BILL NUMBER: AB 35 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 7, 2011
INTRODUCED BY Assembly Member Solorio
DECEMBER 6, 2010
An act to amend Section 3884.2 of add
Section 3884.05 to the Food and Agricultural Code, relating to
state property , and declaring the urgency thereof, to take
effect immediately .
LEGISLATIVE COUNSEL'S DIGEST
AB 35, as amended, Solorio. State property: Orange County
Fair: sale. 32nd District Agricultural Association.
Existing law divides the state into agricultural districts within
the boundaries of which agricultural associations may be formed.
Existing law provides that District 32 is the County of Orange.
Existing law creates District 32a which consists of all that real
property that is a portion of District 32 that is commonly known as
the Orange County Fair and authorizes the Department of General
Services to sell all or any portion of the real property that
composes District 32a pursuant to a public bidding process.
This bill would authorize the Board of Directors of the Orange
County Fair, or an agent of that entity, as specified, to enter into
a revenue sharing plan with the state regarding property of the
Orange County Fairgrounds, as specified, if the plan would generate
an amount in excess of $100,000,000.
(1) Existing law creates State Agricultural District 32a, which
consists of all of the real property that is commonly known as the
Orange County Fair, and authorizes the Department of General Services
to sell all or a portion of the real property that comprises it
pursuant to a public bidding process, as specified. Existing law
requires the Director of General Services to report specified
information to the chairs of the fiscal committees of the Legislature
30 days prior to executing a transaction for the sale of the real
property.
This bill would require the Director of General Services, prior to
sale, to obtain an independent appraisal of the fair market value of
the real property ofDistrict 32a, using specified approaches. The
bill would require that the real property be sold at the minimum fair
market value, which must be consistent with the independent
appraisal, as specified. The bill would provide that if a proposed
sale of the property requires legislative approval of the sale, the
Legislature shall express that approval by statute. The bill would
add information to that which the Director of General Services is
required to report to the chairs of the fiscal committees of the
Legislature, and would revise the time within which that information
is to be provided.
(2) This bill would declare that it is to take effect immediately
as an urgency statute.
Vote: 2/3 majority . Appropriation:
no. Fiscal committee: yes. State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 3884.05 is added to the
Food and Agricultural Code , to read:
3884.05. In addition to any other power authorized by law, the
Board of Directors of the Orange County Fair, or an agent of that
entity who contracts with the state on behalf of that entity, may
enter into a revenue sharing plan with the state regarding the real
property that composes District 32a, along with any personal property
owned by the 32nd District Agricultural Association and the 32nd
District Agricultural Association's right to operate the Orange
County Fair, if the plan would generate an amount in excess of one
hundred million dollars ($100,000,000).
SECTION 1. Section 3884.2 of the Food and
Agricultural Code is amended to read:
3884.2. (a) The District 32a Disposition Fund is hereby created
in the State Treasury.
(b) Subject to the limitations described in this section, the
Department of General Services may sell all or any portion of the
real property that composes District 32a. District 32a shall not
enter into any contract, lease, or other agreement affecting the use
or operation of the real property for a period that exceeds three
months, and all of these contracts, leases, or other agreements shall
contain a provision that they may be canceled upon a 30-day notice
from the Department of General Services. The Department of General
Services shall be reimbursed for any reasonable cost or expense
incurred for the transactions described in this section.
Additionally, to the extent bonds issued by the State Public Works
Board or other entity involve the property to be sold pursuant to
this section, all issuer- and trustee-related costs associated with
the review of any proposed sale, together with the costs related to
the defeasance or retirement of any bonds, which may include the cost
of nationally recognized bond counsel, shall be paid from the
proceeds of any sale or lease authorized by this section. The net
proceeds from the sale shall be deposited into the District 32a
Disposition Fund.
(c) The sale of the real property authorized by this section shall
be pursuant to a public bidding process designed to obtain the
highest, most certain return for the state from a responsible bidder
that represents a fair market value for the property. A notice of
this bidding process shall be posted by the Department of General
Services on its Internet Web site for at least 30 days prior to the
sale of the real property. Prior to sale, the Director of General
Services shall obtain an independent appraisal of the fair market
value of the real property using a cost approach, a sales comparison
approach, and market capitalization approach. The minimum fair market
value of the real property shall be consistent with the independent
appraisal using at least one of these approaches. The provisions of
Section 11011.1 of the Government Code are not applicable to the sale
of real property authorized under this section. If the proposed sale
requires legislative approval of the sale, the Legislature shall
express that approval by statute.
