SB 1134: Surplus land.
- Session Year: 2023-2024
- House: Senate
- Latest Version Date: 2024-08-19
Current Status:
Failed
(2024-08-20: Read second time. Ordered to third reading.)
Introduced
In Committee
First Chamber
In Committee
Second Chamber
Enacted
What does this bill do?
The bill changes how public surplus land is handled by saying each parcel counts as a separate unit of surplus land, except when adjacent parcels are transferred at the same time to the same receiving entity; this affects cities, counties, school and special districts, and other local agencies. It also requires the Department of Housing and Community Development to follow the Administrative Procedure Act (the state’s formal public rulemaking process) when making rules about surplus land and to rely on its April 2021 Surplus Land Act Guidelines while those rules are being developed through July 1, 2026.
The summary is provided by generative AI which can make mistakes. For original language, please view the details in the table below.
(1)Existing law provides for the disposal of land owned by a local agency that is surplus and is not necessary for the agencys use. The local agency is required to declare the land either surplus land or exempt surplus land, as prescribed. Existing law sets forth procedures for the disposal of surplus land and provides that these procedures do not apply to exempt surplus land. land. Existing law, for prescribed surplus land parcels developed with residential units, requires minimum percentages of residential units developed on the parcel to be sold or rented at affordable housing cost or affordable rent.
This bill, with regard to surplus land, would require each parcel of land to be considered a distinct unit of surplus land, with the exception of contiguous parcels that are disposed of simultaneously to the same receiving entity or any entity working in concert with another receiving entity, which parcels the bill would require to be treated as a single unit of land.
(2)Existing law, the Administrative Procedure Act (APA), governs the procedures for the adoption, amendment, or repeal of regulations by state agencies and for the review of those regulatory actions by the Office of Administrative Law. Among other things, the APA requires every state agency to transmit to the office for filing with the Secretary of State a certified copy of every regulation adopted or amended by it, except one that is a building standard, and prescribes procedures for public comment on regulations proposed to be adopted, amended, or repealed.
This bill would specify that any rule, policy, or standard of general application issued by the Department of Housing and Community Development (HCD) in implementing the laws governing the disposal of surplus land owned by local agencies, as described above, is subject to the rulemaking provisions of the APA. Until July 1, 2026, the bill would require HCD to rely upon specified previously adopted guidelines, as provided, to the extent those guidelines do not conflict with current law, while any rule, policy, or standard subject to the bills provisions is going through the rulemaking process, until such time as the rulemaking process is complete.
(3)Existing law requires each county and city to make a central inventory of prescribed surplus lands and to make a matter of public record a description of each parcel and the present uses of the parcel. Existing law requires the city or county to report this and other specified information to HCD. Existing law requires HCD to provide the reported information to the Department of General Services for inclusion in a digitized inventory of all state-owned parcels that are in excess of state needs. Existing law authorizes HCD to review, adopt, amend, and repeal standards, forms, and definitions to implement these inventory provisions and exempts those actions from the rulemaking provisions of the APA.
This bill would delete that APA exemption.
(4)Existing law requires, except as provided, a local agency disposing of surplus land to comply with certain notice requirements before disposing of the land or participating in negotiations to dispose of the land with a prospective transferee, particularly that the local agency send a notice of availability to specified entities that have notified HCD of their interest in surplus land, as specified. Existing law requires a local agency, before agreeing to terms for the disposition of surplus land, to provide to HCD a description of the notices of availability sent, and negotiations conducted with any responding entities, in regard to the disposal of the parcel of surplus land and a copy of any restrictions to be recorded against the property, as prescribed.
Existing law makes a local agency that disposes of surplus land in violation of existing law, except as specified, after receiving specified notification from HCD that the local agency is in violation of existing law, liable for a penalty of 30% of the applicable disposition value for a first violation and 50% for any subsequent violation. Under existing law, a local agency is not liable for the penalty if HCD does not notify the agency that the agency is in violation of existing law within 30 days of receiving the description.
Existing law requires HCD to review, adopt, amend, or repeal guidelines to establish uniform standards to implement these notice and penalty provisions and exempts those actions from the rulemaking provisions of the APA.
This bill would delete that APA exemption.
(1)Existing law provides for the disposal of land owned by a local agency that is surplus and is not necessary for the agencys use. The local agency is required to declare the land either surplus land or exempt surplus land, as prescribed. Existing law sets forth procedures for the disposal of surplus land and provides that these procedures do not apply to exempt surplus land. Existing law, for prescribed surplus land parcels developed with residential units, requires minimum percentages of residential units developed on the parcel to be sold or rented at affordable housing cost or affordable rent.
This bill, with regard to surplus land, would require each parcel of land to be considered a distinct unit of surplus land, with the exception of contiguous parcels that are disposed of simultaneously to the same receiving entity or any entity working in concert with another receiving entity, which parcels the bill would require to be treated as a single unit of land.
(2)Existing law, the Administrative Procedure Act (APA), governs the procedures for the adoption, amendment, or repeal of regulations by state agencies and for the review of those regulatory actions by the Office of Administrative Law. Among other things, the APA requires every state agency to transmit to the office for filing with the Secretary of State a certified copy of every regulation adopted or amended by it, except one that is a building standard, and prescribes procedures for public comment on regulations proposed to be adopted, amended, or repealed.
This bill would specify that any rule, policy, or standard of general application issued by the Department of Housing and Community Development (HCD) in implementing the laws governing the disposal of land owned by local agencies, as described above, is subject to the rulemaking provisions of the APA.
(3)Existing law requires each county and city to make a central inventory of prescribed surplus lands and to make a matter of public record a description of each parcel and the present uses of the parcel. Existing law requires the city or county to report this and other specified information to HCD. Existing law requires HCD to provide the reported information to the Department of General Services for inclusion in a digitized inventory of all state-owned parcels that are in excess of state needs. Existing law authorizes HCD to review, adopt, amend, and repeal standards, forms, and definitions to implement these inventory provisions and exempts those actions from the rulemaking provisions of the APA.
This bill would delete that APA exemption.
(4)Existing law requires, except as provided, a local agency disposing of surplus land to comply with certain notice requirements before disposing of the land or participating in negotiations to dispose of the land with a prospective transferee, particularly that the local agency send a notice of availability to specified entities that have notified HCD of their interest in surplus land, as specified. Existing law requires a local agency, before agreeing to terms for the disposition of surplus land, to provide to HCD a description of the notices of availability sent, and negotiations conducted with any responding entities, in regard to the disposal of the parcel of surplus land and a copy of any restrictions to be recorded against the property, as prescribed.
Existing law makes a local agency that disposes of surplus land in violation of existing law, except as specified, after receiving specified notification from HCD that the local agency is in violation of existing law, liable for a penalty of 30% of the applicable disposition value for a first violation and 50% for any subsequent violation. Under existing law, a local agency is not liable for the penalty if HCD does not notify the agency that the agency is in violation of existing law within 30 days of receiving the description.
Existing law requires HCD to review, adopt, amend, or repeal guidelines to establish uniform standards to implement these notice and penalty provisions and exempts those actions from the rulemaking provisions of the APA.
This bill would delete that APA exemption.
Existing law provides for the disposal of land owned by a local agency that is surplus and is not necessary for the agencys use. The local agency is required to declare the land either surplus land or exempt surplus land, as prescribed. Existing law sets forth procedures for the disposal of surplus land and provides that these procedures do not apply to exempt surplus land. Existing law, for prescribed surplus land parcels developed with residential units, requires minimum percentages of residential units developed on the parcel to be sold or rented at affordable housing cost or affordable rent.
This bill, with regard to surplus land, would require each parcel of land to be considered a distinct unit of surplus land, with the exception of contiguous parcels that are disposed of simultaneously to the same receiving entity or any entity working in concert with another receiving entity, which parcels the bill would require to be treated as a single unit of land.
Existing law prescribes requirements for the disposal of surplus land by a local agency. Existing law requires a local agency to take formal action in a regular public meeting to declare that land is surplus and is not necessary for the agencys use and to declare land as either surplus land or exempt surplus land, as supported by written findings, before a local agency may take any action to dispose of it consistent with an agencys policies or procedures. Different requirements apply to disposal, depending on the declaration as surplus land or exempt surplus land as existing law defines those terms. Existing law, except as specified, requires any local agency disposing of surplus land to send, before disposing of that property or participating in negotiations to dispose of that property with a prospective transferee, a written notice of availability of the property to entities specific to the purpose of the availability.This bill would correct a cross-reference in that notice provision and make other nonsubstantive changes.Existing law prescribes requirements for the disposal of surplus land by a local agency. Existing law requires a local agency to take formal action in a regular public meeting to declare that land is surplus and is not necessary for the agencys use and to declare land as either surplus land or exempt surplus land, as supported by written findings, before a local agency may take any action to dispose of it consistent with an agencys policies or procedures. Different requirements apply to disposal, depending on the declaration as surplus land or exempt surplus land as existing law defines those terms. Existing law, except as specified, requires any local agency disposing of surplus land to send, before disposing of that property or participating in negotiations to dispose of that property with a prospective transferee, a written notice of availability of the property to entities specific to the purpose of the availability.
This bill would correct a cross-reference in that notice provision and make other nonsubstantive changes.
As used in this article, the following definitions shall apply:
(a)(1)Local agency means every city, whether organized under general law or by charter, county, city and county, district, including school, sewer, water, utility, and local and regional park districts of any kind or class, joint powers authority, successor agency to a former redevelopment agency, housing authority, or other political subdivision of this state and any instrumentality thereof that is empowered to acquire and hold real property.
(2)The Legislature finds and declares that the term district as used in this article includes all districts within the state, including, but not limited to, all special districts, sewer, water, utility, and local and regional park districts, and any other political subdivision of this state that is a district, and therefore the changes in paragraph (1) made by the act adding this paragraph that specify that the provisions of this article apply to all districts, including school, sewer, water, utility, and local and regional park districts of any kind or class, are declaratory of, and not a change in, existing law.
(b)(1)Surplus land means land owned in fee simple by any local agency for which the local agencys governing body takes formal action in a regular public meeting declaring that the land is surplus and is not necessary for the agencys use. Land shall be declared either surplus land or exempt surplus land, as supported by written findings, before a local agency may take any action to dispose of it consistent with an agencys policies or procedures. A local agency, on an annual basis, may declare multiple parcels as surplus land or exempt surplus land.
(2)Surplus land includes land held in the Community Redevelopment Property Trust Fund pursuant to Section 34191.4 of the Health and Safety Code and land that has been designated in the long-range property management plan approved by the Department of Finance pursuant to Section 34191.5 of the Health and Safety Code, either for sale or for future development, but does not include any specific disposal of land to an identified entity described in the plan.
(3)Nothing in this article prevents a local agency from obtaining fair market value for the disposition of surplus land consistent with Section 54226.
(4)Notwithstanding paragraph (1), a local agency is not required to make a declaration at a public meeting for land that is exempt surplus land pursuant to subparagraph (A), (B), (E), (K), (L), or (Q) of paragraph (1) of subdivision (f) if the local agency identifies the land in a notice that is published and available for public comment, including notice to the entities identified in subdivision (a) of Section 54222, at least 30 days before the exemption takes effect.
(5)For the purposes of this article, each parcel of land shall be considered a distinct unit of surplus land, except that contiguous parcels that are disposed of simultaneously to the same receiving entity, or any entity working in concert with another receiving entity, shall be treated as a single unit of land.
(c)(1)Except as provided in paragraph (2), agencys use shall include, but not be limited to, land that is being used, or is planned to be used pursuant to a written plan adopted by the local agencys governing board, for agency work or operations, including, but not limited to, utility sites, property owned by a port that is used to support logistics uses, watershed property, land being used for conservation purposes, land for demonstration, exhibition, or educational purposes related to greenhouse gas emissions, sites for broadband equipment or wireless facilities, and buffer sites near sensitive governmental uses, including, but not limited to, waste disposal sites, and wastewater treatment plants. Agencys use by a local agency that is a district shall also include land disposed for uses described in subparagraph (B) of paragraph (2).
(2)(A)Agencys use shall not include commercial or industrial uses or activities, including nongovernmental retail, entertainment, or office development. Property disposed of for the sole purpose of investment or generation of revenue shall not be considered necessary for the agencys use.
(B)In the case of a local agency that is a district, excepting those whose primary mission or purpose is to supply the public with a transportation system, agencys use may include commercial or industrial uses or activities, including nongovernmental retail, entertainment, or office development or be for the sole purpose of investment or generation of revenue if the agencys governing body takes action in a public meeting declaring that the use of the site will do one of the following:
(i)Directly further the express purpose of agency work or operations.
(ii)Be expressly authorized by a statute governing the local agency, provided the district complies with Section 54233.5 if applicable.
(d)(1)Dispose means either of the following:
(A)The sale of the surplus land.
(B)The entering of a lease for surplus land, which is for a term longer than 15 years, inclusive of any extension or renewal options included in the terms of the initial lease, entered into on or after January 1, 2024.
(2)Dispose shall not mean either of the following:
(A)The entering of a lease for surplus land, which is for a term of 15 years or less, inclusive of any extension or renewal options included in the terms of the initial lease.
(B)The entering of a lease for surplus land on which no development or demolition will occur, regardless of the term of the lease.
(e)Open-space purposes means the use of land for public recreation, enjoyment of scenic beauty, or conservation or use of natural resources.
(f)(1)Except as provided in paragraph (2), exempt surplus land means any of the following:
(A)Surplus land that is transferred pursuant to Section 25539.4 or 37364.
(B)Surplus land that is less than one-half acre in area and is not contiguous to land owned by a state or local agency that is used for open-space or low- and moderate-income housing purposes.
(C)Surplus land that a local agency is exchanging for another property necessary for the agencys use. Property may include easements necessary for the agencys use.
(D)Surplus land that a local agency is transferring to another local, state, or federal agency, or to a third-party intermediary for future dedication for the receiving agencys use, or to a federally recognized California Indian tribe. If the surplus land is transferred to a third-party intermediary, the receiving agencys use must be contained in a legally binding agreement at the time of transfer to the third-party intermediary.
(E)Surplus land that is a former street, right of way, or easement, and is conveyed to an owner of an adjacent property.
(F)(i)Surplus land that is to be developed for a housing development, which may have ancillary commercial ground floor uses, that restricts 100 percent of the residential units to persons and families of low or moderate income, with at least 75 percent of the residential units restricted to lower income households, as defined in Section 50079.5 of the Health and Safety Code, with an affordable sales price or an affordable rent, as defined in Section 50052.5 or 50053 of the Health and Safety Code, for a minimum of 55 years for rental housing, land use for ownership housing, and 50 years for rental or ownership housing located on tribal trust lands, and in no event shall the maximum affordable sales price or rent level be higher than 20 percent below the median market rents or sales prices for the neighborhood in which the site is located.
(ii)The requirements of clause (i) shall be contained in a covenant or restriction recorded against the surplus land at the time of sale that shall run with the land and be enforceable against any owner who violates the covenant or restriction and each successor in interest who continues the violation.
(G)(i)Surplus land that is subject to a local agencys open, competitive solicitation or that is put to open, competitive bid by a local agency, provided that all entities identified in subdivision (a) of Section 54222 will be invited to participate in the process, for a housing or a mixed-use development that is more than one acre and less than 10 acres in area, consisting of either a single parcel, or two or more adjacent or nonadjacent parcels combined, that includes not less than 300 residential units, and that restricts at least 25 percent of the residential units to lower income households, as defined in Section 50079.5 of the Health and Safety Code, with an affordable sales price or an affordable rent, as defined in Sections 50052.5 and 50053 of the Health and Safety Code, for a minimum of 55 years for rental housing, land use for ownership housing, and 50 years for rental or ownership housing located on tribal trust lands.
(ii)The requirements of clause (i) shall be contained in a covenant or restriction recorded against the surplus land at the time of sale that shall run with the land and be enforceable against any owner who violates the covenant or restriction and each successor in interest who continues the violation.
(H)(i)Surplus land totaling 10 or more acres, consisting of either a single parcel, or two or more adjacent or nonadjacent parcels combined for disposition to one or more buyers pursuant to a plan or ordinance adopted by the legislative body of the local agency, or a state statute. That surplus land shall be subject to a local agencys open, competitive solicitation process or put out to open, competitive bid by a local agency, provided that all entities identified in subdivision (a) of Section 54222 will be invited to participate in the process for a housing or mixed-use development.
(ii)The aggregate development shall include the greater of the following:
(I)Not less than three hundred residential units.
(II)A number of residential units equal to 10 times the number of acres of the surplus land or 10,000 residential units, whichever is less.
(iii)At least 25 percent of the residential units shall be restricted to lower income households, as defined in Section 50079.5 of the Health and Safety Code, with an affordable sales price or an affordable rent pursuant to Sections 50052.5 and 50053 of the Health and Safety Code, for a minimum of 55 years for rental housing, land use for ownership housing, and 50 years for rental or ownership housing located on tribal trust lands.
(iv)If nonresidential development is included in the development pursuant to this subparagraph, at least 25 percent of the total planned units affordable to lower income households shall be made available for lease or sale and permitted for use and occupancy before or at the same time with every 25 percent of nonresidential development made available for lease or sale and permitted for use and occupancy.
(v)A violation of this subparagraph is subject to the penalties described in Section 54230.5. Those penalties are in addition to any remedy a court may order for violation of this subparagraph. A local agency shall only dispose of land pursuant to this subparagraph through a disposition and development agreement that includes an indemnification clause that provides that if an action occurs after disposition violates this subparagraph, the person or entity that acquired the property shall be liable for the penalties.
(vi)The requirements of clauses (i) to (v), inclusive, shall be contained in a covenant or restriction recorded against the surplus land at the time of sale that shall run with the land and be enforceable against any owner who violates the covenant or restriction and each successor in interest who continues the violation.
(I)A mixed-use development, which may include more than one publicly owned parcel, that meets all of the following conditions:
(i)The development restricts at least 25 percent of the residential units to lower income households, as defined in Section 50079.5 of the Health and Safety Code, with an affordable sales price or an affordable rent, as defined in Sections 50052.5 and 50053 of the Health and Safety Code, for a minimum of 55 years for rental housing, land use for ownership housing, and 50 years for rental or ownership housing located on tribal trust lands.
(ii)At least 50 percent of the square footage of the new construction associated with the development is designated for residential use.
(iii)The development is not located in an urbanized area, as defined in Section 21094.5 of the Public Resources Code.
(J)(i)Surplus land that is subject to a valid legal restriction that is not imposed by the local agency and that makes housing prohibited, unless there is a feasible method to satisfactorily mitigate or avoid the prohibition on the site. A declaration of exemption pursuant to this subparagraph shall be supported by documentary evidence establishing the valid legal restriction. For the purposes of this section, documentary evidence includes, but is not limited to, a contract, agreement, deed restriction, statute, regulation or other writing that documents the valid legal restriction.
(ii)Valid legal restrictions include, but are not limited to, all of the following:
(I)Existing constraints under ownership rights or contractual rights or obligations that prevent the use of the property for housing, if the rights or obligations were agreed to prior to September 30, 2019.
