Loading...
HomeMy WebLinkAbout08242024 - 3.1 LEGISLATIVE COMMITTEE MEMORANDUM 3.1 TO: Mayor and Town Council August 27, 2024 SUBJECT: August Legislative Report BACKGROUND The Legislature reconvened from summer recess on August 5. Prior to breaking for recess, policy committees had until July 3 to advance bills. Appropriations committees had until August 16 to act on bills marked as having a fiscal impact on the State. 499 bills (78% of total introduced) made it through the Senate and 933 bills (61%) advanced from the Assembly. Floor hearings will take place August 19 through August 31, the last day for each house to pass bills to for the Governor’s consideration. Governor Newsom will have until September 30 to sign or veto bills passed by the Legislature. On August 16, Governor Newsom signed 10 bills into law to address rising statewide retail theft. The Governor stressed the importance of the work done so far and instrumental partnerships to bring these measures forward, but acknowledged more work needs to be done in this space. On top of these bills, the state has continued to dedicate more funding to state and local law enforcement to enhance their response to retail theft across the state. DISCUSSION The Town’s Legislative Committee follows legislation that is identified as a priority through the Tri-Valley Cities Coalition and by the Danville Town Council based upon the Town’s legislative framework. The Tri-Valley Cities Legislative Framework identifies six focus areas for the 2024 State Legislative session including: Transportation and Infrastructure, Climate, Environment, Health and Safety, Economic Development, Affordable Housing and Homelessness, Mental Health, and Fiscal Sustainability. The bills and positions that are a priority for the Tri-Valley coalition are discussed in the second half of this report. The following bills have been identified as having an impact on Danville. August Legislative Update 2 August 27, 2024 H.R. 8002 (Harder) Stop the Rate Hikes Act This bill would amend the Public Utility Regulatory Policies Act of 1978 to require States to consider measures that limit the amount of retail utility rate increases a utility company can request to once every 365 days. Location: This bill will not be moving forward this session. Position: Support Tri-Valley Cities Coalition AB 1779 (Irwin) Theft: Jurisdiction This bill would permit the consolidation of specified theft charges, as well as all associated offenses occurring in different counties into a single trial if the district attorneys in all involved jurisdictions agree. Location: This bill passed through the Legislature and has been approved by the Governor. TVC Position: Support AB 1794 (McCarty) Crimes: larceny Under existing law, if the value of all property taken over the course of distinct but related acts motivated by one intention, general impulse, and plan exceeds $950, those values may be aggregated into a single charge of grand theft. This bill would clarify that those values may be aggregated even though the thefts occurred in different places or from different victims. The bill would also, declarative of existing law, provide that circumstantial evidence may be used to prove that multiple thefts were motivated by one intention, general impulse, and plan. Location: This measure was held in committee and will not progress to the Senate Floor. TVC Position: Support AB 1820 (Schiavo) Housing development projects: applications: fees and exactions. This bill would authorize a development proponent that submits a preliminary application for a housing development project to request a preliminary fee and exaction estimate and would require a city, county, or city and county to provide the estimate within 30 business days of the submission of the preliminary application. For development fees imposed by an agency other than a city, county, or city and county, the bill would require the development proponent to request the fee schedule from the agency that imposes the fee without delay. Location: This bill passed through committee and will be scheduled for a floor hearing. TVC Position: Neutral AB 1886 (Alverez) Housing Element Law: substantial compliance: Housing Accountability Act Current law requires the Department of Housing and Community Development (HCD) to review and determine whether a housing element substantially complies with the August Legislative Update 3 August 27, 2024 Housing Element Law. If HCD finds that a draft housing element or amendment does not substantially comply with the Housing Element Law, current law requires the legislative body of the city or county to either (A) change the draft element or amendment to substantially comply with the Housing Element Law or (B) adopt the draft housing element or amendment without changes and make specified findings as to why the draft element or amendment substantially complies with the Housing Element Law despite the HCD findings. This bill would require a planning agency that makes the above- described findings as to why a draft housing element or amendment substantially complies with the Housing Element Law despite the HCD findings to submit those findings to HCD. The bill would require HCD to review those findings in its review of an adopted housing element or amendment. The bill would create a rebuttable presumption of validity for HCD’s findings as to whether the adopted element or amendment substantially complies with the Housing Element Law. Location: This bill passed through committee and will be scheduled for a floor hearing. TVC Position: Oppose AB 2021 (Bauer-Kahan) Crimes: selling or furnishing tobacco or related products and paraphernalia to underage persons Existing law prohibits the sale or furnishing of tobacco or tobacco products or paraphernalia, as specified, to a person who is under 21 years of age. This bill would create a separate fine of $500 for the first offense, $1,000 for the 2nd offense, and $5,000 for any subsequent offense for firms, corporations, businesses, retailers, or wholesalers, who violate this prohibition. Location: This bill passed through committee and will be scheduled for a floor hearing. TVC Position: Support AB 2243 (Wicks) Affordable Housing and High Road Jobs Act of 2022: objective standards and affordability and site criteria The Affordable Housing and High Road Jobs Act of 2022, until January 1, 2033, authorizes a development proponent to submit an application for an affordable housing development or a mixed-income housing development that meets specified objective standards, affordability and site criteria, including being located within a zone where office, retail, or parking are a principally permitted use. The act makes such developments a use by right. Such developments would be subject to one of 2 streamlined, ministerial review processes depending on, among other things, the affordability requirements applicable to the project. This bill would make various changes to the objective standards and affordability and site criteria applicable to an affordable housing development or mixed-income housing development subject to the streamlined, ministerial review process under the act. Location: This bill passed through the Senate Appropriations Committee and will be scheduled for a floor hearing. TVC Position: Oppose Unless Amended August Legislative Update 4 August 27, 2024 AB 2485 (Carillo) Regional housing need: determination This bill requires the Department of Housing and Community Development (HCD) to take certain actions in determining the existing and projected housing need for each region through the regional housing needs determination (RHND) process. It would also require HCD to post its data and methodologies for its regional housing needs determination process and invite stakeholders to weigh in on the process. Location: This measure was held in committee and will not progress to the Senate Floor. TVC Position: Support AB 2943 (Zbur, Rivas) Crimes: shoplifting Known as the California Retail Theft Reduction Act, this bill creates a new crime targeting "serial" retail thieves, with a penalty of up to three years’ incarceration for possession of stolen property with intent to resell. Additionally, it clarifies that similar thefts from different victims can be aggregated to charge grand theft if certain criteria are met. This measure also provides new tools for law enforcement to arrest for shoplifting based on a witness's sworn statement or video footage of the crime and extends the ability of police to keep repeat offenders in custody. Location: This bill passed through the Legislature and has been approved by the Governor. TVC Position: Support SB 402 (Wahab) Involuntary commitment. Existing law, the Lanterman-Petris-Short Act, authorizes the involuntary commitment and treatment of persons with specified mental disorders. Under the act, when a person, as a result of a mental health disorder, is a danger to self or others, or gravely disabled, the person may, upon probable cause, be taken into custody by specified individuals, including, among others, by peace officers and designated members of a mobile crisis team, and placed in a facility designated by the county and approved by the State Department of Health Care Services for up to 72 hours for evaluation and treatment. This bill would additionally authorize, until January 1, 2030, a person to be taken into custody, pursuant to those provisions, by a licensed mental health professional, as defined. This bill would require a licensed mental health professional who is not direct staff of, or contracted by, a county to complete a specified training prior to exercising that authority and would prohibit those licensed mental health professionals from transporting a person taken into custody pursuant to the above-described provisions unless specifically authorized by the county to do so. Location: This measure was held in committee and will not progress to the Assembly Floor. TVC Position: Support SB 905 (Wiener) Crimes: theft from a vehicle This bill creates two new wobbler offenses pertaining to theft from vehicles. The first offense is similar to the existing crime of auto burglary but does not require a prosecutor to prove the vehicle was locked in order to obtain a conviction if someone steals from the vehicle. The second offense makes it unlawful for a person to possess property that was August Legislative Update 5 August 27, 2024 stolen from a vehicle. A misdemeanor conviction is punishable by up to one year in county jail, and a felony conviction is punishable by 16 months, 2 years, or 3 years in a county jail. If a defendant has prior convictions, a felony conviction could result in a term in state prison. Location: This bill passed through the Legislature and has been approved by the Governor. TVC Position: Support SB 1031 (Wiener, Wahab) San Francisco Bay Area: local revenue measures: transportation improvements. This bill authorizes the Metropolitan Transportation Commission (MTC) to propose new taxes, allocate new revenue and issue bonds for specified transportation projects, and requires the State Transportation Agency to consider transit agency consolidation within the San Francisco Bay Area. Location: This bill failed to meet the policy committee deadline and is marked as inactive for the remainder of the legislative session. TVC Position: Watch SB 1037 (Wiener) Planning and zoning: housing element: enforcement. This bill allows the Attorney General to take legal action against a city and seek fines up to $50K a month for violating unspecified state housing laws that require ministerial approval of certain housing projects or for failing to adopt a housing element that substantially complies with the law, even if the jurisdiction is acting in good faith. Location: This bill passed through the Assembly Appropriations Committee and will be scheduled for a floor hearing. TVC Position: Oppose SB 1060 (Becker) Property insurance underwriting: risk models. This bill requires a property insurer that employs risk models for underwriting purposes that account for wildfire risk reduction associated with hazardous fuel reduction, home hardening, defensible space, and fire prevention activities for properties, communities, and landscapes, to provide to the Department of Insurance information that demonstrates compliance with these provisions. Location: This bill failed to pass out of committee and is marked inactive for the remainder of the legislative session. TVC Position: Support November Ballot Measures ACA 13 (Ward) Voting thresholds. With the Taxpayer Protection Act off of the November Ballot pursuant to the CA Supreme Court’s recent decision, the Legislature passed AB 440, which included a provision that would delay ACA 13’s appearance from November 2024 to November 2026. ACA 13 was initially introduced as a strategy to make it difficult for the proponents of the Taxpayer Protection Act to garner enough signatures on the statewide ballot for passage. This August Legislative Update 6 August 27, 2024 strategy offers some additional insurance, should the Taxpayer Protection Act proponents seek to qualify a more narrow version of their original initiative to raise voter thresholds in 2026. Federal In May of 2023, S.1514 and H.R.3170, the Homes for Every Local Protector, Educator, and Responder Act of 2023, or the HELPER Act of 2023, was introduced into Congress. This bipartisan bill would amend the National Housing Act to establish a first-time homebuyers mortgage insurance program for firefighters, paramedics, emergency medical technicians, law enforcement, and teachers that meet specified criteria. Additional Advocacy Efforts The Tri-Valley Cities Mayors will meet again on Monday, September 16. The Tri-Valley Cities Council will also meet September 16. We will hear a legislative update from the League of California Cities and Townsend Public Affairs. Conclusion It is recommended that the Town Council Legislative Sub-Committee accept this report and direct any questions and/or direction to Town legislative staff. Prepared by: Melysa Vander Mel Economic Development Specialist Reviewed by: Joseph Calabrigo Town Manager Attachment A – Bill Summaries/Analysis Attachment B – E-bike/scooter Reform Request Letter Attachment C – TVC Letter of Support AB 2485 Attachment D – TVC Letter of Opposition SB 1037 Attachment E - TVC Letter of Support Helper Act Attachment F – 2025 Legislative Committee Meeting Dates ATTACHMENT A SENATE COMMITTEE ON APPROPRIATIONS Senator Anna Caballero, Chair 2023 - 2024 Regular Session AB 1794 (McCarty) - Crimes: larceny Version: April 11, 2024 Policy Vote: PUB. S. 4 - 0 Urgency: No Mandate: No Hearing Date: August 5, 2024 Consultant: Liah Burnley Bill Summary: AB 1794 authorizes counties to operate a Cal-Fast Pass program to allow retailers to submit details of alleged shoplifting, organized retail theft, or grand theft directly to the district attorney through an online portal on the district attorney’s internet website. Fiscal Impact:  Incarceration costs (local funds, General Fund) to the counties and the California Department of Corrections and Rehabilitation (CDCR) to the extent this bill results in more grand theft convictions. Costs may be in the millions of dollars annually statewide, with actual costs depending on the number of convictions, the length of each sentence, and whether each sentence must be served in county jail or state prison. The average annual cost to incarcerate one perso n in county jail is approximately $29,000. The Legislative Analyst’s Office (LAO) estimates the average annual cost to incarcerate one person in state prison is $133,000. Although county incarceration costs are generally not considered reimbursable state mandates pursuant to Proposition 30 (2012), overcrowding in county jails creates cost pressure on the General Fund because the state has historically granted new funding to counties to offset overcrowding resulting from 2011 public safety realignment.  Cost pressures (General Fund) to provide increased funding to the Organized Retail Theft Prevention Grant Program and Organized Retail Theft Vertical Prosecution Grant Program. This bill authorizes a county that establishes a CAL - Fast Pass Program to apply for funding from these grant programs, widening the pool of authorized grant recipients and potentially increasing the demand for further grant funds. The Governor’s 2024-25 budget proposal includes $373.5 million General Fund over four years for various efforts related to retail theft, including $10 million in fiscal year 2024-25 for the Organized Retail Theft Vertical Prosecution Grant Program. Background: The Cal-Fast Pass program created by this bill is based on a program enacted in Yolo County in fall 2023. The Yolo County “FastPass to Prosecution” program was created to speed up shoplifting investigations by allowing retailers to submit information about suspected crimes directly to the district attorney’s office, rather than reporting the information to the police first. AB 1794 (McCarty) Page 2 of 3 Proposed Law:  Authorizes, but does not require, each county district attorney’s office to establish a CAL-Fast Pass Program to facilitate reporting of retail theft-related incidents from retailers to prosecutors.  Establishes minimum operating and reporting guidelines and authorizes participating counties to apply for funding through two existing grant programs for theft-related prosecution, the Organized Retail Theft Prevention Grant Program and Organized Retail Theft Vertical Prosecution Grant Program.  Specifies that thefts that occurred in multiple places or from multiple victims may be aggregated for the purpose of charging a defendant with grand theft.  