BILL ANALYSIS Ó
SENATE COMMITTEE ON VETERANS AFFAIRS
Senator Jim Nielsen, Chair
2015 - 2016 Regular
Bill No: SB 536 Hearing Date: 4/14/15
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|Author: |Roth |
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|Version: |4/6/15 |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant:|Wade Teasdale |
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Subject: Armories
DESCRIPTION
Summary:
Clarifies that the Department of General Services (DGS) is
authorized to draw on funds in the Property Acquisition Law
Money Account (PAL) in order to pay for ongoing costs associated
with the marketing and sales of unused National Guard armories.
Existing law:
1. Authorizes the Director of DGS, with the approval of the
Adjutant General, to lease and sell National Guard armories,
subject to legislative approval.
2. Establishes the PAL Account to provide funding for the
maintenance, improvement, and care of property acquired
under the Property Acquisition Act, while under the control
of the Department of General Services
3. Establishes the Armory Fund and requires that all proceeds
from the sale or lease of armories be deposited into the
fund, for use, upon appropriation by the Legislature, for
specified purposes related to armories.
This bill:
1. Requires net proceeds, as defined, from the sale or lease
of an armory to be deposited into the Armory Fund.
2. Upon appropriation by the Legislature, authorizes DGS to
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use moneys from the Property Acquisition Law Money Account
for the purposes of selling armory properties.
3. Specifies that the sale of an armory is on an "as is"
basis, and is exempt from specified laws.
4. Authorizes the Director of DGS, with the approval of the
Adjutant General, to sell eight specific armories.
BACKGROUND
The California Military Department (CMD) comprises several
organizations, the largest being the approximately 22,000-member
California National Guard (Guard), which includes official
components of the U.S. Army and U.S. Air Force. The Adjutant
General (TAG) is "dual-hatted" and has separate authorities and
responsibilities from the federal and state governments;
therefore, the TAG serves both as commander of the federally
trained and paid Guard and also as "state director" of the CMD.
Armories
The CMD operates approximately 99 active armory sites throughout
the state. Armories (or "readiness centers") are the primary
sites for unit training and are integral to the readiness and
responsiveness of Guard personnel for both federal and state
missions and non-Guard personnel for state purposes.
Armories are routinely used to mobilize and house troops when
the Guard responds to wildfires, while also serving as emergency
operations centers for other first-responder agencies. Armories
also are used to shelter displaced civilians, who have been
evacuated from their homes due to fires, floods or other state
emergencies. Several armories throughout the state serve as
homeless shelters in the winter months.
Under the traditional model, the federal government (through
U.S. National Guard Bureau) pays for 75 percent of an armory's
construction costs; the state pays the remaining 25 percent and
contributes the land. After construction, the state manages the
armory and pays for all operational and maintenance repair
costs. After 25 years, the federal government fully transfers
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all ownership rights to the state.<1>
In relatively rare cases, where an armory is located on federal
owned land, title to the armory building may be shared between
the federal and state governments or even be held solely by the
federal government. In such cases, the state has no unilateral
authority to sell the armory.
Sale of Unused Armories
Military and Veterans Code §435(a) allows for the sale of any
real property used for armory purposes, when such a sale is
"determined to be in the best interest of the state." Because
California's armories are critical to the mission success of
Guard troops, the state created the Armory Fund to assist in
"recycling" the value of sold armories. MVC §435(b) provides
that all net proceeds from the sale, lease, or exchange of
armories are to be deposited into the Armory Fund. These
deposits are available, upon appropriation by the Legislature,
for the acquisition and construction of replacement armories and
renovation of operational armories.
Every state agency is required to review annually all
proprietary state lands under its jurisdiction to determine if
any are in excess of the agency's foreseeable needs, and to
report such properties to DGS. The state employs DGS as its real
estate agent, authorizing DGS to sell, lease or exchange surplus
properties in the best interests of the state.
In general, when selling surplus state property, DGS uses the
Property Acquisition Law (PAL) account to pay the upfront costs
(appraisals, advertising, title searches, etc.) required to sell
the property. Once a property is sold, the PAL Account is
reimbursed from the proceeds.
Existing law treats the CMD differently from other state
agencies, granting it separate authority to manage, sell and
lease its property. Legally and functionally, an unused armory
is not a surplus property and should not be considered surplus.
The facility has been deemed not surplus, but unusable, perhaps
even unsafe, and, therefore, inadequate to meet its purpose.
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<1> National Guard Bureau Pamphlet 415-5 (31 July 2003), Ch.
7-1, pg. 34.
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Nevertheless, the CMD employs DGS as its real estate agent,
which sells the unused armories using the same general process
used to sell surplus state properties.
