The State Lands Commission, in the Natural Resources Agency, manages more than 4 million acres of property received from the federal government. This includes tide and submerged lands, state school lands, beds of navigable waterways and swamps plus the energy and mineral resources contained within them. Its stewardship includes economic development (leasing properties to companies and utilities), protection, preservation, removal of hazards and restoration. Through its policies, the commission tries to ensure balanced use of the state’s resources, bringing in revenue while complying with environmental and other laws.

2009-10 Annual Staff Report on the Management of State School Lands (pdf)

After California became a state in 1850, the federal government gave 9 million acres of land to California. These lands include 4 million acres of submerged coastal land and the navigable beds of rivers and lakes, also called sovereign land. Money paid in leases for its use goes to the state general fund. In addition, 5.5 million acres of school lands, mostly in the desert, was similarly given to the state in 1853. Revenues from these lands (now under a million acres) goes to the state teachers’ retirement fund.

The State Lands Commission was set up in 1938 as part of the Natural Resources Agency after public scandals over the cheap sale of mineral rights on public lands. Allegations of kickbacks and favoritism in the late 1930s created demands that state lands, which had been the responsibility of various departments headed by gubernatorial appointees, be shifted to a single commission answerable to elected officials.

In 1975, the commission was charged with acting in compliance with the California Environmental Quality Act.

In 1990, after the Exxon Valdez oil spill, the commission was given expanded responsibilities over all marine oil terminals, off shore and onshore, in order to prevent oil spills. The Lempert-Keene-Seastrand Oil Spill Prevention and Response Act expanded the commission’s jurisdiction and led to the creation of the Marine Facilities Division. Additional responsibilities concerning ballast water management were added in 1999 to control introduction of non-indigenous species from foreign waters.  

However, as regulatory programs were added to the commission’s list of responsibilities, staff has been cut by 74% since 1990.

History of the Commission (SLC website) (pdf)

Review of Governor's Reorganization Plan No.1 (Little Hoover Commission) (pdf)

The commission has a broad mandate to manage and protect state land resources.

School Lands—School lands were granted to the state by the federal government in 1853 and mineral grants on those lands were granted in 1927. As of 2010, the state managed 468,600 acres of school lands and mineral rights on 790,000 acres where the surface rights have been sold. Most of the school lands are isolated parcels and many are in the desert. About one-fourth of the land is leased for revenue generating purposes. All net revenues from the use of school lands are deposited in the state treasury and credited to the Teachers Retirement Fund. In 2008-09, the Legislature borrowed $59 million from the fund to cover budget shortfalls.

Energy Resources—The commission has exclusive jurisdiction over oil and gas development on state-owned property. It collects royalties from approximately 1,000 wells at more than 100 sites. A significant geothermal electric generating complex is located in Sonoma County.

Sovereign Lands—When California became a state in 1850, it acquired from the federal government 4 million acres of land underlying navigable and tidal waterways. They are held in trust by the state and are used for fishing, water dependent commerce, navigation, scientific study and ecological preservation. The commission prepares environmental impact reports (EIRs) and reviews permit applications submitted to the California Coastal Commission, the U.S. Army Corps of Engineers and the San Francisco Bay Conservation & Development Commission.

Granted Lands—Major ports, like those in Los Angeles, Long Beach, San Francisco and Oakland, are all located on “granted lands,” property given in trust by the state early in its history to cities and counties. Many marinas, fishing piers and aquatic parks are also on granted lands. The commission monitors these properties to ensure they are developed in accord with terms of the grants.

Oil Spill Prevention—The commission’s duties were expanded in 1990 with passage of the Lempert-Keene-Seastrand Oil Spill Prevention and Response Act. It monitors 80 marine oil terminals onshore and off with the goal of protecting the marine environment.

Land Boundaries—The commission has developed programs to establish boundaries between public and private lands. It participates in the resolution of title disputes that protect the public’s resources as well as enable private parties to proceed with development projects.

