State lawmakers wrapped up the first year of their two-year session without taking action on numerous bills regarding land use planning, development and natural resources. But some of the legislation could receive consideration before the end of the month because lawmakers are likely to return for special sessions called by Gov. Schwarzenegger.
The Legislature passed bills that would require fire safety to be a larger factor in land use planning, allow farmworker housing to be built on agricultural land and give local government the authority to limit the conversion of mobile home parks to resident-owned condominiums. Schwarzenegger has until October 11 to sign or veto the bills.
Nevertheless, the regular 2009 session, which concluded September 11, was marked by a budget deal that pillaged the budgets of redevelopment agencies (see CP&DR, August 1, 2009) and by failure to pass several high-profile bills. Among the failed legislation was a package of water and Bay-Delta bills, a measure exempting a planned football stadium and entertainment complex from planning and environmental laws, a bill lengthening the statute of limitations for lawsuits over a jurisdiction's housing element and a building industry proposal to extend a tax credit for buyers of new homes. Legislation may return in 2010 as a "two-year bill" or in entirely new form.
Proponents of the five-bill water package, which included some Southern California water agencies and the Natural Resources Defense Council, contended that the legislation would advance the "co-equal" goals of restoring the Delta's environment and improving the reliability of water deliveries (see CP&DR Capitol Update, August 15, 2009).

But a coalition of strange bedfellows blocked passage. The Association of California Water Agencies and the building industry said the legislation was too heavily weighted toward the environment. A number of environmental organizations complained that the bills bypassed existing water planning procedures and could authorize construction of a taxpayer-funded peripheral canal. And the Schwarzenegger administration and Republican lawmakers opposed the package because it did not contain a bond for construction of dams and water-storage facilities.

Despite this, Senate President Pro Tem Darrell Steinberg (D-Sacramento) insisted that lawmakers were making progress toward alleviating the state's seemingly intractable water shortages. He asked the governor to call a special session of the Legislature to work on the bills this fall, but Schwarzenegger has declined to do so.

Tim Coyle, vice president of the California Building Industry Association (CBIA), said builders favor legislation that would improve the reliability of water supplies  because the lack of available water is stalling numerous projects.
"I agree with Darrell Steinberg that progress was made," Coyle said. "There is some general interest in getting this resolved, and that's encouraging."

Jim Metropulos, a lobbyist for Sierra Club California, said the package was flawed because it did not reduce reliance on water from the Delta. He recommended implementing last year's Delta Vision plan (see CP&DR Environment Watch, February 2008), stepping up conservation, and spending more money on improving water quality and enforcing water rights.
Nearly overshadowing the debate over water was a bill advanced by the City of Industry, developer Majestic Realty and the Los Angeles Federation of Labor. The measure would exempt a planned football stadium in Industry, 2.9 million square feet of adjacent entertainment and commercial development, and related public works projects from having to comply with the California Environmental Quality Act (CEQA), as well as state planning and zoning laws. The bill, AB 81 X3, by Assemblyman Isadore Hall III (D-Compton) also would bar any legal challenge to the project, including two lawsuits already filed by the City of Walnut and a citizens group. The opponents contend that Industry violated CEQA and other statutes when it approved the project (see CP&DR Places, June 2008; CP&DR In Brief, April 2009).
Proponents say the project would create about 12,000 construction jobs and more than 6,000 permanent jobs. "This is an extraordinary time for California's economy requiring us all to find ways to protect our environment and build our economy," said Hall.

