

SENATE VOTE: 38-0

SUMMARY: Clarifies that the Humboldt Bay Harbor, Recreation, and Conservation District (District) is authorized to sell or transfer certain property, and makes several other changes to the District's Act. Specifically, this bill:

1. Enacts several changes to the District's Act, including the following:

   1. Deletes language requiring that irrevocable grants of fee title be granted or issued, thereby deleting an inconsistency in the District's Act;

   2. Clarifies the responsibilities of the chief executive officer (CEO) and the Treasurer of the District;

   3. Prohibits the District from making an expenditure of trust moneys from the Humboldt Bay, Harbor, Recreation, and Conservation District Fund (Fund) to purchase or otherwise acquire real property without first having provided at least 90 days' written notice of the proposed expenditure to the State Lands Commission (SLC);

   4. Requires the notice to include the total amount of the proposed expenditure from the Fund, the location of the real property, the purpose of the purchase or acquisition, and an explanation of how the purchase or acquisition is consistent with the terms of the trust grant;

   5. Provides, in the event that the SLC does not object within 90 days of receipt of the notice, the District, may proceed with the purchase or acquisition; and,

   6. Requires the District to give the SLC at least 90 days' written notice of a proposed disposition of any interest in real property if the interest was acquired by the District with revenue generated from the granted lands, and requires the notice to include the proposed consideration to be received by the District, the location of the real property, and the purpose of the disposal.

FISCAL EFFECT: According to the Assembly Appropriations Committee, negligible state impact.

COMMENTS:

1. Bill Summary. This bill clarifies that the District is authorized to sell or transfer certain property, and makes several other changes to the District's Act. This bill is sponsored by the SLC.

2. Background. The District is a trustee of sovereign lands granted to it by the Legislature in the 1970s. These lands are considered "granted lands" by the SLC which maintains oversight authority. The District is governed by the specific granting statute(s), the common law Public Trust Doctrine and other applicable law.

Revenues generated by a trustee arising out of the use or operation of its granted lands are public trust assets of the state and must be reinvested back into the trust. These revenues must be kept separate from the general funds of a local government and may not be used for any purpose unconnected with the trust. Expenditures of trust funds by a trustee must be consistent with the common law Public Trust Doctrine and the statutory trust grant.

While granted public trust lands and assets are managed locally, the Legislature delegated the state’s residual and review authority for granted lands to the SLC. The SLC is responsible for monitoring administration of each statutory grant by the trustee to ensure compliance with provisions of the granting statute and the Public Trust Doctrine. The SLC has the authority to investigate, audit, and review the administration of all statutory trust grants. The SLC also has the authority to investigate specific allegations of maladministration, to seek corrective measures by trustees, and make recommendations to the Legislature; the ultimate trustee of public trust lands.

In the course of conducting a review of a mismanagement allegation against the District (which the SLC did not find), SLC staff discovered an ambiguity in the granting statutes relative to the District’s authority to dispose of property acquired after the initial grant ("after-acquired property"). Existing law bars any grantee from transferring, selling or otherwise alienating sovereign tide and submerged lands. However, the statute governing the District restricts its ability to dispose of any lands ("Irrevocable grants of fee title shall not be granted or issued." (see Section 23, c. 1040, Statutes of 1976)).

3. Author's Statement. According to the author, "The Humboldt Bay Harbor, Recreation and Conservation District (District) is trustee of lands granted to it by the Legislature when California became a state. SB 141 seeks to clarify that the District is authorized to sell or transfer property that has been acquired or deeded to it since the original land grant.

"California acquired ownership of submerged lands, tidelands and waterways (sovereign lands) in 1850, and made the District the trustee for these lands. The District and state manage these lands for the benefit of the public for the use of aquaculture such as oysters and clams, fisheries, navigation, visitor-serving facilities, water related recreation, open space and habitat preservation. The state constitution prevents these lands from being sold, and the District is not looking to sell any of these lands.

"In 1970, the Legislature passed a law (Chapter 1283, Statutes of 1970, Section 28) that authorized the District to acquire and dispose of other property, referred to as 'after acquired lands.' While the 1970 law intended to give the District permission to buy, own and sell 'after acquired lands' (non-sovereign lands), it appears that was not written precisely enough to allow the District to actually sell these lands.

