Today's Law As Amended


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SB-9 Surplus property: sale procedures.(2019-2020)



As Amends the Law Today


SECTION 1.
 The Legislature finds and declares all of the following:
(a) The sale of property located within the State Route 710 corridor to a housing-related entity will promote the preservation and creation of affordable housing consistent with Section 54235 of the Government Code.
(b) Offering surplus residential properties to a housing-related entity at low cost will advance the public purpose of preserving affordable housing.
(c) It is the intent of the Legislature that the Department of Transportation engage stakeholders on regulations proposed pursuant to Section 54237.10 of the Government Code, as added by this act, before they are submitted to the Office of Administrative Law.

SEC. 2.

 Section 54221 of the Government Code is amended to read:

54221.
 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 agency’s governing body takes formal action in a regular public meeting declaring that the land is surplus and is not necessary for the agency’s 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 agency’s 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.
(c) (1) Except as provided in paragraph (2), “agency’s 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 agency’s 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, board for, or is disposed to support pursuant to subparagraph (B) of paragraph (2) agency work or operations, including, but not limited to, utility sites,  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. “Agency’s use” by a local agency that is a district shall also include land disposed for uses described in subparagraph (B) of paragraph (2). water treatment plants. 
(2) (A) “Agency’s 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 agency’s 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, “agency’s 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 agency’s 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 where  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) (d)  “Open-space purposes” means the use of land for public recreation, enjoyment of scenic beauty, or conservation or use of natural resources.
(e) “Persons and families of low or moderate income” has the same meaning as provided in Section 50093 of the Health and Safety Code.
(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. 25539.4. 
(B) Surplus land that is (i)  less than one-half acre in area and is  5,000 square feet in area, (ii) less than the minimum legal residential building lot size for the jurisdiction in which the parcel is located, or 5,000 square feet in area, whichever is less, or (iii) has no record access and is less than 10,000 square feet 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. If the surplus land is not sold to an owner of contiguous land, it is not considered exempt surplus land and is subject to this article. 
(C) Surplus land that a local agency is exchanging for another property necessary for the agency’s use. “Property” may include easements necessary for the agency’s 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 agency’s use, or to a federally recognized California Indian tribe. If the surplus land is transferred to a third-party intermediary, the receiving agency’s use must be contained in a legally binding agreement at the time of transfer to the third-party intermediary. agency for the agency’s use. 
(E) Surplus land that is a former street, right of way, or easement, and is conveyed to an owner of an adjacent property.
(F) Surplus land that is put out to open, competitive bid by a local agency, provided all entities identified in subdivision (a) of Section 54222 will be invited to participate in the competitive bid process, for either of the following purposes:
(F)  (i) Surplus land that is to be developed for a  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 Sections  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,  housing and 45 years for ownership housing,  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) (ii)  (i) A  Surplus land that is subject to a local agency’s 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 parcels combined,  in area,  that includes not less than 300 residential housing  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. housing and 45 years for ownership housing. 
(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 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 agency’s 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) (G)  The development restricts at least 25 Surplus land for which a local agency has entered into an exclusive negotiation agreement before September 1, 2020, 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 Sections Section  50052.5 and or  50053 of the Health and Safety Code, for a minimum of 55 years for rental housing, land use  housing and 45 years  for ownership housing, and 50 years for rental or ownership housing located on tribal trust lands. 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) 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) (H)  (i)  Surplus land that is subject to a  valid legal restriction restrictions  that is are  not imposed by the local agency and that makes  would make  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 An existing nonresidential land use designation on the surplus land is not a legal restriction that would make housing prohibited for  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. subparagraph. Nothing in this article limits a local jurisdiction’s authority or discretion to approve land use, zoning, or entitlement decisions in connection with the surplus land. 
(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) (I)  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) (J)  Land that is subject to Sections 17388, 17515, 17536, 81192, 81397, 81399, 81420, and 81422 of the Education Code and  Part 14 (commencing with Section 53570) of Division 31 of the Health and Safety Code. Code, unless compliance with this article is expressly required. 
(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 agency’s 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) (K)  Real property that is used by a district for an  agency’s use expressly authorized in subdivision (c).
(O) (L)  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  one hundred  dwelling units per acre, and includes 100 or more residential units that are restricted to persons and families of low or moderate income, as defined in Section 50093 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.  housing and 45 years for ownership housing.  For purposes of this subparagraph, paragraph,  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 persons and families of  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 land’s 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 agency’s 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 development on land designated for the purposes authorized pursuant to this subparagraph in an agency’s 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  prior to  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. 2.5.

