BILL ANALYSIS �
------------------------------------------------------------
|SENATE RULES COMMITTEE | AB 1748|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524 | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
------------------------------------------------------------
THIRD READING
Bill No: AB 1748
Author: Fong (D)
Amended: As introduced
Vote: 21
SENATE EDUCATION COMMITTEE : 8-0, 6/13/12
AYES: Lowenthal, Alquist, Hancock, Huff, Liu, Price,
Simitian, Vargas
NO VOTE RECORDED: Runner, Blakeslee, Vacancy
ASSEMBLY FLOOR : 75-0, 4/12/12 - See last page for vote
SUBJECT : California Community Colleges: fair market
value of leases
SOURCE : San Jose/Evergreen Community College
DIGEST : This bill removes the limitation that the fair
market value of specified short-term leases not exceed
$25,000 annually, for California Community College (CCC)
district buildings or space not being used for educational
purposes.
ANALYSIS : Existing law exempts certain lease
arrangements from the general provisions regarding the
lease and sale of CCC district property, including CCC
district property that is not needed for educational
activities, if it is leased for a period of more than five
days but less than five years and the fair market value of
the lease does not exceed $25,000 annually. CCC district
CONTINUED
AB 1748
Page
2
governing boards seeking to enter into the aforementioned
negotiated lease are required to include the proposed lease
and methodology used to determine the value of the lease as
an agenda item in a public meeting, and provide one week
public notice before taking action on the lease agreement.
This bill:
1.Eliminates any statutory cap on the fair market value of
any buildings, grounds or space not needed for school
classroom buildings which current law authorizes a
community college governing board to lease for between
five days and up to five years.
2.Makes a technical change.
Comments
This bill authorizes CCC districts to enter into negotiated
short-term lease agreements for property not needed for
educational purposes and generate fair market value for
that property, not subject to the $25,000 annual
limitation. Existing law authorizes CCC districts to enter
into leases for longer-terms or greater than $25,000
annually but requires a public bid process that accepts the
highest responsible bid. The author argues that the
current cap of $25,000 on short-term leases was put into
place almost 20 years ago and does not take into account
differences in property value throughout the state or
increase in value over time. Further, multiple years of
budget cuts and increasing demand for higher education have
left CCC districts needing to maximize alternative revenue
sources. By relieving CCC districts of the $25,000 cap on
short-term leases this bill will provide districts greater
ability to increase revenues through leasing unused
buildings and space.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 6/12/12)
San Jose/Evergreen Community College (source)
California Community College League
CONTINUED
AB 1748
Page
3
Glendale Community College
Kern Community College District
Los Angeles Community College District
Los Rios Community College District
Mt. San Jacinto Community College District
Peralta Community College District
San Diego Community College District
West Kern Community College District
ARGUMENTS IN SUPPORT : According to the author's office,
the statute that implemented the $25,000 cap was
implemented in 1993, is outdated, and needs to be modified
to reflect the 2012 fair market rates for property.
Additionally, a statutory cap does not allow for the range
of differences in property values throughout the state.
This bill would expand a community college district's
existing authority to negotiate short term leases of
facilities without requiring compliance with the more
extensive conditions required for longer term leases or the
sale of property. At a time of extensive cuts to higher
education, this bill could facilitate the use of an
alternative revenue source to meet the local community's
educational needs.
ASSEMBLY FLOOR : 75-0, 4/12/12
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall,
Bill Berryhill, Block, Blumenfield, Bonilla, Bradford,
Brownley, Buchanan, Butler, Charles Calderon, Campos,
Carter, Chesbro, Conway, Davis, Dickinson, Donnelly, Eng,
Feuer, Fong, Fuentes, Furutani, Beth Gaines, Galgiani,
Gatto, Gordon, Gorell, Grove, Hagman, Halderman, Hall,
Harkey, Hayashi, Roger Hern�ndez, Hill, Huber, Hueso,
Huffman, Jeffries, Jones, Knight, Lara, Logue, Bonnie
Lowenthal, Ma, Mansoor, Mendoza, Miller, Mitchell,
Monning, Morrell, Nestande, Nielsen, Norby, Olsen, Pan,
Perea, V. Manuel P�rez, Portantino, Silva, Skinner,
Smyth, Solorio, Swanson, Torres, Valadao, Wagner,
Williams, Yamada, John A. P�rez
NO VOTE RECORDED: Cedillo, Cook, Fletcher, Garrick,
Wieckowski
CONTINUED
AB 1748
Page
4
PQ:nl 6/14/12 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
**** END ****
CONTINUED