"SB 141 simply deletes this prohibition relating to the transfer of irrevocable grants of fee title, specific to after acquired lands. This solution was suggested by the State Lands Commission. By eliminating this restriction it will provide much needed clarification of the District’s ability to manage lands it is entrusted to oversee by the state. This is necessary so that the District can dispose of after-acquired lands. The funds can then be used by the District to reinvest into improving and administering its trust lands within the Humboldt Bay Harbor, Recreation, and Conservation District for the public’s benefit, use and enjoyment."

4. Arguments in Support. Supporters argue that the District's Act has a vague provision that has the potential to restrict the District's ability to sell or transfer after-acquired property, which is typically allowed because these lands do not have the restrictions on alienation that exist with sovereign tide and submerged lands, and that this bill eliminates the prohibition on transferring irrevocable grants of fee title as it related to after-acquired lands.

5. Arguments in Opposition. None on file.

Analysis Prepared by: Debbie Michel / L. GOV. / (916) 319-3958 FN: 0001263

Date of Hearing: July 15, 2015

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Jimmy Gomez, Chair

SBPCA Bill Id:SB 141

Author:(McGuire) – As Amended Ver:June 22, 2015

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY: This bill clarifies that the Humboldt Bay Harbor, Recreation, and Conservation District (District) is authorized to sell or transfer certain property, and makes several other changes to the District's Act. Specifically, this bill:

1. Deletes the provision prohibiting irrevocable grants of fee title be granted or issued.

2. Clarifies the responsibilities of the chief executive officer (CEO) and the Treasurer of the District.

3. Prohibits the District from making an expenditure of trust moneys from the Humboldt Bay, Harbor, Recreation, and Conservation District Fund (Fund) to purchase or otherwise acquire real property without first having provided at least 90 days' written notice of the proposed expenditure to the State Lands Commission (SLC);

FISCAL EFFECT:

Negligible state fiscal impact.

COMMENTS:

1. Purpose. According to the State Lands Commission (SLC), sponsor of the bill, “SB 141 eliminates the prohibition on transferring irrevocable grants of fee title as it related to after-acquired lands. Eliminating this restriction is intended to provide helpful clarification and assist the District in managing trust assets of the state. This clarification is beneficial to the District and to the state because the sale of after-acquired lands provides funds that the District can reinvest into administering and improving its trust lands within Humboldt Bay for the statewide public’s use and enjoyment.”

2. Background. The District is a trustee of sovereign lands granted to it by the Legislature in the 1970s. These lands are considered “granted lands” by the SLC which maintains oversight authority. The District is governed by the specific granting statute(s), the common law Public Trust Doctrine, and other applicable law.

While granted public trust lands and assets are managed locally, the Legislature delegated the state’s residual and review authority for granted lands to the SLC.   The SLC is responsible for monitoring and administration of each statutory grant by the trustee to ensure compliance with provisions of the granting statute and the Public Trust Doctrine.

The SLC has the authority to investigate, audit, and review the administration of all statutory trust grants. The SLC also has the authority to investigate specific allegations of maladministration, to seek corrective measures by trustees, and make recommendations to the Legislature.

In the course of conducting a review, SLC staff discovered an ambiguity in the granting statutes relative to the District’s authority to dispose of property acquired after the initial grant (“after-acquired property”). This bill corrects that inconsistency.

3. Prior Legislation. AB 1943 (Chesbro), Chapter 891, Statutes of 2014, revised the statutory obligation for the City of Eureka to remit certain funds to the state related to tidelands and submerged lands located in Humboldt Bay that were granted to the City in the 1970s.

Analysis Prepared by: Jennifer Swenson / APPR. / (916) 319-2081

Date of Hearing: July 1, 2015

ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT

Brian Maienschein, Chair

SBPCA Bill Id:SB 141

Author:(McGuire) – As Amended Ver:June 22, 2015

SENATE VOTE: 38-0

SUBJECT: Humboldt Bay Harbor, Recreation, and Conservation District Act: land grants, acquisitions, and dispositions.

