MINUTE ITEM

if':is C=:l-?ndar Item f ~'). ot I . was a~oro· ·~d zs Minc~e ·c ... :r1 Ho. ~L ·oy the State ~ -~ ;ds 8om~E:.SiC:n ~y a V})te Oi c~ ~-

A. . O at 1t;. 'f-.J <f..;E.., ~a ting.

MINUTE ITEM 4/29/81 Shimer s 7845 .

21. AUTHORIZATION FOR EXECUTION OF 11EMORANDUM OF UNDER-STANDING BETWE:E.N CALIFORNIA STATE LANDS COMMI5SI0i~ ANr BUREAU OF LAND MANAGEl-iENT, CALIFORNIA ,

During consideiration ·of Ca:lendar Item 21 attached, Mr. Wil.li..am F. Nort~irop, Exernutive Qf'ricer, advise.d t:hat representatives from the WestE~rn States l•and· Commissic1ners Association would

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be in Wash.ingt:on, D.C. dur.~ng the foll_owing :-...~~~·_to meet with Secretary of Interior James Watt, BLM'D~rector Bob Burfo;;d and other~ to dis<!USS, . "?tllong other things, the implementation of this MOU. Coiamissiun-Alt:ernate David ,Ackermau. asked thae Mr. Northrop :iaake this the -subject ·.of ·his Ex~·cutive Officer's report for th~~ next mee:t;:;i.ll;g.

Upon motion d.l~ly made and carried, thE~ r.esoll~.tiori. as prer•ented in Calendar Item 21 111as approve4 by a vote of Z-0.

Att.ar.b!Ilent:: Cale;~~ar I t~rin 2-1

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CALENDA.R ITEM

,, 21

AUTHORIZATION FOR EXECu1:roN 05 MEMGRANDUM OF UNDERS'lANDING i~i?::fWEEN

CALIFORNIA STATE LANDS COMMISS~ON AND BUREAU OF LAND MAlqAGEMi:'l\IT, CAl·:IF0RNIA

T~ January 1981, the Bureau of Land Menagemen~ e~tered

4/81 s 7845 $himer

.... s Memorandum of Understand;Lng (MCIU} with ,t:.he Western St:a,t.es Land Commissioners' Associat~on; (WSI;CA-l setting out general guidel.ines for satisf·acti~m OF sch()ol land indem11i·ty. Subsequently, s.taff has :jlu~t w~th ~alifornia BLM repres·en·tativ:es to develop ar. MDU se.tting out goa"ls and guidelines that address issues th4t alje part'icular to Calif9rnia. The Cal.ifornia MOU wou·ld SUP.pleme:nt and further tit~ .gqals of the BLM/WSLCA MOU. . -

In 1978, Commissio.1 and ·Bl.M staffs cotpple.teg. an audit to ascertain the: extent of California 1·s 1?.nd. tl:ernent. Thi.s audit idem:.i~~ied 62, 423. 59 acres of· ri~maining indemnity base and 52, T'lO. 98 acres not yet surv1~;yed :i that are due t:.o State. Th~~ MOU under consideration. would recognize these lands as the minimum acre~ge due. the State P-nd leave the dooT open fo1: further er1r-· ·:lement to ·CC>me to th\~ S~at'e if iL•vestigai~iori disclo,&e·:s ·the Stat.e is due. additional lands. This future ~tudy and res9lu.t:i:onwi1i be the subject of a separat~~ MOU. The pr;esent MOU al:so 1r.tovi.g.~s that mineral..:..in-character dete.rminations and. land vai.:'Ja·tion work shall b!~ done by Bti-1/SLC teams t;o facii1..t;~~ these processes. A.L~.o, the State would agree to file s~i~ct.ion applications £or the· 62,423.59 acre? .of indemnity 'base not later tha.n December 31, 198·4 ....

Staff rev:.iew of the California Memorandum pf GJ:lderstap~~ng indicates it .:s consistent wich thE:'l W.SLCA/BLM MOU on lndeTQ!l:Lty Selection anct should contributa to an efxective and efficient program to satisfy the State's schc1oii l~nd enti.tlernent.

EXHIBIT. A. Memorandum of Understanding.

IT IS F·'.!:COMME~DED THAT THE COMMISSION AUTd.OR1ZE THE EXECUTIVE OFFlCEk TO £NIER INTO AND EXECUTE A ~1EMORANDUM OF t:~tl>ERSTANDING BE1WEEN CALIFORNIA STATE LANDS COMMI~>SION AND BUR~~µ OF LAND Mf.N~GEMEN1, CALIFORNIA) I:N SUBSTANTIALLY THE "FORM O~~ FILE ;;~-: 1'HE OFFICE OF THE COMMISS:toN.