Armories Proposed for Sale
The following is a description of the armories the CMD seeks
authorization to divest:
Azusa-Orange Armory
60-person armory property located on 1.53 acres at 340 North
Orange Avenue in the city of Azusa, within the county of Los
Angeles. Constructed in 1949.
Brawley Armory
60-person armory located on 1.78 acres at 650 North Second
Avenue in the city of Brawley, within the county of
Imperial. Constructed in 1955.
Compton-Alameda Armory
60-person armory located on 2.12 acres at 200 N. Alameda
Street in the city of Compton, within the county of Los
Angeles. Constructed in 1949.
Indio Armory
60-person armory located on 3.35 acres at 43-143 N. Jackson
Street in the city of Indio, within the county of Riverside.
Constructed in 1957.
Lynwood Armory
60-person armory located on 1.03 acres at 11398 Bullis Road
in the city of Lynwood, within the county of Los Angeles.
Constructed in 1949.
Pomona Park Armory
150-person armory located on .50 acres at 600 South Park
Avenue in the city of Pomona, within the county of Los
Angeles. Constructed in 1933.
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Santa Barbara Armory
600-person armory located on 3.03 acres at 700 E. Canon
Perdido Street in the city of Santa Barbara, within the
county of Santa Barbara. Constructed in 1936.
Yreka Armory
60-person armory located on 1.34 acres at Route 1, Box 120
in the city of Yreka, within the county of Siskiyou.
Constructed in 1956.
In 2012 the Legislature enacted SB 1580 (Govt Org Comm, 2012).
SB 1580 (GO Comm, 2012), which authorized the sale of the
following state armory properties:
- Compton Parmelee Armory in Los Angeles County (4.59
acres).
- Healdsburg Armory in Sonoma County (2.0 acres).
- Nevada City Armory in Placer County (1.57 acres).
- Willows Armory in Mendocino County (2.84 acres).
COMMENT
1.Suggested amendments :
In recent years, DGS has used the PAL Account to cover its
upfront costs in selling armories, with the PAL Account
reimbursed from the sales proceeds; however, there has been
some question as to the propriety of using the PAL Account
for this purpose. This bill clarifies that DGS is
authorized to use the PAL Account, but makes such use
discretionary on DGS' part.
The author might consider amending the proposed subdivision
(d) of MVC §435 to remove that discretion:
(d) Notwithstanding subdivision (b), the Department of
General Services may shall, upon appropriation by the
Legislature, use funds from the Property Acquisition
Law Account for the purposes of selling armory
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properties. The Director of Finance may approve loans
from the General Fund to the Property Acquisition Law
Account.
Allowing the word "MAY" to be used could prevent the CMD
from accurately estimating the time it will take to sell an
armory and also makes it difficult to project the
Department's costs for current budget year.
Example: If DGS decides that it will not use the PAL
Account to sell an armory, then the CMD would have to pay
the typical upfront costs (about $20,000 per property)
directly to DGS before any work is done to prepare the
property for sale. To obtain those funds, the CMD would
have to submit a BCP during the next budget cycle to get
the spending authority required to transfer the funds. This
adds almost a year to the time it takes to sell an armory
and use the proceeds towards replacement capacity.
The "armory sales" bill takes until the next year to be
effective in law, and the CMD must determine if DGS is
willing to use the PAL Account. If the PAL Account is not
used, then the CMD must submit a BCP the following budget
year. If the BCP is approved and included in the budget,
DGS could finally begin the work necessary to sell the
property. To make matters worse, the entire DGS sales
process can take another year, or longer.
Alternatively, if the CMD could forecast, one way or the
other, whether PAL Account funds will be used, the
department could program a BCP to correspond with the
armory sales bill. This would save time, allow the
department to forecast revenue (net proceeds from the sale
of armories are deposited in the Armory Fund), and allow
the Armory Fund to be programmed out over several years for
use in other projects (like fixing armories).
2.Related legislation
a. SB 1580 (Comm on Govt Org, Ch. 798, Stats. 2012 ) With
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regard to the sale of armories, requires the proceeds from
the sale to be deposited in the Armory Fund.
b. SB 1481 (Comm on Govt Org, Ch. 528, Stats. 2010 )
stipulates that proceeds from the sale or lease of
California State Militia armories be deposited in the
Armory Fund, regardless of existing Government Code
provisions that require such proceeds be applied to pay the
principal and interest on the Economic Recovery Bond Act
(Proposition 57, approved in March 2004).
c. AB 600 (Hall, vetoed, 2009 ) would have authorized DGS,
with the approval of the Adjutant General, to complete a
lease to the City of Compton at fair market value of
specified state-owned property known as the Compton Armory
for an initial term of five years, and authorizes renewal
of the lease or other lease agreements of the Compton
Armory for a total term not to exceed 25 additional years.
POSITIONS
Sponsor: Author
Support: None on file
Oppose: None on file
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