Adds to the grand theft statute examples of the types of evidence that may be used to determine whether a defendant acted with a single intent, impulse and plan in committing a series of thefts, such that the thefts may be aggregated into grand theft. Related Legislation: AB 1779 (Irwin) allows specified criminal actions for thefts to be consolidated and brought in any jurisdiction, subject to a hearing on consolidation of the offenses, as specified. AB 1779 is pending on the Senate floor. AB 1802 (Jones-Sawyer) removes the sunset date on the organized retail theft statute and the regional property crimes task force. AB 1802 is pending on the Senate floor. AB 1960 (Soria) creates sentencing enhancements for taking, damaging, or destroying property in the commission or attempted commission of a felony, as specified. AB 1960 is pending on the Senate floor. AB 1972 (Alanis) requires the existing regional crimes property task force to assist railroad police and specifies cargo theft as a property crime for consideration by the regional property crimes task force is pending on the Senate floor. AB 2943 (Zbur) makes it a crime for any person to possess property unlawfully that was acquired through one or more acts of shoplifting, theft, or burglary from a retail business, if the property is not possessed for personal use and the person has intent to sell, exchange, or return the merchandise for value, or the intent to act in concert with one or more persons to sell, exchange, or return the merchandise for value, and the value of the possessed property exceeds $950. AB 2943 is pending on the Senate floor. AB 3209 (Berman) establishes a retail theft restraining order, as specified. AB 3209 is pending on the Senate floor. SB 1144 (Skinner) revises the types of transactions that qualify a third-party seller as a “high-volume third-party seller,” relating to online marketplaces, as specified. SB 1144 is pending on the Assembly floor. AB 1794 (McCarty) Page 3 of 3 SB 1416 (Newman) reinstates sentencing enhancements for selling, exchanging, or returning for value, or attempting to sell, exchange, or return for value, any property acquired through one or more acts of shoplifting, theft, or burglary from a retail business, if the property value exceeds specified amounts. SB 1416 is pending on the Assembly floor. SB 905 (Wiener) creates the new crime of forcibly entering a vehicle with intent to commit theft therein, as specified. SB 905 is pending on the Assembly floor. SB 982 (Wahab) removes the sunset date on the organized retail theft statute. SB 982 is pending on the Assembly floor. SB 1242 (Min) makes it a factor in aggravation if arson was carried out within a merchant’s premises in order to facilitate organized retail theft. SB 1242 is pending on the Assembly floor. Staff Comments: To the extent the CAL-Fast Pass programs authorized by this bill are operated and result in more convictions than would otherwise have occurred, they will likely contribute to increased incarceration costs in the long term. Als o, if, as proponents hope, additional changes made by this bill make it easier to charge and convict defendants with grand theft rather than petty theft, the bill will result in significant incarceration costs to the counties and the state. When taking into account the total costs of incarceration, including fixed costs for staffing and infrastructure in addition to the marginal cost of each inmate, the average annual per capita cost to confine a person in state prison is over $133,000. That’s because there are many other types of costs—including most staffing costs—that are only saved when capacity is reduced. Measures that result in state prison sentences, like those proposed by this bill, would delay cost savings associated with capacity reductions. -- END -- SENATE RULES COMMITTEE Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 AB 1820 THIRD READING Bill No: AB 1820 Author: Schiavo (D), et al. Amended: 6/5/24 in Senate Vote: 21 SENATE LOCAL GOVERNMENT COMMITTEE: 7-0, 6/11/24 AYES: Durazo, Seyarto, Dahle, Glazer, Skinner, Wahab, Wiener SENATE HOUSING COMMITTEE: 9-0, 7/2/24 AYES: Skinner, Ochoa Bogh, Blakespear, Caballero, Cortese, Padilla, Seyarto, Umberg, Wahab NO VOTE RECORDED: Menjivar SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8 ASSEMBLY FLOOR: 72-0, 5/21/24 - See last page for vote SUBJECT: Housing development projects: applications: fees and exactions SOURCE: California Building Industry Association DIGEST: This bill requires local agencies to provide developers with more information on fees and exactions at various stages of the housing development approval process. ANALYSIS: Existing law: 1) Allows local governments to require applicants for development projects to pay impact fees. AB 1820 Page 2 2) Requires, under the Mitigation Fee Act, local officials that are establishing, increasing, or imposing a fee as a condition of approving a development project to: a) Identify the fee's purpose. b) Identify the fee's use, including the public facilities to be financed. c) Determine a reasonable relationship between the fee's use and the development. d) Determine a reasonable relationship between the public facility's need and the development. e) Determine a reasonable relationship between the fee's amount and the cost of the public facility. f) Hold at least one open and public meeting prior to levying a new fee or increasing an existing one. g) If they decide to adopt capital improvement plans, indicate the approximate location, size, time of availability, and estimates of cost for all facilities or improvements to be financed with the fees. h) Deposit and spend the fees within five years of collecting them. i) Refund fees or make specific findings on when and how the fees will be 3) Requires local agencies to deposit mitigation fees to fund a capital improvement associated with a development in a separate account or fund. 4) Requires local agencies that impose mitigation fees to produce an annual report within 180 days of the end of the fiscal year that includes specified information. 5) Requires a city, county, or special district that has an internet website to post and update on their websites specified information, including a current schedule of housing development project costs, zoning ordinances and development standards, annual impact fee reports, and an archive of specified impact fee nexus studies. 6) Requires local agencies to conduct and adopt a nexus study prior to the adoption of an impact fee, and specified standards and practices. AB 1820 Page 3 7) Provides that cities and counties cannot collect impact fees before they conduct the final inspection or issue a certificate of occupancy, whichever occurs first. However, utilities can collect impact fees at the time the utility receives an application for service, which can happen before a final inspection. 8) Prohibits, pursuant to the Housing Crisis Act of 2019 (SB 330, Skinner, Chapter 654) a local agency from applying new rules or standards to a project after a preliminary application containing specified information is submitted. The local agency must also make any required determinations on whether a project site is a historic site when a complete preliminary application is filed. 9) Requires local agencies to exhaustively list all information needed to make a development application complete under the Permit Streamlining Act, limits that list to only those items on the checklist for application required by state law, and prohibits the local agency from requiring additional information. The checklist information must also be posted online. This bill: 1) Provides when a local government requests the fees and exactions associated with a housing development project, the request shall clearly state that the development proponent is not required to respond to the request and will not be subjected to any consequences for not responding or for the content of the response. 2) of fees and exactions expected to be imposed in connection with the project. 3) Authorizes a development proponent who submits a preliminary application to include a request for a preliminary fee and exaction estimate, which the local government shall provide within 30 business days of the submission of the preliminary application. 4) Provides that the fee and exaction estimate is for informational purposes and shall not be legally binding or otherwise affect the scope, amount, or time of payment of any fee or exaction that is otherwise determined by other provisions of law. 5) Provides that a proponent may request a fee schedule from a local government or special district for specified fees or for the cost of providing electrical or gas service from a local publicly owned utility. AB 1820 Page 4 6) Requires, upon approval of a housing development project, the local government to provide the housing development proponent with an itemized list and a good faith estimate of the total sum amount of all fees and exactions that will apply to the project within 30 business days. 7) Requires the development proponent to request the good faith estimate of the total sum amount of all fees and exactions imposed by the agency that will apply to the project, and the agency shall provide the information within 30 business days. This estimate shall be on the average amount of the fees imposed in similar projects. This estimate shall be for informational purposes only. Background 1) Local government finance after Proposition 13. A series of propositions have drastically cut into local revenue sources, requiring local governments to look elsewhere to fund services that the public demands. First, Proposition 13 (1978) capped property tax rates at 1% of assessed value (which only changes upon new construction or when ownership changes) and required 2/3 voter approval for special taxes; as a result local governments turned to general taxes to avoid the higher voter threshold. When Proposition 62 (1986) required majority voter approval of general taxes, local agencies imposed assessments that were more closely tied to the benefit that an individual property owner receives. Subsequently, Proposition 218 (1996) required voter approval of parcel taxes, assessments, and property-related fees. In response to the reduction in property tax revenues from Proposition 13 and the difficulty of raising taxes, local agencies have turned to other sources of funds for general operations, including sales taxes and transient occupancy taxes, also known as hotel taxes. Commercial enterprises generate sales tax and hotel tax revenue, and simultaneously pay property taxes and demand relatively few services (such as public safety or parks). Residential developments, by contrast, do not directly generate sales or hotel tax revenue, and the new residents demand a wider variety of more intensive services. As a result, cities and counties face a disincentive to approve housing because of the higher net fiscal cost of residential development, particularly if they have the option to instead permit commercial development that may produce net fiscal benefits, also known as the fiscalization of land use. AB 1820 Page 5 Since they cannot impose broad-based taxes without great difficulty, cities and counties follow a simple principle: new developments should pay for the impacts they have on the community and the burden they impose on public services. 2) Mitigation Fee Act. When imposing a fee as a condition of approving a development project, the Mitigation Fee Act also requires local officials to ost of the public facility. In its 1987 Nollan decision, the U.S. Supreme Court said conditions for approval. In the 1994 Dolan decision, the U.S. Supreme Court said that conditions on development must have a "rough proportionality" to a project's impacts. Comments 1) Purpose of the bill. transparency measure that allows housing developers to have knowledge of development fees prior to commit 2) No free lunch. This bill imposes new requirements on local agencies that impose fees without any additional resources to help them comply with new requirements. Absent additional resources, local agencies may have to increase fees if they need additional resources to satisfy new requirements. So, while fees may be more transparent, they could end up higher than they were before. In the case of this bill, local agencies must provide fee estimates when a developer submits a preliminary application, and an itemized list of fees for the project when they submit their final application. In both cases, the local agency must provide this information within 30 days. If the local agency needs to increase resources to comply with these requirements, they may increase fees to do so. FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes SUPPORT: (Verified 8/5/24) California Building Industry Association (Source) Abundant Housing LA Bay Area Council Buildcasa California Apartment Association California Builders Alliance AB 1820 Page 6 California Chamber of Commerce California Community Builders California Council for Affordable Housing California Hispanic Chambers of Commerce California YIMBY Circulate San Diego Civicwell East Bay Leadership Council East Bay YIMBY Eden Housing El Dorado County Chamber of Commerce El Dorado Hills Chamber of Commerce Elk Grove Chamber of Commerce Fieldstead and Company, Inc. Folsom Chamber of Commerce Fremont for Everyone Generation Housing Grow the Richmond Habitat for Humanity California Housing Action Coalition Housing California Housing Leadership Council of San Mateo County Housing Trust Silicon Valley How to ADU LeadingAge California Lincoln Area Chamber of Commerce Midpen Housing Mountain View YIMBY Napa-Solano for Everyone Northern Neighbors Peninsula for Everyone People for Housing Orange County Progress Noe Valley Rancho Cordova Area Chamber of Commerce Resources for Community Development Rocklin Area Chamber of Commerce Roseville Area Chamber of Commerce Sacramento Regional Builders Exchange San Francisco YIMBY San Luis Obispo YIMBY AB 1820 Page 7 Sand Hill Property Company Santa Cruz YIMBY Santa Rosa YIMBY Shingle Springs/Cameron Park Chamber of Commerce Silicon Valley Leadership Group South Bay YIMBY Southern California Association of Non-profit Housing Southside Forward SPUR Streets for People United Chamber Advocacy Network Urban Environmentalists Valley Industry and Commerce Association Ventura County YIMBY YIMBY Action Yuba Sutter Chamber of Commerce OPPOSITION: (Verified 8/5/24) City of Oceanside ASSEMBLY FLOOR: 72-0, 5/21/24 AYES: Addis, Aguiar-Curry, Alanis, Alvarez, Arambula, Bauer-Kahan, Berman, Boerner, Bonta, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Chen, Connolly, Davies, Dixon, Essayli, Flora, Mike Fong, Vince Fong, Gallagher, Garcia, Gipson, Grayson, Haney, Hart, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Rendon, Reyes, Luz Rivas, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Wood, Zbur, Robert Rivas NO VOTE RECORDED: Bains, Bennett, Cervantes, Megan Dahle, Friedman, Gabriel, Holden, Mathis Prepared by: Jonathan Peterson / L. GOV. / (916) 651-4119 8/6/24 16:10:38 **** END **** SENATE RULES COMMITTEE Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 AB 1886 THIRD READING Bill No: AB 1886 Author: Alvarez (D), et al. Amended: 7/1/24 in Senate Vote: 21 SENATE HOUSING COMMITTEE: 8-2, 6/18/24 AYES: Skinner, Blakespear, Caballero, Cortese, Menjivar, Padilla, Umberg, Wahab NOES: Ochoa Bogh, Seyarto SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8 ASSEMBLY FLOOR: 52-3, 5/20/24 - See last page for vote SUBJECT: Housing Element Law: substantial compliance: Housing Accountability Act SOURCE: California Building Industry Association SPUR DIGEST: This bill clarifies that a housing element or amendment is not considered substantially compliant with housing element law until the local agency has adopted a housing element that the Department of Housing and Community Development (HCD) has determined is in substantial compliance with housing element law, as specified. ANALYSIS: Existing law: 1) Requires each city and county to adopt a housing element, which must contain specified information, programs, and objectives, including: a) An assessment of housing needs and an inventory of resources and constraints relevant to the meeting of these needs; AB 1886 Page 2 b) relative to affirmatively furthering fair housing and to the maintenance, preservation, improvement, and development of housing; and c) A program that sets forth a schedule of actions during the planning period, and timelines for implementation, that the local government is undertaking to implement the policies and achieve the goals and objectives of the housing element. 2) Requires a planning agency to submit a draft housing element revision to HCD at least 90 days prior to adoption of a revision of its housing element pursuant to statutory deadlines, or at least 60 days prior for a draft amendment. Requires the local government to make the first draft revision of the housing element available for public comment for at least 30 days and, if any comments are received, requires the local government to take at least 10 business days after the 30 day public comment period to consider and incorporate public comments into the draft revision prior to submitting it to HCD. 3) Requires HCD to review the draft and report its written findings to the planning agency within 90 days of its receipt of the first draft submittal for each housing element revision or within 60 days of receipt of a subsequent draft amendment or an adopted revision or adopted amendment to a housing element. Prohibits HCD from reviewing the first draft submitted for each housing element revision until the local government has made the draft available for public comment for at least 30 days and, if comments were received, has taken at least 10 business days to consider and incorporate public comments. 4) Requires HCD, in its written findings, to determine whether the draft element or draft amendment substantially complies with housing element law. 5) prior to the adoption of its draft element or draft amendment, and provides that legislative body may act without them. 6) Requires a legislative body to take one of the following actions, if HCD finds that the draft element or draft amendment dos not substantially comply: a) Change the draft element or draft amendment to substantially comply; or b) Adopt the draft element or draft amendment without changes, in which case the legislative body must include in its resolution of adoption written AB 1886 Page 3 findings that explain the reasons the legislative body believes that the draft element or draft amendment substantially complies with housing element 7) Requires the planning agency to submit a copy of an adopted housing element or amendment promptly to HCD following adoption. 8) Requires HCD to review adopted housing elements or amendments and report its findings to the planning agency within 60 days. 9) Requires HCD to review any action or failure to act by a local government that it determines is inconsistent with an adopted housing element or housing element law, including any failure to implement any program actions included in the housing element. Requires HCD to issue written findings to the local government as to whether the action or failure to act substantially complies with housing element law, and provide a reasonable time no longer than 30 days for the local government to respond to the findings before taking any other action, including revocation of substantial compliance. 10) Authorizes HCD, if it finds that an action or failure to act under (9) does not substantially comply with housing element law, and if it has issued findings that an amendment to the housing element substantially complies with this article, to revoke its findings until it determines that the local government has come into compliance. 