(II)Conservation or other easements or encumbrances that prevent housing development.
(III)Existing leases, or other contractual obligations or restrictions, if the terms were agreed to prior to September 30, 2019.
(IV)Restrictions imposed by the source of funding that a local agency used to purchase a property, provided that both of the following requirements are met:
(ia)The restrictions limit the use of those funds to purposes other than housing.
(ib)The proposed disposal of surplus land meets a use consistent with that purpose.
(ii)Valid legal restrictions that would make housing prohibited do not include either of the following:
(I)An existing nonresidential land use designation on the surplus land.
(II)Covenants, restrictions, or other conditions on the property rendered void and unenforceable by any other law, including, but not limited to, Section 714.6 of the Civil Code.
(iii)Feasible methods to mitigate or avoid a valid legal restriction on the site do not include a requirement that the local agency acquire additional property rights or property interests belonging to third parties.
(K)Surplus land that was granted by the state in trust to a local agency or that was acquired by the local agency for trust purposes by purchase or exchange, and for which disposal of the land is authorized or required subject to conditions established by statute.
(L)Land that is subject to either of the following, unless compliance with this article is expressly required:
(i)Section 17388, 17515, 17536, 81192, 81397, 81399, 81420, or 81422 of the Education Code.
(ii)Part 14 (commencing with Section 53570) of Division 31 of the Health and Safety Code.
(M)Surplus land that is a former military base that was conveyed by the federal government to a local agency, and is subject to Article 8 (commencing with Section 33492.125) of Chapter 4.5 of Part 1 of Division 24 of the Health and Safety Code, provided that all of the following conditions are met:
(i)The former military base has an aggregate area greater than five acres, is expected to include a mix of residential and nonresidential uses, and is expected to include no fewer than 1,400 residential units upon completion of development or redevelopment of the former military base.
(ii)The affordability requirements for residential units shall be governed by a settlement agreement entered into prior to September 1, 2020. Furthermore, at least 25 percent of the initial 1,400 residential units developed shall be restricted to lower income households, as defined in Section 50079.5 of the Health and Safety Code, with an affordable sales price or an affordable rent, as defined in Sections 50052.5 and 50053 of the Health and Safety Code, for a minimum of 55 years for rental housing, land use for ownership housing, and 50 years for rental or ownership housing located on tribal trust lands.
(iii)Before disposition of the surplus land, the agency adopts written findings that the land is exempt surplus land pursuant to this subparagraph.
(iv)Before disposition of the surplus land, the recipient has negotiated a project labor agreement consistent with the local agencys project stabilization agreement resolution, as adopted on February 2, 2021, and any succeeding ordinance, resolution, or policy, regardless of the length of the agreement between the local agency and the recipient.
(v)The agency includes in the annual report required by paragraph (2) of subdivision (a) of Section 65400 the status of development of residential units on the former military base, including the total number of residential units that have been permitted and what percentage of those residential units are restricted for persons and families of low or moderate income, or lower income households, as defined in Section 50079.5 of the Health and Safety Code.
A violation of this subparagraph is subject to the penalties described in Section 54230.5. Those penalties are in addition to any remedy a court may order for violation of this subparagraph or the settlement agreement.
(N)Real property that is used by a district for an agencys use expressly authorized in subdivision (c).
(O)Land that has been transferred before June 30, 2019, by the state to a local agency pursuant to Section 32667 of the Streets and Highways Code and has a minimum planned residential density of at least 100 dwelling units per acre, and includes 100 or more residential units that are restricted to persons and families of low or moderate income, with an affordable sales price or an affordable rent, as defined in Sections 50052.5 and 50053 of the Health and Safety Code, for a minimum of 55 years for rental housing, land use for ownership housing, and 50 years for rental or ownership housing located on tribal trust lands. For purposes of this subparagraph, not more than 20 percent of the affordable units may be restricted to persons and families of moderate income and at least 80 percent of the affordable units must be restricted to lower income households as defined in Section 50079.5 of the Health and Safety Code.
(P)(i)Land that meets the following conditions:
(I)Land that is subject to a sectional planning area document that meets both of the following:
(ia)The sectional planning area was adopted prior to January 1, 2019.
(ib)The sectional planning area document is consistent with county and city general plans applicable to the land.
(II)The land identified in the adopted sectional planning area document was dedicated prior to January 1, 2019.
(III)On January 1, 2019, the parcels on the land met at least one of the following conditions:
(ia)The land was subject to an irrevocable offer of dedication of fee interest requiring the land to be used for a specified purpose.
(ib)The land was acquired through a land exchange subject to a land offer agreement that grants the lands original owner the right to repurchase the land acquired by the local agency pursuant to the agreement if the land will not be developed in a manner consistent with the agreement.
(ic)The land was subject to a grant deed specifying that the property shall be used for educational uses and limiting other types of uses allowed on the property.
(IV)At least 25 percent of the units are dedicated to lower income households, as defined in Section 50079.5 of the Health and Safety Code, at an affordable rent, as defined by Section 50053 of the Health and Safety Code, or an affordable housing cost, as defined by Section 50052.5 of the Health and Safety Code, and subject to a recorded deed restriction for a period of 55 years for rental units and land use for owner-occupied units.
(V)The land is developed at an average density of at least 10 units per acre, calculated with respect to the entire sectional planning area.
(VI)No more than 25 percent of the nonresidential square footage identified in the sectional planning area document receives its first certificate of occupancy before at least 25 percent of the residential square footage identified in the sectional planning area document has received its first certificate of occupancy.
(VII)No more than 50 percent of the nonresidential square footage identified in the sectional planning area document receives its first certificate of occupancy before at least 50 percent of the residential square footage identified in the sectional planning area document has received its first certificate of occupancy.
(VIII)No more than 75 percent of the nonresidential square footage identified in the sectional planning area document shall receive its first certificate of occupancy before at least 75 percent of the residential square footage identified in the sectional planning area document has received its first certificate of occupancy.
(ii)The local agency includes in the annual report required by paragraph (2) of subdivision (a) of Section 65400 the status of development, including the total square footage of the residential and nonresidential development, the number of residential units that have been permitted, and what percentage of those residential units are restricted for persons and families of low or moderate income, or lower income households, as defined in Section 50079.5 of the Health and Safety Code.
(iii)The Department of Housing and Community Development may request additional information from the agency regarding land disposed of pursuant to this subparagraph.
(iv)At least 30 days prior to disposing of land declared exempt surplus land, a local agency shall provide the Department of Housing and Community Development a written notification of its declaration and findings in a form prescribed by the Department of Housing and Community Development. Within 30 days of receipt of the written notification and findings, the department shall notify the local agency if the department has determined that the local agency is in violation of this article. A local agency that fails to submit the written notification and findings shall be liable for a civil penalty pursuant to this subparagraph. A local agency shall not be liable for the civil penalty if the Department of Housing and Community Development does not notify the agency that the agency is in violation of this article within 30 days of receiving the written notification and findings. Once the department determines that the declarations and findings comply with subclauses (I) to (IV), inclusive, of clause (i), the local agency may proceed with disposal of land pursuant to this subparagraph. This clause is declaratory of, and not a change in, existing law.
(v)If the local agency disposes of land in violation of this subparagraph, the local agency shall be liable for a civil penalty calculated as follows:
(I)For a first violation, 30 percent of the greater of the final sale price or the fair market value of the land at the time of disposition.
(II)For a second or subsequent violation, 50 percent of the greater of the final sale price or the fair market value of the land at the time of disposition.
(III)For purposes of this subparagraph, fair market value shall be determined by an independent appraisal of the land.
(IV)An action to enforce this subparagraph may be brought by any of the following:
(ia)An entity identified in subdivisions (a) to (e), inclusive, of Section 54222.
(ib)A person who would have been eligible to apply for residency in affordable housing had the agency not violated this section.
(ic)A housing organization, as that term is defined in Section 65589.5.
(id)A beneficially interested person or entity.
(ie)The Department of Housing and Community Development.
(V)A penalty assessed pursuant to this subparagraph shall, except as otherwise provided, be deposited into a local housing trust fund. The local agency may elect to instead deposit the penalty moneys into the Building Homes and Jobs Trust Fund or the Housing Rehabilitation Loan Fund. Penalties shall not be paid out of funds already dedicated to affordable housing, including, but not limited to, Low and Moderate Income Housing Asset Funds, funds dedicated to housing for very low, low-, and moderate-income households, and federal HOME Investment Partnerships Program and Community Development Block Grant Program funds. The local agency shall commit and expend the penalty moneys deposited into the local housing trust fund within five years of deposit for the sole purpose of financing newly constructed housing units that are affordable to extremely low, very low, or low-income households.
(VI)Five years after deposit of the penalty moneys into the local housing trust fund, if the funds have not been expended, the funds shall revert to the state and be deposited in the Building Homes and Jobs Trust Fund or the Housing Rehabilitation Loan Fund for the sole purpose of financing newly constructed housing units located in the same jurisdiction as the surplus land and that are affordable to extremely low, very low, or low-income households. Expenditure of any penalty moneys deposited into the Building Homes and Jobs Trust Fund or the Housing Rehabilitation Loan Fund pursuant to this subdivision shall be subject to appropriation by the Legislature.
(vi)For purposes of this subparagraph, the following definitions apply:
(I)Sectional planning area means an area composed of identifiable planning units, within which common services and facilities, a strong internal unity, and an integrated pattern of land use, circulation, and townscape planning are readily achievable.
(II)Sectional planning area document means a document or plan that sets forth, at minimum, a site utilization plan of the sectional planning area and development standards for each land use area and designation.
(vii)This subparagraph shall become inoperative on January 1, 2034.
(Q)Land that is owned by a California public-use airport on which residential uses are prohibited pursuant to Federal Aviation Administration Order 5190.6B, Airport Compliance Program, Chapter 20 -- Compatible Land Use and Airspace Protection.
(R)Land that is transferred to a community land trust, and all of the following conditions are met:
(i)The property is being or will be developed or rehabilitated as any of the following:
(I)An owner-occupied single-family dwelling.
(II)An owner-occupied unit in a multifamily dwelling.
(III)A member-occupied unit in a limited equity housing cooperative.
(IV)A rental housing development.
(ii)Improvements on the property are or will be available for use and ownership or for rent by qualified persons, as defined in paragraph (6) of subdivision (c) of Section 214.18 of the Revenue and Taxation Code.
(iii)(I)A deed restriction or other instrument, requiring a contract or contracts serving as an enforceable restriction on the sale or resale value of owner-occupied units or on the affordability of rental units is recorded on or before the lien date following the acquisition of the property by the community land trust.
(II)For the purpose of this clause, the following definitions apply:
(ia)A contract or contracts serving as an enforceable restriction on the sale or resale value of owner-occupied units means a contract described in paragraph (11) of subdivision (a) of Section 402.1 of the Revenue and Taxation Code.
(ib)A contract or contracts serving as an enforceable restriction on the affordability of rental units means an enforceable and verifiable agreement with a public agency, a recorded deed restriction, or other legal document described in subparagraph (A) of paragraph (2) of subdivision (g) of Section 214 of the Revenue and Taxation Code.
(iv)A copy of the deed restriction or other instrument shall be provided to the assessor.
(S)(i)For local agencies whose primary mission or purpose is to supply the public with a transportation system, surplus land that is developed for commercial, or industrial uses or activities, including nongovernmental retail, entertainment, or office development or for the sole purpose of investment or generation of revenue, if the agency meets all of the following conditions:
(I)The agency has an adopted land use plan or policy that designates at least 50 percent of the gross acreage covered by the adopted land use plan or policy for residential purposes. The adopted land use plan or policy shall also require the development of at least 300 residential units, or at least 10 residential units per gross acre, averaged across all land covered by the land use plan or policy, whichever is greater.
(II)The agency has an adopted land use plan or policy that requires at least 25 percent of all residential units to be developed on the parcels covered by the adopted land use plan or policy made available to lower income households, as defined in Section 50079 of the Health and Safety Code, at an affordable sales price or rented at an affordable rent, as defined in Sections 50052.5 and 50053 of the Health and Safety Code, for a minimum of 55 years for rental housing and 45 years for ownership housing. These terms shall be included in the land use plan or policy and dictate that they will be contained in a covenant or restriction recorded against the surplus land at the time of disposition that shall run with the land and be enforceable against any owner or lessee who violates the covenant or restriction and each successor in interest who continues the violation.
(III)Land disposed of for residential purposes shall issue a competitive request for proposals subject to the local agencys open, competitive solicitation process or put out to open, competitive bid by the local agency, provided that all entities identified in subdivision (a) of Section 54222 are invited to participate.
(IV)Prior to entering into an agreement to dispose of a parcel for nonresidential development on land designated for the purposes authorized pursuant to this subparagraph in an agencys adopted land use plan or policy, the agency, since January 1, 2020, must have entered into an agreement to dispose of a minimum of 25 percent of the land designated for affordable housing pursuant to subclause (II).
(ii)The agency may exempt at one time all parcels covered by the adopted land use plan or policy pursuant to this subparagraph.
(2)Notwithstanding paragraph (1), a written notice of the availability of surplus land for open-space purposes shall be sent to the entities described in subdivision (b) of Section 54222 before disposing of the surplus land, provided the land does not meet the criteria in subparagraph (H) of paragraph (1), if the land is any of the following:
(A)Within a coastal zone.
(B)Adjacent to a historical unit of the State Parks System.
(C)Listed on, or determined by the State Office of Historic Preservation to be eligible for, the National Register of Historic Places.
(D)Within the Lake Tahoe region as defined in Section 66905.5.
(g)Persons and families of low or moderate income has the same meaning as provided in Section 50093 of the Health and Safety Code.
SEC. 2.Section 54222.3 of the Government Code is amended to read:54222.3.Except as otherwise provided in Section 54234.5, this article shall not apply to the disposal of exempt surplus land as defined in Section 54221 by an agency of the state or any local agency.SEC. 3.SEC. 2.Section 54230 of the Government Code is amended to read:54230.(a)(1)On or before December 31 of each year, each county and each city shall make a central inventory of all surplus land, as defined in subdivision (b) of Section 54221, and all lands in excess of its foreseeable needs, if any, identified pursuant to Section 50569, located in all urbanized areas and urban clusters, as designated by the United States Census Bureau, within the jurisdiction of the county or city that the county or city or any of its departments, agencies, or authorities owns or controls.
(2)(A)Subject to subparagraph (C), each county and each city shall make a description of each parcel described in paragraph (1) and the present use of the parcel a matter of public record and shall report this information to the Department of Housing and Community Development no later than April 1 of each year, beginning April 1, 2021, in a form prescribed by the department, as part of its annual progress report submitted pursuant to paragraph (2) of subdivision (a) of Section 65400.
(B)The information reported pursuant to this paragraph shall include, but not be limited to, the following information with respect to each site:
(i)Street address, or similar location information.
(ii)Assessors parcel number.
(iii)Existing use.
(iv)Whether the site is surplus land or exempt surplus land.
(v)Size in acres.
(C)The Department of Housing and Community Development may, in its discretion, delay implementation of this paragraph until April 1, 2022.
(3)Each county and each city, upon request, shall provide a list of its surplus land and excess surplus land to an individual, limited dividend corporation, housing corporation, or nonprofit corporation without charge.
(b)The Department of Housing and Community Development shall provide the information reported to it by a city or county pursuant to paragraph (2) of subdivision (a) to the Department of General Services for inclusion in a digitized inventory of all state-owned parcels that are in excess of state needs.
(c)The Department of Housing and Community Development may review, adopt, amend, and repeal standards, forms, and definitions in order to implement this section.
SEC. 4.SEC. 3.Section 54230.5 of the Government Code is amended to read:54230.5.(a)(1)A local agency that disposes of surplus land in violation of this article after receiving a notification from the Department of Housing and Community Development pursuant to subdivision (b) that the local agency is in violation of this article shall be liable for a penalty of 30 percent of the applicable disposition value for a first violation, and 50 percent for any subsequent violation. These penalties shall not apply to violations that do not impact the availability and priority of, or the construction of, housing affordable to lower income households or the ultimate disposition of the land in compliance with this article, such as clerical errors. An entity identified in Section 54222 or a person who would have been eligible to apply for residency in any affordable housing developed or a housing organization as defined in Section 65589.5, or any beneficially interested person or entity may bring an action to enforce this section. A local agency shall have 60 days to cure or correct an alleged violation before an action may be brought to enforce this section, unless the local agency disposes of the surplus land before curing or correcting the alleged violation, or the department deems the alleged violation not to be a violation in less than 60 days.
(2)For the purposes of this section, disposition value means:
(A)In the case of a sale, the greater of the final sale price of the land or the fair market value of the surplus land at the time of sale, as determined by an independent appraisal of the surplus land sold in violation of this article.
(B)In the case of a lease, the discounted net present value of the fair market value of the lease as of the date the lease was entered into, as determined by an independent appraisal of the lease of surplus land in violation of this article.
(3)A penalty assessed pursuant to this subdivision shall, except as otherwise provided, be deposited into a local housing trust fund. The local agency may elect to instead deposit the penalty moneys into the Building Homes and Jobs Trust Fund or the Housing Rehabilitation Loan Fund. Penalties shall not be paid out of funds already dedicated to affordable housing, including, but not limited to, Low and Moderate Income Housing Asset Funds, funds dedicated to housing for very low, low-, and moderate-income households, and federal HOME Investment Partnerships Program and Community Development Block Grant Program funds. The local agency shall commit and expend the penalty moneys deposited into the local housing trust fund within five years of deposit for the sole purpose of financing newly constructed housing units that are affordable to extremely low, very low, or low-income households.
(4)Five years after deposit of the penalty moneys into the local housing trust fund, if the funds have not been expended, the funds shall revert to the state and be deposited in the Building Homes and Jobs Trust Fund or the Housing Rehabilitation Loan Fund for the sole purpose of financing newly constructed housing units located in the same jurisdiction as the surplus land and that are affordable to extremely low, very low, or low-income households. Expenditure of any penalty moneys deposited into the Building Homes and Jobs Trust Fund or the Housing Rehabilitation Loan Fund pursuant to this subdivision shall be subject to appropriation by the Legislature.
(b)(1)Before agreeing to terms for the disposition of surplus land, a local agency shall provide to the Department of Housing and Community Development a description of the notices of availability sent, and negotiations conducted with any responding entities, in regard to the disposal of the parcel of surplus land and a copy of any restrictions to be recorded against the property pursuant to Section 54222.5, 54233, or 54233.5, whichever is applicable, in a form prescribed by the Department of Housing and Community Development. A local agency may submit this information after it has sent notices of availability required by Section 54222 and concluded negotiations with any responding agencies. A local agency shall not be liable for the penalty imposed by subdivision (a) if the Department of Housing and Community Development does not notify the agency that the agency is in violation of this article within 30 days of receiving the description.
(2)The Department of Housing and Community Development shall do all of the following:
(A)Make available educational resources and materials that inform each agency of its obligations under this article and that provide guidance on how to comply with its provisions.
(B)Review information submitted pursuant to paragraph (1).
