BILL ANALYSIS Ó Bill No: AB 826 SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION Senator Roderick D. Wright, Chair 2013-2014 Regular Session Staff Analysis AB 826 Author: Jones-Sawyer As Proposed to be Amended in Committee: June 25, 2013 Hearing Date: June 25, 2013 Consultant: Paul Donahue SUBJECT State surplus property DESCRIPTION AB 826 authorizes the Department of General Services (DGS) to dispose of eight surplus state properties. Specifically, this bill : 1)Authorizes the Director of General Services to sell, exchange, sell combined with an exchange, or lease for fair market value, upon terms and conditions determined to be in the state's best interest, all or any part of the following 3 parcels of real property: a) Approximately 15 acres and improvements known as a portion of the California Department of Corrections and Rehabilitation's Preston Youth Correctional Facility. This property was used as Preston employee housing. The Preston facility was closed on June 30, 2011, the structures are now vacant and beyond their useful life. There is no departmental use for the property. b) Approximately 160 acres and improvements known as a portion of the California Department of Corrections and Rehabilitation's Estrella Correctional Facility. This facility was closed in 2008. There is no departmental use for the property. AB 826 (Jones-Sawyer) continued Page 2 c) Approximately 0.90 acres and improvements, known as the Employment Development Department's Vallejo Office Building, located at 1440 Marin Street, in Vallejo, Solano County. 2)Authorizes DGS to sell all or a portion of the following properties located in the City of Sacramento, County of Sacramento, and leased by the Department to the Capitol Area Development Authority. The properties shall be sold for market value or upon the terms and conditions as the Director determines are in the best interest of the State: a) Approximately .027 acres and improvements, located at 1627 10th Street, in Sacramento. b) Approximately .027 acres and improvements, located at 1607 10th Street, in Sacramento. c) Approximately .030 acres and improvements, located at 1036 P Street, in Sacramento. d) Approximately .025 acres and improvements, located at 1603 10th Street, in Sacramento. e) Approximately .039 acres and improvements, located at 1601 10th Street, in Sacramento. EXISTING LAW 1)Directs each state agency to review all land under its jurisdiction, with certain exceptions, to determine what, if any, land is in excess of its foreseeable needs and report thereon in writing to DGS. 2)Authorizes DGS to dispose of surplus state real property by sale, lease, exchange, a sale combined with an exchange, or other manner of disposition of property, as authorized by the Legislature, upon any terms and conditions and subject to any reservations and exceptions DGS deems to be in the best interests of the state. 3)Authorizes DGS to sell surplus real property to a local agency, or to a nonprofit affordable housing sponsor for affordable housing projects at a sales price less than fair market value if DGS determines that such a discount AB 826 (Jones-Sawyer) continued Page 3 will enable the provision of housing for persons and families of low or moderate income. 4)Authorizes DGS to transfer surplus real property to a local agency for less than fair market value if the local agency uses the surplus state real property for parks or open-space purposes. 5)Establishes criteria for state agencies to use in determining and reporting excess lands. A state agency must report land as surplus that is: a) Not currently utilized, or is underutilized, for any existing or ongoing programs; b) Land for which the agency cannot identify any specific utilization relative to future needs; and, c) Land not identified by the state agency within its master plan for facility development. 6)Exempts the sale of surplus property sold "as is" from designated provisions of the California Environmental Quality Act (CEQA). However, the buyer or transferee of a parcel is subject to CEQA as well as any local governmental entitlement or land use approval requirements. 7)Requires that the proceeds from the sale of surplus state property, with specified exceptions, be used to pay the principal and interest on the Economic Recovery Bond Act of 2004. (Proposition 60A) BACKGROUND 1)Purpose : According to the author's office, "This is the annual DGS proposal for the disposal of excess state real property. State agencies are required by Government Code Section 11011 to identify real properties that are excess to its needs. The proposal is necessary because legislative authorization is needed to declare real properties as surplus and to authorize their disposal by DGS." 2)Background : This measure is an annual surplus property AB 826 (Jones-Sawyer) continued Page 4 bill sponsored by 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, DGS must determine if other state agencies can utilize the land. If the state has no need, 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. Under the provisions of Proposition 60A, the proceeds of the sale of surplus property are used to pay the holders of the state's deficit reduction bonds. These payments are intended to accelerate the redemption of the state's debt, and reduce future General Fund payments to the bondholders. 3)Estrella Correctional Facility, San Luis Obispo County : The DGS reports that this facility opened in 1947, and through actions by both the Legislature (SB 81 and AB 191), and the courts (Farrell v. Cate) altering the amount and type of youthful offenders entrusted to the care of the Department's Division of Juvenile Justice, it eventually closed in 2008. 4)Properties leased by DGS to CADA, Sacramento County : The bill would authorize DGS to dispose of 5 properties that are now leased to the Capitol Area Development Authority (CADA). All of these properties are apartment buildings in the CADA area surrounding the State Capitol. The CADA Board of Directors has reportedly signed off on the sale or transfer of these parcels. PRIOR/RELATED LEGISLATION SB 1645 (Mountjoy), Chapter 731, Statutes of 1998. Authorizes Director of DGS to sell, convey, or exchange properties that are not needed by any state agency at fair market value under specified circumstances if 30-day notice is provided to the JLBC and the applicable Members of the Senate and Assembly who represent the district in which the properties are located. AB 826 (Jones-Sawyer) continued Page 5 SUPPORT: Department of General Services OPPOSE: None on file FISCAL COMMITTEE: Senate Appropriations Committee **********