 Section 54221 of the Government Code is amended to read:

54221.
 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 agency’s governing body takes formal action in a regular public meeting declaring that the land is surplus and is not necessary for the agency’s 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 agency’s 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.
(c) (1) Except as provided in paragraph (2), “agency’s 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 agency’s 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, board for, or is disposed to support pursuant to subparagraph (B) of paragraph (2) agency work or operations, including, but not limited to, utility sites,  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. “Agency’s use” by a local agency that is a district shall also include land disposed for uses described in subparagraph (B) of paragraph (2). water treatment plants. 
(2) (A) “Agency’s 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 agency’s 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, “agency’s 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 agency’s 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 where  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) (d)  “Open-space purposes” means the use of land for public recreation, enjoyment of scenic beauty, or conservation or use of natural resources.
(e) “Persons and families of low or moderate income” has the same meaning as provided in Section 50093 of the Health and Safety Code.
(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 (i)  less than one-half acre in area and is  5,000 square feet in area, (ii) less than the minimum legal residential building lot size for the jurisdiction in which the parcel is located, or 5,000 square feet in area, whichever is less, or (iii) has no record access and is less than 10,000 square feet 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. If the surplus land is not sold to an owner of contiguous land, it is not considered exempt surplus land and is subject to this article. 
(C) Surplus land that a local agency is exchanging for another property necessary for the agency’s use. “Property” may include easements necessary for the agency’s 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 agency’s use, or to a federally recognized California Indian tribe. If the surplus land is transferred to a third-party intermediary, the receiving agency’s use must be contained in a legally binding agreement at the time of transfer to the third-party intermediary. agency for the agency’s use. 
(E) Surplus land that is a former street, right of way, or easement, and is conveyed to an owner of an adjacent property.
(F) Surplus land that is put out to open, competitive bid by a local agency, provided all entities identified in subdivision (a) of Section 54222 will be invited to participate in the competitive bid process, for either of the following purposes:
(F)  (i) Surplus land that is to be developed for a  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 Sections  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,  housing and 45 years for ownership housing,  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) (ii)  (i) A  Surplus land that is subject to a local agency’s 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 parcels combined,  in area,  that includes not less than 300 residential housing  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. housing and 45 years for ownership housing. 
(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 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 agency’s 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) (G)  The development restricts at least 25 Surplus land for which a local agency has entered into an exclusive negotiation agreement before September 1, 2020, 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 Sections Section  50052.5 and or  50053 of the Health and Safety Code, for a minimum of 55 years for rental housing, land use  housing and 45 years  for ownership housing, and 50 years for rental or ownership housing located on tribal trust lands. 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) 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) (H)  (i)  Surplus land that is subject to a  valid legal restriction restrictions  that is are  not imposed by the local agency and that makes  would make  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 An existing nonresidential land use designation on the surplus land is not a legal restriction that would make housing prohibited for  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. subparagraph. Nothing in this article limits a local jurisdiction’s authority or discretion to approve land use, zoning, or entitlement decisions in connection with the surplus land. 
(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) (I)  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) (J)  Land that is subject to Sections 17388, 17515, 17536, 81192, 81397, 81399, 81420, and 81422 of the Education Code and  Part 14 (commencing with Section 53570) of Division 31 of the Health and Safety Code. Code, unless compliance with this article is expressly required. 
(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 agency’s 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) (K)  Real property that is used by a district for an  agency’s use expressly authorized in subdivision (c).
(O) (L)  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  one hundred  dwelling units per acre, and includes 100 or more residential units that are restricted to persons and families of low or moderate income, as defined in Section 50093 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.  housing and 45 years for ownership housing.  For purposes of this subparagraph, paragraph,  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 persons and families of  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 land’s 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 agency’s 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 development on land designated for the purposes authorized pursuant to this subparagraph in an agency’s 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  prior to  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. 3.

