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Key Considerations. Understand the nature and scope of the access you are granting. Consider any limitations you might need to prevent conflicts with your farm operations or other activities on your property. The due diligence period can last from a few months up to a year, which usually can be extended either automatically or upon notice. • Make sure the company is agreeing to restore your property if necessary and repair any damage caused by the inspections, testing, and other due diligence activity. • The letter of intent or option should provide that the company obtains and pays the fees for government approvals, such as a zoning permit, but it may require you to cooperate. Landowners should fully understand the impact on their property from any requested zoning change. • Contact your local tax assessor if you are entering a lease of less than 40 acres for more than 1 year because it may require approval under the state’s Land Division Act. Although practice varies among local governments, it is technically a new “parcel” as the term “division” is defined in the Act. Letter of Intent After your first contact from a solar developer, most landowners quickly receive a letter of intent, term sheet, or preliminary agreement. The form of this document can vary from something very short and informal to one which includes a lot of detail about the proposed project and lease. In addition to allowing time for due diligence, the company uses this arrangement to reserve the site. Upon signing, the landowner cannot shop the property to other companies and, often, must keep any information about the potential solar project strictly confidential. Typical language reads as follows: The Landowner agrees not to solicit or negotiate, or permit its agents or employees to solicit or negotiate, or furnish information to any other solar power entity, concerning the construction and development of a solar panel project on the Landowner’s property. Key Considerations: • Can the landowner still change their mind once the letter of intent is signed? It depends. The letter of intent may or may not create a binding obligation to lease the property. It might if signed by the landowner with agreement to the essential leasing terms, such as the property, the length of the term, and the rental amount. Instead, look for explicit language that the letter or agreement is “not to be interpreted as a binding contract” or is only a “framework for negotiations.” Option to Lease Like the letter of intent, an opt...
Key Considerations. Choosing a Procedural Parent Agency The choice of what procedural rules will govern the new joint powers authority cannot be used to expand the substantive powers of the authority, since a joint powers authority can only exercise powers that are common to all of the contracting agencies.20 But the choice of procedures can nonetheless have important implications for the authority’s activities. The contracting parties should choose a “procedural parent” whose procedures are comprehensive and up-to-date.21 Certain efficiencies, such as streamlined purchasing authority, may make a particular agency a good procedural parent.22 Finally, an alternate agency should be identified in the event the original procedural parent withdraws.23
Key Considerations. State Oversight State statute requires an annual audit of a joint powers authority’s accounts and records,42 unless the authority’s governing body votes unanimously to substitute this annual audit with an audit covering a two- year period.43 The audit must adhere to the requirements prescribed by the California State Controller and to generally accepted accounting standards.44 The choice of who to designate as the authority’s treasurer and auditor will impact auditing requirements. If the authority’s treasurer or auditor is an officer or employee of the authority, then there must be an independent audit conducted by a certified public accountant or public accountant.45 But if neither the authority treasurer nor auditor is themselves an officer or employees of the authority, the audit may be completed by the authority’s designated auditor.46 Under SGMA, the California Department of Water Resources (DWR) is charged with reviewing a groundwater sustainability plan adopted by a joint powers authority serving as a GSA.47 In terms of 37 Gov. Code § 6505(a). 38 Id. § 6505.5, 6505.6. 39 Id. 40 Id. § 6511. 41 Id. § 6512. 42 Id. § 6505(b). 43 Id. § 6505(f). 44 Id. 45 Id. § 6505.6. 46 Id. § 6505.5. 47 Cal. Water Code § 10733(a). ongoing financial oversight or governance, however, SGMA does not impose any additional requirements on joint powers authorities serving as GSA’s.48 Filing Requirements State statute requires that a joint powers authority file with the Secretary of State within 30 days after the effective date of a joint powers agreement, or any amendment to the agreement.49 Whenever such a notice is filed, a copy of the full text of the original or amended agreement must also be filed with the State Controller.50 Under SGMA, an agency electing to serve as the groundwater sustainability agency (GSA) for a basin must also notify DWR within 30 days of its decision to serve as a GSA.51 Funding Contributions and Liability The joint powers agreement can provide a mechanism for initial funding of the newly created entity, including contributions from non-public entities that are represented on the board of directors. The joint powers agreement can also specify that the contracting parties do not intend to be liable for the liabilities, debts, and obligations of the newly formed entity. Sample Provisions and Advice
Key Considerations. There are a few considerations in the design of a framework agreement that are important under emergency situations. These include:
