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HomeMy WebLinkAbout062320 - 03.1 LEGISLATIVE COMMITTEE MEMORANDUM 3.1 TO: Mayor and Town Council June 23, 2020 SUBJECT: June Legislative Report BACKGROUND Both individually and as part of the Tri-Valley Cities coalition, Danville officials are adapting to the social and economic changes and 2020 state legislative priorities. The immediate focus on our advocacy work has been to support legislative efforts that help the Town recover from the COVID-19 pandemic and limit new legislation that impacts local control and adds stress to the Town’s already depleted resources. The California State Legislature (legislature) opened the 2020 legislative session with 2,203 active bills as of February 21, the last day for bills to be introduced during the session. Due to the COVID-19 pandemic the legislative session was suspended on March 16. The Assembly reopened on May 4, followed by the Senate on May 11. During the 7 and 8-week respective closings, the COVID-19 pandemic has had a major impact on the legislative schedule and priorities. State, counties, and local agencies have had to confront a steep and unprecedented economic crisis including job losses, budget shortfalls and reduced services. As a result of this change, the legislature has reduced the number of bills in the Assembly to less than 80 and Senate to less than 60 bills and the numbers are changing every day. Budget On May 14, Governor Newsom introduced a revised budget proposal to the Legislature. The proposal highlighted a swing at the start of the year from an 18 billion-dollar rainy day fund to a 54 billion-dollar budget shortfall as a result of COVID-19. The budget proposes the cancelling of new initiatives, reduced spending, a draw down on reserves, and borrowing and transferring money from special funds. The Federal Government allocated the state 8 billion-dollars in CARES Act funding. As of this report, the budget has been approved as constitutionally mandated however, the Governor and Legislature are far apart on spending and proposed cuts. The Federal Government is discussing legislation for another round of CARES Act funding. The discussions and proposals have focused on direct funding to state and local governments. June Legislative Update 2 June 23, 2020 Housing Housing production remains a top priority of the Senate. The Senate Pro Tem has introduced a housing production legislative package that would streamline existing housing approval processes at the state and local levels. The focus of this package is to reduce workload for local planning departments, increase the availability of existing affordable housing, and build policies that would accelerate job growth and economic development. The package also includes a budget proposal for a renter/landlord stabilization program. Police Policy/Reforms The murder of George Floyd has shocked the nation and created a call to action to re - evaluate and change police practices, policies, regulation and funding. At the State level, Governor Newsom has called for the creation of new standards for crowd control and use of force in protests. Additionally, he called for the end of the carotid hold and other like techniques in California, directing that the carotid hold be removed from the state police training program and state training materials. At the federal level, both houses are proposing legislation on police practices and the President signed an Executive Order that will use grants to help departments meet certification standards on the use of force, create a national database on excessive force complaints, and encourage the involvement of mental health professionals when responding to nonviolent cases, like addiction, homelessness and mental illness. The president also said the order would prioritize grants to police departments to certify that they meet certain standards, and those standards would include a ban on chokeholds except with an officer's life is at risk. DISCUSSION Senate Housing Production Package SB 1385 - Caballero: Neighborhood Homes Act (Oppose) This bill would unlock existing land zoned for commercial office and retail for potential residential development by making housing an eligible use on those sites. The bill would also allow for streamlined ministerial approval of housing projects on land zoned for office or retail commercial use when the site has been vacant or severely underutilized for at least three (3) years and the project meets the existing requirements for by-right housing. League: Watch SB 1120 - Atkins: Subdivisions: Tentative Maps (Oppose) Builds off state Accessory Dwelling Unit (ADU) law that allows for at least three units/parcel; further encourages small-scale neighborhood development spearheaded by homeowners by creating a ministerial approval process for duplexes and lot splits that meet local zoning, environmental and tenant displacement standards. Local governments are not required to permit ADU’s on sites that exercise this option. The June Legislative Update 3 June 23, 2020 creation of local ordinances to implement these sections are not subject to CEQA. SB 995 - Atkins: Environmental Quality: Jobs and Economic Improvement Through Environmental Leadership Act (Support) Provides California Environmental Quality Act (CEQA) relief by expanding the existing AB-900 process for Environmental Leadership Development Projects for housing projects, particularly affordable housing. This creates a new tool for housing developers who may have been interested in utilizing the AB 900 process, but did not meet the existing dollar threshold. In addition to creating housing units, it also could carry the benefit of creating numerous construction jobs. According to figures compiled by the Governor’s Office of Planning and Research and Senate Office of Research, since 2011, 10,573 housing units have been constructed or proposed under projects certified under AB 900, and the law helped create 46,949 high -wage, permanent construction jobs. SB 902 - Wiener: Planning and Zoning: Housing Development: Density (Support with Amendments) Allows local governments to pass a zoning ordinance that is not subject to CEQA for projects that allow up to 10 units, if they are located in one of the following priority areas: a. A transit-rich area b. A jobs-rich area c. An urban infill site This bill further allows for additional small-scale infill development for local governments who want to spur more housing production. It provides cities with a new tool to rezone for density in a streamlined, expedited way. Currently, cities that want to rezone for more housing - or are required to rezone due to state mandates - face years of process and lawsuits, costing significant taxpayer funds. It is important to note this measure does not waive any of existing or proposed new standards that a local government applies to new housing in their jurisdiction. League: Pending SB 1085 - Skinner: Density Bonus Law: Qualifications for Incentives or Concessions (Oppose) SB 1085 would make changes to the Density Bonus Law and incentivize the construction of housing developments that will contain a specified percentage of units for low and moderate-income households and for which the rent is 30% below market rate. The bill’s mandated local costs would not be subject to state reimbursement because local agencies have the authority to charge and adjust planning and permitting fees as necessary to cover administrative costs. Increasing the amount of affordable housing for low- income families remains a top priority for the Senate. Enhancing the Density Bonus Law would allow developers to expand projects, thereby enhancing their profitability, and adding more affordable housing units at no cost to taxpayers. League: Pending June Legislative Update 4 June 23, 2020 Senate Budget Proposal Renter/Landlord Stabilization Program: The program would enable agreements between renters, landlords, and the state to resolve unpaid rents over a limited period, as well as make available short-term tax- credits that provide immediate value to landlords at risk of foreclosure. While the Senate embarked on the goal of increasing housing production at the beginning of 2020, given COVID-19 and its impacts on Californians, the need arose to also incorporate measures to ensure the state does not lose existing rental housing stock. This proposal provides immediate relief to tenants in need to ensure no one is evicted as a result of COVID-19 and/or its economic impacts, while also protecting landlords who operate in good faith and otherwise face foreclosure and, by result, tenant evictions. AB 725 - Wicks: Housing Element. Moderate-income and Above Moderate- income Housing. This measure would require incorporated areas within a metropolitan jurisdiction, at least 25% of the jurisdiction's share of the regional housing need for both the moderate- income and above moderate-income housing categories must be allocated to sites with zoning that allows at least two units of housing, but no more than 35 units of housing per acre. League: Pending AB 2345 - Gonzalez: Planning and Zoning. Density Bonus. This measure would greatly expand Density Bonus law and allow developers to receive up to five concessions and incentives from local governments and up to 50% more density. This measure would also require local governments to award up to six concessions and incentives to 100% affordable housing developments. League: Pending AB 1279 – Bloom: Planning and Zoning: High Development High Opportunity Areas Requires the Department of Housing and Community Development to designate areas in this state as "high-resource areas," as defined as an area of high opportunity and low residential density that is not currently experiencing gentrification and displacement, and that is not at a high risk of future gentrification and displacement. League: Oppose Revenue and Taxation SB 1431 - Glazer: Property Taxation. Reassessment. Disaster Relief. This measure would require county assessors to reassess certain types of properties based on their ability to generate income from renters during the COVID-19 emergency due to eviction controls ordered statewide by the Governor’s Executive Order. This measure would be retroactive to April 5, 2020. The loss estimate must be at least $10,000 of current market value to qualify. This would result in loss of property tax revenue. League: Oppose June Legislative Update 5 June 23, 2020 Environmental Quality AB2323 - Friedman: California Environmental Quality Act Exemptions Expands the application of California Environmental Quality Act (CEQA) exemptions for housing and other specified projects by permitting community plans, as defined, to serve as the basis for exemption of residential, mixed-use and employment center projects near transit and eliminating the exclusion of sites within the boundaries of a state conservancy from existing exemptions for affordable agricultural housing, affordable urban housing, and urban infill housing. Major Provisions 1) Permits community plans, as defined, to serve as the basis for exemption of residential, mixed-use and employment center projects near transit. 2) Eliminates the exclusion of sites within the boundaries of a state conservancy from existing exemptions for affordable agricultural housing, affordable urban housing, and urban infill housing. League: Watch AB 3279 - Friedman: Environmental Quality Act: Administrative and Judicial Procedures This measure would revise CEQA litigation procedures in a number of ways including reducing the deadline for a court to commence hearings from one year to 270 days, and providing that a lead agency may decide whether a plaintiff prepares the administrative record. League: Oppose Transportation, Communications and Public Works AB 2421 – Quirk: Land Use. Permitting. Wireless Communications. This measure would require local agencies to adopt completed permit applications to install an emergency standby generator within the physical footprint of a macro cell tower site within 60 days of submittal of the application. If a local agency has not approved or denied such permit applications within 60 days, the permit would be deemed approved. League: Concerns Constitutional Amendments ACA 25 – Mullen Temporarily permits Members of the Legislature, by two-thirds vote, to remotely attend and vote in a legislative proceeding, or to vote by proxy in a legislative proceeding if permitted by their house, during the pendency of a state of emergency declared by the President of the United States or the Governor. Provides that a Member may only remotely attend and vote, or vote by proxy as authorized, in a proceeding if the state of emergency prevents the Member from safely attending the proceeding in person. Federal Legislation Small Cell Wireless S. 3157 Thune: Streamlining Small Cell Deployment Act This bill would impose deadlines for state and local action on small cell applications and include a “deemed granted” remedy sought by the wireless industry if deadlines were June Legislative Update 6 June 23, 2020 missed. It also would impose restrictions on the fees that states and localities can charge for processing applications or using the rights of way. S. 2012 Feinstein: Restoring Local Control Over Public Infrastructure This bill nullifies rules issued by the Federal Communications Commission that revoke state and local authority to regulate telecommunications equipment deployment and to determine the amount of payment for the use of such equipment. H.R. 530 Eshoo: Acceleration Wireless Broadband Development by Empowering Local Communities Act This bill nullifies rules issued by the Federal Communications Commission that revoke state and local authority to regulate telecommunications equipment deployment. These federal bills have not progressed in the current legislative session. Grant Applications Currently, due to the COVID-19 pandemic, many funding programs are being temporarily postponed primarily due to staffing issues. Grant Funds are constitutionally mandated if set aside by legislation. Bond funds such as the Proposition 68, 4 billion - dollar fund are subject to use in times of budget shortfalls. The town currently has three grant applications that are pending. Town staff is working with Townsend and Associates to submit an application to the FEMA Public Assistance Program, for reimbursement of COVID-19 expenses. New grants are coming online as resources for recovery from COVID-19. Staff is continuing to evaluate existing and new fund options. Prepared by: Diane Friedmann Assistant to the Town Manager Reviewed by: Joseph Calabrigo Town Manager Attachments: A – State Senate and Assembly Committee Reports SENATE COMMITTEE ON APPROPRIATIONS Senator Anthony Portantino, Chair 2019 - 2020 Regular Session SB 1385 (Caballero ) - Local planning: housing: commercial zones Version: May 20, 2020 Policy Vote: GOV. & F. 6 - 0 Urgency: No Mandate: Yes Hearing Date: June 9, 2020 Consultant: Mark McKenzie Bill Summary: SB 1385 would enact the “Neighborhood Homes Act,” which establishes a housing development project as an authorized use on a parcel currently zoned for office or retail commercial use, as specified in a local agency’s zoning code or general plan. Fiscal Impact:  The Department of Housing and Community Development (HCD) estimates it would incur costs of $261,000 in the first year and $246,000 annually thereafter for 1.25 PY of staff time to ongoing to review and update information regarding state housing laws, develop technical assistance materials, provide consultation and guidance to local agencies and developers, and post updated information on the department’s website. (General Fund)  Unknown local costs to implement the bill, including updating procedures and processes to account for the authorization of housing development on a parcel zoned for office or retail commercial use, and providing for streamlined and expedited review of those projects. These costs are not state-reimbursable because local agencies have general authority to charge and adjust planning and permitting fees to cover