 Section 54234 of the Government Code is amended to read:

54234.
 (a) (1) If a local agency, as of September 30, 2019, has entered into an exclusive negotiating agreement or legally binding agreement to dispose of property, the provisions of this article as it existed on December 31, 2019, shall apply, without regard to the changes made to this article by Chapter 664 of the Statutes of 2019, and all subsequent amendments to this article, to  to  the disposition of the property to the party that had entered into such agreement or its successors or assigns, provided the disposition is completed by  not later than  December 31, 2027. 2022. 
(2) If a local agency, as of September 30, 2019, has entered into an exclusive negotiating agreement or legally binding agreement to dispose of property related to the Metro North Hollywood Joint Development Project, the provisions of this article as it existed on December 31, 2019, shall apply, without regard to the changes made to this article by Chapter 664 of the Statutes of 2019, and all subsequent amendments to this article, to the disposition of the property to the party that had entered into such agreement or its successors or assigns, provided the disposition is completed not later than December 31, 2027.
(3) (2)  If a local agency, as of September 30, 2019, has issued a competitive request for proposals for the development of property that includes  include a residential component of  at least 100 residential units and at least 25 percent of the total residential units developed  are restricted to lower income households, as defined in Section 50079.5 of the Health and Safety Code, with an affordable housing cost 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 and 45 years for ownership housing, the provisions of this article as it existed on December 31, 2019, shall apply, without regard to the changes made to this article by Chapter 664 of the Statutes of 2019, and all subsequent amendments to this article, to  to  the disposition of the property to the party that had  participated in the competitive request for proposals  proposal  process, or the party’s  their  successors or assigns, provided a disposition and development agreement for the property is entered into not later than December 31, 2027. 2022.  A joint development involving multiple parcels shall may  meet the requirements of this paragraph so long as there was a single competitive request for proposals process and the joint development otherwise meets all the requirements listed in this paragraph.  proposal process.  A “disposition and development agreement” means an agreement between the developer and the local agency  shall mean an agreement  that binds the developer to construct a specific development and the local agency to dispose of the property if  in the event  permits and other entitlements for the project are obtained. This paragraph shall not apply to land held in the Community Redevelopment Property Trust Fund pursuant to Section 34191.4 of the Health and Safety Code, or that has been designated in a long-range property management plan pursuant to Section 34191.5 of the Health and Safety Code. If the property is not disposed of pursuant to a qualifying disposition and development agreement before March 31, 2024, or if  no disposition and development agreement is entered into before December 31, 2027, 2022,  then future negotiations for and disposition of the property shall be subject to the provisions of this article.
(2) (3)  The dates specified in paragraphs (1) to (3), inclusive,  and (2)  by which the disposition of property must be completed shall be extended if the disposition of property, the local agency’s right or ability to dispose of the property, or a development project for which the property is proposed to be transferred, is the subject of judicial challenge, by petition for writ of mandate, complaint for declaratory relief or otherwise, to the date that is six months following the final conclusion of such that  litigation.
(b) (1) With respect to land held in the Community Redevelopment Property Trust Fund pursuant to Section 34191.4 of the Health and Safety Code, or that has been designated in a long-range property management plan pursuant to Section 34191.5 of the Health and Safety Code, either for sale or retained for future development, this article as it existed on December 31, 2019, without regard to the changes made to this article by Chapter 664 of the Statutes of 2019, and all subsequent amendments to this article,  2019  which take effect on January 1, 2020, shall apply to the disposition of that property if both of the following apply:
(A) An exclusive negotiating agreement or legally binding agreement for disposition was is  entered into not later than December 31, 2020.
(B) The disposition is completed not later than December 31, 2027. 2022. 
(2) If land described in paragraph (1) is the subject of litigation, including, but not limited to, litigation challenging the disposition of such property, the right or ability to dispose of the property, or a development project for which such property is proposed to be transferred, the dates specified in paragraph (1) shall be extended to the date that is six months following the final conclusion of such litigation.
(c) Nothing in this section shall authorize or excuse any violation of the provisions of this article as it existed on December 31, 2019, in the disposition of any property to which such provisions apply pursuant to subdivision (a) or (b).
(d) If a local agency terminated an exclusive negotiating agreement or legally binding agreement to dispose of property pursuant to an earlier, superseded version of subdivision (a) or (b) of this section due to the lapse of a statutory deadline for completing the disposition of property the local agency may, in its sole reasonable discretion, elect whether to ask the party to the terminated exclusive negotiating agreement or legally binding agreement to dispose of property to consider reviving the terminated agreement. If the local agency and other party fully execute an instrument reviving the terminated agreement before January 1, 2024, on substantially the same terms and conditions as the terminated agreement, the revived agreement shall be subject to subdivision (a) or (b), as applicable, of this section.

