Amended in Assembly March 28, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 2726

Introduced by Assembly Member Daly

February 21, 2014

An act to amend begin delete Section 10512 end delete begin insert Sections 10511, 10512, and 10513 end insert of the Public Contract Code, relating to public contracts.

LEGISLATIVE COUNSEL’S DIGEST

AB 2726, as amended, Daly. University of California: real property sales.

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Existing provisions of the California Constitution provide that the University of California constitutes a public trust and requires the university to be administered by the Regents of the University of California, a corporation in the form of a board, with full powers of organization and government, subject to legislative control only for specified purposes, including such competitive bidding procedures as may be applicable to the university by statute for the letting of construction contracts, sales of real property, and purchasing of materials, goods, and services.

end insert

Existing law requires the Regents of the University of California to accept in public a bid for the sale of University of California real property that offers the combination of price and terms which it deems to be in the best interest of the university. begin insert Public notice, as specified, is required when the regents sell end insert begin insert real property valued in excess of $500,000 end insert begin insert . end insert

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This bill would require the Legislative Analyst’s Office to report to the Legislature, by June 30, 2015, on the feasibility of allowing the regents to consider factors other than price and monetary terms in selecting a bid for the sale of real property.

end delete begin insert

This bill would amend the public notice requirements to apply only when the property to be sold is valued in excess of $1,000,000. This bill would also authorize the regents to consider the bidder’s qualifications, as specified, in addition to terms and price in determining which bid or proposal is in the best interests of the university. The bill would also authorize the regents to reject all bids and proposals and would exempt additional property, such as property acquired by foreclosure, from the requirements of these provisions.

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

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

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begin insert SECTION 1. end insert   

end insert

begin insert Section 10511 of the end insert begin insert Public Contract Code end insert begin insert is
amended to read: end insert

10511.  

(a) (1) The Regents of the University of California
shall give public notice to bidders of the sale of University of
California real property situated in California if the estimated value
of the real property to be sold exceeds the amount specified in
paragraph (2).

(2) Paragraph (1) shall apply to real property whose estimated
value exceeds begin delete five hundred thousand dollars ($500,000) end delete begin insert one million
dollars ($1,000,000) end insert net to the seller.

(b) Notice of the sale of real property shall be by publication a
minimum of six times, between 2 and 12 weeks preceding the day
set for receiving bids, as follows:

(1) A minimum of three times in at least one newspaper of
general circulation in the county in which the property is situated.

(2) At least three times in a newspaper of general circulation in
the City of Los Angeles, the City of San Diego, the City of San
Francisco, or the City of Sacramento, whichever is deemed most
appropriate by the regents.

(3) The published notices shall specify the general description
of the property, the source for bid materials and information, and
the date and place for the receiving of sealed bids.

begin delete SECTION 1. end delete
begin insert SEC. 2. end insert   

Section 10512 of the Public Contract Code is amended
to read:

10512.  

(a) On the date designated in the public notice, the
sealed bids shall be publicly opened.

(b) (1) The regents shall accept in public the bid begin delete that offers the
combination of price and terms which it deems to be in the best
interest of the university, or reject all bids end delete begin insert or proposal that it deems
to offer the best combination of price, terms, and bidder’s
qualifications to the university, or reject all bids or proposals end insert . begin insert A
bidder’s end insert begin insert qualifications may include factors other than price and
terms, such as the bidder’s ability to complete the transaction or
to secure development entitlements. end insert

(2) If a successful bidder fails to perform in the manner
specified, the regents may, at their sole option and without further
notice, accept, from those remaining bids begin insert or proposals end insert submitted
and opened in public pursuant to subdivision (a), the bid begin delete that offers
the combination of price and terms that the regents deem to be in
the best interest of the university end delete begin insert or end insert begin insert proposal that it deems to offer
the best combination of price, terms, and bidder’s end insert begin insert qualifications
to the university end insert .

begin delete

(c) The Legislative Analyst’s Office shall report to the
Legislature, by June 30, 2015, on the feasibility of allowing the
regents to consider factors other than price and monetary terms in
selecting a bid for the sale of real property.

end delete

begin insert

begin insert SEC. 3. end insert   

end insert

begin insert Section 10513 of the end insert begin insert Public Contract Code end insert begin insert is amended
to read: end insert

10513.  

The publication and award procedures set forth in this
article shall not be applicable to any of the following:

(a) The sale of an undivided or fractional ownership interest in
real property.

(b) A sale of a right of use in real property that is less than fee
ownership.

(c) A sale of real property subject to title conditions or
restrictions on the university’s ownership deriving from the origin
of that ownership by gift, devise, or otherwise, if that sale would
be inconsistent with those title conditions or restrictions.

(d) The disposition of real property acquired through exercise
of a power of sale pursuant to a deed of trust, begin insert foreclosure, deed in
lieu of foreclosure, transactions when property is accepted in
settlement of a defaulted mortgage, legal settlement, end insert or held as an
asset in the university’s investment portfolio.

(e) A sale of public lands under the direction of the federal land
agent.

(f) A sale to a person or entity who will dedicate the real
property to public use.

(g) A sale of real property acquired after January 1, 1985,
through eminent domain proceedings initiated by the Regents of
the University of California. In those cases, the person from whom
the property was acquired shall be notified and be accorded an
exclusive opportunity for 90 days to purchase the property at its
fair market value. If the person fails to undertake proceedings to
purchase the property within 90 days, the procedures specified in
Sections 10511 and 10512 shall then be followed in the sale of the
property.

(h) An exchange to acquire real property of another person or
entity for university purposes. Any exchange shall be upon terms
and conditions agreed to by the exchanging parties.