Existing law authorizes the Judicial Council to dispose of surplus court facilities pursuant to a specified process that requires, among other things, the Judicial Council to consult with the county where the court facility is located, offer the facility to the county at a fair market value before offering it to another state or local government agency, and deposit the funds received from a sale into the State Court Facilities Construction Fund. The California Constitution requires the proceeds from the sale of surplus state property to be deposited into the Special Fund for Economic Uncertainties, a continuously appropriated fund.

This bill would, notwithstanding any other law, specifically authorize the Judicial Council to sell various properties, including, among others, the Gordon D. Schaber Sacramento County Courthouse, if the sale complies with certain requirements. The bill would require the net proceeds from the sale of the courthouse to be deposited into the State Court Facilities Construction Fund. The bill would state that the disposition of this property is not a sale or other disposition of surplus state property within the meaning of the California Constitution.

This bill would declare that it is to take effect immediately as an urgency statute.

SENATE COMMITTEE ON

Senator Anthony Portantino, Chair

2023 - 2024 Regular Session

AB 959 (McCarty) - Courts

Bill Summary:

AB 959, an urgency measure, would authorize the Judicial Council (JCC) to sell certain outdated or closed court facilities in Plumas, Sacramento, and Stanislaus Counties, as provided, and requires the net proceeds from the sale to be deposited into the State Court Facilities Construction Fund.

Fiscal Impact:

Foregone revenues, likely in the tens of millions to the Special Fund for Economic Uncertainties. Additional revenues in an equal amount to the State Court Facilities Construction Fund. See Staff Comments for additional detail.

Background:

The judicial branch currently manages around 450 facilities across all 58 counties. Its facility program is responsible for various activities including maintaining these facilities, managing leases, and constructing new courthouses to replace outdated facilities. State law authorizes Judicial Council to construct trial court facilities and establishes a special fund, the State Court Facilities Construction Fund (SCFCF), to support the judicial branch’s court facility‑related projects.

The SCFCF has rapidly declined in the past few years, going form a balance of nearly $300 million in 2021-22 to facing insolvency later this fiscal year. Given the insolvency of the SCFCF, the 2021‑22 budget shifted support for the construction of any future courthouses to the General Fund. Accordingly, the 2021‑22 and 2022‑23 budgets included General Fund support to start the construction or renovation of nearly a dozen of the highest ranked immediate need projects identified in the judicial branch’s 2019 assessment of facilities.

This bill would authorize the judicial council to sell several outdated or closed court facilities, and would require the net proceeds to be deposited into the SCFCF.

Proposed Law:

• Authorizes the Judicial Council to sell, notwithstanding any other law, specified property in a fair market value transaction and upon the terms and conditions and subject to the reservations the Judicial Council deems in the best interests of the state, as specified.
• Specifically identifies the property authorized to be sold as the Plumas/Sierra Regional Courthouse, the Gordon D. Schaber Sacramento County Courthouse, the Modesto Main Courthouse, and the Ceres Superior Court.
• Requires the net proceeds from the sale of the property to be deposited into the State Court Facilities Construction Fund.
• Specifies that the disposition of the property authorized in this bill does not constitute a sale or other disposition of surplus state property.

Related Legislation:

AB 143 (Committee on Budget, Ch. 79, Stats. 2021), among other things, authorized the Judicial Council to sell specified court properties in Los Angeles, Fresno, and Kings Counties at fair market value and upon the terms and conditions and subject to the reservations the Judicial Council deems in the best interests of the state, specified that the net proceeds from the sale of the property are to be deposited into the State Court Facilities Construction Fund, and exempted the sale of these properties from the statues governing surplus lands.