11) Requires HCD to notify the local government and authorizes HCD to notify the office of the Attorney General that the local government is in violation of state law if HCD finds that the housing element or an amendment to the element, or any action or failure to act under (9), does not substantially comply with housing element law or that any local government has taken an action in violation of various specified housing laws. 12) Requires local governments on an eight-year housing element cycle with insufficient sites inventories to complete the rezoning of sites, including adoption of minimum density and development standards, no later than three years after either the date the housing element is adopted, as specified, or the date that is 90 days after the receipt of comments from HCD, whichever is earlier, unless the deadline is extended pursuant to existing law. 13) Notwithstanding 12), requires a local government that fails to adopt a housing element that HCD has found to be in substantial compliance with the law within 120 days of the statutory deadline for adoption of the housing element AB 1886 Page 4 to complete the rezoning of sites no later than one year from the statutory deadline for adoption of the housing element. 14) Prohibits a local agency, pursuant to the Housing Accountability Act (HAA) from disapproving specified housing development projects or conditioning the approval of the housing development in a manner that renders the housing development infeasible for very low-, low-, or moderate-income households, unless it makes written findings that the jurisdiction has adopted a housing element that has been revised consistent with exiting law, that is in substantial compliance with housing element law, and the jurisdiction has met or exceed its share of the housing needs allocation (RHNA) for the planning period, for the income category proposed for the housing development project, if the disapproval or conditional approval is not based on housing discrimination, as specified in existing law. 15) Requires a court, if it finds any portion of a general plan, including a housing element, out of compliance with the law, to include within its order or judgment one or more of the following remedies for any or all types of developments or any or all geographic segments of the city or county until the city or county has complied with the law, including: a) b) ty to grant zoning changes and/or variances; c) approvals; d) Mandating the approval of building permits for residential housing that meet specified criteria; e) Mandating the approval of final subdivision maps for housing projects that meet specified criteria; and f) Mandating the approval of tentative subdivision maps for residential housing projects that meet specified criteria. 16) that has been found to be in substantial compliance with the requirements of housing element law by HCD. This bill: 1) Requires each city and county, in addition to providing a copy of the adopted element or amendment, to also provide any findings that the draft element or AB 1886 Page 5 draft amendment substantially complies with housing element law, despite other findings by HCD. 2) Requires HCD, within 60 days of receiving any findings by the city that their housing element substantially complies with housing element law despite findings by HCD, to review those findings and report its findings to the planning agency. 3) Provides that a housing element shall be considered to be in substantial compliance with housing element law when the local agency adopts the housing element or amendment for the current planning period in accordance with housing element law and either of the following apply: a) HCD finds that the adopted housing element or amendment is in substantial not been superseded by subsequent contrary findings by the department or by a decision of a court of competent jurisdiction. b) A court of competent jurisdiction determines that the adopted housing element or amendment substantially complies with housing element law subsequent court decision or by statute. 4) Provides, for purposes of the HAA, that for purposes approval, conditional approval, or disapproval of a housing development project, a housing element or amendment shall be considered in substantial compliance with housing element law only if the element or amendment was in substantial compliance as determined by HCD or a court of competent jurisdiction, when a preliminary application or a complete application was submitted. This provision is declaratory of existing law. 5) Adds legislative intent that clarifications made to housing element law by this bill are intended to ratify the regulatory interpretation by a specific memo issued by HCD on March 16, 2023, as specified. Background Housing elements. Cities and counties are required to develop a housing element as part of the general plan every eight years (every five years for some rural areas). Cities must submit their housing element to HCD for approval by a specified date and currently most local governments should have adopted their housing element AB 1886 Page 6 or be in the process of finalizing their sixth housing element. Local governments have a statutory deadline to submit a housing element based on region. Ninety days before the deadline to adopt a housing element, cities must submit a draft to HCD. HCD is required to review the draft element within 90 days of receipt and provide written findings as to whether the draft amendment substantially complies with housing element law. If HCD finds that the draft element does not substantially comply with the law, the local agency may either make changes to the draft element to substantially comply with the law or adopt the element and make findings as to why a local agency it complies with the law despite the findings of the department. Following adoption of a housing element, a local agency submits it to HCD. When a local government adopts its housing element without making - fact that the process allows a local agency to adopt a housing element without making the changes required by HCD to be in substantial compliance, a local agency is not considered compliant until receiving ultimate approval from HCD. Consequences of not complying with housing element law. Over the last seven years, the Legislature has strengthened the consequences for local agencies who are out of compliance or who amend their zoning after their housing element is found compliant. Local agencies cannot qualify for state funding for affordable housing, or infrastructure for affordable housing without a compliant housing element. AB 72 (Santiago, Chapter 72, Statutes of 2017) gave HCD explicit tantial compliance if it determines that the local agency acts or fails to act in compliance with its housing element, and allows HCD to refer violations of law to the Attorney General (AG). Both the AG and HCD have units with dedicated staff to enforce housing element law and other land use laws passed by the legislature. The AG can also sue a city for non-compliance and the court can issue fines up to $10,000 a day after the local agency fails to comply for an additional 12 months. After an additional six months of non-compliance, the court may increase the fines by six times. Lastly, if a local government fails to adopt a substantially compliant . Housing Accountability Act (HAA) In 1982, the Legislature enacted the HAA, the purpose of which was to ensure that a city does not reject or make infeasible housing development projects that contribute to meeting the housing need determined pursuant to the housing element law without a thorough analysis of the economic, social, and environmental effects of the action and disapprove, or require density reductions in, certain types of residential projects. AB 1886 Page 7 One such constraint on local governments authority to disprove housing is the denying a housing development that includes 20% lower-income housing that does not conform to has not adopted a compliant housing element. Comments 1) Self-certification clarification. In order to avoid the penalties and consequences for failing to comply with housing element law, some local governments have -Although the statute is clear that HCD (and not a local government) determines whether a housing element is in compliance with the law a point reinforced by the courts, as noted in the examples above this bill would further clarify that a housing element is not in compliance until both a local agency has adopted a housing element and HCD has found the element in compliance. This bill eliminates arguments made by local gove - The bill also makes clear that these changes are declaratory of existing law and consistent with guidance provided by HCD in a memo dated March 16, 2023, findi that its adopted element is in substantial compliance but may provide reasoning FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes SUPPORT: (Verified 8/5/24) California Building Industry Association (co-source) SPUR (co-source) Abundant Housing LA California Apartment Association California Building Industry Association California Chamber of Commerce California Community Builders AB 1886 Page 8 California Hispanic Chamber of Commerce California Housing Consortium California Housing Partnership Corporation California Rural Legal Assistance Foundation, INC. California YIMBY Circulate San Diego CivicWell East Bay Leadership Council East Bay YIMBY Fieldstead and Company, INC. Grow the Richmond Housing Action Coalition Housing California Housing Trust Silicon Valley How to ADU LeadingAge California Mountain View YIMBY Napa-Solano for Everyone Northern Neighbors Peninsula for Everyone People for Housing Orange County Progress Noe Valley Public Interest Law Project San Diego Housing Federation San Diego Regional Chamber of Commerce San Francisco YIMBY San Luis Obispo YIMBY Santa Cruz YIMBY Santa Rosa YIMBY South Bay YIMBY Southside Forward Streets for People Urban Environmentalists Ventura County YIMBY YIMBY Action OPPOSITION: (Verified 8/5/24) California State Association of Counties Catalysts for Local Control Cities Association of Santa Clara County AB 1886 Page 9 City of Belmont City of Beverly Hills City of Brentwood City of Carlsbad City of Cloverdale City of Corona City of Eastvale City of Elk Grove City of Fairfield City of Fullerton City of Grass Valley City of Huntington Beach City of Lake Forest City of Lakeport City of Madera City of Manhattan Beach City of Norwalk City of Oakdale City of Palm Desert City of Piedmont City of Rancho Cucamonga City of Rancho Palos Verdes City of Rancho Santa Margarita City of San Luis Obispo City of Santa Clarita City of Santa Paula City of Solana Beach City of Torrance City of Visalia City of Walnut Creek City of Yorba Linda League of California Cities Livable California Los Angeles County Division, League of California Cities Marin County Council of Mayors and Council members Rural County Representatives of California (RCRC) Save Lafayette Town of Danville Tri-Valley Cities of Dublin, Livermore, Pleasanton, San Ramon AB 1886 Page 10 ARGUMENTS IN SUPPORT: The author writes espite being a powerful tool to incentivize housing in cities that are refusing to build enough, the so-called from denying a project based on its zoning code or general plan, was largely unused for decades. However, given the recent change in support for more housing, which has shifted the power dynamic between local governments and Unfortunately, we are after cities erroneously reject projects using self-certification arguments. This issue directly results from a lack of clarity in the code related to compliance with Housing Element Law. AB 1886 seeks to resolve this problem by clarifying that projects remain eligible if the application was submitted while the city was not in ARGUMENTS IN OPPOSITION: Several cities are opposed to this bill because -certification regardless of whether HCD concurs with the submitted housing element. Cities write that they should be entitled to this process if there is a good faith disagreement with HCD. ASSEMBLY FLOOR: 52-3, 5/20/24 AYES: Addis, Aguiar-Curry, Alanis, Alvarez, Bains, Bennett, Berman, Bonta, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Connolly, Mike Fong, Friedman, Garcia, Gipson, Grayson, Haney, Hart, Holden, Hoover, Jackson, Jones-Sawyer, Kalra, Lee, Low, Lowenthal, Maienschein, McCarty, McKinnor, Ortega, Papan, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Rendon, Rodriguez, Blanca Rubio, Santiago, Schiavo, Ting, Valencia, Villapudua, Ward, Weber, Wicks, Wilson, Wood, Zbur, Robert Rivas NOES: Essayli, Gallagher, Muratsuchi NO VOTE RECORDED: Arambula, Bauer-Kahan, Boerner, Cervantes, Chen, Megan Dahle, Davies, Dixon, Flora, Vince Fong, Gabriel, Irwin, Lackey, Mathis, Stephanie Nguyen, Pacheco, Jim Patterson, Joe Patterson, Reyes, Luz Rivas, Sanchez, Soria, Ta, Waldron, Wallis Prepared by: Alison Hughes / HOUSING / (916) 651-4124 8/6/24 16:10:40 **** END **** SENATE RULES COMMITTEE Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 AB 2021 THIRD READING Bill No: AB 2021 Author: Bauer-Kahan (D) Amended: 6/17/24 in Senate Vote: 21 SENATE PUBLIC SAFETY COMMITTEE: 4-1, 6/25/24 AYES: Wahab, Bradford, Skinner, Wiener NOES: Seyarto SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8 ASSEMBLY FLOOR: 72-0, 4/18/24 (Consent) - See last page for vote SUBJECT: Crimes: selling or furnishing tobacco or related products and paraphernalia to underage persons SOURCE: Author DIGEST: This bill creates a separate fine for firms, corporations, businesses, retailers, or wholesalers that sell or furnish tobacco or tobacco products or paraphernalia to a person who is under 21 years of $500 for the first offense, $1,000 for the second offense, and $5,000 for any subsequent offense. ANALYSIS: Existing law: 1) Provides that every person, firm, or corporation that knowingly or under circumstances in which it has knowledge, or should otherwise have grounds for knowledge, sells, gives, or in any way furnishes to another person who is under 21 years of age any tobacco, cigarette, or cigarette papers, or blunt wraps, or any other preparation of tobacco, or any other instrument or paraphernalia that is designed for the smoking or ingestion of tobacco, tobacco products, or any controlled substance, is subject to either a criminal action for a misdemeanor or a civil action brought by a city attorney, a county counsel, or a district attorney, AB 2021 Page 2 punishable by a fine of $200 for the first offense, $500 for the second offense, and $1,000 for the third offense. (Pen. Code, § 308, subd. (a)(1)(A)(i).) 2) Requires that 25 percent of each civil and criminal penalty collected be paid to the office of the city attorney, county counsel, or district attorney, whoever is responsible for bringing the successful action. (Pen. Code, § 308, subd. (a)(1)(B).) 3) Provides that for purposes of determining the liability of persons, firms, or corporations controlling franchises or business operations in multiple locations for the second and subsequent violations of this section, each individual franchise or business location is deemed a separate entity. (Pen. Code, § 308, subd. (c).) 4) Declares and eventually eliminate the illegal purchase and consumption of tobacco products by any person under 21. (Bus. & Prof. Code, § 22950 et seq.) 5) Requires all moneys collected as civil penalties by the California Department of Public Health (CDPH) and other state agencies that enforce the STAKE Act to be deposited in the State Treasury to the credit of the Sale of Tobacco to Minors Control Account. (Bus. & Prof. Code, § 22953.) 6) Requires any person engaging in the retail sale of tobacco products check the identification of tobacco purchasers, to establish the age of the purchaser, if the purchaser reasonably appears to be under 21 years of age. (Bus. & Prof. Code, § 22956.) 7) Specifies that the STAKE Act establishes minimum state restrictions with respect to the legal age to purchase or possess tobacco products, but does not preempt or otherwise prohibit the adoption of a local standard that imposes a more restrictive legal age to purchase or possess tobacco products. Provides that a local standard that imposes a more restrictive legal age to purchase or possess tobacco products controls in the event of an inconsistency between state law and a local standard. (Bus. & Prof. Code, § 22964.) This bill provides that any business, firm, corporation, retailer, or wholesaler who sells, furnishes, or gives tobacco or tobacco products or paraphernalia, cigarettes, or cigarette papers, blunt wraps, or any other preparation of tobacco, or any other AB 2021 Page 3 instrument or paraphernalia that is designed for the smoking or ingestion of tobacco, tobacco products, or any controlled substance to any person under the age of 21, the firm, corporation, retailer, or wholesaler will be subject to either a criminal action for a misdemeanor or a civil action brought by a city attorney, a county counsel, or a district attorney, punishable by a fine of $500 for the first offense, $1,000 for the second offense, and $5,000 for any subsequent offense. Background Existing law includes a wide range of fines on business owners that violate the law by selling or furnishing tobacco products to people under the age of 21. The identification if the person reasonably appears to be under 21. (Bus. & Prof. Code, § 22956.) CDPH is the state governmental agency tasked with primary enforcement responsibility of the STAKE Act. (Bus. & Prof. Code, § 22957.) CDPH may assess civil penalties for any violation of the STAKE Act as follows: (1) a civil penalty of $400 to $600 for the first violation, (2) a civil penalty of $900 to $1,000 for the second violation within a five-year period, (3) a civil penalty of $1,200 to $1,800 for a third violation within a five-year period, (4) a civil penalty of $3,000 to $4,000 for a fourth violation within a five-year period, or (5) a civil penalty of $5,000 to $6,000 for a fifth violation within a five-year period. (Bus. & Prof. Code, § 22958, subd. (a).) In addition to escalating fines, upon the assessment of a third, fourth, or fifth uncontested violation, CDPH must notify the State Board of Equalization which must then assess a $250 civil penalty and suspend or revoke 8, subd. (b)(1).) Additionally, federal law applies to the sale of tobacco. The Tobacco Control Act imposes fines as follows for the illegal sale of tobacco to a person under 21: (a) a warning for the first violation; (b) up to $279 for a second violation within a one- year period; (c) fines may increase for subsequent violations up to $11,182 and may include a no-tobacco-sale order which prohibits a vendor from selling tobacco for a specified period or permanently. (21 U.S.C. § 387 et seq.) When an individual or business is assessed a criminal fine, the amount owed is the amount specified in the statute in additional to penalty assessments. For example, a $1,000 fine for a violation will result in total amount in excess of $4,000 once the penalty assessments