BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 1900|
|Office of Senate Floor Analyses | |
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THIRD READING
Bill No: AB 1900
Author: Jones-Sawyer (D) and O'Donnell (D)
Amended: 8/16/16 in Senate
Vote: 27 - Urgency
SENATE JUDICIARY COMMITTEE: 7-0, 6/21/16
AYES: Jackson, Moorlach, Anderson, Hertzberg, Leno, Monning,
Wieckowski
SENATE APPROPRIATIONS COMMITTEE: 7-0, 8/11/16
AYES: Lara, Bates, Beall, Hill, McGuire, Mendoza, Nielsen
ASSEMBLY FLOOR: 79-0, 4/21/16 (Consent) - See last page for
vote
SUBJECT: San Pedro courthouse
SOURCE: Judicial Council of California
DIGEST: This bill authorizes the Judicial Council to sell the
San Pedro Courthouse, which has not been in use for three years,
and to use the net proceeds to pay for planning, design,
construction, rehabilitation, renovation, replacement, or
acquisition of court facilities. This bill also requires that
the County of Los Angles receive the opportunity to purchase the
property at fair market value before the property is offered to
others for purchase.
ANALYSIS:
Existing law:
AB 1900
Page 2
1)Establishes the Immediate and Critical Needs Account of the
State Court Facilities Construction Fund (ICNA) and limits how
ICNA funds may be spent.
2)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.
1)Provides that notwithstanding any law, the Controller may use
ICNA funds for cash flow loans to the General Fund as
specified.
2)Establishes the Special Fund for Economic Uncertainties
(SFEU).
3)Requires that proceeds from the sale of surplus state property
be deposited into the SFEU after paying the principal and
interest on the 2004 Economic Recovery Bond Act.
4)Provides that upon legislative authorization, the Department
of General Services (DGS) may sell or dispose of excess
property, as specified.
5)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.
6)Provides that the Judicial Council has authority with regard
to court facilities, including, to:
AB 1900
Page 3
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.
This bill:
1)Provides 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.
2)Provides that the sale of the San Pedro Courthouse must be 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 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 fair market value
before otherwise offering the property for sale.
1)Provides that notwithstanding any other law, the net proceeds
from the sale of the courthouse shall be deposited into the
SFEU, and then must be immediately transferred to the ICNA.
AB 1900
Page 4
2)Provides 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.
3)Makes related legislative findings and contains an urgency
clause.
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 SFEU. 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.
AB 1900
Page 5
This bill authorizes the Judicial Council to sell the San Pedro
Courthouse and provides that the net proceeds could only be used
for planning, design, construction, rehabilitation, renovation,
replacement, or acquisition of court facilities. The bill
requires 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.
Comments
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.
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.
Under the California Constitution, the proceeds from the sale of
the San Pedro Courthouse (surplus property) must be directed
into the SFEU. Without legislation, the proceeds would remain
in the SFEU and not be redirected to the Judicial Council for
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Page 6
court facilities. The Legislature may appropriate funds in the
SFEU for any purpose by majority vote. This bill requires the
net proceeds from the sale of the San Pedro Courthouse to be
directed into the SFEU and then appropriated into the ICNA fund.
The author notes that the Legislature has approved several
bills that disposed of surplus property in the same manner (AB
826, Jones-Sawyer, Chapter 505, Statutes of 2013 and SB 798,
Committee on Governmental Organization, Chapter 798, Statutes of
2012).
Existing 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 further requires
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.
FISCAL EFFECT: Appropriation: Yes Fiscal
Com.:YesLocal: No
According to the Senate Appropriation Committee:
Sale proceeds: Redirection of one-time revenue potentially in
excess of several million dollars from the SFEU to the ICNA
fund. 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 SFEU. Absent
the declaration of the courthouse as "surplus property," the
net proceeds of the sale would potentially be subject to
AB 1900
Page 7
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.
Operations/maintenance: Future cost savings (General
Fund-Trial Court Trust 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).
SUPPORT: (Verified8/15/16)
Judicial Council of California (source)
County of Los Angeles
OPPOSITION: (Verified8/15/16)
None received
ASSEMBLY FLOOR: 79-0, 4/21/16
AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker,
Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke,
Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley,
Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth
Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto,
Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper,
Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim,
Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis,
Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte,
O'Donnell, Olsen, Patterson, Quirk, Rodriguez, Salas,
Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner,
Waldron, Weber, Wilk, Williams, Wood, Rendon
AB 1900
Page 8
NO VOTE RECORDED: Ridley-Thomas
Prepared by:Margie Estrada / JUD. / (916) 651-4113
8/16/16 17:33:31
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