BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 536|
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UNFINISHED BUSINESS
Bill No: SB 536
Author: Roth (D)
Amended: 7/8/15
Vote: 21
SENATE VETERANS AFFAIRS COMMITTEE: 5-0, 4/14/15
AYES: Nielsen, Hueso, Allen, Nguyen, Roth
SENATE GOVERNMENTAL ORG. COMMITTEE: 8-0, 4/28/15
AYES: Hall, Berryhill, Block, Hernandez, Hill, Hueso, Lara,
McGuire
NO VOTE RECORDED: Gaines, Galgiani, Vidak
SENATE APPROPRIATIONS COMMITTEE: 7-0, 5/28/15
AYES: Lara, Bates, Beall, Hill, Leyva, Mendoza, Nielsen
SENATE FLOOR: 40-0, 6/1/15
AYES: Allen, Anderson, Bates, Beall, Berryhill, Block,
Cannella, De León, Fuller, Gaines, Galgiani, Glazer, Hall,
Hancock, Hernandez, Hertzberg, Hill, Hueso, Huff, Jackson,
Lara, Leno, Leyva, Liu, McGuire, Mendoza, Mitchell, Monning,
Moorlach, Morrell, Nguyen, Nielsen, Pan, Pavley, Roth, Runner,
Stone, Vidak, Wieckowski, Wolk
ASSEMBLY FLOOR: 78-0, 8/31/15 - See last page for vote
SUBJECT: Armories
SOURCE: California Military Department
DIGEST: This bill (1) requires the Department of General
Services (DGS) to draw on funds in the Property Acquisition Law
Money Account (PAL Account) in order to pay for ongoing costs
associated with the marketing and sales of unused National Guard
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armories, and (2) requires net proceeds from the sale or lease
of an armory to be deposited into the Armory Fund.
Assembly Amendments add provisions pertaining specifically to
the Azusa-Orange Armory: (1) provide the City of Azusa with an
option to purchase the armory, and (2) authorize the purchase
agreement for the armory to take several factors into
consideration, including the value of contributory capital
improvements made by the City of Azusa.
ANALYSIS:
Existing law:
1)Authorizes the Director of DGS, with the approval of the
Adjutant General (TAG), to lease and sell 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 DGS.
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.
4)Provides that disposition of armory properties are not subject
to certain constitutional and statutory provisions, which
require that proceeds from the sale of surplus property monies
be used for payment of principal and interest on Economic
Recovery Bonds.
This bill:
1)Requires net proceeds from the sale or lease of an armory to
be deposited into 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,
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including, but not limited to, all costs and expenses incurred
by DGS, as specified.
3)Authorizes, upon appropriation by the Legislature, DGS to use
monies from the PAL Account for the purposes of selling armory
properties.
4)Specifies that the sale of an armory is on an "as is" basis,
and is exempt from provisions of the California Environmental
Quality Act (CEQA).
5)Provides 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 governmental land use
entitlement requirements and CEQA.
6)Authorizes the Director of DGS, with the approval of the TAG,
to sell seven specific armories. (Listed below under
Background.)
7)Provides that regarding the Azusa-Orange Armory:
a) Directs that the Director of DGS, with the approval of
the TAG, shall grant to the City of Azusa an option to
purchase the Armory which shall expire on July 1, 2016.
b) Authorizes the purchase agreement for the sale of the
Armory to take into consideration the contributory value of
all capital improvements made to the Armory by the City of
Azusa less the value of improvements made in lieu of rents
during the term of the use of the Armory by the City, and
any state costs incurred in the sale of the Armory to the
City.
c) Mandates that, on after July 1, 2016, the Armory shall
be offered for sale by general bid and that any purchase
agreement shall include terms and conditions determined by
the Director of DGS to be in the best interest of the state
based on the fair market value of the armory as determined
by an appraisal undertaken and approved by DGS.
Background
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Armories. 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
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 other CMD 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 the
U.S. National Guard Bureau) pays for 75% of an armory's
construction costs; the state pays the remaining 25% 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
all ownership rights to the state.
In relatively rare cases, where an armory is located on
federally 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 (MVC)
Section 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 Section 435(b) provides that the proceeds
from the sale, lease, or exchange of armories are to be
deposited into the Armory Fund. These deposits are available,
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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
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 not been deemed surplus, but unusable, perhaps
even unsafe, and, therefore, inadequate to meet its intended
purpose.
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, including use of the PAL
Account. Some have suggested that the Legislature should
provide explicit statutory authorization for DGS to use the PAL
Account for selling armories because armories are non-surplus.
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
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Avenue in the City of Brawley, within the County of Imperial.
Constructed in 1955.
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.
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.
Related/Prior Legislation
SB 1580 (Committee on Governmental Organization, Chapter 798,
Statutes of 2012), with regard to the sale of armories, requires
the proceeds from the sale to be deposited in the Armory Fund.
SB 1481 (Committee on Governmental Organization, Chapter 528,
Statutes of 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).
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AB 600 (Hall, 2009) would have authorized DGS, with the approval
of the TAG, 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. The
bill was vetoed by the Governor.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: No
According to the Assembly Appropriations Committee, based on
DGS's estimated average cost of $25,000 per site to sell other
armory properties, total estimated costs are $175,000. These
costs will be borne by the Property Acquisition Law Account and
subsequently reimbursed from armory sale proceeds. Per existing
law, the net proceeds from the sale will be deposited into the
Armory Fund and, upon appropriation by the Legislature, must be
used for the maintenance of existing armories and the
acquisition and construction of new armories.
SUPPORT: (Verified8/31/15)
California Military Department (source)
Department of Finance
OPPOSITION: (Verified8/31/15)
None received
ASSEMBLY FLOOR: 78-0, 8/31/15
AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom,
Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang,
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Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle,
Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina
Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez,
Gordon, Gray, Grove, Hadley, Harper, Holden, Irwin, Jones,
Jones-Sawyer, Kim, Lackey, Linder, Lopez, Low, Maienschein,
Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian,
Obernolte, O'Donnell, Olsen, Patterson, Perea, Quirk, Rendon,
Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark
Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams,
Wood, Atkins
NO VOTE RECORDED: Roger Hernández, Levine
Prepared by: Wade Cooper Teasdale / V.A. / (916) 651-1503
8/31/15 18:01:50
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