(C)Submit written findings to the local agency within 30 days of receipt of the description required by paragraph (1) from the local agency if the proposed disposal of the land will violate this article.
(D)Review, adopt, amend, or repeal guidelines to establish uniform standards to implement this section.
(E)Provide the local agency reasonable time, but not less than 60 days, to respond to the findings before taking any other action authorized by this section.
(3)(A)The local agency shall consider findings made by the Department of Housing and Community Development pursuant to subparagraph (C) of paragraph (2) and shall do one of the following:
(i)Correct any issues identified by the Department of Housing and Community Development.
(ii)Provide written findings explaining the reason its process for disposing of surplus land complies with this article and addressing the Department of Housing and Community Developments findings.
(B)If the local agency does not correct issues identified by the Department of Housing and Community Development, does not provide findings explaining the reason its process for disposing of surplus land complies with this article and addressing the Department of Housing and Community Developments findings, or if the Department of Housing and Community Development finds that the local agencys findings are deficient in addressing the issues identified by the Department of Housing and Community Development, the Department of Housing and Community Development shall notify the local agency, and may notify the Attorney General, that the local agency is in violation of this article.
(c)The Department of Housing and Community Development shall implement the changes in this section made by the act adding this subdivision commencing on January 1, 2021.
(d)Notwithstanding subdivision (c), this section shall not be construed to limit any other remedies authorized under law to enforce this article including public records act requests pursuant to Division 10 (commencing with Section 7920.000) of Title 1.
SEC. 5.SEC. 4.Section 54234.5 is added to the Government Code, immediately following Section 54234, to read:54234.5.(a)Any rule, policy, or standard of general application issued by the Department of Housing and Community Development in implementing this article shall be subject to the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2).(b)(1)Notwithstanding subdivision (a), during the time period in which any rule, policy, or standard is being developed and pending in the rulemaking process pursuant to subdivision (a), the Department of Housing and Community Development shall rely upon the Surplus Land Act Guidelines adopted by the department in April 2021, to the extent those guidelines do not conflict with current law, for the implementation of this article, until such time as the rulemaking process in subdivision (a) is complete.
(2)This subdivision shall remain operative only until July 1, 2026.
As used in this article, the following definitions shall apply:
(a)(1)Local agency means every city, whether organized under general law or by charter, county, city and county, district, including school, sewer, water, utility, and local and regional park districts of any kind or class, joint powers authority, successor agency to a former redevelopment agency, housing authority, or other political subdivision of this state and any instrumentality thereof that is empowered to acquire and hold real property.
(2)The Legislature finds and declares that the term district as used in this article includes all districts within the state, including, but not limited to, all special districts, sewer, water, utility, and local and regional park districts, and any other political subdivision of this state that is a district, and therefore the changes in paragraph (1) made by the act adding this paragraph that specify that the provisions of this article apply to all districts, including school, sewer, water, utility, and local and regional park districts of any kind or class, are declaratory of, and not a change in, existing law.
(b)(1)Surplus land means land owned in fee simple by any local agency for which the local agencys governing body takes formal action in a regular public meeting declaring that the land is surplus and is not necessary for the agencys use. Land shall be declared either surplus land or exempt surplus land, as supported by written findings, before a local agency may take any action to dispose of it consistent with an agencys policies or procedures. A local agency, on an annual basis, may declare multiple parcels as surplus land or exempt surplus land.
(2)Surplus land includes land held in the Community Redevelopment Property Trust Fund pursuant to Section 34191.4 of the Health and Safety Code and land that has been designated in the long-range property management plan approved by the Department of Finance pursuant to Section 34191.5 of the Health and Safety Code, either for sale or for future development, but does not include any specific disposal of land to an identified entity described in the plan.
(3)Nothing in this article prevents a local agency from obtaining fair market value for the disposition of surplus land consistent with Section 54226.
(4)Notwithstanding paragraph (1), a local agency is not required to make a declaration at a public meeting for land that is exempt surplus land pursuant to subparagraph (A), (B), (E), (K), (L), or (Q) of paragraph (1) of subdivision (f) if the local agency identifies the land in a notice that is published and available for public comment, including notice to the entities identified in subdivision (a) of Section 54222, at least 30 days before the exemption takes effect.
(5)For the purposes of this article, each parcel of land shall be considered a distinct unit of surplus land, except that contiguous parcels that are disposed of simultaneously to the same receiving entity, or any entity working in concert with another receiving entity, shall be treated as a single unit of land.
(c)(1)Except as provided in paragraph (2), agencys use shall include, but not be limited to, land that is being used, or is planned to be used pursuant to a written plan adopted by the local agencys governing board, for agency work or operations, including, but not limited to, utility sites, property owned by a port that is used to support logistics uses, watershed property, land being used for conservation purposes, land for demonstration, exhibition, or educational purposes related to greenhouse gas emissions, sites for broadband equipment or wireless facilities, and buffer sites near sensitive governmental uses, including, but not limited to, waste disposal sites, and wastewater treatment plants. Agencys use by a local agency that is a district shall also include land disposed for uses described in subparagraph (B) of paragraph (2).
(2)(A)Agencys use shall not include commercial or industrial uses or activities, including nongovernmental retail, entertainment, or office development. Property disposed of for the sole purpose of investment or generation of revenue shall not be considered necessary for the agencys use.
(B)In the case of a local agency that is a district, excepting those whose primary mission or purpose is to supply the public with a transportation system, agencys use may include commercial or industrial uses or activities, including nongovernmental retail, entertainment, or office development or be for the sole purpose of investment or generation of revenue if the agencys governing body takes action in a public meeting declaring that the use of the site will do one of the following:
(i)Directly further the express purpose of agency work or operations.
(ii)Be expressly authorized by a statute governing the local agency, provided the district complies with Section 54233.5 if applicable.
(d)(1)Dispose means either of the following:
(A)The sale of the surplus land.
(B)The entering of a lease for surplus land, which is for a term longer than 15 years, inclusive of any extension or renewal options included in the terms of the initial lease, entered into on or after January 1, 2024.
(2)Dispose shall not mean either of the following:
(A)The entering of a lease for surplus land, which is for a term of 15 years or less, inclusive of any extension or renewal options included in the terms of the initial lease.
(B)The entering of a lease for surplus land on which no development or demolition will occur, regardless of the term of the lease.
(e)Open-space purposes means the use of land for public recreation, enjoyment of scenic beauty, or conservation or use of natural resources.
(f)(1)Except as provided in paragraph (2), exempt surplus land means any of the following:
(A)Surplus land that is transferred pursuant to Section 25539.4 or 37364.
(B)Surplus land that is less than one-half acre in area and is not contiguous to land owned by a state or local agency that is used for open-space or low- and moderate-income housing purposes.
(C)Surplus land that a local agency is exchanging for another property necessary for the agencys use. Property may include easements necessary for the agencys use.
(D)Surplus land that a local agency is transferring to another local, state, or federal agency, or to a third-party intermediary for future dedication for the receiving agencys use, or to a federally recognized California Indian tribe. If the surplus land is transferred to a third-party intermediary, the receiving agencys use must be contained in a legally binding agreement at the time of transfer to the third-party intermediary.
(E)Surplus land that is a former street, right of way, or easement, and is conveyed to an owner of an adjacent property.
(F)(i)Surplus land that is to be developed for a housing development, which may have ancillary commercial ground floor uses, that restricts 100 percent of the residential units to persons and families of low or moderate income, with at least 75 percent of the residential units restricted to lower income households, as defined in Section 50079.5 of the Health and Safety Code, with an affordable sales price or an affordable rent, as defined in Section 50052.5 or 50053 of the Health and Safety Code, for a minimum of 55 years for rental housing, land use for ownership housing, and 50 years for rental or ownership housing located on tribal trust lands, and in no event shall the maximum affordable sales price or rent level be higher than 20 percent below the median market rents or sales prices for the neighborhood in which the site is located.
(ii)The requirements of clause (i) shall be contained in a covenant or restriction recorded against the surplus land at the time of sale that shall run with the land and be enforceable against any owner who violates the covenant or restriction and each successor in interest who continues the violation.
(G)(i)Surplus land that is subject to a local agencys open, competitive solicitation or that is put to open, competitive bid by a local agency, provided that all entities identified in subdivision (a) of Section 54222 will be invited to participate in the process, for a housing or a mixed-use development that is more than one acre and less than 10 acres in area, consisting of either a single parcel, or two or more adjacent or nonadjacent parcels combined, that includes not less than 300 residential units, and that restricts at least 25 percent of the residential units to lower income households, as defined in Section 50079.5 of the Health and Safety Code, with an affordable sales price or an affordable rent, as defined in Sections 50052.5 and 50053 of the Health and Safety Code, for a minimum of 55 years for rental housing, land use for ownership housing, and 50 years for rental or ownership housing located on tribal trust lands.
(ii)The requirements of clause (i) shall be contained in a covenant or restriction recorded against the surplus land at the time of sale that shall run with the land and be enforceable against any owner who violates the covenant or restriction and each successor in interest who continues the violation.
(H)(i)Surplus land totaling 10 or more acres, consisting of either a single parcel, or two or more adjacent or nonadjacent parcels combined for disposition to one or more buyers pursuant to a plan or ordinance adopted by the legislative body of the local agency, or a state statute. That surplus land shall be subject to a local agencys open, competitive solicitation process or put out to open, competitive bid by a local agency, provided that all entities identified in subdivision (a) of Section 54222 will be invited to participate in the process for a housing or mixed-use development.
(ii)The aggregate development shall include the greater of the following:
(I)Not less than three hundred residential units.
(II)A number of residential units equal to 10 times the number of acres of the surplus land or 10,000 residential units, whichever is less.
(iii)At least 25 percent of the residential units shall be restricted to lower income households, as defined in Section 50079.5 of the Health and Safety Code, with an affordable sales price or an affordable rent pursuant to Sections 50052.5 and 50053 of the Health and Safety Code, for a minimum of 55 years for rental housing, land use for ownership housing, and 50 years for rental or ownership housing located on tribal trust lands.
(iv)If nonresidential development is included in the development pursuant to this subparagraph, at least 25 percent of the total planned units affordable to lower income households shall be made available for lease or sale and permitted for use and occupancy before or at the same time with every 25 percent of nonresidential development made available for lease or sale and permitted for use and occupancy.
(v)A violation of this subparagraph is subject to the penalties described in Section 54230.5. Those penalties are in addition to any remedy a court may order for violation of this subparagraph. A local agency shall only dispose of land pursuant to this subparagraph through a disposition and development agreement that includes an indemnification clause that provides that if an action occurs after disposition violates this subparagraph, the person or entity that acquired the property shall be liable for the penalties.
(vi)The requirements of clauses (i) to (v), inclusive, shall be contained in a covenant or restriction recorded against the surplus land at the time of sale that shall run with the land and be enforceable against any owner who violates the covenant or restriction and each successor in interest who continues the violation.
(I)A mixed-use development, which may include more than one publicly owned parcel, that meets all of the following conditions:
(i)The development restricts at least 25 percent of the residential units to lower income households, as defined in Section 50079.5 of the Health and Safety Code, with an affordable sales price or an affordable rent, as defined in Sections 50052.5 and 50053 of the Health and Safety Code, for a minimum of 55 years for rental housing, land use for ownership housing, and 50 years for rental or ownership housing located on tribal trust lands.
(ii)At least 50 percent of the square footage of the new construction associated with the development is designated for residential use.
(iii)The development is not located in an urbanized area, as defined in Section 21094.5 of the Public Resources Code.
(J)(i)Surplus land that is subject to a valid legal restriction that is not imposed by the local agency and that makes housing prohibited, unless there is a feasible method to satisfactorily mitigate or avoid the prohibition on the site. A declaration of exemption pursuant to this subparagraph shall be supported by documentary evidence establishing the valid legal restriction. For the purposes of this section, documentary evidence includes, but is not limited to, a contract, agreement, deed restriction, statute, regulation or other writing that documents the valid legal restriction.
(ii)Valid legal restrictions include, but are not limited to, all of the following:
(I)Existing constraints under ownership rights or contractual rights or obligations that prevent the use of the property for housing, if the rights or obligations were agreed to prior to September 30, 2019.
(II)Conservation or other easements or encumbrances that prevent housing development.
(III)Existing leases, or other contractual obligations or restrictions, if the terms were agreed to prior to September 30, 2019.
(IV)Restrictions imposed by the source of funding that a local agency used to purchase a property, provided that both of the following requirements are met:
(ia)The restrictions limit the use of those funds to purposes other than housing.
(ib)The proposed disposal of surplus land meets a use consistent with that purpose.
(ii)Valid legal restrictions that would make housing prohibited do not include either of the following:
(I)An existing nonresidential land use designation on the surplus land.
(II)Covenants, restrictions, or other conditions on the property rendered void and unenforceable by any other law, including, but not limited to, Section 714.6 of the Civil Code.
(iii)Feasible methods to mitigate or avoid a valid legal restriction on the site do not include a requirement that the local agency acquire additional property rights or property interests belonging to third parties.
(K)Surplus land that was granted by the state in trust to a local agency or that was acquired by the local agency for trust purposes by purchase or exchange, and for which disposal of the land is authorized or required subject to conditions established by statute.
(L)Land that is subject to either of the following, unless compliance with this article is expressly required:
(i)Section 17388, 17515, 17536, 81192, 81397, 81399, 81420, or 81422 of the Education Code.
(ii)Part 14 (commencing with Section 53570) of Division 31 of the Health and Safety Code.
(M)Surplus land that is a former military base that was conveyed by the federal government to a local agency, and is subject to Article 8 (commencing with Section 33492.125) of Chapter 4.5 of Part 1 of Division 24 of the Health and Safety Code, provided that all of the following conditions are met:
(i)The former military base has an aggregate area greater than five acres, is expected to include a mix of residential and nonresidential uses, and is expected to include no fewer than 1,400 residential units upon completion of development or redevelopment of the former military base.
(ii)The affordability requirements for residential units shall be governed by a settlement agreement entered into prior to September 1, 2020. Furthermore, at least 25 percent of the initial 1,400 residential units developed shall be restricted to lower income households, as defined in Section 50079.5 of the Health and Safety Code, with an affordable sales price or an affordable rent, as defined in Sections 50052.5 and 50053 of the Health and Safety Code, for a minimum of 55 years for rental housing, land use for ownership housing, and 50 years for rental or ownership housing located on tribal trust lands.
(iii)Before disposition of the surplus land, the agency adopts written findings that the land is exempt surplus land pursuant to this subparagraph.
(iv)Before disposition of the surplus land, the recipient has negotiated a project labor agreement consistent with the local agencys project stabilization agreement resolution, as adopted on February 2, 2021, and any succeeding ordinance, resolution, or policy, regardless of the length of the agreement between the local agency and the recipient.
(v)The agency includes in the annual report required by paragraph (2) of subdivision (a) of Section 65400 the status of development of residential units on the former military base, including the total number of residential units that have been permitted and what percentage of those residential units are restricted for persons and families of low or moderate income, or lower income households, as defined in Section 50079.5 of the Health and Safety Code.
A violation of this subparagraph is subject to the penalties described in Section 54230.5. Those penalties are in addition to any remedy a court may order for violation of this subparagraph or the settlement agreement.
(N)Real property that is used by a district for an agencys use expressly authorized in subdivision (c).
(O)Land that has been transferred before June 30, 2019, by the state to a local agency pursuant to Section 32667 of the Streets and Highways Code and has a minimum planned residential density of at least 100 dwelling units per acre, and includes 100 or more residential units that are restricted to persons and families of low or moderate income, with an affordable sales price or an affordable rent, as defined in Sections 50052.5 and 50053 of the Health and Safety Code, for a minimum of 55 years for rental housing, land use for ownership housing, and 50 years for rental or ownership housing located on tribal trust lands. For purposes of this subparagraph, not more than 20 percent of the affordable units may be restricted to persons and families of moderate income and at least 80 percent of the affordable units must be restricted to lower income households as defined in Section 50079.5 of the Health and Safety Code.
(P)(i)Land that meets the following conditions:
(I)Land that is subject to a sectional planning area document that meets both of the following:
(ia)The sectional planning area was adopted prior to January 1, 2019.
(ib)The sectional planning area document is consistent with county and city general plans applicable to the land.
(II)The land identified in the adopted sectional planning area document was dedicated prior to January 1, 2019 2019.
(III)On January 1, 2019, the parcels on the land met at least one of the following conditions:
(ia)The land was subject to an irrevocable offer of dedication of fee interest requiring the land to be used for a specified purpose.
(ib)The land was acquired through a land exchange subject to a land offer agreement that grants the lands original owner the right to repurchase the land acquired by the local agency pursuant to the agreement if the land will not be developed in a manner consistent with the agreement.
(ic)The land was subject to a grant deed specifying that the property shall be used for educational uses and limiting other types of uses allowed on the property.
(IV)At least 25 percent of the units are dedicated to lower income households, as defined in Section 50079.5 of the Health and Safety Code, at an affordable rent, as defined by Section 50053 of the Health and Safety Code, or an affordable housing cost, as defined by Section 50052.5 of the Health and Safety Code, and subject to a recorded deed restriction for a period of 55 years for rental units and land use for owner-occupied units.
(V)The land is developed at an average density of at least 10 units per acre, calculated with respect to the entire sectional planning area.
(VI)No more than 25 percent of the nonresidential square footage identified in the sectional planning area document receives its first certificate of occupancy before at least 25 percent of the residential square footage identified in the sectional planning area document has received its first certificate of occupancy.
(VII)No more than 50 percent of the nonresidential square footage identified in the sectional planning area document receives its first certificate of occupancy before at least 50 percent of the residential square footage identified in the sectional planning area document has received its first certificate of occupancy.
(VIII)No more than 75 percent of the nonresidential square footage identified in the sectional planning area document shall receive its first certificate of occupancy before at least 75 percent of the residential square footage identified in the sectional planning area document has received its first certificate of occupancy.
(ii)The local agency includes in the annual report required by paragraph (2) of subdivision (a) of Section 65400 the status of development, including the total square footage of the residential and nonresidential development, the number of residential units that have been permitted, and what percentage of those residential units are restricted for persons and families of low or moderate income, or lower income households, as defined in Section 50079.5 of the Health and Safety Code.
(iii)The Department of Housing and Community Development may request additional information from the agency regarding land disposed of pursuant to this subparagraph.
(iv)At least 30 days prior to disposing of land declared exempt surplus land, a local agency shall provide the Department of Housing and Community Development a written notification of its declaration and findings in a form prescribed by the Department of Housing and Community Development. Within 30 days of receipt of the written notification and findings, the department shall notify the local agency if the department has determined that the local agency is in violation of this article. A local agency that fails to submit the written notification and findings shall be liable for a civil penalty pursuant to this subparagraph. A local agency shall not be liable for the civil penalty if the Department of Housing and Community Development does not notify the agency that the agency is in violation of this article within 30 days of receiving the written notification and findings. Once the department determines that the declarations and findings comply with subclauses (I) to (IV), inclusive, of clause (i), the local agency may proceed with disposal of land pursuant to this subparagraph. This clause is declaratory of, and not a change in, existing law.
