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AMENDED IN SENATE MARCH 29, 2012

INTRODUCED BY Senator Steinberg

FEBRUARY 22, 2012

An act to add Part 1.86 (commencing with Section 34191.1) to
Division 24 of the Health and Safety Code, and to amend Section
21094.5 of the Public Resources Code,
relating to economic
development.



LEGISLATIVE COUNSEL'S DIGEST


SB 1156, as amended, Steinberg. Community Development and Housing
Joint Powers Authority.
The Community Redevelopment Law authorizes the establishment of
redevelopment agencies in communities to address the effects of
blight, as defined. Existing law dissolved redevelopment agencies and
community development agencies, as of February 1, 2012, and provides
for the designation of successor agencies. Existing law requires
that the successor agency, among other things, wind down the affairs
of the former redevelopment agency and dispose of assets and
properties of the former redevelopment agency, as directed by an
oversight board.
Existing law provides for various economic development programs
that foster community sustainability and community and economic
development initiatives throughout the state.
This bill would declare the intent of the Legislature to
establish and authorize the use of new joint powers authorities and a
new financing option for cities and counties throughout the state to
develop sustainable economic development and affordable housing. The
bill would
authorize the legislative body of the city and
county representing the geographic territory covering the area served
by a former redevelopment agency to elect to form a Community
Development and Housing Joint Powers Authority (authority) after
July 1, 2012, and to carry out the provisions of the Community
Redevelopment Law
. The bill would require the
authority to assume from a successor agency the responsibility for
managing the assets and property of the former redevelopment agency
authorize the authority to adopt a redevelopment plan
for a project area covering specified areas and sites and to include
a provision in the plan to
provide for tax increment
financing, p
rovided that certain mitigation and land use
plans have been adopted
. The bill would retain the Low
and Moderate Income Housing Fund of a former redevelopment agency in
another fund and
authorize the authority to exercise
specified powers enumerated in the Community Redevelopment Law,
to enter into agreements to facilitate articulated career
technical education pathways , and to exercise certain other
powers relating to the financing of its activities
.
Vote: majority. Appropriation: no. Fiscal committee: no
yes . State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

SECTION 1. Part 1.86 (commencing with Section 34191.1) is added to
Division 24 of the Health and Safety Code, to read:

PART 1.86. ECONOMIC DEVELOPMENT and HOUSING PROGRAM


CHAPTER 1. GENERAL PROVISIONS


34191.1. (a) It is the intent of the Legislature to establish and
authorize the use of new joint powers authorities and a new
financing option for cities and counties throughout the state to
develop sustainable economic development and affordable housing. It
is further the intent of the Legislature that the economic
development activities undertaken pursuant to this part encourage
planning and development that reduce greenhouse gas emissions and
facilitate infill and transit-oriented development.

34191.1. (a) The Legislature finds and declares
that better economic development patterns in California can
contribute to greater economic growth by reducing commuter times for
employees, reducing the costs of public infrastructure, and reducing
energy consumption. Better development patterns may also result in
increased options in the type of housing available, more affordable
housing, and a reduction in a household's combined housing and
transportation costs.

(b) The construction industry has been one of the sectors hardest
hit by the economic downturn of recent years. Creating incentives for
construction can help restore construction jobs, which are essential
for a restoration of prosperity.

(c) Economic development patterns can also help California attain
some of its long-term strategic environmental objectives including
reduced air pollution, greater water conservation, reduced energy
consumption, and increased farmland and habitat preservation.


(d) Implementation of the growth plans identified by the
metropolitan planning organizations in their sustainable communities
strategies, and in particular the development of areas identified for
transit priority projects, is essential if California is to achieve
the multiple benefits that would result from economic development.

(e) In addition to the economic problems of the current recession,
development of transit priority projects remains challenging.
Infrastructure is often old and inadequate. Sites may suffer from
contamination that is expensive to remediate. The high construction
costs in urban areas, particularly for multifamily dwellings, create
an additional challenge. For these reasons, it is critical to
restructure and refocus redevelopment in California to assist in
achievement of these multiple benefits.

(f) At the same time, California cannot afford a redevelopment
program that causes schools to lose revenue at a time when investing
in education is also key to the state's economic prosperity. A growth
plan for the state consistent with regional sustainable communities
strategies must also provide that schools are able to play their full
role in achieving the future of California.

(g) The elimination of redevelopment agencies has resulted in the
loss of approximately $1 billion annually in low- and moderate-income
housing funds for communities throughout the state. Communities need
alternative, permanent sources of revenue to support the continued
production of affordable housing units.