are accounted for. The chart below describes how fines are assessed. AB 2021 Page 4 For a base fine of $1,000: Penal Code § 1464 state penalty on fines $1,000 ($10 for every $10) Penal Code § 1465.7 state surcharge $200 (20%) Penal Code § 1465.8 court operations assessment $40 ($40 per criminal conviction) Government Code § 70372 court construction penalty $500 ($5 for every $10) Government Code § 70373 court facilities assessment $30 ($30 for any felony or misdemeanor) Government Code § 76000 county penalty $700 ($7 for every $10) Government Code § 76000.5 county EMS penalty $200 ($2 for every $10) Government Code § 76104.6 Prop 69 DNA fund penalty $100 ($1 for every $10 Government Code § 76104.7 state penalty $400 ($4 for every $10) Total Fine with Assessments: $4,170 FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No SUPPORT: (Verified 8/5/24) California District Attorneys Association City of Alameda CleanEarth4kids.org County Health Executives Association of California OPPOSITION: (Verified 8/5/24) California Attorneys for Criminal Justice ARGUMENT IN SUPPORT: The County Health Executives Association of California writes: According to the U.S. Centers for Disease Control and Prevention (CDC), in 2023, 2.8 million middle school and high school students reported current use of any tobacco products. From 2022 to 2023, the CDC found a decline in current e-cigarette use among high school middle school students. Although a slight decline has occurred, youth tobacco use in the United States remains a major public health concern. Further, the CDC finds that youth who use multiple tobacco products are at higher risk for developing nicotine dependence and may be more likely to continue using into adulthood. Additionally, AB 2021 Page 5 individuals who use tobacco products are at a significantly higher risk of developing severe health conditions, including cancer, heart disease, emphysema, and chronic bronchitis. In addition, the CDC finds national, state, and local program activities have been shown to reduce and prevent youth tobacco product use when implemented together. Increasing penalties on tobacco products is a promising step toward protecting youth from lifelong harm caused by tobacco. ARGUMENT IN OPPOSITION: According to the California Attorneys for Criminal Justice: While the State has a compelling interest in restricting tobacco use to adults who have reached 21 years of age, the considerable fine increase has great potential to harm small business owners. Under the theory of respondeat superior, a small business owner would face a fine for the actions of a reckless employee working a register. The mall business owners, many of whom operate in marginalized communities with underserved populations. Additionally, there are often sting operations that are carried out. It would be more beneficial to focus these enforcement efforts on larger businesses as opposed to someone who runs a small business who may not be able to absorb the financial impact. CACJ suggests that AB 2021 be amended to only apply to businesses with ten or more employees. ASSEMBLY FLOOR: 72-0, 4/18/24 AYES: Addis, Aguiar-Curry, Alanis, Alvarez, Bains, Bauer-Kahan, Bennett, Berman, Calderon, Juan Carrillo, Wendy Carrillo, Chen, Connolly, Davies, Dixon, Flora, Mike Fong, Vince Fong, Friedman, Gabriel, Gallagher, Garcia, Gipson, Grayson, Haney, Hart, Holden, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Rendon, Reyes, Luz Rivas, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Wood, Zbur, Robert Rivas NO VOTE RECORDED: Arambula, Boerner, Bonta, Bryan, Cervantes, Megan Dahle, Essayli, Mathis AB 2021 Page 6 Prepared by: Stephanie Jordan / PUB. S. / 8/6/24 16:10:42 **** END **** SENATE COMMITTEE ON APPROPRIATIONS Senator Anna Caballero, Chair 2023 - 2024 Regular Session AB 2243 (Wicks) - Affordable Housing and High Road Jobs Act of 2022: objective standards and affordability and site criteria Version: August 5, 2024 Policy Vote: HOUSING 8 - 0, L. GOV. 5 - 1 Urgency: No Mandate: Yes Hearing Date: August 12, 2024 Consultant: Mark McKenzie Bill Summary: AB 2243 would expand and modify provisions of the Affordable Housing and High Road Jobs Act of 2022. Fiscal Impact:  The Department of Housing and Community Development (HCD) estimates costs to implement this bill would be minor. HCD staff would likely need to coordinate with local governments, provide guidance and technical assistance, and manage enforcement activities related to the expanded universe of projects that would be eligible for streamlining under the Affordable Housing and High Road Jobs Act of 2022 (AB 2011). (General Fund)  The Department of Industrial Relations (DIR) would incur unknown annual ongoing costs for oversight and enforcement activities related to prevailing wage and apprenticeship standards on projects constructed pursuant to the expanded provisions of this bill. There would also be unknown penalty revenue gains to partially offset these costs. Actual costs and penalty revenues would depend upon the number of qualifying projects constructed under this bill’s expanded applicability and the number of complaints and referrals to the Division of Labor Standards and Enforcement that require enforcement actions, investigations, and appeals. (State Public Works Enforcement Fund)  Unknown local mandated costs. While the bill would impose new costs on local agencies to revise planning requirements and considerations for an expanded pool of projects that would be eligible for streamlining under the Affordable Housing and High Road Jobs Act of 2022, 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: HCD determined in the 6th Regional Housing Needs Allocation (RHNA), that California must plan for more than 2.5 million new homes, one million of which must be affordable to lower-income households. By contrast, housing production in the past decade has been under 100,000 units per year – including less than 10,000 units of affordable housing per year. Numerous bills have been enacted in recent years to address land use and regulatory constraints of new housing production by providing for streamlined, ministerial approval AB 2243 (Wicks) Page 2 of 5 of certain projects deemed to be a “use by right,” regardless of local zoning. Notable among these was AB 2011 (Wicks), Chap. 647/2022, which authorizes, until 2033, a development proponent to submit an application for an affordable housing development or a mixed-income housing development that meets specified objective standards, affordability, and site criteria, including being located within a zone where office, retail, or parking are a principally permitted use. It also makes a development that meets those criteria to be a use by right and subject to one of two streamlined, ministerial review processes depending on, among other things, the affordability requirements applicable to the project, as specified. Project proponents must ensure that certain labor standards are met, including specified prevailing wage, apprenticeship, and healthcare expense requirements. Projects proposed for streamlining under AB 2011 that are not exclusively composed of affordable units can only be located along commercial corridors that are between 70 and 150 feet wide, and the projects must meet specified height and density requirements. Projects that comprise 100 percent affordable units receive add itional benefits, including that they do not have to be located on a commercial corridor or meet height or density requirements. AB 2011 limited the sites where the bill could apply to avoid specified sensitive environmental sites, as well as sites within 500 feet of a freeway or 3,200 feet of an active oil or gas extraction facility, as specified. Proposed Law: This bill would expand and modify provisions of AB 2011, as follows: Changes to AB 2011’s applicability  Expands the existing definition of “commercial corridor” so that the provisions of AB 2011 apply to some streets that are 50 feet wide (instead of a minimum of 70 feet in current law), specifically: (1) for parcels zoned for a height limit of less than 65 feet, a right-of-way of at least 70 and not greater than 150 feet is required, or (2) for any parcel zoned for a height limit equal to or greater than 65 feet, a right-of-way of at least 50 feet and not greater than 150 feet is required.  Make industrial sites eligible for streamlined ministerial review if either of the following conditions apply: (1) the site has not been occupied for the past three years, or (2) the site, as of January 1, 2022, allowed residential uses as a principally permitted use on the site.  Revise the existing definition of “industrial use” to include any use that requires a permit from an air quality district and specifies that industrial uses exclude power substations and utility conveyances, uses where the only source permitted by an air quality district is a backup generator, and on-site residential self-storage.  Exempt certain undeveloped portions of the Coastal Zone from AB 2011.  Amend the existing definition of “principally permitted use” to specify that parking shall be considered a principally permitted use on a site even if the site requires a conditional use permit for parking, and specifies that the definition of principally permitted use applies to any site that met the definition as of January 1, 2023, or at any time thereafter.  Allow AB 2011’s to apply to larger sites than the 20-acre limitation in existing law if it is a regional mall that is (1) at least 250,000 square feet of permitted retail use, (2) at least two-thirds of the permitted uses on the site are retail uses, (3) at least two of the permitted retail uses on the site that are at least 10,000 square feet, and (4) the project on the site will meet specified objective standards, including that the average AB 2243 (Wicks) Page 3 of 5 size of a block, as defined, cannot exceed three acres, at least 5 percent of the site shall be dedicated to open space; and for a portion of the property that fronts a street that is newly created by the project, a building shall abut within 10 feet of the street for at least 60 percent of the frontage.  Add to AB 2011 a project that will convert an existing office building to housing if it is at least 50,000 square feet.  Expand application of AB 2011 to developments that include housing located within 500 feet of a freeway or within 3,200 feet of oil and gas extraction facilities, so long as these projects meet specified criteria.  Extend existing historic site protection provisions that apply to mixed-income developments to 100 percent affordable developments. Density changes to mixed-income projects  Require projects in a very low vehicle travel area, as defined, to have a minimum density of 80 units an acre, similar to the existing requirements for projects near a major transit stop, but also reduces the minimum density that a housing development project must meet in order to qualify for AB 2011 streamlining as follows: (1) for a housing development project with an application that is deemed complete on or before January 1, 2027: reduced by 25 percent for project sites located in a very low vehicle travel area or within one-half mile of a major transit stop, as defined, and reduced by 50 percent for all other eligible project sites, and (2) for any housing development project with an application that is deemed complete on or after January 1, 2027: reduced by 25 percent.  Remove residential density limits for AB 2011 projects that convert existing buildings into residential uses, unless the development project adds at least 20 percent new square footage to an existing building.  Provide that a development proponent can use density bonus concessions, incentives, and waivers to deviate from AB 2011’s height restrictions, as well as AB 2011’s side and rear setback requirements. Ministerial approval process changes  Make several changes to the process for public agencies to ministerially approve 100 percent affordable and mixed-income housing development projects.  Require a local government to determine if a project is consistent or inconsistent with objective planning standards: (1) within 60 days of submittal of an application if the development contains 150 or fewer housing units, (2) within 90 days of submittal of an application if the development contains more than 150 housing units, and (3) within 30 days of a re-submittal of a development proposal application that addresses written feedback from the local government after the initial submission of the development proposal.  Require a local government to provide the development proponent with an exhaustive list of standards the development conflicts with, as specified.  Establish the following timelines under which the local government must approve the development proposal once it determines that a proposal complies with applicable objective standards: within 90 days of submittal if the development contains 150 or fewer housing units, or (2) within 180 days of submittal if the development contains more than 150 housing units. AB 2243 (Wicks) Page 4 of 5  Consistent with SB 423 (Wiener, 2023), which revised an existing ministerial approval process, this bill would requires a public agency with coastal development permitting authority to approve a coastal development permit if it determines that the development is on an eligible site, as specified, and is consistent with all objective standards of the local government’s certified local coastal program or, for areas that are not subject to a fully certified local coastal program, the certified land use plan of that area. It also would specify that the receipt of any density bonus, concession, incentive, waiver, or reduction of development standards, and parking ratios to which the applicant is entitled under density bonus law shall not constitute a basis to find the project inconsistent with a local coastal program.  Require local governments that utilize existing authority in AB 2011 to exempt a parcel from the streamlining provisions in AB 2011, to update their zoning maps to reflect those changes and post that information on their internet websites.  Modify the requirements to conduct certain environmental assessments to: o Delete language that required development proponents to conduct specified environmental assessments as condition of eligibility for accessing AB 2011 streamlining provisions, as specified. o Require local governments to condition approval of a development eligible for streamlining under AB 2011 on the completion a Phase I Environmental Assessment of hazardous substances, as defined. o Require that if recognized environmental conditions are found on the site additional review and mitigation must be prepared and implemented prior to a local agency issuing a certificate of occupancy for the development. Limitations on local standards that can apply  Impose the following limitations on the ability of local agencies to impose some objective standards on AB 2011 projects, specifically to prohibit (1) local affordable housing requirements that exceed the requirements in the bill, unless the local government makes written findings that would allow a reasonable person, based on clear and convincing evidence, to conclude that the proposed housing development project is economically feasible if it is subject to the requirement, and (2) new common open space requirements for AB 2011 projects that convert existing space from nonresidential buildings to residential uses.  Preclude local objective design standards that either (1) prevent developments from being built to the maximum allowable density established by the bill, or (2) require the development to reduce unit size to meet the objective standard.  Require a local government to provide a credit to the development for any fee, as defined in the Mitigation Fee Act, for existing uses that are demolished as part of the development at the rate established by the local government for those existing uses, as specified, but provides that it does not supersede or in any way alter or lessen the effect of the Mitigation Fee Act. Other changes  Allow a housing development project application submitted on or before December 31, 2024, to use the provisions of AB 2011 as applicable on December 31, 2024, or the provisions of AB 2011 as applicable on or after January 1, 2025. AB 2243 (Wicks) Page 5 of 5  Provide that the Housing Accountability Act applies to development proceedings that move forward under AB 2011, and specifies that this amendment is declaratory of existing law.  Make additional technical, clarifying, and conforming changes and include findings and declarations to support its purposes. Related Legislation: AB 3068 (Haney), which is currently pending on the Senate Floor, would establish a streamlined, ministerial approval process for certain adaptive reuse projects on infill sites, regardless of local zoning, as specified. SB 423 (Weiner), Chap. 778/2023, extended the sunset, amended the labor standards, and made other changes to SB 35 (Wiener), Chap. 366/2017. SB 4 (Weiner, Chapter 771, Statutes of 2023) establishes the Affo rdable Housing on Faith and Higher Education Lands Act of 2023, which, until January 1, 2036, enables 100% affordable housing to be a use by right on land owned by religious institutions and independent institution of higher education. AB 2011 (Wicks), Chap. 647/2022, required specified housing development projects to be a use by right on specified sites zoned for retail, office, or parking, and specified certain labor standards, including requirements to pay prevailing wages, for projects subject to the bill’s streamlining provisions. SB 6 (Caballero), Chap. 659/2022, the Middle Class Housing Act of 2022, establishes housing as an allowable use on any parcel zoned for office or retail uses, and specified certain labor standards, including the use of a skilled and trained workforce, for projects subject the bill’s streamlining provisions. 