BILL ANALYSIS
SB 1481
Page 1
SENATE THIRD READING
SB 1481 (Governmental Organization Committee)
As Amended August 2, 2010
Majority vote
SENATE VOTE :33-0
BUSINESS & PROFESSIONS 11-0 APPROPRIATIONS 17-0
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|Ayes:|Hayashi, Conway, Eng, |Ayes:|Fuentes, Conway, |
| |Hernandez, | |Bradford, |
| |Hill, Ma, Nava, Niello, | |Charles Calderon, Coto, |
| |Ruskin, | |Davis, |
| |Smyth, Logue | |De Leon, Gatto, Hall, |
| | | |Harkey, Miller, Nielsen, |
| | | |Norby, Skinner, Solorio, |
| | | |Torlakson, Torrico |
| | | | |
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SUMMARY : Specifies that the proceeds from the sale of armories
must be deposited in the Armory Fund (Fund) and are not required
to be used to retire bond debt resulting from the 2004 Economic
Recovery Bond Act.
EXISTING LAW :
1)Authorizes the Department of General Services, with the
approval of the Adjutant General, to lease up to 99 years or
sell at fair market value, as specified, any real property
held for armory purposes, with statutory approval.
2)Establishes the Fund for the deposit of proceeds from the sale
or lease of armories and authorizes the use of available funds
upon appropriation by the Legislature for the maintenance of
existing armories and construction of new or replacement
armories.
3)Requires the proceeds from the sale of state surplus real
property be used to pay the principal and interest on the
Economic Recovery Bond (ERB) Act of 2004 and subsequently be
deposited into the Special Fund for Economic Uncertainties.
FISCAL EFFECT : According to the Assembly Appropriations
SB 1481
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Committee analysis, no net state costs. The bill clarifies that
the proceeds of the sales of armory properties will not be
treated as General Fund (GF) monies to help pay off the ERBs or
be deposited into the state's GF reserve. Instead, such
proceeds are to be deposited into the 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 GF
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 GF.
COMMENTS : According to the author's office, "Within the State
Treasury is a special fund, the Fund, where proceeds from the
sale or lease of National Guard armories are deposited in order
to finance the construction of new armories and the renovation
of existing armories. An amendment to the California Military
and Veterans Code Section 435 is required to ensure that monies
from the sale of armory properties, no longer utilized by the
California National Guard, continue to be deposited in the Fund.
In November 2004, voters passed Proposition 60A, which requires
the proceeds of the sale of surplus property to be used to pay
down the $15 billion in deficit bonds included in the 2003-04
Budget. These payments are intended to accelerate the
retirement of the state's debt, and reduce future GF payments to
the bondholders. 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
Fund.
Analysis Prepared by : Joanna Gin / B.,P. & C.P. / (916)
319-3301
SB 1481
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FN: 0005633