The California State Lands Commission is governed by three commissioners: the lieutenant governor, the state controller and the state’s director of finance who sits on the governor’s cabinet. The commissioners meet about six times a year, and they elect an executive officer to handle the daily work and operations of the commission. The work is performed by about 200 specialists in the fields of land management, mineral resources, petroleum, the natural sciences and boundary determination.

The commission manages more than 4,000 leases signed with companies and public utilities which use the millions of acres of lands given to the state by the federal government over 160 years ago. The types of leases generated can include agricultural, commercial, industrial, right-of-way, and recreational purposes. The commission is also responsible for overseeing granted lands, such as ports, which have been granted to local governments to manage.

The commission is made up of six divisions that report to an executive officer. Three of the divisions are frontline programs and three are support programs.

The line programs are:

Land Management Division—LMD is responsible for the surface management of school and sovereign lands in the state. The division is staffed by more than 60 land managers, title specialists, boundary specialists, surveyors, appraisers and graphic designers. They are divided into seven working groups and each one includes an attorney from the Legal Division. 

Marine Facilities Division—MFD handles oil transfer safety at marine oil terminals and the threat of invasive species in state waters. The division divides its oil transfer responsibilities between field offices at Hercules in the San Francisco Bay area and Long Beach in Southern California. Inspectors regularly monitor activities and enforce regulations at 61 fixed and mobile marine oil terminals, with an emphasis on pollution control. The division has oversight of the state’s program to prevent or minimize the introduction of non-indigenous species from commercial vessels, primarily through ballast water management. 

Mineral Resources Management Division—MRM manages energy and mineral resources covered by more than 130 oil, gas, geothermal, and mineral leases on more than 95,000 acres of state-owned land. The division emphasizes the prevention of environmental damage through safety audits and inspections. It also monitors and verifies oil and gas production and royalties from commission leases. California leads the nation in geothermal energy and MRD’s geothermal program involves lease negotiation, verification of production, review of net profit allocations and regular inspections.

The support programs are: Legal Services;  the Environmental Planning and Management Division, which makes sure that the commission acts in accord with the California Environmental Quality Act; and Administrative and Information Services Division, which handles human resources, billing and financial matters.

Potential lessees who wish to use state lands or resources can begin the leasing process by accessing guidelines and forms here.

About the California State Lands Commission (SLC website)

2008–09 State Lands Commission Biennial Report (pdf)

Analysis of the 2006-07 Budget Bill (Legislative Analyst’s Office)

The commission divides expenditures from its $29.9 million budget almost evenly between its three main programs: $10.8 million for the Marine Facilities Division, $9.67 million for Mineral Resources Management and $9.4 million for Land Management.

Its $3.4 million administrative expenses are covered by those three programs. 

The state General Fund is the single largest source of income for the commission; $9.9 million comes from taxpayers. Around $15 million is collected through a variety of special funds and $4.5 million is collected via reimbursements for services rendered.

Top 10 Contractors: The commission reported that its largest service contractors in 2012 were:

3-Year Budget (pdf)

Uncollected Rents and Expired Leases on California Lands

A state audit released in August 2011 revealed that the commission has not bothered to collect rent on many state properties leased to entities like Dow Chemical Company and Southern California Gas Company. The leases go back, in some cases, to the 1980s. The commission, said the Los Angeles Times, “has failed to perform the basic duties of any landlord—renewing expired leases, keeping rents at market level and evicting delinquent tenants—the study found.”

In addition to not collecting rent, the commission allowed leases to expire. In those cases, rent was collected but at a rate that does not approach today’s values. As the cover letter of the audit said, “We found that it [the commission] generally failed to promptly conduct rent reviews, causing it to lose $6.3 million in increased rent it may have been able to collect.”

