BILL ANALYSIS                                                                                                                                                                                                    

                              Senator Jim Beall, Chair
                                2015 - 2016  Regular 

          Bill No:          AB 2428           Hearing Date:    6/28/2016
          |Author:   |Ting                                                  |
          |Version:  |6/21/2016                                             |
          |Urgency:  |No                     |Fiscal:      |Yes             |
          |Consultant|Manny Leon                                            |
          |:         |                                                      |

          SUBJECT:  State highways:  property leases

            DIGEST:  This bill authorizes the California Department of  
          Transportation (Caltrans) to lease to the City and County of San  
          Francisco (San Francisco) airspace under or adjacent to a  
          freeway or other real property acquired for highway purposes at  
          below market value, as specified. 

          Existing law:
          1)Grants Caltrans broad authority to acquire by eminent domain  
            any property necessary for state highway purposes.

          2)Authorizes Caltrans to lease to public agencies or private  
            entities the use of areas above or below state highways.   
            Leases to private entities must be made on the basis of  
            competitive bids.

          3)Authorizes Caltrans to make land or airspace available, with  
            or without charge, to a public entity to accommodate needed  
            passenger, commuter, or high-speed rail, magnetic levitation  
            systems, and highway and non-highway mass transit facilities.   


          AB 2428 (Ting)                                      Page 2 of ?
          4)Specifically authorizes Caltrans to lease to a local agency  
            for park purposes all or any portion of land outside the  
            boundary of a highway system when such use will preserve its  
            view, appearance, light, air, and usefulness.  

          5)Authorizes Caltrans to lease to San Francisco, or a political  
            subdivision, any airspace under a freeway or property for an  
            emergency shelter or feeding program at a rate of $1 per  

          6)Authorizes Caltrans to lease non-operating right-of-way areas  
            to municipalities or other local agencies for public purposes,  
            and allows Caltrans to contribute toward the cost of  
            developing local parks and other recreational facilities on  
            such areas.  The lease may provide that the municipality or  
            other local agency can offset the cost of the lease by  
            providing maintenance or landscaping that would otherwise be  
            the responsibility of the state. 

          This bill:

          1)Makes legislative findings and declarations regarding San  
            Francisco's priority development areas (PDAs) and efforts to  
            reduce greenhouse gas emissions.  

          2)Directs Caltrans to offer first right of refusal to lease air  
            space or other real property in a designated PDA to San  
            Francisco, a political subdivision of the city and county, or  
            a state agency for park, recreational, or open-space purposes,  
            as specified. 

          3)Specifies that up to 10 parcels that are leased for the  
            abovementioned purposes are to be leased at an amount that is  
            10% or less than the average fair-market value of the  
            applicable parcel.  

          4)Requires the lessee to fund associated infrastructure, to  
            accept full liability for non-highway uses of the  
            infrastructure, and to fund all non-highway-related  


          AB 2428 (Ting)                                      Page 3 of ?
            maintenance costs associated with the uses.  

          5)Directs the lease to authorize the lessee, at its discretion,  
            to subsidize its associated maintenance costs by generating  
            revenue under a "limited revenue generation model," so long as  
            any excess revenue is shared 50/50 with Caltrans.

          6)Defines "priority development area" to mean a neighborhood  
            within walking distance of frequent transit service that  
            offers a wide variety of housing options and that features  
            various amenities, including grocery stores, community  
            centers, open space, and restaurants.


          1)Purpose.  The author notes, "As one of the nation's most  
            densely populated cities, San Francisco lacks the open space  
            needed to provide opportunities needed to implement its  
            Sustainable Communities Strategy (SCS), which is required by  
            the California Sustainable Communities and Climate Protection  
            Act of 2008 (SB 375).   As part of its compliance efforts, the  
            City and County is looking to leveraged right-of-way and  
            airspace below and adjacent to state freeways in order to  
            develop green spaces, parks, and recreational facilities.

            The City and County is asking the State to partner with  
            this effort by providing the ability to lease these  
            State-owned spaces at 10% of the current market rate.  In  
            addition, San Francisco is asking for the right of first  
            refusal to these leases."

          2)What are PDAs?  PDAs are locally identified,  
            infill-development opportunity areas within existing  
            communities that are primed for a pedestrian- and  
            bicycle-friendly environment served by transit.  Specifically  
            aimed for the development of new housing and job growth, PDAs  
            are the foundation for sustainable regional growth and the Bay  
            Area's SCS.  To become a PDA, an area must be:

             a)   Within an existing community


          AB 2428 (Ting)                                      Page 4 of ?
             b)   Within walking distance of frequent transit service

             c)   Designated for more housing in a locally adopted plan or  
               identified by a local government for future planning and  
               potential growth

             d)   Nominated through a resolution adopted by a city council  
               or county board of supervisors

          1)What is an SCS?  Senate Bill 375 (Steinberg, Chapter 728,  
            Statutes of 2007) was enacted to reduce greenhouse gas  
            emissions from automobiles and light trucks through integrated  
            transportation, land use, housing, and environmental planning.  
             Specifically, SB 375 requires regional transportation  
            agencies to develop an SCS for their respective regions.  An  
            SCS is envisioned to combine transportation and land-use  
            elements in order to achieve emissions reduction targets.  If  
            the emissions reduction targets cannot be met through the SCS,  
            an Alternative Planning Strategy (APS) may be developed that  
            shows how the targets would be achieved through alternative  
            development patterns, infrastructure, or additional  
            transportation measures or policies.  SB 375 also offers local  
            governments regulatory and other incentives to encourage more  
            compact new development and transportation alternatives.

          2)Existing practices.  Existing law provides a number of  
            examples wherein Caltrans is directed to lease or sell  
            property within its possession at well below market rate. For  

             a)   For emergency shelters or feeding programs in San  
               Francisco, at a lease rate of $1 per month

             b)   For emergency shelters, feeding programs, or day care  
               centers in San Diego, for $1 per month

             c)   For feeding programs in San Joaquin County for $1 per  


          AB 2428 (Ting)                                      Page 5 of ?

            This bill simply follows in these footsteps by providing San  
            Francisco with the opportunity to enter into lease agreements  
            with Caltrans, and additionally lease up to 10 parcels of  
            property under market-rate value that will help the  
            city/county achieve their SB375/SCS targets.  

          FISCAL EFFECT:  Appropriation:  No    Fiscal Com.:  Yes     
          Local:  No

          Assembly Votes:

            Floor:    52-26
            Appr:     14-6
            Trans:    10-5
          POSITIONS:  (Communicated to the committee before noon on  
                          June 22, 2016.)

          City and County of San Francisco (Sponsor)


          California Transportation Commission

                                      -- END --