BILL NUMBER: ABX4 22	CHAPTERED
	BILL TEXT

	CHAPTER  20
	FILED WITH SECRETARY OF STATE  JULY 28, 2009
	APPROVED BY GOVERNOR  JULY 28, 2009
	PASSED THE SENATE  JULY 23, 2009
	PASSED THE ASSEMBLY  JULY 23, 2009
	AMENDED IN SENATE  JULY 23, 2009

INTRODUCED BY   Assembly Member Evans

                        JULY 2, 2009

   An act to add Sections 3884.1 and 3884.2 to the Food and
Agricultural Code, and to amend Sections 11011.13 and 11011.15 of,
and to add Sections 11011.2 and 14670.13 to, the Government Code,
relating to state property, making an appropriation therefor, and
declaring the urgency thereof, to take effect immediately.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 22, Evans. State property: Orange County Fair: inventory:
leases: sale and leaseback.
   (1) Existing law provides that the state is divided into
agricultural districts within the boundaries of which district
agricultural associations may be formed. Existing law provides that
District 32 is the County of Orange.
   This bill would create District 32a, which would consist of all of
that real property that is a portion of District 32 that is commonly
known as the Orange County Fair located in the City of Costa Mesa,
and would prescribe certain matters applicable to officers of
District 32 and District 32a. The bill would, among other things, (A)
authorize the Department of General Services to sell all or any
portion of the real property that composes District 32a pursuant to a
public bidding process, as provided; (B) prohibit District 32a from
entering into any contract, lease, or other agreement affecting the
use or operation of that real property for a period that exceeds 3
months; (C) require those contracts, leases, or agreements to contain
a certain cancellation notice; (D) authorize the department to be
reimbursed for reasonable costs or expenses; (E) authorize bonds
involving District 32a property to be paid from the proceeds of any
sale or lease of District 32a property; (F) require the Director of
General Services to report specified information to the chairs of the
fiscal committees of the Legislature 30 days prior to executing a
transaction for the sale of the real property; (G) require the
director to include a reservation to the state of mineral rights in
the sale of the real property; (H) require the net sale proceeds to
be deposited into the District 32a Disposition Fund, which the bill
would create in the State Treasury; and (I) require the department to
report annually to the Legislature on the status of the sale of the
real property.
   This bill would require District 32a to be abolished and all funds
in the District 32a Disposition Fund to be transferred to the
General Fund upon sale of all property that composes District 32a.
   (2) Existing law requires the Department of General Services to
offer for sale land that is declared excess or is declared surplus by
the Legislature, and that is not needed by any state agency, to
local agencies and private entities and individuals, subject to
specified conditions. Existing law also authorizes the Director of
General Services, with the consent of the state agency involved, to
let for a period not to exceed 5 years, any real or personal property
that belongs to the state, subject to specified conditions. Any
money received in connection with these leases is required to be
deposited in the Property Acquisition Law Money Account and be
available to the Department of General Services upon appropriation by
the Legislature.
   This bill would authorize the Department of General Services to
lease specified real property without certain existing restrictions,
if the Director of General Services determines that the real property
is of no immediate need to the state but may have a potential future
use. This bill would require the Department of General Services to
annually report to the Legislature on certain leases entered into
under the authority of these provisions. The bill would also specify
procedures for the reimbursement of costs incurred pursuant to
entering into a lease under these provisions and require the
Department of Finance to deposit, into the General Fund, the net
proceeds of a lease after the reimbursement of those costs.
   This bill would authorize the Department of General Services to
enter into a sale or long-term lease of certain listed properties,
including entering into an option to repurchase that property or
building. The bill would authorize the Department of General Services
to sell real property or buildings if the proceeds of the sale would
be used to defense or otherwise retire lease revenue bonds only if
the issuer and trustee for the bonds approves the sales transaction.
The bill would require the Director of General Services to make an
annual report, on or before June 30 of each year, to the fiscal
committees of the Legislature regarding the prior year's sales and
leases pursuant to these provisions and at least 30 days prior to
entering into any sale or lease pursuant to these provisions. If the
proceeds of the sale would be used to defease or retire the bonds,
those proceeds would be appropriated to the Department of General
Services for that purpose.
   The bill would specify procedures for the reimbursement of costs
incurred pursuant to these provisions. The Department of Finance
would be required to deposit, in the General Fund, the net proceeds
of a sale or lease after the reimbursement of certain costs.
   (3) Existing law requires each agency, as defined, to furnish the
Department of General Services with a record of each parcel of real
property it possesses and to update its real property holdings,
reflecting any changes, by July 1 of each year, including specified
information regarding project uses during the next 3 years.
