AB 750, as introduced, Garcia. Economic development: cities.
The California Constitution generally prohibits the making of a gift of any public money, or thing of value.
Existing law authorizes a city to purchase, lease, receive, hold, and enjoy real and personal property, and control and dispose of it for the common benefit, and to lease property owned or held or controlled by it, or any of its departments, as prescribed.
This bill would authorize a city to dispose of real property, as provided, or provide compensation to a private entity, if the legislative body of the city is presented with, or presents, substantial evidence that the disposition of the property or provision of compensation would stimulate job creation and economic development within the boundaries of the city, and that the amount of private benefit provided would not outweigh the amount of public benefit received through the disposition of the property or the provision of compensation. The bill would provide that the disposition of real property or provision of compensation under these circumstances would not constitute a gift of public funds under the California Constitution.
Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.
The people of the State of California do enact as follows:
Article 3.75 (commencing with Section 37450)
2is added to Chapter 5 of Part 2 of Division 3 of Title 4 of the 3Government Code, to read:
4
(a) Notwithstanding any other law, the disposition of
8real property by a city shall not constitute a gift of public funds
9under Section 6 of Article XVI of the California Constitution, and
10shall constitute an action taken for a public purpose, provided that
11the legislative body of the city disposing of the real property is
12presented with, or presents, substantial evidence of both of the
13following:
14(1) (A) That the disposition of the property will stimulate job
15creation and economic development within the boundaries of the
16city.
17(B) For purposes of this section, “disposition” means the sale,
18lease, transfer, or exchange of real property, or any combination
19
thereof.
20(2) That the amount of private benefit provided will not
21outweigh the amount of public benefit received through the sale,
22lease, or disposition.
23(b) The disposition of real property pursuant to this section shall
24be in compliance with the California Constitution and other
25applicable law relating to the sale, lease, or disposition of real
26property.
(a) Notwithstanding any other law, a city may provide
28compensation to a private party, that is less than or equal to the
29share of sales taxes received by the city as a result of the sales
30tax-generating activities of the private party within the municipal
31boundaries of the city, less the city’s costs of administration with
32respect to those sales tax receipts.
33(b) The provision of compensation to a private party pursuant
34to this section shall not constitute a gift of public funds under
35Section 6 of Article XVI of the California Constitution, and shall
36constitute an action taken for a public purpose, provided that the
37legislative body of the city is presented with, or presents,
38substantial evidence of both of the following:
P3 1(1) The compensation provided to a private party under this
2section will stimulate economic development within the municipal
3boundaries of the city.
4(2) The private benefit provided will not outweigh the amount
5of public benefit received through the provision of compensation
6to a private party pursuant to this section.
If any provision of this act or the application thereof
8to any person or circumstance is held invalid, the invalidity shall
9not affect other provisions or applications of this act which can be
10given effect without the invalid provision or application and to
11this end, the provisions of this act are severable.
The Legislature finds and declares that responsible
13use of public funds and encouragement of economic growth are
14issues of statewide concern and do not constitute a municipal affair
15as that term is used in Section 5 of Article XI of the California
16Constitution. Accordingly, it is the intent of the Legislature that
17Section 1 applies to every city in this state, including charter cities.
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