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 Anna Caballero, Chair 2023 - 2024 Regular Session AB 2485 (Juan Carrillo) - Regional housing need: determination Version: July 3, 2024 Policy Vote: HOUSING 9 - 0 Urgency: No Mandate: No Hearing Date: August 5, 2024 Consultant: Mark McKenzie Bill Summary: AB 2485 would require the Department of Housing and Community Development (HCD) to convene and engage specified stakeholders to consider improvements to the process of determining the housing needs for each region, as specified. The bill would also require HCD to publish specified data and information on its website regarding the decision-making process used to determine regional housing needs. Fiscal Impact:  HCD estimates ongoing costs of approximately $205,000 annually for 1.0 PY of staff to convene and moderate stakeholder meetings to consider improvements to the RHNA process, and to publish specified information on the department’s website. (General Fund) Background: Existing law requires cities and counties to prepare a general plan comprised of seven mandatory elements, including a housing element that identifies existing and projected housing needs. The housing element must include an inventory of adequate sites zoned for housing at all income levels (very low, low, moderate, and above moderate income) and to accommodate a jurisdiction’s share of the regional housing needs that is sufficient to account for population growth and to overcome existing housing deficiencies over the planning period. Housing elements must be updated every eight years in urban areas, and every five years in more rural areas. The regional housing needs assessment (RHNA) process is composed of three main stages: (1) development of regional housing need estimates by HCD and the Department of Finance (DOF), in consultation with regional councils of governments (COGs); (2) allocation of housing within each region by the COGs, or by HCD in an area not within a COG; and (3) incorporation of RHNA allocations into city and county housing elements. If the 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 an annual progress report by April 1 of each year to HCD and the Governor’s Office of Planning and Research on its implementation and progress towards meeting its RHNA amount and removing governmental obstacles to housing development, among other things. Existing law specifies the process for HCD, in consultation with each COG, to determine the existing and projected need for housing in each region. The determination must be based on population projections produced by DOF and regional population forecasts developed by COGs in the preparation of regional transportation plans. If the COG’s estimate is within 1.5% of the DOF estimate, then HCD must use the COG’s estimate. AB 2485 (Juan Carrillo) Page 2 of 2 If the difference is greater than 1.5%, HCD and the COG meet to discuss variances in methodology used for population projections and seek agreement on a projection to use for making a regional housing needs determination. If agreement is not reached, then DOF’s population projection is used, and may be modified by HC D as a result of discussions with the COG. Existing law requires HCD to meet and consult with each COG regarding the assumptions and methodology to be used by HCD to determine regional housing needs at least 26 months prior to the housing element adoption deadline, and prior to developing a region’s housing needs. The COG must provide specified data assumptions, which HCD may accept or reject, or modify its own assumptions or methodology based on the COG’s information. After consultation with a COG, HCD must make a determination of the region’s existing and projected housing need. The COG may file an objection to HCD’s determination, as specified, within 30 days, which HCD must consider within 45 days and make a final written determination of the region’s housing needs that includes an explanation of the information upon which the determination was made. The COG must use HCD’s final determination to create an allocation methodology that distributes the housing need equitably amongst all the local governments in its region. Proposed Law: AB 2485 would require HCD, for the eighth and subsequent revisions of the housing element, to do the following:  Convene and engage stakeholders, including demographers, data experts, and COGs, to consider improvements to the process of determining the existing and projected need for housing for each region, including to the accuracy and transparency of the assumptions and methodologies used to determine a region’s housing need. This engagement process must occur before determining any region’s housing needs.  Publish on its internet website the data sources, analyses, and methodology, including assumptions and factors used in and applied to the DOF projections and COG engagement process, and a summary of the information and determinations described above, prior to finalization of a region’s housing needs. Related Legislation: AB 3093 (Ward), which is currently pending in this Committee, would establish two new categories, acutely low income and extremely low income, that must be accounted for in the RHNA process and housing element law, as specified. Staff Comments: In March 2022, the State Auditor examined the RHNA process and identified several errors in HCD’s housing projections, resulting in a decrease in the housing amounts assigned to some jurisdictions. The Auditor attributed HCD’s miscalculations to a lack of oversight in staff data entry and a failure to consider all factors required by state law in its estimates. Additionally, the Auditor found these shortcomings risk eroding public confidence in HCD’s ability to provide accurate information to COGs about housing needs. The report recommended a formal review process and thorough documentation measures to ensure all RHNA calculations provided to COGs by HCD are accurate. -- END -- é é SB 402 Page 1 Date of Hearing: August 7, 2024 ASSEMBLY COMMITTEE ON APPROPRIATIONS Buffy Wicks, Chair SB 402 (Wahab) – As Amended July 3, 2024 Policy Committee: Health Vote: 16 - 0 Judiciary 10 - 0 Urgency: No State Mandated Local Program: Yes Reimbursable: Yes SUMMARY: This bill authorizes, for a “5150 hold,” a licensed mental health professional (LMHP) who is not direct staff of, or contracted by, a county to take into custody a person who, as result of a mental health disorder, is a danger to self or others, or gravely disabled, under certain conditions and expands related requirements regarding information collection and publication. Specifically, this bill: 1) Authorizes, until January 1, 2030, an LMHP who is designated by a county but is neither direct staff of, or contracted by, the county to take a person into custody for a 5150 hold, meaning an involuntary detention for evaluation and treatment of a person who, as result of a mental health disorder, is a danger to self or others, or is gravely disabled. 2) Defines “licensed mental health professional” as a psychiatrist, psychologist, licensed clinical social worker, licensed marriage and family therapist, or licensed professional clinical counselor who holds a current and active license in good standing and has completed the supervised clinical experience required for the license. 3) Prohibits an LMHP who is not direct staff of, or contracted by, a county from transporting a person who is being taken into custody for a 5150 hold, unless specifically authorized by the county to do so. 4) Requires the Department of Health Care Services (DHCS) to collect the following, in addition to what it already collects quarterly and publishes annually: a) The number of individuals designated by each county to perform functions under Section 5150 of the Welfare and Institutions Code, and the profession of each individual, including license type, practice discipline, or clinical experience, and whether they are direct staff of, or contracted by, the county. b) The number of such holds initiated per profession, including the license type, practice discipline, and clinical experience. c) The number of designations denied or revoked by a county, and the profession of each individual subject to such denial or revocation, including license type, practice discipline, or clinical experience and whether they are direct staff of, or contracted by, the county. d) The number of holds initiated by a peace officer. SB 402 Page 2 5) Requires each law enforcement agency to submit, as required by DHCS and without patient name identifiers, the number of holds initiated by a peace officer. FISCAL EFFECT: 1) DHCS estimates General Fund costs of $184,000 in fiscal year (FY) 2024-25, $287,000 in FY 2025-26, $1,291,000 in FY 2026-27 and $1,237,000 in FY 2027-28 and ongoing. DHCS states it will need eight permanent full-time staff members to do the following: draft all- county letters, provider bulletins, and policies and procedures for the various data requirements and consequences of failure to report; ensure compliance; collect and process data; manage and interpret data; monitor data to ensure quality; translate technical needs to collect the required data; provide technical assistance to data submitters; transform data into suitable formats for ongoing reporting; and create visualizations with additional data elements. 2) The County Behavioral Health Directors Association (CBHDA) estimates annual ongoing costs of $3.4 million to $4.6 million for counties to hire additional staff to meet new data collection and reporting requirements, increase the number of trainings for newly designated mental health providers, and provide licensing and supervised clinical experience verification to the increased number of designees. Fund sources would be local funds and Mental Health Services Fund. 3) Costs to local law enforcement agencies for data collection is likely negligible. If the Commission on State Mandates determines the reporting requirement of this bill constitute a state-mandated local program, a local agency could claim General Fund reimbursement of those costs. According to the Legislative Analyst’s Office, the General Fund faces a structural deficit in the tens of billions of dollars over the next several fiscal years. COMMENTS: 1) Purpose. According to the author: SB 402 is vital legislation that will allow for appropriately trained and licensed mental health professionals to initiate the placement of an individual experiencing a mental health crisis on a 72 hour...5150 hold. Currently, mental health professionals are significantly limited in providing support to vulnerable populations...This proposal seeks to rectify this by authorizing a broader spectrum of licensed mental health professionals—such as Licensed Marriage & Family Therapists (LMFT), Licensed Clinical Social Workers (LCSW), and Licensed Professional Clinical Counselors (LPCC)—to intervene promptly in mental health emergencies…This strategic expansion aligns with contemporary best practices, ensures more inclusive crisis response, reduces the burden on law enforcement, and ultimately enhances public safety. This bill can save lives. SB 402 Page 3 2) Background. The Lanterman-Petris-Short (LPS) Act 5150 Holds. The LPS Act provides for involuntary detentions for varying lengths of time for the purpose of evaluation and treatment, if certain requirements are met, such as that an individual is taken to a county-designated facility. Typically, one first interacts with the LPS Act through a 5150 hold initiated by a peace officer or other person authorized by a county, who must determine and document that the individual meets the standard for a 5150 hold. A county-designated facility may then involuntarily detain an individual for up to 72 hours for evaluation and treatment if they are determined to be, as a result of a mental health disorder, a danger to self or others, or gravely disabled. The professional in charge of the county-designated facility is required to assess an individual to determine the appropriateness of the involuntary detention prior to admitting the individual. Under certain conditions, the detained person may be subsequently involuntarily detained for an initial up-to 14 days for intensive treatment, an additional 14 days (or up to an additional 30 days in some counties), and ultimately, a conservatorship, which is typically for up to a year and may be extended as appropriate. County Designation. The LPS Act allows a county behavioral health director to develop procedures for designating and training people other than peace officers to initiate involuntary holds. 3) Concerns. The Assembly Health Committee analysis of this bill raises numerous concerns about this bill, contrasting the bill’s language with the author’s stated intent. The Assembly Health Committee analysis contends: a) Existing law already allows a county to develop procedures to designate and train people who will be authorized to perform functions for 5150 holds, this bill does not change the authority, and this bill unnecessarily proposes a narrow definition of LMHPs who may be, and in many counties already are, designated to initiate 5150 holds. b) Nothing in this bill will reduce law enforcement involvement in either 5150 holds or crisis response, in spite of the author’s assertion otherwise. c) Existing law already permits any “professional person” to be designated by the county – there are no requirements that the professional work for or be contracted with the county. 4) Prior Legislation. a) SB 929 (Eggman), Chapter 539, Statutes of 2022, expands DHCS’ responsibility to collect and publish information about involuntary detentions under the LPS Act to include additional information, such as clinical outcomes, services provided, and availability of treatment beds, and requires DHCS to convene a stakeholder group to make recommendations on how to provide this information. SB 929 also requires each entities involved in LPS Act to provide data to DHCS upon request, and requires DHCS to annually report to the Legislature information concerning the LPS system. b) AB 1443 (McCarty), Chapter 399, Statutes of 2021, permits a county to develop training and procedures related to taking, or causing to be taken, a person into custody for an involuntary detention, as specified. Requires the County of Sacramento to develop a written policy for training and procedures for designating persons who are employed by SB 402 Page 4 the City of Sacramento and who meet specified criteria to involuntarily detain individuals. Analysis Prepared by: Allegra Kim / APPR. / (916) 319-2081 SENATE RULES COMMITTEE Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 SB 1031 THIRD READING Bill No: SB 1031 Author: Wiener (D) and Wahab (D), et al. Amended: 5/20/24 Vote: 21 SENATE TRANSPORTATION COMMITTEE: 11-4, 4/23/24 AYES: Cortese, Allen, Archuleta, Blakespear, Dodd, Gonzalez, Laird, Limón, Newman, Portantino, Umberg NOES: Niello, Dahle, Nguyen, Seyarto SENATE REVENUE AND TAXATION COMMITTEE: 6-1, 4/24/24 AYES: Glazer, Ashby, Bradford, Dodd, Padilla, Skinner NOES: Dahle SENATE APPROPRIATIONS COMMITTEE: 5-2, 5/16/24 AYES: Caballero, Ashby, Becker, Bradford, Wahab NOES: Jones, Seyarto SUBJECT: San Francisco Bay area: local revenue measure: transportation improvements SOURCE: Author DIGEST: This bill authorizes the Metropolitan Transportation Commission (MTC) to propose new taxes, allocate new revenue and issue bonds for specified transportation projects, and requires the State Transportation Agency to consider transit agency consolidation within the San Francisco Bay area. Senate Floor Amendments of 5/20/24 add clarification to the bill. SB 1031 Page 2 ANALYSIS: Existing law: Establishes MTC as the transportation planning, coordinating, and financing agency for the nine-county San Francisco Bay Area, and specifies its governance, structure duties, and powers. This bill: Consolidation Assessment and Report 1) Requires the California State Transportation Agency (CalSTA) to oversee the completion of a comprehensive assessment of the benefits, disbenefits, and feasibility of consolidation among Bay Area transit agencies. The assessment shall be completed by January 1, 2026. 2) Requires CalSTA to develop a report of recommendations to the Legislature by January 1, 2027 based on the findings of the assessment. Travel Demand Management 1) Authorizes MTC to include additional requirements to existing commuter benefit program as part of a ballot measure that would: a) Requires a covered employer that is located in proximity to transit to purchase a regional transit pass for each of its employees that provides universal and unlimited access to transit services, as specified. b) Requires a covered employer that is not located in proximity to transit to provide a subsidy to each of its employees corresponding in financial value to the regional transit pass. Metropolitan Transportation Commission 1) Makes MTC responsible for implementing a seamless transit rider experience across the region and requires MTC to adopt and update rules and regulations to promote the coordination of fares, as specified, scheduling, mapping and way finding, real-time transit information and other customer-facing policies. SB 1031 Page 3 2) Requires MTC to require every transit system to enter into a joint fare revenue 3) Requires MTC to develop an expenditure plan before placing a measure on the ballot (see below). Revenue Measures 1) Authorizes MTC, either directly or through a qualified voter initiative, to raise and allocate new revenue through all of the following funding mechanisms: a) A retail sales and use tax, which cannot exceed one-half of one percent. b) A regional payroll tax. c) A parcel tax. d) A regional vehicle surcharge. 2) Specifies intent that the amount raised be $1.5 billion annually. 3) Prohibits any new tax from being imposed for longer than 30 years. 4) Until January 1, 2041, grants MTC broad authority over when and how often any of the funding mechanisms, or a combination of funding mechanisms, can be placed on the ballot subject to the following: a) No funding measure can be placed on the ballot in the Counties of Marin and Sonoma before November 2028. b) Before a measure is placed on the ballot MTC shall develop an expenditure plan for the revenues expected to be generated by the measures placed on the ballot in consultation with county transportation authorities. That expenditure plan must be approved by county transportation authorities representing both a majority of the counties in which MTC chooses to place the measures and a majority of the total population in all the counties in which the commission has determined to place the measure. c) A measure proposing a regional vehicle surcharge may not be placed on the ballot until January 1, 2030. SB 1031 Page 4 5) Exempts any sales tax increase authorized by the measure from contributing to the combined sales tax rate limit for any entity in the region. Expenditures 1) Requires that at least 70% of the revenues generated in each county be invested in projects and programs that benefit that county, including transit operations funding for transit agencies that serve riders of that county, for the first five year period that the tax is operative. After the first five year period the minimum county benefit threshold is 90% for each succeeding five year period. 2) Provides that if the Counties of Marin and Sonoma participate in the election approving a tax measure, MTC shall annually allocate revenues equivalent to the revenue that would be collected with a one-quarter of one percent sales tax in those counties to the Sonoma-Marin Area Rail Transit District (SMART). This provision does not apply if a sales tax to fund SMART is in effect on or after April 1, 2029. 