BILL ANALYSIS Ó
AB 1900
Page 1
Date of Hearing: March 29, 2016
ASSEMBLY COMMITTEE ON JUDICIARY
Mark Stone, Chair
AB 1900
(Jones-Sawyer) - As Introduced February 11, 2016
As Proposed to be Amended
SUBJECT: SAN PEDRO COURTHOUSE
KEY ISSUE: SHOULD THE SAN PEDRO COURTHOUSE, WHICH HAS BEEN
CLOSED AND VACATED SINCE 2013 AS A RESULT OF BUDGET CUTS, BE
DECLARED SURPLUS PROPERTY AND OFFERED FOR SALE AT FAIR MARKET
VALUE, AND SHOULD THE PROCEEDS OF THAT SALE BE DISTRIBUTED TO
THE judicial council's COURT CONSTRUCTION IMMEDIATE AND CRITICAL
NEEDS ACCOUNT?
SYNOPSIS
Since 2008, the State's funding challenges has resulted in the
closure of 53 courthouses and 215 courtrooms statewide. Of all
these closures, 8 of the courthouses and 78 of the courtrooms
are in the County of Los Angeles. In June 2013, the Superior
Court of Los Angeles County closed the San Pedro Courthouse, and
shifted the court's caseload to the new Deukmejian Courthouse in
Long Beach. There are no plans to reopen the San Pedro
Courthouse. Although the San Pedro Courthouse has been vacated
since its closure, the Judicial Council continues to pay for the
costs of the operations and the maintenance of that site, funds
AB 1900
Page 2
that otherwise could be used to support actual courtrooms.
This bill authorizes the Judicial Council, the sponsor of this
bill, to manage the sale of the San Pedro Courthouse, and
distribute the proceeds to the Immediate and Critical Needs
Account to pay for court construction and other facility-related
projects. This bill is supported by the County of Los Angeles,
and has no opposition.
SUMMARY: Authorizes the sale of the San Pedro Courthouse, a
surplus property, and moves proceeds from the sale to the
Immediate and Critical Needs Account for court construction and
other facility-related projects. Specifically, this bill:
1)Authorizes Judicial Council to sell the San Pedro Courthouse
at fair market value, upon the terms and conditions that
Judicial Council deems in the best interests of the state, as
long as the following requirements are met:
a) The sale complies with Judicial Council's
responsibilities and authorities with regard to court
facilities as provided by law and as applicable;
b) The Judicial Council consults with the County of Los
Angeles on the sale; and
c) The Judicial Council offers the County of Los Angeles
the right to purchase the property at fair market value.
2)Provides that the proceeds from the sale of the San Pedro
Courthouse shall be deposited into the Special Fund for
Economic Uncertainties, and then immediately transferred to
AB 1900
Page 3
the Immediate and Critical Needs Account of the State Court
Facilities Construction Fund.
3)Makes needed findings and declarations.
4)Provides that the act is an urgency statute, and it is
necessary that it take effect immediately to enable the sale
of the surplus San Pedro court facility to occur as soon as
possible.
EXISTING LAW:
1)Requires proceeds from the sale of surplus state property,
after paying the principal and interest on the 2004 Economic
Recovery Bond Act, to be deposited into the Special Fund of
Economic Uncertainties, or any successor fund. (Cal. Const.,
Art. IV, Section 9; Government Code Section 11011 (g).)
2)Provides that upon legislative authorization, the Department
of General Services may sell or dispose of the excess property
upon any terms and conditions and subject to any reservations
and exceptions as the Department of General Services may deem
to be in the best interests of the state. (Government Code
Section 11011 et seq. Unless stated otherwise, all further
statutory references are to that code.)
3)Directs each state agency to annually review lands under its
jurisdiction to determine what, if any, land is in excess of
its foreseeable needs and to report its finding to the
Department of General Services. (Id.)