their administrative expenses associated with new planning mandates . (local funds) Background: The Planning and Zoning Law requires every county and city to adopt a general plan that sets out planned uses for all of the area covered by the plan. A general plan must include seven mandatory elements, including a housing element that establishes the locations and densities of housing, among other requirements. Cities’ and counties’ major land use decisions—including most zoning ordinances and other aspects of development permitting—must be consistent with their general plans. Zoning ordinances establish the type of land uses that are authorized in a designated area, often identifying a primary use for parcels in an area, as well as other uses that may be allowed if they meet conditions imposed by the local agency to address aesthetics, community impacts, or other site-specific considerations. A city or county’s housing element must identify adequate sites for housing at all income levels—very low, low, moderate, and above moderate income. Each local jurisdiction must also ensure that its housing element makes enough sites available to accommodate its share of the regional housing need assessment (RHNA), which is an estimate for various regions in the state that is developed by the Department of Finance and HCD and further allocated amongst individual local jurisdictions. The housing element of a general plan must generally be updated every eight years, and the local ATTACHMENT A SB 1385 (Caballero) Page 2 of 4 government must identify an adequate number of sites throughout its entire planning period. If a city or county does not have enough sites within its existing inventory of residentially zoned land to accommodate its share of the regional housing needs, it must adopt a program to rezone land within the first three years of the planning period. Every city and county must submit a report to HCD and the Governor’s Offic e of Planning and Research annually on its implementation and progress towards meeting its RHNA amount and removing governmental obstacles to housing development. Some local ordinances provide “ministerial” processes for approving projects that are permitted “by right”—the zoning ordinance clearly states that a particular use is allowable, and local government does not have any discretion regarding approval of the permit if the application is complete. Local governments have two options for providing landowners with relief from zoning ordinances that might otherwise prohibit or restrict a particular land use: variances and conditional use permits. A variance may be granted to alleviate a unique hardship on a property owner because of the way a generally- applicable zoning ordinance affects a particular parcel, and a conditional use permit allows a land use that is not authorized by right in a zoning ordinance, but may be authorized if the property owner takes certain steps, such as to mitigate the potential impacts of the land use. Both of these processes require hearings by the local zoning board and public notice. Some housing projects can be permitted by city or county planning staff ministerially or without further approval from elected officials. Projects reviewed ministerially require only an administrative review designed to ensure they are consistent with existing general plan and zoning rules, as well as meet standards for building quality, health, and safety. Most large housing projects are not allowed ministerial review. Instead, these projects are vetted through both public hearings and administrative review, including design review and appeals processes. Most housing projects that require discretionary review and approval are subject to California Environmental Quality Act (CEQA) review, while projects permitted ministerially are not. Existing law, as enacted by SB 35 (Wiener), Chap. 366/2017, provides for a streamlined, ministerial process for approving infill multifamily housing developments that are in compliance with the applicable objective local planning standards —including the general plan, zoning ordinances, and objective design review standards. To be eligible for streamlining, a specified percentage of the total housing units in the development must be affordable to lower-income households (those under 80 percent of area median income), as specified. An eligible project cannot be located on sensitive environmental sites, such as the prime agricultural land, floodplains, high and very high fire hazard severity zones, and lands with conservation easements. SB 35 also included certain requirements for labor standards, such as the use of a skilled and trained workforce on an eligible project, and sunsets on January 1, 2026. The Mello-Roos Community Facilities Act (Act) allows cities, counties, special districts, and school districts to finance public works projects and a limited list of public services through the imposition of parcel taxes; a Community Facilities District (CFD) formed pursuant to the Act issues bonds against these special taxes to finance public works. The Act allows property owners or voters to either form a new CFD or annex into an existing CFD after following certain procedures, including a specified protest hearing process. Without access to Mello-Roos bond funding, many builders would have to pay SB 1385 (Caballero) Page 3 of 4 higher development impact fees and raise housing prices. But if a CFD pays for capital facilities or services, local agencies can’t charge impact fees for those same facilities and services. Proposed Law: SB 1385 would enact the “Neighborhood Homes Act,” which establishes a housing development project as an authorized use on a “neighborhood lot” zoned for office or retail commercial use under a local agency’s zoning code or general plan. A housing development project on a neighborhood lot may consist of entirely residential units or a mix of commercial retail, office, or residential uses, and must comply with all of the following:  The density for the housing development must meet or exceed the applicable density deemed appropriate to accommodate housing for lower income households under housing element law. If more than one zoning designation in the city or county meets this requirement, the zoning standards that apply to a neighborhood lot are the same zoning standards that apply to the closest parcel that allows for residential use at that density. If the existing zoning on the parcel allows denser residential use, the local zoning applies.  The housing development is subject to local zoning, parking, design, and other ordinances, and must comply with any design review or other procedural requirements imposed by the local government, applicable to a housing development in the zone identified above. SB 1385 allows a local agency to exempt a lot zoned for commercial retail or office use from the bill if the local agency concurrently reallocates the lost residential density to other lots so that there is no net loss in residential production capacity, but only if the local agency finds that the construction cost of the reallocated housing units will not be greater than the construction cost of housing units built on the neighborhood lot. SB 1385 provides that its provisions do not alter or lessen the applicability of any housing, environmental, or labor law applicable to a housing development authorized by the bill, as specified. The bill also specifies that, for purposes of the Housing Accountability Act, , a project is deemed consistent, compliant, and in conformity with local standards if it meets the standards applied by the bill to a neighborhood lot. SB 1385 also modifies the Mello-Roos annexation process. The bill allows an applicant seeking to develop a housing project on a neighborhood lot to request that a Mello- Roos CFD be formed or annexed into an existing CFD, consistent with existing law. However, SB 1385 allows annexation of a neighborhood lot into an existing CFD without the opportunity for existing CFD residents to protest. An applicant who voluntarily enrolls in a CFD cannot be required to pay impact fees or exactions to the extent that these facilities and services are funded by the CFD, consistent with existing law, but must pay all costs not funded by the CFD. SB 1385 allows housing developments on neighborhood lots to be eligible for SB 35’s streamlined ministerial approval process if it meets all of the following requirements:  The proposed project meets the objective zoning, design, and subdivision standards that apply to the neighborhood lot as a result of SB 1385; SB 1385 (Caballero) Page 4 of 4  The proposed project meets all of SB 35’s other requirements; and  The site is zoned for office or retail commercial use and 50 percent or more of its total square footage has been vacant for a period of at least three years prior to the submission of the application. Related Legislation: SB 1299 (Portantino), which is currently pending in this Committee, would establish a program administered by HCD, upon appropriation of funding by the Legislature, to provide grants to cities and counties that rezone idle or underutilized big box retailer or commercial shopping center properties and instead provide for the development of workforce housing, as specified. SB 1385 is part of the Senate’s 2020 Housing Production Package , which also includes the following bills:  SB 902 (Wiener), which is currently pending in this Committee, would allow a local government to adopt an ordinance to allow up to 10 units per parcel, notwithstanding local voter initiatives, in infill, transit-rich, or high opportunity areas. SB 902 also provides that this zoning is not considered a project under the California Environmental Quality Act.  SB 995 (Atkins), which is currently pending in this Committee, would expand the streamlined judicial review provisions of the Jobs and Economic Improvement Through Environmental Leadership Act of 2011 (AB 900) to a project with at least 15% of its units affordable to lower income households and a minimum investment of $15 million, and extend AB 900 provisions until 2025.  SB 1085 (Skinner), which is currently pending in this Committee, would grant a density bonus to a project with at least 20% of its units affordable to moderate income households and increases the density bonus from 35% to 40% for projects that include the maximum amount of very low income households under density bonus law.  SB 1120 (Atkins), which is currently pending in this Committee, would require ministerial approval of either or both of the following, as specified: a housing development of up to two units (duplexes); and the subdivision of a parcel into two equal parts (urban lot split). The bill would also extend the life of subdivision maps by one year, up to a total of four years, as specified. Staff Comments: The bill’s mandated local costs would not be subject to state reimbursement because local agencies have the authority to charge and adjust planning and permitting fees as necessary to cover administrative costs. Existing law authorizes planning and zoning fees to “include the costs reasonably necessary to prepare and revise the plans and policies that a local agency is required to adopt before it can make any necessary findings and determinations.” Case law and previous decisions by the Commission on State Mandates support the position that local governments’ planning costs are not reimbursable when the state imposes new planning mandates. -- END -- SENATE COMMITTEE ON APPROPRIATIONS Senator Anthony Portantino, Chair 2019 - 2020 Regular Session SB 1120 (Atkins) - Subdivisions: tentative maps Version: May 20, 2020 Policy Vote: GOV. & F. 7 - 0 Urgency: No Mandate: Yes Hearing Date: June 9, 2020 Consultant: Mark McKenzie Bill Summary: SB 1120 would require cities and counties to provide for the ministerial consideration of a proposed housing development containing two residential units (a duplex), and ministerial approval of a parcel map dividing a lot into two equal parts for residential use (an urban lot split), as specified. Fiscal Impact:  The Department of Housing and Community Development (HCD) estimates it would incur costs of $105,000 in the first year and $99,000 annually thereafter for 0.5 PY of staff time to provide technical assistance and outreach education to local agencies and affordable housing developers. (General Fund)  Unknown local costs to establish streamlined project review processes for proposed duplex housing developments and tentative maps for urban lot splits, and to conduct expedited design reviews of these proposals. These costs are not state- reimbursable because local agencies have general authority to charge and adjust planning and permitting fees to cover their administrative expenses associated with new planning mandates. (local funds). Background: The Planning and Zoning Law requires every county and city to adopt a general plan that sets out planned uses for all of the area covered by the plan. A general plan must include seven mandatory elements, including a housing element that establishes the locations and densities of housing, among other requirements. Cities’ and counties’ major land use decisions—including most zoning ordinances and other aspects of development permitting—must be consistent with their general plans. Zoning ordinances establish the type of land uses that are authorized in a designated area, often identifying a primary use for parcels in an area, as well as other uses that may be allowed if they meet conditions imposed by the local agency to address aesthetics, community impacts, or other site-specific considerations. Some local ordinances provide “ministerial” processes for approving projects that are permitted “by right”—the zoning ordinance clearly states that a particular use is allowable, and local government does not have any discretion regarding approval of the permit if the application is complete. Local governments have two options for providing landowners with relief from zoning ordinances that might otherwise prohibit or restrict a particular land use: variances and conditional use permits. A variance may be granted to alleviate a unique hardship on a property owner because of the way a generally- applicable zoning ordinance affects a particular parcel, and a conditional use permit allows a land use that is not authorized by right in a zoning ordinance, but may be authorized if the property owner takes certain steps, such as to mitigate the potential SB 1120 (Atkins) Page 2 of 4 impacts of the land use. Both of these processes require hearings by the local zoning board and public notice. Some housing projects can be permitted by city or county planning staff ministerially or without further approval from elected officials. Projects reviewed ministerially require only an administrative review designed to ensure they are consistent with existing general plan and zoning rules, as well as meet standards for building quality, health, and safety. Most large housing projects are not allowed ministerial review. Instead, these projects are discretionary and vetted through both public hearings and administrative review, including design review and appeals processes. Most housing projects that require discretionary review and approval are subject to California Environmental Quality Act (CEQA) review, while projects permitted ministerially are not. Existing law requires local agencies to ministerially permit the development of accessory dwelling units (ADUs) on residential parcels, either within the space of an existing single family home or in a new or converted structure in the rear of a property, or both, regardless of local zoning restrictions. ADU law places numerous specified limitations on the ability of local governments to impose requirements on ADUs to encourage small-scale neighborhood development. The Subdivision Map Act establishes a statewide regulatory framework for controlling the subdividing of land into parcels for sale, lease, or financing. Local subdivision approvals must be consistent with city and county general plans. For smaller