The bill cleared two Assembly committees and won approval of the full chamber by a 54-18 vote in a 24 hour-period concluding on the evening of September 10. But in the Senate, environmentalists, worried that the bill would set a bad precedent, lobbied hard against it, as did San Diego interests who feared a new stadium might tempt the Chargers to leave their city. Democratic lawmakers were caught in the awkward position of having to choose between two key constituencies – labor and environmentalists. But before the Senate could take eleventh-hour action, Steinberg intervened and asked all parties to negotiate.
In a letter distributed to his colleagues hours before adjournment, Steinberg wrote, "Because I see the obvious merit in the proposed stadium development in the City of Industry – the creation of up to 18,000 jobs, the economic development for the area, and the tax revenue for the local and state governments – I am willing to use the full force of my office to commence negotiations in an attempt to settle the litigation in this matter. … If negotiations prove unsuccessful, the California State Senate will consider AB 81 X3 before the end of September."
John Semcken, a partner in Majestic Realty with Ed Roski Jr., said the parties have commenced talks, which are being brokered by former state Attorney General John van de Kamp. "We would prefer to have a negotiated settlement," Semcken said.
The bill "has been portrayed as trying to get around CEQA," Semcken said, "but we have already done two environmental impact reports." He said Majestic sponsored the bill because it could not wait years for the litigation seeking to block the stadium to be resolved in court. "There's an immediate opportunity to move a team to Los Angeles, but before we could do that, we had to have the stadium finalized," he said.
While the Legislature has previously approved CEQA exemptions for some projects – such as for the expansion of the San Francisco airport, Northridge earthquake recovery and the Los Angeles Olympics – it has never before exempted a project from state law requiring development projects and public works projects to be consistent with a general plan, according to legislative analysts. Nor has the Legislature exempted a project from existing and all future legal challenges.
"For the most part, this was just a huge giveaway," said Sande George, lobbyist for the American Planning Association's California Chapter. Planners, Los Angeles County and other opponents of AB 81 X3 fear that the bill would set a precedent under which lawmakers could choose to exempt any favored project from state environmental and planning laws, greatly undercutting the credibility of general plans.
Approval of the fire-safety planning bills – AB 666 (Jones) and SB 505 (Kehoe) – came after years of debate and a governor's veto of similar legislation last year. The Jones measure would require counties to intensify their scrutiny of proposed development in fire-prone areas and those served by the California Department of Forestry and Fire Protection. SB 505 would require cities and counties to add fire safety goals and policies to general plan safety elements. The California State Association of Counties opposes SB 505 but has turned neutral on AB 666.

"There is just nothing in [SB 505] that helps with cost-recovery," CSAC lobbyist Karen Keene said. The legislation could require general plan amendments that might cost from a few thousand to several million dollars to prepare and analyze, she said.
Initially, the farmworker housing bill – AB 494 (Caballero) – would have permitted new housing on any agricultural parcel. But in the face of strong opposition from planners and local governments, it was amended to allow nonprofit entities to build farmworker housing on no more than 5 acres of agricultural land.  The bill's author, Anna Caballero (D-Salinas), has vowed to return in 2010 with a more far-reaching measure.
A priority for housing advocates was AB 566 (Nava), which would permit cities and counties to consider resident support for a mobile-home park owner's application to convert a park to a condominium or common-interest ownership development. Park owners use such conversions to bypass local rent-control ordinances for moderate-income residents and to generate revenue through the sale of individual spaces. However, many mobile home park tenants cannot afford to buy their spaces, nor can they sell their mobile home on the open market because of the exorbitant cost of the space, explained Brian Augusta of the California Housing Law Project.
Some cities and counties that count on mobile home parks to provide affordable housing have tried to limit conversions, but park owners have successfully sued to block local discretion. The legislation would provide that authority.
A second priority for housing advocates was AB 602 (Evans), which proponents contend would merely clarify the statute of limitations for suing over a local housing element or implementation of an element. In Urban Habitat Program v. City of Pleasanton, 164 Cal.App.4th, 1561 (see CP&DR Legal Digest, September 2008), the state appellate court said a party must serve a 60-day notice of a potential lawsuit on a city or county within 90 days of a local government action. Until that decision,  parties could file a 60-day notice of a potential lawsuit over housing policy and decisions at any time, Augusta said. "There was never any question before the Pleasanton decision," he said.
The bill did not pass in part because it was not folded into an unrelated bill until late in the session and in part because of opposition from planners and local government. They argue that AB 602 would provide an unlimited statute of limitations, resulting in uncertain housing policy and decisions.
Also failing to pass this year was AB 765 (Caballero), which would have extended a tax-credit program for buyers of new homes. Lawmakers approved tax credits of up to $10,000 per buyer earlier this year. But the state ended the $100-million program in July when nearly 12,000 applications had been received. When the Franchise Tax Board found that many buyers did not have $10,000 worth of state tax liabilities, it announced that about $30 million worth of tax credits remained unclaimed. AB 765 would have extended the program to allow about 4,200 buyers to tap the $30 million, said the CBIA's Coyle.
The original legislation "tells the story of how a public policy could have a profound impact on a troubled sector of the economy," Coyle said, pointing to new home sales increases when the tax credit was available. "We think it should be continued."
While the legislation passed the Senate Appropriations Committee, which halted numerous spending bills this year, it never came up for a vote on the Senate floor.

