HomeMy WebLinkAboutMINUTES - 04222014 - C.43RECOMMENDATION(S):
ADOPT a position of "Support" on AB 1799, as introduced (Gordon): Land use: mitigation lands, a bill that would
eliminate the requirement of an endowment for long-term stewardship where a governmental entity is the entity
required to provide the long-term stewardship, if the governmental entity provides evidence that it possesses an
investment-grade credit rating, and provides either a resolution adopted by the legislative body of the governmental
entity or a contractual agreement with the local or state agency enforcing the mitigation requirements, as
recommended by the Legislation Committee.
FISCAL IMPACT:
AB 1799 would eliminate the requirement of an endowment or other financial mechanism for long-term stewardship
of mitigation property, and replace that requirement with more flexible alternatives to finance mitigation obligations.
Specifically, a governmental entity would be exempted from providing an endowment or other funding instrument
for long-term stewardship if two requirements are met: 1) the entity must demonstrate financial reliability through
possession of an investment-grade credit rating and 2) the entity must provide either a resolution adopted by its
legislative body or a contractual agreement with the permitting agency enforcing the mitigation requirements.
APPROVE OTHER
RECOMMENDATION OF CNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE
Action of Board On: 04/22/2014 APPROVED AS RECOMMENDED OTHER
Clerks Notes:
VOTE OF SUPERVISORS
AYE:John Gioia, District I Supervisor
Candace Andersen, District II
Supervisor
Mary N. Piepho, District III
Supervisor
Karen Mitchoff, District IV
Supervisor
Federal D. Glover, District V
Supervisor
Contact: L. DeLaney,
925-335-1097
I hereby certify that this is a true and correct copy of an action taken and entered on the minutes of the Board
of Supervisors on the date shown.
ATTESTED: April 22, 2014
David Twa, County Administrator and Clerk of the Board of Supervisors
By: June McHuen, Deputy
cc:
C. 43
To:Board of Supervisors
From:LEGISLATION COMMITTEE
Date:April 22, 2014
Contra
Costa
County
Subject:Support Position on AB 1799 (Gordon): Land Use: Mitigation Lands
BACKGROUND:
As part of a proposed project, public entities must often obtain a permit from a state regulatory agency prior to
commencing work in sensitive environments such as streams, wetlands, or habitat occupied by protected species.
In those situations where environmental impacts remain after all other steps have been taken to avoid or minimize
impacts resulting from the project, the permitting agency requires the public entity to offset those remaining
impacts by providing “compensatory mitigation” that, as its name implies, compensates for those impacts by
replacing and/or restoring the impacted natural resources. These compensatory mitigation properties then must be
maintained and managed in perpetuity.
Current law allows a permitting agency to identify how the long-term maintenance and management, or
stewardship, of the property will be funded. One such way is by requiring the establishment of an endowment,
where the permittee must set aside a substantial amount of public funds and use the interest earned on it to pay for
the long-term maintenance and management of the mitigation site. To generate the interest required for
stewardship efforts, endowment funds must be substantially greater than the actual cost of the annual stewardship
efforts. In addition, endowment funds are permanently restricted for this purpose and cannot be used for anything
else, regardless of circumstances. When taxpayer funding is permanently tied up in this manner, a public entity’s
ability to fund other projects and carry out its work is negatively impacted, as funds are diverted to endowments
and permanently unavailable for other, critical public projects.
AB 1799 would exempt public entities from having to provide endowments or other funding instruments for the
long-term stewardship of mitigation properties, provided certain requirements are met. Specifically, the entity
would need to demonstrate financial reliability through the possession of an investment-grade credit rating by a
nationally recognized statistical rating organization. It would also need to provide a resolution to fund the
long-term stewardship of the property that is adopted by the board or legislative body of the governmental entity
or special district, or a contractual agreement with the regulatory agency that is enforcing the mitigation
requirements to fund the long-term stewardship of the property. By demonstrating strong financial reliability and
a commitment to fund the maintenance requirements in perpetuity, a public entity would prove to a permitting
agency that there is no need for an endowment or other funding instrument for long-term stewardship of its
mitigation property.