3) Requires that 45% of the revenues support transit transformation, which includes improving transit service, implementing customer-focused improvements, and deployment of zero-emission vehicles, though for the first five years the priority is to assist transit operators in preventing service cuts. To be eligible for these funds the public transit agency must be in compliance with to coordinate fares and schedules. Of the 45%, not less than 40% of revenues shall be allocated by county based on the share of the revenue generated in each county, as determined by MTC. Of the 40%, the CTC shall ensure that each public transit agency receives a minimum annual funding of $5 million to $25 million, based on ridership. 4) Requires that not less than 25% of the revenues support projects to transform local streets to support safety, social equity, and climate goals. These funds shall be allocated to the county transportation authority from which the funds were generated. 5) Requires at least 15% of the revenues support connectivity, which includes highway, transit and rail mobility projects that close gaps and relieve bottlenecks in the existing transportation network in a climate neutral manner, as well as resilience improvements, active transportation projects and safety improvements. All of these revenues shall be allocated to the county SB 1031 Page 5 transportation authority representing the county from which the revenue was generated. 6) Requires transit agencies to maintain existing commitments of local funds to transit operations in order to be eligible for funding from the measure, except in proportion to any reduction in operating costs. Bonds 1) Authorizes and provides procedures for MTC to incur indebtedness and issue bonds and other securities against the revenues raised pursuant to this bill. 2) Bond proceeds can only be used to fund capital investments consistent with the expenditures authorized by this bill. Elections Procedures 1) Establishes MTC as a district for the purposes of the placement of a measure on the ballot. 2) If the measure is successful, requires MTC to establish an independent oversight committee, as defined, to ensure that any revenues generated pursuant to this section are expended consistent with the statute. Miscellaneous 1) Requires any legal challenge to any provision of the bill to be commenced within 60 days of the date of the election at which the tax is approved. After that date all financing, bond issuances, and collection of taxes shall be valid and incontestable. 2) Requires MTC, no later than April 1, 2025, to update its regional transportation plan to include the extension of rail transit service operated by the Sonoma- Marin Area Rail Transit District to the City of Cloverdale in Sonoma County as part of its sustainable community strategy. Background 1) MTC is the transportation planning, financing and coordinating agency for the nine-county San Francisco Bay Are SB 1031 Page 6 metropolitan planning organization and state-designated regional transportation mandated long-range transportation plan and state-mandated sustainable communities strategy, a 25-year roadmap to achieving state-mandated goals to reduce greenhouse gas emissions (GHG) from cars and light truck travel, including planning for adequate housing near jobs and transit to accommodate expected population growth. MTC distributes roughly $850 million in federal transportation funds each year for transportation investments across the Bay transit capital funds. Additionally, MTC is responsible for apportioning nearly $1.1 billion in state and locally generated transit operating revenues each year, including roughly $750 million in discretionary operating funds. 2) Bay Area transit and the pandemic. The Bay Area transit network includes nine counties with 27 transit operators. The agencies range from large agencies such as BART and Caltrain which serve tens of millions of riders annually to much smaller ones such as Petaluma Transit and the Rio Vista Delta Breeze. Public transit ridership has been declining for decades, nationally and in California, far before the COVID-19 pandemic. The San Francisco Bay Area, those trends. Prior to the pandemic, Bay Area transit operators were serving roughly 900,000 passengers per day. In 2017 and 2018, the region lost over 5% of its annual riders despite service increases. 3) The transit fiscal cliff. With the onset of the COVID-19 pandemic during the first half of 2020, transit ridership plunged from 50% to as much as 94% in California. Specifically, Caltrain saw a 98% decline in ridership; the Bay Area Rapid Transit District (BART) saw an 88% decline in transit ridership. Bus lines in the Bay Area fared slightly better. San Francisco Metropolitan Transit Association (SFMTA), who operates MUNI, saw a 70% decline in ridership and AC Transit saw a 72% decline. In an effort to stave off financial losses from declining transit ridership, the federal government provided relief for transit operators across the country. In addition, in June 2023 the Legislature passed and Governor Newsom signed into law the 2023-24 State Budget which provides $5.1 billion for transit agencies to use for both capital and operating expenditures. Of these funds, the Bay Area is expected to receive roughly $800 million in funds that were previously committed to two major capital projects SB 1031 Page 7 BART to Silicon Valley Phase 2 project. Additionally, the Bay Area will receive roughly $400 million in funding which can be used flexibly for operations or zero emissions transition investments. The transit capital project funding was also made flexible for operations. Bay Area transit operators face a $169 million standardized operating shortfall in budget year 2024-25, which grows to the $600 million range in 2025-26 and beyond 4) Regional Network Manager Coordination. In May of 2020, MTC created the Blue Ribbon Transit created by the COVID- report, Bay Area Transit Transformation Action Plan, in June of 2021. Comments 1) New Regional Measure. This bill authorizes MTC either directly or through a qualified voter initiative to raise and allocate new revenue. The measure authorizes a variety of revenue mechanisms, including a combination of them. There is no limitation on the number of times MTC can place a measure on the ballot, the duration of the measure, or the funding amount. MTC is permitted to use an election process which requires a majority vote rather than a 2/3 vote. 2) Superagency. The priority of this bill is transit regionalization which reflects a belief that better coordination of the 27 independent transit agencies is foundational to improving transit service. To do this the bill elevates MTC, the regionally focused transportation planning agency, giving them authority to craft ballot measures to raise taxes for the purposes described in the bill and to place those measures before the voters at a general election of their choosing subject to specified constraints. MTC is given responsibility for implementing required to adopt rules and regulations to promote coordination of fares, payment methods, scheduling, mapping, real-time transit information and other policies which benefit from a regional approach for all public transit agencies in its jurisdiction. 3) Spending Is Primarily for Transit Operations and Provides a Moderate but Increasing Return to Source Guarantee. Most of the funding in this bill goes toward transit with a secondary emphasis on safe streets: 45% is dedicated for investments that support transit transformation, as specified. At least 25% is dedicated to investments that support safe streets, such as bicycle and pedestrian infrastructure. At least 15% is dedicated for investments that support SB 1031 Page 8 connectivity in the existing transportation network in a climate-neutral manner. Traffic congestion relief is not prioritized. This bill requires that not less than 70% of revenues from each county must be invested in projects and programs that benefit that county for the initial five- year period. transit agencies that serve riders of that county. After the initial five-year period the 70% minimum increases to 90%. 4) Locally Supported Expenditures Plans. Before placing a tax increase on the ballot the bill requires MTC to create an expenditure plan in consultation with county transportation authorities. That plan must be approved by both a majority of county transportation authorities and by county transportation authorities representing a majority of the population of all the counties in which the ballot measure is to be placed. The relative population of each of the Bay Area counties: Santa Clara -- 25% Alameda -- 22% Contra Costa --15% San Francisco -- 11% San Mateo -- 10% Sonoma -- 6% Solano -- 6% Marin -- 3% Napa -- 2% 5) Consolidation. I transit agencies is a key objective of this bill. There may be many opportunities to improve service and increase ridership by better coordinating service, reducing redundancies, sharing infrastructure and procurements, and reducing costs. FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes According to the Senate Appropriations Committee: CalSTA estimates that costs related to this bill could be as high as the low tens of millions for consultant contracting costs and workload associated with stakeholder engagement, completion of the specified comprehensive assessment of the 27 Bay Area transit agencies by 2026, and developing recommendations for the report to the Legislature by 2027. Staff notes that detail to support the estimate was not available at the time of this analysis. Staff estimates costs would at least be in the high millions, and could potentially exceed $10 million, based on the level of engagement and analysis required by the bill, and the accelerated timelines for completion of the assessment and report. (State Highway Account, Public SB 1031 Page 9 Transportation Account) Unknown significant local costs related to the substantial workload imposed on MTC as a result of this bill in advance of placing any revenue measures before voters in the nine-county Bay Area, including paying for the county costs associated with elections. Ongoing MTC costs would be covered from the 1% set- aside of any new revenues collected from the various taxes and charges authorized by the bill, as specified. Staff is unaware of any instances in which MTC has been deemed an eligible claimant for state reimbursement for mandated costs. from the General Fund would be subject to a determination by the Commission on State Mandates, should MTC file a reimbursement claim. (General Fund) Unknown, potentially significant costs for the California Department of Tax and Fee Administration (CDTFA), the Employment Development Department, and/or the Department of Motor Vehicles (DMV) to administer the collection of sales and use taxes, payroll taxes, or vehicle registration surcharges, respectively, to the extent those taxes are proposed by MTC and approved by the voters. These costs would be fully recovered from the new tax revenues. Major local tax revenue gains of up to $1.5 billion annually to fund specified transportation improvements in the Bay Area, as specified. (local funds) Unknown, significant General Fund cost pressures to deposit funding into the Bay Area Transit Consolidation and Coordination Technical Assistance Fund, which is created by this bill. Any moneys deposited into the fund would be available, upon appropriation by the Legislature, to pay for the costs of the CalSTA assessment and report, and for administrative expenses related to the implementation of the consolidation of transit agencies, if those consolidations occur. (General Fund) SUPPORT: (Verified 5/16/24) Board of Supervisors for The City and County of San Francisco California Yimby Housing Action Coalition Metropolitan Transportation Commission Napa County Transportation and Planning Agency/Napa Valley Transportation Authority San Francisco Bay Area Water Emergency Transportation Authority San Francisco County Transportation Authority Seamless Bay Area SB 1031 Page 10 Sustainable Silicon Valley Wellstone Democratic Renewal Club OPPOSITION: (Verified 5/16/24) Alameda County Taxpayers' Association California Association of Realtors California Chamber of Commerce California Taxpayers Association Coalition of Sensible Taxpayers (COST) Contra Costa Taxpayers Association D2unite Howard Jarvis Taxpayers Association Iconic D3 Kern County Taxpayers Association Orange County Taxpayers Association Sensible D7 Soar - Save Our Amazing Richmond Sun - Sunset United Neighbors Associated General Contractors of California Bay Area Council California Alliance for Jobs California State Council of Laborers City/county Association of Governments of San Mateo County International Union of Operating Engineers, Cal-nevada Conference Livermore Amador Valley Transit Authority North Bay Leadership Council Peninsula Corridor Joint Powers Board (CALTRAIN) San Mateo County Transit District (SAMTRANS) Santa Clara Valley Transportation Authority Sonoma County Transportation Authority/regional Climate Protection Authority Prepared by: Randy Chinn 651-4121 5/21/24 18:07:45 **** END **** SB 1037 Page 1 SENATE THIRD READING SB 1037 (Wiener) As Amended June 13, 2024 Majority vote SUMMARY Creates new legal remedies that can be used by the Attorney General (AG) to enforce the adoption of housing element revisions or to enforce any state law that requires a local government to ministerially approve any planning or permitting application related to a housing development project. Major Provisions 1) Provides that in any action brought by the AG, on behalf of the Department of Housing and Community Development (HCD) or in an independent capacity, to enforce the adoption of housing element revisions, as specified, or to enforce any state law that requires a city, county, or local agency to ministerially approve, without discretionary review, any planning or permitting application related to a housing development project, the city, county, or local agency shall be subject to the following remedies: a) A civil penalty of, at minimum, $10,000 per month, and not exceeding $50,000 per month, for each violation, accrued from the date of the violation until the violation is cured; b) All costs of investigating and prosecuting the action, including expert fees, reasonable attorney's fees, and costs, whenever the AG prevails in a civil action to enforce any state laws under this bill, with awards paid to the Public Rights Law Enforcement Special Fund, as specified; and c) Other relief as the court deems appropriate, including equitable and injunctive relief, provisional or otherwise; any injunction ordered by the court under this bill must be deemed to be prohibitory, and not affirmative. 2) Applies the penalties in this bill only when the agency's acts or omissions in 1), above, are arbitrary, capricious, entirely lacking in evidentiary support, contrary to established public policy, unlawful, or procedurally unfair. 3) Establishes the purpose of the bill is to ensure adequate remedies are available to ensure that state laws mandating streamlined, ministerial approvals related to housing development projects, and the timely adoption of housing element revisions, are promptly and faithfully followed. 4) Requires any civil penalty levied under the bill to be deposited into the Building Homes and Jobs Trust Fund (the Fund) for the sole purpose of supporting the development of affordable housing located in the affected jurisdiction. 5) Requires the expenditure of any penalty moneys deposited into the Fund to be subject to appropriation by the Legislature. SB 1037 Page 2 6) Prohibits any penalty imposed under this bill from being paid out of funds already dedicated to affordable housing, including, but not limited to, very low, low-, and moderate-income households. 7) Allows the court, in the event a city, county, or local agency fails to pay civil penalties imposed by the court, to require the Controller to intercept any available state and local funds and direct those funds to the Fund to correct the jurisdiction's failure to pay, to the extent permitted under the California Constitution. 8) Notwithstanding 4) and 5), above, if the penalty moneys have not been expended five years after deposit, allows the penalty moneys to be used, upon appropriation, to finance newly constructed affordable housing units in the state without any geographic restrictions. 