Amended in Assembly May 23, 2014

Amended in Assembly March 28, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 1656

Introduced by Assembly Member Dickinson

February 11, 2014

An act to add Section 14669.16 to the Government Code, relating to the Department of General Services.

LEGISLATIVE COUNSEL’S DIGEST

AB 1656, as amended, Dickinson. Department of General Services: State Board of Equalization headquarters.

Existing law creates the Department of General Services to provide centralized services, including, but not limited to, planning, acquisition, construction, and maintenance of state buildings and property, purchasing, printing, architectural services, administrative hearings, and accounting services. Existing law provides that the Department of General Services is under the control of an executive officer known as the Director of General Services.

This bill would authorize the Director of General Services, begin delete with the consent of end delete begin insert in consultation with end insert the State Board of Equalization, to enter into one or more agreements for the planning, design, construction, and acquisition of facilities, including any improvements, betterments, and related facilities, and to enter into a begin delete lease, lease-purchase, end delete begin insert lease-purchase end insert or a lease with an option to purchase, for the relocation and consolidation of the State Board of Equalization, according to specific conditions. begin delete This end delete begin insert The bill would require the Department of General Services to be reimbursed for the cost of entering into these agreements or leases in an amount not to exceed $3,000,000 from a loan of funds in the Architecture Revolving Fund, as specified. The end insert bill also would authorize the State Board of Equalization to relocate and consolidate its offices without obligation to pay rent on the existing state-owned or state-leased facilities after they are vacated.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

The Legislature hereby finds and declares all of
the following:

(a) Located in the City of Sacramento, the state owns
approximately 2.50 acres of real property on one city block
bounded by N Street on the north, 5th Street on the east, O Street
on the south, and 4th Street on the west, that is the State Board of
Equalization’s current state-owned headquarters. The state-owned
facility is a 24-story building that contains approximately 616,000
gross square feet, with 463,000 begin delete useable end delete begin insert usable end insert square feet of office
space. The ground floor contains a full-service cafeteria and a child
care center. The state-owned facility also includes a three-story
parking structure with 711 spaces.

(b) The State Board of Equalization collects taxes and fees that
provide approximately 35 percent of the annual revenue for state
government and essential funding for cities, counties, and special
districts. In the 2012-13 fiscal year, the State Board of
Equalization-administered tax and fee programs produced $56
billion for education, public safety, transportation, housing, health
services, social services, and natural resource management.

(c) The current State Board of Equalization headquarters
building lacks sufficient space to meet the State Board of
Equalization’s existing and future consolidated space needs.

(d) The state has expended approximately $65 million in
taxpayer dollars over the last decade to make repairs to the State
Board of Equalization building. The State plans to spend another
$30 million or more to address new issues with the building.

(e) Consolidating the various State Board of Equalization
headquarters and annexes into one location will greatly facilitate
and improve the efficiency of the administrative operations of the
agency.

(f) Allowing the State Board of Equalization to move out of the
real property described in subdivision (a) permanently and to
consolidate its operations into one location will accommodate
future growth as part of its revenue-administrative mission.

SEC. 2.  

Section 14669.16 is added to the Government Code,
to read:

begin delete

14669.16.  

(a) For purposes of this section, the “Sacramento
property” means the 2.50 acres of real property, owned by the state
and located in the City of Sacramento, on one city block bounded
by N Street on the north, 5th Street on the east, O Street on the
south, and 4th Street on the west, that is the State Board of
Equalization’s current state-owned headquarters.