Staff Comments:

This Committee’s rules dictate that if a bill will have an impact on any special fund of more than $150,000 in a given fiscal year then the bill shall be referred to the Suspense File upon a majority vote of the members present and voting. “Fiscal impact” includes loss of revenue, notwithstanding any additional offsetting revenue. Under Article III, Section 9 of the California Constitution, the proceeds of sales of surplus state properties are to be deposited into the Special Fund for Economic Uncertainties. This bill would specifically state that these properties are not to be considered surplus properties, and instead would deposit the proceeds of the sales into the State Court Facilities Construction Fund. Revenues from the sales are estimated to be in the tens of millions, less the costs of title, escrow, and other fees associated with the sale. To the extent these properties would otherwise be considered surplus and sold pursuant to Article III, Section 9 of the Constitution, this bill would have a fiscal impact to the Special Fund for Economic Uncertainties in excess of $150,000. It therefore meets the criteria for referral to the Committee’s Suspense File.

-- END --

SENATE JUDICIARY COMMITTEE

Senator Thomas Umberg, Chair

2023-2024 Regular Session

Bill No: AB 959 (Author:McCarty)

Version: February 14, 2023

Hearing Date: June 20, 2023

Fiscal: Yes

Urgency: Yes

Consultant: AM

SUBJECT

Courts

DIGEST

This bill authorizes the Judicial Council of California (Judicial Council) to sell certain outdated or closed court facilities in Plumas, Sacramento, and Stanislaus Counties, as provided, and requires the net proceeds from the sale to be deposited into the State Court Facilities Construction Fund.

EXECUTIVE SUMMARY

California overhauled its court system through a series of reforms over 20 years ago resulting in the Judicial Council having responsibility, authority, and control over trial court facilities as an owner. Existing law provides certain procedures for selling surplus state property and requires proceeds from the sale of surplus state property to be used to pay the principal and interest on bonds issued pursuant to the Economic Recovery Bond Act. In 2021, the Legislature authorized the Judicial Council to sell specified court properties in Los Angeles, Fresno, and Kings Counties at fair market value and upon the terms and conditions and subject to the reservations the Judicial Council deems in the best interests of the state, specified that the net proceeds from the sale of the property are to be deposited into the State Court Facilities Construction Fund, and exempted the sale of these properties from the statues governing surplus lands. (AB 143 (Committee on Budget, Ch. 79, Stats. 2021.)) This bill seeks to do the same thing for certain specified properties in Plumas, Sacramento, and Stanislaus Counties.

The bill is sponsored by the Judicial Council. There is no known opposition.

PROPOSED CHANGES TO THE LAW

Existing law:

1. Provides that the Judicial Council, as the policymaking body for the judicial branch, has the following responsibilities and authorities with regard to court facilities:
   1. Full responsibility, jurisdiction, control, and authority as an owner would have over trial court facilities, the title of which is held by the state, including, but not limited to, the acquisition and development of facilities;
   2. The full range of policymaking authority over trial court facilities, including, but not limited to, planning, construction, acquisition, and operation, to the extent not expressly otherwise limited by law; and
   3. Dispose of surplus court facilities, as specified. (Gov. Code § 70391.)
2. Requires the Judicial Council to consider the following factors regarding the potential new or planned use of a court facility prior to selling or transferring the facility:
   1. if the use is compatible with the use of other adjacent public buildings;
   2. if the use unreasonably departs from the historic or local character of the surrounding property or local community;
   3. if the use has a negative impact on the local community;
   4. if the use interferes with other governmental agencies that use or are located in or adjacent to the building containing the court facility; and
   5. if the use is of sufficient benefit to outweigh the public good in maintaining it as a court facility or building. (Gov. Code § 70391(c)(3).)
3. Permits the Judicial Council to sell specified court properties in Los Angeles, Fresno, and Kings Counties at fair market value and upon the terms and conditions and subject to the reservations the Judicial Council deems in the best interests of the state, if all of the following requirements are satisfied:
   1. the sales comply with the provisions of 2), above;
   2. the Judicial Council consults with the county where the property is located concerning the sale of the property; and
   3. the Judicial Council offers the county in which the property is located the right to purchase the property at fair market value before otherwise offering the property for sale. (Gov. Code § 70395 – 70397.)
4. Requires the Judicial Council, in consultation with the superior court of each county and the county government, to enter into agreements regarding the transfer of responsibility for court facilities from that county to the Judicial Council. (Gov. Code §70321.)
5. Requires that proceeds from the sale of surplus state property are to be used to pay the principal and interest on bonds issued pursuant to the Economic Recovery Bond Act, and upon the payment of those bonds to be deposited into the Special Fund for Economic Uncertainties, as specified. (Cal. Const. art. III, sec. 9.)

