Report 2010-125 Recommendation 3 Responses

Report 2010-125: State Lands Commission: Because It Has Not Managed Public Lands Effectively, the State Has Lost Millions in Revenue for the General Fund (Release Date: August 2011)

Recommendation #3 To: Lands Commission, State

To ensure that it does not undervalue certain types of leases, the commission should amend its regulations for establishing pipeline rents on state land as staff recommended in the 2010 survey of methods used by agencies in other states to establish pipeline rents.

Annual Follow-Up Agency Response From October 2014

Commission staff has successfully amended regulations with updated per lineal foot rate for pipelines and conduits which will be used in future rent considerations.

Title 2, Division 3, Chapter 1, Article 2, Section 2003 (a) (4) of the California Administrative Code now reads:

Section 2003. Rent or Other Consideration.

(a) Rent or other consideration for the various categories of uses shall be in the best interest of the State and may be based on one or more of the following methods:

...

(4) $0.05 per diameter inch per lineal foot of pipeline, conduit, or fiber optic cable;

Amendment filed 3-10-2014; operative 7-1-2014 (Register 2014, No. 11).

California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented

Annual Follow-Up Agency Response From October 2013

Commission staff submitted a regulations package to update Sections 1900, 2002, and 2003 of Title 2 of the California Code of Regulations to the Office of Administrative Law (OAL) on January 18, 2013. Staff provided the BSA with a copy of the submitted regulations package in January 2013. A copy of the regulations package can be found on the Commission's website using the following link: http://www.slc.ca.gov/Regulations/Regulations_Home_Page.html. Consistent with the OAL's rulemaking process, Commission staff held a public hearing on the proposed regulations on April 16, 2013. The public comment period closed on April 15, 2013. Commission staff is currently reviewing comments received and preparing responses. It is anticipated that the regulatory process will be completed by early 2014 and the new regulations should be effective by March or April 2014. As part of these proposed regulations, Commission staff has recommended increasing the pipeline rents from 2-cents per diameter inch per lineal foot to 5-cents per diameter inch per lineal foot.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

Annual Follow-Up Agency Response From October 2012

Commission staff is finalizing a regulations package to update Sections 1900, 2002 and 2003 of Title 2 of the California Code of Regulations for submission to the Office of Administrative Law (OAL). Staff plans to submit this package in either late October or early November 2012. Once complete, staff will provide BSA with a copy of the regulations package submitted to OAL. Staff anticipates this process taking approximately one year, which is why a November 30, 2013 date is shown in response to Question 6, above. As part of these regulations, Commission staff is recommending increasing the pipeline rents from 2-cents per diameter inch per lineal foot to 5-cents per diameter inch per lineal foot.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

All Recommendations in 2010-125

Agency responses received after June 2013 are posted verbatim.