4)Provides that the Judicial Council, as the policymaking body
AB 1900
Page 4
for the judicial branch, shall have certain responsibilities
and authorities with regard to court facilities, including,
among other things, the following:
a) Exercise full responsibility, jurisdiction, control, and
authority as an owner would have over trial court
facilities the title of which is held by the state,
including, but not limited to, the acquisition and
development of facilities.
b) Exercise the full range of policymaking authority over
trial court facilities, including, but not limited to,
planning, construction, acquisition, and operation, to the
extent not expressly otherwise limited by law. (Section
70391.)
c) Dispose of surplus court facilities following the
transfer of responsibility for court facilities from the
county to the Judicial Council, subject to, among other
things, the following requirements:
i. The Judicial Council shall consult with the
county concerning the disposition of the facility.
ii. When requested by the transferring county, a
surplus facility shall be offered to that county at fair
market value prior to being offered to another state
agency or local government agency. The Judicial Council
shall consider whether the potential new or planned use
of the facility is: compatible with the use of other
adjacent public buildings; unreasonably departs from the
historic or local character of the surrounding property
or local community; has a negative impact on the local
community; unreasonably interferes with other
AB 1900
Page 5
governmental agencies that use or are located in or
adjacent to the building containing the court facility;
and is of sufficient benefit to outweigh the public good
in maintaining it as a court facility or building.
(Id.)
5)Establishes the Immediate and Critical Needs Account of the
State Court Facilities Construction Fund, whose proceeds shall
only be used for any of the following:
a) The planning, design, construction, rehabilitation,
renovation, replacement, or acquisition of court
facilities. Repayment for moneys appropriated for lease of
court facilities pursuant to the issuance of lease-revenue
bonds.
b) Payment for lease or rental of court facilities or
payment of service contracts, including those made for
facilities in which one or more private sector participants
undertake some of the risks associated with the financing,
design, construction, or operation of the facility.
c) For trial court operations, as provided. (Section
70371.5.)
FISCAL EFFECT: As currently in print this bill is keyed fiscal.
COMMENTS: Due to the Judicial Council's ongoing budget
constraints, many of California's courts have closed. Indeed,
since 2008, 53 courthouses have closed, which has resulted in a
closure of 215 courtrooms statewide. Presently, 48 courthouses
and 200 courtrooms remain closed. In order to preserve access
to justice, ideally those courthouses should be re-opened.
AB 1900
Page 6
Realistically, however - given the courts' funding challenges -
not all courthouses will be able to be re-opened. According to
Judicial Council staff, it has become unsustainable to have as
many courthouses as the State once did.
Of all these closures, 8 of the courthouses and 78 of the
courtrooms are in the County of Los Angeles. In June 2013, the
Superior Court of Los Angeles County closed the San Pedro
Courthouse, and shifted the court's caseload to the new
Deukmejian Courthouse in Long Beach. Currently, there are no
plans to reopen the San Pedro Courthouse. Although the San
Pedro Courthouse has been vacated since its closure, the
Judicial Council continues to pay for the costs of the
operations and the maintenance of that site.
What Does the Bill Do? This bill authorizes Judicial Council to
sell the San Pedro Courthouse at fair market value, upon the
terms and conditions that Judicial Council deems in the best
interests of the state, as long as the following requirements
are met: (1) the sale complies with Judicial Council's
responsibilities and authorities with regard to court
facilities; (2) the Judicial Council consults with the County of
Los Angeles on the sale; and (3) the Judicial Council offers the
County of Los Angeles the right to purchase the property at fair
market value. Upon the sale of the San Pedro Courthouse, the
proceeds are to be transferred to the Immediate and Critical
Needs Account of the State Court Facilities Construction Fund.
Immediate and Critical Needs Account. The Immediate and
Critical Needs Account of the State Court Facilities
Construction Fund (ICNA) was established by SB 1407 (Perata,
Chap. 311, Stats. 2008), and provides funds for court
construction projects and other facility-related expenses.
Under SB 1407, Judicial Council is authorized up to $5 billion
in bond financing for court construction projects repayment
funded by increases in civil and criminal fines and fees and
AB 1900
Page 7
other revenue.
Of course, Judicial Council cannot fund every facilities
project. In deciding which projects to undertake, Judicial
Council is required to consider construction proposals that are
in "immediate and critical need." ICNA also prohibits Judicial
Council from approving projects that cannot be fully financed
with the fund's revenue. With that in mind, Judicial Council
initially selected 41 immediate and critical need projects.