SEC. 4.

 Section 54237 of the Government Code is amended to read:

54237.
 (a) Notwithstanding Section 11011.1, an agency of the state disposing of surplus residential property shall do so in accordance with the following priorities and procedures:
(1) First, all single-family residences presently occupied by their former owners shall be offered to those former owners at the appraised fair market value.
(2) Second, all single-family residences shall be offered, pursuant to this article, to their present occupants who have occupied the property for two years or more and who are persons and families of low or moderate income.
(3) Third, all single-family residences shall be offered, pursuant to this article, to their present occupants who have occupied the property for five years or more and whose household income does not exceed 150 percent of the area median income.
(4) Fourth, a single-family residence shall not be offered, pursuant to this article, to present occupants who are not the former owners of the property if the present occupants have had an ownership interest in real property in the last three years.
(b) Single-family residences offered to their present occupants pursuant to paragraphs (2) and (3) of subdivision (a) shall be offered to those present occupants at an affordable price. The price shall not be less than the price paid by the agency for original acquisition, unless the acquisition price was greater than the current fair market value, and shall not be greater than fair market value. When a single-family residence is offered to present occupants at a price that is less than fair market value, the selling agency shall impose terms, conditions, and restrictions to ensure that the housing will remain available to persons and families of low or moderate income and households with incomes no greater than the incomes of the present occupants in proportion to the area median income. The Department of Housing and Community Development shall provide to the selling agency recommendations of standards and criteria for these prices, terms, conditions, and restrictions. The selling agency shall provide repairs required by lenders and government housing assistance programs, or, at the option of the agency, provide the present occupants with a replacement dwelling pursuant to Section 54237.5.
(c) If single-family residences are offered to their present occupants pursuant to paragraphs (2) and (3) of subdivision (a), the occupants shall certify their income and assets to the selling agency. When a single-family residence is offered to present occupants at a price that is less than fair market value, the selling agency may verify the certifications, in accordance with procedures used for verification of incomes of purchasers and occupants of housing financed by the California Housing Finance Agency and with regulations adopted for the verification of assets by the United States Department of Housing and Urban Development. The income and asset limitations and term of residency requirements of paragraphs (2) and (3) of subdivision (a) shall not apply to sales that are described as mitigation measures in an environmental study prepared pursuant to the Public Resources Code, if the study was initiated before this measure was enacted.
(d) (1) After  Except as otherwise provided in paragraph (2), all other    surplus residential properties and all properties described in paragraphs (1), (2), and (3) of subdivision (a) that are not purchased by the former owners or the present occupants shall be then offered as follows: are offered for sale pursuant to subdivisions (a) to (c), inclusive, these properties shall then be offered at fair market value to purchasers who are present tenants who have occupied the property for five years or more and who are in good standing with all rent obligations current and paid in full, with first right of occupancy to the present occupants. 
(e) (1) After a surplus residential property is offered for sale pursuant to subdivisions (a) to (d), inclusive, and if the property is a historic home, the property shall be offered to the city in which the property is located or a nonprofit private entity dedicated to rehabilitating and maintaining the historic home for public and community access and use subject to the following:
(A) Except as required by subparagraph (B), the  The  property shall be offered to a housing-related private or public entity  at a reasonable price, which is best suited to economically feasible use of the property as decent, safe, and sanitary housing at affordable rents and affordable prices for persons and families of low or moderate income, on the condition that the purchasing entity shall cause the property to be rehabilitated and used as follows: a historic home for public and community access and use. 
(i) If the housing-related entity is a public entity, the entity shall dedicate profits realized from a subsequent sale, as specified in subdivision (b) of Section 54237.7, to the construction of affordable housing within the Cities of Pasadena, South Pasadena, Alhambra, La Cañada Flintridge, and the 90032 postal ZIP Code.
(ii) (B)  If the entity is a private housing-related entity or a housing-related public entity, the entity shall cause the property to be developed as limited equity cooperative housing with first right of occupancy to present occupants, except that where the development of cooperative or cooperatives is not feasible, the purchasing entity shall cause the property to be used for low- and moderate-income rental or owner-occupied housing, with first right of occupancy to the present tenants. The price of the property  The sales price  in no case shall be less than the price paid by the entity for original acquisition  Department of Transportation  unless the acquisition price was greater than current fair market value and shall not be greater than fair market value. Subject to the foregoing, it  the price  shall be set at the level necessary to provide housing at affordable rents and affordable prices for present tenants and persons and families of low or moderate income. When residential property is offered at a price that is less than fair market value, the selling agency shall impose terms, conditions, and restrictions that will ensure that the housing will remain available to persons and families of low or moderate income. The Department of Housing and Community Development shall provide to the selling agency recommendations of standards and criteria for prices, terms, conditions, and restrictions. rehabilitate and maintain the historic home for public and community access and use. 
