Senate Bill No. 944

Introduced by Senator Torres

February 5, 2014

An act to amend Section 11011.1 of the Government Code, relating to state government.

LEGISLATIVE COUNSEL’S DIGEST

SB 944, as introduced, Torres. Surplus state property.

Existing law requires the Department of General Services to dispose of surplus state real property in a specified manner, including, but not limited to, prescribing the priority of disposition of the property before the department offers it for sale to private entities or individuals.

This bill would make technical, nonsubstantive changes to these provisions.

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

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

SECTION 1.  

Section 11011.1 of the Government Code is
amended to read:

11011.1.  

(a) Notwithstanding any other begin delete provision of end delete law,
except Article 8.5 (commencing with Section 54235) of Chapter
5 of Part 1 of Division 2 of Title 5, the disposal of surplus state
real property by the Department of General Services begin delete shall be end delete begin insert is end insert
subject to the requirements of this section. For purposes of this
section, “surplus state real property” means real property declared
surplus by the Legislature and directed to be disposed of by the
Department of General Services, including any real property
previously declared surplus by the Legislature but not yet disposed
of by the Department of General Services prior to the enactment
of this section.

(b) (1) The department may dispose of surplus state real
property by sale, lease, exchange, a sale combined with an
exchange, or other manner of disposition of property, as authorized
by the Legislature, upon any terms and conditions and subject to
any reservations and exceptions the department deems to be in the
best interests of the state.

(2) (A) The Legislature finds and declares that the provision
of decent housing for all Californians is a state goal of the highest
priority. The disposal of surplus state real property is a direct and
substantial public purpose of statewide concern and will serve an
important public purpose, including mitigating the environmental
effects of state activities. Therefore, it is the intent of the
Legislature that priority be given, as specified in this section, to
the disposal of surplus state real property to housing for persons
and families of low or moderate income, where land is suitable
for housing and there is a need for housing in the community.

(B) Surplus state real property that has been determined by the
department not to be needed by any state agency shall be offered
to any local agency, as defined in subdivision (a) of Section 54221,
and then to nonprofit affordable housing sponsors, begin delete prior to end delete begin insert before end insert
being offered for sale to private entities or individuals. As used in
this subdivision, “nonprofit affordable housing sponsor” means
any of the following:

(i) A nonprofit corporation incorporated pursuant to Division
2 (commencing with Section 5000) of Title 1 of the Corporations
Code.

(ii) A cooperative housing corporation which is a stock
cooperative, as defined by Section 11003.2 of the Business and
Professions Code.

(iii) A limited-dividend housing corporation.

(C) The department, subject to this section, shall maintain a list
of surplus state real property in a conspicuous place on its Internet
Web site. The department shall provide local agencies and, upon
request, members of the public, with electronic notification of
updates to the list of properties.

(D) To be considered as a potential priority buyer of the surplus
state real property, a local agency or nonprofit affordable housing
sponsor shall notify the department of its interest in the surplus
state real property within 90 days of the department posting on its
Internet Web site the notice of the availability of the surplus state
real property. The local agency or nonprofit affordable housing
sponsor shall demonstrate, to the satisfaction of the department,
that the surplus state real property, or portion of that surplus state
real property, is to be used by the local agency or nonprofit
affordable housing sponsor for open space, public parks, affordable
housing projects, or development of local government-owned
facilities. When more than one local agency expresses an interest
in the surplus state real property, priority shall be given to the local
agency that intends to use the surplus state real property for
affordable housing. If no agreement or transfer of title occurs, the
priority shall next be given to the local agency that intends to use
the surplus state real property for open space, public parks, or
development of local government-owned facilities. The sales
agreement shall be executed by the local agency or nonprofit
affordable housing sponsor within 60 days after the director
determines the local agency or nonprofit affordable housing
sponsor is to receive the surplus state real property. The sale of
the surplus state real property to a local agency or nonprofit
affordable housing sponsor pursuant to this section shall be
completed, and title transferred, within 60 days of the date the
department executes the sales agreement, or, if required by law,
no later than 60 days after the State Public Works Board has
authorized the sale. If the sale of a surplus state real property to a
local agency or nonprofit affordable housing sponsor is not
completed within the timeframe specified in this subparagraph,
then the department shall proceed with the process for disposal to
other private entities or individuals.