subdivisions that create four or fewer parcels, local officials usually use parcel maps, but they can require tentative parcel maps followed by final parcel maps. The Map Act also constrains the dedications and improvements that local cities and counties can require as a condition of a subdivision of four or fewer lots to only the dedication of rights-of-way, easements, and the construction of reasonable offsite and onsite improvements for the parcels being created. Proposed Law: SB 1120 would require cities and counties to provide for the ministerial consideration of a proposed housing development containing two residential units (a duplex), and ministerial approval of a parcel map dividing a parcel into two equal parts for residential use (an urban lot split), under specified conditions. To be eligible, a proposed duplex or parcel proposed for subdivision must be located within an urbanized area or urban cluster, as defined by the United States Census and cannot be located on any of the following:  Prime farmland or farmland of statewide importance;  Wetlands;  Land within the very high fire hazard severity zone, unless the development complies with state mitigation requirements;  A hazardous waste site;  An earthquake fault zone;  Land within the 100-year floodplain or a floodway;  Land identified for conservation under a natural community conservation plan, or lands under conservation easement;  Habitat for protected species; or  A site that has been placed on a national, state, or local historic register. SB 1120 (Atkins) Page 3 of 4 Duplex provisions. SB 1120 requires a housing development containing two units to be considered ministerially in single family zones if the development meets certain conditions, including the requirements on eligible parcels above. The project also cannot require demolition or alteration that would require the evacuation or eviction of an existing housing unit of any of the following types of housing:  Rent-restricted housing, including deed-restricted affordable housing and housing subject to rent or price control by a public entity’s police power;  Housing that has been the subject of an Ellis Act eviction within the past 15 years; or  Housing that has been occupied by a tenant in the last three years. A city or county may impose objective zoning and design standards that do not conflict with the provisions of the bill, and a city or county cannot require a project to comply with any standard that would prevent two units from being built. SB 1120 prohibits demolition of more than one exterior wall of an existing structure unless the local ordinance allows greater demolition or if the site has not been occupied by a tenant in the last three years. The bill would also allow a local government to adopt an ordinance to implement its duplex provisions, and specify that the adoption of such an ordinance is not subject to CEQA. Urban lot splits. SB 1120 requires a city or county to ministerially approve or deny a parcel map for an urban lot split that meets specified requirements, in addition to the requirements for eligible parcels that apply to both duplexes and urban lot splits. Specifically, the urban lot split must meet the following requirements:  The parcel map subdivides an existing parcel to create two new parcels of equal size.  Both newly created parcels are no smaller than 1,200 square feet, unless the local agency adopts a smaller minimum lot size.  The parcel being subdivided is zoned for residential use.  The parcel does not contain rent-restricted housing, housing where an owner has exercised their rights under the Ellis Act within the past 15 years, or housing that has been occupied by tenants in the past three years.  The parcel being subdivided was not previously created through an urban lot split, and none of the adjoining parcels were created by an urban lot split and owned by the same owner. SB 1120 prohibits a local agency from imposing regulations that require dedications of rights-of-way or the construction of reasonable offsite and onsite improvements for parcels created through an urban lot split. However, a local agency may require easements and that the parcel have access to, provide access to, or adjoin the public right-of-way. A local agency can impose objective zoning and design standards that do not conflict with the bill, so long as those standards do not reduce the buildable area, as defined, on each newly created parcel to less than 50 percent of the buildable area on the parcel being subdivided. The bill would also allow a local government to adopt an ordinance to implement the urban lot split requirements, and specify that the adoption of such an ordinance is not subject to CEQA. SB 1120 (Atkins) Page 4 of 4 SB 1120 prohibits the development of ADUs on parcels that use both the urban lot split and duplex provisions of the bill, and it applies the limitations on parking requirements from ADU law to both duplexes and urban lot splits under the bill. SB 1120 allows local governments to extend the life of subdivision maps by one year , up to a total of four years. Related Legislation: SB 1120 is part of the Senate’s 2020 Housing Production Package, which also includes the following bills:  SB 902 (Wiener), which is currently pending in this Committee, would allow a local government to adopt an ordinance to allow up to 10 units per parcel, notwithstanding local voter initiatives, in infill, transit-rich, or high opportunity areas. SB 902 also provides that this zoning is not considered a project under the California Environmental Quality Act.  SB 995 (Atkins), which is currently pending in this Committee, would expand the streamlined judicial review provisions of the Jobs and Economic Improvement Through Environmental Leadership Act of 2011 (AB 900) to a project with at least 15% of its units affordable to lower income households and a minimum investment of $15 million, and extend AB 900 provisions until 2025.  SB 1085 (Skinner), which is currently pending in this Committee, would grant a density bonus to a project with at least 20% of its units affordable to moderate income households and increases the density bonus from 35% to 40% for projects that include the maximum amount of very low income households under density bonus law.  SB 1385 (Caballero), which is currently pending in this Committee, would enact the “Neighborhood Homes Act,” which establishes a housing development project as an authorized use on a parcel currently zoned for office or retail commercial use, as specified in a local agency’s zoning code or g eneral plan. Staff Comments: The bill’s mandated local costs would not be subject to state reimbursement because local agencies have the authority to charge and adjust planning and permitting fees as necessary to cover administrative costs. Existing law authorizes planning and zoning fees to “include the costs reasonably necessary to prepare and revise the plans and policies that a local agency is required to adopt before it can make any necessary findings and determinations.” Case law and previous de cisions by the Commission on State Mandates support the position that local governments’ planning costs are not reimbursable when the state imposes new planning mandates. -- END -- SENATE COMMITTEE ON APPROPRIATIONS Senator Anthony Portantino, Chair 2019 - 2020 Regular Session SB 995 (Atkins) - Environmental quality: Jobs and Economic Improvement Through Environmental Leadership Act of 2011: housing projects Version: June 2, 2020 Policy Vote: E.Q. 5 - 0 Urgency: No Mandate: Yes Hearing Date: June 9, 2020 Consultant: Ashley Ames Bill Summary: This bill would extend the Jobs and Economic Improvement Through Environmental Leadership Act of 2011 until 2025, and would make housing projects that meet certain requirements eligible for certification under the Act. Fiscal Impact:  The California Air Resources Control Board (CARB) estimates ongoing costs of $384,000 (special fund) annually to determine within 60 days whether a project will result in a net increase of greenhouse gas (GHG) emissions.  Unknown costs (General Fund) to the Governor’s Office of Planning and Research to review and certify "leadership projects" and, potentially, to issue guidelines regarding application and certification of projects.  Potential unknown cost pressure (General Fund) to the state-funded court system to process and hear challenges to the project's environmental review within the timeframes prescribed by the bill. (See staff comments.)  Unknown but likely minor costs (General Fund) to Judicial Council to adopt rules of the court to guide implementation of the provisions of this bill and to report to the Legislature. Background: The Jobs and Economic Improvement Through Environmental Leadership Act of 2011 (AB 900). AB 900 established specified administrative and judicial review procedures for the review of the environmental review documents and public agency approvals granted for designated residential, retail, commercial, sports, cultural, entertainment, or recreational use projects, known as Environmental Leadership Development Projects (ELDP). To qualify as an ELDP, the project must meet specified objective environmental standards. The Legislature has also applied similar expedited frameworks for specific sports stadiums that meet certain objective environmental standards. California Environmental Quality Act (CEQA) proceedings. Current law requires the courts to give CEQA-related cases preference over “all other civil actions… so that the action or proceeding shall be quickly heard and determined” (PRC §21167.1). In addition to this existing mandate, the AB 900 process provides that the courts, to the extent feasible, must complete the judicial review process in a given timeframe for certain CEQA-related actions or proceedings. As a consequence, such mandates on a court delay access for other, unknown cases such as medical malpractice suits, wrongful death suits, or contract disputes, as well as potentially exacerbating a court’s backlog on civil documents such as filing a new civil complaint, processing answers and SB 995 (Atkins) Page 2 of 3 cross complaints, or processing a demurrer or summary judgement. Calendar preferences and guaranteed time frames create additional demands and burden on our courts that have very limited resources and a never-ending supply of cases to hear. AB 900 lawsuits. Of the projects that have been subject to AB 900, or similar expedited judicial review, four projects have been challenged under CEQA. Expedited judicial review does not always guarantee a 270 day timeframe and cases can take longer to resolve due to, among other reasons, (1) ambiguity if the 270 days applies to business days or calendar days and if it includes appeals to the Supreme Court, (2) non-CEQA related actions which are not subject to the 270 day timeframe that are filed in addition to CEQA actions, or (3) consolidation of many, and sometimes complicated, actions. Proposed Law: This bill would: 1) Require a lead agency to prepare a master EIR for a general plan, plan amendment, plan element, or specific plan for housing projects where the state has provided funding for the preparation of the master EIR. 2) Extend the Governor’s authority to certify a leadership project to January 1, 2024, and repeal AB 900 January 1, 2025. 3) Make housing projects that meet certain requirements eligible for certification, including: a) The project is located on an infill site. b) For a project located within a metropolitan planning organization for which a sustainable communities strategy or alternative planning strategy is in effect, the project is consistent with the general use designation, density, building intensity, and applicable policies specified in either a sustainable communities strategies or an alternative planning strategy, as specified. c) The project will result in a minimum investment of $15 million in California upon completion. d) At least 15 percent of the housing project is affordable housing. Related Legislation: AB 2991 (Santiago) extends the Jobs and Economic Improvement Through Environmental Leadership Act for five years, and makes various changes to the requirements of the Act. AB 2991 is in the Assembly Appropriations Committee. SB 25 (Caballero, 2019) provides qualified projects, which includes housing projects that will obtain LEED Gold certification and with a minimum 40% affordable housing, with expedited judicial review. SB 25 is in the Assembly Natural Resources Committee. SB 621 (Glazer, 2019) provides affordable housing projects that meet certain requirements, including LEED Gold certification and a minimum 30% of the housing SB 995 (Atkins) Page 3 of 3 units be affordable housing, with expedited judicial review. SB 621 is in the Assembly Natural Resources Committee. Staff Comments: CARB costs. CARB notes that it did not receive any additional resources to complete the additional analyses required under AB 900. It is resource intensive for CARB to determine within 60 days whether a project will result in a net increase of greenhouse gas emissions, as application materials and calculation methodologies often exceed thousands of pages. To cover this workload, CARB has had to divert staff from other core program areas, which is no longer sustainable. In 2019, CARB worked on nine projects under the AB 900 program and made GHG emissions determinations for eight of the nine projects, six of which were undergoing simultaneous review. Based on this bill’s authorization allowing residential projects of only $15 million or more to qualify and the recent trend of increasing project applications of greater complexity, CARB anticipates that its workload could continue to increase if this bill is enacted. Court costs. This bill would result in potential cost pressure of an unknown amount to the state-funded court system to process and hear challenges to a project's environmental review within the timeframes prescribed by the bill. It is possible that, absent this bill, the state would face similar costs resulting from challenges to a project that would occur over a period longer than timeframes prescribed by this bill. However, the acceleration of some cases due to this bill could result in the need for extra personnel and resources in order for the courts to hear them within the required period. The Governor’s May Revision of the state budget includes significant proposed cuts to trail court operations that increase the likelihood that this bill could result in cost pressure. Specifically, the May Revision withdraws a January budget proposal of $107.6 million (General Fund) ongoing to support trial court operations, and instead proposes a reduction of $206.2 million (General Fund) ongoing in order to balance the state budget. -- END -- SENATE COMMITTEE ON APPROPRIATIONS Senator Anthony Portantino, Chair 2019 - 2020 Regular Session SB 902 (Wiener) - Planning and zoning: housing development: density Version: May 21, 2020 Policy Vote: HOUSING 9 - 0 Urgency: No Mandate: No Hearing Date: June 9, 2020 Consultant: Mark McKenzie Bill Summary: SB 902 would authorize a local government to pass an ordinance to zone any parcel for up to 10 units of residential density per parcel, at a height specified in the ordinance, if the parcel is located in a transit-rich area, a jobs-rich area, or an urban infill site, as specified. Fiscal Impact:  The Department of Housing and Community Development (HCD) estimates total General Fund costs of $462,000 in the first year, and $329,000 annually thereafter as follows: o $262,000 in the first year and $249,000 annually thereafter for 1.25 PY of staff time to: produce guidance materials and provide technical assistance to local governments and developers; coordinate with the Governor’s Office of Planning and Research (OPR) and academic researchers to identify jobs-rich areas, perform IT services to publish maps; and update the jobs-rich data and mapping every five years. o $200,000 in the first year and $80,000 annually ongoing to contract with researchers to develop, host, and update the jobs-ri ch maps.  