BILL ANALYSIS
Bill No: SB
136
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Roderick D. Wright, Chair
2009-2010 Regular Session
Staff Analysis
SB 136 Author: Huff
As Amended: April 13, 2009
Hearing Date: April 28, 2009
Consultant: Art Terzakis
SUBJECT
Surplus State Property
DESCRIPTION
SB 136 is the annual surplus property bill, sponsored by
the Department of General Services (DGS), that authorizes
DGS to dispose of all or any portion of the following three
parcels of real property pursuant to existing provisions of
the Government Code pertaining to surplus state property:
a. Parcel #1, consisting of approximately 2.76 acres,
known as the Harts Mills Forest Fire Station (Old),
located at 9476 Oro-Quincy Highway, in Berry Creek, Butte
County.
b. Parcel #2, consisting of approximately 47 acres, known
as the Mendocino Ranger Station Excess Land, located at
17501 North Highway 101, in Willits, Mendocino County.
c. Parcel #3, consisting of an approximately 6-acre
portion of the 18-acre parcel, known as the South
Carlsbad State Beach, located near El Arbol Drive and
Manzano Drive, in Carlsbad, San Diego County.
EXISTING LAW
Existing law generally requires DGS to perform various
functions with respect to state property and provides for
the sale, lease, or transfer of surplus state property.
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Existing law requires the Director of DGS to request
authorization by the Legislature prior to the disposition
by sale or otherwise of state land reported to it by a
state agency as being in excess of its foreseeable needs.
Each state agency is required to annually review
proprietary state lands under its jurisdiction to determine
what lands are in excess of the agency's foreseeable needs
and to report to DGS.
This annual review of proprietary state lands does not
apply to tax-deeded land, land held for highway purposes,
lands under the jurisdiction of the State Lands Commission,
land that has escheated to the state or that has been
distributed to the state by a court decree in estates of
deceased persons, and lands under the jurisdiction of the
State Coastal Conservancy. Jurisdiction of all land
reported as excess is transferred to DGS, when requested by
the Director of DGS, for sale or disposition or as may
otherwise be authorized by law.
Existing law provides criteria for state agencies to use in
determining and reporting to DGS lands in excess of the
agency's foreseeable needs. A state agency is to include
land not currently being utilized, or currently being
underutilized, for any existing or ongoing program; land
for which the agency has not identified any specific
utilization relative to future needs; and land not
identified by the agency within its master plan for
facility development.
Where applicable within its jurisdiction, DGS is
responsible for determining if surplus land is needed by
any other state agency. Existing law (Government Code
Section 11011.1) requires the state to first offer surplus
state real property to local agencies, and next, to offer
the property to nonprofit affordable housing sponsors, as
defined, prior to offering the property to private
entities. Existing law also prescribes the procedure for
local agencies and nonprofit affordable housing sponsors to
use to obtain the surplus state real property.
Existing law specifies that the Legislature may authorize a
particular surplus property be sold at less than fair
market value and provides that 30 days prior to executing
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such a transaction, DGS must report to the chairs of the
fiscal committees of the Legislature the following
information: (a) the financial terms of the transaction;
(b) a comparison of fair market value for the property and
financial terms; (c) the basis for agreeing to terms and
conditions other than fair market value.
Existing law [Government Code 11011 (k) (1) and (2)]
contains provisions exempting the sale of surplus property
from designated provisions of the California Environmental
Quality Act (CEQA). Specifically, the law provides that
any disposition of a parcel of surplus property made on an
"as-is" basis shall be exempt from statutory requirements
of CEQA; however, the law makes it explicit that the buyer
or transferee of a parcel shall be subject to any local
governmental entitlement or land use approval requirements
and CEQA.
Furthermore, existing law provides that if any transaction
is not on an "as-is" basis sale and close of escrow is
contingent on satisfying any local governmental approvals
for entitlement or land use requirements, including
compliance by the local government with CEQA, then the
execution of the purchase and sale agreement or exchange
agreement is exempt from CEQA.
Proposition 60A of November 2004 (SCA 18, Johnson,
Resolution Chapter 103/04) which was adopted by the
electorate (73% margin) requires, among other things, that
the proceeds from the sale of surplus state property, with
specified exceptions, be used to pay the principal and
interest on the Economic Recovery Bond Act of 2004.
BACKGROUND
Summary: This measure is the annual surplus property bill
sponsored by the Department of General Services (DGS).
