BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  SB 416
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          SENATE THIRD READING
          SB 416 (Liu)
          As Amended  September 3, 2013
          2/3 vote 

           SENATE VOTE  :39-0  
           
           HOUSING             7-0         TRANSPORTATION      16-0        
          
           ----------------------------------------------------------------- 
          |Ayes:|Chau, Beth Gaines,        |Ayes:|Lowenthal, Linder,        |
          |     |Atkins, Brown,            |     |Achadjian, Ammiano,       |
          |     |Maienschein, Quirk-Silva, |     |Bloom, Bonta, Buchanan,   |
          |     |Mullin                    |     |Daly, Frazier, Gatto,     |
          |     |                          |     |Holden, Logue, Morrell,   |
          |     |                          |     |Nazarian, Patterson,      |
          |     |                          |     |Quirk-Silva               |
           ----------------------------------------------------------------- 

           APPROPRIATIONS      17-0                                        
           
           -------------------------------- 
          |Ayes:|Gatto, Harkey, Bigelow,   |
          |     |Bocanegra, Bradford, Ian  |
          |     |Calderon, Campos,         |
          |     |Donnelly, Eggman, Gomez,  |
          |     |Hall, Holden, Linder,     |
          |     |Pan, Quirk, Wagner, Weber |
          |     |                          |
          |     |                          |
           -------------------------------- 

           SUMMARY  :  Makes a number of changes to the Roberti Act governing  
          the sale of surplus properties in the State Route (SR) 710  
          corridor.  Specifically,  this bill  :   

          1)Requires the fair market value price that the Department of  
            Transportation (Caltrans) offers to non-income qualified  
            buyers to reflect the "as-is" condition of the property,  
            taking into account any repairs required to make the property  
            safe and habitable.

          2)Allows Caltrans, at the request of an income-qualified person,  
            to offer a residence or property for sale in an "as-is"  








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            condition.

          3)With respect to market-rate residential sales, gives first  
            priority only to tenants in good standing with all rent  
            current and paid in full, rather than any tenant, and 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, before the home can be offered to  
            purchasers who intend to be owner-occupants.  

          4)Specifies that the selling agency may commence the sales of  
            properties that former tenants may possess a right to purchase  
            30 days after the selling agency has done both of the  
            following:

             a)   Posted information regarding the sales on the selling  
               agency's Web site and;

             b)   Made a good faith effort to provide written notice, by  
               first-class mail, to the last known address of each former  
               tenant.

          5)With respect to non-residential properties, gives tenants in  
            good standing priority to purchase the property at fair market  
            value.

          6)Creates the SR 710 Rehabilitation Account and requires  
            Caltrans to deposit proceeds from sales of SR 710 properties  
            into the account.

          7)Limits the total funds that can be maintained in the account  
            to $500,000, and specifies that funds exceeding that amount,  
            less any reimbursements due to the federal government, shall  
            be transferred to the State Highway Account to be used for  
            allocation by the California Transportation Commission  
            (commission) exclusively to fund projects located in Pasadena,  
            South Pasadena, Alhambra, La Canada Flintridge, and the 90032  
            postal ZIP Code.

          8)Specifies that projects shall be selected and prioritized by  
            the affected communities in consultation with the Los Angeles  
            County Metropolitan Transportation Authority (MTA) pursuant to  
            guidelines developed by the commission.









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          9)Requires MTA to submit a proposed program of projects and  
            gives the commission final authority to approve the projects.

          10)        Specifies that eligible projects include, but are not  
            limited to, sound walls; transit; rail capital improvements;  
            bikeways; pedestrian improvements; signal synchronization;  
            left turn signals; and major street resurfacing,  
            rehabilitation, and reconstruction.

          11)        Appropriates, continuously, funds in the SR 710  
            Rehabilitation Account for the purpose of making required  
            repairs to homes being purchased by income-qualified  
            residents, and requires any funds exceeding the amount needed  
            for repairs to be transferred to the State Highway Account.

