Amended in Senate August 5, 2014

Amended in Assembly May 23, 2014

Amended in Assembly March 28, 2014

California Legislature—2013–14 Regular Session

Assembly BillNo. 1656


Introduced by Assembly Member Dickinson

February 11, 2014


An act to add Section 14669.16 to the Government Code, relating to the Department of General Services.

LEGISLATIVE COUNSEL’S DIGEST

AB 1656, as amended, Dickinson. Department of General Services: State Board of Equalization headquarters.

Existing law creates the Department of General Services to provide centralized services, including, but not limited to, planning, acquisition, construction, and maintenance of state buildings and property, purchasing, printing, architectural services, administrative hearings, and accounting services. Existing law provides that thebegin delete Department of General Servicesend deletebegin insert departmentend insert is under the control of an executive officer known as the Director of General Services.

This bill would authorize thebegin delete Director of General Services,end deletebegin insert department,end insert in consultation with the State Board ofbegin delete Equalization,end deletebegin insert Equalization (BOE),end insert to enter into one or more agreements for the planning, design, construction, and acquisition of facilities, including any improvements, betterments, and related facilities, and to enter intobegin delete a lease-purchase orend deletebegin insert one or more agreements to acquire, construct, purchase, lease-purchase, or may enter intoend insert a lease with an option to purchase, for the relocation and consolidation of thebegin delete State Board of Equalization,end deletebegin insert BOEend insert according to specific conditions.begin insert The bill would require the department to determine whether it is in the best interest of the state to sell, lease to other tenants, or exchange the current BOE headquarters property and to notify the chairs of the fiscal committees of the Legislature and the Joint Legislative Budget Committee, or their designees, of the most cost-effective option. The bill also would authorize the State Public Works Board to issue revenue bonds, negotiable notes, or negotiable bond anticipation notes to finance the acquisition of land and facilities for the headquarters, and would permit the State Public Works Board and the department to borrow funds for project costs from the Pooled Money Investment Account, as specified.end insert The bill would require thebegin delete Department of General Servicesend deletebegin insert departmentend insert to be reimbursed for the cost of entering into these agreements or leases in an amount not to exceed $3,000,000 from a loan of funds in the Architecture Revolving Fund, as specified. The bill also would authorize thebegin delete State Board of Equalizationend deletebegin insert BOEend insert to relocate and consolidate its offices without obligation to pay rent on the existing state-owned or state-leased facilities after they are vacated.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

P2    1

SECTION 1.  

The Legislature hereby finds and declares all of
2the following:

3(a) Located in the City of Sacramento, the state owns
4approximately 2.50 acres of real property on one city block
5bounded by N Street on the north, 5th Street on the east, O Street
6on the south, and 4th Street on the west, that is the State Board of
7Equalization’s current state-owned headquarters. The state-owned
8facility is a 24-story building that contains approximately 616,000
9gross square feet, with 463,000 usable square feet of office space.
10The ground floor contains a full-service cafeteria and a child care
11center. The state-owned facility also includes a three-story parking
12 structure with 711 spaces.

13(b) The State Board of Equalization collects taxes and fees that
14provide approximately 35 percent of the annual revenue for state
15government and essential funding for cities, counties, and special
16districts. In the 2012-13 fiscal year, the State Board of
17Equalization-administered tax and fee programs produced $56
P3    1billion for education, public safety, transportation, housing, health
2services, social services, and natural resource management.

3(c) The current State Board of Equalization headquarters
4building lacks sufficient space to meet the State Board of
5Equalization’s existing and future consolidated space needs.

6(d) The state has expended approximately $65 million in
7taxpayer dollars over the last decade to make repairs to the State
8Board of Equalization building. The State plans to spend another
9$30 million or more to address new issues with the building.

10(e) Consolidating the various State Board of Equalization
11headquarters and annexes into one location will greatly facilitate
12and improve the efficiency of the administrative operations of the
13agency.

14(f) Allowing the State Board of Equalization to move out of the
15real property described in subdivision (a) permanently and to
16consolidate its operations into one location will accommodate
17future growth as part of its revenue-administrative mission.

18

SEC. 2.  

Section 14669.16 is added to the Government Code,
19to read:

20

14669.16.  

begin insert

(a) For purposes of this section, the “Sacramento
21property” means the 2.50 acres of real property, owned by the
22state and located in the City of Sacramento, on one city block
23bounded by N Street on the north, 5th Street on the east, O Street
24on the south, and 4th Street on the west, that is the State Board of
25Equalization’s current state-owned headquarters.

end insert
begin delete

26(a)

end delete

27begin insert(b)end insert (1) Notwithstanding any other law, thebegin delete Directorend deletebegin insert Departmentend insert
28 of General Services, in consultation with the State Board of
29Equalization, may enter into one or more agreements for the
30planning, design, construction, and acquisition of facilities,
31including any improvements, betterments, and related facilities,
32for the relocation of the State Board of Equalization in the
33Sacramento region. Thebegin delete Directorend deletebegin insert Departmentend insert of General Services
34may enter intobegin delete a lease-purchaseend deletebegin insert one or more agreements to acquire,
35construct, purchase, lease-purchase,end insert
orbegin insert may enter intoend insert a lease with
36an option tobegin delete purchaseend deletebegin insert purchase,end insert to provide usable office and related
37space in the Sacramento region in order to consolidate various
38departments of the State Board of Equalization into a single
39location.

