The state Legislature completed its two-year session with a flourish during the last week of August but appeared to leave Sacramento without adopting major land-use policy changes. Assembly Speaker Robert Hertzberg's overhaul of the Cortese-Knox Local Government Reorganization Act was among the year's highlights, although he watered down the measure from early drafts. The broad-based Jobs-Center Housing Coalition, which has focused on the Bay Area housing crunch, saw three of its nine bills approved, while the new, two-house Smart Growth Caucus had a similar batting average for its 13 bills.

The Legislature did not pass comprehensive local government finance reform - despite a plethora of reports and studies released earlier this year that indicate the system is failing and that cities and counties often make land-use decisions based on a project's fiscal impacts. The Legislature did pass a measure, SB 1637 (Burton), that phases in a cap of the ERAF property tax shift from counties and cities to schools. The bill ensures that local governments will get all of their shares of the growth in property taxes beginning with the 2002-03 fiscal year.

A measure from Assemblyman Antonio Villaraigosa (D-Los Angeles), the former Assembly speaker, to overhaul the local government finance system bogged down in a two-house conference committee. Lawmakers eventually passed the bill, AB 1396, as a $212 million local government relief package to be distributed on the basis of ERAF contributions and population.

Assemblyman John Longville (D-Rialto) said lawmakers have offered more lip-service than commitment to solving the problem. Longville, a former Rialto mayor who was chairman of the Assembly Local Government Committee for most of the year, said if he were still in local government, he would insist on a constitutional amendment the protects local government revenue sources.

The Hertzberg bill, AB 2838, contains some of the recommendations that the Commission on Local Governance for the 21st Century issued earlier this year. The commission's focus was on making local agency formation commissions, which are guided by Cortese-Knox, more powerful and more independent than they have been. The speaker's bill appears to take steps in that direction, although he made a number of amendments to satisfy the development community, including deleting a provision that would let LAFCOs require community growth plans for unincorporated areas. The bill does require LAFCOs to establish policies and procedures to help stem sprawl by encouraging efficient urban development and preserving open space. The bill also requires cities and special districts to help counties fund LAFCOs, increases commission membership from five to seven and ensures special district representation.

Trish Clarke, a member of the Shasta County LAFCO who served on the 21st Century commission, called the bill positive and helpful. She said it lets LAFCOs force joint planning, or at least consistent planning, in areas where spheres of influence overlap.

"The cities and the counties have to talk to each other," Clarke said.

Ron Wootton, chairman of the California Association of Local Agency Formation Commissions and a special district representative on the San Diego LAFCO, said the bill is important because, "It brings LAFCOs to the table with cities, counties and special districts for the first time."

Wootton added, "This is the first time the cities haven't opposed anything with the word ‘LAFCO' in it."


New coalition gets affordable housing bill passed

The three Jobs-Center Housing Coalition bills that passed dealt with redevelopment housing, brownfields and ballot-box planning. The coalition's bills to decrease California Environmental Quality Act-reviews of infill housing failed, as did a bill that would have provided property tax incentives for communities that balance jobs and housing. Also failing were three bills aimed at modifying the construction defect liability system, which builders say discourage construction of condominiums and townhouses.

The redevelopment bill, AB 2041 (Dutra), allows contiguous redevelopment agencies within a single metropolitan statistical area to establish a joint powers authority for pooling low- and moderate-income housing funds. As of this January, authorization for spending redevelopment funds outside of a project area expired. Backers of this bill said it would encourage development of affordable housing because some redevelopment agencies move slowly on housing while neighboring communities welcome new homes. Bill opponents, however, said AB 2041 would allow cities to receive the economic benefits of redevelopment and escape their affordable housing obligations.

The brownfields bill, SB 1789 (Rainey), calls for the state to analyze policies that hinder remediation and redevelopment of brownfields, and to make recommendations to encourage redevelopment.

The ballot-box planning bill, SB 1966 (Brulte), takes aim at slow-growth initiatives. Cities and counties already had the authority to commission an analysis of a ballot measure; this bill specifies that local officials can refer an initiative to the appropriate city or county agency for a report on how the measure would affect the jurisdictions' ability to meet regional housing needs, infrastructure funding, business attraction and retention, and use of various lands.