Brian Augusta, California Housing Law Project, (916) 446-9241.
Tim Coyle, California Building Industry Association, (916) 443-7933.
Karen Keene, California State Association of Counties, (916) 327-7500.
Jim Metropulos, Sierra Club California, (916) 557-1100.
John Semcken, Majestic Realty, (562) 692-9581.
Sande George, American Planning Association, California Chapter, (916) 443-5301.
APA California legislative update:

Key Land Use Legislation For 2009


California Environmental Quality Act (CEQA)
• AB 696 (Hagman). Would allow a project applicant to resolve CEQA disputes with a lead agency before an arbitrator. Failed in Assembly committee.
• AB 1321 (Eng). Would create an "advance infrastructure mitigation program" in the Natural Resources Agency to streamline environmental review and mitigation of infrastructure projects. Stalled in Assembly committee.
• AB 81 X3 (Hall). Would exempt a proposed football stadium, an associated 3 million square feet of entertainment and other development and related public works projects from CEQA and state planning and zoning law. Stalled in Senate.
• SB 476 (Correa). Would require potential plaintiffs to pursue additional administrative remedies before filing a CEQA lawsuit. Stalled in Assembly committee.
Climate Change
• AB 1404 (De Leon). Would impose limits on a cap-and-trade program for greenhouse gas (GHG) emissions. Backed by environmentalists and social justice organizations, the measure would limit the use of offsets from outside the regulated sector. Approved.
• AB 881 (Huffman). Would create the Sonoma County Regional Climate Protection Authority to coordinate the efforts of local government and private entities in reducing GHG emissions and meeting AB 32 mandates. Approved.
• SB 104 (Oropeza). Would add nitrogen triflouride (NF3) to the list of gases regulated under AB 32. NF3 is used to manufacture photovoltaic solar panels, LCD television screens and microprocessors. Approved.
• SB 144 (Pavley). Would require mitigation for loss of carbon storage when timberlands are converted to other uses. The bill was strongly opposed by the forestry industry and rural counties. Stalled in Assembly committee.
• SB 295 (Dutton). Would require the Air Resources Board to prepare a study of the cost of complying with AB 32. Failed in Senate committee.
• SB 391 (Liu). Would require the California Transportation Plan to address how the state will reach AB 32 emissions goals. Also requires Caltrans to report by the end of 2012 on how the sustainable communities strategies mandated by SB 375 will influence the state's transportation system. Approved.
• SB 575 (Steinberg). Would clarify housing element due dates under SB 375. Approved.
• SB 721 (Steinberg). Would establish a Climate Action Team to coordinate state policy. Stalled in Senate committee.
SB 722 (Steinberg). Would establish advertising and documentation requirements for the sale of GHG emissions credits or reductions. Stalled in Assembly.
Economic Development
• AB 507 (Arambula). Would require a project that receives assistance from the Infrastructure and Economic Development Bank (I-Bank) to meet certain economic development and land use criteria. Stalled in Assembly committee.
• AB 1047 (V. Manuel Perez). Would require the I-Bank to establish a program to assist small and rural communities with obtaining local infrastructure financing. Stalled in Assembly committee.
• SB 27 (Hancock). Prohibits a business from collecting incentives as a result of moving its situs address but not its physical location. The bill is intended to prevent one local government from stealing another entity's sales tax, which is allocated based on situs address. Signed by governor.
• ACA 9 (Huffman) and SCA 12 (Kehoe). These constitutional amendments would ask voters to lower the approval threshold, from two-thirds to 55%, for local special taxes, property-tax increases and bonds. ACA 9 stalled in the Assembly, SCA 12 stalled in Senate committee.
• ACA 15 (Arambula). Would lower the approval threshold for transportation tax measures from two-thirds to 55%. Stalled in Assembly.
• AB 338 (Ma). Would expand from one-quarter mile to one-half mile the area around a transit station that may be part of an infrastructure financing district that uses tax-increment financing. The bill also eliminates the requirement for voter approval, and requires that all housing lost to transit-facility development be replaced. Approved.
• AB 1176 (Ammiano) Would authorize the Port of San Francisco to create an infrastructure financing district to aid redevelopment of a 65-acre brownfield site at Pier 70. Approved.
• AB 1192 (Audra Strickland). Would prohibit a local government from using lease-purchase financing. Stalled in Assembly committee.
• SB 99 (Senate Local Government Committee). Would impose additional accountability requirements on public agencies that provide conduit financing. Approved.