(v)If the local agency disposes of land in violation of this subparagraph, the local agency shall be liable for a civil penalty calculated as follows:
(I)For a first violation, 30 percent of the greater of the final sale price or the fair market value of the land at the time of disposition.
(II)For a second or subsequent violation, 50 percent of the greater of the final sale price or the fair market value of the land at the time of disposition.
(III)For purposes of this subparagraph, fair market value shall be determined by an independent appraisal of the land.
(IV)An action to enforce this subparagraph may be brought by any of the following:
(ia)An entity identified in subdivisions (a) to (e), inclusive, of Section 54222.
(ib)A person who would have been eligible to apply for residency in affordable housing had the agency not violated this section.
(ic)A housing organization, as that term is defined in Section 65589.5.
(id)A beneficially interested person or entity.
(ie)The Department of Housing and Community Development.
(V)A penalty assessed pursuant to this subparagraph shall, except as otherwise provided, be deposited into a local housing trust fund. The local agency may elect to instead deposit the penalty moneys into the Building Homes and Jobs Trust Fund or the Housing Rehabilitation Loan Fund. Penalties shall not be paid out of funds already dedicated to affordable housing, including, but not limited to, Low and Moderate Income Housing Asset Funds, funds dedicated to housing for very low, low-, and moderate-income households, and federal HOME Investment Partnerships Program and Community Development Block Grant Program funds. The local agency shall commit and expend the penalty moneys deposited into the local housing trust fund within five years of deposit for the sole purpose of financing newly constructed housing units that are affordable to extremely low, very low, or low-income households.
(VI)Five years after deposit of the penalty moneys into the local housing trust fund, if the funds have not been expended, the funds shall revert to the state and be deposited in the Building Homes and Jobs Trust Fund or the Housing Rehabilitation Loan Fund for the sole purpose of financing newly constructed housing units located in the same jurisdiction as the surplus land and that are affordable to extremely low, very low, or low-income households. Expenditure of any penalty moneys deposited into the Building Homes and Jobs Trust Fund or the Housing Rehabilitation Loan Fund pursuant to this subdivision shall be subject to appropriation by the Legislature.
(vi)For purposes of this subparagraph, the following definitions apply:
(I)Sectional planning area means an area composed of identifiable planning units, within which common services and facilities, a strong internal unity, and an integrated pattern of land use, circulation, and townscape planning are readily achievable.
(II)Sectional planning area document means a document or plan that sets forth, at minimum, a site utilization plan of the sectional planning area and development standards for each land use area and designation.
(vii)This subparagraph shall become inoperative on January 1, 2034.
(Q)Land that is owned by a California public-use airport on which residential uses are prohibited pursuant to Federal Aviation Administration Order 5190.6B, Airport Compliance Program, Chapter 20 -- Compatible Land Use and Airspace Protection.
(R)Land that is transferred to a community land trust, and all of the following conditions are met:
(i)The property is being or will be developed or rehabilitated as any of the following:
(I)An owner-occupied single-family dwelling.
(II)An owner-occupied unit in a multifamily dwelling.
(III)A member-occupied unit in a limited equity housing cooperative.
(IV)A rental housing development.
(ii)Improvements on the property are or will be available for use and ownership or for rent by qualified persons, as defined in paragraph (6) of subdivision (c) of Section 214.18 of the Revenue and Taxation Code.
(iii)(I)A deed restriction or other instrument, requiring a contract or contracts serving as an enforceable restriction on the sale or resale value of owner-occupied units or on the affordability of rental units is recorded on or before the lien date following the acquisition of the property by the community land trust.
(II)For the purpose of this clause, the following definitions apply:
(ia)A contract or contracts serving as an enforceable restriction on the sale or resale value of owner-occupied units means a contract described in paragraph (11) of subdivision (a) of Section 402.1 of the Revenue and Taxation Code.
(ib)A contract or contracts serving as an enforceable restriction on the affordability of rental units means an enforceable and verifiable agreement with a public agency, a recorded deed restriction, or other legal document described in subparagraph (A) of paragraph (2) of subdivision (g) of Section 214 of the Revenue and Taxation Code.
(iv)A copy of the deed restriction or other instrument shall be provided to the assessor.
(S)(i)For local agencies whose primary mission or purpose is to supply the public with a transportation system, surplus land that is developed for commercial, or industrial uses or activities, including nongovernmental retail, entertainment, or office development or for the sole purpose of investment or generation of revenue, if the agency meets all of the following conditions:
(I)The agency has an adopted land use plan or policy that designates at least 50 percent of the of the gross acreage covered by the adopted land use plan or policy for residential purposes. The adopted land use plan or policy shall also require the development of at least 300 residential units, or at least 10 residential units per gross acre, averaged across all land covered by the land use plan or policy, whichever is greater.
(II)The agency has an adopted land use plan or policy that requires at least 25 percent of all residential units to be developed on the parcels covered by the adopted land use plan or policy made available to lower income households, as defined in Section 50079 of the Health and Safety Code, at an affordable sales price or rented at an affordable rent, as defined in Sections 50052.5 and 50053 of the Health and Safety Code, for a minimum of 55 years for rental housing and 45 years for ownership housing. These terms shall be included in the land use plan or policy and dictate that they will be contained in a covenant or restriction recorded against the surplus land at the time of disposition that shall run with the land and be enforceable against any owner or lessee who violates the covenant or restriction and each successor in interest who continues the violation.
(III)Land disposed of for residential purposes shall issue a competitive request for proposals subject to the local agencys open, competitive solicitation process or put out to open, competitive bid by the local agency, provided that all entities identified in subdivision (a) of Section 54222 are invited to participate.
(IV)Prior to entering into an agreement to dispose of a parcel for nonresidential development on land designated for the purposes authorized pursuant to this subparagraph in an agencys adopted land use plan or policy, the agency, since January 1, 2020, must have entered into an agreement to dispose of a minimum of 25 percent of the land designated for affordable housing pursuant to subclause (II).
(ii)The agency may exempt at one time all parcels covered by the adopted land use plan or policy pursuant to this subparagraph.
(2)Notwithstanding paragraph (1), a written notice of the availability of surplus land for open-space purposes shall be sent to the entities described in subdivision (b) of Section 54222 before disposing of the surplus land, provided the land does not meet the criteria in subparagraph (H) of paragraph (1), if the land is any of the following:
(A)Within a coastal zone.
(B)Adjacent to a historical unit of the State Parks System.
(C)Listed on, or determined by the State Office of Historic Preservation to be eligible for, the National Register of Historic Places.
(D)Within the Lake Tahoe region as defined in Section 66905.5.
(g)Persons and families of low or moderate income has the same meaning as provided in Section 50093 of the Health and Safety Code.
SEC. 2.Section 54222.3 of the Government Code is amended to read:54222.3.This Except as otherwise provided in Section 54234.5, this article shall not apply to the disposal of exempt surplus land as defined in Section 54221 by an agency of the state or any local agency.
SEC. 3.Section 54230 of the Government Code is amended to read:54230.(a)(1)On or before December 31 of each year, each county and each city shall make a central inventory of all surplus land, as defined in subdivision (b) of Section 54221, and all lands in excess of its foreseeable needs, if any, identified pursuant to Section 50569, located in all urbanized areas and urban clusters, as designated by the United States Census Bureau, within the jurisdiction of the county or city that the county or city or any of its departments, agencies, or authorities owns or controls.
(2)(A)Subject to subparagraph (C), each county and each city shall make a description of each parcel described in paragraph (1) and the present use of the parcel a matter of public record and shall report this information to the Department of Housing and Community Development no later than April 1 of each year, beginning April 1, 2021, in a form prescribed by the department, as part of its annual progress report submitted pursuant to paragraph (2) of subdivision (a) of Section 65400.
(B)The information reported pursuant to this paragraph shall include, but not be limited to, the following information with respect to each site:
(i)Street address, or similar location information.
(ii)Assessors parcel number.
(iii)Existing use.
(iv)Whether the site is surplus land or exempt surplus land.
(v)Size in acres.
(C)The Department of Housing and Community Development may, in its discretion, delay implementation of this paragraph until April 1, 2022.
(3)Each county and each city, upon request, shall provide a list of its surplus land and excess surplus land to an individual, limited dividend corporation, housing corporation, or nonprofit corporation without charge.
(b)The Department of Housing and Community Development shall provide the information reported to it by a city or county pursuant to paragraph (2) of subdivision (a) to the Department of General Services for inclusion in a digitized inventory of all state-owned parcels that are in excess of state needs.
(c)The Department of Housing and Community Development may review, adopt, amend, and repeal standards, forms, and definitions in order to implement this section. Any standards, forms, or definitions adopted, amended, or repealed pursuant to this subdivision are hereby exempt from the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2).
SEC. 4.Section 54230.5 of the Government Code is amended to read:54230.5.(a)(1)A local agency that disposes of surplus land in violation of this article after receiving a notification from the Department of Housing and Community Development pursuant to subdivision (b) that the local agency is in violation of this article shall be liable for a penalty of 30 percent of the applicable disposition value for a first violation, and 50 percent for any subsequent violation. These penalties shall not apply to violations that do not impact the availability and priority of, or the construction of, housing affordable to lower income households or the ultimate disposition of the land in compliance with this article, such as clerical errors. An entity identified in Section 54222 or a person who would have been eligible to apply for residency in any affordable housing developed or a housing organization as defined in Section 65589.5, or any beneficially interested person or entity may bring an action to enforce this section. A local agency shall have 60 days to cure or correct an alleged violation before an action may be brought to enforce this section, unless the local agency disposes of the surplus land before curing or correcting the alleged violation, or the department deems the alleged violation not to be a violation in less than 60 days.
(2)For the purposes of this section, disposition value means:
(A)In the case of a sale, the greater of the final sale price of the land or the fair market value of the surplus land at the time of sale, as determined by an independent appraisal of the surplus land sold in violation of this article.
(B)In the case of a lease, the discounted net present value of the fair market value of the lease as of the date the lease was entered into, as determined by an independent appraisal of the lease of surplus land in violation of this article.
(3)A penalty assessed pursuant to this subdivision shall, except as otherwise provided, be deposited into a local housing trust fund. The local agency may elect to instead deposit the penalty moneys into the Building Homes and Jobs Trust Fund or the Housing Rehabilitation Loan Fund. Penalties shall not be paid out of funds already dedicated to affordable housing, including, but not limited to, Low and Moderate Income Housing Asset Funds, funds dedicated to housing for very low, low-, and moderate-income households, and federal HOME Investment Partnerships Program and Community Development Block Grant Program funds. The local agency shall commit and expend the penalty moneys deposited into the local housing trust fund within five years of deposit for the sole purpose of financing newly constructed housing units that are affordable to extremely low, very low, or low-income households.
(4)Five years after deposit of the penalty moneys into the local housing trust fund, if the funds have not been expended, the funds shall revert to the state and be deposited in the Building Homes and Jobs Trust Fund or the Housing Rehabilitation Loan Fund for the sole purpose of financing newly constructed housing units located in the same jurisdiction as the surplus land and that are affordable to extremely low, very low, or low-income households. Expenditure of any penalty moneys deposited into the Building Homes and Jobs Trust Fund or the Housing Rehabilitation Loan Fund pursuant to this subdivision shall be subject to appropriation by the Legislature.
(b)(1)Before agreeing to terms for the disposition of surplus land, a local agency shall provide to the Department of Housing and Community Development a description of the notices of availability sent, and negotiations conducted with any responding entities, in regard to the disposal of the parcel of surplus land and a copy of any restrictions to be recorded against the property pursuant to Section 54222.5, 54233, or 54233.5, whichever is applicable, in a form prescribed by the Department of Housing and Community Development. A local agency may submit this information after it has sent notices of availability required by Section 54222 and concluded negotiations with any responding agencies. A local agency shall not be liable for the penalty imposed by subdivision (a) if the Department of Housing and Community Development does not notify the agency that the agency is in violation of this article within 30 days of receiving the description.
(2)The Department of Housing and Community Development shall do all of the following:
(A)Make available educational resources and materials that inform each agency of its obligations under this article and that provide guidance on how to comply with its provisions.
(B)Review information submitted pursuant to paragraph (1).
(C)Submit written findings to the local agency within 30 days of receipt of the description required by paragraph (1) from the local agency if the proposed disposal of the land will violate this article.
(D)Review, adopt, amend, or repeal guidelines to establish uniform standards to implement this section. The guidelines adopted pursuant to this subdivision are not subject to Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2.
(E)Provide the local agency reasonable time, but not less than 60 days, to respond to the findings before taking any other action authorized by this section.
(3)(A)The local agency shall consider findings made by the Department of Housing and Community Development pursuant to subparagraph (C) of paragraph (2) and shall do one of the following:
(i)Correct any issues identified by the Department of Housing and Community Development.
(ii)Provide written findings explaining the reason its process for disposing of surplus land complies with this article and addressing the Department of Housing and Community Developments findings.
(B)If the local agency does not correct issues identified by the Department of Housing and Community Development, does not provide findings explaining the reason its process for disposing of surplus land complies with this article and addressing the Department of Housing and Community Developments findings, or if the Department of Housing and Community Development finds that the local agencys findings are deficient in addressing the issues identified by the Department of Housing and Community Development, the Department of Housing and Community Development shall notify the local agency, and may notify the Attorney General, that the local agency is in violation of this article.
(c)The Department of Housing and Community Development shall implement the changes in this section made by the act adding this subdivision commencing on January 1, 2021.
(d)Notwithstanding subdivision (c), this section shall not be construed to limit any other remedies authorized under law to enforce this article including public records act requests pursuant to Division 10 (commencing with Section 7920.000) of Title 1.
SEC. 5.Section 54234.5 is added to the Government Code, to read:54234.5.Any rule, policy, or standard of general application issued by the Department of Housing and Community Development in implementing this article shall be subject to the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2).
As used in this article, the following definitions shall apply:
(a)(1)Local agency means every city, whether organized under general law or by charter, county, city and county, district, including school, sewer, water, utility, and local and regional park districts of any kind or class, joint powers authority, successor agency to a former redevelopment agency, housing authority, or other political subdivision of this state and any instrumentality thereof that is empowered to acquire and hold real property.
(2)The Legislature finds and declares that the term district as used in this article includes all districts within the state, including, but not limited to, all special districts, sewer, water, utility, and local and regional park districts, and any other political subdivision of this state that is a district, and therefore the changes in paragraph (1) made by the act adding this paragraph that specify that the provisions of this article apply to all districts, including school, sewer, water, utility, and local and regional park districts of any kind or class, are declaratory of, and not a change in, existing law.
(b)(1)Surplus land means land owned in fee simple by any local agency for which the local agencys governing body takes formal action in a regular public meeting declaring that the land is surplus and is not necessary for the agencys use. Land shall be declared either surplus land or exempt surplus land, as supported by written findings, before a local agency may take any action to dispose of it consistent with an agencys policies or procedures. A local agency, on an annual basis, may declare multiple parcels as surplus land or exempt surplus land.
(2)Surplus land includes land held in the Community Redevelopment Property Trust Fund pursuant to Section 34191.4 of the Health and Safety Code and land that has been designated in the long-range property management plan approved by the Department of Finance pursuant to Section 34191.5 of the Health and Safety Code, either for sale or for future development, but does not include any specific disposal of land to an identified entity described in the plan.
(3)Nothing in this article prevents a local agency from obtaining fair market value for the disposition of surplus land consistent with Section 54226.
(4)Notwithstanding paragraph (1), a local agency is not required to make a declaration at a public meeting for land that is exempt surplus land pursuant to subparagraph (A), (B), (E), (K), (L), or (Q) of paragraph (1) of subdivision (f) if the local agency identifies the land in a notice that is published and available for public comment, including notice to the entities identified in subdivision (a) of Section 54222, at least 30 days before the exemption takes effect.
(5)For the purposes of this article, each parcel of land shall be considered a distinct unit of surplus land, except that contiguous parcels that are disposed of simultaneously to the same receiving entity, or any entity working in concert with another receiving entity, shall be treated as a single unit of land.
(c)(1)Except as provided in paragraph (2), agencys use shall include, but not be limited to, land that is being used, or is planned to be used pursuant to a written plan adopted by the local agencys governing board, for agency work or operations, including, but not limited to, utility sites, property owned by a port that is used to support logistics uses, watershed property, land being used for conservation purposes, land for demonstration, exhibition, or educational purposes related to greenhouse gas emissions, sites for broadband equipment or wireless facilities, and buffer sites near sensitive governmental uses, including, but not limited to, waste disposal sites, and wastewater treatment plants. Agencys use by a local agency that is a district shall also include land disposed for uses described in subparagraph (B) of paragraph (2).
(2)(A)Agencys use shall not include commercial or industrial uses or activities, including nongovernmental retail, entertainment, or office development. Property disposed of for the sole purpose of investment or generation of revenue shall not be considered necessary for the agencys use.
(B)In the case of a local agency that is a district, excepting those whose primary mission or purpose is to supply the public with a transportation system, agencys use may include commercial or industrial uses or activities, including nongovernmental retail, entertainment, or office development or be for the sole purpose of investment or generation of revenue if the agencys governing body takes action in a public meeting declaring that the use of the site will do one of the following:
(i)Directly further the express purpose of agency work or operations.
(ii)Be expressly authorized by a statute governing the local agency, provided the district complies with Section 54233.5 if applicable.
(d)(1) Dispose means either of the following:
(A)The sale of the surplus land.
(B)The entering of a lease for surplus land, which is for a term longer than 15 years, inclusive of any extension or renewal options included in the terms of the initial lease, entered into on or after January 1, 2024.
(2)Dispose shall not mean either of the following:
(A)The entering of a lease for surplus land, which is for a term of 15 years or less, inclusive of any extension or renewal options included in the terms of the initial lease.
(B)The entering of a lease for surplus land on which no development or demolition will occur, regardless of the term of the lease.
(e)Open-space purposes means the use of land for public recreation, enjoyment of scenic beauty, or conservation or use of natural resources.
(f)(1)Except as provided in paragraph (2), exempt surplus land means any of the following:
(A)Surplus land that is transferred pursuant to Section 25539.4 or 37364.
(B)Surplus land that is less than one-half acre in area and is not contiguous to land owned by a state or local agency that is used for open-space or low- and moderate-income housing purposes.
(C)Surplus land that a local agency is exchanging for another property necessary for the agencys use. Property may include easements necessary for the agencys use.
(D)Surplus land that a local agency is transferring to another local, state, or federal agency, or to a third-party intermediary for future dedication for the receiving agencys use, or to a federally recognized California Indian tribe. If the surplus land is transferred to a third-party intermediary, the receiving agencys use must be contained in a legally binding agreement at the time of transfer to the third-party intermediary.
(E)Surplus land that is a former street, right of way, or easement, and is conveyed to an owner of an adjacent property.