SUMMARY: Clarifies that the Humboldt Bay Harbor, Recreation, and Conservation District (District) is authorized to sell or transfer certain property, and makes several other changes to the District's Act. Specifically, this bill:

1. Enacts several changes to the District's Act, including the following:

   1. Deletes language requiring that irrevocable grants of fee title be granted or issued, thereby deleting an inconsistency in the District's Act;

   2. Clarifies the responsibilities of the chief executive officer (CEO) and the Treasurer of the District;

   3. Prohibits the District from making an expenditure of trust moneys from the Humboldt Bay, Harbor, Recreation, and Conservation District Fund (Fund) to purchase or otherwise acquire real property without first having provided at least 90 days' written notice of the proposed expenditure to the State Lands Commission (SLC);

   4. Requires the notice to include the total amount of the proposed expenditure from the Fund, the location of the real property, the purpose of the purchase or acquisition, and an explanation of how the purchase or acquisition is consistent with the terms of the trust grant;

   5. Provides, in the event that the SLC does not object within 90 days of receipt of the notice, the District, may proceed with the purchase or acquisition; and,

   6. Requires the District to give the SLC at least 90 days' written notice of a proposed disposition of any interest in real property if the interest was acquired by the District with revenue generated from the granted lands, and requires the notice to include the proposed consideration to be received by the District, the location of the real property, and the purpose of the disposal.

EXISTING LAW:

1. Establishes the District, and provides, through the District's Act, for the District's powers and authority, the territory of the District, the jurisdiction of the District, the conduct of the District's hearings, election of the Board of Commissioners (Board), and the powers and duties of the Board and of the District.

2. Requires, for the District, that all grants, franchises, leases, permits, rights, or privileges must be made in accordance with such rules and regulations as the Board shall prescribe by resolution, and requires irrevocable grants of fee title to be granted or issued.

3. Allows the Board to employ engineers, attorneys and any other officers and employees necessary in the work of the District.

4. Requires the CEO to appoint a treasurer whose duty it shall be to receive and safely keep all moneys of the District, and requires the CEO to comply with all provisions of law governing the deposit and securing of public funds. Requires the CEO to pay out moneys only as authorized by the Board and not otherwise, provided, however, that no authorization shall be necessary for the payment of principal and interest on bonds of the District. Requires the CEO, at regular intervals, at least once each month, to submit to the secretary of the District a written report and accounting of all receipts and disbursements and fund balances, a copy of which report the CEO shall file with the Board. Requires the treasurer to execute a bond covering the faithful performance by him of the duties of his office and his duties with respect to all moneys coming into his hands as treasurer in such an amount as shall be fixed by resolution of said Board. Requires the surety bond to be executed only by a surety company authorized to do business in California and the premium therefor to be paid by the District. Requires the bond to be approved by the Board and filed with the secretary of the District. Requires the treasurer, before entering upon the duties of the office, to take and file with the secretary of the District the oath of office required by the California Constitution.

5. Allows the District to take by grant, purchase, gift, devise, lease or otherwise acquire, hold and enjoy and lease and dispose of real and personal property of every kind, within the District, necessary to the full or convenient exercise of its powers.

FISCAL EFFECT: According to the Senate Appropriations Committee, pursuant to Senate Rule 28.8, this bill contains negligible state costs.

COMMENTS:

1. Bill Summary. This bill clarifies that the District is authorized to sell or transfer certain property, and makes several other changes to the District's Act. This bill is sponsored by the SLC.

2. Background. The District is a trustee of sovereign lands granted to it by the Legislature in the 1970s. These lands are considered “granted lands” by the SLC which maintains oversight authority. The District is governed by the specific granting statute(s), the common law Public Trust Doctrine and other applicable law.

Revenues generated by a trustee arising out of the use or operation of its granted lands are public trust assets of the state and must be reinvested back into the trust. These revenues must be kept separate from the general funds of a local government and may not be used for any purpose unconnected with the trust.   Expenditures of trust funds by a trustee must be consistent with the common law Public Trust Doctrine and the statutory trust grant.

While granted public trust lands and assets are managed locally, the Legislature delegated the state’s residual and review authority for granted lands to the SLC.   The SLC is responsible for monitoring administration of each statutory grant by the trustee to ensure compliance with provisions of the granting statute and the Public Trust Doctrine. The SLC has the authority to investigate, audit, and review the administration of all statutory trust grants. The SLC also has the authority to investigate specific allegations of maladministration, to seek corrective measures by trustees, and make recommendations to the Legislature; the ultimate trustee of public trust lands.

