BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
AB 1900 (Jones-Sawyer) - San Pedro courthouse
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|Version: March 31, 2016 |Policy Vote: JUD. 7 - 0 |
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|Urgency: Yes |Mandate: No |
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|Hearing Date: August 1, 2016 |Consultant: Jolie Onodera |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: AB 1900, an urgency measure, would authorize the
Judicial Council to sell the property known as the San Pedro
courthouse, a surplus court facility, at fair market value and
upon specified terms and conditions. This bill would deposit and
transfer the sale proceeds from the Special Fund for Economic
Uncertainties to the Immediate and Critical Needs Account
(ICNA), and appropriate the funds to the Judicial Council for
the planning, design, construction, rehabilitation, renovation,
replacement, or acquisition of court facilities.
Fiscal
Impact:
Sale proceeds : Redirection of one-time revenue potentially in
excess of several million dollars from the Special Fund for
Economic Uncertainties (SFEU) to the Immediate and Critical
Needs Account (ICNA). Under existing law, the proceeds from
the sale of surplus state property are to be deposited into
the SFEU (now that the principal and interest on the 2004
Economic Recovery Bonds have been fully paid). The 2016 Budget
Act reflects a 2016-17 ending balance of $1.75 billion in the
AB 1900 (Jones-Sawyer) Page 1 of
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SFEU. Absent the declaration of the courthouse as "surplus
property," the net proceeds of the sale would potentially be
subject to reversion to the General Fund and the State Court
Facilities Construction Fund pursuant to Government Code §
70391(c)(1).
Appropriation to Judicial Council : One-time appropriation
potentially in excess of several million dollars to the
Judicial Council from the ICNA. Annual revenues to the ICNA
have been declining, and the 2016 Budget Act reflects a
2016-17 ending balance of $87.8 million in the ICNA.
Disposition process : Potential one-time costs (General Fund*)
to the Judicial Council for expenses incurred for the
disposition process including but not limited to an appraisal,
title and escrow fees. As the bill requires all sale proceeds
(instead of net proceeds) to be transferred to the ICNA, the
disposition costs would be charged against the Trial Court
Trust Fund.
Operations/maintenance : Future cost savings (General Fund*)
to the Judicial Council in avoided maintenance and operations
costs. Despite the closure of the courthouse at the end of
June 2013, the Judicial Council continues to share
responsibility with the county for maintenance and operations
costs pursuant to Government Code § 70343(a)(2).
Uncodified statutory text : Staff notes the entire provisions
of the bill are uncodified. Although uncodified statutory text
has the force of law, codifying the statutory text of the bill
would facilitate future references to the authorization
provided and the specific terms and conditions of the sale.
*Trial Court Trust Fund
Background: As reported by the Legislative Analyst's Office in "Completing
the Goals of Trial Court Realignment," (September 28, 2011),
although the state assumed responsibility for funding the
operations of trial courts in 1997, the state did not begin to
take over the responsibility for and ownership of trial court
facilities from counties until 2002 with the enactment of SB
1732 (Escutia) Chapter 1082/2002, more commonly referred to as
the Trial Court Facilities Act of 2002. In contrast to the
Legislature's decision to decentralize control of court
employees to individual trial courts, SB 1732 realigned
responsibility for facilities to the Judicial Council. SB 1732
included the following key components:
AB 1900 (Jones-Sawyer) Page 2 of
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Transfer of Responsibility for Trial Court Facilities. The
legislation authorized the transfer of title and all management
responsibility for most court facilities from the counties to
the state by June 30, 2007, and required the Judicial Council
and the California State Association of Counties to establish a
process for transferring facilities on a building-by-building
basis. Moreover, the Judicial Council-not individual trial
courts-was given the primary responsibility for the provision of
court facilities, as well as the authority to own and construct
future court facilities. The Judicial Council has since assumed
responsibility from the counties for all trial court facilities.
Required County Facility Payment. Although the state would
assume responsibility for trial court facilities, the
legislation required counties to make annual payments into a
newly created Court Facilities Trust Fund based on the amount
the county had historically spent on the maintenance and
operation of the transferred facilities. The state would be
responsible for all operation and maintenance costs above the
fixed county payment.
Established State Court Facility Construction Fund (SCFCF). In
order to support the improvement of existing court facilities
and the construction of new facilities, the legislation
increased fines and fees, the resulting revenues of which are
deposited into the SCFCF. These funds were used to finance $1.5
billion in lease-revenue bonds to support 13 trial court
facility projects.
Existing law provides that the Judicial Council, as the
policymaking body for the judicial branch, has the
responsibility and authority to dispose of surplus court
facilities following the transfer of responsibility from the
counties to the state pursuant to trial court realignment,
subject to all of the following:
(1) If the property was a court facility previously the
responsibility of the county, the Judicial Council shall comply
with the requirements of Government Code (GC) § 11011 [DGS
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surplus property statutes], and as follows, except that,
notwithstanding any other provision of law, the proportion of
the net proceeds that represents the proportion of other state
funds used on the property other than for operation and
maintenance shall be returned to the fund from which it came and
the remainder of the proceeds is to be deposited in the State
Court Facilities Construction Fund.
(2) The Judicial Council is required to consult with the county
concerning the disposition of the facility. Notwithstanding any
other law, including GC § 11011, 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.
(3) The Judicial Council is required to 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 governmental
agencies that use or are located in or adjacent to the building
containing the court facility; or is of sufficient benefit to
outweigh the public good in maintaining it as a court facility
or building.
