BILL ANALYSIS
------------------------------------------------------------
|SENATE RULES COMMITTEE | SB 256|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524 | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
------------------------------------------------------------
THIRD READING
Bill No: SB 256
Author: Aanestad (R)
Amended: 5/21/09
Vote: 21
SENATE GOVERNMENTAL ORG. COMMITTEE : 11-0, 4/28/09
AYES: Wright, Harman, Benoit, Calderon, Denham, Florez,
Oropeza, Padilla, Wiggins, Wyland, Yee
NO VOTE RECORDED: Negrete McLeod, Vacancy
SENATE APPROPRIATIONS COMMITTEE : 12-0, 5/28/09
AYES: Kehoe, Cox, Corbett, Denham, DeSaulnier, Hancock,
Leno, Oropeza, Runner, Walters, Wyland, Yee
NO VOTE RECORDED: Wolk
SUBJECT : State property: Department of the California
Highway Patrol
SOURCE : City of Chico
DIGEST : This bill authorizes the Department of General
Services to sell, lease, exchange, or any combination
thereof, all or a portion of approximately 1.69 acres of
state-owned real property located at 995 Fir Street, in the
City of Chico, that is specifically not declared surplus to
the State's needs, and is used by the Department of the
California Highway Patrol as its area office, in order to
relocate and expand the office.
ANALYSIS : Existing law generally requires the Department
CONTINUED
SB 256
Page
2
of General Services (DGS) to perform various functions with
respect to state property and provides for the sale, lease,
or transfer of surplus state property.
Existing law requires the Director of DGS to request
authorization by the Legislature prior to the disposition
by sale or otherwise of state land reported to it by a
state agency as being in excess of its foreseeable needs.
Each state agency is required to annually review
proprietary state lands under its jurisdiction to determine
what lands are in excess of the agency's foreseeable needs
and to report to DGS.
This annual review of proprietary state lands does not
apply to tax-deeded land, land held for highway purposes,
lands under the jurisdiction of the State Lands Commission,
land that has escheated to the state or that has been
distributed to the state by a court decree in estates of
deceased persons, and lands under the jurisdiction of the
State Coastal Conservancy. Jurisdiction of all land
reported in excess is transferred to DGS, when requested by
the Director of DGS, for sale or disposition or as may
otherwise be authorized by law.
Existing law provides criteria for state agencies to use in
determining and reporting to DGS lands in excess of the
agency's foreseeable needs. A state agency is to include
land not currently being utilized, or currently being
underutilized, for any existing or ongoing program; land
for which the agency has not identified any specific
utilization relative to future needs; and land not
identified by the agency within its master plan for
facility development.
Where applicable within its jurisdiction, DGS is
responsible for determining if surplus land is needed by
any other state agency. Existing law (Government Code
Section 11011.1) requires the state to first offer surplus
state real property to local agencies, and next, to offer
the property to nonprofit affordable housing sponsors, as
defined, prior to offering the property to private
entities. Existing law also prescribes the procedure for
local agencies and nonprofit affordable housing sponsors to
SB 256
Page
3
use to obtain the surplus state real property.
Existing law specifies that the Legislature may authorize a
particular surplus property be sold at less than fair
market value and provides that 30 days prior to executing
such a transaction, DGS must report to the chairs of the
fiscal committees of the Legislature the following
information: (1) the financial terms of the transaction;
(2) a comparison of fair market value for the property and
financial terms; (3) the basis for agreeing to terms and
conditions other than fair market value.
Existing law (Government Code Section 11011(k)(1) and (2)
contains provisions exempting the sale of surplus property
from designated provisions of the California Environmental
Quality Act (CEQA). Specifically, the law provides that
any disposition of a parcel of surplus property made on an
"as-is" basis shall be exempt from statutory requirements
of CEQA; however, the law makes it explicit that the buyer
or transferee of a parcel shall be subject to any local
governmental entitlement or land use approval requirements
and CEQA.
Proposition 60A of November 20004 (SCA 18, Johnson,
Resolution Chapter 103, Statutes of 2004) which was adopted
by the electorate (73% margin) requires, among other
things, that the proceeds from the sale of surplus
property, with specified exceptions, be used to pay the
principal and interest on the Economic Recovery Bond Act of
2004.
This bill:
1.Authorizes DGS to sell, exchange, lease (for no more
than 66 years), or any combination thereof, all or a
portion of the state-owned Fir Street Property that is
currently used by the Department of the California
Highway Patrol (CHP).
