Amended in Assembly June 11, 2014

Amended in Senate March 12, 2014

Senate Bill No. 944

Introduced by Senator Torres

February 5, 2014

An act to amend Sections 11011.1 and 11011.15 of the Government Code, relating to state government.

LEGISLATIVE COUNSEL’S DIGEST

SB 944, as amended, 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. Existing law declares that the provision of decent housing for all Californians is a state goal of the highest priority and that priority be given to the disposal of surplus state real property to housing for persons and families of low or moderate income.

This bill would add to those goals the creation of sustainable jobs and state the intent that priority be given to the disposal of surplus state real property to the development of projects that create sustainable employment opportunities of benefit to the area and region where the property is begin delete located. end delete begin insert located when the property is suitable for those purposes. The bill would require the department, when disposing of surplus state real property, to give the same priority to a local agency that intends to use the property for the development of projects that create sustainable employment opportunities of benefit to the area and region where the property is located, as to a local agency that intends to use the property for affordable housing projects. end insert begin delete This end delete

begin insert The end insert bill would, notwithstanding any other law, prohibit a local government from begin insert prezoning, zoning, or end insert rezoning state real property within its jurisdiction that is declared surplus or identified as unused, underutilized, partially utilized, or excess, unless the Department of General Services requests that the property be rezoned or approves the rezoning. begin delete This end delete begin insert The end insert bill would also make technical, nonsubstantive changes to these provisions.

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.  

Section 11011.1 of the Government Code is
amended to read:

11011.1.  

(a) Notwithstanding any other 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 is 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 and the creation of
sustainable jobs are state goals 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, and to the development of
projects that create sustainable employment opportunities of benefit
to the area and region where the property is begin delete located. end delete begin insert located when
the property is suitable for those purposes. end insert

(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, before 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, begin insert development of projects that create sustainable
employment opportunities of benefit to the area and region where
the property is located, end insert or development of local government-owned
facilities. If 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 begin delete housing. end delete begin insert housing or development of projects that create
sustainable employment opportunities of benefit to the area and
region where the property is located. end insert 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 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 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.

SEC. 2.  

Section 11011.15 of the Government Code is amended
to read:

11011.15.  

(a) The Department of General Services shall
maintain a complete and accurate statewide inventory of all real
property held by the state and categorize that inventory by agency
and geographical location. The inventory shall include all
information furnished by agencies pursuant to subdivision (b) and
the University of California pursuant to Section 11011.17. The
inventory shall be updated annually.

(b) Each agency shall furnish the department, in the format
specified by the department, a record of each parcel of real property
that it possesses. Each agency shall update its real property
holdings through December 31 of the previous year, reflecting any
changes, by July 1 of each year. This record shall include, but is
not limited to, all of the following information:

(1) The location of the property within the state and the county,
the size of the property, including its acreage, and any other
relevant property data which the department deems necessary.
This latter requirement shall be uniformly applied to all agencies.

(2) The date of the acquisition of the real property, if available.

(3) The manner in which the property was acquired and the
purchase price, if available.

(4) A detailed description of the current uses of the property,
including specific programmatic uses, and whether the property
is fully utilized, partially utilized, or excess, with regard to either
an existing or ongoing program of the agency. The agency shall
also provide a detailed description of every lease, license, or other
agreement relating to the use of the property.

(5) Any projected future uses of the property during the next
five years, as identified pursuant to the five-year infrastructure
plan or the agency’s master plan. If the property is not included
in the five-year infrastructure plan or the agency’s master plan, or
is identified as partially utilized or excess pursuant to paragraph
(4), the agency shall provide detailed information regarding the
need to continue ownership or management of the property. In the
case of land held for state park use, for which the projected use
would exceed a five-year period, the projected use and estimated
date of construction or use shall be furnished.

(6) A concise description of each major structure located on the
property.

(7) The estimated value of real property declared surplus by the
agency and real property where the agency has not identified a
current or potential use.

(c) The department shall prepare a separate report and shall
update the report annually of all properties declared surplus or
properties with no identified current or projected use. The report
shall be made available upon request.

(d) The head of each agency shall also certify, on or before July
1 annually, that the agency has accurately and completely reported
all property information required by this section and that it has
identified any excess property pursuant to Section 11011. The
Department of General Services shall maintain the certification
notices in a conspicuous place on its Internet Web site.

(e) Notwithstanding any other law, a local government that has
state real property within its jurisdiction that is declared surplus
or identified as unused, underutilized, partially utilized, or excess
pursuant to this section, or Section 11011, shall not begin insert prezone, zone,
or end insert rezone the property, unless the Department of General Services
requests that the property be rezoned or approves the rezoning of
the property.