9) Provides that the liability, penalties, and remedies imposed by this bill are in addition to any other liability, penalties, and remedies imposed by any other law. 10) Provides that the remedies available to the AG under this bill do not limit or affect the remedies available to any other party seeking to enforce specified laws. 11) Applies the provisions of this bill to all cities, including charter cities. COMMENTS Background: In recent years, the Legislature has implemented many policy changes to address the housing deficit, including streamlined, ministerial approval of housing and requiring local governments to plan and zone for more housing via the housing element process. For many years prior to the enactment of these and other laws, local governments often treated the housing element and other housing requirements as a "paper exercise" because the state lacked strong enforcement tools to ensure compliance. AB 72 (Santiago, Chapter 370, Statutes of 2017) established a process for HCD to enforce state housing laws. AB 72 requires HCD to notify a local government, and allows HCD to notify the AG, if HCD finds that a local government's housing element does not substantially comply with state law, or if any local government has taken an action in violation of specified housing laws. In addition to the expanded authority under AB 72, HCD has created and staffed a Housing Accountability Unit, which provides education and technical assistance as well as oversight and enforcement of housing element laws to ensure local governments comply with specified state housing laws. Violations of these laws may lead to a variety of consequences for local governments, including referral to the AG for further civil action. In 2022, AG Bonta created a Housing Strike Force within the Department of Justice. The Strike Force is a cross-sectoral team of attorneys who work with state agencies and partners to enforce statewide housing laws. Last year, the Legislature passed and the Governor signed AB 1485 (Haney, Chapter 763, Statutes of 2023), which granted HCD and the AG the unconditional right to intervene in any suit brought to enforce specified housing laws. The purpose of that bill was to strengthen the state's ability to enforce housing laws and ensure that the state's interests are heard as a matter of right in private litigation dealing with the application of those laws. SB 1037 Page 3 Furthermore, many of the laws referenced above also provide a mechanism for private third party actors for example, developers, advocacy organizations, and members of the public to file their own lawsuits to challenge local land use planning and permitting decisions. Housing Accountability Act (HAA): In 1982, in response to the housing crisis, which was viewed as threatening the economic, environmental, and social quality of life in California, the Legislature enacted the HAA. The purpose of the HAA is to help ensure that a city does not reject or make infeasible housing development projects that contribute to meeting the housing need determined pursuant to the Housing Element Law without a thorough analysis of the economic, social, and environmental effects of the action and without complying with the HAA. The HAA restricts a city's ability to disapprove, or require density reductions in, certain types of residential projects. The HAA does not preclude a locality from imposing developer fees necessary to provide public services or requiring a housing development project to comply with objective standards, conditions, and policies appropriate to the localities share of the regional housing needs assessment. The HAA provides a private right of action to parties, including the development proponent, a person who would be eligible to live in the proposed development, or a housing organization, who wish to challenge a local government that denied approval or imposed severely burdensome conditions for approval on a housing development project. If a locality denies approval or imposes conditions that have a substantial adverse effect on the viability or affordability of a housing development for very low-, low-, or moderate-income households, and the denial or imposition of conditions is subject to a court challenge, the burden is on the local government to show that its decision is consistent with specified written findings. If a court finds that a locality violated the HAA, a court must issue an order or judgment compelling compliance with the HAA within 60 days, including, but not limited to, an order that the locality take action on the housing development project or shelter. The plaintiff is entitled to attorney's fees unless the court find that awarding fees would not further the purposes of the HAA. If a locality fails to comply within 60 days, the court must impose fines, a minimum of $10,000 per housing unit in the housing development project, which must be deposited in a local housing trust fund. The court may also directly approve the housing development project. If the court finds the locality acted in bad faith, in addition to other remedies, the court must multiply the fine by a factor of five. More Teeth: Despite the recent actions by the state to facilitate housing construction at the local level, some local governments continue to violate state law. For example, some cities have been reluctant to process qualifying applications ministerially and others have placed obstructionist requirements to attempt to stop those developments altogether. According to the sponsor, AG Bonta, his office has taken action against some of the most egregious actors, but the remedies available under existing law which provide lengthy off-ramps for curing even after a court finds a state law violation are not effective at deterring bad behavior. This bill seeks to impose fines with a finding of a state law violation more quickly to try to deter bad behavior from occurring in the first place, and also to deter a bad actor from "running out the clock" on the cure period, which may be done in hopes that the delays will harm or render infeasible the housing development in question. This bill imposes on a local government, in addition to any other liability, fines, or remedies imposed by any other law, specific penalties for a finding of a violation of state housing element law, or violation of state law authorizing the SB 1037 Page 4 streamlined, ministerial approval of a housing development project, in a lawsuit brought by the AG. Specifically, the local government would be subject to a civil penalty of between $10,000 and $50,000 per month, for each violation, accrued from the date of the violation until the date the violation is cured; all costs associated with investigating and prosecuting the action; and any other relief the court may deem appropriate. Additionally, the bill clarifies that the remedies provided in this bill do not preclude the imposition of other remedies authorized under existing law. Civil penalty funds would be deposited in the Building Homes and Jobs Fund, specifically to develop affordable housing in the affected jurisdiction. If the affected jurisdiction fails to expend the money in five years, the money would revert to the state for purposes of building affordable housing anywhere in California. Recent amendments provide that these heightened penalties will not be applied to jurisdictions that a court finds are attempting to comply in good faith with the law's requirements or who face substantial undue hardships that are delaying compliance. The bill will only be available to the AG and courts in situations where local acts or omissions to violate state housing laws are found to be arbitrary, capricious, entirely lacking in evidentiary support, contrary to established public policy, unlawful, or procedurally unfair. According to the Author "Senate Bill 1037 will enhance the Attorney General's ability to seek civil penalties against local governments that are found by a court to have violated state housing law. Currently, the Attorney General can bring an action for violation of a ministerial approval law, but even if the Attorney General prevails in court, the local government has sixty days to cure its violation and thus avoid all penalties. As a result, local governments have little incentive to comply with the law. Cities should face immediate consequences after entry of a court judgment for violating state housing laws, and SB 1037 accomplishes this goal. SB 1037 will allow the Attorney General to seek between $10,000 and $50,000 in civil penalties per violation each month as a remedy in legal actions against local governments for noncompliance with housing element law or violating state ministerial approval laws." Arguments in Support AG Bonta, the bill's sponsor, writes in support, " ability to seek civil penalties in court against local governments that violate existing state housing laws, specifically housing element law and ministerial approval laws. Currently, when a court finds a local government in violation of these state housing laws, monetary penalties can only be imposed 60 days, or in some cases up to a year, after a court has ordered compliance and the violation continues. In the meantime, housing development projects are delayed, which often is enough to block a project from ever moving forward. SB 1037 would allow the Attorney General to instead seek new penalties that are assessed from the date that the housing law when the Attorney General warns local governments that they are out of compliance. Penalty money would be earmarked to support the development of affordable housing located in the affected jurisdiction." Arguments in Opposition According to the League of California Cities, "Unfortunately, as currently drafted, SB 1037 does not provide an opportunity for cities to correct an honest mistake or address a genuine difference in interpreting the law. Even those jurisdictions acting in good faith could be subject to significant fines and be required to pay the Attorney General for all costs investigating and SB 1037 Page 5 prosecuting the action, including expert witness fees and attorney's fees. In addition, the language used to define when penalties apply is vague, particularly the use of the following terms 'The penalties set forth in this section shall only apply when local land use decisions or actions are contrary to established public policy, unlawful, or procedurally unfair.' These subjective standards can be interpreted in numerous ways, leading to inconsistent enforcement and unpredictable legal outcomes. This lack of clarity could result in frequent legal challenges as cities attempt to navigate the uncertain parameters set forth by the measure. Consequently, local governments may find themselves entangled in costly legal disputes, diverting resources away from providing essential services to the community and local housing development efforts." FISCAL COMMENTS According to the Assembly Committee on Appropriations: 1) The Attorney General's Office (Department of Justice) anticipates negligible costs. 2) Cost savings to the courts (Trial Court Trust Fund, General Fund) to the extent more immediate penalties compel compliance more expeditiously than the processes in current law, resulting in avoided proceedings. VOTES SENATE FLOOR: 24-9-7 YES: Ashby, Atkins, Blakespear, Bradford, Caballero, Cortese, Dodd, Durazo, Eggman, Glazer, Gonzalez, Hurtado, Laird, McGuire, Menjivar, Min, Padilla, Roth, Skinner, Smallwood-Cuevas, Stern, Umberg, Wahab, Wiener NO: Dahle, Grove, Jones, Newman, Nguyen, Niello, Ochoa Bogh, Seyarto, Wilk ABS, ABST OR NV: Allen, Alvarado-Gil, Archuleta, Becker, Limón, Portantino, Rubio ASM HOUSING AND COMMUNITY DEVELOPMENT: 8-1-0 YES: Ward, Joe Patterson, Grayson, Kalra, Lee, Quirk-Silva, Reyes, Haney NO: Sanchez ASM JUDICIARY: 8-2-2 YES: Kalra, Bryan, Connolly, Haney, Maienschein, McKinnor, Joe Patterson, Reyes NO: Dixon, Sanchez ABS, ABST OR NV: Bauer-Kahan, Pacheco ASM APPROPRIATIONS: 11-4-0 YES: Wicks, Arambula, Bryan, Calderon, Wendy Carrillo, Mike Fong, Grayson, Haney, Hart, Pellerin, Villapudua NO: Sanchez, Dixon, Jim Patterson, Ta UPDATED VERSION: June 13, 2024 CONSULTANT: Nicole Restmeyer / H. & C.D. / (916) 319-2085 FN: 0003707 SB 1060 Page 1 Date of Hearing: June 26, 2024 ASSEMBLY COMMITTEE ON INSURANCE Lisa Calderon, Chair SB 1060 (Becker) – As Amended June 18, 2024 SENATE VOTE: 29-8 SUBJECT: Property insurance underwriting: risk models SUMMARY: Attempts to address insurers using risk models for underwriting purposes. Specifically, this bill: 1) Allows a property insurer who uses risk models for underwriting to account for wildfire risk reduction associated with hazardous fuel reduction, home hardening, defensible space, and fire prevention activities for properties, communities, and landscapes. 2) Requires an insurer using risk models for underwriting purposes (considering factors in (1) above) to report to the California Department of Insurance (CDI) beginning January 15, 2026 and on or before January 15 thereafter on: a) Extent to which models used for underwriting purposes account for the categories of risk mitigation (identified in (1) above) including: i) Types and numbers of policy applications and renewals by ZIP Code, that account for categories of risk mitigation identified in (1) above; and, ii) Any other information CDI deems necessary. 3) Requires CDI to post the report, minus confidential or proprietary information, on their website. 4) Provisions sunset on January 1, 2036. 5) Defines “defensible space” as the same meaning as defined in Section 51177 of the Government Code. 6) Defines “fire prevention activities” as the same meaning as defined in Section 4124 of the Public Resources Code. 7) Defines “hazardous fuel reduction” as the same meaning as defined in Section 4464 of the Public Resources Code. 8) Defines “home hardening” as the same meaning as defined in Section 4291.5 of the Public Resources Code. 9) Makes findings and declarations. SB 1060 Page 2 EXISTING LAW: 1) Provides for the regulation of insurers, agents and brokers, and other insurance-like organizations by the Insurance Commissioner, and imposes a broad range of financial solvency, licensing and market behavior requirements, as set forth in the Insurance Code. 2) Establishes the Wildfire and Forest Resilience Action Plan and the Wildfire and Forest Resilience Action Plan implementation strategy. 3) Establishes the “Safer from Wildfires” Framework. (Section 2644.9 of Title 10 of the California Code of Regulations) FISCAL EFFECT: Unknown COMMENTS: 1) Purpose: According to the author: “The devastating impacts of increasingly frequent and severe wildfires have accelerated insurance rate increases, non-renewals, and market instability, causing an insurance crisis in California. In an effort to save lives, protect property, and address the insurance crisis, California has prioritized efforts to prevent wildfires and reduce their severity. The state, local governments, and individual property owners have spent billions of dollars on hazardous fuel reduction, home hardening, and creating defensible space – all recognized approaches for reducing the severity of wildfires. However, the underwriting models used by insurers to decide whether to renew policies or offer new policies usually do not account for the risk reduction benefits of these activities. That means that communities are not seeing the benefits of these risk mitigation efforts reflected in the cost and availability of insurance coverage. SB 1060 encourages property insurers to incorporate wildfire risk reduction associated with hazardous fuel reduction, home hardening, and defensible space in the models they use for underwriting, to decide whether to renew a policy or offer coverage to a new customer. Accounting for those wildfire risk mitigation actions in underwriting models will ensure that insurers give credit for the billions of dollars that California has invested in wildfire resilience, forest health, and community protection and will result in more available insurance coverage for Californians.” 2) CDI Safer from Wildfires Framework: In 2022, CDI announced the “Safer from Wildfires” framework, which directs insurers to provide discounts to consumers and businesses if they take specified mitigation measures. In crafting this regulation, CDI worked with emergency preparedness agencies in the Governor’s Administration, including CAL FIRE, Cal OES, the Governor’s Office of Planning and Research, and the California Public Utilities Commission. The framework provides a list of home and community wildfire mitigation measures that consumers and business can take to provide protection for the structure, the immediate surroundings, and the community. Under the regulation, the more “Safer from Wildfires” steps a consumer takes the more they may be able to save on their insurance. The regulation required insurance companies to submit new rate filings incorporating the wildfire safety standards created by CDI and also requires insurance companies to provide consumers with their property’s “wildfire risk score” and a right to appeal that score. Once the regulation is fully implemented it should help protect consumers. Steps a consumer can take to help mitigate their property under this framework include: SB 1060 Page 3  Class-A fire rated roof: Most roofs qualify including asphalt shingles, concrete, brick, or masonry tiles, and metal shingles or sheets.  5-foot ember resistant zone, including fencing: Removing greenery and replacing wood chips with stone or decomposed granite 5 feet around your home prevents fire from getting a foot in the door.  Ember- and fire-resistant vents: Installing 1/16 to 1/8 inch noncombustible, corrosion- resistant metal mesh screens over exterior vents can keep wind-blown embers out of your house.  Non-combustible 6 inches at the bottom of exterior walls: Having a minimum of 6 vertical inches measured from the ground up and from any attached horizontal surface like a deck can stop embers from accumulating and igniting your walls. Noncombustible materials include brick, stone, fiber-cement siding or concrete.  Enclosed eaves: Installing soffits under your eaves can prevent heat and embers from getting trapped and igniting. When enclosing eaves, non-combustible or ignition resistant materials are recommended.  Upgraded windows: Multi-paned windows are more resistant to breaking during a wildfire, which helps keep flames from entering. Multi-paned glass or added shutters all qualify.  Cleared vegetation, weeds and debris from under decks: Noncombustible materials like concrete, gravel, or bare soil are permitted.  Removal of combustible sheds and other outbuildings to at least a distance of 30 feet: These include sheds, gazebos, accessory dwelling units (ADUs), open covered structures with a solid roof, doghouses and playhouses.  Defensible space compliance: Following state and local laws requiring defensible space including trimming trees and removal of brush and debris from yard. 3) California’s Risk Modeling and Advisory Workgroup: The Risk Modeling Advisory Workgroup (Workgroup) provides a means to understand and model wildfire risk for a community and specified parcels through the input of mitigating factors. The Workgroup provides a forum for subject matter experts in wildfire related fields to address wildfire risk modeling issues of statewide concern. CAL FIRE is tasked with posting the recommendations on how to understand and model risk for a community and specific parcel on the internet website. The Workgroup reports to the Wildfire Mitigation Advisory Committee and acts in an advisory capacity to the California Department of Forestry and Fire Protection in consultation with the State Fire Marshal and the California Insurance Commissioner on wildfire risk modeling. The Workgroup released a report on September 9, 2023 outlining many obstacles but also providing recommendations. One recommendation included the need for data collection. SB 1060 Page 4 As stated in the report, “To accurately gauge the most current state of wildfire risk is WUI communities, there needs to be a common data set upon which consumers of data can rely. The Workgroup recommends the establishment of a “Wildfire Open Data Commons” to overcome many of the challenges associated with the availability of and access to wildfire risk data. The Workgroup believes that there is a widespread agreement among users of wildfire risk data, including catastrophic modelers, fire managers, the insurance industry, and public and private wildfire research organizations on the value of this type of shared data.” This measure doesn’t take approaches/recommendations outlined in this report. 4) The Sustainable Insurance Strategy (SIS): Following the Governor’s Executive Order in September 2023, the Insurance Commissioner announced historic insurance reforms. These reforms should be complete by December 2024. The Insurance Commissioner has already released a number of proposed regulations that will address the rate filing process, catastrophe modeling, and distressed areas. The distressed area reform is the most recent announcement and an important piece to highlight. This specific piece of the SIS is intended to incentivize insurers to write policies in identified high “risk’ areas. The Insurance Commissioner is in the thick of things as far as attempting to stabilize the insurance market. A number of informational hearings have taken place monitoring the progress of these reforms to ensure balance is found between stabilizing the market and maintaining consumer protections. 