BILL ANALYSIS                                                                                                                                                                                                    



                                                                  SB 1481
                                                                  Page  1

          Date of Hearing:   August 4, 2010

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

           SB 1481 (Committee on Governmental Organization) - As Amended:   
                                   August 2, 2010 

          Policy Committee:                              Business and  
          Professions  Vote:                            11-0

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:               

           SUMMARY  

          This bill clarifies that proceeds from the disposition of  
          California National Guard armory properties are not subject to  
          current law requirements directing the net proceeds of surplus  
          property sales to first help pay off the Economic Recovery Bonds  
          (ERBs) and thereafter to be deposited in the Reserve for  
          Economic Uncertainty.

           FISCAL EFFECT  

          No net state costs. The bill clarifies that the proceeds of the  
          sales of armory properties will not be treated as General Fund  
          monies to help pay off the ERBs or be deposited into the state's  
          General Fund reserve. Instead, such proceeds are to be deposited  
          into the Armory Fund, where, upon appropriation by the  
          Legislature, these monies are available for the state's share of  
          costs for acquisition or construction of replacement or new  
          armories-costs that would otherwise be a General Fund  
          obligation.

          Moreover, the state's armories, which average over 50 years in  
          age, are generally not surplus to the Military Department's  
          needs, but are simply obsolete and in need of complete  
          replacement, thus it is not appropriate to consider their  
          disposition within the statutory framework for surplus property  
          sales. Finally, though some records are not readily available,  
          it is likely that funding for many of the older armory  
          properties came in part from federal funds and in some cases  
          from local funds, with at most only a portion coming from the  
          state General Fund.








                                                                  SB 1481
                                                                  Page  2


           COMMENTS  

           1)Background  . Proposition 60A, enacted in November 2004,  
            requires proceeds from the sale of surplus state property to  
            be used to pay down the $15 billion in deficit bonds  
            authorized in conjunction with the 2003-04 Budget Act. These  
            payments are intended to accelerate the retirement of the  
            state's debt.  Existing law also provides the California  
            Military Department with separate authority to sell and lease  
            its property, with the revenues earned to be deposited into  
            the Armory Fund.

           2)Purpose  . The Armory Fund is a special fund established in 1983  
            to assist with funding the construction or renovation of  
            National Guard armories.  According to the sponsor, the  
            Military Department, SB 1584 makes a clarifying revision (as  
            described above) "to ensure the Fund remains a viable funding  
            source for the acquisition and construction of future  
            armories."
           Analysis Prepared by  :    Chuck Nicol / APPR. / (916) 319-2081