This bill:

1. Authorizes the Judicial Council to sell, notwithstanding any other law, specified property in a fair market value transaction and upon the terms and conditions and subject to the reservations the Judicial Council deems in the best interests of the state, if all of the following requirements are satisfied:
   1. the sale complies with Section 70391, as applicable;
   2. the Judicial Council consults with the county in which the property is located concerning the sale of the property; and
   3. the Judicial Council offers the county in which the property is located the right to purchase the property in a fair market value transaction before otherwise offering the property for sale.
2. Specifies that the property authorized to be sold in 1), above, means:
   1. The Plumas/Sierra Regional Courthouse located at 600 South Gulling Street, City of Portola, County of Plumas, Assessor Parcel Number 126-050-046.
   2. The Gordon D. Schaber Sacramento County Courthouse located at 720 Ninth Street, City of Sacramento, County of Sacramento, Assessor Parcel Number 002-0145-026.
   3. The Modesto Main Courthouse located at 800 11th Street, and the Hall of Records, located at 1100 I Street, City of Modesto, County of Stanislaus, collectively a portion of Assessor Parcel Number 105-025-001.
   4. The Ceres Superior Court located at 2744 Second Street, City of Ceres, County of Stanislaus, Assessor Parcel Number 127-016-014.
3. Requires the net proceeds from the sale of the property to be deposited into the State Court Facilities Construction Fund.

COMMENTS

1. Stated need for the bill

The author writes:

The Judicial Council currently owns two vacant properties and upon completion of two new courthouses, will have two further vacant properties. To sell these properties and avoid the liabilities and costs associated with maintaining vacant properties, the council must obtain statutory authority to sell them.

1. The sale of state court facilities

Existing law generally requires state agencies to report to Department of General Services all property that can be deemed surplus. (Gov. Code § 11011.) The Department then submits a list of properties to the Legislature to be officially declared surplus by legislation and requests authorization to dispose of the land. Upon approval by the Legislature, the Department must determine whether the land could first be used by any other state agency, local agency, or nonprofit affordable housing organization. The property can only be sold to the public once the Department determines that the property cannot be utilized by one of the aforementioned entities. Proposition 60A enacted Section 9 of Article III of the California Constitution in 2004, and required that all surplus property be disposed of by the Department of General Services and that all sale proceeds be used to pay the principal and interest on bonds issued pursuant to the Economic Recovery Bond Act.

California overhauled its court system through a series of reforms over 20 years ago resulting in the existing superior court system where the Judicial Council has the responsibility, authority, and control over trial court facilities as an owner. Prior to the overhaul of the trial court system, individual counties managed California’s trial courts and owned many of the trial court facilities. As a result of SB 1732 (Escutia, Ch. 1082, Stats. 2002), the Judicial Council took ownership of county court facilities. In 2021, the Legislature authorized the Judicial Council to sell specified court properties in Los Angeles, Fresno, and Kings Counties at fair market value and upon the terms and conditions and subject to the reservations the Judicial Council deems in the best interests of the state. (AB 143 (Committee on Budget, Ch. 79, Stats. 2021.)) AB 143 also specified that the net proceeds from the sale of the property are to be deposited into the State Court Facilities Construction Fund. The Legislature specifically exempted the sale of these properties from the statutes governing surplus lands.

This bill seeks to enact similar provisions for certain outdated or closed court facilities in Plumas, Sacramento, and Stanislaus Counties. According to the Judicial Council:

The Ceres Superior Court was permanently closed in March, 2009 and all former operations will be moving to the new courthouse in Modesto. The Modesto location will permanently close upon commencing occupancy in a new courthouse in December, 2024. The Schaber Courthouse in Sacramento will permanently close upon commencing occupancy in the new courthouse in February, 2024. The Plumas/Sierra Regional Courthouse closed permanently in November, 2014. In accordance with existing law and AB 959 language, the council has worked with the associated counties and have collectively agreed on the need to sell the identified properties.

