Today's Law As Amended


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AB-1271 Surplus land.(2021-2022)



As Amends the Law Today


SECTION 1.

 Section 54221 of the Government Code, as amended by Section 158 of Chapter 370 of the Statutes of 2020, 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 This article does not prevent  a local agency from obtaining fair market value for the disposition of surplus land consistent with Section 54226.
(c) (1) Except as provided in paragraph (2), “agency’s use” shall include, but not be limited to, land that is being used, is planned to be used pursuant to a written plan adopted by the local agency’s governing 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, and buffer sites near sensitive governmental uses, including, but not limited to, waste 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 where applicable.
(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 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.
(D) Surplus land that a local agency is transferring to another local, state, or federal agency for the agency’s use.
(E) Surplus land that is a former street, right of way,  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:
(i) 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 50052.5 or 50053 of the Health and Safety Code, for a minimum of 55 years for rental 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) A mixed-use development that is more than one acre in area, that includes not less than 300 housing residential  units, and that restricts at least 25 percent of the residential units to lower income households, as defined in Section 50079.5 of the Health and Safety Code, with an affordable sales price or an affordable rent, as defined in Sections 50052.5 and 50053 of the Health and Safety Code, for a minimum of 55 years for rental housing and 45 years for ownership housing.
(iii) A former military base or other planned residential or mixed-use development of adjacent or nonadjacent parcels of greater than five total acres, that are subject to a written plan, where at least one of the owners is a local agency, and that meets all of the following criteria:
(I) The development will include not less than 1200 housing units at build out.
(II) The development restricts at least 25 percent of every 200 residential unit increment constructed 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 and 45 years for ownership housing.
(III) Where nonresidential development is included in the development, at least 25 percent of the total planned units affordable to lower income households shall be made available for lease or sale, use and occupancy for every 25 percent of nonresidential development made available for lease or sale, use and occupancy.
(G) Surplus land that is subject to valid legal restrictions that are not imposed by the local agency and that would make housing prohibited, unless there is a feasible method to satisfactorily mitigate or avoid the prohibition on the site. An existing nonresidential land use designation on the surplus land is not a legal restriction that would make housing prohibited for purposes of this subparagraph. Nothing in this article limits This article does not limit  a local jurisdiction’s authority or discretion to approve land use, zoning, or entitlement decisions in connection with the surplus land.
(H) 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.
(I) 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, unless compliance with this article is expressly required.
(J) Real property that is used by a district for agency’s use expressly authorized in subdivision (c).
(K) 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 one hundred  100  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,  income  with an affordable sales price or an affordable rent, as defined in Sections 50052.5 and 50053 of the Health and Safety Code, for a minimum of 55 years for rental housing and 45 years for ownership housing. For purposes of this 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 as defined in Section 50079.5 of the Health and Safety Code.
(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 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. state park 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.

SEC. 2.

 Section 54222 of the Government Code is amended to read:

