Governor Newsom Signs Assembly Bill 130 Impacting K-12 School Districts’ Process to Dispose of Surplus Property

07.15.2025

On June 30, 2025, Governor Gavin Newsom signed Assembly Bill 130 (“AB 130”) into law, which amends a portion of the Surplus Land Act (Gov. Code § 54220 et seq.) governing K-12 school districts’ ability to exempt itself from the Surplus Land Act requirements. AB 130 is a “Budget Trailer Bill”, which makes legal changes in order to implement policies that are part of the State’s Budget Act. Such a bill takes effect immediately upon signing by the Governor; therefore, changes in the law from AB 130 became effective on June 30, 2025.

In California, a local agency, such as a public school district, must follow certain procedures under the Surplus Land Act to dispose of its surplus real properties. Among other requirements, the local agency must provide a written notice of availability to certain public and private entities (e.g., low- and moderate-income housing sponsors, park or recreation departments of cities or counties, etc.) (“Entities”) before disposing of surplus real property.

The Surplus Land Act also identifies certain surplus real properties to be exempt from its statutory procedures. For properties that fall within the statutory definition of “exempt surplus property,” such local agency is not required to provide any notifications to or engage in a negotiation with the Entities under the Surplus Land Act.

Before AB 130, “exempt surplus property” included real property owned by K-12 school districts if: (1) the property was subject to an advisory committee (also known as a “7-11 Committee”) prior to its sale, lease, or rental; (2) the property was jointly used between a school district and a private entity; or (3) the property was subject to an exchange pursuant to Education Code section 17536.

Under the newly amended Surplus Land Act, specifically Government Code section 54221, any K-12 school district’s property subject to a 7-11 Committee or that is part of a property exchange transaction no longer automatically qualifies on that basis alone as “exempt surplus property.” Accordingly, real property subject to a 7-11 Committee or a property exchange may now be required to, among other Surplus Land Act requirements, provide notices of availability to Entities. For exchanged property, we note however that exemptions still do remain if the K-12 school district is exchanging surplus property for another property that is necessary for the school district’s use, which may soften the impacts of this legislative change in many if not most instances.

While the changes to the Surplus Land Act appear, on their face, minimal, AB 130 likely impacts a K-12 school district’s procedures to dispose of surplus real property. In a sale, lease, or rental of a surplus school building or space in a school building, which is subjected to a 7-11 Committee, the K-12 school districts are now required to provide notification of availability to Entities and the California Department of Housing and Community Development, in addition to the obligations to dispose of surplus real property under the Education Code.

It is important to note, however, that each surplus property transaction should undergo an analysis of whether such property falls within any of the several statutory definitions of “exempt surplus land.” We encourage K-12 school districts to work with legal counsel to determine the applicability of the provisions of the Surplus Land Act.