AB 1421, as amended, Committee on Accountability and Administrative Review. Surplus state property: realtors and landlocked properties.
(1) Existing law prescribes a process for the sale of surplus state real property. This process requires each state agency to report annually to the Department of General Services any proprietary state lands under the jurisdiction of that agency that are in excess of its foreseeable needs. Existing law provides certain exceptions from this requirement, including, among others, lands under the jurisdiction of specified state entities. Existing law requires the department to determine if excess land is needed by another agency and, if it is, to provide for transfer to another agency. Existing law authorizes a state agency authorized to sell surplus state property to employ a licensed real estate broker, with the approval of the department, for a negotiated commission not to exceed reasonable and customary brokerage commissions applicable to similar privately owned properties in the area. Existing law prohibits the Director of General Services from employing the services of a broker unless the director determines that the employment of a broker to sell the property would result in a cost savings to the state.
This bill would revise the authorization for a state agency selling surplus state property to employ a licensed real estate broker to require that the broker be local with respect to that property and would prescribe requirements for the selection of the broker. The bill would require the state to adopt criteria to determine the competence and qualification for the services to be performed and to evaluate the customary brokerage commission to be charged based on services in the area.
(2) Existing law authorizes the Director of the Department of General Services, without regard to any other law, upon the written request and consent, as specified, to sell, convey, or exchange specified properties that are not needed by any state agency at fair market value following a 30-day notice to the Joint Legislative Budget Committee and the applicable Members of the Senate and Assembly who represent the district in which the properties are located. Existing law requires, in this context, that the surplus character of certain properties, including those obtained as a result of seizure or with a market value of less than $25,000, be established pursuant to the general surplus property procedures described above. Existing law requires that funds received from these sales be handled the same as those funds received from surplus property sales, as specified.
This bill would authorize the Director of the Department of General Services, pursuant to the provisions described above, to sell, convey, and exchange property that is landlocked or without legal access from a public road, street, or highway, and property that is a remainder or remnant parcel having a diminished economic utility or value, as specified, if the sale, conveyance, or exchange is with the owner of an adjoining propertybegin insert, and the property meets specified size limitationsend insert. The bill would also remove the requirement that the surplus character of certain properties be established pursuant to the general surplus property procedures, as described above.
(3) The California Constitution provides that the proceeds from the sale of surplus state property be used to pay the principal and interest on bonds issued pursuant to the Economic Recovery Bond Act until the principal and interest on those bonds are fully paid, after which these proceeds are required to be deposited into the Special Fund for Economic Uncertainties. Existing statutory law similarly requires that the net proceeds received from any real property disposition be paid into the Deficit Recovery Bond Retirement Sinking Fund Subaccount, a continuously appropriated fund, until the bonds issued pursuant to the act are retired.
By increasing the amount transferred into a continuously appropriated fund, this bill would make an appropriation.
Vote: majority. Appropriation: yes. Fiscal committee: yes. State-mandated local program: no.
The people of the State of California do enact as follows:
Section 11011.5 of the Government Code is
2amended to read:
(a) If no state or other public entity seeks to obtain
4title to specific surplus state-owned real property, a state agency
5authorized to sell that property, except property acquired for state
6highway purposes, may, with the approval of the Department of
7General Services, employ a licensed real estate broker who is local
8with respect to that property for a negotiated commission not to
9exceed reasonable and customary brokerage commissions
10applicable to similar privately owned properties in
the area in
11connection with that sale and pay the amount of commission earned
12by the broker. The commission shall be paid only out of the
13proceeds of the sale before the proceeds are remitted to the State
14Treasury. The Director of General Services shall only employ the
15services of a broker if the director determines that the employment
16of a broker to sell the property would result in a cost savings to
17the state. Any state properties sold through the services of a broker
18shall be reported, along with a comparison of the estimated cost
19savings obtained through the use of a broker, in the annual surplus
20property report to the Legislature required pursuant to Section
2111011.
22(b) Notwithstanding any other law, the state’s selection for the
23professional services of a licensed real estate broker shall be made
24on the basis of the
location of the property, the broker’s
25demonstration of knowledge of the local real estate market and
26success in selling real property in the local market, and on
27demonstrated competence and the professional qualifications
28necessary for the satisfactory performance of the services required.
29To implement this selection method, the state shall adopt specific
30criteria to determine the competence and qualification for the
P4 1services to be performed and to evaluate the customary brokerage
2commission to be charged based on services in the area.
Section 14664 of the Government Code is amended
4to read:
(a) The director may execute grants to real property
6belonging to the state in the name and upon behalf of the state,
7whenever the sale or exchange of real property is authorized or
8contemplated by law, if no other state agency is specifically
9authorized and directed to execute the grants. The director may
10also execute deeds or any other instruments necessary to correct
11erroneous descriptions on deeds by which the state acquired title.
12(b) (1) Notwithstanding any other law, upon the written request
13and consent of the state agency with control or jurisdiction over
14the property concerned, the director may sell,
convey, or exchange
15properties that are not needed by any state agency at fair market
16value following a 30-day notice to the Joint Legislative Budget
17Committee and the applicable Members of the Senate and
18Assembly who represent the district in which the properties are
19located, under any of the following circumstances:
20(A) Property, not to exceed five acres, to a local governmental
21agency for the purpose of local public works projects, including,
22but not limited to, utility rights-of-way, drainage ditches, road
23widening, including curbs, gutters, sidewalks, and small parking
24lots.
25(B) Property with a fair market value of up to one million dollars
26($1,000,000) received by the state through the office of the
27Attorney General or another state agency as the result of a
28foreclosure,
seizure, or court action.
29(C) Property that is being encroached on, where the adjacent
30landowner and the state agency with control or jurisdiction over
31the property concerned, the director, and the Attorney General
32agree that the best manner in which to resolve the matter is through
33a sale of the property or for an exchange of property of equal value.
34(D) Property not needed by any state agency with a fair market
35value of less than twenty-five thousand dollars ($25,000).
36(E) Propertybegin insert, not to exceed fifty acres,end insert that is landlocked, or
37without legal access from a public road, street, or highway, if the
38sale, conveyance, or exchange is
with the owner of an adjoining
39property.
P5 1(F) Propertybegin insert, not to exceed fifteen acres,end insert that is a remainder or
2remnant parcel having a diminished economic utility or value due
3to its size, shape, location, or other detrimental characteristics if
4the sale, conveyance, or exchange is with the owner of an adjoining
5property.begin insert The fifteen acre limitation shall not apply to property
6acquired for public purposes if the written request for the sale,
7conveyance, or exchange of the remainder or remnant parcel is
8made within one year of the acquisition of the property.end insert
9(2) All funds received by the state pursuant to this subdivision
10shall
be handled in the identical manner as funds received from
11state property disposed of pursuant to Section 11011.
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