54222.
 Except as provided in Division 23 (commencing with Section 33000) of the Public Resources Code, any local agency disposing of surplus land shall send, prior to disposing of that property or participating in negotiations to dispose of that property with a prospective transferee, a written notice of availability of the property to all of the following:
(a) (1) A written notice of availability for the purpose of developing low- and moderate-income housing shall be sent to any local public entity, as defined in Section 50079 of the Health and Safety Code, within whose jurisdiction the surplus land is located. Housing sponsors, as defined by Section 50074 of the Health and Safety Code,  sponsors  that have notified the Department of Housing and Community Development of their interest in surplus land shall be sent a notice of availability of surplus land  for the purpose of developing low- and moderate-income housing. All notices shall be sent by electronic mail, or by certified mail, and shall include the location and a description of the property.
(2) The Department of Housing and Community Development shall maintain on its internet website an up-to-date listing of all notices of availability throughout the state. and links to copies of the notices of availability, which shall be available as a downloadable PDF. 
(b) A written notice of availability for open-space purposes shall be sent:
(1) To any park or recreation department of any city within which the land may be situated. surplus land is located. 
(2) To any park or recreation department of the county within which the surplus  land is situated. located. 
(3) To any regional park authority having jurisdiction within the area in which the surplus  land is situated. located. 
(4) To the State Resources Agency or any agency that may succeed to its powers.
(c) A written notice of availability of land suitable for school facilities construction or use by a school district for open-space purposes shall be sent to any school district in within  whose jurisdiction the surplus  land is located.
(d) A written notice of availability for the purpose of  developing property located within an infill opportunity zone designated pursuant to Section 65088.4 or within an area covered by a transit village plan adopted pursuant to the Transit Village Development Planning Act of 1994 (Article 8.5 (commencing with Section 65460) of Chapter 3 of Division 1 of Title 7) shall be sent to any county, city, city and county, successor agency to a former redevelopment agency, public transportation agency, or housing authority within whose jurisdiction the surplus land is located.
(e) The entity or association  desiring to purchase or lease the surplus land for any of the purposes authorized by this section shall notify in writing the disposing agency of its interest in purchasing or leasing the land within 60 days after the agency’s notice of availability of the land  is sent via certified mail or provided via electronic mail.
(f) For the purposes of this section, “participating in negotiations” does not include the commissioning of appraisals, due diligence prior to disposition, discussions with brokers or real estate agents not representing a potential buyer, or other studies to determine value or best use of land, issuance of a request for qualifications, development of marketing materials, or discussions conducted exclusively among local agency employees and elected officials.

SEC. 3.

 Section 54222.5 of the Government Code is amended to read:

54222.5.
 An entity proposing to use the surplus land for developing low- and moderate-income housing shall agree to make available not less than 25 percent of the total number of units developed on the parcels at affordable housing cost, as defined in Section 50052.5 of the Health and Safety Code, or affordable rent, as defined in Section 50053 of the Health and Safety Code, to lower income households, as defined in Section 50079.5 of the Health and Safety Code. Rental units shall remain affordable to, and occupied by, lower income households for a period of at least 55 years. The initial occupants of all ownership units shall be lower income households, and the units shall be subject to an equity sharing agreement consistent with paragraph (2) of subdivision (c) of Section 65915. These requirements shall be contained in a covenant or restriction recorded against the surplus land at the time of sale, which shall run with the land and shall be enforceable, against any owner who violates a covenant or restriction and each successor in interest who continues the violation, by any of the following:
(a) The local agency that disposed of the property. surplus land. 
(b) A resident of a unit subject to this section.
(c) A residents residents’  association with members who reside in units subject to this section.
(d) A former resident of a unit subject to this section who last resided in that unit.
(e) An applicant seeking to enforce the covenants or restrictions for a particular unit that is subject to this section, if the applicant conforms to all of the following:
(1) Is of low or moderate income, as defined in Section 50093 of the Health and Safety Code.
(2) Is able and willing to occupy that particular unit.
(3) Was denied occupancy of that particular unit due to an alleged breach of a covenant or restriction implementing this section.
(f) A person on an affordable housing waiting list who is of low or moderate income, as defined in Section 50093 of the Health and Safety Code, and who is able and willing to occupy a unit subject to this section.

SEC. 4.

 Section 54223 of the Government Code is amended to read:

54223.
 (a) After the disposing agency has received a notice of interest from the entity desiring to purchase or lease the surplus  land on terms that comply with this article, the disposing agency and the entity shall enter into good faith negotiations to determine a mutually satisfactory sales price and terms or lease terms. If the price or terms cannot be agreed upon after a good faith negotiation period of not less than 90 days, the land may be disposed of  local agency may dispose of the surplus land  without further regard to this article, except that Section 54233 shall apply. apply, and the disposing agency shall offer the original responding entity 30 days to match or exceed a secondary respondent’s offer price. If the original responding entity replies agreeing to match the secondary offer within the 30-day period, the disposing agency shall enter into good faith negotiations for a period of not less than 90 days with the original responding entity in which the disposing agency will attempt reach agreement on the terms of the sale or lease. 
(b) Residential use shall be deemed an acceptable use for the surplus land for the purposes of good faith negotiations with a local agency conducted pursuant to this article. Nothing in this subdivision shall restrict a local jurisdiction’s authority or discretion to approve land use, zoning, or entitlement decisions in connection with the surplus land. Except as provided in subdivision (c), terms agreed to pursuant to the negotiations shall not do any of the following:
(1) Disallow residential use of the site as a condition of the disposal.
(2) Reduce the allowable number of residential units or the maximum lot coverage below what may be allowed by zoning or general plan requirements.
(3) Require as a condition of disposal, any design standards or architectural requirements that would have a substantial adverse effect on the viability or affordability of a housing development for very low, low-, or moderate-income households, other than the minimum standards required by general plan, zoning, and subdivision standards and criteria.
(c) Terms agreed to pursuant to the negotiations required by subdivision (a) may include limitations on residential use or density if, without the limitations, the residential use or density would have a specific, adverse impact, supported by written findings, upon the public health or safety or upon the operation or facilities of a local agency, and there is no feasible method to satisfactorily mitigate the impact.

SEC. 5.

 Section 54224 of the Government Code is amended to read:

54224.
 Nothing in this article shall preclude a local agency, housing authority, or redevelopment  agency which purchases surplus  land from a disposing agency pursuant to this article from reconveying the surplus  land to a nonprofit or for-profit housing developer for development of low- and moderate-income housing as authorized under other provisions of law.

SEC. 6.

 Section 54225 of the Government Code is amended to read:

54225.
 Any public local  agency disposing of surplus land to an entity described in Section 54222 that intends to use the land for park or recreation purposes, for open-space purposes, for school purposes, or for low- and moderate-income housing purposes may provide for a payment period of up to 20 years in any contract of sale or sale by trust deed for the land. The payment period for surplus land disposed of for housing for persons and families of low and moderate income may exceed 20 years, but the payment period shall not exceed the term that the land is required to be used for low- or moderate-income housing.

SEC. 7.

 Section 54227 of the Government Code is amended to read:

54227.
 (a) In the event that any local agency disposing of surplus land receives a notice of interest to purchase or lease that land from more than one of the entities to which notice of available surplus land  availability  was given pursuant to this article, the local agency shall give first  priority to the entity or entities that agree to use the site for housing that meets the requirements of Section 54222.5. If the local agency receives offers from more than one entity that agrees to meet the requirements of Section 54222.5, then the local agency shall give priority to the entity that proposes to provide the greatest number of units that meet the requirements of Section 54222.5. In the event that more than one entity proposes the same number of units that meet the requirements of Section 54222.5, priority shall be given to the entity that proposes the deepest average level of affordability for the affordable units. A local agency may negotiate concurrently with all entities that provide notice of interest for the purpose of developing affordable  low- and moderate-income  housing that meets the requirements of Section 54222.5.
(b) Notwithstanding subdivision (a), first  priority shall be given to an entity that agrees to use the site for park or recreational purposes if the land being offered is already being used and will continue to be used for park or recreational purposes, or if the land is designated for park and recreational use in the local general plan and will be developed for that purpose.

SEC. 8.

 Section 54230.5 of the Government Code, as amended by Section 159 of Chapter 370 of the Statutes of 2020, is amended to read:

54230.5.
 (a) (1) A local agency that disposes of surplus  land in violation of this article after receiving a notification from the Department of Housing and Community Development pursuant to subdivision (b) that the local agency is in violation of this article shall be liable for a penalty of 30 percent of the final sale sales  price of the surplus  land sold in violation of this article for a first violation and 50 percent for any subsequent violation. An entity identified in Section 54222 or a person who would have been eligible to apply for residency in any affordable housing developed or a housing organization as defined in Section 65589.5, or any beneficially interested person or entity may bring an action to enforce this section. A local agency shall have 60 days to cure or correct an alleged violation before an action may be brought to enforce this section, unless the local agency disposes of the surplus  land before curing or correcting the alleged violation, or the department deems the alleged violation not to be a violation in less than 60 days.
(2) A penalty assessed pursuant to this subdivision shall, except as otherwise provided, be deposited into a local housing trust fund. The local agency may elect to instead deposit the penalty moneys into the Building Homes and Jobs Trust Fund or the Housing Rehabilitation Loan Fund. Penalties shall not be paid out of funds already dedicated to affordable housing, including, but not limited to, Low and Moderate Income Housing Asset Funds, funds dedicated to housing for very low, low-, and moderate-income households, and federal HOME Investment Partnerships Program and Community Development Block Grant Program funds. The local agency shall commit and expend the penalty moneys deposited into the local housing trust fund within five years of deposit for the sole purpose of financing newly constructed housing units that are affordable to extremely low, very low, or low-income households.
(3) Five years after deposit of the penalty moneys into the local housing trust fund, if the funds have not been expended, the funds shall revert to the state and be deposited in the Building Homes and Jobs Trust Fund or the Housing Rehabilitation Loan Fund for the sole purpose of financing newly constructed housing units located in the same jurisdiction as the surplus land and that are affordable to extremely low, very low, or low-income households. Expenditure of any penalty moneys deposited into the Building Homes and Jobs Trust Fund or the Housing Rehabilitation Loan Fund pursuant to this subdivision shall be subject to appropriation by the Legislature.
(b) (1) Prior to agreeing to terms for the disposition of surplus land, a local agency shall provide to the Department of Housing and Community Development a description of the notices of availability sent, and negotiations conducted with any responding entities, in  including evidence the negotiations were conducted in good faith when good faith negotiations are required by this article, in  regard to the disposal of the parcel of surplus land and a copy of any restrictions to be recorded against the property pursuant to Section 54233  54222.5, 54233,  or 54233.5, whichever is applicable, in a form prescribed by the Department of Housing and Community Development. A local agency may submit this information after it has sent notices of availability required by Section 54222 and concluded negotiations with any responding agencies. A local agency shall not be liable for the penalty imposed by subdivision (a) if the Department of Housing and Community Development does not notify the agency that the agency is in violation of this article within 30 days of receiving the description.
(2) The Department of Housing and Community Development shall do all of the following:
(A) Make available educational resources and materials that inform each agency of its obligations under this article and that provide guidance on how to comply with its provisions.
(B) Review information submitted pursuant to paragraph (1).
(C) Submit written findings to the local agency within 30 days of receipt of the description required by paragraph (1) from the local agency if it determines that  the proposed disposal of the land will violate this article.
(D) Review, adopt, amend, or repeal guidelines to establish uniform standards to implement this section. The guidelines adopted pursuant to this subdivision are not subject to Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2.
(E) Provide the local agency reasonable time, but not less than 60 days, to respond to the findings before taking any other action authorized by this section.
(3) (A) The local agency shall consider findings made by the Department of Housing and Community Development pursuant to subparagraph (B) (C)  of paragraph (2) and shall do one of the following:
(i) Correct any issues identified by the Department of Housing and Community Development.
(ii) Provide written findings explaining the reason its process for disposing of surplus land complies with this article and addressing the Department of Housing and Community Development’s findings.
(B) If the local agency does not correct issues identified by the Department of Housing and Community Development, does not provide findings explaining the reason its process for disposing of surplus land complies with this article and addressing the Department of Housing and Community Development’s findings, or if the Department of Housing and Community Development finds that the local agency’s findings are deficient in addressing the issues identified by the Department of Housing and Community Development, the Department of Housing and Community Development shall notify the local agency, and may notify the Attorney General, that the local agency is in violation of this article.
(c) The Department of Housing and Community Development shall implement the changes in this section made by the act adding this subdivision commencing on January 1, 2021.
(d) Notwithstanding subdivision (c), this section shall not be construed to limit any other remedies authorized under law to enforce this article including public records act requests pursuant to Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1.
SEC. 9.
 If the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.