In the course of conducting a review of a mismanagement allegation against the District (which the SLC did not find), SLC staff discovered an ambiguity in the granting statutes relative to the District’s authority to dispose of property acquired after the initial grant (“after-acquired property”). Existing law bars any grantee from transferring, selling or otherwise alienating sovereign tide and submerged lands. However, the statute governing the District restricts its ability to dispose of any lands (“Irrevocable grants of fee title shall not be granted or issued.” (see §23, c. 1040, Statutes of 1976)).

3. Author's Statement. According to the author, "The Humboldt Bay Harbor, Recreation and Conservation District (District) is trustee of lands granted to it by the Legislature when California became a state. SB 141 seeks to clarify that the District is authorized to sell or transfer property that has been acquired or deeded to it since the original land grant.

"California acquired ownership of submerged lands, tidelands and waterways (sovereign lands) in 1850, and made the District the trustee for these lands. The District and state manage these lands for the benefit of the public for the use of aquaculture such as oysters and clams, fisheries, navigation, visitor-serving facilities, water related recreation, open space and habitat preservation. The state constitution prevents these lands from being sold, and the District is not looking to sell any of these lands.

"In 1970, the Legislature passed a law (Chapter 1283, Statutes of 1970, Section 28) that authorized the District to acquire and dispose of other property, referred to as “after acquired lands.” While the 1970 law intended to give the District permission to buy, own and sell “after acquired lands” (non-sovereign lands), it appears that was not written precisely enough to allow the District to actually sell these lands.

"SB 141 simply deletes this prohibition relating to the transfer of irrevocable grants of fee title, specific to after acquired lands. This solution was suggested by the State Lands Commission. By eliminating this restriction it will provide much needed clarification of the District’s ability to manage lands it is entrusted to oversee by the state. This is necessary so that the District can dispose of after-acquired lands. The funds can then be used by the District to reinvest into improving and administering its trust lands within the Humboldt Bay Harbor, Recreation, and Conservation District for the public’s benefit, use and enjoyment."

4. Arguments in Support. Supporters argue that the District's Act has a vague provision that has the potential to restrict the District's ability to sell or transfer after-acquired property, which is typically allowed because these lands do not have the restrictions on alienation that exist with sovereign tide and submerged lands, and that this bill eliminates the prohibition on transferring irrevocable grants of fee title as it related to after-acquired lands.

5. Arguments in Opposition. None on file.

REGISTERED SUPPORT / OPPOSITION:

Support

State Lands Commission [SPONSOR]

California Special Districts Association

Humboldt Bay Harbor, Recreation, and Conservation District

Humboldt County Board of Supervisors

Opposition

None on file

Analysis Prepared by: Debbie Michel / L. GOV. / (916) 319-3958

 CONSENT  

Bill No: SB 141

Author: McGuire (D), et al.

Amended: 5/13/15

Vote: 21

SENATE NATURAL RES. & WATER COMMITTEE: 9-0, 3/24/15

AYES: Pavley, Stone, Allen, Fuller, Hertzberg, Hueso, Jackson, Monning, Wolk

SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8

SUBJECT: Humboldt Bay Harbor, Recreation, and Conservation District Act: land grants, acquisitions, and dispositions

SOURCE: Author

DIGEST: This bill (1) clarifies the Humboldt Bay Harbor, Recreation, and Conservation District’s (District) ability to dispose of after-acquired property, (2) clarifies the responsibility of the Chief Executive Officer and Treasurer of the board of commissioners of the District; and (3) requires the District to provide the State Lands Commission (Commission) 90 days written notice prior to expending trust moneys for the acquisition of real property and prior to the disposition of interest in real property.

ANALYSIS:

Existing law, under the Humboldt Bay Harbor, Recreation, and Conservation District Act:

1. Regulates the use of specified tide and submerged lands within Humboldt Bay and provides for the fill, improvement, and reclamation of those tidelands, as prescribed.

2. Requires that all grants, franchises, leases, permits, rights or privileges be made in accordance with those rules and regulations as the board of commissioners of the District prescribes by resolution, and prohibits irrevocable grants of fee title from being granted or issued.

3. Authorizes the District to acquire, hold and enjoy, and lease and dispose of real and personal property of every kind, within the district, necessary to the full or convenient exercise of its powers.

