BILL ANALYSIS �
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|SENATE RULES COMMITTEE | AB 2442|
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THIRD READING
Bill No: AB 2442
Author: Williams (D)
Amended: 8/24/12 in Senate
Vote: 21
SENATE GOVERNMENTAL ORGANIZATION COMM. : 7-4, 6/26/12
AYES: Calderon, Corbett, De Le�n, Evans, Hernandez,
Padilla, Yee
NOES: Wright, Anderson, Berryhill, Walters
NO VOTE RECORDED: Cannella, Wyland
ASSEMBLY FLOOR : 50-25, 5/30/12 - See last page for vote
SUBJECT : State property: California Hope Public Trust
SOURCE : Service Employees International Union
DIGEST : This bill establishes the California Hope Public
Trust (Trust) to support the California State University
(CSU), California Community Colleges (CCC), and University
of California (UC) systems to be governed and administered
by the Department of General Services (DGS) with input from
a nine member advisory board of the trust.
Senate Floor Amendments of 8/24/12 redefine the California
Hope Public Trust Board as an advisory body. The Board
would give input to the Department of General Services,
which would retain control of the supervision of surplus
and underutilized state properties. The amendments also
eliminate Senate confirmation for the members of what will
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now become an advisory-only Board.
ANALYSIS : Existing law:
1.Requires each state agency to report annually to DGS any
proprietary state lands under the jurisdiction of that
agency that are in excess of the foreseeable needs of
that agency.
2.Provides certain exceptions from this requirement,
including, among others, lands under the jurisdiction of
specified state entities.
3.Authorizes the Director of General Services to require a
state agency to transfer to DGS jurisdiction over any
land declared excess by a state agency.
4.Authorizes DGS to take specified actions with respect to
that property, including, among others, asking permission
from the Legislature to sell or dispose of the property.
5.Authorizes DGS to give priority to any property that
involves the exchange of surplus lands listed in
specified reports.
6.Requires DGS to maintain a complete and accurate
statewide inventory of all real property held by the
state.
This bill:
1. Creates the California Hope Public Trust to be
administered by DGS with input from an advisory board,
and 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 submit an inventory to the Trust of all
state-owned real property and lease agreements for all
state-owned real estate and property, that is not
exempt from transfer to the trust, beginning March 31,
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2013, and requires the Trust to biennially review this
inventory beginning January 1, 2015, in consultation
with the advisory board, 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,
specifies Judicial Counsel lands and property that, if
transferred to the trust would result in increased
costs to the agency in possession of the property.
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
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to construct or develop buildings and land for
joint-use purposes, contract with DGS to manage and
maintain Trust properties.
6. Requires the Trust to notify the chair of the fiscal
committee 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. 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.
10. 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.
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11. 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 employment status
and responsibilities, as specified; and, provisions
outlined in #4 through #9, above.
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. "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."
Prior Legislation
AB 2578 (Frommer) in 2006, and AB 593 (Frommer) from 2005
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were substantially similar to this bill. Both were vetoed
by Governor Schwarzenegger. The veto message stated:
"This bill would delegate important decisions
regarding the allocation of State resources to a new
entity, unaccountable to the people, and outside the
annual budget process. In doing so, it would hamper
the ability of the Legislature and the Governor to
make such resource decisions that take into account
all of the State's needs."
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee, $500,000
to $1 million annually from the General Fund to the trust
to manage the state's real estate through December 31,
2018.
Unknown, major asset and revenue shift through December
31, 2018. To the extent the Legislature transfers
property to the trust, and the trust manages state
property for revenue generating purposes than the
Department of General Services is otherwise permitted to
do, this bill could reduce net state costs to the General
Fund. To the extent it generates enterprise revenue, the
trust could increase General Fund revenue.
Potential state property management workload decrease to
the department.
SUPPORT : (Verified 8/24/12)
Service Employees International Union (source)
California Faculty Association
California State University
Community College League of California
Faculty Association of California Community Colleges
University of California
OPPOSITION : (Verified 8/24/12)
CalTax
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ARGUMENTS IN SUPPORT : The author states that, 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.
According to the author, the California Hope Public Trust
created by this bill will be able to evaluate and better
utilize state property, and the proceeds of the trust will
benefit the UC, CSU and CCC 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. The trust would manage the
properties with a goal of increasing the value of its
holdings and earning revenue for the CCC, UC and CSU
systems.
Among other things, the supporters point out that the trust
will fill a gap that was identified by the State Auditor,
who expressed concern that no state entity has broad
oversight to review property-retention decisions by
individual agencies. This bill would enable the trust to
evaluate state property in order to determine whether there
are properties that are currently underutilized.
ARGUMENTS IN OPPOSITION : CalTax states in opposition
that, "California's General Fund is in a state of
dysfunction, and earmarking revenues will lead to further
budgetary inflexibility, issues of manipulation,
substitution of revenues, implications on tax policy, and
higher tax administration and compliance costs.
The core disadvantage of earmarking is the inflexibility or
rigidity that it introduces into the state budget process.
Earmarking makes it more difficult for the governor and the
legislature to determine which of competing spending
priorities proved the most public benefits for the budget
dollar spent."
ASSEMBLY FLOOR : 50-25, 5/30/12
AYES: Alejo, Allen, Ammiano, Atkins, Beall, Block,
Blumenfield, Bonilla, Bradford, Brownley, Buchanan,
Butler, Charles Calderon, Campos, Carter, Cedillo,
Chesbro, Dickinson, Eng, Fong, Fuentes, Furutani,
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Galgiani, Gatto, Hall, Hayashi, Roger Hern�ndez, Hill,
Huber, Hueso, Huffman, Lara, Bonnie Lowenthal, Ma,
Mendoza, Mitchell, Monning, Pan, Perea, V. Manuel P�rez,
Portantino, Skinner, Smyth, Solorio, Swanson, Torres,
Wieckowski, Williams, Yamada, John A. P�rez
NOES: Achadjian, Bill Berryhill, Conway, Cook, Donnelly,
Beth Gaines, Garrick, Gorell, Grove, Hagman, Halderman,
Harkey, Jeffries, Jones, Knight, Logue, Mansoor, Miller,
Morrell, Nestande, Nielsen, Norby, Olsen, Silva, Wagner
NO VOTE RECORDED: Davis, Feuer, Fletcher, Gordon, Valadao
DLW:n 8/27/12 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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