BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 273| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: SB 273 Author: Hueso (D) Amended: 4/27/15 Vote: 27 - Urgency SENATE GOVERNMENTAL ORG. COMMITTEE: 9-0, 5/12/15 AYES: Hall, Berryhill, Galgiani, Hernandez, Hill, Hueso, Lara, McGuire, Vidak NO VOTE RECORDED: Block, Gaines SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8 SUBJECT: State real property: surplus SOURCE: Department of General Services DIGEST: This bill authorizes the Department of General Services (DGS) to dispose of two parcels deemed surplus - a Department of Conservation field office in Coalinga (Fresno County) and a Department of Forestry conservation camp in Whiskeytown (Shasta County). ANALYSIS: Existing law: 1)Authorizes DGS, subject to legislative approval, to sell, lease, exchange, or transfer various specified properties for current market value, or upon such other terms and conditions that DGS determines are in the best interests of the state. 2)Establishes criteria for state agencies to use in determining and reporting excess lands. A state agency must report land as surplus that is: SB 273 Page 2 a) Not currently utilized, or is underutilized, for any existing or ongoing programs; b) Land for which the agency cannot identify any specific utilization relative to future needs; and, c) Land not identified by the state agency within its master plan for facility development. 3)Requires DGS to dispose of surplus state real property in a specified manner, and prescribes the priority of disposition of the property before DGS may offer it for sale to private entities or individuals. 4)Exempts the sale of surplus property sold "as is" from designated provisions of the California Environmental Quality Act (CEQA). However, the buyer or transferee of a parcel is subject to CEQA as well as any local governmental entitlement or land use approval requirements. 5)Authorizes DGS to sell surplus real property to a local agency or to a nonprofit affordable housing sponsor for affordable housing projects at a sales price less than fair market value if DGS determines that such a discount will enable the provision of housing for persons and families of low or moderate income. 6)Requires, unless otherwise specified by law, that the proceeds from the sale of surplus state property be used to pay the principal and interest on the Economic Recovery Bond Act of 2004. This bill: 1)Authorizes DGS to sell, exchange, sell combined with an exchange, or lease for fair market value, upon terms and conditions deemed to be in the best interests of the state, the following real property: a) Parcel 1, consisting of 0.17 acres and improvements, known as the Department of Conservation field office SB 273 Page 3 located at 466 North Fifth Street, in Coalinga, Fresno County. b) Parcel 2, consisting of approximately 29.93 acres and improvements, known as the Department of Forestry Crystal Creek Conservation Camp located at 2242 Highway 299 West, in Whiskeytown, Shasta County. 2)Requires that, to the extent that bonds issued by the State Public Works Board involve the property to be sold pursuant to this bill, all issuer and trustee related costs associated with the review of any proposed sale, together with the costs related to the defeasance or retirement of any bonds, which may include the cost of nationally recognized bond counsel, shall be paid from the proceeds of any sale or lease authorized by this bill's provisions. 3)Contains an urgency clause to take effect immediately. Background This is the annual DGS sponsored legislation for the disposal of surplus state real property. State law requires state agencies to identify real properties that are excess to their needs. Legislative authorization is needed to declare real properties as surplus and to authorize their disposal by DGS. All proceeds generated from the sale of surplus properties are deposited into the Deficit Recovery Bond Retirement Sinking Fund Subaccount to pay the principal and interest on bonds issued pursuant to the 2004 Economic Recovery Bond Act. Once the principal and interest on those bonds are fully paid, the proceeds from the sale of surplus state property are deposited into the Special Fund for Economic Uncertainties, or any successor fund. DGS' Real Estate Services Division (RESD) is responsible for the disposition of state surplus real property assets. RESD is also responsible for determining the present and future space needs of state agencies, administering the sales and leasing of state-owned surplus property, and leasing privately-owned space for state agencies. RESD also assists state landholding SB 273 Page 4 agencies in making real estate decisions regarding their properties. DGS reports that the Department of Conservation property in Coalinga was originally purchased in 1918 as a single story 1,670 square foot home on an approximately 0.17 acre lot. Today it is used as office space yet despite upgrades over the years it no longer meets program needs. DGS notes that the Department of Forestry conservation camp in Whiskeytown consists of approximately 29.93 acres which were acquired in the 1950s. Numerous fire support structures were added to the property shortly after acquisition but the land and structures are currently undersized and no longer meet program needs. The Department of Forestry discontinued use of the site several years ago which eventually resulted in structural damage to the facilities due to a lack of security at the site. DGS claims that until disposed of, this particular property will continue to pose a liability to the state. Prior/Related Legislation SB 536 (Roth, 2015) authorizes DGS, with the approval of the Adjutant General, to sell seven specified state armory properties that are no longer considered needed by the California Military Department. AB 2174 (Committee on Accountability and Administrative Review, Chapter 337, Statutes of 2014) authorized DGS to dispose of certain state surplus property, subject to specified conditions. AB 826 (Jones-Sawyer, Chapter 505, Statutes of 2013) authorized DGS to dispose of eight specified parcels of state property. SCA 18 (Johnson, Chapter 103, Statutes of 2004) required, among other things, that the proceeds from the sale of surplus state real property be used to pay the principal and interest on the Economic Recovery Bond Act of 2004. The provisions relating to state property were adopted by the electorate in Proposition 60A of 2004. FISCAL EFFECT: Appropriation: Yes Fiscal SB 273 Page 5 Com.: Yes Local: No SUPPORT: (Verified 5/26/15) Department of General Services (source) OPPOSITION: (Verified 5/26/15 None received ARGUMENTS IN SUPPORT: According to DGS, the properties contained in this bill have been identified by state agencies as no longer serving a programmatic need. DGS points out that "while these properties remain under state ownership, they may have additional issues, such as non-compliance with the Americans with Disabilities Act, pose security concerns, or cost the state money to maintain and secure while vacant. In addition there could be significant costs associated with making these properties compliant with current building standards." Prepared by:Arthur Terzakis / G.O. / (916) 651-1530 5/27/15 9:21:13 **** END ****