BILL ANALYSIS Ó
AB 1900
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB
1900 (Jones-Sawyer and O'Donnell)
As Amended August 19, 2016
2/3 vote. Urgency
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|ASSEMBLY: |79-0 |(April 21, |SENATE: |39-0 |(August 23, |
| | |2016) | | |2016) |
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Original Committee Reference: JUD.
SUMMARY: Authorizes the sale of the San Pedro Courthouse and
moves proceeds from the sale to the Immediate and Critical Needs
Account, a fund that provides 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
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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 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 San Pedro court facility to occur as soon as possible.
5)Provides that the disposition of the property shall not
constitute a sale of surplus state property within the meaning
of the California Constitution.
The Senate amendments provide that the disposition of the
property shall not constitute a sale of surplus state property
within the meaning of the California Constitution and make
technical changes.
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. (California
Constitution, Article IV, Section 9; Government Code Section
11011 (g).)
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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
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
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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 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.)
AB 1900
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FISCAL EFFECT: According to the Senate Appropriations analysis:
1)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 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 Section 70391(c)(1).
2)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.
3)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 Section 70343(a)(2).
*Trial Court Trust Fund
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.
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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, eight 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.
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),
Chapter 311, Statutes of 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
other revenue.
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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. Indeed, 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 courthouse be deposited into a fund that
re-invests in courts that are in the most immediate and critical
need.
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. Since this bill
provides that the sale does not constitute the sale of surplus
state property, the provisions relating to DGS do not apply.
Instead, this bill provides that Judicial Council has the
responsibility of managing the sale of the San Pedro Courthouse.
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.
This Bill Allows the County of Los Angeles to be Given the
Option to First Purchase the Property, Similar to Existing Law.
Existing law provides that when Judicial Council disposes of
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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.
Similar to 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.
Analysis Prepared by:
Eric Dang / JUD. / (916) 319-2334 FN: 0004906