   This bill would define terms for purposes of this requirement and
would require the update of the real property holdings to include
additional information regarding specific programmatic uses, whether
the property is fully utilized, partially utilized, or excess with
regard to an existing or ongoing program of the agency, agreements
relating to the use of the property, and projected future uses during
the next 5 years, as identified pursuant to the 5-year
infrastructure plan, the agency's master plan, or as specified. The
bill would require the head of each agency to make a specified annual
certification and would require the Department of General Services
to maintain the certification notices on its Internet Web site.
   (4) The California Environmental Quality Act (CEQA) requires a
lead agency to prepare, or cause to be prepared, and certify the
completion of, an environmental impact report on a project that it
proposes to carry out or approve that may have a significant effect
on the environment or to adopt a negative declaration if it finds
that the project will not have that effect. CEQA generally requires a
lead agency to prepare a mitigated negative declaration for a
project that may have a significant effect on the environment if
revisions in the project would avoid or mitigate that effect and
there is no substantial evidence that the project, as revised, would
have a significant effect on the environment. CEQA also provides some
exemptions from its requirements for specified projects.
   This bill would exempt the sale, lease, or repurchase of the
Orange County Fair or specified state real property or buildings
subject to the bill that is made on an "as is" basis from designated
provisions of CEQA. The bill would also exempt from those provisions
of CEQA the execution of the purchase and sale agreement or the
exchange agreement for this property or these buildings if the
disposition is not made on an "as is" basis and the close of escrow
is contingent on a specified requirement and compliance with CEQA.
   (5) This bill would state the Legislature's finding and
declaration that specified provisions apply to every transaction
undertaken pursuant to the authority of this act.
   (6) The bill would authorize the Director of Finance to provide a
loan from the General Fund in the amount of not more than $10,000,000
to augment Item 1760-001-0002 of Section 2 of the Budget Act of 2009
and to adjust the amounts appropriated in Item 1760-001-0002 of
Section 2 of the Budget Act of 2009, for the purposes of supporting
the management of the state's real property assets to implement the
bill, thereby making an appropriation.
   (7) The California Constitution authorizes the Governor to declare
a fiscal emergency and to call the Legislature into special session
for that purpose. The Governor issued a proclamation declaring a
fiscal emergency, and calling a special session for this purpose, on
July 1, 2009.
   This bill would state that it addresses the fiscal emergency
declared by the Governor by proclamation issued on July 1, 2009,
pursuant to the California Constitution.
   (8) This bill would declare that it is to take effect immediately
as an urgency statute.
   Appropriation: yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 3884.1 is added to the Food and Agricultural
Code, to read:
   3884.1.  There is hereby created District 32a, which consists of
all of that real property that is a portion of District 32 that is
commonly known as the Orange County Fair located in the City of Costa
Mesa. Notwithstanding any other law, any officer of District 32a may
also be an officer of District 32 and shall be a resident of
District 32. All otherwise applicable ethical duties, including those
in Section 1090 of the Government Code, subdivision (a) of Section
8920 of the Government Code, and the Political Reform Act of 1974
(Title 9 (commencing with Section 81000) of the Government Code),
shall apply to the officers of both District 32 and District 32a, and
shall apply in regard to the transactions contemplated by Section
3884.2.
  SEC. 2.  Section 3884.2 is added to the Food and Agricultural Code,
to read:
   3884.2.  (a) The District 32a Disposition Fund is hereby created
in the State Treasury.
   (b) The Department of General Services may sell all or any portion
of the real property that composes District 32a. District 32a shall
not enter into any contract, lease, or other agreement affecting the
use or operation of the real property for a period that exceeds three
months, and all of these contracts, leases, or other agreements
shall contain a provision that they may be canceled upon a 30-day
notice from the Department of General Services. The Department of
General Services shall be reimbursed for any reasonable cost or
expense incurred for the transactions described in this section.
Additionally, to the extent bonds issued by the State Public Works
Board or other entity involve the property to be sold pursuant to
this section, all issuer and trustee related costs associated with
the review of any proposed sale, together with the costs related to
the defeasance or retirement of any bonds, which may include the cost
of nationally recognized bond counsel, shall be paid from the
proceeds of any sale or lease authorized by this section. The net
proceeds from the sale shall be deposited into the District 32a
Disposition Fund.
   (c) The sale of the real property authorized by this section 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 property. A notice of this
bidding process shall be posted by the Department of General Services
on its Internet Web site for at least 30 days prior to the sale of
the real property. The provisions of Section 11011.1 of the
Government Code are not applicable to the sale of real property
authorized under this section.
