BILL ANALYSIS Ó
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Isadore Hall, III
Chair
2015 - 2016 Regular
Bill No: SB 536 Hearing Date: 4/28/2015
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|Author: |Roth |
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|Version: |4/20/2015 |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant:|Arthur Terzakis |
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SUBJECT: Armories
DIGEST: This bill authorizes the Director of General Services
(DGS), with the approval of the Adjutant General, to sell eight
specified state armory properties that are no longer considered
needed by the Military Department. In addition, this bill
grants DGS the authority, upon appropriation by the Legislature,
to use funds from the Property Acquisition Law Money Account
(PAL Account) to pay for costs associated with the sale of
armory properties.
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)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.
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
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entities or individuals.
4)Authorizes DGS, with the approval of the Adjutant General, to
lease and sell real property held for armory purposes, subject
to legislative approval.
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|5)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. |
| |
|6)Expressly provides that disposition of armory properties are not |
| subject to constitutional and statutory provisions requiring |
| proceeds from the sale of surplus property monies be used for |
| payment of principal and interest on Economic Recovery Bonds. |
| [Military & Veterans Code Section 435(b)] |
| |
|7)Establishes the PAL Account to provide funding for the |
| maintenance, improvement, and care of property acquired under the |
| Property Acquisition Act until needed for the purpose that it was |
| acquired. Surplus property, while under the control of DGS is |
| eligible for funding from this account. |
| |
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This bill:
1)Clarifies that all "net" proceeds, instead of "all" proceeds,
from the sale or lease of an armory shall be deposited in the
Armory Fund.
2)Defines "net proceeds" to mean the gross proceeds less: (a)
outstanding reimbursements due to the PAL Account for costs
incurred by DGS in selling an armory property and (b) all
costs directly related to the disposition of an armory,
including, but not limited to, all costs and expenses incurred
by DGS, as specified.
3)Authorizes DGS, upon appropriation by the Legislature, to use
funds from the PAL Account to pay for costs associated with
the sale of armory properties.
4)Provides that the Director of Finance may approve loans from
SB 536 (Roth) Page 3 of ?
the General Fund to the PAL Account.
5)Stipulates that the sale of an armory shall be on an "as is"
basis and shall be exempt from provisions of the California
Environmental Quality Act (CEQA).
6)Also, makes it explicit that upon vesting title of the armory
to the purchaser or transferee of the armory, the purchaser or
transferee shall be subject to any local government land use
entitlement requirements and CEQA.
7)Grants DGS, with the approval of the Adjutant General, the
authority to sell any of the following 8 armory properties:
a) Azusa-Orange Armory - approximately1.53 acres, located
at 340 North Orange Avenue in the City of Azusa, within the
County of Los Angeles.
b) Brawley Armory - approximately 1.78 acres, located at
650 North Second Avenue in the City of Brawley, within the
County of Imperial.
c) Compton-Alameda Armory - approximately 2.12 acres,
located at 200 N. Alameda Street in the City of Compton,
within the County of Los Angeles.
d) Indio Armory - approximately 3.35 acres, located at
43-143 N. Jackson Street in the City of Indio, within the
County of Riverside.
e) Lynwood Armory - approximately 1.03 acres, located at
11398 Bullis Road in the City of Lynwood, within the County
of Los Angeles.
f) Pomona Park Armory - approximately 0.50 acres, located
at 600 South Park Avenue in the City of Pomona, within the
County of Los Angeles.
g) Santa Barbara Armory - approximately 3.03 acres, located
at 700 E. Canon Perdido Street in the City of Santa
Barbara, within the County of Santa Barbara.
h) Yreka Armory - approximately 1.34 acres, located at
Route 1, Box 120 in the City of Yreka, within the County of
Siskiyou.
SB 536 (Roth) Page 4 of ?
Background
California's Armories: According to the Military Department,
California has approximately 100 active armory sites throughout
the state. Armories are the primary place for unit training and
are integral to the readiness and responsiveness of National
Guard personnel. The National Guard has dual responsibilities:
to federal authorities to ensure the readiness of forces for
national security missions and to the Governor for state
missions. The use of armories for emergency operations is
common. Armories are routinely used to mobilize and house
soldiers when the Guard responds to wildfires, while also
serving as emergency operations centers for other
first-responder agencies. Armories are also commonly used as
shelters for displaced civilians who have been evacuated from
their homes due to fires, floods or other state emergencies.
Several armories throughout the state routinely serve as
homeless shelters during the winter months.
Under the traditional model, the federal government (through the
U.S. National Guard Bureau) pays for 75% of an armory's
construction costs and the state pays the remaining 25% and
contributes the land. After construction, the state manages the
armory and pays for all operational and maintenance repairs.
After 25 years, the federal government fully transfers all
ownership rights to the state.
Purpose of SB 536: According to the author's office, the eight
armories identified in this bill for sale have reached the end
of their service life - they are antiquated, undersized armories
that have decayed to a point where their ongoing maintenance
costs far outweigh their utility. The average age of these
armories is 60 years and they are no longer practical or safe
for California National Guard soldiers to assemble and train in.