Analysis
While Contra Costa County has not yet had to purchase mitigation property and therefore has not been subject to
establishing a permanent endowment for the long-term stewardship of a mitigation property, AB 1799 would
provide significant protection from a future situation in which it would be required to do so. Staff also notes that
this bill does not reduce or eliminate a public entity’s obligation to provide mitigation; rather, it simply allows
public entities more flexibility for financing its mitigation obligations. If enacted into law, the provisions of the
bill would provide this flexibility and prevent public funds from being permanently restricted and therefore
unavailable to address other priority needs of Contra Costa County. Finally, AB 1799 would have an indirect
benefit of enhancing our local economy, because funds that might otherwise have been permanently restricted
would be available to create jobs and complete critical public projects for the County.
For these reasons, the Legislation Committee at its April 3, 2014 meeting voted unanimously to recommend that
the Board of Supervisors adopt a position of support on AB 1799 and send a letter of support to
Assemblymember Gordon and members of our state delegation.
Current Status: 04/02/2014: From ASSEMBLY Committee on LOCAL GOVERNMENT: Do pass to
Committee on WATER, PARKS AND WILDLIFE.
Committee: Assembly Water, Parks and Wildlife Committee
Hearing: 04/29/2014 8:30 am, State Capitol, Room 437
ATTACHMENTS
AB 1799 Bill Text
california legislature—2013–14 regular session
ASSEMBLY BILL No. 1799
Introduced by Assembly Member Gordon
(Coauthors: Assembly Members Alejo, Campos, and Wieckowski)
(Coauthors: Senators Beall and Correa)
February 18, 2014
An act to amend Sections 65965 and 65966 of the Government Code,
relating to land use.
legislative counsel’s digest
AB 1799, as introduced, Gordon. Land use: mitigation lands.
The Planning and Zoning Law provides that if a state or local agency
requires a person to transfer to that agency an interest in real property
to mitigate the environmental impact of a project or facility, that agency
may authorize specified entities to hold title to, and manage that interest
in, real property, as well as any accompanying funds, provided those
entities meet specified requirements. Existing law requires that if
accompanying funds, as defined, are conveyed at the time the property
is protected, then the holder of those accompanying funds must meet
specified requirements and requires a state or local agency to exercise
due diligence in reviewing the qualifications of a special district or
nonprofit organization to effectively manage and steward land, water,
or natural resources, as well as the accompanying funds. Existing law
requires a conservation easement created as a component of satisfying
a local or state mitigation requirement to be perpetual in duration, and
sets forth the requirements for long-term stewardship of property by
various entities, including, among others, local governmental entities
and nonprofit organizations.
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This bill would eliminate the requirement of an endowment or other
financial mechanism for long-term stewardship where a governmental
entity or special district is the entity required to provide the long-term
stewardship, if the governmental entity or special district provides
evidence to the local or state agency that it possesses an
investment-grade credit rating by a nationally recognized statistical
rating organization, and provides either a resolution adopted by the
legislative body of the governmental entity or special district or a
contractual agreement with the local or state agency enforcing the
mitigation requirements, as specified.
Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.
The people of the State of California do enact as follows:
line 1 SECTION 1. Section 65965 of the Government Code is
line 2 amended to read:
line 3 65965. For the purposes of this chapter, the following
line 4 definitions apply:
line 5 (a) “Endowment” means the funds that are conveyed solely for
line 6 the long-term stewardship of a mitigation property. Endowment
line 7 funds are held as charitable trusts that are permanently restricted
line 8 to paying the costs of long-term management and stewardship of
line 9 the mitigation property for which the funds were set aside.
line 10 Endowments shall be governed by the underlying laws, regulations,
line 11 and specific governmental approvals under those laws and
line 12 regulations pursuant to which the endowments were exacted,
line 13 consistent with subdivision (b) of Section 65966 and with the
line 14 Uniform Prudent Management of Institutional Funds Act (Part 7
line 15 (commencing with Section 18501) of Division 9 of the Probate
line 16 Code). Endowments do not include funds conveyed for meeting
line 17 short-term performance objectives of a project.
line 18 (b) “Community foundation” means any community foundation
line 19 that meets all of the following requirements:
line 20 (1) Meets the requirements of a community trust under Section
line 21 1.170A-9(f)(10)-(11) of Title 26 of the Code of Federal
line 22 Regulations.
line 23 (2) Is exempt from taxation as an organization described in
line 24 Section 501(c)(3) of the Internal Revenue Code.
line 25 (3) Is qualified to do business in this state.
