BILL ANALYSIS
SB 256
Page 1
Date of Hearing: July 7, 2009
ASSEMBLY COMMITTEE ON BUSINESS AND PROFESSIONS
Mary Hayashi, Chair
SB 256 (Aanestad) - As Amended: May 21, 2009
SENATE VOTE : 39-0
SUBJECT : State property: Department of the California Highway
Patrol.
SUMMARY : Authorizes the Department of General Services (DGS)
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 (CHP) as
its area office, in order to relocate and expand the office.
Specifically, 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 CHP.
2)Requires 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 it's presently needs and
future 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
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needs 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. Requires DGS to
obtain approval from DOF prior to the execution of any
disposition agreement regarding the Fir Street Property.
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 DGS'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 legislative findings and declarations.
EXISTING LAW :
1)Requires DGS to perform various functions with respect to
state property and provides for the sale, lease, or transfer
of surplus state property.
2)Requires the DGS to request authorization from 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
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needs and to report to DGS.
3)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 required 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.
4)Requires DGS be responsible for determining if surplus land is
needed by any other state agency, and to first offer surplus
state real property to local agencies, and then to nonprofit
affordable housing sponsors, as defined, prior to offering the
property to private entities. Prescribes the procedure for
local agencies and nonprofit affordable housing sponsors to
use to obtain the surplus state real property.
5)Specifies that the Legislature may authorize a particular
surplus property to 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: (a) the financial terms
of the transaction; (b) a comparison of fair market value for
the property and financial terms; and, (c) the basis for
agreeing to terms and conditions other than fair market value.
6)Exempts 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. Furthermore, existing law
provides that if any transaction is not on an "as-is" basis
sale and close of escrow is contingent on satisfying any local
governmental approvals for entitlement or land use
requirements, including compliance by the local government
with CEQA, then the execution of the purchase and sale
agreement or exchange agreement is exempt from CEQA.
7)Requires, pursuant to Proposition 60A of November 2004 (SCA
18, Johnson, Resolution Chapter 103/04) that the proceeds from
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the sale of surplus state property, with specified exceptions,
be used to pay the principal and interest on the Economic
Recovery Bond Act of 2004.
FISCAL EFFECT : Unknown
COMMENTS :
Purpose of this bill . According to the author's office,
"Because of deteriorating and cramped conditions, the California
Highway Patrol in Chico is considering a new facility for its
Area Office. The proposal is part of the CHP's five year
Infrastructure Plan and is due for replacement. The current
site, 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 Department of General Services staff several times to
explore the options available, and it was decided that the best
course would be to pursue legislation."
Background . In the early 1990s, DGS undertook a program to save
money and make government more accessible to citizens by
rearranging state offices in major urban centers. The plan also
envisioned consolidation in numerous other California
communities where the state leased dispersed office space.
Based on a series of regional plans and facility studies, DGS'
efforts led to office consolidation projects (completed or in
the process of development) in major metropolitan areas (e.g.,
San Francisco, Oakland, Los Angeles, Riverside/San Bernardino,
Long Beach, San Diego and Sacramento).
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 measure avoids
the transfer of the proceeds associated with the disposition of
the property by specifying that the disposition of the Cypress
Property does not constitute a sale or other disposition of
surplus state property that would otherwise be subject to
Section 9 of Article III of the Constitution.
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This bill also exempts the disposition of the Fir Street
property from provisions of law requiring DGS to determine if
surplus land is needed by any other state agency prior to making
it available to local agencies.
The ability to get excess properties declared surplus by the
Legislature has been impeded in the 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 been resolved with enactment of ABX2 8
(Nestande), Chapter 6 of 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.
Related legislation .
ABX2 8 (Nestande), Chapter 6, Statutes of 2009-10 Second
Extraordinary Session, exempted the sale of surplus state real
property made on an "as is" basis from designated provisions of
CEQA. The bill also exempted from those provisions of CEQA the
execution of the purchase and sale agreement or the exchange
agreement for surplus state real property if the disposition is
not made on an "as is" basis and the close of escrow is
contingent on a specified requirement or compliance with CEQA.
ABX2 8 also provided expedited environmental permitting and CEQA
exemption for a list of 11 critical transportation projects, as
specified.
SB 760 (Aanestad) of the 2009-10 Session, authorizes DGS to
sell, lease, exchange, or any combination thereof, approximately
3.14 acres of real property in the City of Red Bluff that is
specifically declared not to be surplus to the needs of the
state, and, in return, to acquire up to 40,000 net square feet
of usable office and related space for consolidated
administrative operations of the state.
SB 586 (Yee) of the 2009-10 Session, directs DGS, in
consultation with the Department of Food and Agriculture, to
enter into negotiations to sell, to any interested party, at
fair market value, with certain restrictions, a 13-acre parking
lot portion of the state-owned Cow Palace property, located in
the County of San Mateo and the City and County of San
Francisco.
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SB 178 (Aanestad) of the 2009-10 Session, authorizes DGS to
sell, lease or exchange approximately three acres of state-owned
real property located at 875 Cypress Avenue, in the City of
Redding, that is specifically not declared surplus to the
State's needs and is currently used by the Department of
Forestry and Fire Protection (CalFire) as its Shasta-Trinity
Unit Headquarters, for the purpose of consolidating operations
on or near the Redding Airport.
SB 136 (Huff) of the 2009-10 Session, authorizes DGS to dispose
of three parcels consisting of approximately 2.76 acres, known
as the Harts Mills Forest Fire Station (Old), located at 9476
Oro-Quincy Highway, in Berry Creek, Butte County; approximately
47 acres, known as the Mendocino Ranger Station Excess Land,
located at 17501 North Highway 101, in Willits, Mendocino
County; and approximately 85 acres, known as the East Campus of
the Agnews Developmental Center in Santa Clara County.
REGISTERED SUPPORT / OPPOSITION :
Support
Mayor Ann Schwab, City of Chico
Opposition
None on file.
Analysis Prepared by : Ross Warren / B. & P. / (916) 319-3301