Existing law requires all state agencies to annually review
all proprietary state lands and determine if any lands are
in excess of their needs, then report this information to
the director of DGS. In turn, DGS is required to annually
report to the Legislature the lands declared excess and
request authorization to dispose of the land by sale or
otherwise. Specifically, this measure would authorize the
Director of DGS to dispose of three specified parcels
pursuant to Section 11011.1 of the Government Code.
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California Environmental Quality Act (CEQA) Exemption: The
ability to get excess properties declared surplus by the
Legislature has been impeded these past few years by a
disagreement between the Legislature and the Administration
regarding the removal of a statutory exemption for the
State's surplus properties from the requirements of CEQA.
This disagreement has at least for now been resolved with
enactment of AB 8xx (Nestande), Chapter 6 of 2009-10 Second
Extraordinary Session, that places within Section 11011 of
the Government Code an ongoing CEQA exemption for all
properties declared surplus by the Legislature.
Arguments in Support: Writing in support of SB 136, the
Howard Jarvis Taxpayers Association indicates the State
should do everything possible to sell this property for a
fair price. The Association believes "this simple step
will reduce government and ensure that California has
enough revenue to meet truly pressing needs during this
recession."
PRIOR/RELATED LEGISLATION
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. The bill 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 8xx
also provided expedited environmental permitting and CEQA
exemption for a list of 11 critical transportation
projects, as specified.
SB 760 (Aanestad) 2009-10 Session. Would authorize DGS to
sell, lease, exchange, or any combination thereof,
approximately 3.14 acres of real property in the City of
Red Bluff that is specifically declared not to be surplus
to the needs of the state, and, in return, to acquire up to
40,000 net square feet of usable office and related space
for consolidated administrative operations of the state.
(Pending in this Committee)
SB 586 (Yee) 2009-10 Session. An urgency measure that
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would direct DGS, in consultation with the Department of
Food and Agriculture, to enter into negotiations to sell,
to any interested party, at fair market value, with certain
restrictions, a 13-acre parking lot portion of the
state-owned Cow Palace property, located in the County of
San Mateo and the City and County of San Francisco.
(Passed out of this committee on a vote of 11-1; currently
pending in Senate Environmental Quality Committee)
SB 256 (Aanestad) 2009-10 Session. Would authorize DGS to
sell, lease, exchange, or any combination thereof
approximately 1.69 acres of real property in the City of
Chico, currently used by the California Highway Patrol as
its Chico area office, which is specifically declared not
to be surplus to the needs of the state. (Pending in this
Committee)
SB 178 (Aanestad) 2009-10 Session. Would authorize DGS to
sell, lease, exchange, or any combination thereof,
approximately 3 acres of real property in the City of
Redding, currently used by the Department of Forestry and
Fire Protection as its Shasta-Trinity Unit Headquarters,
that is specifically declared not to be surplus to the
needs of the state. (Pending in this Committee)
SB 30 (Denham) 2009-10 Session. Would require DGS to
identify not less than $1 billion worth of state property
that can be sold immediately to pay off outstanding general
obligation bonds and help close the budget deficit. Also,
would require state agencies affected by the sale to
determine the costs and benefits of leasing back their
existing space or finding new, more cost-effective space.
(Pending in this Committee)
SB 29 (Denham) 2009-10 Session. Would mandate the sale of
land that the Los Angeles Memorial Coliseum and the Los
Angeles Memorial Sports Arena occupy, including the state's
share of the Sports Arena structure, and abolishes the Los
Angeles Memorial Coliseum Commission upon completion of
that sale. (Pending in this Committee)
SB 140 (Kehoe) Chapter 513, Statutes of 2008. Authorized
DGS to sell, lease, exchange, or any combination thereof,
approximately 2.7 acres of real property in the City of San
Diego that is specifically declared not to be surplus to
the needs of the state, and, in return, to acquire up to
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120,000 net square feet of usable office and related space
for consolidated administrative operations of the state.
Also provided that funds derived from the sale or exchange
of the real property would be appropriated to DGS to expend
for the purposes of the bill.
SB 1681 (Battin) Chapter 532, Statutes of 2008. Among
other things, revised the conditions and procedures by
which DGS may dispose of surplus land to local agencies and
private entities and individuals.
SB 1527 (Yee) 2007-08 Session. Similar to SB 586 (Yee) of
2009. (Vetoed by Governor - message stated "this measure
circumvents the state's current competitive bid process and
would potentially limit the state's financial return for
the sale of state-owned land without creating any added
value for the surrounding community. By including the
first right of refusal provisions, this bill narrows the
range of options for the use of the property and places
the state at risk to receive less revenue than if the
property was offered to all interested parties through a
normal competitive bid process.")