(C) Property sold pursuant to this subdivision shall be sold in the existing “as is” condition.
(D) The selling agency shall impose terms, conditions, and restrictions as will ensure that the historic home will remain available for public and community access and use. The purchaser shall comply with monitoring requirements, as determined by the Department of Transportation.
(B) (E)  (i) The  If the property is a historic home, the property shall be offered first to a housing-related public entity subject to clause (i) or (ii) of subparagraph (A) or to a nonprofit private entity dedicated to rehabilitating and maintaining the historic home for public and community access and use subject to clause (ii) of subparagraph (A).  Department of Transportation may designate in regulations, or delegate by agreement to, a public agency to monitor the property’s compliance with the terms, conditions, and restrictions required by this subdivision. The monitoring entity may charge the property owner a fee to recover the cost of this monitoring. 
(ii) (2)  For purposes of this subdivision, “historic home” means single-family surplus residential property that is listed on, or for which an application has been filed for listing on, at least one of the following by January 1, 2015:
(I) (A)  The California Register of Historical Resources, as established pursuant to Article 2 (commencing with Section 5020) of Chapter 1 of Division 5 of the Public Resources Code.
(II) (B)  The National Register of Historic Places, as established pursuant to Chapter 3021 of Title 54 of the United States Code.
(III) (C)  The National Register of Historic Places, as previously established pursuant to the federal National Historic Preservation Act (54 U.S.C. Sec. 300101 et seq.).
(2) (f)  This subdivision shall not apply to properties  After surplus residential properties are  offered for sale pursuant to Section 54239.1, 54239.5, or 54239.6. subdivisions (a) to (e), inclusive, these properties shall be offered to a housing-related entity as follows: 
(1) The sales price shall be the price paid by the Department of Transportation for original acquisition. The original acquisition price shall not be adjusted for inflation.
(2) Property sold pursuant to this subdivision shall be sold in the existing “as is” condition.
(3) For each property purchased under this subdivision, the housing-related entity shall do all of the following:
(A) (i) Cause the property to be used for low- and moderate-income rental housing for a term of at least 55 years. The purchase and operation of the property shall be subject to a covenant recorded against the property that requires the property to remain available and affordable for rental by lower income and moderate-income households, as defined by Sections 50079.5 and 50052.5 of the Health and Safety Code, respectively, for a term no shorter than 55 years.
(ii) In the event that the property is sold prior to the expiration of the covenant, the covenant shall remain in effect until the time at which it expires. In the event the housing-related entity is no longer able to provide the housing on the property, the housing-related entity shall transfer the title to the city in which the property is located, which shall transfer the title and operations to a successor housing-related entity that will maintain the property and the operations in compliance with the covenant. Any housing-related entity purchaser shall comply with monitoring requirements, as determined by the Department of Transportation.
(B) Provide first right of occupancy to the present occupants. The rental amount shall be in accordance with income certification if the current occupants qualify as low or moderate income. If the current tenant’s income exceeds the limits for that level, the rent for those occupants shall be no less than their current rent, or adjusted no higher than current market rates for the area.
(C) Cause any additional new units added to the property to be used only for low- or moderate-income rental housing.
(D) Provide relocation assistance as required under subdivision (b) of Section 54238.3.
(4) The Department of Transportation may designate in regulations, or delegate by agreement to, a public agency to monitor the property’s compliance with the covenant required by this subdivision. The monitoring entity may charge the property owner a fee to recover the cost of this monitoring.
(e) (g)  A surplus residential property not sold pursuant to subdivisions (a) to (d), inclusive, or Section 54239.1, 54239.5, or 54239.6, as applicable,  (f), inclusive,  shall then be sold at fair market value, with priority given first to purchasers who are present tenants in good standing with all rent obligations current and paid in full, second to former tenants who were in good standing at the time they vacated the premises, with priority given to the most recent tenants first, and then to purchasers who will be owner occupants. The selling agency may commence the sale of property that former tenants may possess a right to purchase as provided by this subdivision 30 days after the selling agency has done both of the following:
(1) Posted information regarding the sale under this subdivision on the selling agency’s internet website.
(2) Made a good faith effort to provide written notice, by first-class mail, to the last known address of each former tenant.
(f) (h)  (1) Tenants in good standing of nonresidential properties shall be given priority to purchase, at fair market value, the property they rent, lease, or otherwise legally occupy.
(2) (A) A tenant in good standing of a nonresidential property shall be given priority to purchase, at the lesser of fair market value or value in use, if the tenant is a city or a nonprofit organization qualified as exempt under Section 501(c)(3) of the Internal Revenue Code.
(B) The Department of Transportation shall not sell a nonresidential property to a tenant described in subparagraph (A) at a value below the minimum sales price, as defined by Section 1476 of Title 21 of the California Code of Regulations as that regulation read on July 1, 2019.
(C) If a nonresidential property is offered at a price that is less than fair market value, the selling agency shall impose appropriate terms, conditions, and restrictions.
(D) As used in this paragraph, “value in use” means the value of a nonresidential property assuming a specific use, that may or may not be the property’s highest and best use on the effective date of the property’s appraisal.