By depositing the net proceeds into the State Court Facilities Construction Fund, it will ensure that all sale proceeds will be used to fund construction on new court facilities.

1. Statements in support

The Judicial Council of California, sponsor of the bill, writes:

The Judicial Council is committed to ensuring all Californians will have equal access to courts and be served in an efficient and effective manner. This bill meets that mandate by ensuring the Judicial Council does not need to expend unnecessary funding, staff time, and mitigation measures for potential safety issues that are commonly associated with vacant buildings. By allowing the council to sell these buildings at fair market value and in alignment with existing law, state funding is appropriately expended where it is needed most—going toward maintaining our existing facilities that are actively in use by court users and by allowing net proceeds to go toward building projects for new courthouses and renovations to existing courthouses to improve the court experience for the millions of Californians who access the courts every year.

SUPPORT

Judicial Council of California

OPPOSITION

None known

RELATED LEGISLATION

Pending Legislation: None known.

Prior Legislation:

AB 143 (Committee on Budget, Ch. 79, Stats. 2021), among other things, authorized the Judicial Council to sell specified court properties in Los Angeles, Fresno, and Kings Counties at fair market value and upon the terms and conditions and subject to the reservations the Judicial Council deems in the best interests of the state, specified that the net proceeds from the sale of the property are to be deposited into the State Court Facilities Construction Fund, and exempted the sale of these properties from the statues governing surplus lands.

PRIOR VOTES

Assembly Floor (Ayes 80, Noes 0)

Assembly Appropriations Committee (Ayes 15, Noes 0)

Assembly Judiciary Committee (Ayes 11, Noes 0)

**************

ASSEMBLY THIRD READING

ATR Bill Id:AB 959

Author:(McCarty)

As Introduced Ver:February 14, 2023

2/3 vote. Urgency

SUMMARY

Authorizes the Judicial Council to sell specified court facilities in Plumas, Sacramento, and Stanislaus Counties.

Major Provisions

1. Defines, for the purpose of this bill, "property" to mean each of the following:
   1. The Plumas/Sierra Regional Courthouse located at 600 South Gulling Street, City of Portola, County of Plumas, Assessor Parcel Number 126-050-046;
   2. The Gordon D. Schaber Sacramento County Courthouse located at 720 Ninth Street, City of Sacramento, County of Sacramento, Assessor Parcel Number 002-0145-026;
   3. The Modesto Main Courthouse located at 800 11th Street, and the Hall of Records, located at 1100 I Street, City of Modesto, County of Stanislaus, collectively a portion of Assessor Parcel Number 105-025-001; and
   4. The Ceres Superior Court located at 2744 Second Street, City of Ceres, County of Stanislaus, Assessor Parcel Number 127-016-014.
2. Provides that, notwithstanding any other law, the Judicial Council may sell the property, in a fair market value transaction and upon the terms and conditions and subject to the reservations the Judicial Council deems in the best interests of the state, if all of the following requirements are satisfied:
   1. The sale complies with the requirements of existing law regarding community impacts of selling court property;
   2. The Judicial Council consults with the county in which the property is located concerning the sale of the property; and
   3. The Judicial Council offers the county in which the property is located the right to purchase the property in a fair market value transaction before otherwise offering the property for sale.
3. Provides that the proceeds of the court facility sales authorized pursuant to 2), above, are to be deposited into the State Court Facilities Construction Fund.
4. Clarifies that the disposition of the property authorized by this bill does not constitute a sale or other disposition of surplus state property within the meaning of the California Constitution.
5. Adopts an urgency clause.

COMMENTS

As a result of age, budget constraints, and population growth patterns, California courts currently maintain several closed court houses, in addition to maintaining several aging court facilities that are slated to be replaced with new facilities in the near future. This measure authorizes the Judicial Council to sell four courthouses in Plumas, Sacramento, and Stanislaus Counties.