• SB 279 (Hancock). Would authorize use of Mello-Roos financing to pay for water conservation, energy efficiency and renewable energy improvements. Approved.
• AB 558 (Portantino). Would authorize a city to meet 10% of its regional housing-needs assessment through a program that places foster youth in existing households. Stalled in Assembly committee.
• AB 566 (Nava). Would authorize cities and counties to consider resident support for a proposed conversion of a mobile home park to a condominium or common interest development (see CP&DR Legal Digest, September 1, 2009). Approved.
• AB 570 (Arambula). Would alter a Department of Housing and Community Development program so that housing trust funds in small and rural communities are better able to compete for state funding. Approved.
• AB 602 (Evans). Would provide that a lawsuit over a housing element, or implementation of the element, may be brought at any time. Stalled in Senate.
• AB 761 (Charles Calderon). Would limit local mobile home rent-control measures. Stalled in Senate committee.
• SB 326 (Tony Strickland). Would require a housing element to quantify existing and projected foreclosure rates, and specify how those rates affect housing needs. Stalled in Assembly committee.
• SB 595 (Cedillo). Would place a $1.5 billion bond to fund supportive housing projects for veterans on the state ballot. Stalled in Senate committee.
Local Planning
• AB 333 (Fuentes). Extends the expiration date of tentative subdivision maps by 24 months. Signed by governor.
• AB 596 (Evans). Would establish a grant program, but provides no actual money, for funding local planning. Stalled in Assembly committee.
• AB 666 (Jones). Would require a county to make specific findings regarding fire-service availability and firefighting access before approving development in a state fire responsibility area or very high fire hazard severity zone. Approved.
• AB 853 (Arambula). Would expedite city annexation of unincorporated islands and fringe communities, and obligate local government to improve services in the areas. Stalled in Senate committee.
• AB 1084 (Adams). Would authorize anyone willing to pay for an audit to request an audit of local development impact fees. If the audit finds fees are excessive, the local government must adjust fees accordingly and refund excess fee revenue. Approved.
• SB 43 (Alquist). Would authorize a Santa Clara joint powers authority to use a no-bid design-build process to construct a football stadium for the San Francisco 49ers. The Santa Clara City Council is split 3-2 in favor of this approach. Approved.
• SB 194 (Florez). Would require that cities and counties receiving Proposition 84 funds adopt general plan goals and policies to promote environmental and social justice in disadvantaged, unincorporated communities. Stalled in Senate committee.
• SB 215 (Wiggins). Would require local agency formation commissions to consider sustainable communities strategies and alternative planning strategies required by SB 375 before acting on boundary changes. Approved.
• SB 268 (Harmon). Would require alcohol and drug abuse recovery or treatment facilities to comply with local zoning. Failed in Assembly committee.
• SB 310 (Ducheny). Would permit a city, county or special district to develop a watershed improvement plan that addresses stormwater runoff, and to assess fees to implement the plan. The building industry-sponsored bill provides an alternative to project-specific stormwater regulation. Approved.
• SB 406 (DeSaulnier). Would permit metropolitan planning organizations and county transportation commissions to levy a $2 annual fee on vehicle registrations to fund regional and local blueprint planning. The bill also would require the governor's Strategic Growth Council to coordinate with a reconstituted Planning Advisory and Assistance Council within the Office of Planning and Research on implementing regional blueprints. Approved.
• SB 505 (Kehoe). Would requires cities and counties in "very high fire hazard severity zones" to adopt, by 2015, new general plan goals, policies and objectives to minimize wildfire risks to new development. Approved.
• SB 518 (Lowenthal). Would prohibit the expenditure of state funds to subsidize parking and would require local governments to select from a menu of parking policies, such as eliminating minimum parking requirements or setting maximum parking standards. Failed on Senate floor.
• SB 737 (Negrete McLeod). Would repeal an exemption permitting counties to avoid forming a countywide airport land use commission. The bill would affect nine counties and is strongly opposed by the City of Watsonville and cities in San Bernardino County, which now have land use autonomy around airports. Stalled in Assembly committee.
• AB 720 (Caballero). Would permit a city or county that uses housing set-aside funding to count a rehabilitated unit toward meeting its fair share of low-, very low-, or extremely low-income housing. Approved.
• SB 93 (Kehoe). Would limit the ability of a redevelopment agency to fund a public-works project outside of a redevelopment project area. Initially opposed, the California Redevelopment Association eventually endorsed the heavily amended legislation. Approved.
• SB 430 (Dutton). Extends from 10 years to 15 years the time limit on San Bernardino County's Cedar Glen disaster recovery project area redevelopment plan. Signed by governor.
• SB 477 (Florez). Would permit a redevelopment agency to lend or grant money to the purchaser of low-income housing-tax credits for the construction of low-income rental housing. Stalled in Assembly committee.
• SB 530 (Dutton). Would revise how pass-through payments for certain redevelopment projects are calculated. Stalled in Assembly committee.
Renewable Energy
• AB 45 (Blakeslee). Would reauthorize counties to regulate small wind-energy systems and limit the height of turbines. Approved.
• AB 64 (Krekorian) and SB 14 (Simitian). Together, these bills would require utilities to obtain 33% of their energy from renewable sources, primarily located within California, by 2020. The bills also would tighten the Public Utility Commission's process for siting new transmission lines. Saying the legislation is too restrictive, Gov. Schwarzenegger has promised a veto. Approved.
• AB 1351 (Blakeslee). Would permit utilities to count certain hydroelectric projects in their renewable energy portfolios. Approved.
SB 560 (Ashburn). Would provide emissions credits to cities and counties that permit and site commercial wind, solar and biomass energy projects. Stalled in Senate committee.
• AB 744 (Torrico). Would authorize congestion-pricing programs within the nine-county Bay Area. Stalled in Senate committee.
• AB 1135 (Skinner). Would require motorists to report their odometer readings when renewing vehicle registrations. Transportation engineers and planners say such information is crucial for refining transportation-demand models. Stalled in Assembly committee.
• AB 1375 (Galgiani). Would establish a Department of High-Speed Trains, which would assume responsibility for the proposed high-speed rail system. Stalled in Assembly committee.
• SB 205 (Hancock). Would authorize transportation planning agencies to place on the ballot for majority approval a measure raising vehicle registrations by up to $10 to fund transportation projects and programs. Stalled in Assembly committee.
• SB 409 (Ducheny). Would consolidate existing rail programs into a Department of Railroads. Stalled in Senate.
• SB 545 (Cedillo). Would require that any extension of the 710 freeway through South Pasadena be constructed in a tunnel. Approved.