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line 1 (4) Is a “qualified organization” as defined in Section 170(h)(3)
line 2 of the Internal Revenue Code.
line 3 (5) Has complied with National Standards for U.S. Community
line 4 Foundations as determined by the Community Foundations
line 5 National Standards Board, a supporting organization of the Council
line 6 on Foundations.
line 7 (6) Is registered with the Registry of Charitable Trusts
line 8 maintained by the Attorney General pursuant to Section 12584.
line 9 (c) “Conservation easement” means a conservation easement
line 10 created pursuant to Chapter 4 (commencing with Section 815) of
line 11 Title 2 of Part 2 of Division 2 of the Civil Code.
line 12 (d) “Direct protection” means the permanent protection,
line 13 conservation, and preservation of lands, waters, or natural
line 14 resources, including, but not limited to, agricultural lands, wildlife
line 15 habitat, wetlands, endangered species habitat, open-space areas,
line 16 or outdoor recreational areas.
line 17 (e) “Governmental entity” means any state agency, office,
line 18 officer, department, division, bureau, board, commission, public
line 19 postsecondary educational institution, city, county, or city and
line 20 county, or a joint powers authority formed pursuant to the Joint
line 21 Exercise of Powers Act (Chapter 5 (commencing with Section
line 22 6500) of Division 7 of Title 1) that meets either of the following
line 23 requirements:
line 24 (1) The joint powers authority was created for the principal
line 25 purpose and activity of the direct protection or stewardship of land,
line 26 water, or natural resources, including, but not limited to,
line 27 agricultural lands, wildlife habitat, wetlands, endangered species
line 28 habitat, open-space areas, and outdoor recreational areas.
line 29 (2) The joint powers authority was created for the purpose of
line 30 constructing, maintaining, managing, controlling, and operating
line 31 transportation infrastructure, such as major thoroughfares and
line 32 bridges.
line 33 (f) (1) “Mitigation agreement” means either of the following:
line 34 (A) A written agreement between the project proponent and the
line 35 entity qualified to hold the property and the endowment pursuant
line 36 to this chapter, which is submitted to the state or local agency for
line 37 the purpose of obtaining any permit, clearance, or mitigation
line 38 approval from that state or local agency.
line 39 (B) A written agreement between the project proponent and the
line 40 entity qualified to hold the property pursuant to this chapter,
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line 1 including any agreement with an entity qualified to hold the
line 2 endowment pursuant to this chapter, which is submitted to the state
line 3 or local agency for the purpose of obtaining any permit, clearance,
line 4 or mitigation approval from that state or local agency.
line 5 (2) A mitigation agreement shall govern the long-term
line 6 stewardship of the property and the endowment.
line 7 (g) “Congressionally chartered foundation” means a nonprofit
line 8 organization that meets all of the following requirements:
line 9 (1) Is chartered by the United States Congress.
line 10 (2) Is exempt from taxation as an organization described in
line 11 Section 501(c)(3) of the Internal Revenue Code.
line 12 (3) Is qualified to do business in this state.
line 13 (4) Is registered with the Registry of Charitable Trusts
line 14 maintained by the Attorney General pursuant to Section 12584.
line 15 (5) Has as a purpose the conservation and management of fish,
line 16 wildlife, plants, and other natural resources, which includes, but
line 17 is not limited to, the direct protection or stewardship of land, water,
line 18 or natural wildlife habitat, wetlands, endangered species habitat,
line 19 open-space areas, and outdoor recreational areas.
line 20 (h) “Investment grade” means a credit rating provided by a
line 21 nationally recognized statistical rating organization that indicates
line 22 a relatively low risk of default. For purposes of this subdivision,
line 23 “nationally recognized statistical rating organization” means a
line 24 rating agency designated by the Securities and Exchange
line 25 Commission as being nationally recognized.
line 26 (h)
line 27 (i) “Nonprofit organization” means any nonprofit organization
line 28 that meets all of the following requirements:
line 29 (1) Is exempt from taxation as an organization described in
line 30 Section 501(c)(3) of the Internal Revenue Code.
line 31 (2) Is qualified to do business in this state.
line 32 (3) Is a “qualified organization” as defined in Section 170(h)(3)
line 33 of the Internal Revenue Code.
line 34 (4) Is registered with the Registry of Charitable Trusts
line 35 maintained by the Attorney General pursuant to Section 12584.
line 36 (5) Has as its principal purpose and activity the direct protection
line 37 or stewardship of land, water, or natural resources, including, but
line 38 not limited to, agricultural lands, wildlife habitat, wetlands,
line 39 endangered species habitat, open-space areas, and outdoor
line 40 recreational areas.