Existing law requires the state to adhere to a very specific process for selling surplus property unless the Legislature provides specific-authority for the sale of government property. As a part of the consolidation of California's courts in 2002, recognizing that county governments previously owned many of California's courthouses, the Judicial Council was required to offer the county in which the property is located a chance to repurchase the surplus court facility at the fair market value. However, in 2004, Proposition 60A enacted Section 9 of Article III of the California Constitution and required that all surplus property be disposed of by the Department of General Services and that all sale proceeds be provided to the State's the Special Fund of Economic Uncertainties, or any successor fund.

Existing law generally requires state agencies to report to the Department of General Services all property that can be deemed surplus. The Department then submits a list of properties to the Legislature to be officially declared surplus by legislation. Upon approval by the Legislature, the Department must determine whether the land could first be used by any other state agency, local agency, or nonprofit affordable housing organization. The property can only be sold to the public once the Department determines that the property cannot be utilized by one of the aforementioned entities. Given the numerous steps required in order for the Department of General Services to sell surplus property, not only can compliance with the existing law be time consuming but the law does not generate revenue for the individually impacted state agency.

This bill clarifies that courthouse sales are permitted to bypass the traditional surplus property sales process. Recognizing the special needs of the courts, in prior years the Legislature has enacted specialized bills providing for the sale of surplus courthouse property. This bill would do the same for four court facilities in Plumas, Sacramento, and Stanislaus Counties. Like its predecessors, this measure requires the Judicial Council to consider the impact of courthouse sales to the surrounding communities. Accordingly, this measure requires the Judicial Council to consider community impacts, consult with the local governments impacted by the sale, and offer the property to the county government before placing it on the open market. This measure also directs the proceeds of the property sales to the judicial branch.

This bill appropriately directs the proceeds of courthouse sales to the State Court Facilities Construction Fund. As discussed above, existing law generally directs all proceeds from surplus state property to the State's Special Fund of Economic Uncertainties. This measure like several prior courthouse sale measures, redirects the proceeds from the sale of the four courthouses authorized by this measure to the State Court Facilities Construction Fund. Although not typical, such a redirection of funds appears prudent given that the State Court Facilities Construction Fund provides the necessary support for building new courthouses. By taking cost pressures off the General Fund for courthouse construction, this measure seems to appropriately spend the proceeds of selling surplus court property.

According to the Author

Existing law requires the Judicial Council to have statutory authority in order to sell any property owned by the council. The council currently owns two vacant properties and plans to vacate two further properties upon completion of new courthouses. When the council is unable to sell unused property, it incurs maintenance and upkeep costs along with any potential issues associated with vacant buildings.

The Judicial Council currently owns two vacant properties and upon completion of two new courthouses, will have two further vacant properties. To sell these properties and avoid the liabilities and costs associated with maintaining vacant properties, the council must obtain statutory authority to sell them.

Arguments in Support

This measure is sponsored by the Judicial Council of California. In support of this bill, the Council writes:

Per existing law, every sale of state-owned real property must be specifically authorized by statute. Previous sales of Council property are authorized under Government Code Section 70391, et. al. The language in AB 959 aligns with the existing statutes and specifies the net proceeds are to be deposited into the council's State Court Facilities Construction Fund.

The Judicial Council is committed to ensuring all Californians will have equal access to courts and be served in an efficient and effective manner. This bill meets that mandate by ensuring the Judicial Council does not need to expend unnecessary funding, staff time, and mitigation measures for potential safety issues that are commonly associated with vacant buildings. By allowing the council to sell these buildings at fair market value and in alignment with existing law, state funding is appropriately expended where it is needed most—going toward maintaining our existing facilities that are actively in use by court users and by allowing net proceeds to go toward building projects for new courthouses and renovations to existing courthouses to improve the court experience for the millions of Californians who access the courts every year.

Arguments in Opposition

No opposition on file.

FISCAL COMMENTS

According to the Assembly Appropriations Committee, revenues (State Court Facilities Construction Fund) estimated at approximately $20 million, less any costs for the Judicial Council to manage the sale of the specified properties. The Judicial Council reports that transaction costs are expected to be limited to property appraisals, title, and escrow fees.

