BILL ANALYSIS
AB 1240
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 1240 (Davis)
As Amended July 23, 2009
Majority vote
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|ASSEMBLY: |77-0 |(May 21, 2009) |SENATE: |38-0 |(August 27, |
| | | | | |2009) |
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Original Committee Reference: HIGHER ED.
SUMMARY : Authorizes the Los Angeles Community College District
(LACCD) to enter into property leases on facilities that are 50,000
square feet or less for five years before complying with the Field
Act, until January 1, 2015, and modifies the California Community
Colleges (CCC) bidding processes. Specifically, this bill :
1)Allows LACCD to lease property and lease with an option to purchase
property of 50,000 square feet or less for five instead of three
years before having to retrofit the facility for compliance with the
Field Act, until January 1, 2015.
2)Eliminates the requirement that CCC districts call for oral bids
before accepting the high written bid for the purchase or lease of
district property
3)Eliminates the requirement that CCC districts split the commission
between the broker who brought in the highest written bid and the
broker who brought in the highest oral bid.
The Senate amendments limit to 50,000 square feet the size of the
facility that qualifies for the extension of Field Act compliance and
make clarifying changes.
AS PASSED BY THE ASSEMBLY , this bill is substantially similar to the
version approved by the Senate.
FISCAL EFFECT : Potential savings to LACCD, to the extent allowing
longer lease terms provides more economical choices in selecting
satellite centers and less costly lease terms.
COMMENTS : Current law requires CCC Field Act compliance on a lease of
any length if that lease includes an option to purchase and on all
leases that exceed three years. This time frame can be an impediment
to developing satellite centers because 1) three years is not long
AB 1240
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enough to determine the long-term viability of a site, and 2)
landlords are reluctant to lease for a period as short as three years
because it does not provide enough time to amortize minor remodel
costs incurred when leasing to new tenants.
Currently, CCC districts must solicit oral bids after the submission
of written bids for the lease or sale of CCC district property. In
essence, the opening of written bids immediately becomes an oral
auction for those bidders who are present. Since a bidder is not
required to participate in the submission of written documents as a
prerequisite to oral bidding, this requirement makes it difficult to
conduct an orderly bid and award process. In the event of a sale on
an oral bid to a purchaser hired by a licensed real estate broker,
CCCs are required to pay half of the commission to the highest written
bidder's broker and half to the highest oral bidder's broker, which
serves as a disincentive for contractors to bid on CCC public works
projects. These provisions are not required of any other higher
education institution.
Analysis Prepared by : Sandra Fried / HIGHER ED. / (916) 319-3960
FN: 0002257