SEC. 5.

 Section 54237.9 is added to the Government Code, to read:

54237.9.
 Notwithstanding any other provision in this article, the price of property sold pursuant to this article shall not be less than the price paid by the Department of Transportation for original acquisition of the property. The original acquisition price shall not be adjusted for inflation.

SEC. 6.

 Section 54237.10 is added to the Government Code, to read:

54237.10.
 (a) The Legislature finds and declares that the state’s homelessness crisis has compounded the need for affordable housing described in Section 54235. To help mitigate the need for affordable housing and to speed up sales pursuant to this article, the Legislature further finds and declares that an emergency exists for purposes of Sections 11342.545, 11346.1, and 11349.6.
(b) The Department of Transportation shall adopt emergency regulations by June 1, 2021, to implement this article.
(c) Notwithstanding Section 11346.1, the emergency regulations adopted pursuant to subdivision (b) shall remain in effect for two years after adoption or until permanent regulations are adopted, whichever is sooner.

SEC. 7.

 Section 54239 is added to the Government Code, to read:

54239.
 Before selling unimproved property within the State Route 710 corridor within the Cities of Pasadena, South Pasadena, or Los Angeles pursuant to Section 118 of the Streets and Highways Code, the Department of Transportation shall offer to sell the property at the price paid by the Department of Transportation for original acquisition to a housing-related entity for affordable housing purposes, pursuant to the terms and conditions provided in subdivision (f) of Section 54237.
SEC. 8.
 Sections 4 to 7, inclusive, of this act shall not apply to any sale of surplus residential property pursuant to Section 54237 of the Government Code that is in escrow as of December 31, 2020. Any surplus residential property that is subject to Section 54237 of the Government Code that is not in escrow as of December 31, 2020, or for which that escrow does not close, shall be offered for sale pursuant to the regulations required by this act and the priorities and procedures provided by this act, regardless of prior offers or prior determinations of eligibility.
SEC. 9.
 Section 2.5 of this bill incorporates amendments to Section 54221 of the Government Code proposed by this bill and Senate Bill 1030. That section of this bill shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2021, (2) each bill amends Section 54221 of the Government Code, and (3) this bill is enacted after Senate Bill 1030, in which case Section 54221 of the Government Code, as amended by Senate Bill 1030, shall remain operative only until the operative date of this bill, at which time Section 2.5 of this bill shall become operative, and Section 2 of this bill shall not become operative.
SEC. 10.
 The Legislature finds and declares that a special statute is necessary and that a general statute cannot be made applicable within the meaning of Section 16 of Article IV of the California Constitution because of the unique social, cultural, and economic conditions that necessitate the repair and improvement of neighborhoods within the Cities of Pasadena and South Pasadena and the El Sereno neighborhood of the City of Los Angeles.