BILL NUMBER: SB 586	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  SEPTEMBER 4, 2009
	AMENDED IN ASSEMBLY  AUGUST 24, 2009
	AMENDED IN SENATE  MAY 6, 2009

INTRODUCED BY   Senator Yee

                        FEBRUARY 27, 2009

    An act to add Section 19622.5 to the Business and
Professions Code, and to add Section 11011.27 to the Government Code,
relating to state property, making an appropriation therefor, and
declaring the urgency thereof, to take effect immediately. 
 An act to add Sections 3853.1 and 3853.2 to the Food and
Agricultural Code, relating to agricultural districts, and making an
appropriation therefor. 



	LEGISLATIVE COUNSEL'S DIGEST


   SB 586, as amended, Yee.  State property: sale. 
 Agricultural districts: Cow Palace: sale.  
    (1) Existing law provides that the state is divided into
agricultural districts within the boundaries of which district
agricultural associations may be formed. Existing law provides that
District 1a is the County of San Mateo and the City and County of San
Francisco.  
   This bill would create District 1b, which consists of all of that
real property that is a portion of District 1a that is commonly known
as the Cow Palace, and would prescribe certain matters applicable to
officers of District 1a and District 1b. The bill would, among other
things, (A) authorize the Department of General Services to dispose
of all or any portion of the real property that composes District 1b
pursuant to a public bidding process, as provided, (B) prohibit
District 1b from entering into any contract, lease, or other
agreement affecting the use or operation of that real property for a
period that exceeds 3 months, (C) require those contracts, leases, or
agreements to contain a certain cancellation notice, (D) authorize
the department to be reimbursed for reasonable costs or expenses, (E)
authorize bonds involving District 1b property to be paid from the
proceeds of any disposition of District 1b property, (F) require the
Director of General Services to report specified information to the
chairs of the fiscal committees of the Legislature 30 days prior to
executing a transaction for the disposition of the real property, (G)
require the director to include a reservation to the state of
mineral rights in the disposition of the real property, (H) require
the net disposition proceeds to be deposited into the District 1b
Disposition Fund, which the bill would create in the State Treasury,
and (I) require the department to report annually to the Legislature
on the status of the disposition of the real property.  
   This bill would require District 1b to be abolished and all funds
in the District 1b Disposition Fund to be transferred to the General
Fund upon sale of all property that composes District 1b.  
   This bill would also declare the Legislature's findings that the
disposition of this state property does not constitute a sale of
surplus state property, as set forth in specified existing law. 

   (2) The California Environmental Quality Act (CEQA) requires a
lead agency to prepare, or cause to be prepared, and certify the
completion of, an environmental impact report on a project that it
proposes to carry out or approve that may have a significant effect
on the environment or to adopt a negative declaration if it finds
that the project will not have that effect. CEQA generally requires a
lead agency to prepare a mitigated negative declaration for a
project that may have a significant effect on the environment if
revisions in the project would avoid or mitigate that effect and
there is no substantial evidence that the project, as revised, would
have a significant effect on the environment. CEQA also provides some
exemptions from its requirements for specified projects.  
   This bill would exempt the disposition of the state real property
or buildings subject to the bill that is made on an "as is" basis
from designated provisions of CEQA. The bill would also exempt from
those provisions of CEQA the execution of the purchase and sale
agreement or the exchange agreement for this property or these
buildings if the disposition is not made on an "as is" basis and the
close of escrow is contingent on a specified requirement and
compliance with CEQA.  
    (3) This bill would authorize the Director of Finance to provide
a General Fund loan in the amount of $500,000 to a certain item of
the Budget Act, which relates to the Department of General Services,
and to adjust the amounts appropriated in that item that are provided
for the purposes of supporting the management of the state's real
property assets in order to accommodate any increase in workload or
other costs to the Department of General Services to implement this
bill. By authorizing adjustments to certain appropriated amounts in
the Budget Act, the bill would make an appropriation. 
   Existing law authorizes the Director of General Services to
dispose of state surplus property, subject to specified conditions,
including authorization by the Legislature.  
   This bill would require the director, prior to January 1, 2012, to
sell, at fair market value, upon those terms and conditions
determined by the director, a specified parcel of state property
located in the County of San Mateo and the City and County of San
Francisco to any interested party.  
   The bill would provide that the net proceeds of the conveyance
would be paid into the Fair and Exposition Fund, a continuously
appropriated fund, for the benefit of a specified district
agricultural association, as provided, thereby making an
appropriation. The bill would require reimbursement to the Department
of General Services for any cost or expense incurred in the
disposition of the property. This bill would also declare the
Legislature's findings that the sale of this state property does not
constitute a sale of surplus state property, as set forth in
specified existing law.  
   This bill would declare that it is to take effect immediately as
an urgency statute. 
   Vote:  2/3   majority  . Appropriation:
yes. Fiscal committee: yes. State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

