BILL ANALYSIS �
AB 1503
Page 1
Date of Hearing: March 12, 2014
ASSEMBLY COMMITTEE ON ACCOUNTABILITY AND ADMINISTRATIVE REVIEW
Jim Frazier, Chair
AB 1503 (Gaines) - As Amended: March 3, 2014
SUBJECT : Department of General Services
SUMMARY : Requires the Department of General Services (DGS),
with consent from the Department of Corrections and
Rehabilitation (CDCR), to lease vacant property on the grounds
of California State Prison at Folsom (CSP Folsom) to a specified
nonprofit entity for the construction and operation of a peace
officers memorial and museum. Specifically, this bill :
1)Directs DGS, with the approval of CDCR, to lease vacant
property on the grounds of CSP Folsom to the Old Guard
Foundation, Inc., or a similar and related nonprofit (lessee),
for the construction and operation of a peace officers
memorial and museum facility (facility).
2)Requires DGS to lease the specified property for the facility
in "as is" condition; for a maximum term of 50 years; and for
consideration of $1 per year and a one-time payment of $50 to
be paid at the beginning of the lease.
3)States that the operation of the museum facility must include,
but not be limited to, museums, conference rooms, classrooms,
exhibits, workshops for artifact preservation and repair,
secure storage, parking, a gift shop, and a cafeteria, snack
bar, or dining area.
4)Makes the lessee fully responsible for the maintenance and
operation of the facility in a way that does not conflict with
the operation of adjacent correctional facilities and exempts
the state from any liability for facility construction,
operation, improvement or maintenance.
5)Requires the lessee to begin construction of the facility
within 48 months, and to have substantially completed
construction within 72 months, of the beginning of the lease.
6)Instructs DGS, with the approval of CDCR, to provide any
necessary utility easements and specifies that utility
connections constructed by the lessee for the facility must be
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separate from existing utilities used by the state and
installed at the expense of the lessee.
7)Requires the terms of the lease to include specified
circumstances under which the leased property and all
improvements to the leased property revert to the state and
authorizes DGS under these circumstances to charge the lessee
for any costs incurred in the demolition of the facility and
restoration of the property to its pre-leased condition.
8)Clarifies that the construction and operation of the facility
are solely the responsibility of the lessee and shall not be
considered public works.
9)Requires the lessee to pay all administrative costs incurred
by DGS associated with the lease and any required easements.
EXISTING LAW :
1)Authorizes DGS to develop and review an inventory of property
surplus to the needs of the state in portions or their
entirety, and allows DGS, subject to legislative approval, to
sell, lease, exchange, or transfer various specified
properties for current market value, or upon terms and
conditions as DGS determines are in the best interests of the
state.
2)Authorizes DGS, with the consent of the state agency
concerned, to lease for a maximum period of five years, any
real or personal property belonging to the state, if the
Director of DGS deems the lease is not expressly prohibited by
law and is in the state's best interest.
3)Requires legislative authority for leases of state land for
periods exceeding five years and provides exemptions to the
five year limit for specified parcels.
FISCAL EFFECT : Unknown
COMMENTS : This bill seeks to require DGS, with the consent of
CDCR, to enter into a 50-year lease with the Old Guard
Foundation, Inc., or a related nonprofit, for a proposed
memorial and museum site on the grounds of CSP Folsom.
According to the sponsor of this bill, the Old Guard Foundation,
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Inc., the current museum space near the entrance to CSP Folsom
is "too small of a location to adequately highlight the history
of corrections, house important artifacts, honor the men and
women who serve in the corrections profession, and dispel the
negative stereotypes surrounding the corrections system."
The author states that this bill is intended to facilitate an
arrangement with DGS and CDCR to provide for an expansion of the
current museum to a larger site on prison grounds. According to
the author, the expanded facility would be built and operated
with private donations and CDCR would have no role in its
construction or operation once a lease is approved. CDCR
reports that it has been in collaborative discussions with the
sponsor regarding an expansion of the existing museum.
Current law restricts the length for which the state may lease
its own real property to private or other entities to no more
than five years. Any lease for longer than five years requires
specific statutory authority. Various individual statutes have
been enacted over the years to allow the state to lease specific
parcels of state property in excess of five years. However,
these leases generally require the state to review the terms and
conditions every five years to ensure the state's interests are
protected.
As previously noted, any lease beyond the statutorily mandated
five year limit requires specific legislative approval. Under
this bill, DGS and CDCR would enter into a 50-year lease with
the sponsor for an annual lease payment of $1 and a one-time
upfront fee of $50. According to DGS, the lease for the current
museum space was written for five years and the current rent is
calculated at a rate of 22 cents per square foot for 1150 square
feet of space, for a total of $253 per month plus utilities.
This bill also establishes various terms and conditions
governing the proposed lease, including the construction
schedule of the facility and circumstances under which the
leased property would revert to the state. According to DGS,
these kinds of details would normally be negotiated through the
competitive bidding process.
While DGS indicates that it does have leases with nonprofit
organizations, the exact number is unknown because their
database does not track that information. DGS reports that,
typically, these leases are for below market value.
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AUTHOR'S AMENDMENTS : To ensure consistency with current law that
provides exemptions to the five year lease limit for other
specified parcels, the author will be accepting amendments in
committee to do the following:
1)Require the lease to be, at a minimum, equivalent to the lease
arrangement for the current museum space,
2)Subject the lease to periodic review every five years by the
Director of DGS, and,
3)Require the lessee to submit a report to DGS as part of the
review.
PRIOR LEGISLATION :
1)AB 2588 (Butler) of 2012 would have authorized DGS to sell,
exchange, or lease, for fair market value, as DGS determines
are in the state's best interests, a specified parcel of land
north of the Los Angeles County Courthouse to create sports
fields. This bill was held in the Assembly Business,
Professions, and Consumer Protection Committee.
2)AB 600 (Hall) of 2009 would have authorized DGS to lease state
owned property, the Compton Armory, to the City of Compton at
fair market value for a maximum five-year period, with an
option to extend the lease to 25 years. The Governor vetoed
this bill with the following message: "This bill is
unnecessary. Current law already authorizes DGS to enter into
long-term leases on State-owned land that may have some
potential future use to the program needs."
3)AB 434 (Waters), Chapter 146, Statutes of 1989, authorizes
DGS, with the consent of CDCR, to enter into a 50-year lease
with the City of Folsom for a specified parcel within the
grounds of CSP Folsom for a water reservoir. Requires the
lease to be for fair market value and periodically reviewed
every five years by the Director of DGS.
REGISTERED SUPPORT / OPPOSITION :
Support
Old Guard Foundation, Inc. (sponsor)
AB 1503
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Opposition
None on file.
Analysis Prepared by : Cassie Royce / A. & A.R. / (916)
319-3600