(d) (1) Within the period described in paragraph (2), prior to
executing a transaction for a sale of real property authorized by
this section, the Director of General Services shall report to the
chairpersons of the fiscal committees of the Legislature all of the
following:
(A) The financial terms of the transaction. If the sale of the
real property is for other than an all-cash offer, the Director of
General Services shall provide information on the creditworthiness of
the purchaser, including audited financial statements and a business
credit report.
(B) A comparison of fair market value for the real property and
the terms listed subparagraph (A).
(C) Any basis for agreeing to terms and conditions other than fair
market value.
(D) A full description of payment schedules, annual cashflows, and
default risks if the state finances all or any portion of the sale.
(2) The Director of General Services shall provide the information
required by this subdivision at the earliest possible time, and not
later than 30 days prior to the proposed transaction when the
Legislature is in session. If the information is provided and the
Legislature is not in session, then the 30-day period shall not begin
to run until the Legislature is in session. Upon request of the
Chairperson of the Joint Legislative Budget Committee, the Director
of General Services may extend the period that the Legislature may
review the information on the proposed transaction prior to its
execution by an additional 30 days.
(e) As to the real property sold pursuant to this section, the
Director of General Services shall except and reserve to the state
all mineral deposits, as defined in Section 6407 of the Public
Resources Code, together with the right to prospect for, mine, and
remove the deposits. If, however, the Director of General Services
determines that there is little or no potential for mineral deposits,
the reservation may be without surface right of entry above a depth
of 500 feet, or the rights to prospect for, mine, and remove the
deposits shall be limited to those areas of the real property
conveyed that the director determines to be reasonably necessary for
the removal of the deposits.
(f) The Department of General Services shall report to the
Legislature on or before June 30 of each year on the status of the
sale of real property authorized by this section.
(g) Upon the sale of all property that composes District 32a,
District 32a shall be abolished and all funds in the District 32a
Disposition Fund shall be transferred to the General Fund.
(h) (1) The disposition of state real property or buildings
specified in subdivision (b) that are made on an "as is" basis shall
be exempt from Chapter 3 (commencing with Section 21100) to Chapter 6
(commencing with Section 21165), inclusive, of Division 13 of the
Public Resources Code. Upon title to the parcel vesting in the
purchaser or transferee of the property, the purchaser or transferee
shall be subject to any local governmental land use entitlement
approval requirements and to Chapter 3 (commencing with Section
21100) to Chapter 6 (commencing with Section 21165), inclusive, of
Division 13 of the Public Resources Code.
(2) If the disposition of state real property or buildings
specified in subdivision (b) is not made on an "as is" basis and
close of escrow is contingent on the satisfaction of a local
governmental land use entitlement approval requirement or compliance
by the local government with Chapter 3 (commencing with Section
21100) to Chapter 6 (commencing with Section 21165), inclusive, of
Division 13 of the Public Resources Code, the execution of the
purchase and sale agreement or of the exchange agreement by all
parties to the agreement shall be exempt from Chapter 3 (commencing
with Section 21100) to Chapter 6 (commencing with Section 21165),
inclusive, of Division 13 of the Public Resources Code.
(3) For the purposes of this subdivision, "disposition" means the
sale, lease, or repurchase of state property or buildings specified
in subdivision (b).
(i) The disposition of real property or buildings, or both,
pursuant to this section does not constitute a sale or other
disposition of state surplus property within the meaning of Section 9
of Article III of the California Constitution and shall not be
subject to subdivision (g) of Section 11011 of the Government Code.
SEC. 2. This act is an urgency statute
necessary for the immediate preservation of the public peace, health,
or safety within the meaning of Article IV of the Constitution and
shall go into immediate effect. The facts constituting the necessity
are:
In order that the sale of the real property that composes District
32a achieves the Legislature's intended purposes and remains in the
best interests of the people of California and the residents of
Orange County, and that the Legislature is provided the time
necessary to review the terms of the sale, it is necessary that this
act go into effect immediately.