BILL ANALYSIS Ó
SENATE JUDICIARY COMMITTEE
Senator Hannah-Beth Jackson, Chair
2015-2016 Regular Session
AB 1900 (Jones-Sawyer)
Version: March 31, 2016
Hearing Date: June 21, 2016
Fiscal: Yes
Urgency: Yes
ME
SUBJECT
San Pedro Courthouse
DESCRIPTION
This bill would authorize the Judicial Council to sell the San
Pedro Courthouse, which has not been in use for three years, and
to use the proceeds to pay for planning, design, construction,
rehabilitation, renovation, replacement, or acquisition of court
facilities. This bill also requires that the County of Los
Angeles receive the opportunity to purchase the property at a
fair market price before the property is offered to others for
purchase.
BACKGROUND
There have been 53 courthouse closures and 215 courtroom
closures throughout California since 2008. Los Angeles County
alone has suffered 78 courtroom and 8 courthouse closures since
2008. The San Pedro Courthouse was closed by the Superior Court
of Los Angeles in June 2013 due to budget cuts and remains
closed to this day. Nonetheless, the Judicial Council continues
to fund the maintenance of the San Pedro Courthouse, including
payment for utilities, landscaping, and vandalism prevention.
The Judicial Council recently declared the San Pedro Courthouse
as surplus property pursuant to their requirement under
Government Code Section 11011 to identify real properties that
are no longer needed. The Judicial Council, sponsor of this
bill, seeks legislative authorization to sell the San Pedro
Courthouse and legislative direction to use the proceeds to pay
for planning, design, construction, rehabilitation, renovation,
replacement, or acquisition of court facilities. Under current
law, proceeds from the sale of the San Pedro Courthouse, or any
courthouse, would be directed into the Special Reserve for
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Economic Uncertainties. Additionally, under current law, the
Judicial Council is required to consult with the County in which
the surplus property is located and if the County expresses an
interest in purchasing the property, the Judicial Council is
also obligated to offer the surplus property to the County at
fair market value prior to offering the property to another
state agency or local government agency. (Gov. Code Sec.
70391(c)(2).) In a letter dated March 30, 2015, the County of
Los Angeles confirmed it wants to purchase the San Pedro
Courthouse after it is declared surplus.
This bill would authorize the Judicial Council to sell the San
Pedro Courthouse and provide that the proceeds could only be
used for planning, design, construction, rehabilitation,
renovation, replacement, or acquisition of court facilities.
The bill would also require the Judicial Council to give the
County of Los Angeles the right to purchase the San Pedro
Courthouse for fair market value before otherwise offering the
property for sale.
CHANGES TO EXISTING LAW
Existing law establishes the Immediate and Critical Needs
Account of the State Court Facilities Construction Fund (ICNA)
and limits how ICNA funds may be spent. (Gov. Code Sec.
70371.5.)
Existing law permits ICNA funds to only be used for the
following purposes:
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;
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; or
trial court operations. (Gov. Code Sec. 70371.5(a)(1)-(4).)
Existing law provides that notwithstanding any law, the
Controller may use ICNA funds for cash flow loans to the General
Fund as specified. (Gov. Code Sec. 70371.5(g).)
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Existing law establishes the Special Fund for Economic
Uncertainties. (Gov. Code Sec. 16418.)
Existing law requires that proceeds from the sale of surplus
state property be deposited into the Special Fund for Economic
Uncertainties after paying the principal and interest on the
2004 Economic Recovery Bond Act. (Cal. Const. art. 3, Sec. 9;
Gov. Code Sec. 11011(g).)
Existing law provides that upon legislative authorization, the
Department of General Services may sell or dispose of excess
property, as specified. (Gov. Code Sec. 11011 et seq.)
Existing law directs each state agency to annually review lands
under their jurisdiction to determine what lands are in excess
of their foreseeable needs and to report on their findings to
the DGS. (Gov. Code Sec. 11011.)
Existing law provides that the Judicial Council has authority
with regard to court facilities, including, to:
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;
exercise the full range of policymaking authority over trial
court facilities, including, but not limited to, the
acquisition and development of facilities, planning,
construction, and operation of court facilities, to the extent
not expressly otherwise limited by law; and
dispose of surplus court facilities following the transfer of
responsibility for court facility from the county to the
Judicial Council, as specified, including consulting with the
county concerning the disposition of the facility and offering
the surplus facility to the county at fair market value prior
to offering it to other state agencies or local government
agencies, when the transferring county requests it. (Gov.
Code Sec. 70391.)
This bill would provide that notwithstanding any other law, the
Judicial Council may sell the San Pedro Courthouse located at
505 South Centre Street with Assessor Parcel Number
7455-0130901.
