SB 50: The Legislature Attempts to Protect National Parks, Erects New Hurdles for Local Development

 

The year 2017, probably like 2018 and years to come, was marked by legal conflict between the State of California and the federal government. Hidden amidst higher-profile state enactments was SB 50, a statute that looks on the surface like a mostly-procedural conservation measure but that will have substantial practical effects for many local agencies.

Blocking Privatization of Public Land

The federal government owns over 45 million acres in California—about 45% of our the state’s total area. This includes the beloved national parks of Yosemite and Kings Canyon, newer conservation areas like the Sand to Snow National Monument northwest of Palm Springs, and vast stretches of desert and mountains run by the Bureau of Land Management.  Various threads of activism, reaching back at least to the Sagebrush Rebellion of the 1970s, have argued that the federal government should put much of this land in private hands.

SB 50 aims to prevent such transfers by giving the State of California the right to either purchase the land in place of the intended recipient, or redirect the land to a recipient of its choice. If it applied only to, say, attempts to sell off national parks, it would arouse little use or notice. But it applies to any transfer from any federal agency to any entity in California. This includes transactions that that many agencies are counting on: conveyances of land, especially on former military bases, for conservation, economic development, or housing. Many of these deals were negotiated long ago, and often must be implemented on firm schedules to allow agencies to qualify for grants or meet other key deadlines. SB 50 introduces risk and delay into these deals. Both the risk and delay are manageable.

Procedural Hurdles for Federal Conveyances

Under SB 50, the State Lands Commission exercises (or waives) this “right of first refusal.” It must approve a “Certificate of Compliance” for federal transfers, confirming compliance with SB 50. For now, this requires a voluminous application and a vote from the Commission at one of its bimonthly meetings. As of this writing, the Commission has considered around 10 requests for Certificates of Compliance and has approved all of them. Commission staff is in the process of adopting regulations to establish many categories of federal transfer as “routine.” Commission staff will be able to grant Certificates of Compliance for these routine transfers without a Commission hearing and vote. Agencies may wish to comment on the proposed regulations to ensure that their future federal transfers are subject to this simpler and quicker procedures. SMW is engaged with SLC staff regarding the substance of the regulations and may be available to advise agencies regarding their input.

Enforcement for violations is harsh: a deed that has not been subject to the State’s “right of first refusal” is void ab initio. That is, under state law it does not actually transfer title to the land. Further, a deed that does not fit the required format may not be recorded. Title insurers have made known that they will not insure title to any federal conveyance that does not meet these requirements. And the federal agencies are adamant (often because of federal legal requirements) that they will not transfer lands to any agency other than the specified recipient.  In short, as long as the law stands, public agencies or other entities receiving land from the United States must comply with its requirements in order to complete transactions.

Federal Response Varies From Indifferent to Litigious

The statute, however, may not remain in effect for long. The law appears to interfere with the Federal government’s ability to dispose of its property as it sees fit, arguably violating the Supremacy and Property clauses of the constitution. In April, the United States sued California, making that argument. The suit claims that the statute “discriminates against the United States and delays and otherwise obstructs conveyances of real property owned by the United States, including by creating a potential cloud on marketable title.” The United States has not sought to prevent the statute’s operation while the suit is pending so for now, the Commission and the county recorders’ offices are implementing it. The federal agencies transferring land to California agencies, chiefly the military branches, are taking an approach that might be called “passive cooperation.” They are not assisting with efforts by agencies to comply with the law, but they are taking no active steps to prevent compliance.

For Now, Local Agencies Acquiring Federal Land Must Complete the SB 50 Process

While the lawsuit is pending, SB 50 remains in effect. Public agencies that hope to receive federal lands in the next year or so should plan to complete the SB 50 process, which can take several months, prior to the closing of their transactions. SMW has assisted clients in the Commission process to receive several Certificates of Compliance. We are now negotiating the form of the Certificates and the federal deeds with Commission staff, title insurers, and the county recorders.

For more information, contact SMW attorney Gabe Ross.

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