(b)

end delete

begin insert

begin insert 14669.16. end insert   

end insert

begin insert (a end insert begin insert ) end insert  (1) Notwithstanding any other law, the Director
of General Services, begin delete with the consent of end delete begin insert in consultation with end insert the
State Board of Equalization, may enter into one or more agreements
for the planning, design, construction, and acquisition of facilities,
including any improvements, betterments, and related facilities,
for the relocation of the State Board of Equalization in the
Sacramento region. The Director of General Services may enter
into a begin delete lease, lease-purchase, end delete begin insert lease-purchase end insert or a lease with an
option to purchase to provide usable office and related space in
the Sacramento region in order to consolidate various departments
of the State Board of Equalization into a single location.

begin delete

(2) The Department of General Services shall undertake and
complete a site selection for the purposes of relocating and
consolidating the State Board of Equalization’s headquarters and
annexes in the Sacramento region no later than June 30, 2015.

end delete begin delete

(3)

end delete

begin insert (2) end insert  The begin delete department end delete begin insert Department of General Services end insert shall solicit
and accept proposals for acquiring or constructing consolidated
facilities for the State Board of Equalization on the basis of the
best value. For purposes of this paragraph, “best value” means a
value determined by objective criteria, including, but not limited
to, price, features, functions, life-cycle costs, experience, and other
criteria deemed appropriate by the department.

begin delete

(4)

end delete

begin insert ( end insert begin insert 3) end insert  The begin delete department end delete begin insert Department of General Services end insert shall
develop the terms and conditions of the agreements or leases
authorized by paragraph (1) no later than December 31, 2015.

begin delete

(5) In connection with the selection and acquisition of a lease,
lease-purchase, or a lease with an option to purchase, the
department may solicit and accept proposals for the sale, exchange,
lease, rehabilitation, or any combination thereof, of all or a portion
of the Sacramento property.

end delete begin delete

(c)

end delete

begin insert (b) end insert  The begin delete department end delete begin insert Department of General Services end insert shall
provide notice of the terms and conditions of the proposed
agreements or leases to the chairs of the fiscal committees of the
Legislature and the Joint Legislative Budget Committee, or their
designees, at least 45 days prior to executing the agreement for a
begin delete lease, lease-purchase, end delete begin insert lease-purchase end insert or lease with an option to
purchase real property authorized by this section. The department
may proceed with the agreement or lease 45 days following the
date the department gave notice to the above-mentioned chairs.

begin delete

(d) The department shall determine whether it is in the best
interest of the state to sell, to lease to other tenants, or to exchange
the Sacramento property. The department shall report to the chairs
of the fiscal committees of the Legislature and the Joint Legislative
Budget Committee, or their designees, on the most cost-effective
option for the state.

(e) (1) Upon the Director of General Services making the
determination specified in subdivision (d) that the Sacramento
property should be either sold, exchanged, or leased to another
tenant, the Director of General Services may sell, exchange, lease,
or any combination thereof, all or a portion of the Sacramento
property. Upon sale, exchange, or lease of the Sacramento property,
and subject to the requirements of Section 9 of Article III of the
California Constitution, the Director of General Services shall
make an early payoff of the total outstanding lease revenue bonds
on the Sacramento property, including accrued interest and any
other obligations associated with the Sacramento property, using
the revenues resulting from any sale, exchange, or lease.

(2) In the event that the Director of General Services sells the
Sacramento property and the sale constitutes a sale of surplus state
property for purposes of Section 9 of Article III of the California
Constitution, the “proceeds from the sale” for purposes of that
section shall be the revenues from the sale in excess of the amount
necessary to satisfy the total outstanding bonds on the Sacramento
property, as required by paragraph (1).

end delete begin insert

(c) The Department of General Services shall be reimbursed
for the department’s costs pursuant to subdivision (a), in an amount
not to exceed three million dollars ($3,000,000), from a loan of
funds that are continuously appropriated pursuant to Section 14957
and deposited into the Architecture Revolving Fund for repairs to
the State Board of Equalization’s headquarters building located
at 450 N Street in the City of Sacramento. Any amounts loaned
pursuant to this subdivision shall be repaid from the State Board
of Equalization’s operating funds within five years from the date
those funds were borrowed. Interest charges shall be waived
pursuant to subdivision (e) of Section 16314.

end insert begin delete

(f)

end delete

begin insert (d) end insert  Notwithstanding subdivision (c) of Section 14682, the State
Board of Equalization is authorized to relocate its offices from
existing state-owned or state-leased facilities for the purpose of
consolidating the State Board of Equalization headquarters and
annexes into a single location without any obligation to pay rent
on those facilities after vacating such premises.