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line 1 (i)
line 2 (j) “Project proponent” means an individual, business entity,
line 3 agency, or other entity that is developing a project or facility and
line 4 is required to mitigate any adverse impact upon natural resources.
line 5 (j)
line 6 (k) “Property” means fee title land or any partial interest in real
line 7 property, including a conservation easement, that may be conveyed
line 8 pursuant to a mitigation requirement by a state or local agency.
line 9 (k)
line 10 (l) “Special district” means any of the following special districts:
line 11 (1) A special district formed pursuant to Article 3 (commencing
line 12 with Section 5500) of Chapter 3 of Division 5 or Division 26
line 13 (commencing with Section 35100) of the Public Resources Code.
line 14 (2) A resource conservation district organized pursuant to
line 15 Division 9 (commencing with Section 9001) of the Public
line 16 Resources Code.
line 17 (3) A district organized or formed pursuant to the Metropolitan
line 18 Water District Act (Chapter 209 of the Statutes of 1969).
line 19 (4) A county water district organized under Division 12
line 20 (commencing with Section 30000) of the Water Code, that has
line 21 more than 5,000 acres of mitigation lands.
line 22 (5) A special district formed pursuant to Chapter 2 (commencing
line 23 with Section 11561) of Division 6 of the Public Utilities Code that
line 24 provides water and wastewater treatment services.
line 25 (6) A district organized or formed pursuant to the County Water
line 26 Authority Act (Chapter 545 of the Statutes of 1943).
line 27 (7) A local flood control district formed pursuant to any law.
line 28 (l)
line 29 (m) “Stewardship” encompasses the range of activities involved
line 30 in controlling, monitoring, and managing for conservation purposes
line 31 a property, or a conservation or open-space easement, as defined
line 32 by the terms of the easement, and its attendant resources.
line 33 SEC. 2. Section 65966 of the Government Code is amended
line 34 to read:
line 35 65966. (a) Any conservation easement created as a component
line 36 of satisfying a local or state mitigation requirement shall be
line 37 perpetual in duration, whether created pursuant to Chapter 6.6
line 38 (commencing with Section 51070) of Part 1 of Division 1 of Title
line 39 5 of this code or Chapter 4 (commencing with Section 815) of
line 40 Title 2 of Part 2 of the Civil Code.
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line 1 (b) Any local or state agency that requires property to be
line 2 protected pursuant to subdivision (a) or (b) of Section 65967 may
line 3 identify how the funding needs of the long-term stewardship of
line 4 the property will be met. Nothing in this chapter shall be construed
line 5 as otherwise precluding other methods of funding for the long-term
line 6 stewardship of the property. If an endowment is conveyed or
line 7 secured at the time the property is protected, all of the following
line 8 shall apply:
line 9 (1) The endowment shall be held, managed, invested, and
line 10 disbursed solely for, and permanently restricted to, the long-term
line 11 stewardship of the specific property for which the funds were set
line 12 aside.
line 13 (2) The endowment shall be calculated to include a principal
line 14 amount that, when managed and invested, is reasonably anticipated
line 15 to cover the annual stewardship costs of the property in perpetuity.
line 16 (3) The endowment shall be held, managed, invested, disbursed,
line 17 and governed as described in subdivision (a) of Section 65965
line 18 consistent with the Uniform Prudent Management of Institutional
line 19 Funds Act (Part 7 (commencing with Section 18501) of Division
line 20 9 of the Probate Code).
line 21 (c) If a nonprofit corporation holds the endowment, the nonprofit
line 22 shall utilize generally accepted accounting practices that are
line 23 promulgated by the Financial Accounting Standards Board or any
line 24 successor entity.
line 25 (d) If a local agency holds the endowment, the local agency
line 26 shall do all of the following:
line 27 (1) Hold, manage, and invest the endowment consistent with
line 28 subdivision (b) to the extent allowed by law.
line 29 (2) Disburse funds on a timely basis to meet the stewardship
line 30 expenses of the entity holding the property.
line 31 (3) Utilize accounting standards consistent with standards
line 32 promulgated by the Governmental Accounting Standards Board
line 33 or any successor entity.