PURPOSE

EXHIBIT "A"

MEMORANDUM OF UNDl;:RS.TANDING

BETWEEN

C~I,.IFORNIA STATE LANDS COMMISSION

AND

BUREAU OF LAND MANAGEME~~,.CtiLIFORNlA

It is the inte1it 6-£ ~his Memorandum of Understanding CMQ1J) t:o supplemen:.. the Nat;io·~al level Memorandum of Understar?'"ing (January 8, 1981) betwee\'1 the \'f~ste·rn States Land Commiss1.or11t?rs Association .<!nd the Burea~ of Land, Management (BLM.l, which deals wit:n the processing of indemn.i:l:y selections.

This MOU establishes certaiR pI:oced:µ;ra:L gg~delines appl·icabl.e to the indenmity selectlon program. in Cali,fornia ang providE:·s for cooperat:ive efforts o·n property :1.Taluations.

POLICY

T~~ policy 1)£ the Department of the rinte.rior and the Bureau gf.. Land Man;~gement is, tc expeditiously trans.~er all out.standing sect:ion entitlements to the State of Californi·.a.

This policy· reflects the Supre~e Court decision entitl~d "Andrus vs. Utah" and the following 1management commitm~mts:

1. The outstanding entitleme_n~. r.ights are to be cor:isidered as an obligation and debt due to th·~ states by the Federal ·Gove:C:nrnent.

2. I~ the applicacion of laws~ regulations, and p6licies on indemnity selections, t:~.te Bureau will consi.der the equities of the states to the gi:eatest extent possible withj.n the con?'Criiints of applicable ia1r.y.

3. Satisfaction of indemnit:y ?election rights and d1.sposal of parcels of public lands for chc.:t purpose WJ.11 be considered as "serving th'~ ,national interest:" in the ~~ntext qf Section 102 (ar\1} cf t;he Fede-ra: Land Pol.icy <:lrtd-N,-\nagement Act: of 1976 (,li,il,'~:.,1 -

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and in cC"riii.~ction wLth land.;.·use P.1:anning and classif i.cat:.ion activities iri the i:nd~mnity selection impleine'l'.:~tation program.

AUTHORITY

The authority permitti!lg indemnity s(uec ... ions is outlined in the Nationa'l level MOU incorporatE~d ~s ·an .. attachment to this docu.ment.

DEFINITIONS

A. Ent~itlement

In December· 1978; the BLM and the State Lands Commiss:;i;.on completed a comt:rrehensive audit of thE~ remaining school base acteages due to the State of Cali'fornia. The re~sults 0£ this. audi·t ari~:

1. Remaining i'ndemriity Base {Includes all wLthdrawn lands, some of which are unsurveyed·)

2. t-i:tnus Excess Ind·~mni-ty Used

Subtotal

3. ·unsurveyed Lands (Sections 16 & 36 to pass in-place a.t time of surV~!y-)

Total

63.;rz.:;.~13 ac1:es ( aci;eag·~ bas'~d on protraction 1diagrams -and survey ~Ila ts)

-::-1, 301.54 ac.Tes

6,2 ,423. 59

52,7.10.98 acres ( acre.~ge ~based on protraction diagk3msl

115~134.57 acres

Fr.·r the purpos~~s of this ~g,ree.J;P,~t.-~ only those la.nds iqentifi~~d ,g.s select:t;~:m base ~62, 423 .. 59 ac.,..(;•,s·) wj 1-1 i;>e used to complete .t:he selection process .. Tht;; eomplete lis·ting of these lands is i..ncorporate~d herein by referen~e.

Those unsurveyed lands C 52, 710. 98 acres) on ,~.;ih,j,.ch cit1e would pass co the State, when surveyed. w~ll be used for exchange only; specific guiaan~e r1::garding these lands will be incorporated iii·'::O t:he existing State Lands Commission/ELM YiOC on

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exc:nanges. In addition, fui;ure audits or reinterprE!­tations may ioncrease. the St.ate'~ entitlement.

ThE! BLM recognizes that the Stat:~ is entitled to sel~ct no less than 62,4~3.59 acres (9n the basis of the above r.udit). The State may be entitlE~d to add~tiona~ base upon the survey of unidentified hiatus townships or any other W!-:::esolved acreages, ·the resolution ·of whict. w.i:U be covered in a .s~parate Memorandum of Understa:nding. ·

B. Se:i..ecL,j.on .C~cepts ---~ -. Ti11? State Lands Commission may, at its option, el1:?ct to utilize ei.t;her the pooling concept, the tract-for-tract procedures, or a· c.ombination o4

th1:? two as described below. 'Regardless of the approach, s~lections may not exceetj the State's acxeage entitlement or value limits.