The auditors reviewed 35 leases and found more than $8.2 million in lost revenue. Among the more egregious examples of the commission’s bumbling:

·   The Southern California Gas Company runs a natural gas pipeline through 48 acres of the Mojave Desert but did not pay for that privilege for five years,

·   Dow Chemical leases tidelands along San Pablo Bay, but because the state did not keep its records current, no payments were made for 17 years. Auditors estimated the state lost $165,900 on the deal.

·   Crockett Marine Services has leased the land for its Carquinez Strait boat dock from the state since 1989 and subleased it to another company for profit—yet never paid the state for the lease. An estimated $662,000 could have been paid to the state in 22 years but was not.

In response to the report, Executive Officer Curtis Fossum, a 30-year veteran of the commission who had only been in the top spot for a few months, blamed cutbacks in staff—from 242 in 1991 to 63 in 2011—for some of the problems, but acknowledged that mistakes were made. The audit had, in fact, addressed the decrease in staff, saying, “the commission has not developed any analyses to determine an appropriate workload and the number of staff needed to address such a workload.”

Lax Land Oversight Cost California Millions  (by Patrick McGreevy, Los Angeles Times)

State Lands Commission  (California State Auditor) (pdf)

On the Money: Mismanaged State Lands  (by Mike Luery, CBS Sacramento)

State Lands Commission Misses Millions in Rent (by Wyatt Buchanan, San Francisco Chronicle)

State Fails as Landlord (by Stephen Frank, California Political News & Views)

Audit: California Losing Millions in Land Leases (by Judy Lin, Associated Press)

The Value of Air

It seemed like a good idea at the time.

When Huntington Harbour homeowner Frank Singer built a cantilevered deck extension hanging off the back of his house across the waterway that ran behind it he figured no one would care since it didn’t block the channel where small craft owners navigated the channel to the sea.

But the State Lands Commission owns the land beneath the waterway and sent Singer a bill for using the space above it. He called the fee, $680 a year, an “air tax” and tried to rally his Southern California neighbors to his cause of resistance.

“The proper method would be to determine the value of the air the deck invades, not the value of what invades the air,”' Singer argued. And the air, he said, is “worthless.”

State Lands Commission Executive Officer Curtis Fossum, who was then the commission’s chief counsel, disagreed. “You don't have a right to build over the state's property. If the state wants to permit it, it's duty bound to charge a fair market value.”

When Singer protested, the commission asked him to send photos of his deck. The photos also showed the cantilevered decks of neighbors. At least one promptly got a bill in the mail.

The flummoxed Singer said: “This is their way of having you rat on your neighbor,” he said. “That's disgusting.”

Homeowner Fights State Over “Air Tax” (by Marilyn Kalfus, Orange County Register)

Legislating Coastal Properties with Rising Sea Level in Mind

Prompted by reports from scientists and the Intergovernmental Panel on Climate Change, the California Ocean Protection Council and other agencies have created reports that model the possibly devastating effects on California’s shoreline if sea levels rise by 14 inches by 2050. 

Assemblywoman Julia Brownley introduced AB 752, addressing the projected sea level rise for public trust lands. The bill would require that land grant trustees who administer public lands—i.e., cities, counties, harbor districts and ports, and sanitary districts—develop plans for dealing with a sea level rise and related storm surges and flooding issues. The plans must be in place by 2013, and must include fiscal analyses of projected damage and repair costs if plans are not made. The State Lands Commission would administer the Brownley bill.

Brownley introduced a similar bill in 2010 that was defeated.

AB 752  (California Legislative Information)

Law Would Force Bay Area Cities to Plan for Sea Level Rise  (by Julia Scott, San Jose Mercury News)

Reforms Suggested by the State Auditor

A scathing report from the state auditor outlined the failure of the commission to properly manage the state’s resources, and immediate reforms were urged. They included developing policies and procedures for the staff to track lease payments, steps to follow when those payments are late, and when to refer such cases to the attorney general. Regular audits, appraisals and rent reviews must be conducted on time. All divisions of the commission should use the same database to track leases, and a succession plan and analysis of workload must be done.