line 34 (e) (1) Unless the mitigation agreement provides that another
line 35 person or entity shall prepare the annual fiscal report described
line 36 below, a governmental entity, community foundation, special
line 37 district, a congressionally chartered foundation, or a nonprofit
line 38 organization that holds funds pursuant to this chapter, including
line 39 an endowment or moneys for initial stewardship costs, shall provide
line 40 the local or state agency that required the endowment with an
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line 1 annual fiscal report that contains at least the following elements
line 2 with respect to each individual endowment dedicated and held by
line 3 that entity:
line 4 (A) The balance of each individual endowment at the beginning
line 5 of the reporting period.
line 6 (B) The amount of any contribution to the endowment during
line 7 the reporting period including, but not limited to, gifts, grants, and
line 8 contributions received.
line 9 (C) The net amounts of investment earnings, gains, and losses
line 10 during the reporting period, including both realized and unrealized
line 11 amounts.
line 12 (D) The amounts distributed during the reporting period that
line 13 accomplish the purpose for which the endowment was established.
line 14 (E) The administrative expenses charged to the endowment
line 15 from internal or third-party sources during the reporting period.
line 16 (F) The balance of the endowment or other fund at the end of
line 17 the reporting period.
line 18 (G) The specific asset allocation percentages including, but not
line 19 limited to, cash, fixed income, equities, and alternative investments.
line 20 (H) The most recent financial statements for the organization
line 21 audited by an independent auditor who is, at a minimum, a certified
line 22 public accountant.
line 23 (2) If an entity is required to submit an identical annual fiscal
line 24 report pursuant to paragraph (1) to the Department of Fish and
line 25 Game and any other state or local agency, then that report shall be
line 26 provided only to the Department of Fish and Game. In that
line 27 instance, the Department of Fish and Game shall provide a copy
line 28 of that annual fiscal report on its Internet Web site for a minimum
line 29 of five years.
line 30 (f) If a state agency authorizes a governmental entity, special
line 31 district, or nonprofit organization to hold property pursuant to
line 32 subdivision (a) or (b) of Section 65967 in connection with a
line 33 development project, the agency may require the project proponent
line 34 to pay a one-time fee that does not exceed the reasonable costs of
line 35 the agency in reviewing qualifications of potential holders of the
line 36 property and approving those holders. This one-time fee shall be
line 37 collected only if the agency can demonstrate its actual review of
line 38 qualifications and approval of holders.
line 39 (g) If a local agency authorizes a governmental entity, special
line 40 district, or nonprofit organization to hold property or an endowment
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line 1 pursuant to this chapter, the agency may require the project
line 2 proponent to pay a one-time fee that does not exceed the reasonable
line 3 costs of the agency in reviewing qualifications of the parties
line 4 identified in the mitigation agreement, approving those parties,
line 5 and any regular oversight over those parties to ensure that the
line 6 parties are complying with all applicable laws. This one-time fee
line 7 shall be collected only if the agency can demonstrate its actual
line 8 review of qualifications, approval of parties, or regular oversight
line 9 of compliance and performance.
line 10 (h) A local agency may require a project proponent to provide
line 11 a one-time payment that will provide for the initial stewardship
line 12 costs for up to three years while the endowment begins to
line 13 accumulate investment earnings. The funds for the initial
line 14 stewardship costs are distinct from the funds that may be conveyed
line 15 for long-term stewardship, construction, or other costs. If there are
line 16 funds remaining at the completion of the initial stewardship period,
line 17 the funds shall be conveyed to the project proponent.
line 18 (i) The local agency may contract with or designate a qualified
line 19 third party to do any of the following:
line 20 (1) Review the qualifications of a governmental entity, special
line 21 district, or nonprofit organization to effectively manage and
line 22 steward natural land or resources pursuant to subdivision (c) of
line 23 Section 65967.
line 24 (2) Review the qualifications of a governmental entity,
line 25 community foundation, or nonprofit organization to hold and
line 26 manage the endowment that is set aside for long-term stewardship
line 27 of the property.
line 28 (3) Review reports or other performance indicators to evaluate
line 29 the stewardship of lands, natural resources, or funds, and
line 30 compliance with the mitigation agreement.
line 31 (j) If a property conserved pursuant to subdivision (a) or (b) of
line 32 Section 65967 is condemned, the net proceeds from the
line 33 condemnation of the real property interest set aside for mitigation
line 34 purposes shall be used for the purchase of property that replaces
line 35 the natural resource characteristics the original mitigation was
line 36 intended to protect, or as near as reasonably feasible. Any
line 37 endowment held for the condemned property shall be held for the
line 38 long-term stewardship of the replacement property.