(c) (1) If more than one local agency desires the surplus state
real property for use as an open space, a public park, or the
development of a local government-owned facility, the department
shall transfer the surplus state real property to the local agency
offering the highest price above fair market value. If more than
one local agency desires the surplus state real property for use as
an affordable housing project, the department shall transfer the
surplus state real property to the local agency offering the greatest
number of affordable housing units. If more than one nonprofit
affordable housing sponsor desires the surplus state real property
for use as an affordable housing project, the department shall
transfer the surplus state real property to the nonprofit affordable
housing sponsor offering the greatest number of affordable housing
units.

(2) If no local agency or nonprofit affordable housing sponsor
is interested, or an agreement, as provided above, is not reached,
then the disposal of the surplus state real property to private entities
or individuals shall be pursuant to a public bidding process
designed to obtain the highest most certain return for the state from
a responsible bidder, and any transaction based on such a bidding
process shall be deemed to be the fair market value for the purposes
of the reporting requirements pursuant to subdivision (d).

(3) Notwithstanding any other begin delete provision of end delete law, the department
may sell surplus state real property, or a portion of surplus state
real property, to a local agency, or to a nonprofit affordable housing
sponsor if no local agency is interested in the surplus state real
property, for affordable housing projects at a sales price less than
fair market value if the department determines that such a discount
will enable the provision of housing for persons and families of
low or moderate income. Nothing shall preclude a local agency
that purchases the surplus state real property for affordable housing
from reconveying the surplus state real property to a nonprofit
affordable housing sponsor for development of affordable housing.
Transfer of title to the surplus state real property or lease of the
surplus state real property for affordable housing shall be
conditioned upon continued use of the surplus state real property
as housing for persons and families of low and moderate income
for at least 40 years and the department shall record a regulatory
agreement that imposes affordability covenants, conditions, and
restrictions on the surplus state real property. The regulatory
agreement shall be a first priority lien on the surplus state real
property and last for a period of at least 40 years, and if another
state agency is lending funds for a project, a combined regulatory
agreement shall be utilized. Notwithstanding any other provision
of law, the regulatory agreement shall not be subordinated to any
other lien or encumbrance except for any federal loan program the
statutes or regulations of which require a first priority lien for that
federal loan.

(4) Notwithstanding any other begin delete provision of end delete law, the Director of
General Services may transfer surplus state real property to a local
agency for less than fair market value if the local agency uses the
surplus state real property for parks or open-space purposes. The
deed or other instrument of transfer shall provide that the surplus
state real property would revert to the state if the use changed to
a use other than parks or open-space purposes during the period
of 25 years after the transfer date. For the purpose of this paragraph,
“open-space purposes” means the use of land for public recreation,
enjoyment of scenic beauty, or conservation or use of natural
resources.

(d) Thirty days prior to executing a transaction for a sale, lease,
exchange, a sale combined with an exchange, or other manner of
disposition of the surplus state real property for less than fair
market value or for affordable housing, or as authorized by the
Legislature, the Director of General Services shall report to the
chairpersons of the fiscal committees of the Legislature all of the
following:

(1) The financial terms of the transaction.

(2) A comparison of fair market value for the surplus state real
property and the terms listed in paragraph (1).

(3) The basis for agreeing to terms and conditions other than
fair market value.

(e) As to surplus state real property sold or exchanged pursuant
to this section, the director shall except and reserve to the state all
mineral deposits, as described in Section 6407 of the Public
Resources Code, together with the right to prospect for, mine, and
remove the deposits. If, however, the director determines that there
is little or no potential for mineral deposits, the reservation may
be without surface right of entry above a depth of 500 feet, or the
rights to prospect for, mine, and remove the deposits shall be
limited to those areas of the surplus state real property conveyed
that the director determines to be reasonably necessary for the
removal of the deposits.

(f) The failure to comply with this section, except for subdivision
(d), shall not invalidate the transfer or conveyance of surplus state
real property to a purchaser for value.

(g) For purposes of this section, fair market value is established
by an appraisal and economic evaluation conducted by the
department or approved by the department.