Additionally, the Military Department has determined that these
facilities are no longer necessary for it carry out its core
mission. Therefore, the properties should be sold and the
proceeds retained by the Armory Fund for use in acquiring new
properties better suited to serve the mission of the Military
Department, or to retrofit and modernize existing facilities.
The author's office points out that when DGS undertakes the sale
of surplus state property it uses the PAL Account to pay the
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upfront costs associated with marketing the property,
appraisals, and title searches. Once the property is sold, the
PAL Account is reimbursed from the proceeds of the sale. This
bill would enable DGS to use the same process when selling
armory property.
Proposition 60A of 2004: Proposition 60A of November 2004 (SCA
18, Johnson, Resolution Chapter 103/04) was adopted by the
electorate (73% margin) and requires, among other things, that
the proceeds of the sale of surplus state property, with
specified exceptions (such as Caltrans property and armories),
be used to pay the holders of the state's deficit reduction
bonds. These payments are intended to accelerate the redemption
of the state's debt, and reduce future General Fund payments to
the bondholders.
According to the State Treasurer's March 1, 2015 General
Obligation Bond Debt Report, there is $944 million left to pay
off the Economic Recovery Bond Act. The Governor's 2015-16
Budget seeks to make the final payment on the $15 billion in
Economic Recovery Bonds and thus retire that debt.
Prior/Related Legislation
AB 826 (Jones-Sawyer), Chapter 505, Statutes of 2013.
Authorized DGS to dispose of 8 specified parcels of state
property. Also, required that the proceeds from one specific
parcel be used to pay off any indebtedness secured by the
property and attributable to any federal equity financing, as
required under applicable state and federal law.
SB 1580 (Governmental Organization), Chapter 798, Statutes of
2012. Authorized DGS, with the approval of the Adjutant
General, to sell the Compton Armory (Los Angeles County), the
Healdsburg Armory (Sonoma County), the Nevada City Armory
(Placer County), and the Willows Armory (Mendocino County),
including improvements made to those armories. Also, required
the proceeds from the sale of the armories to be deposited in
the Armory Fund. Additionally, required that DGS be reimbursed
for any reasonable costs or expenses incurred in conducting a
transaction involving those armories. Furthermore, authorized
DGS to sell 3 additional parcels of state property, as
specified.
SB 1481 (Governmental Organization), Chapter 528, Statutes of
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2010. Provided that the disposition of armory properties shall
not be subject to the statutory provisions that require proceeds
from the sale or lease of surplus state property be applied to
retire state deficit recovery bonds and thereafter be deposited
in the Special Fund for Economic Uncertainties.
SB 1167 (Cogdill), Chapter 327, Statutes of 2010. Authorized
DGS to dispose of all or any portion of two parcels of real
property (the Veterinary Laboratory for the Department of Food
and Agriculture located in Fresno and the Department of Motor
Vehicles field office located in Roseville, Placer County).
AB 2279 (Evans), Chapter 595, Statutes of 2010. Authorized DGS
to sell or exchange, at fair market value based upon an
appraisal approved by DGS, all or part of a specified parcel of
state property only to the County of Napa upon terms,
conditions, reservations, and exceptions that DGS determines are
in the best interest of the state, by January 1, 2015.
SB 136 (Huff), Chapter 166, Statutes of 2009. Authorized DGS to
dispose of three specified parcels of real property pursuant to
certain provisions.
AB 8xx (Nestande), Chapter 6, Statutes of 2009-10 Second
Extraordinary Session. Among other things, exempted the sale of
surplus state real property made on an "as is" basis from
designated provisions of CEQA. Also, exempted from those
provisions of CEQA the execution of the purchase and sale
agreement or the exchange agreement for surplus state real
property if the disposition is not made on an "as is" basis and
the close of escrow is contingent on a specified requirement or
compliance with CEQA.
AB 600 (Hall) 2009-10 Session. 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. (Vetoed by Governor on
the basis that current law already authorizes DGS to enter into
long-term leases on state-owned land that may have some
potential future use to the program needs.)
AB 887 (De La Torre), Chapter 651, Statutes of 2008. Authorized
DGS, with the approval of the Adjutant General, and until
January 1, 2010, to complete a lease to the City of Lynwood at
fair market value, of state-owned property known as the Lynwood
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Armory. Also, provided for a 5-year term for the lease and
authorized renewal of the lease or other lease agreements of the
Lynwood Armory for a total term not to exceed 25 additional
years. Additionally, notwithstanding the requirement for
payment of lease proceeds into the Deficit Recovery Bond
Retirement Sinking Fund Subaccount, required the proceeds of the
lease to be deposited into the Armory Fund pursuant to a
specified provision of law.
AB 1123 (Berg), Chapter 625, Statutes of 2007. Authorized DGS,
with the approval of the Adjutant General, to lease to the City
of Healdsburg at fair market value and for a period of up to 30
years specified state property known as the Healdsburg Armory.
Also, required that proceeds from the lease be deposited into
the Armory Fund.
FISCAL EFFECT: Appropriation: No Fiscal
Com.: Yes Local: No
SUPPORT:
None received
OPPOSITION:
None received