SB 1133 (Denham) 2007-08 Session. Would have mandated the
sale of the parcel of land that the Coliseum and the Sports
Arena occupy, including the state's share of the Sports
Arena structure, and abolishes the Los Angeles Memorial
Coliseum Commission upon completion of that sale. (Failed
passage on Senate floor)
SB 1060 (Ridley-Thomas) 2007-08 Session. Would have
abolished the Los Angeles Memorial Coliseum Commission
(LAMCC) and reorganized the administrative and management
structure for Exposition Park in Los Angeles by creating an
Exposition Park Authority consisting of 9-board members
responsible for managing and operating all state-owned
properties located in Exposition Park. Also, mandates that
the board sell the parcel that the Los Angeles Memorial
Sports Arena occupies. (Failed passage in Assembly policy
committee)
SB 282 (Cox) Chapter 293, Statutes of 2007. Established
the State Fair Leasing Authority, consisting of specified
representatives, for the purpose of entering into leases or
other agreements for the use of the State Fair (Cal-Expo)
Race Track or any other facilities owned or controlled by
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the fair.
AB 2026 (Villines) Chapter 761, Statutes of 2008.
Authorized DGS to sell, exchange, or lease for fair market
value nine specified parcels deemed to be surplus to the
state's needs. Additionally, rescinded the surplus
authorization granted previously to DGS with respect to
seven specified parcels. Furthermore, exempted the State's
execution of a purchase and sales agreement from CEQA
however, the provisions made it explicit that in an "as is"
sale, the buyer or transferee will be subject to any local
governmental entitlement or land use approval requirements
including requisite CEQA provisions.
AB 1849 (De Vore) 2007-08 Session. Similar to SB 1133
(Denham) of 2008. (Failed passage in Assembly policy
committee)
AB 957 (Spitzer) Chapter 59, Statutes of 2008. Required
Caltrans to report to DGS its property holdings, including
excess lands, on July 1 of each year.
SB 625 (Battin) 2005-06 Session. Would have authorized DGS
to offer surplus land that is suitable for "economic
development" to local governmental agencies at fair market
value. (Held in Assembly policy committee)
SB 99 (Battin) 2005-06 Session. Would have established the
Commission on Asset Review and Divestiture to review
biennially the inventory of all real property held by the
State. (Held in Senate Appropriations Committee)
AB 53 (Negrete McLeod) 2005-06 Session. The annual DGS
surplus property bill containing approximately 30 parcels
for disposal. (Died on Senate Inactive File)
AB 54 (Negrete McLeod) 2005-06 Session. The annual DGS
surplus property bill. (Vetoed by Governor because of
concerns over requiring DGS to initiate a CEQA process on
the properties identified prior to any sale, lease, or
exchange. The Governor stated that "such a provision could
potentially cost California taxpayers millions of
dollars.")
SB 1755 (Denham) 2003-04 Session. Would have required that
DGS ensure state agencies receive up to 15% of the sale of
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state surplus real property as a one-time expenditure for
that agency subject to specified limitations and approval
by the Director of Finance, and would have provided with
certain exceptions, a reward of % of the sales price of
the surplus property, not to exceed $5,000, to the agency
employee(s) who first disclosed the availability of the
property. (Failed passage in this Committee)
SB 1750 (Battin) 2003-04 Session. Similar to SB 99
(Battin) of 2005-06. (Failed passage in this Committee)
SB 669 (Battin) 2003-04 Session. Would have required DGS
to identify $1 billion worth of state property that can be
sold immediately to help close the budget deficit. The
bill also would have required state agencies affected by
the sale to determine the costs and benefits of leasing
back their existing space or finding new, more
cost-effective space. (Passed out of this Committee on a
vote of 11-0; Died in Senate Appropriations Committee -
Suspense file)
SB 856 (Committee on Governmental Organization) Chapter
258, Statutes of 2003. The annual DGS surplus property
bill.
SB 1607 (Committee on Governmental Organization) Chapter
974, Statutes of 2002. The annual DGS surplus property
bill.
SB 951 (Committee on Governmental Organization) Chapter
610, Statutes of 2001 . The annual DGS surplus property
bill.
SUPPORT: As of April 24, 2009:
Department of General Services (sponsor)
Howard Jarvis Taxpayers Association
OPPOSE: None on file as of April 24, 2009.
FISCAL COMMITTEE: Senate Appropriations Committee
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