   (d) Thirty days prior to executing a transaction for a sale of
real property authorized by this section, the Director of General
Services shall report to the chairs 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 real property and
the terms listed in paragraph (1).
   (3) Any basis for agreeing to terms and conditions other than fair
market value.
   (e) As to the real property sold pursuant to this section, the
Director of General Services shall except and reserve to the state
all mineral deposits, as defined in Section 6407 of the Public
Resources Code, together with the right to prospect for, mine, and
remove the deposits. If, however, the Director of General Services
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 real property
conveyed that the director determines to be reasonably necessary for
the removal of the deposits.
   (f) The Department of General Services shall report to the
Legislature on or before June 30 of each year on the status of the
sale of real property authorized by this section.
   (g) Upon the sale of all property that composes District 32a,
District 32a shall be abolished and all funds in the District 32a
Disposition Fund shall be transferred to the General Fund.
   (h) (1) The disposition of state real property or buildings
specified in subdivision (b) that are made on an "as is" basis shall
be exempt from Chapter 3 (commencing with Section 21100) to Chapter 6
(commencing with Section 21165), inclusive, of Division 13 of the
Public Resources Code. Upon title to the parcel vesting in the
purchaser or transferee of the property, the purchaser or transferee
shall be subject to any local governmental land use entitlement
approval requirements and to Chapter 3 (commencing with Section
21100) to Chapter 6 (commencing with Section 21165), inclusive, of
Division 13 of the Public Resources Code.
   (2) If the disposition of state real property or buildings
specified in subdivision (b), is not made on an "as is" basis and
close of escrow is contingent on the satisfaction of a local
governmental land use entitlement approval requirement or compliance
by the local government with Chapter 3 (commencing with Section
21100) to Chapter 6 (commencing with Section 21165), inclusive, of
Division 13 of the Public Resources Code, the execution of the
purchase and sale agreement or of the exchange agreement by all
parties to the agreement shall be exempt from Chapter 3 (commencing
with Section 21100) to Chapter 6 (commencing with Section 21165),
inclusive, of Division 13 of the Public Resources Code.
   (3) For the purposes of this subdivision, "disposition" means the
sale, lease, or repurchase of state property or buildings specified
in subdivision (b).
   (i) The disposition of real property or buildings, or both,
pursuant to this section does not constitute a sale or other
disposition of state surplus property within the meaning of Section 9
of Article III of the California Constitution and shall not be
subject to subdivision (g) of Section 11011 of the Government Code.
  SEC. 3.  Section 11011.2 is added to the Government Code, to read:
   11011.2.  (a) (1) Notwithstanding any other law, including, but
not limited to, Sections 11011 and 14670, except as provided in this
section, the Department of General Services may lease real property
under the jurisdiction of a state agency, department, or district
agricultural association, if the Director of General Services
determines that the real property is of no immediate need to the
state but may have some potential future use to the program needs of
the agency, department, or district agricultural association.
   (2) The Director of General Services may not lease any of the
following real property pursuant to this section:
   (A) Tax-deeded land or lands under the jurisdiction of the State
Lands Commission.
   (B) Land that has escheated to the state or that has been
distributed to the state by court decree in estates of deceased
persons.
   (C) Lands under the jurisdiction of the State Coastal Conservancy
or another state conservancy.
   (D) Lands under the jurisdiction of the Department of
Transportation or the California State University System, or land
owned by the Regents of the University of California.
   (E) Lands under the jurisdiction of the Department of Parks and
Recreation.
   (F) Lands under the jurisdiction of the Department of Fish and
Game.
   (3) A lease entered into pursuant to this section shall be set at
the amount of the lease's fair market value, as determined by the
Director of General Services. The Director of General Services may
determine the length of term or a use of the lease, and specify any
other terms and conditions which are determined to be in the best
interest of the state.
   (b) The Department of General Services may enter into a long-term
lease of real property pursuant to this section that has outstanding
lease revenue bonds and for which the real property cannot be
disencumbered from the bonds, only if the issuer and trustee for the
bonds approves the lease transaction, and this approval takes into
consideration, among other things, that the proposed lease
transaction does not breach a covenant or obligation of the issuer or
trustee.
   (c) (1) All issuer- and trustee-related costs for reviewing a
proposed lease transaction pursuant to this section, and all other
costs of the lease transaction related to the defeasance or other
retirement of any bonds, including the cost of nationally recognized
bond counsel, shall be paid from the proceeds of that lease.