          12)        Prohibits funds from the sale of surplus properties  
            in the SR 10 corridor from being used to advance or construct  
            any proposed North State Route 710 tunnel.

          13)        Requires that any funds remaining in the SR 710  
            Rehabilitation Account after the last property is repaired,  
            less any reimbursements due to the federal government, be  
            transferred to the State Highway Account to be used  
            exclusively for eligible projects in the specified  
            communities.

          14)         Requires that the preliminary project alternative  
            referred to as Alternative F-6 in the December 2012  
            Alternative Analysis Report of the MTA, for purposes of the  
            California Environmental Quality Act, no longer be deemed a  
            feasible alternative for consideration in any state  
            environmental review process for the Interstate 710 North Gap  
            Closure project, State Clearinghouse number 1982092310.

           FISCAL EFFECT  : According to the Assembly Appropriations  
          Committee:

          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  








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            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 over 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  :  For decades, Caltrans has proposed the SR 710  
          extension project to close a roughly 4.5-mile unconstructed gap  
          in the freeway from just north of SR 10 in Los Angeles to SR 210  
          in Pasadena.  This gap affects the cities of Alhambra, Pasadena,  
          South Pasadena, and a portion of Los Angeles.  The project has  
          been in the planning stage since 1953 for a variety of reasons  
          related to the federal environmental review process.  The Los  
          Angeles County Metropolitan Transportation Authority (MTA), on  
          behalf of Caltrans, is currently preparing a Draft Environment  
          Impact Report to assess alternatives for ameliorating traffic  
          congestion in the area between the current terminus of SR 710  
          and SR 210 in Pasadena.  At this point in the process, the  
          originally proposed surface route has been eliminated from  
          consideration. Alternatives remaining include a tunnel, light  
          rail, bus rapid transit, and transportation demand and traffic  
          flow management.  By 2014, Caltrans plans to identify how it  
          intends to proceed.

          Caltrans currently owns 460 properties within the originally  
          proposed right-of-way, including 330 single-family homes and 103  
          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.  The author believes this is a role outside of  
          Caltrans' primary mission and one that Caltrans is not anxious  
          to continue.  Given that a surface route is no longer under  
          consideration, the most expeditious means of taking Caltrans out  
          of the real estate management business is to sell the  
          properties.  This will restore community integrity and have the  
          added advantage of returning the properties to private ownership  








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          and to the local tax rolls.

          This bill makes a number of minor changes to the Roberti Act  
          governing the sale of surplus properties in the SR 710 corridor  
          aimed at expediting the sale of Caltrans-owned properties in the  
          corridor that are no longer needed to construct the freeway  
          extension.  The bill additionally creates the SR 710  
          Rehabilitation Account and requires that Caltrans deposit  
          proceeds from the sale of SR 710 properties into the account for  
          the purposes of making repairs required by the Roberti Act to  
          homes being purchased by income-qualified residents.  The bill  
          limits the account to having a maximum of $500,000 on deposit at  
          any one time.  Funds in excess of $500,000 would be deposited  
          into the State Highway Account to be used to fund eligible  
          projects, such as sound walls, transit, rail capital  
          improvements, bikeways, pedestrian improvements, signal  
          synchronization, left turn signals, and major street  
          rehabilitation, in Pasadena, South Pasadena, Alhambra, La Canada  
          Flintridge, and the 90023 ZIP code.  The bill prohibits any of  
          the proceeds from the sales of SR 710 properties be used to  
          advance or construct the proposed North State Route 710 tunnel,  
          and requires that the surface freeway alternative known as  
          Alternative F-6 no longer be deemed a feasible alternative for  
          consideration in any state environmental review process for the  
          Interstate 710 North Gap Closure project.

           Analysis Prepared by  :    Anya Lawler / H. & C.D. / (916)  
          319-2085 
                                                                FN: 0002180