2011 California Code
Government Code
TITLE 7. PLANNING AND LAND USE [65000 - 66499.58]
CHAPTER 4.6. Mitigation Lands: Nonprofit Organizations
Section 65968

(a) Notwithstanding Section 13014 of the Fish and Game Code, if accompanying funds are conveyed pursuant to Section 65966 for property conveyed pursuant to Section 65967, the accompanying funds may be held by the same special district or nonprofit organization that holds the property pursuant to this section.

(b) Except as permitted below, the accompanying funds shall be held by the agency that requires the mitigation or by the special district or nonprofit organization that holds the property. The exceptions to this requirement are the following:

(1) Accompanying funds that are held by an entity other than the state or holder of the mitigation property as of January 1, 2012.

(2) Accompanying funds that are held by another entity pursuant to the terms of a natural community conservation plan (Chapter 10 (commencing with Section 2800) of Division 3 of the Fish and Game Code) or a safe harbor agreement (Article 3.7 (commencing with Section 2089.2) of Chapter 1.5 of Division 3 of the Fish and Game Code) that is executed on or before January 1, 2012.

(3) Where existing law prohibits the holder of the mitigation property to hold the endowment, including for-profit entities.

(c) The special district or nonprofit organization shall hold, manage, invest, and disburse the funds in furtherance of the long-term stewardship of the property for which the funds were set aside.

(d) The holder of accompanying funds shall meet all of the following requirements:

(1) The holder has the capacity to effectively manage the mitigation funds.

(2) The holder has the capacity to achieve reasonable rates of return on the investment of those funds similar to those of other prudent investors.

(3) The holder utilizes generally accepted accounting practices as promulgated by either of the following:

(A) The Financial Accounting Standards Board for nonprofit organizations.

(B) The Governmental Accounting Standards Board for public agencies, to the extent those practices do not conflict with any requirement for special districts in Article 2 (commencing with Section 53630) of Chapter 4 of Part 1 of Division 2 of Title 5 of the Government Code.

(4) The holder will be able to ensure that funds are accounted for, and tied to, a specific property.

(5) If the holder is a nonprofit organization, it has an investment policy that is consistent with the Uniform Prudent Management of Institutional Funds Act (Part 7 (commencing with Section 18501) of Division 9 of the Probate Code).

(e) Except for a mitigation agreement prepared by a state agency, the mitigation agreement that authorizes the funds to be conveyed to a special district or nonprofit organization pursuant to subdivision (a) shall include a provision that requires the accompanying funds held by a special district or a nonprofit organization to revert to the local agency, or to a successor organization identified by the agency and subject to subdivision (d), if any of the following occurs:

(1) The special district or nonprofit organization ceases to exist.

(2) The special district or nonprofit organization is dissolved.

(3) The special district or nonprofit organization becomes bankrupt or insolvent.

(4) The local agency reasonably determines that the accompanying funds held by the special district or nonprofit organization, or its successor entity, are not being held, managed, invested, or disbursed for conservation purposes and consistent with the mitigation agreement and legal requirements. Any reverted funds shall continue to be held, managed, and disbursed only for long-term stewardship and benefit of the specific property for which they were set aside. If the funds revert from the special district or nonprofit organization, the special district or nonprofit organization may choose to relinquish the property. If the property is relinquished, the local agency shall accept title to the property or identify an approved special district or nonprofit organization to accept title to the property.

(f) Nothing in this section shall prohibit a state or local agency from determining that a special district or nonprofit organization meets the requirements of this section and is qualified to hold the accompanying funds, or including a provision in the mitigation agreement as described in subdivision (e).

(g) Subject to subdivision (e), any accompanying funds that are conveyed to and held by a special district or nonprofit organization pursuant to this section shall continue to be held by the entity if this section is repealed and those funds are conveyed prior to the date this section is repealed.

(h) This section shall remain in effect only until January 1, 2022, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2022, deletes or extends that date.

(Added by Stats. 2011, Ch. 590, Sec. 5. Effective January 1, 2012. Repealed as of January 1, 2022, by its own provisions.)