This bill:

1. Eliminates the ambiguity in the District’s granting statutes and thus allows the District to dispose of after-acquired property by striking the sentence of its granting statutes.

2. Clarifies the responsibility of the Chief Executive Officer and Treasurer of the board of commissioners of the District.

3. Requires the District to provide the Commission 90 days written notice prior to expending trust moneys for the acquisition of real property and prior to the disposition of interest in real property. The Commission will have 90 days following the notice of intent to acquire real property with trust moneys to review and approve the acquisition.

Background

1. The District is a trustee of sovereign lands granted to it by the Legislature in the 1970s. These lands are considered “granted lands” by the Commission, which maintains oversight authority. The District is governed by the specific granting statute(s), the common law Public Trust Doctrine and other applicable law.

2. Revenues generated by a trustee arising out of the use or operation of its granted lands are public trust assets of the State and must be reinvested back into the trust. These revenues must be kept separate from the general funds of a local government and may not be used for any purpose unconnected with the trust. Expenditures of trust funds by a trustee must be consistent with the common law Public Trust Doctrine and the statutory trust grant.

3. While granted public trust lands and assets are managed locally, the Legislature delegated the State’s residual and review authority for granted lands to the Commission. The Commission is responsible for monitoring administration of each statutory grant by the trustee to ensure compliance with provisions of the granting statute and the Public Trust Doctrine. The Commission has the authority to investigate, audit, and review the administration of all statutory trust grants. The Commission also has the authority to investigate specific allegations of maladministration, to seek corrective measures by trustees, and make recommendations to the Legislature; the ultimate trustee of public trust lands.

4. In the course of conducting a review of a mismanagement allegation against the District (which the Commission did not find), Commission staff discovered an ambiguity in the granting statutes relative to the District’s authority to dispose of property acquired after the initial grant (“after-acquired property”). Existing law bars any grantee from transferring, selling or otherwise alienating sovereign tide and submerged lands. However, the statute governing the District restricts its ability to dispose of any lands (“Irrevocable grants of fee title shall not be granted or issued.” (see §23, Chapter 1040, Statutes of 1976)).

Comments

Stringent restrictions remain on the District. The District is still restricted in its purchasing and sale of land, particularly in regards to Public Trust property, by the remainder of its granting document, as well as by other existing law.

In particular (from Chapter 1283 of the Statutes of 1970):

• SEC. 28. The district may take by grant, purchase, gift, devise, lease or otherwise acquire, hold and enjoy and lease and dispose of real and personal property of every kind, within the district, necessary to the full or convenient exercise of its powers.

• SEC. 77(7b). The district or its successors shall not, at any time, grant, convey, give or alienate said lands, or any part thereof, to any individual, firm or corporation for any purposes whatsoever; provided, that said district, or its successors, may grant franchises thereon for limited periods, not exceeding 66 years, for wharves and other public uses and purposes, and may lease said lands, or any part thereof, for limited periods, not exceeding 66 years, for purposes consistent with the trusts upon which said lands are held by the State of California, and with the requirements of commerce and navigation, and collect and retain rents and other revenues from such leases, franchises and privileges. Such lease or leases, franchises and privileges may be for any and all purposes which shall not interfere with commerce, navigation, fisheries, and ecological protection.

Amendments have been made. Sections 2 and 3 were added by the Senate on May 13, 2015. Section 2 provides clarifying amendments as to the role and responsibility of the District Board Chief Executive Officer and Treasurer. Section 3 specifies that the Board must provide 90 day notice to the Commission prior to the purchase or selling of real property acquired with trust moneys, and the Commission must provide a response to a proposed purchase within 90 days of receiving that notice.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

SUPPORT: (Verified 5/19/15)

Board of Commissioners of the Humboldt Bay Harbor Recreation and Conservation District

State Lands Commission

Humboldt County Board of Supervisors

OPPOSITION: (Verified 5/19/15)

None received

ARGUMENTS IN SUPPORT: According to the State Lands Commission, “SB 141 eliminates the prohibition on transferring irrevocable grants of fee title as it related to after-acquired lands. Eliminating this restriction is intended to provide helpful clarification and assist the District in managing trust assets of the state. This clarification is beneficial to the District and to the state because the sale of after-acquired lands provides funds that the District can reinvest into administering and improving its trust lands within Humboldt Bay for the statewide public’s use and enjoyment.”