(F)(i)Surplus land that is to be developed for a housing development, which may have ancillary commercial ground floor uses, that restricts 100 percent of the residential units to persons and families of low or moderate income, with at least 75 percent of the residential units restricted to lower income households, as defined in Section 50079.5 of the Health and Safety Code, with an affordable sales price or an affordable rent, as defined in Section 50052.5 or 50053 of the Health and Safety Code, for a minimum of 55 years for rental housing, land use for ownership housing, and 50 years for rental or ownership housing located on tribal trust lands, and in no event shall the maximum affordable sales price or rent level be higher than 20 percent below the median market rents or sales prices for the neighborhood in which the site is located.
(ii)The requirements of clause (i) shall be contained in a covenant or restriction recorded against the surplus land at the time of sale that shall run with the land and be enforceable against any owner who violates the covenant or restriction and each successor in interest who continues the violation.
(G)(i)Surplus land that is subject to a local agencys open, competitive solicitation or that is put to open, competitive bid by a local agency, provided that all entities identified in subdivision (a) of Section 54222 will be invited to participate in the process, for a housing or a mixed-use development that is more than one acre and less than 10 acres in area, consisting of either a single parcel, or two or more adjacent or non-adjacent nonadjacent parcels combined, that includes not less than 300 residential units, and that restricts at least 25 percent of the residential units to lower income households, as defined in Section 50079.5 of the Health and Safety Code, with an affordable sales price or an affordable rent, as defined in Sections 50052.5 and 50053 of the Health and Safety Code, for a minimum of 55 years for rental housing, land use for ownership housing, and 50 years for rental or ownership housing located on tribal trust lands.
(ii)The requirements of clause (i) shall be contained in a covenant or restriction recorded against the surplus land at the time of sale that shall run with the land and be enforceable against any owner who violates the covenant or restriction and each successor in interest who continues the violation.
(H)(i)Surplus land totaling 10 or more acres, consisting of either a single parcel, or two or more adjacent or non-adjacent nonadjacent parcels combined for disposition to one or more buyers pursuant to a plan or ordinance adopted by the legislative body of the local agency, or a state statute. That surplus land shall be subject to a local agencys open, competitive solicitation process or put out to open, competitive bid by a local agency, provided that all entities identified in subdivision (a) of Section 54222 will be invited to participate in the process for a housing or mixed-use development.
(ii)The aggregate development shall include the greater of the following:
(I)Not less than three hundred residential units.
(II)A number of residential units equal to 10 times the number of acres of the surplus land or 10,000 residential units, whichever is less.
(iii)At least 25 percent of the residential units shall be restricted to lower income households, as defined in Section 50079.5 of the Health and Safety Code, with an affordable sales price or an affordable rent pursuant to Sections 50052.5 and 50053 of the Health and Safety Code, for a minimum of 55 years for rental housing, land use for ownership housing, and 50 years for rental or ownership housing located on tribal trust lands.
(iv)If nonresidential development is included in the development pursuant to this subparagraph, at least 25 percent of the total planned units affordable to lower income households shall be made available for lease or sale and permitted for use and occupancy before or at the same time with every 25 percent of nonresidential development made available for lease or sale and permitted for use and occupancy.
(v)A violation of this subparagraph is subject to the penalties described in Section 54230.5. Those penalties are in addition to any remedy a court may order for violation of this subparagraph. A local agency shall only dispose of land pursuant to this subparagraph through a disposition and development agreement that includes an indemnification clause that provides that if an action occurs after disposition violates this subparagraph, the person or entity that acquired the property shall be liable for the penalties.
(vi)The requirements of clauses (i) to (v), inclusive, shall be contained in a covenant or restriction recorded against the surplus land at the time of sale that shall run with the land and be enforceable against any owner who violates the covenant or restriction and each successor in interest who continues the violation.
(I)A mixed-use development, which may include more than one publicly owned parcel, that meets all of the following conditions:
(i)The development restricts at least 25 percent of the residential units to lower income households, as defined in Section 50079.5 of the Health and Safety Code, with an affordable sales price or an affordable rent, as defined in Sections 50052.5 and 50053 of the Health and Safety Code, for a minimum of 55 years for rental housing, land use for ownership housing, and 50 years for rental or ownership housing located on tribal trust lands.
(ii)At least 50 percent of the square footage of the new construction associated with the development is designated for residential use.
(iii)The development is not located in an urbanized area, as defined in Section 21094.5 of the Public Resources Code.
(J)(i)Surplus land that is subject to a valid legal restriction that is not imposed by the local agency and that makes housing prohibited, unless there is a feasible method to satisfactorily mitigate or avoid the prohibition on the site. A declaration of exemption pursuant to this subparagraph shall be supported by documentary evidence establishing the valid legal restriction. For the purposes of this section, documentary evidence includes, but is not limited to, a contract, agreement, deed restriction, statute, regulation or other writing that documents the valid legal restriction.
(ii)Valid legal restrictions include, but are not limited to, all of the following:
(I)Existing constraints under ownership rights or contractual rights or obligations that prevent the use of the property for housing, if the rights or obligations were agreed to prior to September 30, 2019.
(II)Conservation or other easements or encumbrances that prevent housing development.
(III)Existing leases, or other contractual obligations or restrictions, if the terms were agreed to prior to September 30, 2019.
(IV)Restrictions imposed by the source of funding that a local agency used to purchase a property, provided that both of the following requirements are met:
(ia)The restrictions limit the use of those funds to purposes other than housing.
(ib)The proposed disposal of surplus land meets a use consistent with that purpose.
(ii)Valid legal restrictions that would make housing prohibited do not include either of the following:
(I)An existing nonresidential land use designation on the surplus land.
(II)Covenants, restrictions, or other conditions on the property rendered void and unenforceable by any other law, including, but not limited to, Section 714.6 of the Civil Code.
(iii)Feasible methods to mitigate or avoid a valid legal restriction on the site do not include a requirement that the local agency acquire additional property rights or property interests belonging to third parties.
(K)Surplus land that was granted by the state in trust to a local agency or that was acquired by the local agency for trust purposes by purchase or exchange, and for which disposal of the land is authorized or required subject to conditions established by statute.
(L)Land that is subject to either of the following, unless compliance with this article is expressly required:
(i)Section 17388, 17515, 17536, 81192, 81397, 81399, 81420, or 81422 of the Education Code.
(ii)Part 14 (commencing with Section 53570) of Division 31 of the Health and Safety Code.
(M)Surplus land that is a former military base that was conveyed by the federal government to a local agency, and is subject to Article 8 (commencing with Section 33492.125) of Chapter 4.5 of Part 1 of Division 24 of the Health and Safety Code, provided that all of the following conditions are met:
(i)The former military base has an aggregate area greater than five acres, is expected to include a mix of residential and nonresidential uses, and is expected to include no fewer than 1,400 residential units upon completion of development or redevelopment of the former military base.
(ii)The affordability requirements for residential units shall be governed by a settlement agreement entered into prior to September 1, 2020. Furthermore, at least 25 percent of the initial 1,400 residential units developed shall be restricted to lower income households, as defined in Section 50079.5 of the Health and Safety Code, with an affordable sales price or an affordable rent, as defined in Sections 50052.5 and 50053 of the Health and Safety Code, for a minimum of 55 years for rental housing, land use for ownership housing, and 50 years for rental or ownership housing located on tribal trust lands.
(iii)Before disposition of the surplus land, the agency adopts written findings that the land is exempt surplus land pursuant to this subparagraph.
(iv)Before disposition of the surplus land, the recipient has negotiated a project labor agreement consistent with the local agencys project stabilization agreement resolution, as adopted on February 2, 2021, and any succeeding ordinance, resolution, or policy, regardless of the length of the agreement between the local agency and the recipient.
(v)The agency includes in the annual report required by paragraph (2) of subdivision (a) of Section 65400 the status of development of residential units on the former military base, including the total number of residential units that have been permitted and what percentage of those residential units are restricted for persons and families of low or moderate income, or lower income households, as defined in Section 50079.5 of the Health and Safety Code.
A violation of this subparagraph is subject to the penalties described in Section 54230.5. Those penalties are in addition to any remedy a court may order for violation of this subparagraph or the settlement agreement.
(N)Real property that is used by a district for an agencys use expressly authorized in subdivision (c).
(O)Land that has been transferred before June 30, 2019, by the state to a local agency pursuant to Section 32667 of the Streets and Highways Code and has a minimum planned residential density of at least 100 dwelling units per acre, and includes 100 or more residential units that are restricted to persons and families of low or moderate income, with an affordable sales price or an affordable rent, as defined in Sections 50052.5 and 50053 of the Health and Safety Code, for a minimum of 55 years for rental housing, land use for ownership housing, and 50 years for rental or ownership housing located on tribal trust lands. For purposes of this subparagraph, not more than 20 percent of the affordable units may be restricted to persons and families of moderate income and at least 80 percent of the affordable units must be restricted to lower income households as defined in Section 50079.5 of the Health and Safety Code.
(P)(i)Land that meets the following conditions:
(I)Land that is subject to a sectional planning area document that meets both of the following:
(ia)The sectional planning area was adopted prior to January 1, 2019.
(ib)The sectional planning area document is consistent with county and city general plans applicable to the land.
(II)The land identified in the adopted sectional planning area document was dedicated prior to January 1, 2019
(III)On January 1, 2019, the parcels on the land met at least one of the following conditions:
(ia)The land was subject to an irrevocable offer of dedication of fee interest requiring the land to be used for a specified purpose.
(ib)The land was acquired through a land exchange subject to a land offer agreement that grants the lands original owner the right to repurchase the land acquired by the local agency pursuant to the agreement if the land will not be developed in a manner consistent with the agreement.
(ic)The land was subject to a grant deed specifying that the property shall be used for educational uses and limiting other types of uses allowed on the property.
(IV)At least 25 percent of the units are dedicated to lower income households, as defined in Section 50079.5 of the Health and Safety Code, at an affordable rent, as defined by Section 50053 of the Health and Safety Code, or an affordable housing cost, as defined by Section 50052.5 of the Health and Safety Code, and subject to a recorded deed restriction for a period of 55 years for rental units and land use for owner-occupied units.
(V)The land is developed at an average density of at least 10 units per acre, calculated with respect to the entire sectional planning area.
(VI)No more than 25 percent of the nonresidential square footage identified in the sectional planning area document receives its first certificate of occupancy before at least 25 percent of the residential square footage identified in the sectional planning area document has received its first certificate of occupancy.
(VII)No more than 50 percent of the nonresidential square footage identified in the sectional planning area document receives its first certificate of occupancy before at least 50 percent of the residential square footage identified in the sectional planning area document has received its first certificate of occupancy.
(VIII)No more than 75 percent of the nonresidential square footage identified in the sectional planning area document shall receive its first certificate of occupancy before at least 75 percent of the residential square footage identified in the sectional planning area document has received its first certificate of occupancy.
(ii)The local agency includes in the annual report required by paragraph (2) of subdivision (a) of Section 65400 the status of development, including the total square footage of the residential and nonresidential development, the number of residential units that have been permitted, and what percentage of those residential units are restricted for persons and families of low or moderate income, or lower income households, as defined in Section 50079.5 of the Health and Safety Code.
(iii)The Department of Housing and Community Development may request additional information from the agency regarding land disposed of pursuant to this subparagraph.
(iv)At least 30 days prior to disposing of land declared exempt surplus land, a local agency shall provide the Department of Housing and Community Development a written notification of its declaration and findings in a form prescribed by the Department of Housing and Community Development. Within 30 days of receipt of the written notification and findings, the department shall notify the local agency if the department has determined that the local agency is in violation of this article. A local agency that fails to submit the written notification and findings shall be liable for a civil penalty pursuant to this subparagraph. A local agency shall not be liable for the civil penalty if the Department of Housing and Community Development does not notify the agency that the agency is in violation of this article within 30 days of receiving the written notification and findings. Once the department determines that the declarations and findings comply with subclauses (I) to (IV), inclusive, of clause (i), the local agency may proceed with disposal of land pursuant to this subparagraph. This clause is declaratory of, and not a change in, existing law.
(v)If the local agency disposes of land in violation of this subparagraph, the local agency shall be liable for a civil penalty calculated as follows:
(I)For a first violation, 30 percent of the greater of the final sale price or the fair market value of the land at the time of disposition.
(II)For a second or subsequent violation, 50 percent of the greater of the final sale price or the fair market value of the land at the time of disposition.
(III)For purposes of this subparagraph, fair market value shall be determined by an independent appraisal of the land.
(IV)An action to enforce this subparagraph may be brought by any of the following:
(ia)An entity identified in subdivisions (a) to (e), inclusive, of Section 54222.
(ib)A person who would have been eligible to apply for residency in affordable housing had the agency not violated this section.
(ic)A housing organization, as that term is defined in Section 65589.5.
(id)A beneficially interested person or entity.
(ie)The Department of Housing and Community Development.
(V)A penalty assessed pursuant to this subparagraph shall, except as otherwise provided, be deposited into a local housing trust fund. The local agency may elect to instead deposit the penalty moneys into the Building Homes and Jobs Trust Fund or the Housing Rehabilitation Loan Fund. Penalties shall not be paid out of funds already dedicated to affordable housing, including, but not limited to, Low and Moderate Income Housing Asset Funds, funds dedicated to housing for very low, low-, and moderate-income households, and federal HOME Investment Partnerships Program and Community Development Block Grant Program funds. The local agency shall commit and expend the penalty moneys deposited into the local housing trust fund within five years of deposit for the sole purpose of financing newly constructed housing units that are affordable to extremely low, very low, or low-income households.
(VI)Five years after deposit of the penalty moneys into the local housing trust fund, if the funds have not been expended, the funds shall revert to the state and be deposited in the Building Homes and Jobs Trust Fund or the Housing Rehabilitation Loan Fund for the sole purpose of financing newly constructed housing units located in the same jurisdiction as the surplus land and that are affordable to extremely low, very low, or low-income households. Expenditure of any penalty moneys deposited into the Building Homes and Jobs Trust Fund or the Housing Rehabilitation Loan Fund pursuant to this subdivision shall be subject to appropriation by the Legislature.
(vi)For purposes of this subparagraph, the following definitions apply:
(I)Sectional planning area means an area composed of identifiable planning units, within which common services and facilities, a strong internal unity, and an integrated pattern of land use, circulation, and townscape planning are readily achievable.
(II)Sectional planning area document means a document or plan that sets forth, at minimum, a site utilization plan of the sectional planning area and development standards for each land use area and designation.
(vii)This subparagraph shall become inoperative on January 1, 2034.
(Q)Land that is owned by a California public-use airport on which residential uses are prohibited pursuant to Federal Aviation Administration Order 5190.6B, Airport Compliance Program, Chapter 20 -- Compatible Land Use and Airspace Protection.
(R)Land that is transferred to a community land trust, and all of the following conditions are met:
(i)The property is being or will be developed or rehabilitated as any of the following:
(I)An owner-occupied single-family dwelling.
(II)An owner-occupied unit in a multifamily dwelling.
(III)A member-occupied unit in a limited equity housing cooperative.
(IV)A rental housing development.
(ii)Improvements on the property are or will be available for use and ownership or for rent by qualified persons, as defined in paragraph (6) of subdivision (c) of Section 214.18 of the Revenue and Taxation Code.
(iii)(I)A deed restriction or other instrument, requiring a contract or contracts serving as an enforceable restriction on the sale or resale value of owner-occupied units or on the affordability of rental units is recorded on or before the lien date following the acquisition of the property by the community land trust.
(II)For the purpose of this clause, the following definitions apply:
(ia)A contract or contracts serving as an enforceable restriction on the sale or resale value of owner-occupied units means a contract described in paragraph (11) of subdivision (a) of Section 402.1 of the Revenue and Taxation Code.
(ib)A contract or contracts serving as an enforceable restriction on the affordability of rental units means an enforceable and verifiable agreement with a public agency, a recorded deed restriction, or other legal document described in subparagraph (A) of paragraph (2) of subdivision (g) of Section 214 of the Revenue and Taxation Code.
(iv)A copy of the deed restriction or other instrument shall be provided to the assessor.
(S)(i)For local agencies whose primary mission or purpose is to supply the public with a transportation system, surplus land that is developed for commercial, or industrial uses or activities, including nongovernmental retail, entertainment, or office development or for the sole purpose of investment or generation of revenue, if the agency meets all of the following conditions:
(I)The agency has an adopted land use plan or policy that designates at least 50 percent of the of the gross acreage covered by the adopted land use plan or policy for residential purposes. The adopted land use plan or policy shall also require the development of at least 300 residential units, or at least 10 residential units per gross acre, averaged across all land covered by the land use plan or policy, whichever is greater.
(II)The agency has an adopted land use plan or policy that requires at least 25 percent of all residential units to be developed on the parcels covered by the adopted land use plan or policy made available to lower income households, as defined in Section 50079 of the Health and Safety Code, at an affordable sales price or rented at an affordable rent, as defined in Sections 50052.5 and 50053 of the Health and Safety Code, for a minimum of 55 years for rental housing and 45 years for ownership housing. These terms shall be included in the land use plan or policy and dictate that they will be contained in a covenant or restriction recorded against the surplus land at the time of disposition that shall run with the land and be enforceable against any owner or lessee who violates the covenant or restriction and each successor in interest who continues the violation.
(III)Land disposed of for residential purposes shall issue a competitive request for proposals subject to the local agencys open, competitive solicitation process or put out to open, competitive bid by the local agency, provided that all entities identified in subdivision (a) of Section 54222 are invited to participate.
(IV)Prior to entering into an agreement to dispose of a parcel for non-residential nonresidential development on land designated for the purposes authorized pursuant to this subparagraph in an agencys adopted land use plan or policy, the agency, since January 1, 2020, must have entered into an agreement to dispose of a minimum of 25 percent of the land designated for affordable housing pursuant to subclause (II).
(ii)The agency may exempt at one time all parcels covered by the adopted land use plan or policy pursuant to this subparagraph.
(2)Notwithstanding paragraph (1), a written notice of the availability of surplus land for open-space purposes shall be sent to the entities described in subdivision (b) of Section 54222 before disposing of the surplus land, provided the land does not meet the criteria in subparagraph (H) of paragraph (1), if the land is any of the following:
(A)Within a coastal zone.
(B)Adjacent to a historical unit of the State Parks System.
(C)Listed on, or determined by the State Office of Historic Preservation to be eligible for, the National Register of Historic Places.
(D)Within the Lake Tahoe region as defined in Section 66905.5.
(g)Persons and families of low or moderate income has the same meaning as provided in Section 50093 of the Health and Safety Code.
