AB 1594: Surplus nonresidential property: sales by the Department of Transportation: net equity.

Existing law establishes priorities and procedures that any state agency disposing of surplus property is required to follow. Existing law sets forth an order of priority for the disposal of surplus nonresidential property. In this regard, existing law requires a tenant in good standing of a nonresidential property who is a city or a nonprofit organization to be given priority to purchase the property at the lesser of fair market value or value in use, as specified. Existing law prohibits the Department of Transportation from selling a nonresidential property to a tenant as described above at a value below the minimum sales price, as defined. Existing law requires an offer to sell surplus nonresidential property as described above at less than fair market value to be subject to appropriate terms, conditions, and restrictions, as specified.

This bill would create an exception from that prohibition for a tenant who is a nonprofit organization that operates multiple residential structures primarily for the purposes of familial habitation during medical treatment and related administrative activities. Specifically, the bill would prohibit the tenant from being required to pay to the Department of Transportation any amounts in excess of the lesser of fair market value or value in use, as specified, regardless of any contractual obligation to pay those amounts. The bill would require the tenant to be required to repay any amounts not paid pursuant to the above provision if the tenant sells the property or no longer qualifies as a nonprofit organization. The bill would require the Department of Transportation to include that requirement in the terms, conditions, and restrictions of the offer to the tenant. The bill would make its provisions retroactive and applicable to any contracts entered into between the Department of Transportation and a qualified tenant.

This bill would make legislative findings and declarations as to the necessity of a special statute for certain nonresidential tenants carrying long-term debt obligations to the Department of Transportation.

This bill would make legislative findings and declarations related to a gift of public funds.