Smart Growth Caucus finds mixed success

The Smart Growth Caucus, headed by Assemblywoman Patricia Wiggins (D-Santa Rosa), had endorsed 13 bills that ranged from Hertzberg's LAFCO measure to bills that concerned water, housing bonds, transit-oriented development and other issues. Only three measures passed - the Hertzberg bill, a wetlands protection measure and a regional jobs-housing balance bill. Two other bills, Villaraigosa's AB 1396 and a smart-growth measure, passed in substantially amended form.

The wetlands bill, AB 2286 (Davis), calls for the California Resources Agency to update the wetlands management plan required by the Keene-Nejedly California Wetlands Protection Act of 1978. The bill calls for compiling an inventory of wetlands and setting priorities for enhancement, restoration and conservation of wetlands.

The jobs-housing balance bill, SB 1642 (Figueroa), requires the Department of Housing and Community Development and regional councils of government to seek a ratio of 1.5 houses for each job. Noting that there are still few penalties for jurisdictions that fail to build the houses that a regional plan specifies, a Senate bill analysis questioned the eventual effectiveness of SB 1642.

"It is unclear exactly what impact the establishment of a specific numeric jobs/housing balance goal will have on this process," Senate Housing and Community Development Committee Consultant Mark Stivers wrote. "Would it be more appropriate to create incentives or sanctions for local governments to facilitate the production of additional housing?"

The smart-growth measure, AB 779 (Torlakson), started off as a carrot for transit-oriented development. But the assemblyman from Martinez amended the bill so that it establishes "smart growth" criteria for the California Pollution Control Financing Authority to award grants. According to Torlakson's office, the bill would direct grants to "economically distressed cities and counties" to develop revitalization plans. The local governments must incorporate in their plans smart-growth strategies, such as transit-oriented development, traffic reduction measures, and infill development on brownfield sites. State Treasurer Phil Angelides, who oversees the CPCFA, supported the revised bill. The Legislature also approved a companion measure, SB 1986 (Costa), that allows the CPCFA to provide grants and loans for brownfields site assessments, remedial action plans, technical assistance, cleanup and redevelopment.


Plenty of project-specific bills

One late-session, gut-and-amend bill, AB 2698 (Florez), smoothes the way for a large electrical plant that Enron Corp. wants to build in southern Kern County. Enron has chosen 30 acres of pasture owned by the Tejon Ranch for a 750-megawatt power plant. However, the property is under a Williamson Act contract, which provides the landowner a substantial tax break in exchange for maintaining the property for agriculture or open space. Normally, getting out of a Williamson Act contract takes 10 years. Outright cancellation of a Williamson Act contract requires the local governing body, in this case the Kern County Board of Supervisors, to make a finding that says, basically, there is nowhere else that this project could be built - a finding that the county is willing to make. The landowner also has to pay a substantial amount to the county, which Enron is apparently willing to pay.

The legislation greatly reduces the statute of limitations for challenging this particular Williamson Act cancellation. Normally, the public gets 180 days to file a lawsuit, but AB 2698 cuts the statue of limitations to 30 days for the Enron project only. That forces potential opponents to act quickly and gives Enron quicker certainty on the project.

A bill by Senate President Pro Tem John Burton, SB 1562, takes an approach to CEQA that could be the first of its kind. The bill says that the state's purchase and restoration of 19,000 acres of salt flats along San Francisco Bay, now owned by Cargill Salt Co., will offset the airport's plan to fill in 1,000 acres of the bay for new runways.

Bills that carve out CEQA exemptions for specific projects are not uncommon, but this could be the first bill that spells out mitigations before an environmental review is complete, said Randy Pestor, a consultant to the Senate Committee on Environmental Quality.

The salt flats purchase is estimated to cost about $300 million. A companion bill, AB 398 (Migden), allocates $30 million in state funding as a down payment, although Gov. Davis is reported to be cool about the expenditure. U.S. Sen. Dianne Feinstein has secured $50 million in federal funding for the purchase.

While the Florez and Burton bills each aid a specific development, lawmakers approved two other measures intended to slow or halt projects in Southern California. Assembly Bill 1758 (Kuehl) hinders a proposed subdivision in eastern Ventura County by offering protection to a rare plant; AB 2752 (Cardoza) puts the kibosh on a landfill proposed next to a northern San Diego County Indian reservation.

Kuehl's bill hits at a Washington Mutual plan to develop a 3,000-home subdivision on Ahmanson Ranch, a project approved in 1992 but strongly opposed by neighboring Los Angles County and some area homeowners. Earlier this year, the San Fernando spineflower, which scientists thought had became extinct half a century ago, was found growing on the Ahmanson Ranch. Project opponents seized on the spineflower discovery and demanded action by the state. But state officials at first seemed unsure how the rediscovered species fit into the regulatory framework.

