(1) Existing law establishes priorities and procedures that any state agency disposing of surplus property is required to follow. Existing law sets forth an order of priority for the disposal of specified surplus residential property, including that a state agency disposing of single-family surplus residential property first offer the property at the appraised fair market value to former owners and present occupants, and then offer the property at an affordable price to other present occupants who have occupied the property for a specified number of years and who meet certain income levels. Existing law sets certain parameters for the calculation of an affordable price for purposes of these provisions based on, among other things, the fair market value of the property. This bill would, instead, require the first tier priority offer to be based on the appraised condition-adjusted fair market value and would define "condition-adjusted fair market value" to mean the fair market value of the property as of October 13, 2019, and as adjusted as to reflect the existing "as is" condition of the property and the amount needed to make certain repairs and capital improvements, as provided. The bill would revise the above-specified parameters for calculating an affordable price to instead be based on the condition-adjusted fair market value. (2) If the surplus residential property is not sold pursuant to the priorities described above, or pursuant to other specified priorities, existing law requires the property to then be sold at fair market value, with priority given first to purchasers who are present tenants in good standing, as provided, and then to former tenants who were in good standing at the time they vacated the premises, as provided. This bill would, instead, require the property to be sold to those present or former tenants at condition-adjusted fair market value. This bill would require any dispute between the Department of Transportation and a purchaser regarding the final sales price of surplus residential property offered at the condition-adjusted fair market value sales price to be submitted to the Office of Administrative Law, as provided. The bill would require the department to provide certain documents related to the surplus residential property to all persons or entities offered or purchasing surplus residential property. The bill would require any surplus residential property purchased at the condition-adjusted fair market value price pursuant to the bill to be assessed at its condition-adjusted fair market value price for property tax purposes. (3) Existing law contains provisions that are specific to the sale of surplus residential property located in the City of South Pasadena. Those provisions, among other things, contain a priority requiring surplus residential property located in the city to be offered at fair market value to specified present tenants who are in good standing, as provided. This bill would, instead, require the property to be offered to those present tenants at condition-adjusted fair market value. The bill would authorize the City of South Pasadena, in a transaction between the city and the Department of Transportation, and without taking ownership of surplus residential property, to offer the residence to the present tenants, regardless of whether the tenant is in good standing, as specified, at the condition-adjusted fair market value price. The bill would require the proceeds realized by the city from this type of sale to be placed into an affordable housing trust fund, as provided. The bill would make other related changes. (4) This bill would make legislative findings and declarations as to the necessity of a special statute for the City of South Pasadena.