SECTION 1.Section 54222 of the Government Code is amended to read:54222.Except as provided in Division 23 (commencing with Section 33000) of the Public Resources Code, any local agency disposing of surplus land, declared pursuant to subdivision (b) of Section 54221, shall send, before disposing of that property or participating in negotiations to dispose of that property with a prospective transferee, a written notice of availability of the property to all of the following:(a)(1)A written notice of availability for developing low- and moderate-income housing shall be sent to any local public entity, as defined in Section 50079 of the Health and Safety Code, that has jurisdiction where the surplus land is located. Housing sponsors, as defined by Section 50074 of the Health and Safety Code, that have notified the Department of Housing and Community Development of their interest in surplus land shall be sent a notice of availability for the purpose of developing low- and moderate-income housing. All notices shall be sent by electronic mail, or by certified mail, and shall include the location and a description of the property.(2)The Department of Housing and Community Development shall maintain on its internet website an up-to-date listing of, and a link to, all notices of availability throughout the state and a listing of all entities, including housing sponsors, that have notified the department of their interest in surplus land for the purpose of developing low- and moderate-income housing.(b)A written notice of availability for open-space purposes shall be sent as follows:(1)To any park or recreation department of any city within which the surplus land is located.(2)To any park or recreation department of the county within which the surplus land is located.(3)To any regional park authority having jurisdiction within the area in which the surplus land is located.(4)To the Natural Resources Agency or any agency that may succeed to its powers.(c)A written notice of availability of land suitable for school facilities construction or use by a school district for open-space purposes shall be sent to any school district that has jurisdiction where the surplus land is located.(d)A written notice of availability for developing property located within an infill opportunity zone designated pursuant to Section 65088.4 or within an area covered by a transit village plan adopted pursuant to the Transit Village Development Planning Act of 1994 (Article 8.5 (commencing with Section 65460) of Chapter 3 of Division 1 of Title 7) shall be sent to any county, city, city and county, successor agency to a former redevelopment agency, public transportation agency, or housing authority within whose jurisdiction the surplus land is located.(e)The entity desiring to purchase or lease the surplus land for any of the purposes authorized by this section shall notify in writing the disposing agency of its interest in purchasing or leasing the land within 60 days after the agencys notice of availability is sent via certified mail or provided via electronic mail.(f) For the purposes of this section, participating in negotiations does not include the any of the following:(1)The commissioning of appraisals, due diligence prior to disposition, discussions with brokers or real estate agents not representing a potential buyer, or other studies to determine value or best use of land, issuance of a request for qualifications, development of marketing materials, or discussions conducted exclusively among local agency employees and elected officials.(2)Issuing a request for proposals or request for qualifications to the entities in subdivision (a) of this section for the purposes of complying with subparagraphs (A), (F), (G), (H), or (I) of paragraph (1) of subdivision (f) of Section 54221.(3)Negotiating a lease, exclusive negotiating agreement, or option agreement for the purposes of complying with subparagraphs (A), (F), (G), (H), or (I) of paragraph (1) of subdivision (f) of Section 54221.(4)Negotiating with a developer to determine if the local agency can satisfy the disposal exemption requirements described in paragraph (2) of subdivision (d) of Section 54221.Except as provided in Division 23 (commencing with Section 33000) of the Public Resources Code, any local agency disposing of surplus land, declared pursuant to subdivision (b) of Section 54221.5, 54221, shall send, before disposing of that property or participating in negotiations to dispose of that property with a prospective transferee, a written notice of availability of the property to all of the following:
(a)(1)A written notice of availability for developing low- and moderate-income housing shall be sent to any local public entity, as defined in Section 50079 of the Health and Safety Code, that has jurisdiction where the surplus land is located. Housing sponsors, as defined by Section 50074 of the Health and Safety Code, that have notified the Department of Housing and Community Development of their interest in surplus land shall be sent a notice of availability for the purpose of developing low- and moderate-income housing. All notices shall be sent by electronic mail, or by certified mail, and shall include the location and a description of the property.
(2)The Department of Housing and Community Development shall maintain on its internet website an up-to-date listing of, and a link to, all notices of availability throughout the state and a listing of all entities, including housing sponsors, that have notified the department of their interest in surplus land for the purpose of developing low- and moderate-income housing.
(b)A written notice of availability for open-space purposes shall be sent: sent as follows:
(1)To any park or recreation department of any city within which the surplus land is located.
(2)To any park or recreation department of the county within which the surplus land is located.
(3)To any regional park authority having jurisdiction within the area in which the surplus land is located.
(4)To the State Natural Resources Agency or any agency that may succeed to its powers.
(c)A written notice of availability of land suitable for school facilities construction or use by a school district for open-space purposes shall be sent to any school district that has jurisdiction where the surplus land is located.
(d)A written notice of availability for developing property located within an infill opportunity zone designated pursuant to Section 65088.4 or within an area covered by a transit village plan adopted pursuant to the Transit Village Development Planning Act of 1994 (Article 8.5 (commencing with Section 65460) of Chapter 3 of Division 1 of Title 7) shall be sent to any county, city, city and county, successor agency to a former redevelopment agency, public transportation agency, or housing authority within whose jurisdiction the surplus land is located.
(e)The entity desiring to purchase or lease the surplus land for any of the purposes authorized by this section shall notify in writing the disposing agency of its interest in purchasing or leasing the land within 60 days after the agencys notice of availability is sent via certified mail or provided via electronic mail.
(f) For the purposes of this section, participating in negotiations does not include the any of the following:
(1)The commissioning of appraisals, due diligence prior to disposition, discussions with brokers or real estate agents not representing a potential buyer, or other studies to determine value or best use of land, issuance of a request for qualifications, development of marketing materials, or discussions conducted exclusively among local agency employees and elected officials.
(2)Issuing a request for proposals or request for qualifications to the entities in subdivision (a) of Section 54222 this section for the purposes of complying with subparagraphs (A), (F), (G), (H), or (I) of paragraph (1) of subdivision (f) of Section 54221.
(3)Negotiating a lease, exclusive negotiating agreement, or option agreement for the purposes of complying with subparagraphs (A), (F), (G), (H), or (I) of paragraph (1) of subdivision (f) of Section 54221.
(4)Negotiating with a developer to determine if the local agency can satisfy the disposal exemption requirements described in paragraph (2) of subdivision (d) of Section 54221.
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Date
|
Status
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|---|---|
| Aug 20, 2024 | Read second time. Ordered to third reading. |
| Aug 20, 2024 | Ordered to inactive file on request of Assembly Member Aguiar-Curry. |
| Aug 19, 2024 | Read second time and amended. Ordered to second reading. |
| Aug 15, 2024 | From committee: Do pass as amended. (Ayes 11. Noes 0.) (August 15). |
| Jul 2, 2024 | July 2 set for first hearing. Placed on suspense file. |
| Jun 20, 2024 | From committee: Do pass and re-refer to Com. on APPR. (Ayes 9. Noes 0.) (June 19). Re-referred to Com. on APPR. |
| Jun 11, 2024 | June 26 hearing postponed by committee. |
| Jun 10, 2024 | From committee with author's amendments. Read second time and amended. Re-referred to Com. on L. GOV. |
| Jun 3, 2024 | Referred to Com. on L. GOV. |
| May 21, 2024 | In Assembly. Read first time. Held at Desk. |
| May 20, 2024 | Read third time. Passed. (Ayes 39. Noes 0. Page 4028.) Ordered to the Assembly. |
| May 2, 2024 | Read second time. Ordered to third reading. |
| May 1, 2024 | From committee: Do pass. (Ayes 6. Noes 0. Page 3820.) (May 1). |
| Apr 17, 2024 | Set for hearing May 1. |
| Apr 3, 2024 | Re-referred to Com. on L. GOV. |
| Mar 18, 2024 | From committee with author's amendments. Read second time and amended. Re-referred to Com. on RLS. |
| Feb 21, 2024 | Referred to Com. on RLS. |
| Feb 14, 2024 | From printer. May be acted upon on or after March 15. |
| Feb 13, 2024 | Introduced. Read first time. To Com. on RLS. for assignment. To print. |
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Date
|
Description
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Location
|
Votes
|
|
|---|---|---|---|---|
| Aug 15, 2024 | Do pass as amended. | Assembly Standing Committee on Appropriations |
Passed |
|
| Jun 19, 2024 | Do pass and be re-referred to the Committee on [Appropriations] | Assembly Standing Committee on Local Government |
Passed |
|
| May 20, 2024 | Senate 3rd Reading SB1134 Caballero | Senate Floor |
Passed |
|
| May 1, 2024 | Do pass | Senate Standing Committee on Local Government |
Passed |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
|
Organization
|
Position
|
Date
|
|---|---|---|
| California Special Districts Association | * Support | Jun 19, 2024 |
| California State Association Of Counties | * Support | Jun 19, 2024 |
| Habitat For Humanity California | * Support | Jun 22, 2024 |
| Lighthouse Public Affairs | * Support | Jun 22, 2024 |
| Public Interest Law Project | * Neutral | May 1, 2024 |
SENATE THIRD READING
STR Bill Id:SB 1134
Author:(Caballero)
As Amended Ver:August 19, 2024
Majority vote
SUMMARY
Requires, for purposes of the Surplus Land Act (SLA), each parcel of land to be treated as a distinct unit of surplus land, unless the parcels are contiguous and disposed of simultaneously to the same receiving entity.
Deletes the Department of Housing and Community Development (HCD) exemption from the Administrative Procedures Act (APA) when reviewing or adopting SLA guidelines, and instead explicitly states that any rule or policy issued by HCD in implementing the SLA is subject to the APA.
Major Provisions
- Requires, for purposes of the SLA, each parcel of land to be treated as a distinct unit of surplus land, unless the parcels are contiguous and disposed of simultaneously to the same receiving entity.
- Deletes HCD's APA exemption when adopting any standards, forms, definitions, or guidelines that apply to the SLA.
- Requires that any rule, policy, or standard of general application issued by HCD to implement the SLA is subject to the rulemaking provisions of the APA.
- Establishes that HCD shall rely on the SLA Guidelines adopted on April 2021 to implement the SLA until the APA rulemaking process is complete or until July 1,2026.
COMMENTS
- Surplus Land Act. Before local officials may dispose of property they own, they must declare in a public meeting that the land is no longer necessary for the local agency's use and declare the land either "surplus land" or "exempt surplus land." The SLA designates certain types of land as "exempt surplus land," such as transfers to other government entities, which are not subject to the requirements of the SLA. All other surplus land must follow the procedures laid out in the SLA, including a requirement that the local government disposing of the surplus land give a "first right of refusal" to other local agencies, including schools and parks and recreation departments, and nonprofit affordable housing developers, and to negotiate in good faith with them to try to come to agreement. HCD enforces the SLA's provisions.
In 2023, AB 480 (Ting), Chapter 788, Statutes of 2023 and SB 747 (Caballero), Chapter 786, Statues of 2023 made significant changes to the SLA. Together the bills attempted to strike a balance between ensuring comprehensive coverage of dispositions, while enacting exemptions and other changes that would streamline the process for local governments. This bill further clarifies the SLA regarding contiguous parcels.
- Administrative Procedures Act. The APA establishes standard provisions that apply to rulemaking proceedings as well as the adjudicative procedures related to administrative hearings. Similar to other laws with broad application, such as the Fair Political Practices Act or the Ralph M. Brown Act, the APA is structured in a way that it can be applied broadly to a wide universe of public entities, officials, or actions. The APA applies broadly to state agencies unless a statute specifically exempts an agency or action from the APA.
- Rulemaking Actions Under the APA. The Office of Administrative Law (OAL) administers the rulemaking provisions of the APA and reviews rulemaking proceedings prepared by state agencies. The APA establishes procedures that all agencies must follow when developing regulations that implement or clarify statutory provisions. While the specific scope of an agency's authority to implement a particular statute is typically embedded in that statute, the APA establishes uniform procedures that agencies must comply with when adopting regulations. This includes, but is not limited to, the following requirements for rulemaking agencies proposing to add, amend or repeal regulations:
- Requirements for rulemaking agencies to prepare an initial statement of reasons (ISOR) explaining the specific purpose and necessity of each section of the regulation;
- Requirements for rulemaking agencies to prepare an estimate of the economic impact of the proposed regulations;
- Requirements for rulemaking agencies to hold an initial 45-day comment period on the initial draft of the regulations and subsequent 15-day comment periods on any proposed changes to the initial regulations that occur during the rulemaking period;
- Requirements for rulemaking agencies to hold a public hearing if requested by interested parties;
- Requirements for rulemaking agencies to prepare written responses to written comments received during the 45-day or any subsequent 15-day comment period as well as any oral comments received at a public hearing;
- Requirements to prepare a final statement of reasons (FSOR) recognizing changes made throughout the rulemaking process and deviations from the ISOR; and,
- Requirements to complete the rulemaking and submit the rulemaking record to OAL for review and approval within one year.
- Rulemaking Actions Under the APA. The Office of Administrative Law (OAL) administers the rulemaking provisions of the APA and reviews rulemaking proceedings prepared by state agencies. The APA establishes procedures that all agencies must follow when developing regulations that implement or clarify statutory provisions. While the specific scope of an agency's authority to implement a particular statute is typically embedded in that statute, the APA establishes uniform procedures that agencies must comply with when adopting regulations. This includes, but is not limited to, the following requirements for rulemaking agencies proposing to add, amend or repeal regulations:
OAL reviews rulemaking proceedings to ensure compliance with the APA, such as whether the agency has sufficiently demonstrated that specific provisions of the regulations are necessary to implement the statute, whether the agency has complied with the timelines and disclosure requirements of the APA, and whether the agency responded to all germane comments submitted to the agency regarding the rulemaking proceeding.
- Hearings Under the APA. The APA additionally establishes standards for informal and formal hearings conducted either directly by state agencies and commissions or by the Office of Administrative Hearings (OAH) on their behalf. The statute provides a standard process and code of procedures that govern hearings and ensure the rights of parties to the hearing are protected. The statute is written broadly enough to be applicable to and govern the array of state administrative hearings on a variety of subjects. For example, APA hearing requirements apply to hearings related to appeals of penalties issued for violations of environmental regulations, actions to suspend or revoke a medical license, actions related to financial audits of local education agencies, administrative fines assessed by the Department of Corrections, and many more.
The adjudicative procedures embedded in the APA include requirements for the conduct of informal and formal administrative hearings. These include, but are not limited to, the following:
- Requirements for the hearing to provide an opportunity for the subject of the action to be heard and to present and rebut evidence;
- Requirements for parties to the hearing to receive a copy of the governing procedures related to the action;
- Requirements for allowing public observation of a hearing;
- Requirements governing disqualification of hearing officers due to conflicts of interest;
- Requirements governing ex parte communications;
- Requirements for providing language assistance; and,
- Requirements specifying the time, form and manner for which decisions shall be issued.
As the APA applies broadly to guidance, decisions, and other actions issued or taken by state agencies, it is not uncommon for specific statutes to include an APA exemption. For example, guidelines related to the administration of grant programs are commonly exempt from the APA. Additionally, situations of great urgency can be subject to an emergency rulemaking process, which includes many of the standard rulemaking requirements but allows a rulemaking to be completed in an expedited fashion but subjects the emergency regulations to expiration.
According to the Author
"Last year, I authored SB 747 to make numerous improvements to the [SLA] to ensure local governments have the clarity and tools to further economic and affordable housing development. This year, [this bill] continues this work by ensuring that HCD follows the APA when promulgating SLA regulations. The APA is an integral democratic tool for ensuring that HCD clearly articulates and processes the regulations. The APA also requires that all regulations be approved by the OAL, which reviews regulations to ensure they are clear, necessary, and legally valid. It is important that we hold all state agencies to the same standards of public transparency and review, which [this bill] helps achieve."
Arguments in Support
The California Special Districts Association, California Association of Sanitation Agencies, California State Association of Counties, Rural County Representatives of California, and Urban Counties of California have a support if amended position and write, "Local agencies continue to be challenged by implementation of carefully negotiated language in the Surplus Lands Act in numerous bills over the last five years. Requiring HCD to utilize the APA process will provide important opportunities for stakeholder input in the spirit of transparency, clarity on the law, and improved understanding of implementation procedures."
Arguments in Opposition
Public Interest Law Project, San Diego Housing Federation, Nonprofit Housing of Northern California, and the East Bay Housing Organizations write in opposition, "Our organizations were key supporters of legislation in 2019 that significantly strengthened the Surplus Lands Act (SLA) to make it an effective tool for directing local surplus land into addressing the state's affordable housing crisis. As currently written, SB 1134 would undermine the effective implementation of the SLA by requiring that any generally applicable administrative interpretations by the Department of Housing and Community Development (HCD) go through the drawn out and costly Administrative Procedures Act (APA) rather than the more efficient process of adopting guidelines."
FISCAL COMMENTS
According the Assembly Appropriations Committee, "HCD estimates General Fund costs of $1.2 million annually for three budget years for five staff positions to adopt, amend, or repeal the SLA guidelines per the APA. HCD estimates it would take approximately 24 to 36 months for this process, including six to 12 months in year one to draft SLA guideline documents as required by the Office of Administrative Law (OAL) regular rulemaking, and 18 to 24 months in years two and three to follow the OAL process and timeline to adopt the SLA guidelines.
"According to the Legislative Analyst's Office, the General Fund faces a structural deficit in the tens of billions of dollars over the next several fiscal years."
VOTES
SENATE FLOOR: 39-0-1
YES: Allen, Alvarado-Gil, Archuleta, Ashby, Atkins, Becker, Blakespear, Bradford, Caballero, Cortese, Dahle, Dodd, Durazo, Eggman, Glazer, Gonzalez, Grove, Hurtado, Jones, Laird, Limón, McGuire, Menjivar, Newman, Nguyen, Niello, Ochoa Bogh, Padilla, Portantino, Roth, Rubio, Seyarto, Skinner, Smallwood-Cuevas, Stern, Umberg, Wahab, Wiener, Wilk
ABS, ABST OR NV: Min
ASM LOCAL GOVERNMENT: 9-0-0
YES: Juan Carrillo, Waldron, Sanchez, Haney, Kalra, Pacheco, Ramos, Ward, Wilson
ASM APPROPRIATIONS: 11-0-4
YES: Wicks, Arambula, Bryan, Calderon, Wendy Carrillo, Mike Fong, Grayson, Haney, Hart, Pellerin, Villapudua
ABS, ABST OR NV: Sanchez, Dixon, Jim Patterson, Ta
UPDATED
VERSION: August 19, 2024
CONSULTANT: Linda Rios / L. GOV. / (916) 319-3958 FN: 0004122
Date of Hearing: July 2, 2024
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Buffy Wicks, Chair
SBPCA Bill Id:SB 1134
Author:(Caballero) – As Amended Ver:June 10, 2024
Policy Committee: | Local Government | Vote: | 9 - 0 |
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| ||
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Urgency: No State Mandated Local Program: No Reimbursable: No
SUMMARY:
This bill, for purposes of the Surplus Land Act (SLA), requires each parcel of land be treated as a distinct unit of surplus land, unless the parcels are contiguous and disposed of simultaneously to the same receiving entity.
This bill also deletes the Department of Housing and Community Development (HCD) exemption from the Administrative Procedures Act (APA) when reviewing or adopting SLA guidelines, and instead explicitly states any rule or policy issued by HCD in implementing the SLA is subject to the APA.
FISCAL EFFECT:
HCD estimates General Fund costs of $1.2 million annually for three budget years for five staff positions to adopt, amend, or repeal the SLA guidelines per the APA. HCD estimates it would take approximately 24 to 36 months for this process, including six to 12 months in year one to draft SLA guideline documents as required by the Office of Administrative Law (OAL) regular rulemaking, and 18 to 24 months in years two and three to follow the OAL process and timeline to adopt the SLA guidelines.
