BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  AB 2726
                                                                  Page  1

          Date of Hearing:   April 30, 2014

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                  Mike Gatto, Chair

                    AB 2726 (Daly) - As Amended:  March 28, 2014 

          Policy Committee:                               
          AccountabilityVote:9-3

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:               

           SUMMARY  

          This bill streamlines the University of California's process for  
          disposing of real property. Specifically, this bill:

          1)Increases, from $500,000 to $1 million, the minimum estimated  
            value of real property UC is required to sell through  
            competitive bidding.

          2)Requires UC to accept the bid that, in addition to offering  
            the best combination of price and terms to UC, as currently  
            required, also takes into account the bidder's qualifications,  
            which may include factors such as the bidder's ability to  
            complete the transaction or secure development entitlements.

          3)Adds properties acquired through foreclosure, deed in lieu of  
            foreclosure, and transactions involving property accepted in  
            settlement of a defaulted mortgage or other legal settlement,  
            to the list of real property dispositions currently exempt  
            from competitive bidding.

           FISCAL EFFECT  

          Minor administrative cost savings to UC from streamlining the  
          disposition of properties valued at between $500,000 and $1  
          million and by allowing the university to take into account  
          bidder qualifications when selecting the best bid. UC indicates  
          that, because many properties under $1 million are single family  
          residences, these changes will facilitate sales to the broader  
          range of potential buyers and increase the likelihood that sales  
          can proceed more expeditiously to a qualified buyer. UC expects  
          this to result in additional net revenues of up to several  








                                                                  AB 2726
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          hundred thousand dollars annually. Finally, exempting property  
          acquired by UC through foreclosure from competitive bidding will  
          also expedite the disposition of such properties.

           COMMENTS  

           Purpose  . UC is sponsoring this bill to reduce administrative  
          costs associated with the sale or other disposition of UC-owned  
          property.  UC contends this additional flexibility will allow  
          the university to seek the highest and best use of properties,  
          many of which are single family homes that have been donated to  
          UC.

           Analysis Prepared by  :    Chuck Nicol / APPR. / (916) 319-2081