However, due to a decrease in revenue from civil and criminal
fines and fees and other reduction in available funds, Judicial
Council has cancelled and indefinitely delayed 15 of those
projects in order to preserve the ICNA funds. But even with
these cancelled projects, the ICNA fund cannot support all the
critical court projects. This Committee has learned that even
if Judicial Council completes the remaining 26 facility
projects, ICNA is estimated to become insolvent by 2023-24. In
an attempt to improve this outcome, this bill provides that
proceeds from the sale of the San Pedro Courthouse be deposited
into ICNA. Although the sale of the San Pedro Courthouse is
unlikely to resolve the ongoing revenue problem with ICNA, it
seems appropriate that proceeds from the sale of a surplus
courthouse be deposited into a fund that re-invests in courts
that are in the most immediate and critical need.
It should be noted that the proceeds from the sale of the San
Pedro Courthouse are not immediately deposited into ICNA. To
satisfy a constitutional requirement, this bill first deposits
the proceeds from the sale into the Special Fund for Economic
Uncertainties. (Note: The constitutional requirement that
proceeds from the sale of surplus property be used to pay bonds
issued under the 2004 Economic Recovery Bond Act is not
applicable because those bonds have since been retired.) After
the proceeds are deposited to the Special Fund for Economic
Uncertainties, commonly referred to as the Rainy Day Fund, the
proceeds are then immediately transferred to ICNA.
AB 1900
Page 8
This Bill Correctly Places the Authority of the Sale of the San
Pedro Courthouse with the Judicial Council, Rather than the
Department of General Services. Current law gives the
Department of General Services (DGS) the responsibility of
managing and disposing surplus property. Under the existing
framework, DGS annually reports to the Legislature the land that
is declared excess by other state agencies, and must receive
authorization from the Legislature to dispose of that surplus
land. Indeed, Assembly Bill 2904 (Committee on Accountability
and Administrative Review) is this year's annual DGS surplus
property bill.
After the Legislature grants DGS authority, DGS must go through
additional steps before it disposes the surplus property. For
example, before it disposes the land, DGS must determine whether
the land could first be used by any other state agency, local
agency, or nonprofit affordable housing sponsor.
Given that the proceeds are distributed back to building
additional courts or providing for operational costs, it seems
appropriate for the Judicial Council to manage the sale of the
San Pedro courthouse. To that end, this bill, as proposed to be
amended, provides additional clarity that Judicial Council has
the responsibility of managing the sale of the San Pedro
Courthouse.
This Bill Allows the County of Los Angeles to be Given the
Option to First Purchase the Property, in Accordance with
Existing Law. Existing law provides that when Judicial Council
disposes of surplus court facilities, it must consult with the
county concerning the disposition, and offer to the county at
fair market value prior to being offered to another state or
local governmental agency.
AB 1900
Page 9
In accordance with existing law, this bill requires Judicial
Council to consult with the County of Los Angeles on the sale,
and to offer to the County of Los Angeles the right to purchase
the courthouse. To that end, this bill, as proposed to be
amended, provides additional clarity that Judicial Council
comply with existing law in executing the sale of the San Pedro
courthouse.
Existing law also requires Judicial Council, when disposing of
surplus court facilities, to consider whether the potential new
or planned use of the facility, among other things, has a
negative impact on the local community, and is of sufficient
benefit to outweigh the public good in maintaining it as a court
facility or building. Although this Committee is unaware of the
exact plans should the County of Los Angeles purchase the San
Pedro Courthouse, the Committee has learned that the County of
Los Angeles seeks to reinvest the property back into the
community.
In support of the bill, the County of Los Angeles writes:
The San Pedro Courthouse has served as an anchor for local
business and residential activity since its opening in
1969. However, the courthouse has been vacant since its
closure by the State, leaving a void in the community.
This landmark building should continue to be a focal point
of civic activity for the San Pedro community. The State's
proposed disposal of the courthouse provides a prime
opportunity for the property to be acquired locally so that
it may be used for services that benefit the San Pedro
community.
REGISTERED SUPPORT / OPPOSITION:
AB 1900
Page 10
Support
Judicial Council (sponsor)
County of Los Angeles
Opposition
None on file
Analysis Prepared by:Eric Dang / JUD. / (916) 319-2334