2.Requires the Director of DGS to use the proceeds of any
sale, exchange, lease, or any combination thereof, to
acquire the land and facilities to provide a substitute
location for the Chico area office of the CHP capable of
accommodating its presently necessary and future
SB 256
Page
4
expansion.
3.Requires DGS to initially offer the Fir Street Property
to the City of Chico, and if the City fails to purchase
the property, to sell, exchange or lease the property to
the public.
4.Requires any transaction to be for no less than fair
market value, as determined by an independent appraisal
or pursuant to a competitive selection process.
5.Stipulates that compensation for the Fir Street Property
may include land, or a combination of land, improvements
and money.
6.Authorizes DGS to enter into one or more agreements or
leases for the purpose of providing a substitute
location for the Chico CHP area office capable of
accommodating its presently necessary and future
expansion.
7.Stipulates that any funds received from the sale,
exchange, lease, or combination thereof, of all or a
portion of the Fir Street Property authorized by this
bill shall be held in trust and used only for the
acquisition, lease, lease-purchase, lease with an option
to purchase, or lease-purchase finance of the land and
facilities appropriated to DGS for expenditure for those
purposes.
8.States that the disposition of the Fir Street Property
is not subject to provisions of law requiring the
proceeds from the sale of state surplus property be used
to pay the principal and interest on the Economic
Recovery Bonds or provisions of law requiring state
surplus property be offered first to local government
agencies and affordable housing interests.
9.Requires DGS to develop the terms and conditions of any
disposition agreement and provide them to the Department
of Finance (DOF) prior to soliciting bids. Also,
requires DGS to obtain approval from DOF prior to
execution of any disposition agreement regarding the Fir
Street Property.
SB 256
Page
5
10.Requires DGS to notify the Chair of the Senate
Appropriations Committee, the Chair of the Assembly
Appropriations Committee, and the Chair of the Joint
Legislative Budget Committee, or his or her designee, in
writing, of the Director's intention to enter into a
lease or an agreement, not less than the minimum time
that the Chair of the Joint Legislative Budget
Committee, or his or her designee, may in each instance
determine.
11.Makes various legislative findings and declarations
regarding the Fir Street Property.
Comments
According to the author's office, the CHP is considering a
new facility for its area office location in Chico because
its existing facility is deteriorating and cramped. The
author's office claims that the proposal is part of the
CHP's five-year Infrastructure Plan and is due for
replacement.
The author's office indicates that the existing CHP site,
located at 995 Fir Street in Chico, is inadequate to
accommodate the proposed new facility. However, because
the property is surrounded by City-owned property, selling
the property to the City would be of benefit to both
agencies. The city is hoping to use the property to expand
their existing police headquarters which is adjacent to the
CHP office. City staff has met with CHP and DGS staff
several times to explore the options available, and it was
decided that the best course would be to pursue
legislation.
Proposition 60A . Under the provisions of Proposition 60A,
the proceeds of the sale of surplus property must be used
to pay the holders of the state's deficit reduction bonds.
These payments are intended to accelerate the redemption of
the state's debt, and reduce future General Fund payments
to the bondholders. This bill avoids the transfer of the
proceeds associated with the disposition of the property by
specifying that the disposition of the Red Bluff property
does not constitute a sale or other disposition of surplus
SB 256
Page
6
state property that would otherwise be subject to Section 9
of Article III of the California Constitution.
CEQA Exemption . The ability to get excess properties
declared surplus by the Legislature has been impeded these
past few years by a disagreement between the Legislature
and the Administration regarding the removal of a statutory
exemption for the State's surplus properties from the
requirements of CEQA. This disagreement has at least for
now been resolved with enactment of AB 8XX (Nestande),
Chapter 6, 2009-10 Second Extraordinary Session, that
places within Section 11011 of the Government Code an
ongoing CEQA exemption for all properties declared surplus
by the Legislature.
This bill makes it explicit that provisions do not
constitute a sale or other disposition of surplus property,
thus, DGS staff contends that a CEQA exemption is not
necessary for this bill.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
Fiscal Impact (in thousands)
Major Provisions 2009-10 2010-11
2011-12 Fund
Sale of non-surplus Unknown, likely significant, one
time Special*
state property increase in revenue; unknown
potential
costs for new CHP
office or lease cost
avoidance depending
on how property
is disposed
*Motor Vehicle Account
SUPPORT : (Verified 5/28/09)
City of Chico (source)
Department of the California Highway Patrol
SB 256
Page
7
TSM:cm 5/29/09 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
**** END ****