BILL ANALYSIS                                                                                                                                                                                                    

                   Senate Appropriations Committee Fiscal Summary
                           Senator Tom Torlakson, Chairman

                                           1527 (Yee)
          Hearing Date:  5/22/08          Amended: 5/20/08
          Consultant:  Bob Franzoia       Policy Vote: G O 10-0  Ag 4-1
          BILL SUMMARY: SB 1527, an urgency measure, would direct the  
          Department of General Services, prior to January 1, 2009, to  
          sell, at fair market value, a parcel of state property located  
          in the County of San Mateo and the City and County of San  
          Francisco.  The net proceeds of the sale would be paid into the  
          Fair and Exposition Fund, a continuously appropriated fund, for  
          the benefit of the District 1-A Agricultural Association,  
          thereby making an appropriation.  The bill would require  
          reimbursement from the net proceeds of the sale of any DGS costs  
          incurred in the disposition of the property.
                            Fiscal Impact (in thousands)

           Major Provisions         2008-09      2009-10       2010-11     Fund
           Sale of state property Unknown, major revenue gain one  

          * Fair and Exposition Fund (if the parcel was initially acquired  
          with moneys form this fund; otherwise the revenue from the sale  
          would be deposited in the Deficit Recovery Bond Retirement  
          Sinking Fund Subaccount pursuant to Prop 60A as noted below)  
          STAFF COMMENTS: The property would be sold to the Daly City  
          Redevelopment Agency or to the City of Daly City.  The net  
          proceeds shall be paid into the Fair and Exposition Fund for the  
          benefit of the District 1-A Agricultural Association.  The sale  
          would be required to have an agreement requiring the purchaser  
          to retain title to the entire property sold to it for uses  
          consistent with the general plan of the City of Daly City, any  
          amendment to that general plan, any specific plan amendments to  
          any specific plan, and the Bayshore revitalization redevelopment  

          Current law generally requires a state agency to review annually  


          its real property holdings and determine what, if any, is in  
          excess of its foreseeable needs.  These properties are commonly  
          referred to as "surplus state properties."  Once real property  
          has been identified as surplus, the state attempts to sell the  
          property, or dispose of it in some other manner.  When surplus  
          property is sold, the sales revenues are deposited into the  
          account that originally paid for the acquisition of the  
          property. In most instances, sales revenues are deposited in the  
          General Fund and are available for expenditure on any state  
          program.  Pursuant to Proposition 60A (2004), the proceeds from  
          the sale would be used to pay the principal and interest on  
          Proposition 57 bonds.  Once these bonds are fully repaid,  
          proceeds from surplus property sales would be deposited in the  
          General Fund.  Proposition 60A only applies to those properties  
          that were purchased with General Fund revenue or bonds secured  
          by the General Fund.  Staff notes that the bill, as amended on  
          May 20, 2008 contains a finding and declaration that appears to  
          be at odds with the intent of the bill to dispose of the  
          property.  Staff recommends an amendment to strike Section 3 of  
          the bill.