VOTES

ASM JUDICIARY: 11-0-0

YES: Maienschein, Essayli, Connolly, Dixon, Haney, Kalra, Pacheco, Papan, Reyes, Robert Rivas, Sanchez

ASM APPROPRIATIONS: 15-0-1

YES: Holden, Megan Dahle, Bryan, Calderon, Wendy Carrillo, Dixon, Mike Fong, Hart, Lowenthal, Mathis, Papan, Pellerin, Sanchez, Weber, Ortega

ABS, ABST OR NV: Robert Rivas

UPDATED

VERSION: February 14, 2023

CONSULTANT: Nicholas Liedtke / JUD. / (916) 319-2334 FN: 0000448

Date of Hearing: April 26, 2023

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Chris Holden, Chair

ABPCA Bill Id:AB 959

Author:(McCarty) – As Introduced Ver:February 14, 2023

Urgency: Yes State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill authorizes the Judicial Council to sell four specified court facilities in Plumas, Sacramento, and Stanislaus counties, provided that each transaction fulfills certain requirements and the Judicial Council consults with the county in which each property is located.

FISCAL EFFECT:

Revenues (State Court Facilities Construction Fund) estimated at approximately $20 million, less any costs for the Judicial Council to manage the sale of the specified properties. The Judicial Council reports that transaction costs are expected to be limited to property appraisals, title, and escrow fees.

COMMENTS:

1. Author’s Statement. According to the author:

Existing law requires the Judicial Council to have statutory authority in order to sell any property owned by the council. The council currently owns two vacant properties and plans to vacate two further properties upon completion of new courthouses. When the council is unable to sell unused property, it incurs maintenance and upkeep costs along with any potential issues associated with vacant buildings.

The Judicial Council currently owns two vacant properties and upon completion of two new courthouses, will have two further vacant properties. To sell these properties and avoid the liabilities and costs associated with maintaining vacant properties, the council must obtain statutory authority to sell them.

1. Sale of Court Property. Generally, state entities must complete a very specific process for selling surplus property unless the Legislature provides specific authority allowing a sale to bypass the standard process. This bill provides that authority for four specified courthouse properties, allowing the Judicial Council to sell the properties if certain conditions are met, and directing the proceeds from the sale back into the judicial branch. The Legislature has passed similar authorization for past court sales, including as part of the 2021-22 fiscal year budget package (see AB 143 (Committee on Budget), Chapter 79, Statutes of 2021).

Analysis Prepared by: Annika Carlson / APPR. / (916) 319-2081

Date of Hearing: March 21, 2023

ASSEMBLY COMMITTEE ON JUDICIARY

Brian Maienschein, Chair

ABPCA Bill Id:AB 959

Author:(McCarty) – As Introduced Ver:February 14, 2023

PROPOSED CONSENT

SUBJECT: COURTHOUSE SALES

KEY ISSUE: should the judicial council be permitted to sell four surplus court facilities in Plumas, Sacramento, and Stanislaus counties?

SYNOPSIS

This non-controversial and straight-forward measure authorizes the Judicial Council to sell outdated or closed court facilities in Plumas, Sacramento, and Stanislaus Counties. Similar to prior court sale measures approved by this Committee, the bill requires the Judicial Council to provide the county government the initial right to purchase the buildings and to seek to ensure that the building sales generally conform to local land use rules and public preferences for the use of the property. This measure also directs the proceeds of the buildings to the State Court Facilities Construction Fund, which enables the funding to be used to help construct new court facilities, thus lessening cost pressures on the General Fund.

This measure, like its predecessors, is sponsored by the Judicial Council of California who highlight the unique nature of court property and the benefits of using the proceeds from the sales of old courthouses to construct new facilities. As currently in print, this bill has no known opposition.