P4    1(2) The Department of General Services shall solicit and accept
2proposals for acquiring or constructing consolidated facilities for
3the State Board of Equalization on the basis of the best value. For
4purposes of this paragraph, “best value” means a value determined
5by objective criteria, including, but not limited to, price, features,
6functions, life-cycle costs, experience, and other criteria deemed
7 appropriate by the department.

8(3) The Department of General Services shall develop the terms
9and conditions of the agreements or leases authorized by paragraph
10(1) no later than December 31, 2015.

begin insert

11(4)  The acquisition of a new facility and sale of the existing
12facility may be handled separately or combined into one proposal.
13The Department of General Services may solicit and accept
14proposals and may enter into one or more agreements for the sale,
15exchange, lease, rehabilitation, or any combination thereof, of all
16or a portion of the Sacramento property for the purpose of
17providing office space to one or more entities.

end insert
begin delete

18(b)

end delete

19begin insert(c)end insert The Department of General Services shall provide notice of
20the terms and conditions of the proposed agreements or leases to
21the chairs of the fiscal committees of the Legislature and the Joint
22Legislative Budget Committee, or their designees, at least 45 days
23prior to executing the agreement for a lease-purchase or lease with
24an option to purchase real property authorized by this section. The
25department may proceed with the agreement or lease 45 days
26following the date the department gave notice to the
27above-mentioned chairs.

begin insert

28(d) The department shall determine whether it is in the best
29interest of the state to sell, to lease to other tenants, or to exchange
30the Sacramento property. The department shall notify the chairs
31of the fiscal committees of the Legislature and the Joint Legislative
32Budget Committee, or their designees, of the most cost-effective
33option for the state.

end insert
begin insert

34(e) (1) Upon the Department of General Services making the
35determination specified in subdivision (d) that the Sacramento
36property should be either sold or leased to another tenant, the
37department may sell, exchange, lease, or any combination thereof,
38all or a portion of the Sacramento property. Upon sale, exchange,
39or lease of the Sacramento property, and subject to the
40requirements of Section 9 of Article III of the California
P5    1Constitution, the Department of General Services shall make an
2early payoff of the total outstanding lease revenue bonds on the
3Sacramento property, including accrued interest and any other
4obligations associated with the Sacramento property, using the
5revenues resulting from any sale, exchange, or lease.

end insert
begin insert

6(2) (A) If the Department of General Services sells the
7Sacramento property and the sale constitutes a sale of surplus
8state property for purposes of Section 9 of Article III of the
9California Constitution, the “proceeds from the sale” for purposes
10of that section shall be the revenues from the sale in excess of the
11amount necessary to satisfy the total outstanding bonds on the
12Sacramento property, as required by paragraph (1).

end insert
begin insert

13(B) In order to facilitate the sale of the Sacramento property,
14the Department of General Services and the State Public Works
15Board may borrow from the General Fund an amount necessary
16to satisfy the total outstanding bonds. Any amounts loaned pursuant
17to this subparagraph shall be repaid from the proceeds of the sale
18of the Sacramento property.

end insert
begin insert

19(f) (1) The State Public Works Board may issue revenue bonds,
20negotiable notes, or negotiable bond anticipation notes pursuant
21to Chapter 5 (commencing with Section 15830) of Part 10b of
22Division 3 of Title 2 to finance the acquisition of land and facilities
23authorized in subdivision (b). The State Public Works Board and
24the Department of General Services may borrow funds for project
25costs from the Pooled Money Investment Account pursuant to
26Sections 16312 and 16313. If the bonds authorized by the project
27are not sold, the Department of General Services shall commit a
28sufficient amount of its support appropriation to repay any loans
29made for the project from the Pooled Money Investment Account.
30It is the intent of the Legislature that this commitment be included
31in future budget acts until outstanding loans from the Pooled
32Money Investment Account are repaid either through the proceeds
33from the sale of bonds or from an appropriation.

end insert
begin insert

34(2) The amount of revenue bonds, negotiable notes, or
35negotiable bond anticipation notes to be sold may equal, but shall
36not exceed the cost of acquisition, including land, construction,
37preliminary plans and working drawings, construction management
38and supervision, other costs relating to the design and construction
39of the facilities, and any additional sums to pay interim and
40permanent financing costs and costs to issue these bonds. The
P6    1additional amount may include interest and a reasonable required
2reserve fund.

end insert
begin insert

3(3) Notwithstanding Section 13332.11, the State Public Works
4Board may authorize the augmentation of the amount authorized
5pursuant to this subdivision by up to, but not exceeding, 10 percent
6of the amount specifically authorized.

end insert
begin delete

P5   1 7(c)

end delete

8begin insert(g)end insert The Department of General Services shall be reimbursed
9for the department’s costs pursuant to subdivisionbegin delete (a),end deletebegin insert (b),end insert in an
10amount not to exceed three million dollars ($3,000,000), from a
11loan of funds that are continuously appropriated pursuant to Section
1214957 and deposited into the Architecture Revolving Fund for
13repairs to the State Board of Equalization’s headquarters building
14located at 450 N Street in the City of Sacramento. Any amounts
15loaned pursuant to this subdivision shall be repaid from the State
16Board of Equalization’s operating funds within five years from
17the date those funds were borrowed. Interest charges shall be
18waived pursuant to subdivision (e) of Section 16314.

begin delete

13 19(d)

end delete

20begin insert(h)end insert Notwithstanding subdivision (c) of Section 14682, the State
21Board of Equalization is authorized to relocate its offices from
22existing state-owned or state-leased facilities for the purpose of
23consolidating the State Board of Equalization headquarters and
24annexes into a single location without any obligation to pay rent
25on those facilities after vacating such premises.



O

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