Pooling Concept

This approach. involve~ p9oli:µg all base acrg~g·e due the State and assigning a v·alue-per-ac-re. · The values of selected lands $ay ~ot exceed

2.

the valu_e of the pooled base -lands by more than ten. pEJrcenP .. · ·

': rac t-f o:r-Tra'.c t

Tracts of base land may be -offered for' ~~~cts of selected land withoi1t tbe constraints· o,}. a tract-for-tract matcl~ i:n acreage or d.ollar value. Whl>:n a. base land tract has a value of less :tltan f500 per acre, the value of the selected t'ract may~not exceep the base land value by more than 2~01,,4 1f the base land tract h.<:ls a value of more t:han $500 per acre, th~ roughly equivalent guidelines (10%) will ap~;I,v; i.e., a selection may not ex~eed t:he ·bas~ land ;ralue by more than 10'1o•

C. Va.luation

Va.tuation on be>th basE' end selected lands wtll be made at: app1~oximabely the same date. If the St at:e elects t:o uc ilize th1: pooling concept:, tract.­fc•t"-t:ract: concE~pt, or a combination of bot~, appraised ·.'<:ilues of base lands will ~e fixed as of the date

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D.

of appraisal; any subsequent ·apprai&.al of sel~cced iands will also be made as •:>f this ci~.

1. Appraisals

The basic policy on valuing ba~e and selecte~ lands will pe ~3sed on ·the highest and be~t use. Although ho formal appraisals are required for this p;:-ogram, the cpr11parat:ive value appro~ch will ~P used whenever possibl~, with CO$C and iii.come approaches used when appropriate.

2. Mineral Evaluati.on

Where the highest and best .use include.·S minE1~al ex.c.raction or developme,nt, the contributiop· .of minerals. to the fee value of the trac._i:. shal! -b.2 determined by :the moss supportable val~ation method: eit~er discounted casb· flow for the period of depletion of the estima~ed .r~s;~Fves or. mal:.!~et da ta1 from s'lles ·Or leases of si'~~.lar pJ:ioperty ri~;hts on comparable properties.

Purely speculative mine~rai va1ues will be assume~ to be inr.luded in sales prices of pr9pert.~g:s with compar~rbly s~eculative mineraJ rotenti'al. In the abse~1ce of reliable: marke·t data, however, mineral valµes in the base and selected lands wili. be balanced through the use of a min?ral potential ranking system developed by BLM/~St(ite Lanq.s Commission Geoiogists/ Mining Erigi:neers, to facilit~te the .appraisal process.

MLneral-In-Character

A:. l mineral-i·n-charact::.=r d•=terminati•')ns wi.11 be made as ',of the date of the sel'ection· application. Ba~~ lands must be mineral-in-character if a selection it:rvolv~l3 mineral_ lc;rtds. Any base lang,s classif:ted by USG'S as "pr.ospec:tive.ly va:luable" or "valuable" f,:;.r any leasab~e mineral wJll be cohsidered as mi nerai-in-cbal;acter. Thi~· interpretation also applies to l~nas so class~fied for locatable minera:s by BLM and St.;tt:e Lands Commiesion Geologists/Mining Engineers.

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f.lf~UTE ~A~!:

.os~rj 8'4'J!

COOPERATIVE PROCEDURES

A. Bl.M/State Lands Commission

L .Each cooperator will name one individual from e~ch office to~·oordinate the program and maintain contact w5.th respective staffs.

2. Each -coopera.t.or will jointly agree on mineral- . in-character det..armination' for base and selected lands. These determinations will be ma<le effective as of the date of filing a ~election. The basis for de~ermining mineral-in-char~cte~ includes literature search, knowledgE.:.able sources in industry, geplogic inference, mining claim activity, etc.

3 •. Each cooperator will jc"intly agree on Fair

h.

Market ~alue apQraisals anq mineral evaluatio~~ for base and s·el:~.~t~-4 lands. Since no formal reports are requi;.~?d. prelirni:nary e·~~tirnates of value :using comErarati:ve sales., arid other approa~rres as necessary~ will be jointly p~epared~ however;. sepal:.'ate appral.sa'l reports will btl made for base and select~d lands. No review of estimates ~£ value will be made unless there is d~sagreement, in which ce.se, reports will be forwarded for resolution by the BLM ~tate Directpr and the ·Executive Officer of the State Lands C.ommis.sion.

In the 4-,pterest of ope:r.ating effi.cieticv and expediency, both coope:ratOJ'.'~ agree i;h-al i".'l"., i-~vidual selection applications will normally not b~ less than 2~500 or more than 15,000 acres.

B. .State 1:.ands Commission-, E.r.ecutive Officer

1. Assure that funding ~nd personnel -are· available to continue thP. project :thr~gh to· comp.'!:etion recognizing, howeve~; that budgetary cot..srraints may limiL availabiltty of funds or personnel.