   (2) The Department of General Services shall be reimbursed for any
reasonable costs or expenses incurred in conducting a transaction
pursuant to this section.
   (3) Notwithstanding subdivision (g) of Section 11011, the
Department of General Services shall deposit, into the General Fund,
the net proceeds of a lease entered into pursuant to this section,
after deducting the amount of the reimbursement of costs incurred
pursuant to this section or the reimbursement of adjustments to the
General Fund loan made pursuant to Section 8 of the act adding this
Section from the lease.
   (d) The Department of General Services shall transmit a report to
each house of the Legislature on or before June 30, 2011, and on or
before June 30 each year thereafter, listing every new lease that
exceeds a period of five years entered into under the authority of
this section and the following information regarding each listed
lease:
   (1) Lease payments.
   (2) Length of the lease.
   (3) Identification of the leasing parties.
   (4) Identification of the leased property.
   (5) Any other information the Director of General Services
determines should be included in the report to adequately describe
the material provisions of the lease.
  SEC. 4.  Section 11011.13 of the Government Code is amended to
read:
   11011.13.  For purposes of Section 11011.15, the following
definitions shall apply:
   (a) "Agency" means any state agency, department, division, bureau,
board, commission, district agricultural association, and the
California State University. "Agency" does not mean the Legislature,
the University of California, or the Department of Transportation.
   (b) "Fully utilized" means that 100 percent of the property is
being appropriately utilized by a program of an agency every business
day of the year.
   (c) "Partially utilized" means one or more of the following:
   (1) Less than 100 percent of the property is appropriately
utilized by a program of an agency.
   (2) The property is not used every business day of the year by an
agency.
   (3) The property is used by other nonstate governmental entities
or private parties.
   (d) "Excess land" means property that is no longer needed for
either an existing or ongoing state program or a function of an
agency.
  SEC. 5.  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.
  SEC. 6.  Section 14670.13 is added to the Government Code, to read:

   14670.13.  (a) Notwithstanding any other law, but subject to the
conditions specified in subdivision (c), the Department of General
Services may enter into a sale or long-term lease of the properties
specified in subdivision (b). A sale or long-term lease entered into
pursuant to this section may include an option for the state to
repurchase that property or building, or both. The Director of
General Services may determine the other terms and conditions that
shall be imposed upon that sale or lease, for the best interest of
the state. Any sale of property pursuant to this section shall be for
no less than fair market value.
   (b) The Department of General Services may enter into a sale or
long-term lease pursuant to this section for any, or all, of the
following real properties or buildings, or both:
   (1) The Attorney General Building located at 1300 I Street in the
City of Sacramento.
   (2) The California Emergency Management Agency Building located at
3650 Schreiver Avenue in the City of Rancho Cordova.
   (3) The Capitol Area East End Complex, located in the City of
Sacramento, at all of the following locations:
   (A) Block 225 located at 1430 N Street in the City of Sacramento.
   (B) Block 171 located at 1501 Capitol Avenue in the City of
Sacramento.
   (C) Block 172 located at 1500 Capitol Avenue in the City of
Sacramento.
   (D) Block 173 located at 1615 Capitol Avenue in the City of
Sacramento.
   (E) Block 174 located at 1616 Capitol Avenue in the City of
Sacramento.
   (F) The parking facility located at 1214 17th Street in the City
of Sacramento.
   (4) The Elihu M. Harris Building located at 1515 Clay Street in
the City of Oakland.
   (5) The Franchise Tax Board Complex located at 9645 Butterfield
Way in the City of Sacramento.
   (6) The San Francisco Civic Center, also known as the Earl Warren
/ Hiram Johnson Building, at both of the following locations:
   (A) 350 McAllister Street in the City and County of San Francisco.

   (B) 455 Golden Gate Avenue in the City and County of San
Francisco.
   (7) The New Junipero Serra State Building located at 320 West 4th
Street in the City of Los Angeles.
   (8) The Department of Justice Building located at 4949 Broadway in
the City of Sacramento.
   (9) The Public Utilities Commission Building, also known as the
Governor Edmund G. "Pat" Brown Building, located at 505 Van Ness
Avenue in the City and County of San Francisco.
   (10) The Judge Joseph A. Rattigan Building located at 50 D Street
in the City of Santa Rosa.
   (11) The Ronald Reagan State Building located at 300 South Spring
Street in the City of Los Angeles.
   (c) (1) The Legislature hereby finds and declares it may be
infeasible to sell or lease the real property or buildings listed in
subdivision (b), if the real property or buildings have outstanding
lease revenue bonds due to bond covenants, market disclosure issues,
and federal tax regulations and the bonds cannot be defeased or
otherwise retired.
