BILL NUMBER: SB 754 CHAPTERED 10/14/07 CHAPTER 681 FILED WITH SECRETARY OF STATE OCTOBER 14, 2007 APPROVED BY GOVERNOR OCTOBER 14, 2007 PASSED THE SENATE SEPTEMBER 6, 2007 PASSED THE ASSEMBLY SEPTEMBER 5, 2007 AMENDED IN ASSEMBLY JULY 12, 2007 AMENDED IN ASSEMBLY JUNE 27, 2007 AMENDED IN SENATE APRIL 26, 2007 INTRODUCED BY Senator Kehoe FEBRUARY 23, 2007 An act to add Section 14670.2 to the Government Code, relating to state property, and making an appropriation therefor. LEGISLATIVE COUNSEL'S DIGEST SB 754, Kehoe. State property: leases. Existing law authorizes the Director of General Services, with the consent of the state agency involved, to let for a period not to exceed 5 years, any real or personal property that belongs to the state, subject to specified conditions. Any money received in connection with these leases is required to be deposited in the Property Acquisition Law Money Account and be available to the department upon appropriation by the Legislature. This bill, notwithstanding existing law, would authorize the Director of General Services, with the consent of the Department of Motor Vehicles, to lease or exchange, for a term of years, as determined by the director, specified parcels of real property that are acquired and used by the state for the benefit of the Department of Motor Vehicles, subject to specified conditions. This bill would also provide that the proceeds from the lease or exchange of that property shall be deposited in the Motor Vehicle Account in the State Transportation Fund and shall be available to the Department of Motor Vehicles, thereby making an appropriation. This bill would also require that a mixed-use facility be located at the current state-owned site unless there are mitigating circumstances requiring relocation. If relocation is necessary, the bill would require that the replacement facility be located within the geographic area that serves the current customer base. This bill would also require the Department of General Services and the Department of Motor Vehicles, jointly, to notify the Joint Legislative Budget Committee prior to entering into any lease that is 30 years or longer and to report the terms and conditions of any lease 45 days prior to entering into that lease. This bill would also require that a lease or exchange of properties be for no less than fair market value and upon terms and conditions that are determined to be in the best interest of the state. This bill would also require reimbursement to the Department of General Services for any cost or expense incurred in the disposition or lease of any parcels. Appropriation: yes. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. The Legislature hereby finds and declares all of the following: (a) The Department of Motor Vehicles comes into direct contact with more residents of this state each year than any other state agency and it is imperative that the facilities that offer services to the motoring public are safe, clean, and designed for efficiency. (b) Adding a new or replacement office is a costly and time consuming process and in order to meet the challenges of a growing population, innovative approaches will be required to ensure that adequate facilities are available for the public. (c) There is high value in many of the existing state-owned facilities operated by the department, even though these offices have exceeded their useful life. This equity may be leveraged to develop mixed-use projects that would, in addition to the motor vehicle office, incorporate retail, office, and residential units. These projects would provide modern motor vehicle offices while offering housing opportunities, increased sales taxes, and additional jobs within the communities they serve. (d) It is the intent of the Legislature that the department, in cooperation with the Joint Legislative Budget Committee, the Department of Finance, and the Department of General Services, pursue creative facility strategies, including the mixed-use approach, where feasible and appropriate. (e) It is the further intent of the Legislature that when exercising options, the Department of Motor Vehicles continue to maintain its relationship as a good neighbor in the communities it serves by participating with local entities, both public and private, as appropriate, to promote and support local community activities. SEC. 2. Section 14670.2 is added to the Government Code, to read: 14670.2. (a) Notwithstanding any other provision of law, the Director of General Services, with the consent of the Department of Motor Vehicles, may lease or exchange, if the director deems the leasing or exchanging to be in the best interest of the state, for a term of years, as determined by the director, and for fair market value, all or portions of parcels of real property, that are acquired and used by the state for the benefit of the Department of Motor Vehicles, as described in subdivision (b), for the purpose of developing mixed public and private use facilities, including adequate parking for the Department of Motor Vehicles field office, as determined by that department, subject to all of the following conditions: (1) All proceeds from the lease or exchange of the Department of Motor Vehicles property shall be deposited into the Motor Vehicle Account in the State Transportation Fund and shall be available for expenditure by the Department of Motor Vehicles. (2) Each lease shall provide that the lessee may sublease for commercial, retail or residential uses that portion of the developed property that is not required for use of the state. (3) A mixed-use facility developed pursuant to this section shall be located at the current state-owned site unless there are mitigating circumstances requiring relocation. If relocation does become necessary, the replacement facility shall be located within the geographic area that serves the current customer base. (b) For purposes of this section, the following parcels of real properties may be leased or exchanged pursuant to subdivision (a): (1) A parcel of real property located at 1377 Fell Street, San Francisco. (2) 3960 Normal Street, San Diego, provided that any lease or exchange of property shall include a condition that a local farmer's market may continue to conduct regular business. (3) 8629 Hellman Avenue, Rancho Cucamonga. (c) The Department of General Services and the Department of Motor Vehicles, jointly, shall notify the Joint Legislative Budget Committee when the Department of General Services, with the consent of the Department of Motor Vehicles, enters into any lease for a period of 30 years or more and shall report to the committee the terms and conditions of any lease at least 45 days prior to entering into that lease. (d) Any lease or exchange of properties carried out pursuant to this section shall be for no less than fair market value and upon terms and conditions that the Director of General Services determines to be in the best interest of the state. Compensation for the property may include land, improvements, money, or any combination thereof. (e) The Department of General Services shall be reimbursed for any cost or expense incurred in the disposition or lease of any parcels described in this section by the Department of Motor Vehicles or from the proceeds of the lease or exchange of those parcels. (f) None of the properties identified in this section shall be subject to Section 11011.1 or Article 8 (commencing with Section 54220) of Chapter 5 of Part 1 of Division 2 of Title 5, and the properties shall be or have been offered to the public through a competitive process determined by the director to be in the best interest of the state.