Updated Surplus Land Act Guidelines

CSDA highly encourages all special districts impacted by newly proposed Draft Updated Guidelines from the California Department of Housing and Community Development (HCD) related to the Surplus Land Act (SLA) to submit written comments to HCD. PUBLIC COMMENTS are due by March 25, 2024. 

Special districts may submit public comments:

  1. Submit comments to: SLAguidelines@hcd.ca.gov by March 25, 2024. For your reference and use, please see the template letter provided on this page. Please CC California Special Districts Association at advocacy@csda.net.  

HCD will hold a webinar regarding the Draft Updated Guidelines on March 6, 2024, at 9:30 A.M. Public comment will be accepted in connection with the webinar. A registration link can be found here.

Additional information from HCD about the Draft Updated Guidelines and the SLA can be viewed here.


In 2023, Governor Gavin Newsom signed two laws that made several changes to the requirements of the SLA, AB 480 (Ting) and SB 747 (Caballero), with both laws taking effect on January 1, 2024.

Previously, in 2019, Governor Newsom signed AB 1486 (Ting), which made significant changes to the requirements of the SLA, including new mandatory reporting to HCD, requirements for negotiations with affordable housing entities, and potential penalties for violation of the SLA. In response to AB 1486, HCD adopted Surplus Land Act implementation guidelines (Current Guidelines). CSDA, its members, and its coalition partners provided public comments on the Current Guidelines before they were adopted. Although some changes were secured, the Current Guidelines were inconsistent with the statute in several respects, including with respect to the SLA’s application to leases at that time, as well as requirements for notification to HCD in connection with exempt surplus land.

Following the recent enactment of AB 480 and SB 747, HCD released the Draft Updated Surplus Land Act Guidelines issued February 23, 2024 (Draft Updated Guidelines). The Draft Updated Guidelines are inconsistent with the statute and may result in operational challenges for special districts.

Public comment on the Draft Updated Guidelines is now open.


CSDA was deeply involved in the development of AB 480, SB 747, and AB 1486 as those bills went through the legislative process, with special districts throughout the state weighing in about the implications for district lands prepared for future community needs:

  • Prior to SB 747 becoming law, CSDA worked closely with the author to amend the bill to enable the SLA to statutorily apply to leases for the first time, under negotiated terms that balanced the concerns of supporters and opponents of the bill. CSDA also worked with the author to make meaningful changes to the penalty structure of the SLA by providing additional bases for enforcement, while also placing reasonable guardrails on penalties for non-substantive violations. SB 747 also made a number of other important changes to the SLA. These provisions collectively allowed CSDA to move from a Support if Amended position to a Support position.
  • Prior to AB 480 becoming law, CSDA worked closely with the author and committee staff to seek amendments to a prior version of the bill which would have undermined special district protections and created costly bureaucratic delays and expenses by giving HCD a role in virtually all transactions involving local government land. CSDA was able to obtain amendments resolving these concerns, resulting in AB 480 largely mirroring SB 747, and allowing CSDA to remove its opposition. AB 480’s provisions control were inconsistent with SB 747.
  • Prior to AB 1486 becoming law, CSDA was able to obtain amendments to protect special districts and their communities and thereby removed opposition to the bill.

HCD’s Draft Updated Guidelines subvert necessary, negotiated protections secured through the legislative process, and conflict with plain statutory language and legislative intent. These draft guidelines threaten special districts’ authority to appropriately and efficiently engage in statutorily authorized transactions involving their lands.

The draft guidelines include several issues of concern that ignore, unlawfully expand upon, or misstate current law as it pertains to special districts and the SLA, including:

  1. The Draft Updated Guidelines Misapply the SLA to the Agency’s Use Land and Improperly Purport to Apply the SLA to Exempt Surplus Land.

Agency’s use is a category of land that is neither surplus land nor exempt surplus land, for which the SLA preserves certain local agency prerogatives. AB 480 and SB 747 did not make material changes to the SLA’s agency’s use provisions, and evidence clear legislative intent not to do so. The Draft Updated Guidelines delete an existing definition of the agency’s use of land in Section 102(d), which had been consistent with the statute negotiated by local agencies to remove opposition to AB 1486. This problem is exacerbated in proposed Section 102(cc), which changes the definition of Surplus Land by incorporating a reference to the proposed Section 104 Agency’s Use definition, therefore causing an inconsistency between the Surplus Land definition in the Draft Updated Guidelines and statute and consequently undermining local agencies’ utilization of land for agency’s use purposes.

The Draft Updated Guidelines continue to fail to include any reference whatsoever to the plain language of Government Code Section 54222.3, which conflicts with many of the proposed guidelines’ changes related to exempt surplus land, and plainly states that: “This article shall not apply to the disposal of exempt surplus land as defined in Section 54221 by an agency of the state or any local agency.” Unless a code section specifically references applicability to exempt surplus land, the presumption is that all the provisions of this article do not apply to “exempt surplus land” (upon the determination by an agency that a parcel is “exempt surplus land”). For an example of where a single particular type of “exempt surplus land” is expressly referenced as subject to the SLA (pursuant to a process to comply with HCD approval), see 54221(f)(1)(P)(iv). The Draft Updated Guidelines unjustifiably place HCD in the middle of exempt surplus land determinations notwithstanding those statutory limitations.

  1. The Draft Updated Guidelines Misapply SLA Penalty Provisions while Making Changes in Conflict with Statute.

AB 747 and AB 480 amended the SLA penalty provisions found in Government Code Section 54230.5 to provide a fair process for assessing and calculating penalties for specified violations of the SLA, while providing that such penalties shall not apply to violations that do not impact the availability and priority of, or the construction of, housing affordable to lower-income households or the ultimate disposition of the land in compliance with the article, such as clerical errors. The Draft Updated Guidelines are inconsistent with and undermine these important statutory changes.

  1. The Draft Updated Guidelines Allow Third Parties to Issue Notices of Alleged Violations of the SLA Directly to Public Agencies with No Basis in Statute, Exposing Local Agencies to Unaccountable Interference with Operations.

The Draft Updated Guidelines purport to grant third-party entities (i.e., not HCD) the ability to issue notices of alleged violations of the SLA directly to local agencies. Allowing third parties to directly trigger enforcement deadlines for local agencies without HCD initiation is not supported by statute and could wreak havoc on local agency transactions and operations.

  1. The Draft Updated Guidelines Subject Local Agencies to a Subjective Open-Ended Definition of “Good Faith Negotiations.”

Government Code Section 54223 requires that “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 local agency may dispose of the surplus land without further regard to this article.…” The Draft Updated Guidelines undermine the certainty of the statute by requiring in Section 202(a)(1)(C)(iv)(V) that a local agency not “arbitrarily end active negotiations after 90 days of good faith negotiations.”