Subject to commission approval, the executive officer and his staff assembled a response to the audit, both defending its work and agreeing to many of the specific recommendations. For example, the suggestions that the commission develop policies and procedures to track lease payments, and steps to follow when payments are late was answered this way: “Commission staff agrees and has already begun taking measures to implement this recommendation. While accounting procedures for 30, 60, and 90-day dunning letters are in place, there is a recognized need to better coordinate Accounting, Land Management and Legal division in disposition of delinquent leases should those initial steps fail.”

The idea that all divisions should use the same database to track leases was implemented. The commission agreed with many of the other recommendations and took steps to comply.

State Lands Commission (California State Auditor) (pdf)

State Lands Commission Response (by Curtis L. Fossum) (pdf)

Has the State Lands Commission Outlived Its Usefulness?

The State Lands Commission has not approved an offshore oil lease in 40 years, since before the Santa Barbara oil spill in 1969. And it wasn’t about to break new ground in 2009 when it killed an elaborate plan crafted by Plains Exploration & Production, a Texas oil company, and a coalition of Santa Barbara environmental groups.

The project at Tranquillon Ridge had won the support of some environmental groups because in exchange for allowing the new drilling, the company agreed to eventually shut the project down along with three other functioning oil platforms in 2022 and donate 4,000 acres of land for public use. The drilling proposal split the environmental community.

But more importantly for the future of the State Lands Commission, Governor Arnold Schwarzenegger proposed transferring authority for the project to the Department of Finance, which was predisposed to approve it and reap for the cash-strapped state an estimated $2 billion in revenue over a 14-year period.

Legislation to shift power to the Department of Finance failed in the state Senate but negotiations over the drilling continued until May 2010 when, shortly after the Gulf oil spill, the Schwarzenegger administration abruptly switched its position.

Yet, the question remained. Was it time to shut down the commission and shift its responsibilities elsewhere?

No. Its Mission Is Still Vital

Governor Culbert Olson swept into power in 1938 on a progressive platform of reform amid a series of scandals concerning misappropriation of state resources. Ironically, one of the solutions was to strip power over oil drilling on public lands from the Department of Finance and give it to a new commission independent of gubernatorial appointees.

The commission is headed by three officials elected statewide, an arrangement that has served the state well by allowing the agency to focus on its core mission of ensuring a balanced use of the state’s resources—bringing in revenue while complying with environmental and other laws.

John Garamendi, lieutenant governor and commission member when Governor Schwarzenegger tried to “reform” the agency, characterized the move as a willingness on the part of the administration to “undermine 70+ years of checks and balances” in order to “drill baby drill.” 

“Let’s keep in mind it was 70 years ago that a major scandal at the Department of Finance led to the State Lands Commission having the authority to issue leases,” Garamendi said.

Garamendi was referring to the 1938 scandal that helped bring down the administration of Republican Frank Merriam. “Olson accused Merriam of having let the Department of Finance . . . become ‘the agency of private interests,’ ” according to the book “Crude Politics” by Paul Sabin. “The . . . scandal and the investigator’s report on legislative corruption, both in 1938, opened a window on internal administrative and legislative corruption in Sacramento.” The book described how “famed lobbyist Artie Samish . . . doled out slush fund cash to lawmakers backing the Finance Department’s plays on behalf of Standard Oil and other companies.”

Samish was arrested for refusing to testify before a grand jury looking into allegations that Department of Finance executives held up oil companies for stock, cash, kickbacks and nepotism, in exchange for the rights to drill on state oil tidelands and sites offshore Southern California.

Garamendi spoke for a lot of supporters of the State Lands Commission when he said, “To bypass the SLC and give the Department of Finance authority to approve this oil lease threatens the independence of the SLC, a commission designed to be an independent environmental watchdog.”