Unknown, likely minor costs for OPR to coordinate with HCD to identify high opportunity areas that are either jobs-rich or enable shorter commute distances, as specified. (General Fund) Background: The Planning and Zoning Law requires every county and city to adopt a general plan that sets out planned uses for all of the area covered by the plan. A general plan must include seven mandatory elements, including a housing element that establishes the locations and densities of housing, among other requirements. Cities’ and counties’ major land use decisions—including most zoning ordinances and other aspects of development permitting—must be consistent with their general plans. Zoning ordinances establish the type of land uses that are authorized in a designated area, often identifying a primary use for parcels in an area, as well as other uses that may be allowed if they meet conditions imposed by the local agency to address aesthetics, community impacts, or other site-specific considerations. A zoning ordinance may be subject to the California Environmental Quality Act (CEQA) if it will have a significant impact on the environment. The adoption of local ordinances providing for accessory dwelling unit development, however, are explicitly exempt from CEQA. There are also several statutory exemptions that provide limited environmental SB 902 (Wiener) Page 2 of 3 review for projects that are consistent with a previously adopted general plan, community plan, specific plan, or zoning ordinance Local governments have two options for providing landowners with relief from zoning ordinances that might otherwise prohibit or restrict a particular land use: variances and conditional use permits. A variance may be granted to alleviate a unique hardship on a property owner because of the way a generally-applicable zoning ordinance affects a particular parcel, and a conditional use permit allows a land use that is not authorized by right in a zoning ordinance, but may be authorized if the property owner takes certain steps, such as to mitigate the potential impacts of the land use. Both of these processes require hearings by the local zoning board and public notice. A city or county’s housing element must identify adequate sites for housing at all income levels—very low, low, moderate, and above moderate income. Each local jurisdiction must also ensure that its housing element makes enough sites available to accommodate its share of the regional housing need assessment (RHNA), which is an estimate for various regions in the state that is developed by the Department of Finance and HCD and further allocated amongst individual local jurisdictions. The housing element of a general plan must generally be updated every eight years, and the local government must identify an adequate number of sites throughout its entire planning period. If a city or county does not have enough sites within its existing inventory of residentially zoned land to accommodate its share of the regional housing needs, it must adopt a program to rezone land within the first three years of the planning period. Every city and county must submit a report to HCD and the Governor’s Office of Planning and Research annually on its implementation and progress towards meeting its RHNA amount and removing governmental obstacles to housing development. Proposed Law: SB 902 would authorize a local government to pass an ordinance to zone any parcel for up to 10 units of residential density per parcel, at a height specified in the ordinance, if the parcel is located in a transit-rich area, a jobs-rich area, or an urban infill site. Specifically, this bill would:  Authorize passage of the ordinance, notwithstanding any local restrictions on adopting ordinances enacted by the jurisdiction, including restrictions enacted by a local voter initiative that limit the ability to adopt zoning ordinances.  Specify that an ordinance adopted under this bill would not be considered a project for purposes of CEQA.  Define “jobs-rich area” as an area identified by HCD, in consultation with OPR, that is high opportunity and either jobs rich or would enable shorter commuter distances based upon whether, in a regional analysis, the tract meets both of the following: o It is high opportunity, meaning its characteristics are associated with positive educational and economic outcomes for households of all income levels; and o New housing sited in the tract would enable residents to either live near more jobs than is typical for the region, or enable shorter commute distances for residents, as specified.  Require HCD to publish a state map showing areas identified as “jobs -rich areas” by January 1, 2022, and to update the map every five years thereafter.  Define “transit rich area” as a parcel within one -half mile of a major transit stop or a parcel on a high quality bus corridor with a fixed-route bus service that meets specified service interval times. SB 902 (Wiener) Page 3 of 3  Define “urban infill site” as a site that satisfies all of the following: o A site that is a legal parcel or parcels located in a city if, and only if, the city boundaries include some portion of either an urbanized area or urban cluster, or for unincorporated areas, a legal parcel or parcels wholly within the boundaries of an urbanized area or urban cluster. o A site in which at least 75% of the perimeter of the site adjoins parcels that are developed with urban uses. o A site that is zoned for residential use or residential mixed-use development, or has a general plan designation that allows residential use or a mix of residential and nonresidential sues, with at least 2/3 of the square footage of the development designated for residential use. Related Legislation: SB 902 is part of the Senate’s 2020 Housing Production Package, which also includes the following bills:  SB 995 (Atkins), which is currently pending in this Committee, would expand the streamlined judicial review provisions of the Jobs and Economic Improvement Through Environmental Leadership Act of 2011 (AB 900) to a project with at least 15% of its units affordable to lower income households and a minimum investment of $15 million, and extend AB 900 provisions until 2025.  SB 1085 (Skinner), which is currently pending in this Committee, would grant a density bonus to a project with at least 20% of its units affordable to moderate income households and increases the density bonus from 35% to 40% for projects that include the maximum amount of very low income households under density bonus law.  SB 1120 (Atkins), which is currently pending in this Committee, would require ministerial approval of either or both of the following, as specified: a housing development of up to two units (duplexes); and the subdivision of a parcel into two equal parts (urban lot split). The bill would also extend the life of subdivisio n maps by one year, up to a total of four years, as specified.  SB 1385 (Caballero), which is currently pending in this Committee, would enact the “Neighborhood Homes Act,” which establishes a housing development project as an authorized use on a parcel currently zoned for office or retail commercial use, as specified in a local agency’s zoning code or general plan. SB 35 (Wiener), Chap. 366/2017, created a streamlined, ministerial approval process for infill developments in cities and counties that have failed to meet their RHNA production targets. -- END -- SENATE COMMITTEE ON APPROPRIATIONS Senator Anthony Portantino, Chair 2019 - 2020 Regular Session SB 1085 (Skinner) - Density Bonus Law: qualifications for incentives or concessions: student housing for lower income students: moderate-income persons and families: local government constraints Version: May 27, 2020 Policy Vote: HOUSING 9 - 0 Urgency: No Mandate: Yes Hearing Date: June 9, 2020 Consultant: Mark McKenzie Bill Summary: SB 1085 would make several changes to the Density Bonus Law and grant additional benefits to housing development projects with a specified percentage of units designated for low and moderate income households, if the rent charged for those units is 30% below the market rate for the jurisdiction in which the development is proposed. Fiscal Impact:  The Department of Housing and Community Development (HCD) estimates it would incur costs of $101,000 in 2020-21 and $95,000 in 2021-22 for 0.5 PY of staff time to update guidance documents for the Density Bonus Law, and to provide technical assistance and outreach education to local agencies and affordable housing developers. (General Fund)  Unknown local costs to provide for the additional incentives when applying a density bonus, as specified. These costs are not state-reimbursable because local agencies have general authority to charge and adjust planning and permitting fees to cover their administrative expenses associated with new planning mandates. (local funds). Background: Existing law requires a city or county to adopt an ordinance that specifies how it will implement state Density Bonus Law, which requires the granting of a specified density bonus when an applicant for a housing development of 5 or more units agrees to construct a project with at least any of the following: 1) 10% of housing units dedicated for lower income households; 2) 5% of units for very low-income households; 3) A senior citizen development or mobilehome park; 4) 10% of units in a common interest development for moderate income households; 5) 10% of the total units for transitional foster youth, disabled veterans, or homeless persons; or 6) 20% of the total units for lower-income students in a student housing development. Existing law requires a city or county to allow an increase in density of 20% - 35% on a sliding scale, depending on the percentage of units affordable to very low- and low- income households, over the otherwise maximum allowable residential density under the applicable zoning ordinance and land use element of the general plan. For #4 above, however, the increase in density is limited to 5%. Allowing more total units in a SB 1085 (Skinner) Page 2 of 3 project allows a developer to spread the subsidized cost of affordable units more broadly over the market-rate units, making affordable housing more financially feasible. In addition to the density bonus, existing law provides a sliding scale of incentives or concessions as follows:  One incentive or concession for projects that include at least 10% of the total units for moderate-income households, 10% of the total units for lower-income households, or at least 5% for very low-income households.  Two incentives or concessions for projects that include at least 20% of the total units for moderate-income households, 20% of the total units for lower income households, or least 10% for very low income households.  Three incentives or concessions for projects that include at least 30% of the total units for moderate-income households 30% of the total units for lower-income households, or at least 15% for very low-income households. Existing housing element law requires every city and county must submit a report to HCD and the Governor’s Office of Planning and Research annually on its implementation and progress towards meeting its share of the regional housing needs assessment amount and removing governmental obstacles to housing development. Proposed Law: SB 1085 would make changes to the Density Bonus Law and incentivize the construction of housing developments that will contain a specified percentage of units for low and moderate income households and for which the rent is 30% below market rate. Specifically, this bill would:  Require a city or county to include data on the number of units in a student housing development for lower-income students for which a developer was granted a density bonus in the annual housing progress report it files with HCD.  Make a student housing development eligible for one incentive or concession if at least 20% of the units are for lower-income students, as defined.  Grant a 35% density bonus for a development with 20% of the units for low or moderate income households and the rent is 30% below the market rate for the jurisdiction in which the development is located. A local government may not impose a parking ratio that exceeds 0.5 spaces per bedroom if a project meeting these criteria is located within ½ mile of a transit stop, as specified.  Provide for the following sliding scale of concessions and incentives for a development with a specified percentage of the units reserved for low or moderate income households and rent that is 30% below the jurisdiction’s market rate, as specified: o One incentive or concession for a project that includes at least 20% of the units for low or moderate income households. o Two incentives or concessions for a project that includes at least 30% of the units for low or moderate income households. o Three incentives or concessions for a project that includes at least 40% of the units for low or moderate income households.  Prohibit fees relating to affordable housing, including inclusionary zoning fees, in lieu fees, and public benefit fees established unde r a local agency’s police powers from being imposed on the affordable units or bonus units of a housing development. SB 1085 (Skinner) Page 3 of 3  Define “total units” or “total dwelling units” as a calculation of the number of units that excludes a unit added by a specified density bonus and includes a unit designated to satisfy a local agency’s inclusionary zoning requirement . Related Legislation: AB 2345 (Gonzalez), which is currently pending on the Assembly Floor, would revise Density Bonus Law to increase the maximum allowable density bonus and the number of concessions and incentives a developer can seek, as specified. Staff notes that this bill is part of the Senate’s 2020 Housing Production Package, which also includes the following measures:  SB 902 (Wiener), which is currently pending in this Committee, would allow a local government to adopt an ordinance to allow up to 10 units per parcel, notwithstanding local voter initiatives, in infill, transit-rich, or high opportunity areas. SB 902 also provides that this zoning is not considered a project under the California Environmental Quality Act.  SB 995 (Atkins), which is currently pending in this Committee, would expand the streamlined judicial review provisions of the Jobs and Economic Improvement Through Environmental Leadership Act of 2011 (AB 900) to a project with at least 15% of its units affordable to lower income households and a minimum investment of $15 million, and extend AB 900 provisions until 2025.  SB 1120 (Atkins), which is currently pending in this Committee, would require ministerial approval of either or both of the following, as specified: a housing development of up to two units (duplexes); and the subdivision of a parcel into two equal parts (urban lot split). The bill would also extend the life of subdivision maps by one year, up to a total of four years, as specified.  SB 1385 (Caballero), which is currently pending in this Committee, would enact the “Neighborhood Homes Act,” which establishes a housing development project as an authorized use on a parcel currently zoned for office or retail commercial use, as specified in a local agency’s zoning code or general plan. Staff Comments: The bill’s mandated local costs would not be subject to state reimbursement because local agencies have the authority to charge and adjust planning and permitting fees as necessary to cover administrative costs. Existing law authorizes planning and zoning fees to “include the costs reasonably necessary to prepare and revise the plans and policies that a local agency is required to adopt before it can make any necessary findings and determinations.” Case law and previous decisions by the Commission on State Mandates support the position that local governments’ planning costs are not reimbursable when the state imposes new planning mandates. -- END -- AB 725 Page 1 ASSEMBLY THIRD READING AB 725 (Wicks) As Amended January 16, 2020 Majority vote SUMMARY: Amends Housing Element law to require certain jurisdictions to zone for multi-family moderate and above-moderate income housing. Major Provisions 1) Requires that, for incorporated areas within a metropolitan jurisdiction, at least 25% of the jurisdiction's share of the regional housing need for both the moderate-income and above moderate-income housing categories must be allocated to sites with zoning that allows at least two units of housing, but no more than 35 units of housing per acre. 2) Specifies that, for sites with this allocation: a) A project proponent may propose, and a jurisdiction may approve, a single-family detached home; b) This allocation cannot be the basis for a jurisdiction to deny a project that does not comply with the allocation; and c) This allocation cannot be the basis for a jurisdiction to not impose price controls, or in lieu thereof, any exactions or conditions of approval. 