BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                      



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          |SENATE RULES COMMITTEE            |                  AB 1748|
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                                 THIRD READING


          Bill No:  AB 1748
          Author:   Fong (D)
          Amended:  As introduced
          Vote:     21

           
           SENATE EDUCATION COMMITTEE  :  8-0, 6/13/12
          AYES:  Lowenthal, Alquist, Hancock, Huff, Liu, Price, 
            Simitian, Vargas
          NO VOTE RECORDED:  Runner, Blakeslee, Vacancy

          ASSEMBLY FLOOR  :  75-0, 4/12/12 - See last page for vote


           SUBJECT  :    California Community Colleges:  fair market 
          value of leases

           SOURCE  :     San Jose/Evergreen Community College


           DIGEST  :    This bill removes the limitation that the fair 
          market value of specified short-term leases not exceed 
          $25,000 annually, for California Community College (CCC) 
          district buildings or space not being used for educational 
          purposes. 

           ANALYSIS  :    Existing law exempts certain lease 
          arrangements from the general provisions regarding the 
          lease and sale of CCC district property, including CCC 
          district property that is not needed for educational 
          activities, if it is leased for a period of more than five 
          days but less than five years and the fair market value of 
          the lease does not exceed $25,000 annually.  CCC district 
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          governing boards seeking to enter into the aforementioned 
          negotiated lease are required to include the proposed lease 
          and methodology used to determine the value of the lease as 
          an agenda item in a public meeting, and provide one week 
          public notice before taking action on the lease agreement. 

          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. 

           Comments
           
          This bill authorizes CCC districts to enter into negotiated 
          short-term lease agreements for property not needed for 
          educational purposes and generate fair market value for 
          that property, not subject to the $25,000 annual 
          limitation.  Existing law authorizes CCC districts to enter 
          into leases for longer-terms or greater than $25,000 
          annually but requires a public bid process that accepts the 
          highest responsible bid.  The author argues that the 
          current cap of $25,000 on short-term leases was put into 
          place almost 20 years ago and does not take into account 
          differences in property value throughout the state or 
          increase in value over time.  Further, multiple years of 
          budget cuts and increasing demand for higher education have 
          left CCC districts needing to maximize alternative revenue 
          sources.  By relieving CCC districts of the $25,000 cap on 
          short-term leases this bill will provide districts greater 
          ability to increase revenues through leasing unused 
          buildings and space. 

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  No   
          Local:  No

           SUPPORT  :   (Verified  6/12/12)

          San Jose/Evergreen Community College (source) 
          California Community College League

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          Glendale Community College
          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
          West Kern Community College District


           ARGUMENTS IN SUPPORT  :    According to the author's office, 
          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. 


           ASSEMBLY FLOOR  :  75-0, 4/12/12
          AYES:  Achadjian, Alejo, Allen, Ammiano, Atkins, Beall, 
            Bill Berryhill, Block, Blumenfield, Bonilla, Bradford, 
            Brownley, Buchanan, Butler, Charles Calderon, Campos, 
            Carter, Chesbro, Conway, Davis, Dickinson, Donnelly, Eng, 
            Feuer, Fong, Fuentes, Furutani, Beth Gaines, Galgiani, 
            Gatto, Gordon, Gorell, Grove, Hagman, Halderman, Hall, 
            Harkey, Hayashi, Roger Hernández, Hill, Huber, Hueso, 
            Huffman, Jeffries, Jones, Knight, Lara, Logue, Bonnie 
            Lowenthal, Ma, Mansoor, Mendoza, Miller, Mitchell, 
            Monning, Morrell, Nestande, Nielsen, Norby, Olsen, Pan, 
            Perea, V. Manuel Pérez, Portantino, Silva, Skinner, 
            Smyth, Solorio, Swanson, Torres, Valadao, Wagner, 
            Williams, Yamada, John A. Pérez
          NO VOTE RECORDED:  Cedillo, Cook, Fletcher, Garrick, 
            Wieckowski



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          PQ:nl  6/14/12   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

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