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State Auditor Identifies $8 Million in Lost Rent From Public Land Leases

Some of California’s wealthiest energy companies have benefited from a sort of rent control -- or, in some cases, no rent at all -- thanks to poor management by the State Lands Commission, according to a recent report from the State Auditor.

The report looked at 35 leases, out of around a thousand leases that generate money for the state.

“In those 35 leases we found about $8.2 million of lost revenue because they were either not collecting rent from lessees, and they had allowed them to stay on the property for maybe 17 years or more, or they weren’t performing timely rent reviews on the leases," said Margarita Fernández, chief of public affairs for the State Auditor’s Office.

The State Lands Commission is responsible for managing millions of acres of public land, most of it along the coast.

In one case examined by the auditor, the Southern California Gas Company, which is owned by San Diego-based Sempra Energy, failed to pay rent for five years on a pipeline running through the Mojave Desert.

In addition, the method for establishing rent for pipelines hasn’t been adjusted in more than 30 years.

Among the auditor’s recommendations for toughening up the landlord: Start tallying up the rent that’s past due, and review the rent on leases every five years.