BILL ANALYSIS Ó
SENATE COMMITTEE ON EDUCATION
Alan Lowenthal, Chair
2011-2012 Regular Session
BILL NO: AB 1748
AUTHOR: Fong
INTRODUCED: February 17, 2012
FISCAL COMM: No HEARING DATE: June 13, 2012
URGENCY: No CONSULTANT:Kathleen Chavira
SUBJECT : Fair Market Value of leases.
SUMMARY
This bill eliminates the $25,000 cap on the fair market
value of property which a local community college board is
authorized to lease for up to five years, if it is not
needed for school classroom buildings.
BACKGROUND
Current law authorizes a community college governing board
to sell, or lease for a term up to 99 years, any real or
personal property it owns which is not, or will not be
needed for school classroom buildings at the time of the
delivery of title or possession, and outlines various
conditions including the use of the funds, priorities and
procedures for a lease with option to purchase, public
disclosure requirements, public bid requirements, and other
conditions which must be met. (Education Code, Chapter 2,
Article 4, § 81360 - § 81382).
Current law authorizes a community college governing board
to lease buildings, groups, or space therein, together with
any personal property, if its value is less than
twenty-five thousand dollars ($25,000) per year (as
certified by the governing board) for a period of five
days, but no more than five years, without complying with
any other provision of Article 4. Prior to executing the
lease, the governing board is required to include a
description of the proposed lease and an explanation of the
methodology used to establish the lease rate and for
determining the fair market value of the lease in an agenda
of a public meeting of the board. Any revenue derived from
the lease must be retained by the leasing community college
AB 1748
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district to supplement, but not supplant, any state
funding. (Education Code § 81378.1)
ANALYSIS
This bill:
1) Eliminates any statutory cap on the fair market value
of any buildings, grounds or space not needed for
school classroom buildings which current law
authorizes a community college governing board to
lease for between five days and up to five years.
2) Makes a technical change.
STAFF COMMENTS
Need for the bill . According to the author, the statute
that implemented the $25,000 cap was implemented in 1993,
is outdated, and needs to be modified to reflect the 2012
fair market rates for property. Additionally, a statutory
cap does not allow for the range of differences in property
values throughout the state. This bill would expand a
community college district's existing authority to
negotiate short term leases of facilities without requiring
compliance with the more extensive conditions required for
longer term leases or the sale of property. At a time of
extensive cuts to higher education, this bill could
facilitate the use of an alternative revenue source to meet
the local community's educational needs.
SUPPORT
California Community College league
Kern Community College District
Los Angeles Community College District
Los Rios Community College District
Mt. San Jacinto Community College District
Peralta Community College District
San Diego Community College District
San Jose-Evergreen Community College District
West Kern Community College District
OPPOSITION
None received.
AB 1748
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