According to the Legislative Analyst’s Office, the General Fund faces a structural deficit in the tens of billions of dollars over the next several fiscal years.
COMMENTS:
- Purpose. According to the author:
Last year, I authored SB 747 to make numerous improvements to the [SLA] to ensure local governments have the clarity and tools to further economic and affordable housing development. This year, [this bill] continues this work by ensuring that HCD follows the APA when promulgating SLA regulations. The APA is an integral democratic tool for ensuring that HCD clearly articulates and processes the regulations. The APA also requires that all regulations be approved by the OAL, which reviews regulations to ensure they are clear, necessary, and legally valid. It is important that we hold all state agencies to the same standards of public transparency and review, which [this bill] helps achieve.
- Background. SLA. Before local officials may dispose of property they own, they must declare in a public meeting the land is no longer necessary for the local agency’s use and declare the land either “surplus land” or “exempt surplus land.” The SLA designates certain types of land as “exempt surplus land,” such as transfers to other government entities, which are not subject to the requirements of the SLA. All other surplus land must follow the procedures laid out in the SLA, including the requirement the local government disposing of the surplus land give a “first right of refusal” to other local agencies, including schools and parks and recreation departments, and nonprofit affordable housing developers, and to negotiate in good faith with them to try to come to agreement. HCD enforces the SLA’s provisions.
In 2023, AB 480 (Ting), Chapter 788 and SB 747 (Caballero), Chapter 786 made significant changes to the SLA. Together the bills attempted to strike a balance between ensuring comprehensive coverage of dispositions, while enacting exemptions and other changes that would streamline the process for local governments. This bill further clarifies the SLA regarding contiguous parcels.
APA. To provide the public meaningful opportunity to participate in the adoption of regulations or rules, the APA establishes procedures every agency must follow when developing regulations that implement or clarify statutory provisions. The APA applies broadly to state agencies unless a statute specifically exempts an agency or action from the APA. The Office of Administrative Law (OAL) administers the rulemaking provisions of the APA and reviews rulemaking proceedings prepared by state agencies.
It is not uncommon for specific statutes to include an APA exemption. For example, guidelines related to the administration of grant programs are commonly exempt from the APA. Additionally, situations of great urgency can be subject to an emergency rulemaking process that allows rulemaking to be completed in an expedited fashion, but subjects the emergency regulations to expiration.
The SLA gives HCD the authority to adopt guidelines to implement the law’s penalty provisions, but exempts these guidelines from the APA. HCD originally issued guidelines pursuant to this authority in April 2021. Under those guidelines, HCD began reviewing disposals of surplus land. The guidelines also required local agencies to notify HCD 30 days in advance of disposing of exempt surplus land. In February 2024, HCD released a draft of updated guidelines for public comment. The draft guidelines implement SB 747 and AB 480, as well as additional significant changes to the implementation of the SLA.
This bill deletes HCD’s existing exemptions from the APA and instead requires any rule, policy, or standard of general application issued by HCD implementing the SLA be subject to the rulemaking provisions of the APA.
- Related Legislation. SB 1439 (Ashby), of this legislative session, exempts specific parcels in the City of Sacramento from the SLA, provided the parcels are used for a health facility and meet other requirements. SB 1439 failed passage in the Assembly Housing and Community Development Committee.
Analysis Prepared by: Jennifer Swenson / APPR. / (916) 319-2081
Date of Hearing: June 19, 2024
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
Juan Carrillo, Chair
SBPCA Bill Id:SB 1134
Author:(Caballero) – As Amended Ver:June 10, 2024
SENATE VOTE: 39-0
SUBJECT: Surplus land
SUMMARY: Deletes the Department of Housing and Community Development’s (HCD’s) exemption from the Administrative Procedures Act (APA) when developing or adopting guidelines to implement the Surplus Land Act (SLA) and specifies that each parcel of land be treated as a distinct unit of surplus land, unless the parcels are contiguous and disposed simultaneously to the same receiving entity. Specifically, this bill:
- Provides that, for the purposes of the SLA each parcel of land must be considered a distinct unit of surplus land, except that contiguous parcels that are disposed of simultaneously to the same receiving entity, or any entity working in concert with another receiving entity, must be treated as a single unit of land.
- Deletes the HCD’s exemption from the APA when developing standards, forms, or definitions and adopting, amending, or repealing guidelines to implement the SLA, as specified.
- Provides that any rule, policy, or standard of general application issued by HCD to implement the SLA shall be subject to the rulemaking provisions of the APA
EXISTING LAW:
- Establishes the SLA which, among other provisions, provides the following:
- Defines “surplus land” as land owned by any local agency that is determined to be no longer necessary for the agency’s use;
- Requires each local agency to annually make an inventory of all lands, surplus lands, and all lands held in excess of foreseeable needs, to make this inventory a matter of public record, and to share this information with HCD in its annual progress report;
- Requires a local agency to declare land either “surplus land” or “exempt surplus land,” as supported by written findings, before a local agency may take any action to dispose of it;
- Exempts certain types of surplus land owned by local agencies from the requirements of the SLA;
- Provides the following regarding disposal of non-exempt surplus land:
- Requires a local agency that is disposing of non-exempt surplus land to notify certain public entities and housing sponsors that surplus land is available for low- and moderate- income housing, parks, recreation, open space, school facilities, and infill opportunity zones or transit village plans;
- Requires that, if another agency or housing sponsor wants to buy or lease the surplus land for one of these purposes, it must inform the disposing agency of its interest within 60 days;
- Specifies that, if multiple entities want to purchase the land, the housing sponsor that proposes to provide the greatest level of affordable housing gets priority. The disposing agency and the entity have an additional 90 days to negotiate a mutually satisfactory price and terms in good faith. If they cannot agree, the agency that owns the surplus land can dispose of the land on the private market; and
- Requires a local agency, prior to agreeing to the terms for the disposition of surplus land, to provide specified information about its disposition process to HCD. Requires HCD to submit to the local agency, within 30 days, written findings of any process violations that have occurred. The law provides a local agency at least 30 days to either correct the violations or adopt a resolution with findings explaining why the process is not in violation.
- Provides that a local agency that disposes of land in violation of the SLA following a notification from HCD is liable for a penalty of 30 percent of the final sale price or appraised market value at the time of the disposition for the first violation and 50 percent for subsequent violations. Requires that penalty assessments must be deposited into a local housing trust fund, the state Building Homes and Jobs Fund, or the Housing Rehabilitation Loan Fund, as specified. (GOV § 54220-54234)
- Provides HCD an exemption from the APA in adopting guidelines to implement specified provisions of the SLA. (GOV § 54230 -54230.5)
- Establishes the APA, which specifies the procedures and requirements necessary for the creation of regulations to implement statute. (GOV § 11340 et seq.)
FISCAL EFFECT: This bill is keyed fiscal.
COMMENTS:
- Bill Summary. This bill repeals the HCD’s exemption from the APA when reviewing, adopting, amending, or repealing guidelines to establish uniform standards for implementation of the SLA. The bill also requires each parcel of surplus land to be considered a distinct unit of surplus land with the exception of contiguous parcels disposed of simultaneously to the same receiving entity or any entity working in concert with another receiving entity.
This bill is author sponsored. - Author’s Statement. According to the author, “Last year, I authored SB 747 to make numerous improvements to the Surplus Land Act to ensure local governments have the clarity and tools to further economic and affordable housing development. This year, SB 1134 continues this work by ensuring that the Department of Housing and Community Development follows the Administrative Procedures Act when promulgating Surplus Land Act regulations. The Administrative Procedures Act (APA) is an integral democratic tool for ensuring that HCD clearly articulates and processes the regulations. The APA also requires that all regulations be approved by the Office of Administrative Law, which reviews regulations to ensure they are clear, necessary, and legally valid. It is important that we hold all state agencies to the same standards of public transparency and review, which SB 1134 helps achieve.”
- Surplus Land Act. Public agencies are major landlords in some communities, owning significant pieces of real estate. When properties become surplus to an agency’s needs, public officials want to dispose, which includes selling or leasing the land for more than 15 years, the land to recoup their investments. The SLA spells out the steps local agencies must follow when they want to dispose of land. It requires local governments to give a “first right of refusal” to other local agencies, including schools and parks and recreation departments, and nonprofit affordable housing developers, and to negotiate in good faith with them to try to come to agreement. This means that local agencies must first open their properties up to public agencies and nonprofit affordable housing developers, commonly referred to as housing sponsors, even if they have a different purpose in mind for the property.
- Agency’s Use. Before local officials can dispose of property, they must declare that the land is no longer needed for the “agency’s use” in a public meeting and declare the land either “surplus land” or “exempt surplus land.” “Agency’s use” includes land that is being used, or is planned to be used pursuant to a written plan adopted by the local agency.
As a general rule, “agency’s use” cannot include commercial or industrial uses or activities, and land disposed of for the purpose of investment or generating revenue cannot be considered necessary for the agency’s use. As a result, cities and counties are limited in their ability to dispose of properties for economic development or revenue generation purposes. However, most special districts are not subject to those restrictions on agency’s use as long as they can demonstrate that use of the site will do one of the following: - Directly further the express purpose of agency work or operations.
- Be expressly authorized by a statute governing the local agency.
Transit districts can only dispose of property for commercial or revenue generation purposes if they meet specific requirements for developing affordable housing across their portfolio of properties, and have made a certain amount of progress towards building that housing.
The SLA designates certain types of land as “exempt surplus land.” Statute provides that the entirety of the SLA does not apply to disposals of exempt surplus land. However, some exemptions have requirements for eligibility. If the disposal is not consistent with the exemption claimed, the disposition may be illegal. All other surplus land must follow the procedures laid out in the SLA before a local agency can dispose of it.
- Process of the SLA. Before agencies can enter into negotiations to dispose of surplus land, they must send a written notice of availability to various public agencies and nonprofit affordable housing developers notifying them that land is available for the following purposes:
- Low- and moderate-income housing;
- Park and recreation, and open space;
- School facilities; or
- Infill opportunity zones or transit village plans.
Housing sponsors can notify HCD if they are interested in acquiring surplus land to develop affordable housing. HCD maintains a list of notices of availability on its website.
If another agency or housing sponsor wants to buy or lease the surplus land for one of these purposes, it must tell the disposing agency within 60 days, and if multiple entities want to purchase the land, the housing sponsor that proposes to provide the greatest level of affordable housing gets priority. The agency and the housing sponsor then have an additional 90 days to negotiate a mutually satisfactory price and terms in good faith. If they cannot agree, the agency that owns the surplus land can sell the land on the private market. If surplus land is not sold to an affordable housing developer, but housing is developed on it later, 15 percent of the units must be sold or rented at an affordable cost to lower income households.
The SLA says that nothing in its provisions:
- Limits the power of any local agency to sell or lease surplus land at fair market value or less than fair market value;
- Prevents a local agency from obtaining fair market value;
- Limits a local agency’s authority or discretion to approve land use, zoning, or other entitlement decisions in connection with surplus land; or
- Requires a local agency to dispose of land just because it is surplus.
Local agencies that dispose of surplus land in violation of the SLA face penalties totaling 30 percent of the sales price or the appraised fair market value at the time of disposition for the first violation, and 50 percent for subsequent violations. These penalty revenues must be deposited in a local housing trust fund. The enforcement process in the SLA requires that:
- Prior to agreeing to terms for the disposition of surplus land, a local agency must provide HCD a description of the notices of availability sent, and negotiations conducted with any responding entities, as specified.
- HCD must submit written findings to the local agency within 30 days of receipt of the description of the disposal if the proposed disposal of the land will violate SLA.
- A local agency has at least 60 days to respond to the findings before HCD may take further action. The local agency must consider findings made by HCD and then either correct any issues found by HCD or respond in writing why the disposal complied with the SLA.
- If the local agency does not respond or does not address the issues, HCD must notify the local government and may notify the Attorney General that the disposal violates the SLA.
- A local agency cannot be held liable for the penalties under the SLA if HCD does not notify the agency that the agency is in violation within 30 days of receiving the description.
- SLA Reform. In 2023, AB 480 (Ting), Chapter 788 and SB 747 (Caballero), Chapter 786 made significant changes to the SLA. Together the bills attempted to strike a balance between ensuring comprehensive coverage of dispositions, while enacting exemptions and other changes that would streamline the process for local governments. Specifically, SB 747 and AB 480:
- Define “dispose” in the law to include leases of longer than 15 years that are entered into on or after January 1, 2024, but excludes leases of terms shorter than15 years and leases where no development or demolition will occur;
- Apply penalties to leases that violate the SLA, but provide that penalties don’t apply to non-substantive violations of the SLA;
- Add numerous categories of exempt surplus land, such as properties of smaller than one-half acre, specified mixed-use developments and developments on larger sites that include affordability requirements, airport land, and others;
- Authorize disposal of certain categories of exempt surplus land without a public hearing, as long as specified notice is provided;
- Establish additional types of activities that explicitly qualify as “agency’s use”; and
- Extend provisions that allow projects with an exclusive negotiating agreement in place to follow a previous version of the SLA.
- Administrative Procedures Act. The APA establishes standard provisions that apply to rulemaking proceedings as well as the adjudicative procedures related to administrative hearings. Similar to other laws with broad application, such as the Fair Political Practices Act or the Brown Act, the APA is structured in a way that it can be applied broadly to a wide universe of public entities, officials, or actions. The APA applies broadly to state agencies unless a statute specifically exempts an agency or action from the APA.
- Rulemaking Actions Under the APA. The Office of Administrative Law (OAL) administers the rulemaking provisions of the APA and reviews rulemaking proceedings prepared by state agencies. The APA establishes procedures that all agencies must follow when developing regulations that implement or clarify statutory provisions. While the specific scope of an agency’s authority to implement a particular statute is typically embedded in that statute, the APA establishes uniform procedures that agencies must comply with when adopting regulations. This includes, but is not limited to, the following requirements for rulemaking agencies proposing to add, amend or repeal regulations:
- Requirements for rulemaking agencies to prepare an initial statement of reasons (ISOR) explaining the specific purpose and necessity of each section of the regulation;
- Requirements for rulemaking agencies to prepare an estimate of the economic impact of the proposed regulations;
- Requirements for rulemaking agencies to hold an initial 45-day comment period on the initial draft of the regulations and subsequent 15-day comment periods on any proposed changes to the initial regulations that occur during the rulemaking period;
- Requirements for rulemaking agencies to hold a public hearing if requested by interested parties;
- Requirements for rulemaking agencies to prepare written responses to written comments received during the 45-day or any subsequent 15-day comment period as well as any oral comments received at a public hearing;
- Requirements to prepare a final statement of reasons (FSOR) recognizing changes made throughout the rulemaking process and deviations from the ISOR; and,
- Requirements to complete the rulemaking and submit the rulemaking record to OAL for review and approval within one year.
- Rulemaking Actions Under the APA. The Office of Administrative Law (OAL) administers the rulemaking provisions of the APA and reviews rulemaking proceedings prepared by state agencies. The APA establishes procedures that all agencies must follow when developing regulations that implement or clarify statutory provisions. While the specific scope of an agency’s authority to implement a particular statute is typically embedded in that statute, the APA establishes uniform procedures that agencies must comply with when adopting regulations. This includes, but is not limited to, the following requirements for rulemaking agencies proposing to add, amend or repeal regulations:
OAL reviews rulemaking proceedings to ensure compliance with the APA, such as whether the agency has sufficiently demonstrated that specific provisions of the regulations are necessary to implement the statute, whether the agency has complied with the timelines and disclosure requirements of the APA, and whether the agency responded to all germane comments submitted to the agency regarding the rulemaking proceeding.
- Hearings Under the APA. The APA additionally establishes standards for informal and formal hearings conducted either directly by state agencies and commissions or by the Office of Administrative Hearings (OAH) on their behalf. The statute provides a standard process and code of procedures that govern hearings and ensure the rights of parties to the hearing are protected. The statute governs hearing procedures for more than 1,500 state and local agencies. The statute is written broadly enough to be applicable to and govern the array of state administrative hearings on a variety of subjects. For example, APA hearing requirements apply to hearings related to appeals of penalties issued for violations of environmental regulations, actions to suspend or revoke a medical license, actions related to financial audits of local education agencies, administrative fines assessed by the Department of Corrections, and many more.
The adjudicative procedures embedded in the APA include requirements for the conduct of informal and formal administrative hearings. These include, but are not limited to, the following:
- Requirements for the hearing to provide an opportunity for the subject of the action to be heard and to present and rebut evidence;
- Requirements for parties to the hearing to receive a copy of the governing procedures related to the action;
- Requirements for allowing public observation of a hearing;
- Requirements governing disqualification of hearing officers due to conflicts of interest;
- Requirements governing ex parte communications;
- Requirements for providing language assistance; and,
- Requirements specifying the time, form and manner for which decisions shall be issued.
As the APA applies broadly to guidance, decisions, and other actions issued or taken by state and local agencies, it is not uncommon for specific statutes to include an APA exemption. For example, guidelines related to the administration of grant programs are commonly exempt from the APA. Additionally, situations of great urgency can be subject to an emergency rulemaking process, which includes many of the standard rulemaking requirements but allows a rulemaking to be completed in an expedited fashion but subjects the emergency regulations to expiration.
- Policy Considerations. By requiring that any rule, policy, or standard issued by HCD in implementing the SLA be subject to the rulemaking provision of the APA, it is unclear where the guidelines as of December 31, 2023, or any guidelines issued this year, will stand if this bill were to become law. This provision of the bill does not apply retroactively and there is no requirement in the bill to set a deadline as to when HCD will need to adopt regulations via the APA. By not specifying where existing guidelines stand, the bill creates a gray area that could impact the implementation and application of the SLA. The author may wish to consider continuing to work with relevant policy committees to clarify this issue.
- Related Legislation. SB 1439 (Ashby) exempts specified parcels in the City of Sacramento from the SLA if the parcels would be used for specified health facilities. SB 1439 is pending is in this committee.
- Previous Legislation. AB 480 (Ting), Chapter 788, Statutes of 2023 made numerous changes to the SLA, including the disposal process, the authority of the HCD, and penalties for violations.
SB 747 (Caballero), Chapter 786, Statutes of 2023, made numerous changes to the SLA, including modifying SLA procedures, defining disposals of surplus land to include leases of longer than 15 years, altering the definition of exempt surplus land, and other changes. - Arguments in Support. The California Special Districts Association, California Association of Sanitation Agencies, California State Association of Counties, Rural County Representatives of California, and Urban Counties of California have a support if amended position and write, “Local agencies continue to be challenged by implementation of carefully negotiated language in the Surplus Lands Act in numerous bills over the last five years. Requiring HCD to utilize the APA process will provide important opportunities for stakeholder input in the spirit of transparency, clarity on the law, and improved understanding of implementation procedures.
“Counties, cities, and special districts have worked in good faith to address legislative concerns about use of the SLA, including clarifying statutory definitions of “exempt surplus lands”. As a result, we are concerned about a proposed amendment to Section 54222.3 in the current version of the bill that suggests that HCD has authority to regulate the disposal of exempt surplus lands via utilizing the APA. We understand that this language was an inadvertent drafting error that will be corrected in a future version of the measure and appreciate the author’s responsiveness to our concerns. .”