2. File selectLon applicat:ions on ail base !62,423.59 acres). All applica~ions will be tendered prior to D~G~wber 31~ 1984.

3. Excess indemnity lands (1,301.54 acres) identified under "Definitions" wlll be used l:.O delet:e

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fractional: ~cre·~ge-s on the base land 1 i.st .­However, the Act of March 1, 1877, provided that the State could ·pupchase for $1.25 per acre any exc~s&': acr·eag·e used prior to enactment of that laY?. 'The State has 71. 81 acres of excess in .this category, leaving a remai.nder of 1,229.73 actes. If ehe-Scat~ does tiot exercise the abova opt:ion, all of the c-xcess w".11 be appL~'eQ t9/ the ba?e list. The ,Sta.*-e wL!-i -review th~ 'base li·st and advise BLM of the areas whe~e ~hese lractional acr~ages are L be de~~t:ed.

c. BLM qa~ifornia, s~~~~ Director

1.. Initiate the processing of. a selection on receipt of an applicatioh

2 A·:;·:;~~E· that; adequate funding end personnel are cons~aered in the formulation of the annual lands and realty budget, ·1ecogniz.ing, howevE;.7-'~ that budgetary constraints may limit the ava~~­ability of funds or perscmne:\..

3. Appoint a BLM team to review all selections for conformity with 1and~use plans and NEPA req1:?-iremerits~

OPERATIONAL PROCEDURES

The Ta.sk tmplementat.ion Plan, which is i.ncorporat~d by reference in th€ Nat:;.onal-level MOU:-_ prop_oses cercai'9- procedures. for iclept.ifying S?lections. For the ?urposes of t'i!'l· 'agreement, t~e fe>llc1wing prociedures will be utilized f(yr the selection program in California:

2.

The State Lands Commissi9n will deve'lop a Lis.~ing of :;elP~.t',ed pubU..:-~ 1-cinds by cr~osr~phic area, ran}<i.ng them in order of pricrity. ·

The BLM will review (30-45 days) the State 1 s selection list. Within 1..5 days after tht::: initial screening~ t:he BlN will nottfy the State :.ands Coinmission as to the areas where t:hey would or •;ould not recommend classificati-0ns for lieu selection. This d?-tf?rminat.1.on will be reviewed joi.ncly by both parties who will reach ag);.eement ongo/no,-go areas. If further studv of a selection area is required before ~LN can make a decision on classifi­ca:tion, both parties w:!.),.l agre.e on a ccmpl·eti on

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da ti=-· The final BL'l decision on whether a selection classification wouid or would not be approved will be mnde by t:he State Dire!ctor.

3. Within 30 days after joint agl'eement on selection areas, the State will file a selection(s) application utilizing t'he pooling, tract-for-tract, or an chpproach combining both concept:s.

4. The BLM. will process the selection application. After proposed and ini.tial classifications have been issue4 and all protests resolvect, BLM will issue a clear list to th~ Stats.

IMPLEMENTATION SCHEDULE

The proposed i~ ,:>lementati,on schedule for the selec,1;ion program in California is planned for completion in 1984. !:.pecif ic t.ime frames for cofop1.eting certain actions are ac; follows:

1. Mineral~in-characte·r determ].)nation of ai.l base l~~ds by BLM/SLC Geologists/Mining Engineers March 1982. Mineral-in-character dct~rm1nations will be made for each selection application .when £iled. Ea.ch cas.e is estimated to take four weeks.

2. Af cer t:he 30-to-45-day ini:tie.1 screening of a selection propos~l and the ~LM. decision to allow, t:he SLC will file an application withi:n 30 days.·

·3. BLM will assign a team to analyze and make recommend­ations on a ~election application (30-to-60-day review period). Thi.s analysi~ will include the mineral potem:ial ranking and fair market value appraisals. lf va],.ues conform to the perceq.tage guidelines, BLM will issue a prop.::?sed and an :i.:p.itial c.i:a-.:;sification decision each with a 3"0-day review period. Publication o:f t:he selection in local newspapers may require another three weeks.

The Lotal amount of time to proces5 any particular selection wi i 1 var~ depending on acreage and che particular resol.rrc_e vaiues OE the selected lands. On the aver~ge, however, most: selections will requi:re at the minimum, three months to process a£tet receipt of the applic?ti6n.

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Th': ~-iemorandum of linderstanding will become effect:ive upon the date of the last signature below. Thi;; MOU mgy be renegotia.:.ed at any time and either party may car . .;el .:he agreemenc afte.r a 60-day notif-.cation period.

WILLlliN F. NORTHROP Executive Officer State Lands Commtssion State of California

Date

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JAMES B. RUCH BLM State Director California State Office Bureau of Land Mar.agem~nt

Da.!:e