BILL ANALYSIS Ó SB 1580 Page 1 Date of Hearing: June 26, 2012 ASSEMBLY COMMITTEE ON BUSINESS, PROFESSIONS AND CONSUMER PROTECTION Mary Hayashi, Chair SB 1580 (Committee on Government Organization) - As Amended: June 18, 2012 SENATE VOTE : 37-0 SUBJECT : State surplus property: armories: sales. SUMMARY : Authorizes the Department of General Services (DGS) with the Adjutant General's approval, to sell specified armory properties. Authorizes the DGS to dispose of all or any portion of three specified parcels of state property and rescinds the surplus authorization of two specified properties. Specifically, this bill : 1)Authorizes the DGS, with the Adjutant General's approval, to sell the following properties "as is" and subject to any local governmental land use entitlement requirements: a) Approximately 4.59 acres of real property, located at 2320 N. Parmelee Avenue, Compton, California, known as the Compton Parmelee Armory; b) Approximately 2.0 acres of real property, located at 900 Powell Avenue, Healdsburg, California, known as the Healdsburg Armory; c) Approximately 1.57 acres of real property, located at 14061 Nevada City Highway, Nevada City, California, known as the Nevada City Armory; and, d) Approximately 2.84 acres of real property with improvements made thereon, located at 950 West Laurel Street, Willows, California, known as the Willows Armory. 2)Requires that the proceeds from the sale of armories authorized above be deposited in the Armory Fund (Fund). 3)Requires the Military Department (MD) to reimburse the DGS for any reasonable costs incurred in selling the specified armories. SB 1580 Page 2 4)Authorizes DGS to dispose of all or any portion of the following three specified parcels of state property: a) Approximately 1.42 acres, formerly known as the Employment Development Department Field Office, located at 135 West Fremont, in Stockton, San Joaquin County. Proceeds from this sale shall be subject to the reimbursement of federal equity financing, if any exists in the property, as required under applicable state and federal law; b) Approximately 0.36 acres, known as the California Department of Corrections and Rehabilitation (CDCR) Watts Parole Center, located at 9110 S. Central Avenue, in Los Angeles, Los Angeles County; and, c) Approximately 0.6 acres, including a 1,113 square foot residence and garage identified as Assessor Parcel Number 004-050-031-000, known as the CDCR Single Family Residence, located on Sutter Lane, in Ione, Amador County. 5)Rescinds the surplus authorization of the following two specified properties: a) Approximately 2 acres, known as the Healdsburg Armory, located at 900 Powell Avenue, Healdsburg, Sonoma County, declared surplus property sale in AB 1123, Chapter 625, Statutes of 2007; and, b) Real property under the jurisdiction of the Department of Motor Vehicles (DMV), known as the DMV Santa Maria Field Office, located at 523 South McClellan Street, Santa Maria, Santa Barbara County, declared surplus in AB 358, Chapter 448, Statutes of 2007. EXISTING LAW : 1)Specifies that the proceeds from the sale of armories must be deposited in the Fund and are not required to be used to retire bond debt resulting from the 2004 Economic Recovery Bond Act (ERB Act). (Military and Veterans Code Section 435) 2)Authorizes the DGS to develop and review an inventory of property surplus to the needs of the state in portions or SB 1580 Page 3 their entirety, and allows the DGS, subject to legislative approval, to sell, lease, exchange, or transfer various specified properties for current market value, or upon terms and conditions as the DGS determines are in the state's best interests. 3)Establishes criteria for state agencies to use in determining and reporting excess lands. The law requires a state agency to include: a) Land not currently being utilized, or currently being underutilized, for any existing or ongoing program; b) Land for which the agency has not identified any specific utilization relative to future needs; and, c) Land not identified by the agency within its master plan for facility development. FISCAL EFFECT : Unknown COMMENTS : Purpose of this bill . According to the author's office, "This bill will authorize the MD, in coordination with the DGS, to sell four California National Guard (CNG) armory properties and deposit any net proceeds into the Fund? It is vital to the CNG infrastructure that all proceeds from the sale of unusable armories be deposited in the Fund. Without working armories, the CNG's ability to support state emergencies will be significantly impaired." Background . This bill is comprised of two parts - the first part relates to the sale of four armories and the second part relates to the disposition and rescission of state surplus properties. For the first part relating to the sale of armories, the author's office states that the Compton-Parmelee, Healdsburg, Nevada City, and the Willows Armories have reached the end of their service life. Armories are the primary place for unit training. According to the author's office, the average age of these armories is 60 years and they are no longer practical or safe for CNG soldiers to assembly in. The MD has approximately 103 active armory sites throughout the state. The CNG has dual SB 1580 Page 4 responsibilities to federal authorities to ensure the readiness of forces for national security missions and to the Governor for state missions. Armories are routinely used for emergency operations, such as mobilizing and housing CNG soldiers responding to wildfires, while serving as emergency operation centers for other first-responder agencies. Armories are also commonly used as shelters for displaced civilians who have been evacuated from their homes due to fires, floods, or other state emergencies. Several armories throughout the state routinely serve as homeless shelters during winter months. This bill would authorize the DGS, with the Adjutant General's approval, to dispose of four armories, with the proceeds from the sale going towards the Fund to provide financial support for the ongoing maintenance of active armories. As this bill is written, the CNG armories are not deemed state surplus property. The second part of this bill may be considered the provisions of the annual surplus property bill sponsored by the DGS. Existing law requires all state agencies to annually review and determine if any lands under their jurisdiction are in excess of need. This information is provided to DGS to annually report to the Legislature the excess lands and request authorization to sell excess land. When selling state surplus property, the DGS must determine if other state agencies can utilize the land. If the state has no need, the DGS must then offer surplus state real property to local agencies, and next, to nonprofit affordable housing sponsors prior to offering the property to private entities. In November 2004, voters passed Proposition 60A, which requires the proceeds of the sale of surplus property to be used to pay down the $15 billion in deficit bonds included in the 2003-04 Budget. These payments are intended to accelerate the retirement of the state's debt, and reduce future General Fund payments to the bondholders. Support . According to the sponsor, the MD, "SB 1580 will authorize the MD, in coordination with the DGS, to sell four CNG armory properties and deposit the net proceeds into the Fund. These four facilities are no longer suitable for CNG soldiers to assemble and train in: the Compton-Parmelee, Healdsburg, Nevada SB 1580 Page 5 City, and Willows Armories. These aged, undersized armories have decayed to a point where their ongoing maintenance costs far outweigh their utility. Pursuant to state law, all net proceeds from the sale, lease, or exchange of CNG armories are deposited into the Fund. These monies accumulate in the Fund and are available, upon appropriation by the Legislature, for the acquisition and construction of replacement armories, as well as funding much-needed maintenance of existing operational armories." Previous Legislation . AB 1272 (Butler), Chapter 178, Statutes of 2011, authorized the DGS to dispose of all or any portion of six specified parcels of state property, and rescinded the surplus authorization of two specified properties. SB 1481 (Committee on Governmental Organization), Chapter 528, Statutes of 2010, specified that the proceeds from the sale of armories must be deposited in the Fund and are not required to be used to retire bond debt resulting from the 2004 ERB Act. AB 900 (Hall) of 2009, would have authorized the DGS to lease state owned property, the Compton Armory, to the City of Compton at fair market value for a period not to exceed five years, with an option to extend the lease to 25 years. The Governor vetoed this bill with the following message: "This bill is unnecessary. Current law already authorizes the DGS to enter into long-term leases on State-owned land that may have some potential future use to the program needs." REGISTERED SUPPORT / OPPOSITION : Support Military Department (sponsor) Opposition None on file. Analysis Prepared by : Joanna Gin / B.,P. & C.P. / (916) 319-3301 SB 1580 Page 6