Although some environmentalist groups initially supported the proposed oil lease proposal because it would curtail drilling in the future, 35 organizations opposed turning over authority to the Department of Finance. 

This isn’t the first time an effort has been made to muzzle the watchdog.

Republican Governor Pete Wilson Reorganization Plan No. 1 of 1995 proposed eviscerating the State Lands Commission. Responsibility for oil and gas drilling oversight would shift to a newly created Department of Energy and Conservation and the commission’s marine facility oil inspection function would move to the Department of Fish and Game.

The year before, the Wilson administration had simply proposed eliminating the commission without bothering to dispose of its parts. That suggestion died in the Legislature.

When the independent Little Hoover Commission reviewed Governor Wilson’s reorganization plan, it received from the State Lands Commission a lengthy defense of its mission and arguments why it shouldn’t be tampered with. It took note of Governor Wilson’s and Little Hoover’s focus on eliminating duplication of effort by state entities and made a pitch for its unique role in government.

“The State Lands Commission has the sacred public trust responsibility for protecting State-owned lands on behalf of the citizenry. . . . The Commission argues that it is important to keep land use and oversight decisions in the hands of a balanced forum of elected and appointed officials.”

“The Commission is not a regulatory agency but instead is a land management entity. . . . Rather than duplicating Department of Conservation efforts, the Commission feels it is taking added steps to ensure a higher level of protection.”

“The Commission argues that it would be a conflict of interest to have the same agency trying to maximize the productive use of resources that also restricts drilling through regulatory safeguards.”

Yes. It’s Time to Reform the Commission

No one can deny that California government is huge, complicated and wasteful in some of its duplicative efforts.

The Little Hoover Commission, in its review of Governor Wilson’s 1995 reorganization plan, was not swayed by the State Lands Commission’s arguments that it remain intact.

“Long experience in reviewing programs has convinced the Commission that effectiveness and efficiency go hand in hand with integrated structures that house similar functions,” Little Hoover staffers wrote in concluding that the Legislature should allow the Wilson plan to take effect.

The plan was rejected, but the arguments from the Wilson administration and Little Hoover Commission still receive significant support among the electorate. Eliminating the commission would save money, eliminate duplications of effort, place some functions in departments better suited to executing them, provide a clearer structure to enhance public interaction, better fulfill legislative mandates and provide greater accountability to the executive branch tasked with executing the state’s laws.

Review of Governor's Reorganization Plan No.1 (Little Hoover Commission) (pdf)

Chiang Issues Statement on New Tranquillion Ridge Offshore Oil Development (Controller John Chiang press release)

State Lands Commission Denies PXP-EDC Offshore Oil Drilling Proposal (by Anne Soble, Malibu Surfside News)

State Lands Commission Analysis Definitively Determines PXP’s New Oil Drilling Agreement is Unenforceable (Assemblywoman Susan Jordan)

How Oil Scandal Shaped State Politics (Calbuzz)

California Lands Commission Spurns Schwarzenegger's Oil Drilling Proposal (by Steve Chawkins, Los Angeles Times)

No: Arnold’s Plan is a Quick and Dirty Power Grab (A statement from Lieutenant Governor John Garamendi)

Paul D. Thayer, 1999-2010

Robert Hight, 1994-1999

Charles Warren, 1989-1994

Claire Dedrick, 1982-1989. Dedrick, a Ph.D. microbiologist, became an environmental activist in the 1960s when a she resisted a road expansion project in front of her home in Northern California. She said, “When the county engineer yelled, ‘Get back to your kitchen, lady, and let me build my road,’ I became an activist.”  After serving in several high-level roles, including being the first woman appointee to the Public Utilities Commission, Dedrick became executive officer of the State Lands Commission. She retired from government work after that, but continued to serve as a consultant to environmental groups.

William Northrup  1975-1982

Edward N. Gladish, 1973 -1974

Frank  J. Hortig, 1957-1973

Rufus W. Putnam, 1948-1957