3) Provides that no reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because a local agency or school district has the authority to levy service charges, fees, or assessments sufficient to pay for the program or level of service mandated by this act, within the meaning of Section 17556 of the Government Code. COMMENTS: The cost of housing in California is the highest of any state in the nation. One of the many reasons that housing is too expensive is the type of housing that is being built. Almost all of the housing built in California is single-family (which can be an inefficient use of land) and mid- and high-rise construction (which are expensive to build). One strategy to lower the cost of housing is to facilitate the construction of "missing-middle" housing types, including medium-density typologies such as duplexes, fourplexes, garden apartment, town homes, and their ilk. These types of units have many benefits, including being land-efficient; less expensive to build; being more contextually similar to existing single-family neighborhoods; providing sufficient density to support the shops, restaurants, and transit that are associated with walkable neighborhoods; helping expand the pool of homebuilders, since the construction and building materials are comparatively less complicated than larger mid- and high-rise structures; and being naturally less expensive in the market because they are typically smaller than single-family homes, thereby helping increase access to opportunity and facilitate neighborhood equity and inclusion. A major reason that these units are not being built is that they are not allowed under local zoning. A 2019 Terner Center survey of California cities and counties revealed that only 7% zoned over AB 725 Page 2 half their land for multi-family housing, and only 35% zoned even 25% of their land for multi- family housing. One reason that there is not sufficient land zoned for medium-density housing is that it is not local jurisdictions are not required to do so. In planning for housing, housing element law requires local jurisdictions to adequately plan to meet their existing and projected housing needs through the Regional Housing Needs Allocation (RHNA) process. RHNAs are assigned by four income categories as guideposts for each community to develop a mix of housing types for all economic segments of the population. These income categories include very low-income (under 50% of Area Median Income (AMI)), low-income (between 50-80% of AMI), moderate-income (80%-120% of AMI), and above-moderate income (above 120% of AMI). Upon receiving its RHNA, each jurisdiction must then demonstrate, through its housing element, that the development capacity exists to accommodate, at a minimum, the allocation for each of the four income categories. Jurisdictions do so by creating an inventory of developable sites. Per housing element law, sites determined to be eligible for very low-income and low-income housing must be zoned for a density of at least 30 units per acre in metropolitan jurisdiction and 20 units per acre in suburban jurisdictions. There is no density minimum for moderate-income and above moderate-income housing sites, which represent approximately 60% of the overall housing allocation. The purpose of this bill is to facilitate the development of more medium density housing at moderate and above-moderate incomes, akin to the requirement for very low- and low-income housing. It would do so by requiring at least 25% of the jurisdiction's share of the regional housing need for both moderate-income and above moderate-income housing be allocated to sites with zoning that allows at least two units of housing, but no more than 35 units per acre of housing. Such density would enable the production of medium-density housing on these sites that typically are subject to more restrictive zoning currently. For a typical jurisdiction, this bill would increase the minimum percentage of land zoned for multi-family housing from approximately 40% to 55%. According to the Author: According to the author, "As we continue to tackle the housing crisis, "missing middle" developments prompt the loudest outcry and have the best chance of being relatively more affordable for residents who make too much for subsidized housing but still can't afford market- rate homes." Arguments in Support: According to California YIMBY, the bill "will require many local governments, especially in high-cost coastal areas, to plan for multigenerational neighborhoods that are more inclusive and more able to accommodate multiple income levels." Arguments in Opposition: None on file FISCAL COMMENTS: According to the Assembly Committee on Appropriations, no state costs. Any state-mandated local costs are not reimbursable by the state because cities and counties have fee authority to recover those costs. AB 725 Page 3 VOTES: ASM HOUSING AND COMMUNITY DEVELOPMENT: 7-0-1 YES: Chiu, Bloom, Gloria, Kiley, Limón, Maienschein, Quirk-Silva ABS, ABST OR NV: Diep ASM LOCAL GOVERNMENT: 5-3-0 YES: Aguiar-Curry, Bloom, Ramos, Luz Rivas, Robert Rivas NO: Lackey, Boerner Horvath, Voepel ASM APPROPRIATIONS: 11-6-1 YES: Gonzalez, Bloom, Bonta, Calderon, Carrillo, Chau, Eggman, Eduardo Garcia, Maienschein, Quirk, Robert Rivas NO: Bigelow, Brough, Megan Dahle, Diep, Fong, Petrie-Norris ABS, ABST OR NV: Gabriel UPDATED: VERSION: January 16, 2020 CONSULTANT: Steve Wertheim / H. & C.D. / (916) 319-2085 FN: 0002629 AB 2345 Page 1 ASSEMBLY THIRD READING AB 2345 (Gonzalez and Chiu) As Amended May 22, 2020 Majority vote SUMMARY: Revises Density Bonus Law to increase the maximum allowable density and the number of concessions and incentives a developer can seek. Major Provisions 1) Requires a developer to receive four incentives and concessions for projects that include the following percentage of total units: 31% for lower income households, 13% for very low income households, and 31% for moderate income households in a common interest development. 2) Requires a developer to receive five incentives and concessions for projects that include the follow percentage of total units: 33% for lower income households, 15% for very low income households, and 33% for moderate income households in a common interest development. 3) Requires a developer to receive three incentives or concession for projects that include 12% rather than 15% for very low income households. 4) Requires a developer to receive six instead of four incentives and concessions for projects that are within one-half mile of transit that are 100% affordable to lower income households, although 20% may be affordable to moderate income households. 5) Gives a local government discretion to grant additional waivers or reductions in development standards for projects that are within one-half mile of transit and are 100% affordable to lower income households, although 20% may be available to moderate income households. 6) Extends the density bonuses that a developer can request as follows (additions in bold, underlined, and italics): Very Low Income Density Bonus Percent Very Low Income Units Percent Density Bonus 5 20 6 22.5 7 25 8 27.5 9 30 10 32.5 11 35 12 38.75 13 42.5 14 46.25 ≥15 50 AB 2345 Page 2 Low Income Density Bonus Percent Low Income Units Percent Density Bonus 10 20 11 21.5 12 23 13 24.5 14 26 15 27.5 16 29 17 30.5 18 32 19 33.5 20 35 21 38.75 22 42.5 23 46.25 24 50 25 50 26 50 27 50 28 50 29 50 30 50 31 50 32 50 ≥ 33 50 Moderate Income Density Bonus Percent Moderate Income Units Percent Density Bonus 10 5 11 6 12 7 13 8 14 9 15 10 16 11 17 12 18 13 19 14 20 15 21 16 22 17 AB 2345 Page 3 23 18 24 19 25 20 26 21 27 22 28 23 29 24 30 25 31 26 32 27 33 28 34 29 35 30 36 31 37 32 38 33 39 34 40 35 41 38.75 42 42.5 43 46.25 ≥ 44 50 7) Provides that if a city, county, or city and county has adopted a density bonus ordinance that requires a higher percentage of density bonus than what is required above prior to the enactment of this Act then that density bonus ordinance is not required to be updated. 8) Defines "natural or constructed impediments," for the purpose of calculating the distance of a project from a major transit stop, to include, but not be limited to, freeways, rivers, mountains, and bodies of water, but does not include residential structures, shopping centers, parking lots, or rails used for transit. 9) Provides that the distance of a development from a major transit stop shall be measured from any point located on the property of the proposed development to any point on the property on which the major transit stop is located, including any parking lot owned by the transit authority or other local agency operating the major transit stop. 10) Reduces the amount of parking a local government can require of a developer requesting a density bonus as follows: a) For two to three bedrooms from 2 spaces to 1.5 spaces; and b) For four or more bedrooms 2.5 to 2 spaces. AB 2345 Page 4 11) Reduce the amount of parking a local government can require for a development that includes the maximum amount of very-low income or low income housing units under density bonus law and that is with one-half mile of unobstructed access to mass transit, from 0.5 spaces per bedroom to 0.5 spaces per unit. 12) Reduces the amount of parking a local government can require of a 100% affordable development for lower income households within one-half mile of unobstructed access to mass transit, from 0.5 spaces per unit to zero spaces per unit. 13) Reduces the amount of parking a local government can require of a 100% affordable rental development for seniors 62 years or older, with either paratransit service or unobstructed access within one-have mile of a fixed bus route that operates eight times a day, from 0.5 spaces per unit to zero spaces per unit. 14) Requires the following local governments include the following information in the housing element annual report: a) The number of density bonus applications received by the city or county; b) The number of density bonus applications approved by the city or county; and c) Data from a sample of projects, selected by the planning agency, approved to receive a density bonus from the city or county, including, but not limited to, the percentage of density bonus received, the percentage of affordable units in the project, the number of other incentives or concessions granted to the project, and any waiver or reduction of parking standards for the project. 15) Provides that no reimbursement is required by this Act because a local government has the authority to levy service charges, fees, or assessments to pay for the program or level of services mandated by the Act. COMMENTS: Density bonus law: Density bonus law was originally enacted in 1979, to help address the affordable housing shortage and to encourage development of more low- and moderate income housing units. Over 40 years later, the state faces the same affordable housing challenges. Density bonus is a tool to encourage the production of affordable housing by market rate developers, although it is used by developers building 100% affordable developments as well. In return for inclusion of affordable units in a development, developers are given an increase in density over a city's zoned density and concessions and incentives. The increase in density and concessions and incentives are intended to financially support the inclusion of the affordable units. All local governments are required to adopt an ordinance that provides concessions and incentives to developers that seek a density bonus on top of the cities' zoned density in exchange for including extremely low, very low, low, and moderate income housing. Failure to adopt an ordinance does not relieve a local government from complying with state density bonus law. Local governments must grant a density bonus when an applicant for a housing development of five or more units seeks and agrees to construct a project that will contain a percentage of affordable housing. AB 2345 Page 5 As part of the density bonus application, a developer may also request incentives, concessions and parking ratio reductions. The number of incentives and concessions, and the parking ratio reduction, vary depending on the percentage and type of affordable housing included in a project. Maximum density: A developer can access a 35% density bonus and three concessions and incentives under existing law. To qualify for a 35% density bonus, a developer must restrict either 11% of the units in a development to very-low income households (making less than 50% of Area Median Income) or 20% to lower income households (at or below 80% of AMI). This bill would extend the density formula to a maximum density of 50%. A developer could access a 50% density bonus if between 24% to 33% of the units are restricted to low income units, 15 to 33% for very low income units; and 44% for moderate income. Committee staff notes that it is unclear why a developer would agree to include more than the lowest possible percentage of affordability to receive a 50% density bonus. Concessions and incentives: In addition to an increase in density, a developer can request concessions under density bonus law to reduce the cost of the development and support the inclusion of the affordable housing units. Under existing law, a developer can receive up to three incentives or concessions for projects that include at least 30% of the total units for lower income households, at least 15% for very low-income households, or at least 30% for persons and families of moderate income in a common interest development. This bill would allow a developer to receive four concessions and incentives for including additional density. As discussed above, AB 2345 is based on the San Diego Affordable Homes Bonus Program, which allowed a developer to seek up to five concessions and incentives. San Diego found that developers only requested, at most, three concessions and incentives. It is important to note that developers are not required to take a density bonus to receive concessions and incentives, provided they include the required affordable housing units. Density bonus law is a balancing act between providing enough benefits for the developer to offset the inclusion of affordable housing units. In addition, density bonus law already requires a local government to provide waivers in development standards to accommodate the additional density allowed under density bonus law. The committee may wish to continue allowing a developer to seek up to three concessions and incentives (excluding 100% affordable projects), and instead adjust the density needed to access three concessions upward to reflect the changes proposed in other provisions of this bill. Impact on Measure JJJ: In 2016, the voters of the City of Los Angeles approved the Transit Oriented Communities (TOC) Affordable Housing Incentive Program to added provisions to the municipal code to require developers requesting certain entitlements for residential projects to either provide affordable units or pay an in-lieu fee. Measure JJJ also required the Department of City Planning to create a program to further incentivize affordable housing near transit. Accordingly, the Transit Oriented