   SECTION 1.    Section 3853.1 is added to the 
 Food and Agricultural Code   , to read:  
   3853.1.  There is hereby created District 1b which consists of all
of that real property that is a portion of District 1a that is
commonly known as the Cow Palace located in Daly City and the City
and County of San Francisco. Notwithstanding any other law, any
officer of District 1b may also be an officer of District 1a and
shall be a resident of District 1a. All otherwise applicable ethical
duties, including those in Section 1090 of the Government Code,
subdivision (a) of Section 8920 of the Government Code, and the
Political Reform Act of 1974 (Title 9 (commencing with Section 81000)
of the Government Code), shall apply to the officers of both
District 1a and District 1b, and shall apply in regard to the
transactions contemplated by Section 3853.2. 
   SEC. 2.    Section 3853.2 is added to the  
Food and Agricultural Code   , to read:  
   3853.2.  (a) The District 1b Disposition Fund is hereby created in
the State Treasury.
   (b) (1) The Department of General Services may dispose all or any
portion of the real property that composes District 1b. District 1b
shall not enter into any contract, lease, or other agreement
affecting the use or operation of the real property for a period that
exceeds three months, and all of these contracts, leases, or other
agreements shall contain a provision that they can be canceled upon a
30-day notice from the Department of General Services. The
Department of General Services shall be reimbursed for any reasonable
cost or expense incurred for the transactions described in this
section.
   (2) Additionally to the requirements of paragraph (1), to the
extent bonds issued by the State Public Works Board or other entity
involve the property to be disposed of pursuant to this section, all
issuer and trustee related costs associated with the review of any
proposed disposition, together with the costs related to the
defeasance or retirement of any bonds, which may include the cost of
nationally recognized bond counsel, shall be paid from the proceeds
of any disposition authorized by this section. The net proceeds from
the disposition shall be deposited into the District 1b Disposition
Fund.
   (c) The disposition of the real property authorized by this
section shall be pursuant to a public bidding process designed to
obtain the highest, most certain return for the state from a
responsible bidder, and any transaction based on such a bidding
process shall be deemed to be the fair market value for the property.
A notice of this bidding process shall be posted by the Department
of General Services on its Internet Web site for at least 30 days
prior to the disposition of the real property. The provisions of
Section 11011.1 of the Government Code are not applicable to the
disposition of real property authorized under this section.
   (d) Thirty days prior to executing a transaction for the
disposition of real property authorized by this section, the Director
of General Services shall report to the chairs of the fiscal
committees of the Legislature all of the following:
   (1) The financial terms of the transaction.
   (2) A comparison of fair market value for the real property and
the terms listed in paragraph (1).
   (3) Any basis for agreeing to terms and conditions other than fair
market value.
   (e) As to the real property disposed of pursuant to this section,
the Director of General Services shall except and reserve to the
state all mineral deposits, as defined in Section 6407 of the Public
Resources Code, together with the right to prospect for, mine, and
remove the deposits. If, however, the Director of General Services
determines that there is little or no potential for mineral deposits,
the reservation may be without surface right of entry above a depth
of 500 feet, or the rights to prospect for, mine, and remove the
deposits shall be limited to those areas of the real property
conveyed that the director determines to be reasonably necessary for
the removal of the deposits.
   (f) The Department of General Services shall report to the
Legislature on or before June 30 of each year on the status of the
disposition of real property authorized by this section.
   (g) Upon the disposition of all property that composes District
1b, District 1b shall be abolished and all funds in the District 1b
Disposition Fund shall be transferred to the General Fund.
   (h) (1) The disposition of state real property or buildings
specified in subdivision (b) that are made on an "as is" basis shall
be exempt from Chapter 3 (commencing with Section 21100) to Chapter 6
(commencing with Section 21165), inclusive, of Division 13 of the
Public Resources Code. Upon title to the parcel vesting in the
purchaser or transferee of the property, the purchaser or transferee
shall be subject to any local governmental land use entitlement
approval requirements and to Chapter 3 (commencing with Section
21100) to Chapter 6 (commencing with Section 21165), inclusive, of
Division 13 of the Public Resources Code.
   (2) If the disposition of state real property or buildings
specified in subdivision (b), is not made on an "as is" basis and
close of escrow is contingent on the satisfaction of a local
governmental land use entitlement approval requirement or compliance
by the local government with Chapter 3 (commencing with Section
21100) to Chapter 6 (commencing with Section 21165), inclusive, of
Division 13 of the Public Resources Code, the execution of the
purchase and sale agreement or of the exchange agreement by all
parties to the agreement shall be exempt from Chapter 3 (commencing
with Section 21100) to Chapter 6 (commencing with Section 21165),
inclusive, of Division 13 of the Public Resources Code.
   (3) For the purposes of this section, "disposition" means the
sale, lease, exchange, or repurchase of state property or buildings
specified in subdivision (b).
   (i) The disposition of real property or buildings, or both,
pursuant to this section does not constitute a sale or other
disposition of state surplus property within the meaning of Section 9
of Article III of the California Constitution and shall not be
subject to subdivision (g) of Section 11011 of the Government Code.

