BILL ANALYSIS                                                                                                                                                                                                    

                                                                  AB 113
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          Date of Hearing:   April 27, 2009

                                   Mike Eng, Chair
                AB 113 (Portantino) - As Introduced:  January 13, 2009
          SUBJECT  :  Department of Transportation:  surplus property:   
          State Route 710

           SUMMARY  :  Requires the California Department of Transportation  
          (Caltrans) to sell real property it owns in the unconstructed  
          portion of the State Route (SR) 710 corridor in Los Angeles  
          County.  Specifically,  this bill  :  

          1)Makes legislative findings and declarations, including the  

             a)   Caltrans owns over 500 residential properties in the  
               unconstructed portion of the SR 710 corridor, some of which  
               it bought as early as the 1950's;

             b)   Media reports and legislative hearings have indicated  
               that Caltrans has been negligent in its maintenance of the  

             c)   A 2006 legislative audit found that Caltrans had been  
               negligent in its maintenance of the properties and lacked a  
               comprehensive and accurate surplus property inventory; and

             d)   An estimate by the Southern California Association of  
               Governments (SCAG) suggests that the sale of the properties  
               in the SR 710 corridor could generate $500 million and  
               could fund vital state programs.

          2)Requires Caltrans, notwithstanding any other provision of law,  
            to sell real property that it owns within the unconstructed  
            portion of the SR 710 corridor, north of SR 10.  

          3)Requires Caltrans, when selling residential properties, to do  
            so according to existing law, commonly referred to as the  
            "Roberti bill," with one exception. 

          4)Provides an exception from this requirement for property  
            occupied prior to January 1, 2004, by a school or a nonprofit  
            organization.  For this property, Caltrans is required to  


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            offer the occupant the right of first refusal to purchase the  

          5)Directs the proceeds from the sale of each parcel as follows:   

             a)   An amount equal to Caltrans' acquisition price to be  
               deposited into the State Highway Account; and 

             b)   Remaining proceeds to be deposited into the General Fund  
               and are to be available upon appropriation for higher  
               education in California.

          This bill is an urgency measure.

           EXISTING LAW  :

          6)Allows Caltrans to acquire any real property that it considers  
            necessary for state highway purposes.  

          7)Allows Caltrans, whenever it determines that any real property  
            acquired by the state for highway purposes is no longer  
            necessary for those purposes, to sell or exchange it in the  
            manner and upon terms, standards, and conditions established  
            by the California Transportation Commission (CTC).  

          8)Requires Caltrans, to the greatest extent possible, to offer  
            to sell or exchange excess real property within one year from  
            the date that it determines the property to be excess.  

          9)Generally requires state and local agencies, prior to  
            disposing of surplus lands, first to offer property for sale  
            or lease to local public agencies, housing authorities, or  
            redevelopment agencies within whose jurisdiction the property  
            is located.  Requires Caltrans to give priority first to  
            entities agreeing to use the land for low- or moderate-income  
            housing, then to entities for open-space purposes, school  
            facilities construction, enterprise zone purposes, and infill  
            opportunities, in that order.

          10)Provides an exception from these provisions for the disposal  
            of surplus residential properties in the unconstructed portion  
            of the SR 710 corridor.  According to this exception, referred  
            to as  the "Roberti bill," surplus properties in this corridor  
            are to be sold as follows:


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             a)   First, homes presently occupied by their former owners  
               must be offered for sale to the occupant at fair market  
               value.  (Caltrans reports that there are no longer any  
               properties in the SR 710 corridor occupied by previous  

             b)   Second, homes are to be offered to present occupants  
               that have lived in the property for at least two years and  
               who are persons and families of low or moderate income;

             c)   Third, homes must be offered for sale to present  
               occupants that have lived in the home for more than five  
               years and whose household income does not exceed 150% of  
               the area median income;

             d)   Homes are not to be offered to present occupants if the  
               present occupant has had an ownership interest in real  
               property in the last three years;

             e)   Homes offered pursuant to b) and c) above are to be  
               offered at an affordable price, but not less than the  
               acquisition price or more than fair market value.  Homes  
               sold at less than fair market value must have deed  
               restrictions to assure that the house remains available to  
               families and households of low or moderate income;

             f)   Prior to selling these properties, Caltrans must provide  
               repairs required by lenders and government housing  
               assistance programs;

             g)   Homes not sold under these terms must then be offered to  
               housing-related private and public entities for a price  
               which is best suited economically to using the property for  
               low- or moderate-income housing; and

             h)   Any surplus homes not sold pursuant these provisions are  
               then to be sold at fair market value with first priority  
               given to purchasers who are present occupants and then to  
               purchasers who will be owner occupants.

          11)Proceeds from the sale of surplus property are deposited  
            first to the State Highway Account (SHA) and then transferred  
            to the Public Transportation Account, with few exceptions.