SUMMARY: Authorizes the Judicial Council to sell specified court facilities in Plumas, Sacramento, and Stanislaus Counties. Specifically, this bill:

1. Defines, for the purpose of the bill, “property” to mean each of the following:
   1. The Plumas/Sierra Regional Courthouse located at 600 South Gulling Street, City of Portola, County of Plumas, Assessor Parcel Number 126-050-046;
   2. The Gordon D. Schaber Sacramento County Courthouse located at 720 Ninth Street, City of Sacramento, County of Sacramento, Assessor Parcel Number 002-0145-026;
   3. The Modesto Main Courthouse located at 800 11th Street, and the Hall of Records, located at 1100 I Street, City of Modesto, County of Stanislaus, collectively a portion of Assessor Parcel Number 105-025-001; and
   4. The Ceres Superior Court located at 2744 Second Street, City of Ceres, County of Stanislaus, Assessor Parcel Number 127-016-014.
2. Provides that, notwithstanding any other law, the Judicial Council may sell the property, in a fair market value transaction and upon the terms and conditions and subject to the reservations the Judicial Council deems in the best interests of the state, if all of the following requirements are satisfied:
   1. The sale complies with the requirements of existing law regarding community impacts of selling court property;
   2. The Judicial Council consults with the county in which the property is located concerning the sale of the property; and
   3. The Judicial Council offers the county in which the property is located the right to purchase the property in a fair market value transaction before otherwise offering the property for sale.
3. Provides that the proceeds of the court facility sales authorized pursuant to 2) are to be deposited into the State Court Facilities Construction Fund.
4. Clarifies that the disposition of the property authorized by this bill does not constitute a sale or other disposition of surplus state property within the meaning of the California Constitution.
5. Adopts an urgency clause.

EXISTING LAW:

1. Tasks the Judicial Council, as the policymaking body for the judicial branch, with the following responsibilities and authorities with regard to court facilities:
   1. Exercise full responsibility, jurisdiction, control, and authority as an owner would have over trial court facilities the title of which is held by the state, including, but not limited to, the acquisition and development of facilities;
   2. Exercise the full range of policymaking authority over trial court facilities, including, but not limited to, planning, construction, acquisition, and operation, as specified; and
   3. Dispose of surplus court facilities, as specified. (Government Code Section 70391.)
2. Requires, prior to selling or transferring a court facility, the Judicial Council to consider, regarding the potential new or planned use of the facility, the following factors:
   1. If the use is compatible with the use of other adjacent public buildings;
   2. If the use unreasonably departs from the historic or local character of the surrounding property or local community;
   3. If the use has a negative impact on the local community;
   4. If the use interferes with other governmental agencies that use or are located in or adjacent to the building containing the court facility; and
   5. If the use is of sufficient benefit to outweigh the public good in maintaining it as a court facility or building. (Government Code Section 70391 (c)(3).)
3. Permits the Judicial Council to sell specified court properties in Los Angeles, Fresno, and Kings Counties at fair market value and upon the terms and conditions and subject to the reservations the Judicial Council deems in the best interests of the state, if all of the following requirements are satisfied:
   1. The sales comply with the provisions of 2), above;
   2. The Judicial Council consults with the county where the property is located concerning the sale of the property; and
   3. The Judicial Council offers the county in which the property is located the right to purchase the property at fair market value before otherwise offering the property for sale. (Government Code Sections 70395 – 70397.)
4. Requires the Judicial Council, in consultation with the superior court of each county and the county government, to enter into agreements regarding the transfer of responsibility for court facilities from that county to the Judicial Council. (Government Code Section 70321.)
5. Requires that proceeds from the sale of surplus state property are to be used to pay the principal and interest on bonds issued pursuant to the Economic Recovery Bond Act and upon the payment of those bonds to be deposited into the Special Fund for Economic Uncertainties, as specified. (Cal. Const. art. III, sec. 9.)

FISCAL EFFECT: As currently in print this bill is keyed fiscal.

COMMENTS: As a result of age, budget constraints, and population growth patterns, California courts currently maintain several closed court houses, in addition to maintaining several aging court facilities that are slated to be replaced with new facilities in the near future. This measure, like a series of bill previously heard by this Committee, would authorize the Judicial Council to sell four courthouses in Plumas, Sacramento, and Stanislaus Counties. In support of this straight-forward measure the author writes:

Existing law requires the Judicial Council to have statutory authority in order to sell any property owned by the council. The council currently owns two vacant properties and plans to vacate two further properties upon completion of new courthouses. When the council is unable to sell unused property, it incurs maintenance and upkeep costs along with any potential issues associated with vacant buildings.

