Mitigation Land Acquisition



Some CDFW permits such as Lake or Streambed Alteration (LSA) Agreements and Incidental Take Permits (ITPs) require that Permittees mitigate the impacts of their projects. Mitigation often takes the form of land acquisition and permanent protection. This may be through the purchase of conservation or mitigation bank credits, or Habitat Management Land Acquisition (HMLA).

This page describes the HMLA process and provides tools for Permittees.

CDFW may assume any of the following roles:

  • Third-party beneficiary in a conservation easement or fee title
    This is the most common role. After CDFW approval, a Permittee may grant an easement or transfer the fee title of HM lands to an entity such as a land trust. CDFW is a third-party beneficiary to this agreement.
  • Grantee in a conservation easement or fee title
    This is less common. If land is going to be granted to CDFW, it must be reviewed and accepted by the Wildlife Conservation Board(opens in new tab).

The HMLA Process (non-banking)

Stage 1 - Property Eligibility

Review the Permittee Checklist of Documents for HMLA Property Review and Protection (PDF)(opens in new tab) (Permittee Checklist). Your CDFW Regional Representative (identified in your permit) may conduct a site visit of the proposed property. They, in coordination with a CDFW Senior Right of Way Agent, will review property-related documents to determine if the property is eligible to meet permit mitigation requirements, including acreage and biological suitability. Your CDFW Regional Representative will notify you of their findings, and if the property is eligible, Stage 2 begins. If the property is not eligible, you will need to propose a different property or alternative form of mitigation.

Stage 2 - Property Acceptance

Your CDFW Regional Representative will request documents identified in Stage 2 of the Permittee Checklist (PDF)(opens in new tab) and will provide an example of a Conservation Easement (CE) unless property is being conveyed in fee. Show any changes to the CE template in a red-line or strikeout format and submit it electronically to your CDFW Regional Representative. The documents will be reviewed by your CDFW Regional Representative, a CDFW Senior Right of Way Agent, and a CDFW Senior Land Surveyor. Any substantive deviations from the example will require review by CDFW's Office of the General Counsel. After review, your CDFW Regional Representative will notify you of CDFW's decision to accept or deny the property. When CDFW accepts the property, move on to Stage 3.

Stage 3 - Property Protection and Closing Documentation

This stage takes place after the property has been accepted as mitigation by CDFW. During this stage, the property is protected by recording documents transferring fee title or a conservation easement and closing the real estate transaction. When CDFW is a third-party beneficiary, you will need to provide your CDFW Regional Representative with a digital copy of the closing package to ensure CDFW has a copy of all closing documentation required for permit compliance.

When CDFW is a conservation easement grantee or is acquiring land in fee title, the Wildlife Conservation Board(opens in new tab) will review the package and the Executive Director of signs a certificate of acceptance. The Wildlife Conservation Board then sends the conservation easement or grant deed to the title company for recording. You or the title company needs to provide your CDFW Regional Representative with a digital copy of the closing package to ensure CDFW has a copy of all closing documentation required for permit compliance.

Forms and Resources

Frequently Asked Questions

What is a Conservation Easement?

A conservation easement is a voluntary legal agreement that protects the land by permanently limiting some uses that would compromise the conservation values or the landowners' goals for the property. A Permittee may enter into a conservation easement with a land trust, government agency, tribe, or other qualified organization to mitigate adverse impacts on natural resources. CDFW may agree to act as grantee for a conservation agreement or CDFW may, in its sole discretion, approve a non-profit entity, public entity, or Native American tribe to act as grantee for a conservation easement, provided that the entity, agency, or tribe meets the requirements of Civil Code section 815.3. CDFW must be named in the conservation easement as third-party beneficiary. See California Government Code section 65965 et seq. and California Civil Code section 813 et seq.

What is Fee Title?

In some instances, if CDFW agrees, a Permittee may grant fee title to HM lands to CDFW. The Permittee must provide funding for perpetual management of HM lands and must reimburse CDFW for all reasonable costs incurred by CDFW during land acquisition. More commonly, CDFW, in its sole discretion, may authorize a governmental entity, special district, non-profit organization, for-profit entity, person, or another entity to hold title and to manage the property provided that the district, organization, entity, or person meets the requirements of Government Code sections 65965-65968, as amended. In these cases, CDFW serves as third-party beneficiary.

What is an Endowment?

And endowment refers to financial assets that are structured so the initial amount invested (i.e., the principal capital, or corpus) remains intact, and only the interest or investment gains are withdrawn.

Does CDFW Require an Endowment for the Long-Term Stewardship of Mitigation Lands?

Yes. If CDFW requires a project proponent to purchase, transfer, or protect land to offset adverse impacts to fish and wildlife, state law requires the creation of a fund for the sole purpose of managing that land in perpetuity. That fund must meet the definition of an endowment (Gov. Code, § 65965, subd. (a)) and shall meet the following criteria:

  1. The endowment shall be held, managed, invested, and disbursed solely for, and permanently restricted to, the long-term stewardship of the specific property for which the funds were set aside.
  2. The endowment shall be calculated to include a principal amount that, when managed and invested, is reasonably anticipated to cover the annual stewardship costs of the property in perpetuity.
  3. The endowment shall be held, managed, invested, disbursed, and governed as described in subdivision (a) of Section 65965 consistent with the Uniform Prudent Management of Institutional Funds Act (Part 7 (commencing with Section 18501) of Division 9 of the Probate Code).

In the context of mitigation lands, endowments are restricted and specifically defined in Government Code section 65956 as funds that are conveyed solely for the long-term stewardship of a mitigation property, and permanently restricted to paying the costs of long-term management and stewardship of the mitigation property for which the funds were set aside.

Habitat Conservation Planning Branch
1010 Riverside Parkway, West Sacramento, CA 95605
Mailing: P.O. Box 944209, Sacramento, CA 94244-2090