(4) All funds received for disposal of surplus court facilities
shall be deposited by the Judicial Council in the State Court
Facilities Construction Fund.
(5) If the facility was acquired, rehabilitated, or constructed,
in whole or in part, with moneys in the State Court Facilities
Construction Fund that were deposited in that fund from the
state fund, any funds received for disposal of that facility
shall be apportioned to the state fund and the State Court
Facilities Construction Fund in the same proportion that the
original cost of the building was paid from the state fund and
other sources of the State Court Facilities Construction Fund.
(6) Submission of a plan to the Legislature for the disposition
of court facilities transferred to the state, prior to, or as
part of, any budget submission to fund a new courthouse that
will replace the existing court facilities transferred to the
state. (GC § 70391 (c).)
AB 1900 (Jones-Sawyer) Page 4 of
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Proposed Law:
This bill, an urgency measure, would state the intent of the
Legislature to specifically authorize the Judicial Council, with
certain participation by the County of Los Angeles, to sell
property known as the San Pedro courthouse, a surplus court
facility that is unsuitable for the needs of the judicial
branch, and appropriate those sale proceeds to the Judicial
Council for the planning, design, construction, rehabilitation,
renovation, replacement, or acquisition of court facilities.
Specifically, this bill:
Authorizes the Judicial Council to sell the property, at
fair market value and upon the terms and conditions and
subject to the reservations the Judicial Council deems in
the best interests of the state, if all of the following
requirements are satisfied:
(1) The sale complies with Section 70391 of the Government
Code, as applicable.
(2) The Judicial Council consults with the County of Los
Angeles concerning the sale of the property.
(3) The Judicial Council offers the County of Los Angeles
the right to purchase the property at a fair market value
before otherwise offering the property for sale.
Requires the proceeds from the sale of the property to
be deposited into the Special Fund for Economic
Uncertainties and then to be immediately transferred to the
Immediate and Critical Needs Account (ICNA) of the State
Court Facilities Construction Fund.
Appropriates the proceeds from the sale of the property
from the ICNA to the Judicial Council for the purposes of
the planning, design, construction, rehabilitation,
renovation, replacement, or acquisition of court
facilities.
AB 1900 (Jones-Sawyer) Page 5 of
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Specifies "property" shall mean the San Pedro courthouse
located at 505 South Centre Street, in the City and County
of Los Angeles, Assessor Parcel Number 7455-013-901.
Provides this act is an urgency statute necessary for
the immediate preservation of the public peace, health, or
safety within the meaning of Article IV of the Constitution
and shall go into immediate effect. The facts constituting
the necessity are: To enable the sale of the surplus San
Pedro court facility to occur as soon as possible, it is
necessary that this act take effect immediately.
Prior
Legislation: SB 1407 (Perata) Chapter 311/2008 created the ICNA
and authorized the Judicial Council up to $5 billion in bond
financing for court construction projects.
SB 1732 (Escutia) Chapter 1082/2002, commonly referred to as the
Trial Court Facilities Act of 2002, sought to implement the
recommendations of the Task Force on Court Facilities to
transition facilities from county to state control. In contrast
to the Legislature's decision to decentralize control of court
employees to individual trial courts, SB 1732 realigned
responsibility for facilities to the Judicial Council.
Staff
Comments: This bill declares the San Pedro courthouse a surplus
court facility and will potentially result in one-time revenue
to the state in the millions of dollars.
Under existing law (Section 9 of Article III of the California
Constitution), the proceeds from the sale of "surplus state
property" occurring on or after November 2, 2004, are required
to be used to pay the principal and interest on bonds issued
pursuant to the Economic Recovery Bond Act of 2004. Once the
principal and interest on those bonds are fully paid (which
occurred in 2015), the proceeds from the sale of surplus state
AB 1900 (Jones-Sawyer) Page 6 of
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property are required to be deposited into the Special Fund for
Economic Uncertainties (SFEU), or any successor fund.
Although this bill requires the sale proceeds to be deposited in
the SFEU, the bill additionally requires immediate transfer of
the sale proceeds to the ICNA, resulting in a redirection of
funds that otherwise would have remained in the SFEU.
Staff notes that in the absence of the declaration of the San
Pedro courthouse as surplus state property, existing law
pursuant to Government Code § 70391(c)(1) provides that the
proportion of the net proceeds that represents the proportion of
other state funds used on the property other than for operation
and maintenance is required to be returned to the fund from
which it came, which in the case of the San Pedro courthouse
would be the General Fund, and the remainder of the proceeds are
to be deposited in the State Court Facilities Construction Fund.
Disposition of the property without designating it as "surplus
state property" would additionally allow the Judicial Council to
utilize a portion of the sale proceeds to cover the costs of the
disposition process of the property, as only the net proceeds of
the sale are required to be returned to the originating fund
source.
Recommended Amendments:
1. Staff notes the entire contents of the measure are
uncodified. Although uncodified statutory text has the
force of law, the author may wish to consider an amendment
to codify the statutory text of the bill (excluding the
legislative intent language) to facilitate the future
reference to the sale authorization and the specific terms
and conditions tied to the sale.
2. To account for the costs incurred in the disposition
process of the property (including the appraisal, title and
escrow fees, etc.), and to the extent allowable under the
authority for sale of the property, the author may wish to
consider technical amendments to specify only the net
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proceeds of the sale are to be deposited, transferred, and
appropriated, as specified.
3. Staff recommends the following technical amendment
on page 2 in line 19, strike the word "a".
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