Communities (TOC) Affordable Housing Incentive Program became effective on September 22, 2017. The program encourages affordable housing within a half mile of major transit stops by providing additional density, reduced parking, and other incentives for projects that include covenanted affordable units. JJJ provides a developer a 50% density bonus if 17% of the units in the development are reserved for very low-income households. This bill would provide a 50% density bonus if a developer restricts 15% of the units to very low income households, which would conflict with JJJ. The committee may wish to consider if this issue should be addressed. AB 2345 Page 6 According to the Author: According to the author, "California's Density Bonus Law has been on the books for 40 years, with a goal to boost mixed-income developments, but has failed to draw enough interest from developers. The City of San Diego took steps to enhance the state's existing program, and generated significant interest to build additional affordable and market-rate housing. Communities across California can take a page from the lessons learned in San Diego. Assembly Bill 2345 will expand the Density Bonus Law to provide the same enhancements adopted by the City of San Diego, and will help alleviate California's housing shortage. With more than 40% of all California households spending too much of their income on housing, this bill will provide developers the incentive to build the affordable homes we urgently need in California." Arguments in Support: The sponsor of this bill, Circulate San Diego, writes in support, "Circulate supports this law because an identical effort in the City of San Diego has proven to substantially increase both the number of applications for use of the bonus program, as well as the total number of affordable and market rate homes permitted. Applications increased by 900% when San Diego enhanced its program. Additionally, applications saw a 473% increase for deed-restricted affordable units, and a 453% increase overall in units for mixed-income applications. This modest adjustment to an existing policy will have outsized positive impacts on housing affordability and availability across the state. Arguments in Opposition: The American Planning Association is opposed to this bill unless amended. They are concerned that the percentage of affordability is too low for the corresponding density. They are also concerned that the TOC program will be undermined by the changes proposed in this bill because they are not consistent with that program and could serve as an incentive to choose state density bonus law over the TOC, which requires 17% affordability for a project to receive a 50% density bonus. This bill requires 15% to receive a 50% bonus. They are also concerned that the number of incentives and concessions proposed is too high and also not commensurate with the amount of affordability required. FISCAL COMMENTS: According to the Assembly Appropriations Committee: 1) Estimated costs of $200,000 (General Fund (GF )) in the first year and $190,000 (GF) in the second year and ongoing, to the Department of Housing and Community Development (HCD) for one staff position to update memos and guidance documents for state Density Bonus Law, provide technical assistance and outreach to local governments and affordable housing developers, and to analyze additional data collected from the annual progress reports. 2) Estimated one-time costs of $75,000 (GF) to HCD for a one-time information technology (IT) contract to update its Housing Element Tracking System to add the new data points to be collected. AB 2345 Page 7 VOTES: ASM HOUSING AND COMMUNITY DEVELOPMENT: 7-0-1 YES: Chiu, Diep, Gabriel, Gloria, Kiley, Limón, Quirk-Silva ABS, ABST OR NV: Maienschein ASM APPROPRIATIONS: 17-0-1 YES: Gonzalez, Bigelow, Bloom, Bonta, Calderon, Carrillo, Chau, Megan Dahle, Diep, Eggman, Fong, Gabriel, Eduardo Garcia, Petrie-Norris, McCarty, Robert Rivas, Voepel ABS, ABST OR NV: Bauer-Kahan UPDATED: VERSION: May 22, 2020 CONSULTANT: Lisa Engel / H. & C.D. / (916) 319-2085 FN: 0002948 AB 1279 Page 1 ASSEMBLY THIRD READING AB 1279 (Bloom) As Introduced February 21, 2019 Majority vote SUMMARY: Requires certain development sites in high resource areas to allow for more density and height and makes these sites subject to "use by-right " approval. Major Provisions 1) Requires the Department of Housing and Community Development (HCD) to designate areas in this state as "high-resource areas," as defined as an area of high opportunity and low residential density that is not currently experiencing gentrification and displacement, and that is not at a high risk of future gentrification and displacement; 2) Requires that a housing development project must be a use by right in any high-resource area if the development satisfies the following criteria: a) In areas zoned only for single-family residential development, the development project consists of up to four residential units with a height of up to 20 feet. The units would have to be either affordable to households making 100% of the area median income (AMI), or sold or rented at a higher AMI if the developer pays 10% of the difference to the local jurisdiction for construction of units for households at 50% AMI or less; b) In areas zoned for residential use that are at least one -quarter acre in size and located on a major street and/or the central business district, the development project consists of up to 40 residential units with a height of up to 30 feet. Projects with 10 or fewer units would need to meet the same affordability parameters as the projects in single -family zones discussed above. Projects of more than 10 units would need to dedicate at least 10% of the units to households with low incomes (typically 50%-80% AMI) and 5% to very low incomes (typically under 50% AMI); c) If the parcel exceeded one-half acre in these prime locations, a project that had at least 25% of its units dedicated to low-income households and 25% to very-low income households would be allowed to have up to 100 residential units with a height of up to 55 feet. Such a project could receive a density bonus if it were to include additional affordable units; and, d) No qualifying project must require the demolition of housing that is currently for rent or has been in the past ten years, or be located in an environmentally unsafe or sensitive area. COMMENTS: The cost of housing in California is the highest of any state in the nation. According to the Legislative Analyst's Office, the foremost reason for this is that far less housing has been built in California's coastal areas than people demand. Facilitating the necessary growth will require building at higher densities than are currently allowed in much of the state. AB 1279 Page 2 Additionally, multiple studies have shown that life outcomes improve for those living in "high- resource areas," i.e., neighborhoods with high quality public schools, proximity to well-paying jobs, and a clean and safe environment. Such studies ha ve also shown that living in such communities can have a particularly beneficial outcome for low-income people in terms of health, employment, and educational attainment. However, historically low -income people have been excluded from high-resource areas through a number of means that have only been exacerbated by the rapidly rising cost of housing in California. The bill is intended to help alleviate the housing crisis and reduce exclusionary practices by making housing a use by right in high resource are as when certain criteria are met, allowing increased densities and heights that are tailored to proximity to arterial streets and central business districts. The bill would establish minimum amounts of affordable housing, and create additional incentives for projects that are at least 50 percent affordable. The bill would preclude the use of this provision for projects that would result in demolition of housing that is currently for rent or has been in the past ten years, or be located in an environmentall y unsafe or sensitive area. To facilitate the implementation of these requirements, the bill requires HCD to undergo a process, with defined stakeholders, to define "high-resource areas" as areas that are not experiencing nor at risk of gentrification and displacement. According to the Author: According to the author, "California's housing shortage is well-documented, and it is primarily a shortage of units affordable to households at the lower end of the income spectrum. Facilitating the production of affordable housing units requires increasing allowable residential densities in many communities and creating more opportunities for multifamily development. Allowing these types of projects to be developed by right in the most exclusionary places is crucial to ensuring that they are able to proceed." Arguments in Support: Supporters argue that this bill addresses exclusionary zoning practices in high-resource areas, which exacerbate racial and economic segregation and reduce opportunities for lower -wage workers to live close to where they work, and will facilitate mixed -income and affordable housing in high-resource, lower-density communities. Arguments in Opposition: According to the City of La Palma, "this bill would usurp cities' authority to protect and preserve the quality of residential areas and quality of life by allowing housing developments that meet minimum standards, including affordability requirements, by-right ". FISCAL COMMENTS: According to the Assembly Committee on Appropriations: 1) Estimated one-time costs to HCD of $100,000 (GF) in the first year for a mapping consultant contract and $225,000 (GF) for HCD staff to coordinate with stakeholders and the mapping consultant. 2) Estimated ongoing costs of $207,000 (GF) annually to HCD for program staff to support the program. 3) Unknown ongoing administrative costs to support the program AB 1279 Page 3 VOTES: ASM RULES: 12-0-0 YES: Cooley, Cunningham, Carrillo, Flora, Grayson, Kamlager-Dove, Maienschein, Mathis, Quirk-Silva, Ramos, Robert Rivas, Wicks ASM HOUSING AND COMMUNITY DEVELOPMENT: 6-1-1 YES: Chiu, Gabriel, Gloria, Kiley, Maienschein, Quirk -Silva NO: Diep ABS, ABST OR NV: Limón ASM LOCAL GOVERNMENT: 5-2-1 YES: Aguiar-Curry, Bloom, Ramos, Luz Rivas, Robert Rivas NO: Lackey, Voepel ABS, ABST OR NV: Boerner Horvath ASM APPROPRIATIONS: 12-6-0 YES: Gonzalez, Bloom, Bonta, Calderon, Carrillo, Chau, Eggman, Gabriel, Eduardo Garcia, Maienschein, Quirk, Robert Rivas NO: Bigelow, Brough, Diep, Fong, Obernolte, Petrie -Norris UPDATED: VERSION: February 21, 2019 CONSULTANT: Steve Wertheim / H. & C.D. / (916) 319-2085 FN: 0000743 SENATE COMMITTEE ON APPROPRIATIONS Senator Anthony Portantino, Chair 2019 - 2020 Regular Session SB 1431 (Glazer) - Property taxation: reassessment: disaster relief Version: May 6, 2020 Policy Vote: GOV. & F. 4 - 3 Urgency: No Mandate: Yes Hearing Date: June 9, 2020 Consultant: Robert Ingenito Bill Summary: SB 1431 would permit disaster reassessments for property tax purposes for properties affected by COVID -19. Fiscal Impact: The Board of Equalization (BOE) indicates that the revenue loss that would result from this bill cannot be determined. However, the magnitude is likely significant. BOE’s administration costs would be minor and absorbable. Background: Under the California Constitution, all property is taxable unless explicitly exempted by the Constitution or federal law. Specifically, Proposition 13 (1978) limits the maximum amount of any ad valorem tax on real property at 1 percent of value, and directs assessors to set assessed values at 1975 market value levels and only reappraise property thereafter if there is a change in ownership or new construction. Voters enacted Proposition 8 (1978) a few months after Proposition 13, which amended the Constitution to allow a te mporary reduction in value to reflect substantial damage, destruction, or other factors causing a decline in value. Local agencies are authorized to provide for the assessment or reassessment of taxable property “physically damaged or destroyed” for prop erty tax purposes. Specifically, current law allows a county board of supervisors to enact an ordinance allowing taxpayers to apply for reassessment when their property is damaged or destroyed in a major misfortune or calamity. The ordinance can apply to large disasters, such as earthquakes or wildfires, or site -specific incidents, like house fires. Additionally, assessors must revalue property when a diminution in value is attributable to restricted access to property as a result of the disaster, if the Go vernor has issued a disaster proclamation as a result of the disaster. Restricted access traditionally means when an event like a landslide destroys a road or imposes a physical barrier to a taxpayer accessing their property. If the county enacts an ordi nance, its assessor must revalue property affected by the disaster. The loss estimate must be at least $10,000 of current market value to qualify. The assessor will first determine the market value of a property, which often exceeds its assessed value. The assessor then calculates a percentage loss in the market value of the property, and multiplies that percentage by its market value. If the loss exceeds $10,000, the assessor then compares the adjusted market value to its assessed value, and enrolls a new value if the adjusted market value is less than the assessed value. Taxpayers must file a claim with the county assessor within the time specified in its ordinance, or 12 months from the date of damage or destruction, whichever is later. The SB 1431 (Glazer) Page 2 of 3 assessor next revalues the property to its disaster-affected value, and sends the taxpayer a notice of proposed new assessment. The county will then issue a separate supplemental refund for taxes paid in the current year based on the amount of reduction. The refund is prorated from the month in which the disaster occurred to the end of the fiscal year, or completion of new construction, whichever is first. Taxpayers must still pay their regular tax bill. Taxpayers may appeal the proposed reassessment to the assessment appeals board within six months of the date of mailing the notice. The property retains its disaster-affected value until fully restored, reconstructed, or rebuilt. If the taxpayer rebuilds their property in a like or similar manner, the propert y retains its prior base year value. Proposed Law: This bill would, among other changes, amend disaster reassessment law to require disaster reassessments for a state of emergency. Additionally, it would redefine damage to include the diminution in value resulting from any law, order, rule, or regulation of the state or any city, county, or other political subdivision providing tenant protections in response to the COVID -19 pandemic, including, but not limited to, eviction controls imposed under (1) Executive Order No. N-33-20, which ordered all Californians to stay at their home or place of residence, except as specified, and (2) Executive Order No. N-37-20, issued on March 27, 2020, extended deadlines for 60 days to evict tenants for nonpayment of rent due to COVID -19. The measure also defines “major misfortune or calamity” to include the COVID -19 pandemic, as defined in the Governor’ state of emergency declaration issued March 4, 2020, thereby allowing disaster reassessment for diminution in the value of property resulting from restricted access due to the COVID -19 pandemic. The bill would be effective immediately upon enactment, but provides that it would be retroactive to April 5, 2020. A ffected taxpayers can submit an application within 12 months of the effective date of the bill or within the time specified in the county’s ordinance, whichever is later. Staff Comments: This bill would expand the eligibility for disaster relief of specified properties affected by the COVID -19 pandemic. BOE indicates that it cannot estimate the number or type of properties that would qualify for relief under this bill. Moreover, for disaster relief purposes, it is unclear as to what point in time a market value determination would be made. However, the assessed value of any property is variable and depends on the facts of each property on a case -by case basis. The revenue loss resulting from the bill would depend (1) on the number of properties that would qualify for relief under this bill, (2) the type of properties, (3) the taxable value of the properties, and (4) current market value of the properties. All of these are unknown; consequently, the bill’s ultimate revenue loss is indeterminable. Lower local property tax revenues lead to increased General Fund Prop osition 98 spending by up to roughly 50 percent (the exact amount depends on the specific amount of the annual Proposition 98 guarantee, which in turns depends upon a variety of economic, demographic and budgetary factors). Thus, this bill would lead to increased General Fund expenditures of an unknown amount. SB 1431 (Glazer) Page 3 of 3 The BOE will incur absorbable costs to update its documents, website materials, and provide guidance to assessors. Any local government costs resulting from the mandate in this measure are not state - reimbursable because the mandate only involves the definition of a crime or the penalty for conviction of a crime. -- END -- AB 2323 Page 1 (Without Reference to File ) ASSEMBLY THIRD READING AB 2323 (Friedman and Chiu) As Amended June 4, 2020 Majority vote SUMMARY: Expands the application of California Environmental Quality Act (CEQA) exemptions for housing and other specified projects by permitting community plans, as defined, to serve as the basis for exemption of residential, mixed-use and employment center projects near transit and eliminating the exclusion of sites within the boundaries of a state conservancy from existing exemptions for affordable agricultural housing, affordable urban housing, and urban infill housing. Major Provisions 1) Permits community plans, as defined, to serve as the basis for exemption of residential, mixed-use and employment center projects near transit. 