Prepared by: Angee Doerr / N.R. & W. / (916) 651-4116

5/21/15 12:28:28

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SENATE COMMITTEE ON NATURAL RESOURCES AND WATER

Senator Fran Pavley, Chair

2015 - 2016 Regular

Bill No: SB 141 Hearing Date: March 24, 2015

Subject: Humboldt Bay Harbor, Recreation, and Conservation District Act: land use

BACKGROUND AND EXISTING LAW

The Humboldt Bay Harbor, Recreation & Conservation District (District) is a trustee of sovereign lands granted to it by the Legislature in the 1970s. These lands are considered “granted lands” by the California State Lands Commission (Commission), which maintains oversight authority. The District is governed by the specific granting statute(s), the common law Public Trust Doctrine and other applicable law.

Revenues generated by a trustee arising out of the use or operation of its granted lands are public trust assets of the State and must be reinvested back into the trust. These revenues must be kept separate from the general funds of a local government and may not be used for any purpose unconnected with the trust.  Expenditures of trust funds by a trustee must be consistent with the common law Public Trust Doctrine and the statutory trust grant.

While granted public trust lands and assets are managed locally, the Legislature delegated the State’s residual and review authority for granted lands to the Commission.   The Commission is responsible for monitoring administration of each statutory grant by the trustee to ensure compliance with provisions of the granting statute and the Public Trust Doctrine. The Commission has the authority to investigate, audit, and review the administration of all statutory trust grants. The Commission also has the authority to investigate specific allegations of maladministration, to seek corrective measures by trustees, and make recommendations to the Legislature; the ultimate trustee of public trust lands.

In the course of conducting a review of a mismanagement allegation against the District (which the Commission did not find), Commission staff discovered an ambiguity in the granting statutes relative to the District’s authority to dispose of property acquired after the initial grant (“after-acquired property”). Existing law bars any grantee from transferring, selling or otherwise alienating sovereign tide and submerged lands. However, the statute governing the District restricts its ability to dispose of any lands (“Irrevocable grants of fee title shall not be granted or issued.” (see §23, c. 1040, Statutes of 1976)).

PROPOSED LAW

This bill would eliminate the ambiguity in the District’s granting statutes and thus allow the District to dispose of after-acquired property by striking the sentence of its granting statutes quoted above.

ARGUMENTS IN SUPPORT

According to the State Lands Commission, “SB 141 eliminates the prohibition on transferring irrevocable grants of fee title as it related to after-acquired lands. Eliminating this restriction is intended to provide helpful clarification and assist the District in managing trust assets of the state. This clarification is beneficial to the District and to the state because the sale of after-acquired lands provides funds that the District can reinvest into administering and improving its trust lands within Humboldt Bay for the statewide public’s use and enjoyment.”

ARGUMENTS IN OPPOSITION

None

COMMENTS

Stringent restrictions remain on the District. The District is still restricted in its purchasing and sale of land, particularly in regards to Public Trust property, by the remainder of its granting document, as well as by other existing law.

In particular (from Chapter 1283 of the Statutes of 1970):

• SEC. 28. The district may take by grant, purchase, gift, devise, lease or otherwise acquire, hold and enjoy and lease and dispose of real and personal property of every kind, within the district, necessary to the full or convenient exercise of its powers

• SEC. 77(7b). The district or its successors shall not, at any time, grant, convey, give or alienate said lands, or any part thereof, to any individual, firm or corporation for any purposes whatsoever; provided, that said district, or its successors, may grant franchises thereon for limited periods, not exceeding 66 years, for wharves and other public uses and purposes, and may lease said lands, or any part thereof, for limited periods, not exceeding 66 years, for purposes consistent with the trusts upon which said lands are held by the State of California, and with the requirements of commerce and navigation, and collect and retain rents and other revenues from such leases, franchises and privileges. Such lease or leases, franchises and privileges may be for any and all purposes which shall not interfere with commerce, navigation, fisheries, and ecological protection.

SUPPORT

Board of Commissioners of the Humboldt Bay Harbor

Recreation and Conservation District

California State Lands Commission

OPPOSITION

None Received

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