GOVERNOR SIGNS URGENCY MEASURE TO CLARIFY 2011 LAW ON ENDOWMENT FUNDS FOR MITIGATION LANDS

By Katherine J. Hart

Just short of one year from signing Senate Bill 436 into law, Governor Brown signed urgency measure Senate Bill 1094 into law in late September to clarify endowment requirements for lands held by public or private entities to mitigate impacts on natural resources.

In the 2010-2011 Legislative Session Senator Kehoe introduced Senate Bill No. 436 (SB 436), which added sections 65965 through 69568 to the Government Code. The Governor signed the bill into law on October 8, 2011. (See Legislative Update Mitigation Chapter of Planning and Zoning Law is Amended-and Expanded to Ensure the Proper Management of Protected Lands SB 436.) The purpose of the bill was to expressly authorize state and local agencies to allow special districts and qualifying nonprofits that hold and manage conservation easements to also hold and manage the associated endowment funds for those easements. However, as noted in my write up on SB 436, the bill did not require an agency to identify funding for stewardship of properties to be protected, but instead gave agencies the option to identify such endowments and laid out some rules regarding the management and investment of the endowments.

As a member and current president of a non-profit entity that was created solely for the purpose of preserving, maintaining and managing mitigation lands to offset the impacts of development, the development and management of endowments is a critical component to managing mitigation land. The amendments to Government Code sections 65965 through 69568 provides the Attorney General with the authority to oversee the management of the endowment funds, and importantly, expands the types of entities that can hold endowment funds, as well as modifies the requirements that an entity holding an endowment fund must satisfy.

As amended, Section 65965 actually defines the term “endowment” (replacing the term “accompanying funds” which was vague and ambiguous), and further permits “community foundations,” “congressionally chartered foundations” and certain nonprofits organizations to hold, manage and invest endowment funds for mitigation property. The bill also redefines “mitigation agreement” to clarify that it is a written agreement between the project proponents and the entity qualified to hold the mitigation lands and the endowment or a written agreement between a project proponent and the entity qualified to hold the mitigation lands, as well as any agreement with an entity qualified to hold the endowment as provided in Section 65965. Additionally, Section 65966 expands the requirements for an entity to satisfy in order to hold an endowment.

SB 1094 will allow those conservation easements held in abeyance at the Department of Fish and Game to be processed and approved, with improved and clarified endowment requirements for mitigation lands.

Katherine J. Hart is Senior Counsel at Abbott & Kindermann, LLP. For questions relating to this article or any other California land use, real estate, environmental and/or planning issues contact Abbott & Kindermann, LLP at (916) 456-9595.

The information presented in this article should not be construed to be formal legal advice by Abbott & Kindermann, LLP, nor the formation of a lawyer/client relationship. Because of the changing nature of this area of the law and the importance of individual facts, readers are encouraged to seek independent counsel for advice regarding their individual legal issues.

Trackbacks (0) Links to blogs that reference this article Trackback URL
Comments (0) Read through and enter the discussion with the form at the end