BILL ANALYSIS                                                                                                                                                                                                    Ó




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          |SENATE RULES COMMITTEE            |                        SB 273|
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                                   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:








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             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  








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               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  








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          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  








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          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


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