BILL ANALYSIS                                                                                                                                                                                                    Ó




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          |SENATE RULES COMMITTEE            |                       AB 1900|
          |Office of Senate Floor Analyses   |                              |
          |(916) 651-1520    Fax: (916)      |                              |
          |327-4478                          |                              |
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                                   THIRD READING 


          Bill No:  AB 1900
          Author:   Jones-Sawyer (D) and O'Donnell (D)
          Amended:  8/19/16 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 superior courthouse


          SOURCE:    Judicial Council of California


          DIGEST:  This bill authorizes the Judicial Council to sell the  
          San Pedro superior courthouse, which has not been in use for  
          three years, as specified.  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.  This bill requires the net proceeds from  
          the sale to be deposited into the Immediate and Critical Needs  
          Account of the State Court Facilities Construction Fund (ICNA). 


          Senate Floor Amendments of 8/19/16 ensure that the proceeds from  
          the sale are transferred to the Judicial Council's ICNA fund and  
          remove the appropriation from the same account.  These  
          amendments also clarify that the disposition of the property  








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          authorized in this bill does not constitute a sale or other  
          disposition of surplus state property within the meaning of the  
          California Constitution and shall not be subject to specified  
          law.  


          ANALYSIS:  





          Existing law:

          1)Establishes the ICNA fund 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.  









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          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: 

                 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:








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                 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  
            ICNA.

          2)Provides that the disposition of the property does not  
            constitute a sale or other disposition of surplus state  
            property within the meaning of Section 9 of Article III of the  
            California Constitution and shall not be subject to  
            subdivision (g) of Section 11011 of the Government Code.
            
          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  








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                                                                    Page  5



          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.  

          This bill authorizes the Judicial Council to sell the San Pedro  
          Courthouse and provides that the net proceeds be deposited into  
          the ICNA fund.  This 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.









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             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  
          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 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.  


          FISCAL EFFECT:   Appropriation:    No          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  
            reversion to the General Fund and the State Court Facilities  








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            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:   (Verified8/21/16)


          Judicial Council of California (source)
          County of Los Angeles


          OPPOSITION:   (Verified8/21/16)


          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,  








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                                                                    Page  8



            Waldron, Weber, Wilk, Williams, Wood, Rendon
          NO VOTE RECORDED:  Ridley-Thomas

          Prepared by:Margie Estrada / JUD. / (916) 651-4113
          8/22/16 20:37:42


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