   SEC. 3.    The Legislature finds and declares that
Article 4 (commencing with Section 1090) of Chapter 1 of Division 4
of Title 1 of the Government Code applies to every transaction
undertaken pursuant to the authority of this act. 
   SEC. 4.    The Director of Finance may provide a
General Fund loan in the amount of five hundred thousand dollars
($500,000) to augment Item 1760-001-0002 of Section 2.00 of the
Budget Act of 2009 and may adjust the amounts appropriated in Item
1760-001-0002 of Section 2.00 of the Budget Act of 2009 that are
provided for the purposes of supporting the management of the state's
real property assets in order to accommodate any increase in
workload or other costs to the Department of General Services to
implement this act.  
  SECTION 1.    Section 19622.5 is added to the
Business and Professions Code, to read:
   19622.5.   Pursuant to subdivision (c) of Section 19622.3, within
30 days of enactment of this section, the Department of Food and
Agriculture, until January 1, 2010, shall assume only the rights,
duties, and powers of the board of directors of the District 1-A
Agricultural Association associated with negotiating the sale of the
real property of the District 1-A Agricultural Association. 

  SEC. 2.    Section 11011.27 is added to the
Government Code, to read:
   11011.27.  (a) The Director of General Services in consultation
with the Department of Food and Agriculture, prior to January 1,
2012, shall enter into negotiations to sell, at fair market value
with an all-cash sale or cash equivalent without any conditions
relating to entitlements, to any interested third party, upon those
terms and conditions and subject to those reservations and exceptions
that the director determines are in the best interests of the state,
the following real property:
   Parcel A: Beginning at a point on the southerly line of Walbridge
Street, now Geneva Avenue, with the easterly line of Carter Street
(in the City and County of San Francisco); thence running easterly
along the southerly line of Walbridge Street 980 feet; thence at a
right angle south 19*35' west 600 feet; thence at a right angle north
70*25' west 720 feet; thence at a right angle south 19*35' west 60
feet; thence at a right angle north 70*25' west 260 feet; thence at a
right angle north 19*35' east 660 feet along the easterly line of
Carter Street to the point of beginning.
   (b) A notice of every public auction or bid opening shall be
posted on the parcel to be sold pursuant to this section and shall be
published in a newspaper of general circulation published in the
county in which the real property to be sold is situated.
   (c) Notwithstanding the terms and conditions negotiated pursuant
to subdivision (a), the director shall not sell the property
identified in subdivision (a) for less than its fair market value.
   (d) Fair market value shall be evaluated at the highest and best
use of the property as entitled with its existing zone designation,
generally required for all real estate appraisals and as governed by
the Uniform Standards of Professional Appraisal Practice (USPAP).
   (e) An agreement for the sale of the property identified in
subdivision (a) shall require a purchaser to develop the property 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 Plan.
   (f) The Department of General Services shall be reimbursed from
the sale proceeds for any cost or expense incurred in the disposition
of the property described in subdivision (a).
   (g) The net proceeds of any moneys received from the disposition
of any parcel of property described in subdivision (a) shall be paid
into the Fair and Exposition Fund for the benefit of the District 1-A
Agricultural Association.  
  SEC. 3.    The Legislature finds and declares that
the disposition of state property authorized in Section 2 of this
act does not constitute a sale or other disposition of surplus state
property as set forth in Section 9 of Article III of the California
Constitution or subdivision (g) of Section 11011 of the Government
Code.  
  SEC. 4.    This act is an urgency statute
necessary for the immediate preservation of the public peace, health,
or safety within the meaning of Article IV of the Constitution and
shall go into immediate effect. The facts constituting the necessity
are:
   In order for the Director of General Services to sell the property
described in Section 2 of this act at the earliest possible time, it
is necessary that this act take effect immediately.