BILL ANALYSIS �
AB 2442
Page 1
ASSEMBLY THIRD READING
AB 2442 (Williams)
As Amended May 25, 2012
Majority vote
BUSINESS & PROFESSIONS 6-2 HIGHER
EDUCATION 6-2
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|Ayes:|Hayashi, Allen, Butler, |Ayes:|Block, Brownley, Fong, |
| |Eng, Hill, Ma | |Galgiani, Lara, |
| | | |Portantino |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Bill Berryhill, Smyth |Nays:|Olsen, Miller |
| | | | |
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APPROPRIATIONS 12-5
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|Ayes:|Fuentes, Blumenfield, | | |
| |Bradford, Charles | | |
| |Calderon, Campos, Davis, | | |
| |Gatto, Ammiano, Hill, | | |
| |Lara, Mitchell, Solorio | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Harkey, Donnelly, | | |
| |Nielsen, Norby, Wagner | | |
| | | | |
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SUMMARY : Establishes the California Hope Public Trust (Trust)
to support the California State University (CSU), California
Community Colleges (CCC), and University of California (UC)
systems. Specifically, this bill :
1)Creates the Trust and a board to govern and administer it,
requires it to be funded by transfers of state-owned property,
and requires it to manage its properties with the goal of
increasing their value and earning revenue for the CSU, CCC,
and UC systems, as specified.
2)Requires the Department of General Services (DGS) to annually
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submit an inventory to the Trust of all state-owned real
property and lease agreements for all state-owned real estate
and property beginning March 31, 2013, and requires the Trust
to biennially review this inventory beginning January 1, 2015,
and determine which properties to control, as specified. The
Trust must prepare a plan for assuming responsibility of
state-owned real estate and property. The Trust must submit a
request to the Legislature by January 1, 2015, to enact
legislation authorizing the Trust to control these properties.
3)Prohibits the Trust from considering for transfer any of the
following: Department of Transportation property that is used
for existing highways or airspace or acquired for highway
projects; State Parks properties; lands under the jurisdiction
of the State Lands Commission; Department of Corrections and
Rehabilitation (CDCR) and CDCR Division of Juvenile Facilities
properties that are used explicitly for incarcerating inmates;
the State Capitol; any land, building, or property determined
to be of historical or cultural significance; any property
subject to constitutional provisions governing the Highway
Users Tax Account; and, lands under UC or CSU jurisdiction.
4)Requires the Trust to: report annually to DGS regarding
surplus property, as specified, and identify land or property
that would assist the Trust to effectuate its purposes;
generate a return on its real estate holdings; provide
innovative stewardship of real property and infrastructure;
provide for efficient and effective utilization of state
assets; ensure that all projects satisfy state, regional, and
local land-use and environmental requirements that apply to
private sector projects; and, ensure that it meets smart
growth principles, as specified.
5)Authorizes the Trust, among other things, to: acquire and
dispose of any property, and construct and maintain buildings,
subject to specified legislative notification; lease any Trust
property to any person or entity; enter into joint ventures
with other entities to construct or develop buildings and land
for joint-use purposes; approve loans or other financing for
Trust projects; contract with DGS to manage and maintain Trust
properties; issue revenue bonds; and, sell Trust property and
lease the property back to generate proceeds.
6)Requires the Trust to notify the chair of the fiscal committee
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of each house before approving the acquisition or disposition
of real property; prohibits the Trust from selling or
disposing of any state excess land or surplus property, as
specified; and, requires the Trust to annually report to the
Legislature beginning July 1, 2016, on the Trust's activities,
as specified.
7)Creates the California Hope Public Trust Fund (Trust Fund),
requires all net proceeds of Trust activities to be paid to
the Trust Fund, and requires the Trust, upon appropriation by
the Legislature in the annual Budget Act, to use the moneys in
the fund to support instruction and direct student services at
the CSU, the CCC, and UC systems. The Legislature must
appropriate funds according to the following schedule: 50% to
the CSU, 25% to the UC and 25% to the CCCs.
8)States legislative intent that moneys in the Trust Fund not be
used to enter into or renew a contract that provides for an
increase in compensation for a UC or CSU administrator, as
defined, and to establish an administrative cap on the Trust
once it is fully operational.
9)Authorizes the Trust to issue revenue bonds, requires Bond
sales to be coordinated by the Treasurer, and outlines
provisions governing bond sales, as specified.
10)Sunsets this bill on January 1, 2019, unless legislation is
enacted beforehand to transfer properties to the Trust as
outlined above, and requires the Trust to assume
responsibility for providing real estate services for
transferred properties, including planning of future projects.
11)Exempts the Department of Parks and Recreation, the
Department of Fish and Game, the Wildlife Conservation Board
and other state conservancies from current law requiring all
state agencies to annually report surplus property to DGS, and
authorizes DGS to give priority to proposals for disposing of
surplus lands to further the purposes of the Trust.
12)Specifies that the following shall only become operative to
the extent legislation is adopted pursuant to 2), above:
provisions governing the Trust board's authority to hire an
executive director, chief executive officer and other
specified staff; provisions governing the executive director's
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employment status and responsibilities, as specified; and,
provisions outlined in 4) through 9), above.
13)Requires any revenue received or generated from the
application of this bill's provisions attributable to the
Trust to supplement, rather than supplant, state funds that
are made available or expended for the same or similar
purpose.
FISCAL EFFECT : According to Assembly Appropriations Committee:
1)To the extent properties are transferred to the Trust that
otherwise would have been declared surplus and sold by the
state, there will be revenue losses, potentially in the tens
of millions of dollars, to the General Fund (GF) and special
funds.
2)To the extent the Trust is more successful in enhancing the
value and disposing of state properties, there will be revenue
increases of up to tens of millions of dollars for UC, CSU,
and the CCC.
3)Initial costs for the Trust will be around $200,000 to develop
a legislative proposal for transferring properties to the
Trust.
4)Annual operating costs thereafter will depend in part on the
extent of the state property portfolio and the opportunities
that portfolio provides for undertaking revenue generating
projects for the benefit of higher education. These costs are
supposed to be supported by Trust revenues, but initially some
GF support, in the form of appropriations or loans, would
probably be necessary.
COMMENTS : According to the author, "Public higher education in
California has sustained considerable reductions in state
funding in recent years. Although all state budget areas have
undergone significant cuts over the past several budget cycles,
higher education does not enjoy the same funding mandates and
legal protections as other state services such as K-12
education. Improving the opportunity for college attendance and
graduation in California are not only needed to meet the demands
of tomorrow, but ensure the economic prosperity of the State.
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"According to a 2009 California State Auditor follow-up review
of the State's management of surplus property, the State still
lacks assurance that underused or unused properties are sold to
generate revenue or are put to better use. AB 2442 creates the
California Hope Public Trust which will be able to evaluate and
better utilize state property with the proceeds benefitting the
UC, CCC and CSU systems. The Trust is funded by transfers of
state-owned properties that are determined by the Trust to be
suitable for development and have been approved by the
Legislature. Those properties would be managed with the goal of
increasing the value of its holdings and earning revenue for the
UC, CCC and CSU systems.
"The California Hope Public Trust is aimed at renewing our
commitment to our higher education systems and our students by
supplementing, not replacing, our General Fund investment to the
UC and CSU systems."
Analysis Prepared by : Angela Mapp / B.,P. & C.P. / (916)
319-3301
FN: 0003919