BILL ANALYSIS Ó
SB 416
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Date of Hearing: August 21, 2013
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
SB 416 (Liu) - As Amended: August 19, 2013
Policy Committee: HousingVote: 7-0
Transportation 16-0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill establishes additional provisions governing the sale
of surplus properties in the State Route (SR) 710 corridor and
the use of proceeds from those sales. Specifically, this bill:
1)Requires that properties offered for sale at fair market value
reflect the "as-is" condition of the property, taking into
account any repairs required to make the property safe and
habitable.
2)With respect to market-rate residential sales:
a) Gives first priority to those tenants in good standing
with all rent current and paid in full.
b) Gives second priority to former occupants who were in
good standing at the time they left the home, with priority
given to the most recent tenants first.
3)Gives tenants of non-residential properties in good standing
priority to purchase the property at fair market value.
4)Allows Caltrans, at the request of an income-qualified person,
as defined under current law, to offer a residence or property
for sale in an "as-is" condition.
5)Establishes the SR 710 Rehabilitation Account for deposit of
proceeds from sales of SR 710 properties, and continuously
appropriates these funds for the purpose of making required
repairs to homes being purchased by low- and moderate-income
residents.
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6)Limits the balance of funds in the rehabilitation account to
$500,000 and requires excess funds-less any required federal
reimbursement for participation in the original purchase of
the properties-to be deposited in the State Highway Account
and allocated by the California Transportation Commission to
transportation projects in Pasadena, South Pasadena, Alhambra,
La Canada Flintridge and the 90032 ZIP Code.
FISCAL EFFECT
1)According to a March 1, 2012 estimate by Caltrans, the market
value of the SR 710 parcels is approximately $279 million,
although this estimate is not based on an official appraisal.
Under current law, net proceeds from the sale of these surplus
properties would be deposited into the Transportation Debt
Service Fund to offset General Fund debt service payments for
general obligation bonds. In contrast, this bill places the
revenues, up to the prescribed $500,000 limit, into the
rehabilitation account (for repairs to those properties sold
to low- and moderate-income households), with the excess
placed in the State Highway Account for use in the specified
communities. Thus the redirection of net proceeds from these
property sales, which will occur of several years, will
require corresponding increases in General Fund allocations
for transportation debt service.
2)By allowing a portion of the revenues from surplus property
sales to be used for needed repairs to other 710-corridor
properties, the bill could help to expedite the property
sales.
COMMENTS
1)Background . I-710 is a major north-south interstate freeway
running 23 miles through Los Angeles County-from Long Beach to
Alhambra, stopping short of the originally planned terminus in
Pasadena. Construction of the 4.5-mile segment between
Alhambra and Pasadena, through South Pasadena, has been
delayed for decades due to community opposition.
The LA Metropolitan Transportation Authority, on behalf of
Caltrans, is currently preparing a draft environment impact
report to assess alternatives for ameliorating traffic
congestion in the SR 710 corridor and to address community
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concerns. The originally proposed surface route has
essentially been eliminated from further consideration.
Alternatives remaining under consideration include a tunnel,
light rail, bus rapid transit, and transportation demand and
traffic flow management.
2)Purpose . Caltrans currently owns 460 properties within the
originally proposed right-of-way, including 358 single-family
homes and 42 multifamily housing units. According to the
author, the Bureau of State Audits has cited Caltrans a number
of times over the years for poor performance as a real estate
manager and landlord. Given that a surface route is no longer
under consideration, the author believes that the most
expeditious means of taking Caltrans out of the real estate
management business is to sell the properties and, as a
result, restore community integrity and return the properties
to private ownership and to the local tax rolls. SB 416 is
intended to facilitate the expeditious sale of those
properties.
3)Prior Legislation . In 2012, SB 204 (Liu), as similar bill that
also required development of an alternative transportation
improvement program, was vetoed, with the Governor arguing
that the bill was premature because the environmental review
process was not yet complete.
Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081