The Judicial Council currently owns two vacant properties and upon completion of two new courthouses, will have two further vacant properties. To sell these properties and avoid the liabilities and costs associated with maintaining vacant properties, the council must obtain statutory authority to sell them.

Existing law requires the state to adhere to a very specific process for selling surplus property unless the Legislature provides specific-authority for the sale of government property. As a part of the consolidation of California’s courts in 2002, recognizing that county governments previously owned many of California’s courthouses, the Judicial Council was required to offer the county in which the property is located a chance to repurchase the surplus court facility at the fair market value. However, in 2004, Proposition 60A enacted Section 9 of Article III of the California Constitution and required that all surplus property be disposed of by the Department of General Services and that all sale proceeds be provided to the State’s the Special Fund of Economic Uncertainties, or any successor fund.

Existing law generally requires state agencies to report to Department of General Services all property that can be deemed surplus. The Department then submits a list of properties to the Legislature to be officially declared surplus by legislation. Upon approval by the Legislature, the Department must determine whether the land could first be used by any other state agency, local agency, or nonprofit affordable housing organization. The property can only be sold to the public once the Department determines that the property cannot be utilized by one of the aforementioned entities. Given the numerous steps required in order for the Department of General Services to sell surplus property, not only can compliance with the existing law be time consuming but the law does not generate revenue for the individually impacted state agency.

This bill clarifies that courthouse sales are permitted to bypass the traditional surplus property sales process. Recognizing the special needs of the courts, in prior years the Legislature has enacted specialized bills providing for the sale of surplus courthouse property. This bill would do the same for four court facilities in Plumas, Sacramento, and Stanislaus Counties. Like its predecessors, this measure requires the Judicial Council to consider the impact of courthouse sales to the surrounding communities. Accordingly, this measure requires the Judicial Council to consider community impacts, consult with the local governments impacted by the sale, and offer the property to the county government before placing it on the open market. This measure also directs the proceeds of the property sales to the judicial branch.

This bill appropriately directs the proceeds of courthouse sales to the State Court Facilities Construction Fund. As discussed above, existing law generally directs all proceeds from surplus state property to the State’s Special Fund of Economic Uncertainties. This measure like several prior courthouse sale measures, redirects the proceeds from the sale of the four courthouses authorized by this measure to the State Court Facilities Construction Fund. Although not typical, such a redirection of funds appears prudent given that the State Court Facilities Construction Fund provides the necessary support for building new courthouses. By taking cost pressures off the General Fund for courthouse construction, this measure seems to appropriately spend the proceeds of selling surplus court property.

ARGUMENTS IN SUPPORT: This measure is sponsored by the Judicial Council of California. In support of the bill, the Council writes:

Per existing law, every sale of state-owned real property must be specifically authorized by statute. Previous sales of Council property are authorized under Government Code Section 70391, et. al. The language in AB 959 aligns with the existing statutes and specifies the net proceeds are to be deposited into the council’s State Court Facilities Construction Fund.

The Judicial Council is committed to ensuring all Californians will have equal access to courts and be served in an efficient and effective manner. This bill meets that mandate by ensuring the Judicial Council does not need to expend unnecessary funding, staff time, and mitigation measures for potential safety issues that are commonly associated with vacant buildings. By allowing the council to sell these buildings at fair market value and in alignment with existing law, state funding is appropriately expended where it is needed most—going toward maintaining our existing facilities that are actively in use by court users and by allowing net proceeds to go toward building projects for new courthouses and renovations to existing courthouses to improve the court experience for the millions of Californians who access the courts every year.

REGISTERED SUPPORT / OPPOSITION:

Support

Judicial Council of California (sponsor)

Opposition

None on file

Analysis Prepared by: Nicholas Liedtke / JUD. / (916) 319-2334