- Arguments in Opposition. None on file.
REGISTERED SUPPORT / OPPOSITION:
Support
Habitat for Humanity (Previous Version)
Support if Amended
California Association of Sanitation Agencies
California Special Districts Association
California State Association of Counties (CSAC)
Rural County Representatives of California (RCRC)
Urban Counties of California (UCC)
Opposition
None on file.
Analysis Prepared by: Linda Rios / L. GOV. / (916) 319-3958
SENATE RULES COMMITTEE Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | SB 1134 |
THIRD READING
Bill No: SB 1134
Author: Caballero (D)
Amended: 3/18/24
Vote: 21
SENATE LOCAL GOVERNMENT COMMITTEE: 6-0, 5/1/24
AYES: Durazo, Seyarto, Dahle, Skinner, Smallwood-Cuevas, Wiener
NO VOTE RECORDED: Glazer
SUBJECT: Surplus land
SOURCE: Author
DIGEST:
This bill provides that individual parcels must be treated separately under the Surplus Land Act (SLA), except as specified.
ANALYSIS:
Existing law:
- Establishes procedures for the disposal of publicly-owned land that is surplus to the needs of local agencies, under SLA.
- Requires local officials that want to dispose of public property to declare that the land is no longer needed for the agency’s use in a public meeting and declare the land either “surplus land” or “exempt surplus land.”
- Provides that “agency’s use” includes land that is being used, or is planned to be used pursuant to a written plan adopted by the local agency or will be disposed of to support agency work or operations, and excludes land for agency’s use from the SLA.
- Requires local agencies to follow the procedures laid out in the SLA before surplus land can be sold, including, but not limited, to:
- Send a written notice of availability to various public agencies and nonprofit groups, referred to as “housing sponsors,” notifying them that land is available for the following purposes:
- Low- and moderate-income housing;
- Park and recreation, and open space;
- School facilities; or
- Infill opportunity zones or transit village plans.
- Send a written notice of availability to various public agencies and nonprofit groups, referred to as “housing sponsors,” notifying them that land is available for the following purposes:
- Negotiates in good faith for 90 days with housing sponsors that respond.
- Allows the local agency to dispose of the property on the private market if agreement is not reached with a housing sponsor.
- Requires that, if a property sold as surplus is not sold to a housing sponsor, but housing is developed on it later, 15% of the units must be sold or rented at an affordable cost to lower income households.
- Requires local agencies to notify the Department of Housing and Community Development (HCD) prior to agreeing to terms for the disposition of surplus land.
- Imposes penalties of 30% of the disposition value of the land for a first violation and 50% of the disposition value for any subsequent violation for selling land in violation of the SLA.
- Establishes an enforcement process, which provides, among other things, that a local agency cannot be liable for a penalty if it is not notified by HCD that it is in violation of the act.
- Designates certain types of land as “exempt surplus land” and provides that the entirety of the SLA does not apply to exempt surplus land.
- Allows HCD to develop guidelines to implement the penalty provisions of the SLA and provides that those guidelines are not subject to the Administrative Procedures Act.
This bill provides that for the purposes of the SLA, each parcel of land must be considered a distinct unit of surplus land, except that contiguous parcels that are disposed of simultaneously to the same receiving entity, or any entity working in concert with another receiving entity, must be treated as a single unit of land.
Background
The SLA gives HCD the authority to adopt guidelines to implement the law’s penalty provisions. These Guidelines are not subject to the Administrative Procedures Act, which prescribes the state’s procedures for adopting regulations and provide the public with a meaningful opportunity to participate in the adoption of regulations or rules. HCD originally issued Guidelines pursuant to this authority in April 2021. Under the auspices of those Guidelines, HCD began reviewing disposals of surplus land. The Guidelines also required local agencies to notify HCD 30 days in advance of disposing of exempt surplus land.
Following several years of implementation, in February 2024, HCD released a draft of updated Guidelines for public comment. The draft Guidelines contain changes that implement SB 747 (Caballero, Chapter 786, Statutes of 2023) and AB 480 (Ting, Chapter 788, Statutes of 2023) , as well as additional significant changes to the implementation of the SLA. These additional proposed changes:
- Require notice to HCD prior to disposing of land for agency’s use, and require the entire parcel be used for agency’s use.
- Specify that eminent domain may qualify as agency’s use in certain circumstances.
- Specify how contiguous parcels must be treated under the SLA.
- Define the actions that constitute good faith negotiation, including that the agency cannot arbitrarily end active negotiations after the 90 day period in statute has run.
- Require unspecified documentation beyond the written findings required by statute for exempt surplus land disposals.
- State the 30-day clock for HCD’s response to a local agency does not begin until HCD has received all documentation.
- Allow private enforcement of the SLA to proceed without a requirement for HCD action on an alleged violation.
The author wants to provide additional clarity to local governments on the Surplus Land Act.
Comments
- Purpose of the bill. According to the author, “Last year, I authored SB 747 to make numerous improvements to the Surplus Land Act to ensure local governments have the clarity and tools to further economic and affordable housing development. This year, SB 1134 continues this work to further clarify that exempt land is considered a distinct parcel except when more than one distinct parcel immediately adjoins another, and sold together to a singular entity. In this situation, that collection of adjoining parcels will be treated as one. This minor and clarifying change will help ensure local governments are disposing of their exempt parcels correctly.”
- Why are we here? The SLA has generated voluminous numbers of complaints from local governments that it has slowed or stopped property dispositions and introduced significant uncertainty into their disposition processes. SB 747 was the result of an effort to address the myriad concerns that local governments had raised with the implementation of the SLA. The recent draft Guidelines developed by HCD have reopened the discussion. Local governments—and the author of this measure—are concerned HCD’s proposed changes to the SLA Guidelines are contrary to statute in ways that will slow dispositions further. The draft Guidelines appear to conflict with statute in a few significant ways:
- Changing the treatment of “agency’s use.” AB 480 originally contained changes to the statutory description of property for an “agency’s use.” The analysis of AB 480 in this Committee’s predecessor, the Senate Committee on Governance and Finance, noted, “the changes in AB 480 could be interpreted to preclude disposal of land for agency’s use. This would, among other things, deprive special districts of revenue raising purposes to support their operations that are allowed under existing law. Current law specifically preserves this option for special districts because they have fewer options to support their operations than cities or counties.” The Senate Governance and Finance Committee then removed those changes from AB 480 to ensure that the treatment of agency’s use remained the same under the law. However, the draft Guidelines make significant changes to the treatment of land for agency’s use.
- Requiring documentation for exemption determinations and delaying the start of the 30-day period for HCD to respond to a local government submission until HCD has received all documentation that it has determined that it requires. This requirement presents two potential conflicts with statute. First, Government Code Section 54222.3 provides that “[the SLA] shall not apply to the disposal of exempt surplus land as defined in Section 54221 by an agency of the state or any local agency.” Yet the draft Guidelines impose requirements on local governments in connection with the disposal of exempt surplus land. Second, statute only requires a local government to adopt written findings prior to disposing of exempt surplus land, but the draft Guidelines would grant HCD authority to endlessly request new documentation related to exemption determinations.
- Delaying the effective date of changes in statute to the date of finalization of the updated Guidelines. SB 747 and other changes to the SLA adopted last year became effective on January 1, 2024, and those changes were not dependent on HCD adopting any new or updated guidelines. These changes included new exemptions for affordable housing and other uses of property, among other provisions. However, the draft Guidelines imply that local governments may only qualify for these new exemptions after the updated Guidelines are adopted.
On the other side, housing equity organizations support many of the changes that HCD is proposing to the SLA Guidelines as important clarifications of the SLA process and closures of additional loopholes in the SLA. In other areas, they are concerned that HCD’s draft Guidelines aren’t sufficiently expansive regarding private enforcement of SLA violations. This bill, currently makes a minor, technical change to the SLA, but may provide the author an opportunity to make changes to the SLA if the proposed Guidelines become effective in substantially similar form.
FISCAL EFFECT: Appropriation: No Fiscal Com.: No Local: No
SUPPORT: (Verified 5/2/24)
Habitat for Humanity California
OPPOSITION: (Verified 5/2/24)
None received
Prepared by: Anton Favorini-Csorba / L. GOV. / (916) 651-4119
5/3/24 13:01:54
**** END ****
SENATE COMMITTEE ON LOCAL GOVERNMENT
Senator María Elena Durazo, Chair
2023 - 2024 Regular
Bill No: | SB 1134 | Hearing Date: | 5/1/24 |
Author: | Caballero | Fiscal: | No |
Version: | 3/18/24 | Consultant: | Favorini-Csorba |
Surplus land
Provides that individual parcels must be treated separately under the Surplus Land Act, except as specified.
Background
Surplus Land Act. Public agencies are major landlords in some communities, owning significant pieces of real estate. When properties become surplus to an agency’s needs, public officials want to sell the land to recoup their investments. The Surplus Land Act (SLA) spells out the steps local agencies must follow when they want to dispose of land. It requires local governments to give a “first right of refusal” to other governments and nonprofit housing developers, and to negotiate in good faith with them to try to come to agreement. This means that local agencies must open their properties up to affordable housing developers first, even if they have a different purpose in mind for the property.
Before local officials can dispose of property, they must declare that the land is no longer needed for the agency’s use in a public meeting and declare the land either “surplus land” or “exempt surplus land.” Land that is being used for an agency’s use is not subject to the SLA. “Agency’s use” includes land that is being used, or is planned to be used pursuant to a written plan adopted by the local agency or will be disposed of to support agency work or operations.
As a general rule, agency’s use cannot include commercial or industrial uses or activities, and land disposed of for the purpose of investment or generating revenue cannot be considered necessary for the agency’s use. As a result, cities and counties are limited in their ability to dispose of properties for economic development purposes.
The SLA designates certain types of land as “exempt surplus land.” Statute provides that the entirety of the SLA does not apply to disposals of exempt surplus land. All other surplus land must follow the procedures laid out in the SLA before a local agency can sell it.
SLA process. Before agencies can enter into negotiations to dispose of surplus land, they must send a written notice of availability to various public agencies and nonprofit groups, referred to as “housing sponsors,” notifying them that land is available for the following purposes:
- Low- and moderate-income housing;
- Park and recreation, and open space;
- School facilities; or
- Infill opportunity zones or transit village plans.
Housing sponsors can notify the Department of Housing and Community Development (HCD) if they are interested in acquiring surplus land to develop affordable housing. HCD maintains a list of notices of availability on its website.
If another agency or housing sponsor wants to buy or lease the surplus land for one of these purposes, it must tell the disposing agency within 60 days, and if multiple entities want to purchase the land, the housing sponsor that proposes to provide the greatest level of affordable housing gets priority. The agency and the housing sponsor then have an additional 90 days to negotiate a mutually satisfactory price and terms in good faith. If they cannot agree, the agency that owns the surplus land can sell the land on the private market. If surplus land is not sold to an affordable housing developer, but housing is developed on it later, 15 percent of the units must be sold or rented at an affordable cost to lower income households.
The SLA says that nothing in its provisions:
- Limits the power of any local agency to sell or lease surplus land at fair market value or less than fair market value;
- Prevents a local agency from obtaining fair market value;
- Limits a local agency’s authority or discretion to approve land use, zoning, or other entitlement decisions in connection with surplus land; or
- Requires a local agency to dispose of land just because it is surplus.
Local agencies that dispose of surplus land in violation of the SLA face penalties totaling 30 percent of the sales price, or fair market value of the sale or lease, of land disposed of in violation of the SLA for a first violation, and 50 percent for subsequent violations. These penalty revenues must be deposited in a local housing trust fund. The enforcement process in the SLA requires that:
- Prior to agreeing to terms for the disposition of surplus land, a local agency must provide HCD a description of the notices of availability sent, and negotiations conducted with any responding entities, as specified.
- HCD must submit written findings to the local agency within 30 days of receipt of the description of the disposal if the proposed disposal of the land will violate SLA.
- A local agency has at least 60 days to respond to the findings before HCD may take further action. The local agency must consider findings made by HCD and then either correct any issues found by HCD or respond in writing why the disposal complied with the SLA.
- If the local agency does not respond or does not address the issues, HCD must notify the local government and may notify the Attorney General that the disposal violates the SLA.
- A local agency cannot be held liable for the penalties under the SLA if HCD does not notify the agency that the agency is in violation within 30 days of receiving the description.
Recent SLA revisions. Two bills chaptered last year, SB 747 (Caballero) and AB 480 (Ting), made significant changes to the SLA. Collectively, the bills attempted to strike a balance between ensuring comprehensive coverage of dispositions, while enacting exemptions and other changes that would streamline the process for local governments. Specifically, SB 747 and AB 480:
- Define “dispose” in the law to include leases of longer than 15 years that are entered into on or after January 1, 2024, but exclude leases of shorter than 15 years and leases where no development or demolition will occur;
- Apply penalties to leases that violate the SLA, but provide that penalties don’t apply to non-substantive violations of the SLA;
- Add numerous categories of exempt surplus land, such as properties of smaller than one-half acre, specified mixed-use developments and developments on larger sites that include affordability requirements, airport land, and land owned by transportation agencies if the agency has a policy requiring affordable housing to be built on their properties;
- Authorize disposal of certain categories of exempt surplus land without a public hearing, as long as specified notice is provided;
- Establish additional types of activities that explicitly qualify as “agency’s use”; and
- Extend provisions that allow projects with an exclusive negotiating agreement in place to follow a previous version of the SLA.
HCD SLA Guidelines. The SLA gives HCD the authority to adopt guidelines to implement the law’s penalty provisions. These Guidelines are not subject to the Administrative Procedures Act, which prescribes the state’s procedures for adopting regulations and provide the public with a meaningful opportunity to participate in the adoption of regulations or rules. HCD originally issued Guidelines pursuant to this authority in April 2021. Under the auspices of those Guidelines, HCD began reviewing disposals of surplus land. The Guidelines also required local agencies to notify HCD 30 days in advance of disposing of exempt surplus land.
Following several years of implementation, in February 2024, HCD released a draft of updated Guidelines for public comment. The draft Guidelines contain changes that implement SB 747 and AB 480, as well as additional significant changes to the implementation of the SLA. These additional proposed changes:
- Require notice to HCD prior to disposing of land for agency’s use, and require the entire parcel be used for agency’s use;
- Specify that eminent domain may qualify as agency’s use in certain circumstances;
- Specify how contiguous parcels must be treated under the SLA;
- Define the actions that constitute good faith negotiation, including that the agency cannot arbitrarily end active negotiations after the 90 day period in statute has run;
- Require unspecified documentation beyond the written findings required by statute for exempt surplus land disposals;
- State the 30-day clock for HCD’s response to a local agency does not begin until HCD has received all documentation; and
- Allow private enforcement of the SLA to proceed without a requirement for HCD action on an alleged violation.
The author wants to provide additional clarity to local governments on the Surplus Land Act.
Proposed Law
Senate Bill 1134 provides that for the purposes of the SLA, each parcel of land must be considered a distinct unit of surplus land, except that contiguous parcels that are disposed of simultaneously to the same receiving entity, or any entity working in concert with another receiving entity, must be treated as a single unit of land.
Comments
1. Purpose of the bill. According to the author, “Last year, I authored SB 747 to make numerous improvements to the Surplus Land Act to ensure local governments have the clarity and tools to further economic and affordable housing development. This year, SB 1134 continues this work to further clarify that exempt land is considered a distinct parcel except when more than one distinct parcel immediately adjoins another, and sold together to a singular entity. In this situation, that collection of adjoining parcels will be treated as one. This minor and clarifying change will help ensure local governments are disposing of their exempt parcels correctly.”
2. Why are we here? The SLA has generated voluminous numbers of complaints from local governments that it has slowed or stopped property dispositions and introduced significant uncertainty into their disposition processes. SB 747 was the result of an effort to address the myriad concerns that local governments had raised with the implementation of the SLA. The recent draft Guidelines developed by HCD have reopened the discussion. Local governments—and the author of this measure—are concerned HCD’s proposed changes to the SLA Guidelines are contrary to statute in ways that will slow dispositions further. The draft Guidelines appear to conflict with statute in a few significant ways:
- Changing the treatment of “agency’s use.” AB 480 originally contained changes to the statutory description of property for an “agency’s use.” The analysis of AB 480 in this Committee’s predecessor, the Senate Committee on Governance and Finance, noted, “the changes in AB 480 could be interpreted to preclude disposal of land for agency’s use. This would, among other things, deprive special districts of revenue raising purposes to support their operations that are allowed under existing law. Current law specifically preserves this option for special districts because they have fewer options to support their operations than cities or counties.” The Committee then removed those changes from AB 480 to ensure that the treatment of agency’s use remained the same under the law. However, the draft Guidelines make significant changes to the treatment of land for agency’s use.
- Requiring documentation for exemption determinations and delaying the start of the 30-day period for HCD to respond to a local government submission until HCD has received all documentation that it has determined that it requires. This requirement presents two potential conflicts with statute. First, Government Code Section 54222.3 provides that “[the SLA] shall not apply to the disposal of exempt surplus land as defined in Section 54221 by an agency of the state or any local agency.” Yet the draft Guidelines impose requirements on local governments in connection with the disposal of exempt surplus land. Second, statute only requires a local government to adopt written findings prior to disposing of exempt surplus land, but the draft Guidelines would grant HCD authority to endlessly request new documentation related to exemption determinations.
- Delaying the effective date of changes in statute to the date of finalization of the updated Guidelines. SB 747 and other changes to the SLA adopted last year became effective on January 1, 2024, and those changes were not dependent on HCD adopting any new or updated guidelines. These changes included new exemptions for affordable housing and other uses of property, among other provisions. However, the draft Guidelines imply that local governments may only qualify for these new exemptions after the updated Guidelines are adopted.
On the other side, housing equity organizations support many of the changes that HCD is proposing to the SLA Guidelines as important clarifications of the SLA process and closures of additional loopholes in the SLA. In other areas, they are concerned that HCD’s draft Guidelines aren’t sufficiently expansive regarding private enforcement of SLA violations. This bill, SB 1134, currently makes a minor, technical change to the SLA, but may provide the author an opportunity to make changes to the SLA if the proposed Guidelines become effective in substantially similar form. Should SB 1134 be amended to make additional changes to the SLA, it would likely trigger a provision of the Senate Rules that would return the bill to Committee for hearing, where the merits of further changes to the SLA would be considered.
3. Related legislation. SB 1439 (Ashby), which the Committee will also consider at its May 1st hearing, exempts land to be used for health care facilities from the SLA. Additionally, SB 1514 (Committee on Local Government) corrects two technical drafting errors that were contained in AB 480, which amended the SLA last year. SB 1514 was approved by the Committee at its April 3rd hearing on a 7-0 vote.
Support and Opposition
(4/26/24)
Support: Habitat for Humanity California
Opposition: None submitted.
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Discussed in Hearing
9MIN
Assembly Standing Committee on Local Government
3MIN
Senate Floor
8MIN
Senate Standing Committee on Local Government
Bill Author
Bill Co-Author(s):