• AB 39 (Huffman). Would outline requirements for a Bay Delta conservation plan, to be adopted by a new Delta Stewardship council before 2012. Stalled in Assembly.
• AB 49 (Feuer) Would establish methods for reducing urban water usage by 20% by 2020, a stated goal of the Schwarzenegger administration. Stalled in Assembly.
• SB 12 (Simitian). Would create an appointed Delta Stewardship Council that would approve a Bay Delta conservation plan and have other broad authorities. Stalled in Senate.
• SB 229 (Pavley). Would establish new plans for water diversions from the Delta and groundwater monitoring. Stalled in Senate.
• SB 458 (Steinberg). Would create a new Delta Conservancy and modify the membership – and the responsibilities – of the Delta Protection Commission. Stalled in Senate.
• AB 55 (Jeffries). Would establish new criteria for nonresidential projects that require a water supply assessment. Only projects that would use at least as much water as a 500-unit housing project would require an assessment under the bill. Stalled in Assembly committee.
• AB 300 (Caballero). Would require a city or county to consider voluntary demand-management measures when reviewing a development project's water supply assessment. Stalled in Senate committee.
• AB 1408 (Krekorian). Would establish a "water conservation mitigation fund" into which subdivision developers would pay fees for conservation projects that fully offset the new subdivision's projected water use. The offsets could be used to meet water supply requirements for large projects. Failed on Assembly floor.
• SB 565 (Pavley). Would require that 50% of wastewater now discharged into the ocean be recycled by 2030. Stalled in Assembly committee.
Williamson Act
• AB 494 (Caballero). Would permit construction of farmworker housing by nonprofit entities on some agricultural lands. Approved.
• AB 512 (Yamada). Would make horse breeding and training facilities compatible uses under the Williamson Act. Stalled in Assembly committee.
• SB 170 (Florez). Would permit an Indian tribal government to cancel a Williamson Act contract so the tribe may develop a cultural center, housing or infrastructure on the agricultural land. The Santa Ynez Band of Chumash Indians, which operates a casino and wants to expand its reservation in Santa Barbara County, is the bill's  sponsor. Stalled in Senate committee.
• SB 715 (Wolk). Would strengthen various Williamson Act provisions. Stalled in Assembly committee.
• AB 102 (Smyth). Would authorize a new Santa Susana State Park Advisory Committee to recommend whether the 2,800-acre Rocketdyne property in eastern Ventura County should become a state park. Stalled in Senate committee.
• AB 109 (Feuer). Would impose a moratorium until 2012 on new digital advertising displays visible from any highway. Stalled in Assembly committee.
• AB 210 (Hayashi). Clarifies how cities and counties may adopt their own green-building standards. Signed by governor.
• AB 444 (Caballero). Would clarify that nonprofit entities may accept and disburse public funds for management of mitigation lands and conservation easements held by land trusts or special districts. Approved.

• SB 213 (Florez). Would extend an existing moratorium on new card clubs from 2015 to 2020. The measure is strongly backed by existing card clubs and the City of Hawaiian Gardens, which is heavily dependent on card room revenue. Approved.
• SB 690 (Leno). Would permit removal of illegal outdoor advertising displays and displays that were permitted but have been modified in a way that makes them illegal. Stalled in Senate committee.