BILL ANALYSIS �
SB 1266
Page 1
Date of Hearing: August 8, 2012
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
SB 1266 (Corbett) - As Amended: August 6, 2012
Policy Committee: Water, Parks and
Wildlife Vote: 11-0
Business and Professions 9-0
Urgency: No State Mandated Local Program:
No Reimbursable: No
SUMMARY
This expands the scope of proposed state resource land
acquisitions that must undergo independent appraisal and makes
related requirements. Specifically, this bill:
1)Requires an acquisition agency or project partner to contract
for an appraisal of any proposed expenditure or grant by an
acquisition agency. (The bill defines an acquisition agency as
the Wildlife Conservation Board (WCB), the Department of Fish
and Game (DFG) or a state conservancy and a project partner as
a public agency or nonprofit seeking state funding for the
acquisition of conservation lands.)
2)Prohibits the land owner, as of January 1, 2015, from being a
co-client of the appraiser.
3)Makes various requirements of the appraisal and appraisal
reports, including that (a) the appraisal conform to the
Uniform Standards for Professional Appraisal Practice, (b) the
fee charged to conduct the appraisal not be based on a
percentage of the appraisal value, (c) the appraiser not have
a financial interest in the property being acquired, (d) the
appraiser be qualified, based upon education, experience and
knowledge, and (e), if applicable, the appraiser have
knowledge of property attributes that require special
knowledge to value, such as timber, water and minerals.
4)Requires the appraisal for a major acquisition of land, which
the bill defines as $15 million or more of state funds, be
reviewed by a qualified independent appraiser.
SB 1266
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FISCAL EFFECT
1)Unknown costs, potentially ranging in the low to high hundreds
of thousands of dollars, to WCB, DFG and the state
conservancies, to commission appraisals beyond the number
agencies would commission under current law (GF, bond funds
and special funds).
2)Unknown savings, of less than the costs identified above, to
acquisition agencies resulting from decreased review of
appraisals submitted following a prior appraisal rejected by
the Department of General Services (GF, bond funds and special
funds).
COMMENTS
1)Rationale. The author intends this bill to establish best
practices for the state purchase of lands for conservation
purposes. The author contends the bill ensures potential
purchases are thoroughly and uniformly reviewed and state
agencies get best value.
2)Background. In 2007, the Legislative Analyst's Office (LAO)
released a report that raised concerns about the appraisal
process used by public agencies to acquire conservation lands.
The LAO's recommended legislation requiring development of a
set of appraisal standards, to centralize the appraisal
function at DGS, to expand existing requirements for public
disclosure of appraisal-related information, to improve the
legislative notification process, and to take steps to avoid
unwarranted tax benefits in connection with the acquisitions.
SB 1285 (Corbett, Chapter 711, Statutes of 2008), in response
to the concerns contained in the LAO report, required DGS to
convene a workgroup to develop and adopt standards for
appraisals of conservation acquisitions, subject to the
approval of the Natural Resources Agency.
Current law prohibits the purchase price for any real property
acquired by the Wildlife Conservation Board from exceeding the
fair market value of the property, as determined by an
appraisal prepared by a licensed real estate appraiser and
SB 1266
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approved by DGS. Current law requires an independent
appraisal, contracted for by the acquisition agency, of the
fair market value of the land for any major acquisition,
defined as a proposed expenditure of state funds of $25
million or more, of conservation lands. Appraisals must be
reviewed by a qualified independent appraiser retained by the
acquisition agency.
3)Support. This bill is supported by the California Council of
Land Trusts (sponsor) and numerous conservation organizations
who contend the current conservation land appraisal process
fails to provide the state with the best information upon
which to make its acquisition decisions. These proponents
contend appraisals contracted by the owners of the land being
appraised-which current law allows-frequently fail scrutiny by
DGS.
4)At the time this analysis was prepared, there was no
opposition registered to this bill.
Analysis Prepared by : Jay Dickenson / APPR. / (916) 319-2081