   (2) If the proceeds of a sale subject to this section will be used
to defease or otherwise retire lease revenue bonds on real property
or a building listed in subdivision (b), the proceeds in an amount
necessary to defease or retire the bonds are hereby appropriated to
the Department of General Services, and the Department of General
Services may sell that building or real property pursuant to this
section, including a fee simple sale or the sale of a lesser property
interest, such as a long-term lease of the real property, only if
the issuer and trustee for the bonds approves the sale transaction
and this approval takes into consideration, among other things, that
the proposed sale transaction will not breach any covenant or
obligation of the issuer or trustee.
   (d) The disposition of the real properties or buildings, or both,
pursuant to this section does not constitute a sale or other
disposition of surplus state property within the meaning of Section 9
of Article III of the California Constitution and shall not be
subject to subdivision (g) of Section 11011.
   (e) Thirty days prior to executing a transaction for a sale or
lease of any of the real property or buildings listed in subdivision
(b), the Director of General Services shall report to the chairs of
the fiscal committees of the Legislature the terms and conditions of
the transaction, including, but not limited to, the financial terms.
   (f) Commencing in 2010, on or before June 30 of each year
following the enactment of this section, the Director of General
Services shall report the status of any completed or pending sales
pursuant to this section to the fiscal committees of the Legislature.

   (g) (1) The Department of General Services shall be reimbursed for
any reasonable costs or expenses incurred pursuant to this section.
   (2) All issuer- and trustee-related costs of reviewing any
proposed sale transaction, and all costs related to the defeasance or
other retirement of any bonds, including the cost of nationally
recognized bond counsel, shall be paid from the proceeds of a sale or
lease conducted pursuant to this section.
   (3) The Department of General Services shall deposit in the
General Fund the net proceeds from the sale or long-term lease of the
real properties or buildings leases, or both, made pursuant to this
section, after deducting the amount of reimbursement for costs
incurred pursuant to this section or the reimbursement of adjustments
to the General Fund loan.
   (h) (1) The disposition of state real property or buildings
specified in subdivision (b) that are made on an "as is" basis shall
be exempt from Chapter 3 (commencing with Section 21100) to Chapter 6
(commencing with Section 21165), inclusive, of Division 13 of the
Public Resources Code. Upon title to the parcel vesting in the
purchaser or transferee of the property, the purchaser or transferee
shall be subject to any local governmental land use entitlement
approval requirements and to Chapter 3 (commencing with Section
21100) to Chapter 6 (commencing with Section 21165), inclusive, of
Division 13 of the Public Resources Code.
   (2) If the disposition of state real property or buildings
specified in subdivision (b) is not made on an "as is" basis and
close of escrow is contingent on the satisfaction of a local
governmental land use entitlement approval requirement or compliance
by the local government with Chapter 3 (commencing with Section
21100) to Chapter 6 (commencing with Section 21165), inclusive, of
Division 13 of the Public Resources Code, the execution of the
purchase and sale agreement or of the exchange agreement by all
parties to the agreement shall be exempt from Chapter 3 (commencing
with Section 21100) to Chapter 6 (commencing with Section 21165),
inclusive, of Division 13 of the Public Resources Code.
   (3) For the purposes of this subdivision, "disposition" means the
sale, lease or repurchase of state property or buildings specified in
subdivision (b).
  SEC. 7.  The Legislature finds and declares that Article 4
(commencing with Section 1090) of Chapter 1 of Division 4 of Title 1
of the Government Code applies to every transaction undertaken
pursuant to the authority of this act.
  SEC. 8.  The Director of Finance may provide a loan from the
General Fund in the amount of not more than ten million dollars
($10,000,000) to augment Item 1760-001-0002 of Section 2 of the
Budget Act of 2009 and may adjust the amounts appropriated in Item
1760-001-0002 of Section 2 of the Budget Act of 2009, for the
purposes of supporting the management of the state's real property
assets to accommodate any increase in workload or other costs to the
Department of General Services in implementing this act.
  SEC. 9.  This act addresses the fiscal emergency declared by the
Governor by proclamation on July 1, 2009, pursuant to subdivision (f)
of Section 10 of Article IV of the California Constitution.
  SEC. 10.  This act is an urgency statute necessary for the
immediate preservation of the public peace, health, or safety within
the meaning of Article IV of the Constitution and shall go into
immediate effect. The facts constituting the necessity are:
   In order to provide for the speedy resolution of the state's
fiscal crisis, it is necessary that this act take effect immediately.