65968
. (a) Notwithstanding Section 13014 of the Fish and Game Code,
if an endowment is conveyed pursuant to Section 65966 for property
conveyed pursuant to Section 65967, the endowment may be held by the
same governmental entity, special district, or nonprofit organization
that holds the property pursuant to this section.
(b) (1) Except as permitted pursuant to paragraph (2), the
endowment shall be held by one of the following:
(A) The agency or agencies that required the mitigation.
(B) The governmental entity, special district, or nonprofit
organization that either holds the property, or holds an interest in
the property, for conservation purposes.
(C) The governmental entity or special district that retains the
property after conveying an interest in the property for conservation
purposes if that governmental entity or special district is
protecting, restoring, or enhancing the property that was retained.
(2) The exceptions to paragraph (1) are the following:
(A) An endowment that is held by an entity other than the state or
holder of the mitigation property as of January 1, 2012.
(B) An endowment that is held by another entity, which is
qualified pursuant to this chapter, 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). In order for
this paragraph to apply, prior to setting aside any endowments, the
implementation agreement that is a part of an approved natural
community conservation plan, the planning agreement for any natural
community conservation plan that has not yet been approved, or the
safe harbor agreement shall specifically address the arrangements for
the endowment including, but not limited to, qualifications of the
endowment holder, capitalization rate, return objectives, and the
spending rule and disbursement policies.
(C) If existing law prohibits the holder of the mitigation
property to hold the endowment, including for-profit entities.
(D) If the project proponent and the holder of the mitigation
property or conservation easement agree that a community foundation
or a congressionally chartered foundation shall hold the endowment.
(E) If the mitigation property is held or managed by a federal
agency.
(F) If any of the same mitigation property is required to be
conveyed pursuant to both a federal and state governmental approval,
and under the federal governmental approval the federal agency does
not approve one of the entities described in paragraph (1) of
subdivision (b) as chosen to hold the endowment by the agreement of
the project proponent and the holder of the mitigation property or
conservation easement.
(c) A community foundation or congressionally chartered foundation
that holds an endowment pursuant to subparagraphs (A) to (F),
inclusive, of paragraph (2) of subdivision (b), shall meet all the
qualifications and requirements of this chapter for holding,
managing, investing, and disbursing the endowment funds.
(d) Any entity that holds an endowment under this chapter shall
hold, manage, invest, and disburse the funds in furtherance of the
long-term stewardship of the property in accordance with subdivision
(a) of Section 65965.
(e) The holder of an endowment shall certify to the project
proponent or the holder of the mitigation property or a conservation
easement and the local or state agency that required the endowment
that it meets 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 for endowment funds and shall manage and invest the
endowment in good faith and with the care an ordinarily prudent
person in a like position would exercise under similar circumstances,
consistent with the Uniform Prudent Management of Institutional
Funds Act (Part 7 (commencing with Section 18501) of Division 9 of
the Probate Code).
(3) The holder utilizes generally accepted accounting practices as
promulgated by either of the following:
(A) The Financial Accounting Standards Board or any successor
entity for nonprofit organizations.
(B) The Governmental Accounting Standards Board or any successor
entity 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.
(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, a community
foundation, or a congressionally chartered foundation, 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).
(f) If a governmental entity, community foundation, special
district, nonprofit organization, or a congressionally chartered
foundation meets the requirements of this chapter, it is qualified to
be a holder of the endowment for the purpose of obtaining any
permit, clearance, or mitigation approval from a state or local
agency.
(g) Except for a mitigation agreement prepared by a state agency,
the mitigation agreement that authorizes the funds to be conveyed to
a governmental entity, community foundation, special district, a
congressionally chartered foundation, or nonprofit organization
pursuant to subdivision (a) shall include a provision that requires
the endowment be held by a governmental entity, 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 (e), if any of the following occurs:
(1) The governmental entity, community foundation, special
district, a congressionally chartered foundation, or nonprofit
organization ceases to exist.
(2) The governmental entity, community foundation, special
district, a congressionally chartered foundation, or nonprofit
organization is dissolved.
(3) The governmental entity, community foundation, special
district, a congressionally chartered foundation, or nonprofit
organization becomes bankrupt or insolvent.
(4) The local agency reasonably determines that the endowment held
by the governmental entity, community foundation, special district,
or nonprofit organization, or its successor entity, is 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 governmental
entity, community foundation, 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 governmental entity, community foundation, special district,
or nonprofit organization to accept title to the property.
(h) Nothing in this section shall prohibit a state or local agency
from determining that a governmental entity, community foundation,
special district, a congressionally chartered foundation, or
nonprofit organization meets the requirements of this section and is
qualified to hold the endowment, or including a provision in the
mitigation agreement as described in subdivision (g).
(i) A state or local agency may allow the endowment to be held
temporarily in an escrow account until December 31, 2012, after which
time the funds shall be transferred to the entity that will
permanently hold the endowment.
(j) Subject to subdivision (g), any endowment that is conveyed to
and held by a governmental entity, special district, or nonprofit
organization pursuant to this section shall continue to be held by
the entity if this section is repealed.
(k) A state or local agency shall not require, as a condition of
obtaining any permit, clearance, agreement, or mitigation approval
from the state or local agency, that a preferred or exclusively named
entity by the state or local agency be named as the entity to hold,
manage, invest, and disburse the funds in furtherance of the
long-term stewardship of the property for which the funds were set
aside.
(l) 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.