The Kuehl bill authorizes the Department of Fish & Game to grant immediate protection to a species that was thought to be extinct. The bill makes it clear that the spineflower and any other rediscovered species must be left alone while the state completes a process to determine the status of the plant or animal.

The narrowly drafted Cardoza bill prohibits the state from permitting a landfill in a canyon considered sacred by the Pala Indians. In 1994, voters approved the Gregory Mountain landfill, an action that the Pala Indians challenged in court but lost. (See CP&DR, June 1997, January 1999).

Some bill opponents argued that the Indians were mostly concerned about the garbage dump's proximity to their planned casino.


Not this time

Several bills had a high profile earlier in the session but did not become law. Among them:

  • AB 1219 (Kuehl), which would have required verification of water supply availability before approval of residential developments with at least 200 units. This bill was a favorite of environmentalists and the East Bay Municipal Utility District, and was strongly opposed by developers and local government.
  • AB 755 (Hayden), which would have added a number of provisions to strengthen CEQA. This bill had been a priority for environmentalists.
  • AB 717 (Keeley), which would have placed a two-year moratorium on clear-cutting of private forests.
  • AB 1968 (Wiggins), which would have authorized cities and counties to enter into agreements to coordinate land-use planning on a regional basis.
  • AB 2779 (Cox), which would have strengthened existing provisions that require incorporations to be "revenue neutral." While the California State Association of Counties backed the bill, several groups seeking to create new cities, including the Rancho Cordova Incorporation Committee, argued that it would slow or stymie their efforts.
  • AB 2774 (Corbett), which would have provided $10 million in grant funds for general plan updates.

Others land-use bills of interest that were passed by the state Legislature:
  • AB 356 (Washington) creates an enterprise zone in the City of Compton to induce economic development.
  • AB 950 (Wiggins) extends the sunset date by five years (to January 1, 2006) on a measure that allows Fairfield, Suisun City, Vacaville and Solano County to create a joint powers agency to provide housing for the retention of Travis Air Force Base. So far, the jurisdictions have not moved on the JPA because of a lack of funds.
  • AB 970 (Ducheny/Battin) establishes the Governor's Clean Energy Green Team with the intent of expediting approval of clean power plants. The bill was a response to soaring energy costs and roving brownouts.
    • AB 1416 (Wesson) among other things, extends a moratorium on new cardrooms by five years to 2007.
  • AB 1807 (Longville) gets Caltrans more involved in the CEQA review of local development projects by giving the Office of Planning and Research a middleman role.
  • AB 1944 (Wayne) strengthens Williamson Act provisions and specifies what land-uses are compatible with the act.
  • AB 1960 (Machado) prohibits a local agency formation commission from charging city incorporation proponents for the cost of an EIR. The bill stems, in part, from the San Fernando Valley secession movement.
  • AB 2300 (Florez) is another attempt to crack-down on Marks-Roos financing arrangements where the only public entity is geographically removed from the development that would be funded. Although the state attorney general and treasurer support the bill, last year Gov. Davis vetoed a similar bill.
  • SB 57 (Hayden) creates the Santa Monica Bay Restoration Project, in part to address the problem of stormwater pollution in the bay.
  • SB 89 (Escutia) requires the Cal EPA secretary to convene a working group on environmental justice. The group will have three years to prepare a series of recommendations on implementing environmental justice procedures and policies into Cal EPA programs.
  • SB 329 (Peace) creates an 11-member San Diego Regional Government Efficiency Commission, which must craft a plan for consolidating San Diego's regional agencies and improving coordination among the agencies. The bill is a much watered-down version of an earlier measure that would have eliminated the San Diego Association of Governments.
  • SB 667 (Sher) creates an $85 million brownfields assessment and reuse grant/loan program in the Department of Toxic Substances Control.
  • SB 1621 (Alarcon) limits local governments' ability to declare moratoria on multi-family housing development and requires cities and counties to zone adequate land to meet the jurisdictions' housing needs for all income categories. The bill is a response to recent multi-family housing moratoria in Indio, Palmdale, Lancaster and Paso Robles.
  • SB 1834 (Alpert) requires the State Water Resources Control Board to develop guidelines that the board and the nine regional water quality control boards should use for implementing nonpoint source pollution control programs.