5) Concerns with this bill: This measure has manifested throughout the legislative process since being introduced in February. More questions remain as to the purpose and intent. In print now, the measure states, if an insurer uses risk models for underwriting purposes, the insurer can account for wildfire risk reduction associated with hazardous fuel reduction, home hardening, defensible space and fire prevention activities. The next provision mandates insurers that use risk models for underwriting to report to CDI on an annual basis for 10 years on the risk mitigation categories described above. The bill is inconsistent with one provision permissive and the other required- hence confusing. Additionally, while this may not seem damaging as a whole, the topic of insurer’s underwriting is not a subject matter previously legislated (although litigated) and much thought and time must be provided considering the current insurance crisis this state is in. (This measure does not help stabilize the insurance market.) It is unclear if the insurers have the ability to provide the information requested in the measure and more importantly, whether the models have the ability to provide what is asked in this measure. It’s also unclear, if CDI even knows which insurers use which risk models for what purposes. While the author of this measure would like to focus on insurers underwriting, this may actually further exasperate the insurance availability crisis. The author may wish to propose an informational hearing on the topic of underwriting and discuss what appropriate and useful data to CDI should be collected prior to moving any legislation forward that could further impact insurance availability. Furthermore and rightfully so, a lot of time, energy, and state/federal funding has been spent on risk mitigation and home hardening to prevent and prepare for the next wildfire. Unfortunately, homeowners are still struggling to obtain and maintain insurance. It’s unclear still, if the Safer from Wildfires Framework is working as intended so perhaps the focus should be on ensuring policyholders receive a discount before we move onto pointing to underwriting as a hindrance. SB 1060 could have an adverse effect and send SB 1060 Page 5 the wrong signal and it is not worth calling anyone’s bluff to find out. Putting forth what could be perceived as additional barriers for homeowners to get insurance is not an option. As reported in a number of recent articles including CalMatters (California home insurance: Regulators require more policy-writing- CalMatters) “California can’t legally require insurers to write either residential or commercial property policies.” Solutions and focus should be on making California insurable, not uninsurable. 6) Related legislation: AB 1933 (Calderon) Requires CDI to report to the Assembly Committee on Insurance and the Senate Committee on Insurance regarding wildfire risk models, on or before, January 1, 2026, and annually thereafter. Pending before the Senate Insurance Committee. AB 2416 (Connolly) Requires by December 31, 2027, and every three years thereafter, CDI to evaluate whether to update the Safer from Wildfires regulations to include certain building hardening measures. Pending before the Senate Insurance Committee. 7) Previous legislation: AB 642 (Friedman) (Chaptered by Secretary of State, Chapter 375, Statutes of 2021) This measure required the Workgroup (discussed above) to act in an advisory capacity to CAL FIRE, in consultation with the State Fire Marshal and the Insurance Commissioner on wildfire risk modeling. 8) Arguments in support: According to Consumer Watchdog, “SB 1060 would have required that underwriting models used by insurance companies take into account the wildfire risk reductions resulting from hazardous fuel reduction, home hardening, defensible space, and fire prevention activities for properties, communities and landscapes. While that mandate has been removed, we support the bill to continue that critical conversation.” 9) Arguments in opposition: According to the “Trades” (the Personal Insurance Federation of California, the American Property Casualty Insurance Association, the National Association of Mutual Insurance Companies, and the Pacific Association of Domestic Insurers): “…this bill is premature and impossible to implement given the real-world data constraints, and it is inconsistent with the critical efforts led by the Governor and Insurance Commissioner to restore a healthy and competitive insurance market that increases insurance availability and reliability for Californians…” 10) Recommended committee amendments: The following amendments change the focus of the bill to the Safer from Wildfires Framework (discounts for mitigation) established and enforced by CDI.  Add the following language to Insurance Code 12964.5 or other section within that article. 3000. As used in this article: (a) “Defensible space” has the same meaning as defined in Section 51177 of the Government Code. (b) “Fire prevention activities” has the same meaning as defined in Section 4124 of the Public Resources Code. SB 1060 Page 6 (c) “Hazardous fuel reduction” has the same meaning as defined in Section 4464 of the Public Resources Code. (d) “Home hardening” has the same meaning as defined in Section 4291.5 of the Public Resources Code. 3001. If an admitted property insurer uses risk models pursuant to Section 2644.9 of Title 10 of the California Code of Regulations for underwriting purposes, those risk models may account for wildfire risk reduction associated with hazardous fuel reduction, home hardening, defensible space, and fire prevention activities for properties, communities, and landscapes. 3002. (a) If an admitted insurer usesing risk models pursuant to Section 2644.9 of Title 10 of the California Code of Regulationsfor underwriting purposes, as described in Section 3001, shall, beginning January 15, 2026, and on or before each January 15 thereafter, may report to the department the extent to which risk models used for underwriting purposes account for the categories of risk mitigation identified in Section 3001, including the types and numbers of policy applications and renewals, by ZIP Code. that are evaluated by underwriting models that account for the categories of risk mitigation identified in Section 3001. and any other information the department deems necessary. The department shall post the information contained in the report, excluding any confidential or proprietary information, on the department’s internet website. REGISTERED SUPPORT / OPPOSITION: Support City of Laguna Niguel City of Oakland Mayor Sheng Thao City of Yorba Linda Consumer Watchdog County of Monterey United Policyholders (Support if Amended) Opposition American Property Casualty Insurance Association National Association of Mutual Insurance Companies Pacific Association of Domestic Insurance Companies Personal Insurance Federation of California Analysis Prepared by: Kathleen O'Malley / INS. / (916) 319-2086 “Small Town Atmosphere Outstanding Quality of Life” 5 0 0 L A G O N D A W A Y, D A N V I L L E , C A L I F O R N I A 9 4 5 2 6 Administration Building Engineering & Planning Transportation Maintenance Police Parks and Recreation (925) 314-3388 (925) 314-3330 (925) 314-3310 (925) 314-3320 (925) 314-3450 (925) 314-3700 (925) 314-3400 s July 10, 2024 The Honorable Steve Glazer California State Senate 1021 O Street, Suite Sacramento, CA 95814 The Honorable Rebecca Bauer-Kahan California State Assembly 1021 O Street, Suite Sacramento, CA 95814 The Honorable Tim Grayson California State Assembly 1021 O Street, Suite Sacramento, CA 95814 RE: Request for Future Legislation to Enact Electric Bicycle and Scooter Safety Reforms Dear Senator Glazer, Assembly Member Bauer-Kahan, and Assembly Member Grayson On behalf of the Town of Danville, I am writing to express concerns about the growing popularity and presence of electric and quasi-motorized bicycles and scooters (e-bicycles and e-scooters) on our streets and sidewalks. There have been an increasing number of complaints and safety concerns reported to the Danville Police Department from residents, businesses, and property owners throughout town regarding the use of e- bicycles and e-scooters. In most instances, these concerns feature youth riders who lack a fundamental understanding of the rules of the road to operate these devices safely. E-bikes, e-scooters, and mopeds possess capabilities that far exceed those of regular bicycles. They are heavier, faster, and equally accessible to our youth. While we recognize the importance of active forms of transportation in creating walkable and accessible communities and in achieving our greenhouse gas (GHG) reduction goals, we must also prioritize the safety of our community. The Town of Danville believes the first step is ensuring clear labeling of operator requirements. However, with the growing accessibility of these devices for personal use, the Town of Danville has observed an increase in the usage of motorized bicycles and scooters, defined under CVC 406(a) and 407.5(a). These statutes require operators to be in possession of a valid California Driver’s License or permit, a process that supports a fundamental understanding of the rules of the road. Additionally, these statutes require ATTACHMENT B July 10, 2024 Page 2 each device to have an affixed label specifying insurance and liability consequences, along with age and permitting requirements. These requirements and warnings aid in law enforcement response capabilities, however, the application of these tools can be expanded to curb youth-related incidents. The Town of Danville and its public safety officers seek to expand these requirements to e-bikes, which currently lack a robust regulation regime within the law. Specifically, our Town would like to see there be age, permitting, and enhanced labeling requirements to aid law enforcement in mitigating the risks associated with operating these quasi-motorized devices. As we look ahead to the 2025-26 Legislative Session, we would like to request a meeting to kick off conversations on how to tackle this public safety concern and discuss potential policy solutions. Please do not hesitate to reach out to Cat Bravo, Management Analyst (CBravo@danville.ca.gov), and the Town’s Legislative Advocate, Carlin Shelby (CShelby@townsendpa.com) with any questions. Thank you for your time and consideration. Sincerely, ___________________________ KAREN G. STEPPER, MAYOR Tri-Valley Cities DANVILLE • DUBLIN • LIVERMORE • PLEASANTON • SAN RAMON August 12, 2024 The Honorable Juan Carrillo California State Capitol 1021 O Street, Suite 4320 Sacramento, CA 95814 RE: AB 2485 (Carrillo) Regional housing need: determination. Tri-Valley Cities Coalition – Notice of Support Dear Assembly Member Carrillo, On behalf of the Tri-Valley Cities Coalition which includes the cities of Dublin, Livermore, Pleasanton, San Ramon, and the Town of Danville, we wish to express our support of AB 2485, which seeks to enhance transparency in the Department of Housing and Community Development’s (HCD) regional housing needs calculation process by creating an advisory panel and requiring the publication of methodologies used on HCD’s website. AB 2485 aims for transparency in the RHNA determination process by providing local governments, COGs, housing stakeholders, members of the public, and all interested parties with information on the data sources, analyses, and calculation methods used by HCD. This bill would establish a formal review process by creating an expert panel to advise HCD on its assumptions, data, and analyses prior to a final RHNA determination. This bill will increase local government stakeholder engagement on the RHNA allocations for future cycles of the housing element revision process. This in turn will increase transparency and ensure that HCD is responsible for its methodologies in assessing regional housing needs allocations. For these reasons, the Tri-Valley Cities Coalition is pleased to support AB 2485. Sincerely, ______________________ ____________________ City of Pleasanton City of San Ramon Mayor Karla Brown Mayor David E. Hudson __________________ ____________________ ____________________ Town of Danville City of Dublin City of Livermore Mayor Karen Stepper Mayor Michael McCorriston Mayor John Marchand ATTACHMENT C Tri-Valley Cities DANVILLE • DUBLIN • LIVERMORE • PLEASANTON • SAN RAMON CC: Senator Steven Glazer Assembly Member Rebecca Bauer-Kahan Tri-Valley Cities DANVILLE • DUBLIN • LIVERMORE • PLEASANTON • SAN RAMON August 12, 2024 The Honorable Scott Wiener California State Senate 1021 O Street, Room 8620 Sacramento, CA 95814 RE: SB 1037 (Wiener) Planning and Zoning: Housing Element: Enforcement Tri-Valley Cities Coalition – Notice of Opposition Dear Senator Wiener, On behalf of the Tri-Valley Cities Coalition which includes the cities of Dublin, Livermore, Pleasanton, San Ramon, and the Town of Danville, we wish to express our opposition to Senate Bill 1037 (Wiener), which allows the Attorney General to take legal action against a local government, and seek fines up to $50,000 a month, for failure to adopt a compliant housing element, or if the city does not follow State laws that require ministerial approval of certain housing projects. Under existing law, local governments may incur substantial fines and penalties for breaching specific housing statutes. Prior to the imposition of fines, a city is afforded the chance to rectify the violation. Furthermore, escalated fines are only enforced if the city neglects to comply with a court directive or demonstrates bad faith in its actions. Regrettably, SB 1037 presently lacks provisions allowing local governments to rectify inadvertent errors or resolve authentic disparities in legal interpretation. Even jurisdictions acting in utmost good faith could potentially face substantial fines and the obligation to cover all expenses incurred by the Attorney General in investigating and prosecuting the matter, encompassing fees for expert witnesses and attorneys. In lieu of enacting new fines and penalties, as provided in SB 1037, lawmakers and the Department of Housing and Community Development should offer municipalities precise directives and technical support to facilitate the completion of their housing elements; to in turn enable the implementation of essential housing construction initiatives. For these reasons, the Tri-Valley Cities Coalition respectfully opposes SB 1037. Sincerely, ______________________ ____________________ City of Pleasanton City of San Ramon Mayor Karla Brown Mayor David E. Hudson __________________ ____________________ ____________________ Town of Danville City of Dublin City of Livermore Mayor Karen Stepper Mayor Michael McCorriston Mayor John Marchand ATTACHMENT D Tri-Valley Cities DANVILLE • DUBLIN • LIVERMORE • PLEASANTON • SAN RAMON cc: Assembly Member Rebecca Bauer-Kahan Senator Steven Glazer Tri-Valley Cities DANVILLE • DUBLIN • LIVERMORE • PLEASANTON • SAN RAMON August 12, 2024 The Honorable Patrick McHenry Chairman United States House of Representatives Washington, D.C. 20515 The Honorable Sherrod Brown Chairman United States Senate Washington, D.C. 20510 The Honorable Maxine Waters Ranking Member United States House of Representatives Washington, D.C. 20515 The Honorable Tim Scott Ranking Member United States Senate Washington, D.C. 20510 Dear Chairman McHenry, Chairman Brown, Ranking Member Waters, and Ranking Member Scott: On behalf of the Tri-Valley Cities Coalition which includes the cities of Dublin, Livermore, Pleasanton, San Ramon, and the Town of Danville, we write to reemphasize our strong support of S.1514 and H.R.3170, the Homes for Every Local Protector, Educator, and Responder (HELPER) Act, introduced by U.S. Senators Marco Rubio (R-FL), John Ossoff (D-GA), Sherrod Brown (D-OH), Raphael Warnock (D-GA), Robert Menendez (D-NJ), Catherine Cortez Masto (D- NV), and Richard Blumenthal (D-CT) and U.S. Representatives John Rutherford (R-FL) and Bonnie Watson Coleman (D-NJ). The HELPER Act would create a home loan program within the Federal Housing Administration to help our law enforcement officers, firefighters, EMTs, paramedics, and preK-12 teachers (“first responders”) by making homeownership more affordable. Too often, our civil servants struggle to afford their first home. Because of this, we are writing in support of the HELPER Act, which would help our civil servants access the housing they need to serve their communities. First responders dedicate their lives to protecting and serving their fellow Americans. The COVID- 19 pandemic has only made clearer the ongoing challenges that these brave first responders face. It is time we honor them for their service. To that end, the HELPER Act program will function similarly to the home loan program managed by the Department of Veterans Affairs. Managed by the Federal Housing Administration, it will allow law enforcement officers, firefighters, EMTs, paramedics, and preK-12 teachers to obtain a low-interest, fully insured home loan with no down payment and no monthly mortgage insurance costs for a first-time home purchase. Our nation’s first responders have demonstrated their unwavering commitment to their communities. Even amidst a deadly pandemic, these heroes have served without hesitation. We believe they have earned access to affordable housing so that they can provide for their families and continue to serve their communities. We write to request that this legislation receive a committee markup hearing during the 118th Congress and receive full consideration by your respective committees. ATTACHMENT E Tri-Valley Cities DANVILLE • DUBLIN • LIVERMORE • PLEASANTON • SAN RAMON Sincerely, ______________________ ____________________ City of Pleasanton City of San Ramon Mayor Karla Brown Mayor David E. Hudson __________________ ____________________ ____________________ Town of Danville City of Dublin City of Livermore Mayor Karen Stepper Mayor Michael McCorriston Mayor John Marchand DATE: August 27, 2024 TO: Councilmember Morgan, Councilmember Storer FROM: Melysa Vander Mel, Economic Development Specialist SUBJECT: 2025 Legislative Committee Dates The following are the dates for the 2025 Town of Danville Legislative Committee Meetings: January 28, 2025 February 25, 2025 March 25, 2025 April 22, 2025 May 27, 2025 June 24, 2025 July 22, 2025 August 26, 2025 September 23, 2025 October 28, 2025 November 25, 2025 *December 16, 2025 *All dates are the 4th Tuesday of the month at 9:00 a.m. with the exception of December due to town furlough. ATTACHMENT F