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          FISCAL EFFECT  :   Unknown

           COMMENTS  :   According to the author, "AB 113 will improve the  
          neighborhoods of my constituents, generate millions of dollars  
          annually in property tax revenue, and give many long-term  
          residents of the City and County of Los Angeles their long  
          awaited opportunity for home-ownership."  The author contends  
          that this bill will accomplish this without eliminating any  
          future transportation options (such as a tunnel) that are  
          currently under consideration by the Los Angeles County  
          Metropolitan Transportation Authority (Metro).   
          SR 710 serves as a major north-south link in the Los Angeles  
          County transportation network. It is heavily traveled and  
          congestion is increasing within the corridor.  Additional  
          congestion is created on surface streets by a 4.5 mile gap that  
          begins where the SR 710 ends on Valley Boulevard near the Los  
          Angeles/Alhambra border.  Motorists who wish to continue  
          traveling north must drive on local streets through the cities  
          of Alhambra, Los Angeles, South Pasadena, and Pasadena.  SR 710  
          resumes at Del Mar Boulevard in the City of Pasadena and  
          continues 0.6 miles north where it meets the Foothill Freeway  
          (Interstate 210).  

          In 1953, the California Highway Commission, the predecessor to  
          the CTC, adopted the location for the freeway gap closure  
          project, and Caltrans began using both standard and advance  
          acquisition procedures to acquire properties for the  
          right-of-way.  During the 20-year period that followed adoption  
          of the route, Caltrans acquired more than 400 properties with  
          the intent to raze them to make way for a freeway.

          The proposed extension project, however, engendered considerable  
          controversy, evoking strong opposition and equally strong  
          support.  Embroiled in one lawsuit after another for decades,  
          Caltrans, with its hundreds of parcels of property in the  
          corridor, become a reluctant long-term property manager.  

          Proponents of AB 113 argue that, after decades of waiting, it is  
          time to sell these properties and  use the proceeds to resolve  
          some of California's revenue problems.  Moreover, many of the  
          supporters AB 113 urge an end to problems they have reportedly  
          encountered with Caltrans' property management policies and  


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          Opponents to this bill, however, assert that AB 113 is an  
          attempt to thwart completion of the SR 710 freeway gap closure  
          project by requiring that long-held properties purchased to  
          build the freeway be sold.  They cite regional traffic  
          congestion and resultant hazardous health issues as reasons why  
          the project should be completed.  Furthermore, opponents argue  
          that proceeds from the sale of surplus property should not be  
          diverted away from transportation to pay for higher education  

          Writing in opposition to this bill, the City of Monterey Park  
          states that AB 113 is a "blatant attempt to stop the completion  
          of the 710 freeway."  The city further asserts that "closing the  
          710 freeway gap is an indispensable component of any effort to  
          expand and efficiently move national goods through the I-710  
          corridor and address the transportation needs of the region."

           Committee concerns:
          12)Currently, Caltrans and Metro have commissioned a technical  
            study to examine the possibility of extending the SR 710 using  
            a tunnel.  Information gathered throughout the study will  
            describe soil and sub-surface conditions and will determine  
            the feasibility of building a tunnel to complete SR 710.   
            Should the study findings suggest construction of a tunnel is  
            viable, the next step for project proponents will be to  
            initiate environmental review studies.  

            Also, in November 2008, Los Angeles County voters approved  
            Measure R, a half-cent county-wide sales tax to fund  
            transportation.  The expenditure plan that accompanied that  
            measure included $780 million in funding for the SR 710 gap  
            closure tunnel.   

            The SR 710 project is not dead--far from it, in fact.   
            Consequently, forcing Caltrans to sell properties that, after  
            all these years, might actually be needed for the purpose for  
            which they were bought, would be imprudent.

          13)As the project continues to move forward, and if the tunnel  
            option continues to prevail, Caltrans should be urged to  
            declare as surplus as many of the properties as possible,  
            without jeopardizing the project in any way or without putting  
            itself in inexcusable position of having to purchase  
            properties back.  Until the initial environmental studies are  


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            complete, however, and at least preliminary alignments sited,  
            Caltrans should hold on to the properties.  

          14)When it is time to sell the properties, Caltrans already has  
            the authority it needs to declare the properties surplus and  
            to dispose of them.  Legislation is not necessary.  

          15)Any proceeds realized from the sale of surplus property  
            should be returned to the SHA and used for  
            transportation-related purposes.  

          Caltrans Tenants of the 710 Corridor
          City of La Canada Flintridge
          City of South Pasadena
          Los Angeles Conservancy
          South Pasadena Preservation Foundation, Board of Directors
          The Waverly School
          77 Individuals
          710 Freeway Coalition
          Alhambra Chamber of Commerce
          Alhambra Unified School District
          City of Alhambra
          City of Monterey Park
          City of Rosemead
          Eugene Sun, Mayor, City of San Marino
          Mary Cammarano, Director, San Gabriel County Water District
          Southern California Association of Governments
          2 Individuals

          Analysis Prepared by  :    Janet Dawson / TRANS. / (916) 319-2093