2) Eliminates the exclusion of sites within the boundaries of a state conservancy from existing exemptions for affordable agricultural housing, affordable urban housing, and urban infill housing. COMMENTS: CEQA includes various statutory exemptions, as well as categorical exemptions in the CEQA Guidelines, for housing projects. For example, any residential development project, including any subdivision, or any zoning change that is consistent with an adopted specific plan is exempt from CEQA pursuant to a statute enacted in 1984. SB 1925 (Sher), Chapter 1039, Statutes of 2002 established CEQA exemptions for certain residential projects providing affordable urban or agricultural housing, or located on an infill site within an urbanized area, and meeting specified unit and acreage criteria. Since SB 1925, additional legislation has provided CEQA exemptions and streamlining for residential (including, but not limited to, affordable housing) and certain other projects in infill areas. SB 375 (Steinberg), Chapter 728, Statutes of 2008 provided a CEQA exemption for a narrow set of eligible residential projects in infill areas adjacent to transit. SB 226 (Simitian), Chapter 469, Statutes of 2011 provided abbreviated CEQA review procedures for a broader set of urban infill projects, including retail, commercial, and public buildings. SB 743 (Steinberg), Chapter 386, Statutes of 2013established a new exemption for residential, mixed-use and "employment center" projects located within one-half mile of a major transit stop, if the project is consistent with an adopted specific plan and specified elements of an SB 375 strategy. SB 743 also required the Office of Planning and Research (OPR) to propose revisions to the CEQA Guidelines for transportation impacts to better support infill development. In 2017, the Legislature passed three bills to streamline the CEQA process for affordable housing projects. SB 35 (Wiener), Chapter 366, Statutes of 2017 established a ministerial approval process (i.e., not subject to CEQA) for certain multifamily affordable housing projects AB 2323 Page 2 that are proposed in local jurisdictions that have not met regional housing needs. SB 540 (Roth), Chapter 369, Statutes of 2017 authorizes a city or county to establish a workforce housing opportunity zone (WHOZ) by preparing an environmental impact report (EIR) and by adopting a specific plan. Once a WHOZ is established, and for five years thereafter, eligible housing developments within a WHOZ must be approved within 60 days without requiring the preparation of an EIR or negative declaration under CEQA. AB 73 (Chiu) Chapter 371, Statutes of 2017 authorizes a city or county to create a housing sustainability district (HSD) to complete upfront zoning and environmental review in order to receive incentive payments for residential and mixed-use development projects with an affordable housing component. Once the city or county has prepared an EIR for the HSD, then housing projects within, and consistent with, a designated HSD are exempt from CEQA. AB 1804 (Berman), Chapter 670, Statutes of 2018 codified an existing categorical exemption for infill projects, expanding the exemption to apply to multi-family residential and mixed-use housing projects on infill sites in unincorporated urbanized areas or urban clusters. Since 1978, CEQA has included statutory exemptions for housing projects. There are now 12 distinct CEQA exemptions for housing projects. Three are specific to projects with an affordable housing fraction, the rest are available to affordable and market-rate projects alike. Each exemption includes a range of conditions, including requirements for prior planning-level review, as well as limitations on the location and characteristics of the site. These conditions are intended to guard against the approval of projects with significant environmental impacts that go undisclosed and unmitigated – endangering workers, residents and the greater environment. However, as these exemptions have been added in bills over the past 40 years, and in particular since SB 1925 in 2002, the conditions in each bill have varied and evolved. Some, particularly SB 1925, included conditions which are excessively restrictive and subjective, making the exemptions difficult to use. More recent exemptions have been less restrictive, more objective, and have emphasized production of housing in urban areas near transit. According to the Author: AB 2323 is intended to help address California's housing and climate crises by ensuring that CEQA streamlining for housing projects works as intended, and that well-planned housing near transit and jobs is not delayed unnecessarily. AB 2323, in its current form and with pending amendments, aims to make the existing housing exemptions more consistent, objective and aligned with housing and climate goals. Arguments in Support: Housing advocates, environmental groups, local governments, planners, and environmental professionals support the bill because it makes existing CEQA streamlining for housing projects more practical, usable, and consistent with both housing and climate goals. For example, according to the Association of Environmental Professionals (AEP), California law provides numerous opportunities for streamlining or exempting infill housing projects from review under the California Environmental Quality Act (CEQA). However, these many options are often vague, overly complicated, and inconsistent, limiting their usage by lead agencies. AB 2323 seeks to clarify and align several of these measures to help lead agencies understand and determine when and how they can be applied. AB 2323 Page 3 Arguments in Opposition: The State Building and Construction Trades Council (S BCTC) and other affiliated labor unions objected to the bill's prior provision, which was removed by the June 4 amendments, permitting some exemptions for housing projects on sites included on the Department of Toxic Substances Control (DTSC) "Cortese List," if the site had been cleaned up and cleared for residential use. With the removal of those provisions, and an additional clarifying amendment, SBCTC indicates to the author they will adopt a "support if amended" position. FISCAL COMMENTS: According to the Assembly Appropriations Committee, no additional state costs. VOTES: ASM NATURAL RESOURCES: 7-2-2 YES: Friedman, Flora, Chau, Eggman, Limón, Mathis, McCarty NO: Cristina Garcia, Mark Stone ABS, ABST OR NV: Brough, Muratsuchi ASM APPROPRIATIONS: 16-0-2 YES: Gonzalez, Bigelow, Bloom, Bonta, Calderon, Carrillo, Chau, Megan Dahle, Diep, Eggman, Fong, Eduardo Garcia, Petrie-Norris, McCarty, Robert Rivas, Voepel ABS, ABST OR NV: Bauer-Kahan, Gabriel UPDATED: VERSION: June 4, 2020 CONSULTANT: Lawrence Lingbloom / NAT. RES. / (916) 319-2092 FN: 0003024 AB 3279 Page 1 (Without Reference to File ) ASSEMBLY THIRD READING AB 3279 (Friedman) As Amended June 4, 2020 Majority vote SUMMARY: Revises California Environmental Quality Act (CEQA) litigation procedures by 1) reducing the deadline for a court to commence hearings from one year to 270 days, 2) providing that a lead agency may decide whether a plaintiff prepares the administrative record, and 3) authorizing a court to issue an interlocutory remand. Major Provisions 1) Requires the court to regulate the briefing schedule so that, to the extent feasible, hearings commence within 270 days, rather than one year, of the filing of the appeal. 2) Requires briefing to be completed within 60, rather than 90, days of the petitioner's request for hearing. 3) Authorizes the plaintiff to elect to prepare the record only upon request of the public agency. 4) Authorizes a court to issue an interlocutory remand order if the court finds both of the following: a) The order would promote judicial efficiency and expedition. b) The public agency's reconsideration on remand comports with due process and is not likely to result in a post hoc rationalization of the public agency's actions. 5) Clarifies that the remand provision shall not prevent a court from entering a final judgment, affect the right of parties to appeal that judgment, or affect the appropriate determination of attorney's fees. 6) Repeals several obsolete sections and makes conforming and correction amendments. COMMENTS: In order to enforce compliance with CEQA, actions taken by public agencies can be challenged in superior court once the agency approves the project. CEQA appeals are subject to unusually short statutes of limitations. Under current law, CEQA lawsuits generally must be filed within 30 to 35 days, depending on the type of decision. The courts are required to give CEQA actions preference over all other civil actions. The petitioner must request a hearing within 90 days of filing the petition and, generally, briefing must be completed within 90 days of the request for hearing. Courts are required to commence hearings on CEQA appeals within one year of filing, to the extent feasible. CEQA establishes procedures for the preparation and certification of the administrative record (e.g., application materials, staff reports, transcripts or minutes of public proceedings, notices, AB 3279 Page 2 written comments, and written correspondence prepared by or submitted to the public agency regarding the proposed project). Generally, the respondent agency is required to prepare and certify the record within 60 days of the petitioner's request. However, the petitioner may elect to prepare the record subject to certification by the respondent agency, or the parties may agree to an alternative method of preparing the record. Upon finding a public agency's actions are not in compliance with CEQA, a court is required to order one or more of the following: 1) A mandate that the determination, finding, or decision be voided by the public agency, in whole or in part. 2) If the court finds that a specific project activity or activities will prejudice the consideration or implementation of particular mitigation measures or alternatives to the project, a mandate that the public agency and any real parties in interest suspend any or all specific project activity or activities that could result in an adverse change or alteration to the physical environment, until the public agency has taken any actions that may be necessary to comply with CEQA. 3) A mandate that the public agency take specific action as may be necessary to bring the determination, finding, or decision into compliance with CEQA. Any order is required to include only those mandates that are necessary to achieve compliance with CEQA and only those specific project activities in noncompliance with CEQA. According to the Author: AB 3279 addresses common delays in litigation over CEQA actions to promote swifter and more efficient resolution of lawsuits regarding all projects. Arguments in Support: Supporters state this bill would make incremental improvements to the CEQA process that will allow more housing and other land use projects to be built with less unnecessary dela ys. Specifically, the bill would authorize courts to hear CEQA appeals sooner, reduce the time parties take to file petitions, expedite the preparation of the administrative record, and authorize courts to issue interlocutory remand orders instead of setting aside project approvals and forcing applicants to start the process all over again. Arguments in Opposition: Labor, environmental, and environmental justice advocates, typically aligned with CEQA petitioners, list the following concerns: 1) The bill unnecessarily expedites an already expedited judicial review process for CEQA cases, restricting petitioners' rights to seek judicial review. 2) The current 90-day briefing schedule is already demanding for petitioners. 60 days is too short. AB 3279 Page 3 3) Restricting petitioners' ability to prepare the record impedes their ability to prosecute the case and increases costs due to record disputes. 4) Interlocutory remand may prevent petitioners from obtaining a final judgment necessary to then file an appeal, and is unnecessary because CEQA already requires a writ to include only those mandates that are necessary to achieve compliance with CEQA. 5) By permitting a lead agency to remedy non-compliance with CEQA prior to a final judgment, rather than via a judgment against the lead agency and in favor of the petitioner, an interlocutory remand order may jeopardize petitioners' ability to recover attorneys' fees. FISCAL COMMENTS: According to the Assembly Appropriations Committee: 1) Initial first-year costs of $208,000 and ongoing annual cost of $362,000 for the Attorney General's Office to increase staff (2 PY) to address the anticipated increase in litigation (General Fund and special fund). 