This bill would provide that the sale of the San Pedro
Courthouse must be at fair market value and upon the terms and
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conditions and subject to the reservations the Judicial Council
deems in the best interests of the state if the following
requirements are met:
the sale complies with Section 70391 of the Government Code,
as applicable;
the Judicial Council consults with the County of Los Angeles
concerning the sale of the courthouse; and
the Judicial Council offers the County of Los Angeles the
right to purchase the courthouse at a fair market value
before otherwise offering the property for sale.
This bill would provide that notwithstanding any other law, the
proceeds from the sale of the courthouse shall be deposited into
the Special Fund for Economic Uncertainties, and then must be
immediately transferred to the ICNA.
This bill would provide that the proceeds from the sale of the
San Pedro Courthouse shall be appropriated from the ICNA to the
Judicial Council and can only be used for planning, design,
construction, rehabilitation, renovation, replacement, or
acquisition of court facilities.
This bill makes related legislative findings and contains an
urgency clause.
COMMENT
1. Stated need for the bill
The author writes:
The bill would declare the existing San Pedro Courthouse
surplus property and allow for its disposal by the
Judicial Council. The state of California, acting by and
through the Judicial Council, holds title to the San Pedro
Courthouse. The Courthouse is a shared-use facility, with
the Judicial Council holding a 95.15 percent equity
interest and the County of Los Angeles holding the
remaining 4.85 percent.
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The Superior Court of California, County of Los Angeles
closed the Courthouse on June 30, 2013, and has since
advised Judicial Council staff that the court does not
have a current or any future need for the Courthouse.
According to a report by the Judicial Council, the County
of Los Angeles has expressed its desire to purchase the
Courthouse at its fair market value as soon as possible
and the court supports the sale to the County.
After the Judicial Council declared and proposed
legislation required to dispose of the Courthouse as
surplus property, the Legislature requested an alternative
proposal framed in a manner authorizing the sale not as
surplus property so as to allow the Judicial Council to
retain the proceeds from its sale.
2. The County of Los Angeles is interested in purchasing the
Courthouse
The County of Los Angeles, in a "letter of interest" regarding
the "San Pedro Courthouse Acquisition," writes that the "County
wants to purchase the San Pedro Courthouse after it has been
declared surplus." This triggers the Judicial Council's
statutory duty to give the County of Los Angeles the right of
first refusal to purchase the San Pedro Courthouse for fair
market value. It appears that if the Legislature approves this
bill, the Judicial Council already has a buyer lined up and
will, as quickly as possible be able to sell the property and
cease paying maintenance fees.
3. Allows Judicial Council to spend proceeds on court
facilities
Under the California Constitution, the proceeds from the sale of
the San Pedro Courthouse (surplus property) must be directed
into the Special Fund for Economic Uncertainties (SFEU).
Without legislation, the proceeds would remain in the SFEU and
not be redirected to the Judicial Council for court facilities.
The Legislature may appropriate funds in the SFEU for any
purpose by majority vote. This bill would require the proceeds
from the sale of the San Pedro Courthouse to be directed into
the SFEU and then appropriated into the Immediate and Critical
Needs Account of the State Court Facilities Construction Fund
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(ICNA). The author notes that the legislature has approved
several bills that disposed of surplus property in the same
manner.<1>
Current law delineates what ICNA funds may be spent on. ICNA
funds may be spent on planning, design, construction,
rehabilitation, renovation, replacement, or acquisition of court
facilities. However, ICNA funds can be spent in other ways
including on trial court operations. The bill would further
require that the ICNA funds generated from the sale of the San
Pedro Courthouse to only be spent on planning, design,
construction, rehabilitation, renovation, replacement, or
acquisition of court facilities. An argument could be made that
since the funds are being deposited into ICNA that the Judicial
Council should be allowed to spend the funds on everything they
can currently use ICNA funds for, including trial court
operations. However, because the funds arise from the closure
and sale of a courthouse, the funds arguably most appropriately
should be used to open new court facilities or ensure that
existing facilities remain open.
Support : County of Los Angeles
Opposition : None Known
HISTORY
Source : Judicial Council of California
Related Pending Legislation : None Known
Prior Legislation :
SB 1407 (Perata, Ch. 311, Stats. 2008) created the Immediate and
Critical Needs Account of the State Court Facilities
Construction Funds and authorized the Judicial Council up to $5
billion in bond financing for court construction projects.
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<1> See e.g. AB 826 (Jones-Sawyer, Ch. 505, Stats. 2013)
authorized Department of General Services to dispose of 8
parcels of state property with some of the proceeds being
redirected; SB 1580 (Governmental Organization, Ch. 798, Stats.
2012) authorized sale of armories and have proceeds deposited in
the Armory Fund.
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Prior Vote :
Assembly Floor (Ayes 79, Noes 0)
Assembly Appropriations Committee (Ayes 20, Noes 0)
Assembly Judiciary Committee (Ayes 9, Noes 0)
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