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line 1 (k) Unless prohibited by law, no provision in this chapter is
line 2 intended to prohibit for-profit entities from holding, acquiring, or
line 3 providing property for mitigation purposes.
line 4 (l) Nothing in this section shall prohibit a state agency from
line 5 exercising any powers described in subdivision (d), (g), or (h).
line 6 (m) A governmental entity, special district, or nonprofit
line 7 organization may contract with a community foundation or
line 8 congressionally chartered foundation at any time to hold, manage,
line 9 and invest the endowment for a mitigation property and disburse
line 10 payments from the endowment to the holder of the mitigation
line 11 property consistent with the fund agreement.
line 12 (n) Except as expressly authorized in paragraph (1) of
line 13 subdivision (e), the mitigation agreement shall not include any
line 14 provision to waive or exempt the parties from any requirement, in
line 15 whole or part, of this chapter.
line 16 (o) Subdivisions (b) to (e), inclusive, shall not apply to funds,
line 17 including funds from mitigation fees, held for the long-term
line 18 management and stewardship of property pursuant to either an
line 19 interim or approved habitat conservation plan pursuant to Chapter
line 20 35 (commencing with Section 1531) of Title 16 of the United
line 21 States Code or an interim or approved natural community
line 22 conservation plan pursuant to Chapter 10 (commencing with
line 23 Section 2800) of Division 3 of the Fish and Game Code, if, in the
line 24 interim or approved plan documents, the permitting agency
line 25 determines the endowment to be established with those funds will
line 26 be adequate and provides a schedule for funding the endowment.
line 27 (p) (1) If a governmental entity or special district is the project
line 28 proponent required to provide long-term stewardship of property
line 29 pursuant to subdivision (b), an endowment or other financial
line 30 mechanism for long-term stewardship shall not be required if the
line 31 governmental entity or special district provides evidence to the
line 32 local or state agency that it possesses an investment-grade credit
line 33 rating by a nationally recognized statistical rating organization
line 34 or other equivalent evidence of financial reliability, and provides
line 35 one of the following:
line 36 (A) A resolution to fund the long-term stewardship of the
line 37 property adopted by the board or legislative body of the
line 38 governmental entity or special district.
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line 1 (B) A contractual agreement with the state or local agency
line 2 enforcing the mitigation requirements to fund the long-term
line 3 stewardship of the property.
line 4 (2) A resolution or contract provided pursuant to paragraph
line 5 (1) shall include all of the following:
line 6 (A) A summary of the governmental entity or special district’s
line 7 current and projected financial state.
line 8 (B) A finding regarding a financial analysis conducted on
line 9 annual management costs.
line 10 (C) An annual pledge of revenue to cover the annual mitigation
line 11 requirements.
line 12 (D) An annual pledge of revenue to cover the annual
line 13 management costs.
line 14 (E) Use of accounting standards consistent with standards
line 15 promulgated by the Governmental Accounting Standards Board
line 16 or its successor entity.
line 17 (F) An annual fiscal report.
line 18 (3) If the governmental entity or special district is subsequently
line 19 downgraded below an investment-grade credit rating by a
line 20 nationally recognized statistical rating organization or fails to
line 21 maintain an equivalent standard of financial reliability, the state
line 22 or local agency enforcing the mitigation requirement may provide
line 23 written notice thereof and require the governmental entity or
line 24 special district to post collateral for performance of the long-term
line 25 stewardship in the form of a performance bond, escrow account,
line 26 casualty insurance, letter of credit, or other appropriate
line 27 instrument. The obligation to maintain collateral shall end, and
line 28 all unused collateral shall be canceled or refunded, upon the
line 29 governmental entity or special district providing evidence of its
line 30 return to an investment-grade credit rating by a nationally
line 31 recognized statistical rating organization or other equivalent
line 32 evidence of financial reliability.
line 33 (4) If the governmental entity or special district fails to
line 34 adequately fund the long-term stewardship by revoking, failing to
line 35 comply with, or otherwise rendering ineffective the board
line 36 resolution described in paragraph (1), or after being provided
line 37 written notice, fails to cure within the remedy period set forth in
line 38 the contractual agreement, the state or local agency enforcing the
line 39 mitigation requirement may, in addition to any contractual
line 40 remedies, require the governmental entity or special district to
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line 1 post collateral for performance of the long-term stewardship in
line 2 the form of a performance bond, escrow account, casualty
line 3 insurance, letter of credit, or other appropriate instrument.
O
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