2) Unknown, potentially significant, increase in court costs or delays in other civil litigation resulting from the shortened deadlines. The courts are required to give CEQA actions preference over all other civil actions. VOTES: ASM NATURAL RESOURCES: 9-2-0 YES: Friedman, Flora, Brough, Chau, Eggman, Cristina Garcia, Limón, Mathis, McCarty NO: Muratsuchi, Mark Stone ASM APPROPRIATIONS: 15-1-2 YES: Bigelow, Bauer-Kahan, Bloom, Calderon, Carrillo, Chau, Megan Dahle, Eggman, Fong, Gabriel, Eduardo Garcia, Petrie-Norris, McCarty, Robert Rivas, Voepel NO: Diep ABS, ABST OR NV: Gonzalez, Bonta UPDATED: VERSION: June 4, 2020 CONSULTANT: Lawrence Lingbloom / NAT. RES. / (916) 319-2092 FN: 0003014 AB 2421 Page 1 ASSEMBLY THIRD READING AB 2421 (Quirk) As Amended June 4, 2020 Majority vote SUMMARY: Requires expedited permitting of emergency standby generators for macro cell towers. Major Provisions This bill limits permit reviews for emergency standby generators for macro cell towers to administrative review only, and creates a shot-clock by which permit reviews must be completed. The proposed generator must be rated below 50 horsepower and certified to California emission standards, have a 190-gallon double-wall storage tank, and be mounted on a concrete pad. The macro cell tower site at which the emergency standby generator is proposed to be installed must be an existing site that was previously permitted by the local agency. The emergency standby generator must comply with all applicable state and local laws and regulations, including building and fire safety codes. A county or city must approve or deny a permit application for such a generator within 60 days. If an application is incomplete, the county or city has 10 days to notify the applicant, in which case the shot-clock stops until the applicant provides the requested information. A county or city cannot require any new or different information for a permit application than it routinely requires for applications for other emergency standby generators. If a county or city fails to approve or deny a completed application within 60 days, the application will be deemed approved. This bill does not prohibit a local agency from revoking, through the appropriate process, the permit or approval status for an emergency standby generator that is determined to violate an applicable state or local law or regulation, including building and fire safety codes, or from otherwise enforcing state and local law with respect to the emergency standby generator. If a county or city requires more than one permit application for the installation of a generator, all applications submitted concurrently must be issued within the same 60-day period set forth above. A county or city may not require an applicant to submit proof of consent or other authorization from an underlying property owner as part of the initial application for a generator permit. However, the applicant must not install the generator until the applicant provides documentation to the local agency, if the local agency requires it. A county of city may impose a permit fee to cover its costs associated with administering this bill. The fee shall not exceed the reasonable costs of providing the service for which the fee is charged and shall not be levied for general revenue purposes. This bill applies to all counties and cities, including charter cities, and contains a repeal date of January 1, 2024. COMMENTS: Public Safety Power Shutoffs have been part of California's strategy to prevent wildfires for several years. However, 2019 was a landmark year for PSPS events, which occurred from October 9 to November 1 in about 30 counties in Northern California and several in Southern California and affected all three of the state's largest power utilities – Pacific Gas and Electric AB 2421 Page 2 Company (PG&E), Southern California Edison (SCE), and San Diego Gas & Electric (SDG&E). Over the course of the PSPS events, more than 3 million people lost power. Given the critical importance of uninterrupted communications during power outages, this bill seeks to protect this communications infrastructure so it will continue to operate in the event the primary source of power goes down during a PSPS event or other power interruption. AT&T reports some delays (from five to 30 months) in local jurisdictions that have required – as part of the permitting process for back-up generators – variances, substantial aesthetic structures, spec sheets and transmission details on existing equipment not affected by a generator application, and documents that the agency already has on file. In addition to speeding up the permitting process with a shot-clock and deemed approved approach, this bill also prohibits local agencies from requiring a permit applicant to prove up- front that an underlying property owner has provided consent for the installation of a generator. This allows the applicant to pursue the permitting process concurrently with the process of obtaining permission from property owners. The applicant would still be required to provide this evidence to the local agency before installing the generator if the agency requires it as part of the permitting process. According to the Author: "In order to facilitate wireless network upgrades needed to mitigate the impacts of Public Safety Power Shutoffs, this legislation will help enable the rapid deployment of emergency standby generators at macro cell sites. These resources are vital for public safety and welfare to help ensure consumers maintain access to 911 services, wireless emergency alerts, and other public safety communications. "AB 2421 is a critical component to supporting the efforts of wireless service providers to install emergency standby generators before catastrophic events threaten Californians' ability to stay connected to emergency services when needed most. Without the short term, narrowly crafted process prescribed in this legislation, widely differing and lengthy permitting requirements across the state could delay these public safety efforts by many months. AB 2421 is focused on improving public safety through power-resilient wireless communications networks." Arguments in Support: The Peace Officers Research Association of California, in support, writes, "This bill would enable California to take timely steps to improve public safety communications in preparation for the coming wildfire seasons and possible power shutoffs by electric utilities. AB 2421 streamlines the local permitting process for back-up power equipment at cell sites, while safeguarding final permitting authority with the local jurisdiction. This legislation would only apply to the installation of generators that are certified to California low emission standards. "Expediting the deployment of back-up power solutions at wireless sites is essential to public safety. During extended power outages, wildfires, and other emergencies, mobile communications are critical for our members to stay connected, as well as to share potentially life-saving information with the public. Even when commercial power is lost, Californians must be able to maintain access to 911 and receive emergency notifications, including Wireless Emergencies Alerts (WEA) broadcast by our public safety officials. California's Legislature should use every tool available to rapidly prepare for the growing threat of wildfires, power outages, and other disasters. For these reasons, we strongly urge you to support AB 2421." AB 2421 Page 3 Arguments in Opposition: The Communications Workers of America, District 9 (CWA), writes, "CWA believes strongly that the communications grid should be reliable, promote public safety, and be subject to robust oversight. CWA workers are on the front lines, working to ensure the reliability of these cell towers, and the communications grid as a whole. Local review can be a critical step to ensuring reliability and establishing the necessity of a requested approval. There may be circumstances demanding an expedited review process with automatic approval after 60 days. However, the default provision contained in AB 2421 applies to every application, in every city and county in California. This bill is not narrowly tailored to only those areas of high wildfire risk or other exigent circumstances. Nor is there an avenue for the local government to extend the mandated timeline for justifiable reasons. "Additionally, AB 2421's focus on short - term generator power could have the unintended consequence of allowing corporations to ignore or delay long-term infrastructure investment and repair. Ultimately, it is in the best interest of California to ensure that it has a communications grid that has bee n hardened and is available to all. CWA believes that a greater focus should be made on the long-term health of the communications grid as opposed to an overreliance on temporary solutions. Furthermore, discussion on this bill would benefit from insight into how telecommunications companies responded to outages during recent wildfires and what strategies they employed for long-term sustainability. Unfortunately, these corporations have failed to provide this information and have argued that they are not required to inform the public about their activities. Temporary and short- term responses may be necessary, but are best evaluated in the context of understanding the overall strategies to maintain and strengthen the communications grid long-term." FISCAL COMMENTS: According to the Assembly Appropriations Committee, no state costs. State-mandated local costs are not reimbursable by the state because the bill authorizes a local agency to impose a fee to cover costs associated with administering the bill's provisions. VOTES: ASM LOCAL GOVERNMENT: 8-0-0 YES: Aguiar-Curry, Lackey, Bloom, Boerner Horvath, Ramos, Luz Rivas, Robert Rivas, Voepel ASM APPROPRIATIONS: 18-0-0 YES: Gonzalez, Bigelow, Bauer-Kahan, Bloom, Bonta, Calderon, Carrillo, Chau, Megan Dahle, Diep, Eggman, Fong, Gabriel, Eduardo Garcia, Petrie-Norris, McCarty, Robert Rivas, Voepel UPDATED: VERSION: June 4, 2020 CONSULTANT: Angela Mapp / L. GOV. / (916) 319-3958 FN: 0003026 ACA 25 Page 1 ASSEMBLY THIRD READING ACA 25 (Mullin, et al.) As Amended June 4, 2020 2/3 vote SUMMARY: Temporarily permits Members of the Legislature, by two-thirds vote, to remotely attend and vote in a legislative proceeding, or to vote by proxy in a legislative proceeding if permitted by their house, during the pendency of a state of emergency declared by the President of the United States or the Governor. Provides that a Member may only remotely attend and vote, or vote by proxy as authorized, in a proceeding if the state of emergency prevents the Member from safely attending the proceeding in person. Major Provisions 1) Provides that Members of the Legislature, through the use of technology and without being physically present in the State Capitol, may attend and vote remotely in a legislative proceeding, or vote by proxy in a legislative proceeding if authorized by their house, during the pendency of a state of emergency declared by the President of the United States or the Governor. 2) Provides that a Member may attend and vote remotely, or vote by proxy as authorized, in a legislative proceeding only if the state of emergency prevents the Member from safely attending the proceeding in person. 3) Provides that the vote of a Member remotely attending a proceeding shall have the same force and effect as if the Member were physically present in the State Capitol; and, requires that a Member remotely attending a proceeding shall be included in the determination of a quorum. 4) Defines "state of emergency" as the existence of conditions of disaster or of extreme peril to the safety of persons and property within the State, or parts thereof, including, but not limited to, such conditions as an attack or probable or imminent attack by an enemy of the United States, fire, flood, storm, insurrection, earthquake, volcanic eruption, or pandemic or other public health emergency. 5) Requires that the Legislature, or each house, shall choose technology for remote legislative proceedings that furthers the goals of security, the integrity and efficiency of the legislative process, and accessibility for Members who participate in proceedings remotely and members of the public who seek to view proceedings conducted by remote participation. 6) Provides that if one-fifth or more of the Members of a house are unable to attend a legislative proceeding during a state of emergency because they are deceased, disabled, or missing, a quorum of the house shall be established by a majority of its Members able to attend. 7) Provides that the Legislature may provide by statute for the temporary filling of vacant offices of Members with pro tempore members in the event that one-fifth or more of the Members of a house are deceased, disabled, or missing during a state of emergency. ACA 25 Page 2 8) Requires that a Member's authorization to attend and vote remotely, and to vote by proxy if applicable, shall end upon the termination of the state of emergency. 9) Requires that the Legislature by concurrent resolution, or each house by separate resolutions, shall adopt rules to implement remote legislative proceedings by a two-thirds rollcall vote before the end of the biennial legislative session in which these provisions take effect. 10) Provides that the Legislature or each house, as applicable, may amend rules that implement remote legislative proceedings by a subsequent resolution adopted by a two-thirds rollcall vote. 11) Requires that the resolution adopted by the Legislature, or each house, shall specify rules for remote attendance and voting, and shall include procedures for authenticating a Member's remote attendance and voting. 12) Provides that the resolution may permit Members to vote by proxy, in which case the resolution shall specify rules for this method of voting and shall include procedures for authenticating a Member's proxy vote. 13) Provides that a Member may remotely attend and vote in proceedings as permitted by the Member's house prior to adoption of the resolution implementing remote legislative proceedings. COMMENTS: Remote participation in other states: According to information from the National Conference of State Legislatures ("NCSL"), remote participation is currently allowed in Oregon and Wisconsin if emergencies exist. Oregon voters approved a constitutional amendment in 2012 that defined "catastrophic disaster" and granted additional powers to the governor and legislatures. Wisconsin's constitutional provision authorizes the legislature to "adopt such other measures that may be necessary and proper", which included a statute allowing for virtual meetings of the legislature and legislative committees when an emergency or imminent threat of one exists. COVID-19 Response: According to the NCSL, between March and May 2020, at least 20 states, the District of Columbia, Guam, and the Virgin Islands have changed procedures to allow for remote participation as a result of the COVID-19 pandemic. ACA 25 provides California, subject to voter approval, the similar ability to allow for remote legislative proceedings. According to the Author: California is the fifth largest economy in the world with a population of over 40 million and growing. We have a full time Legislature which, under normal circumstances, is able to be nimble and respond by passing urgency legislation and adjust spending priorities, in real time, when conditions warrant. However, it took a worldwide pandemic for us to discover that California government is unable to continue to function, according to American notions of checks and balances during such an emergency. The legislative branch of government currently has no authority to convene remotely during an emergency where it would be unsafe for members to gather and meet in person. ACA 25 seeks to put before the voters a Constitutional amendment that would require both houses of the Legislature to adopt rules, by a two-thirds vote, which would allow for the sworn duties of the Legislature to continue, and to require such rules to provide for and maintain maximum transparency and visibility by the public. I am ACA 25 Page 3 pleased that this is a bi-partisan effort, which seeks to safely maintain both the integrity of California government as well as public access to the proceedings. Arguments in Support: None received. Arguments in Opposition: The Institute of Governmental Advocates (IGA) opposes ACA 25 and considers this bill "unnecessary and unwise." "ACA 25 would allow legislative business to be conducted without being physically present and/or by proxy voting during the pendency of a state of emergency declared by the President or the Governor." IGA also argues that "the definition of state of emergency is so overly broad that it would authorize the Legislature to act in the dark at almost any time it so desires. Moreover, Governors have a long history of making emergency declarations, but never rescinding such declarations once the emergency has ended." FISCAL COMMENTS: This bill is keyed non-fiscal by the Legislative Counsel. VOTES: ASM RULES: 10-0-2 YES: Cooley, Cunningham, Carrillo, Flora, Grayson, Levine, Mathis, Quirk-Silva, Ramos, Robert Rivas ABS, ABST OR NV: Maienschein, Wicks UPDATED: VERSION: June 4, 2020 CONSULTANT: Michael Erke / RLS. / (916) 319-2800 FN: 0003027