(b)

(h) The Legislature finds that a comprehensive strategy
for the long-term economic development of the state must encourage
the creation of workforce skills needed to attract and retain a
high-wage workforce, in addition to public infrastructure
requirements. Public investments in human capital are as vital to the
long-term growth of the state's economy as investments in physical
capital.
34191.2. For purposes of this part, "authority" or "Community
Development and Housing Joint Powers Authority" means the joint
exercise of powers agency formed under Chapter 5 (commencing with
Section 6500) of Division 7 of Title 1 of the Government Code.
CHAPTER 2. COMMUNITY DEVELOPMENT AND HOUSING JOINT POWERS
AUTHORITY


34191.10. (a) The legislative body of the city and county
representing the geographic territory covering the area served by a
former redevelopment agency may elect to form a Community Development
and Housing Joint Powers Authority pursuant to this part.
(b) The authority may exercise the powers enumerated in the
Community Redevelopment Law (Part 1 (commencing with Section 33000))
with respect to assembling, purchasing, and selling property and
remediating environmental damage to further housing, commercial, and
industrial development.

34191.10. (a) The legislative body of the city
and county representing the geographic territory covering the area
served by a former redevelopment agency may elect to form a Community
Development and Housing Joint Powers Authority pursuant to this part
after July 1, 2012, to carry out the provisions of the Community
Redevelopment Law (Part 1.8 (commencing with Section 33000)). If the
former redevelopment agency was formed solely by a county, the county
may exercise the powers authorized by this part.

(c)

(b) The authority may enter into financial and other
agreements with community colleges, K-12 school districts, and
private businesses to facilitate the development and operation of
articulated career technical education pathways, as specified in
Section 88532 of the Education Code.
CHAPTER 3. FINANCING


34191.15. An authority formed pursuant to this part shall assume
from a successor agency the operational and fiduciary responsibility
for managing the assets, properties, contracts, leases, books and
records, buildings, and equipment of former redevelopment transferred
to the successor agency pursuant to Chapter 5 of the First
Extraordinary Session of the Statutes of 2011. The authority shall
maximize the economic value of the assets in furtherance of the goals
and objectives authorized in this part. To the extent that any
conflict occurs, this part shall supersede the asset disposition
procedures set forth in subdivision (e) of Section 34177 and
subdivision (a) of Section 34181.

34191.15. An authority formed pursuant to this part may adopt a
redevelopment plan for a project area pursuant to this section.
Notwithstanding any other provision of this division, a determination
shall not be required to be made regarding blight within the project
area, and an action shall not be required to be taken for the
elimination of blight in connection with the creation of a
redevelopment plan for a project area. The redevelopment plan shall
terminate on a specified date not to exceed 30 years from the date of
the first issuance of bond indebtedness by the agency. A project
area shall include only the following areas:
(a) For areas within the geographic boundaries of a metropolitan
planning organization where a sustainable communities strategy has
been adopted by the metropolitan planning organization, and the State
Air Resources Board, pursuant to subparagraph (H) of paragraph (2)
of subdivision (b) of Section 65080 of the Government Code, has
accepted the metropolitan planning organization's determination that
the sustainable communities strategy would, if implemented, achieve
the greenhouse gas emission reduction targets:
(1) Transit priority areas where a transit priority project, as
defined in Section 21155 of the Public Resources Code, may be
constructed, provided that if the project area is based on proximity
to a planned major transit stop or a high-quality transit corridor,
the stop or the corridor must be scheduled to be completed within the
planning horizon established by Section 450.322 of Title 23 of the
Code of Federal Regulations. For purposes of this paragraph, a
transit priority area may include a military base reuse plan that
meets the definition of a transit priority area and a contaminated
site within a transit priority area.
(2) Areas that are small walkable communities, as defined in
paragraph (4) of subdivision (e) of Section 21094.5 of the Public
Resources Code. No more than one small walkable community project
area shall be designated within a city.
(b) Sites that have land use approvals, covenants, conditions and
restrictions, or other effective controls restricting the sites to
clean energy manufacturing, and sites that are consistent with the
sustainable communities strategy, if those sites are within the
geographic boundaries of a metropolitan planning organization. Clean
energy manufacturing consists of the manufacture of components,
parts, or materials for the generation of renewable energy resources
or for alternative fuel vehicles.

34191.16. Solely for purposes of Section 16 of Article XVI of the
California Constitution, a redevelopment plan adopted pursuant to
Section 34191.11 may include a provision for the receipt of tax
increment funds according to Section 33670, provided that the local
government with land use jurisdiction has adopted all of the
following:
(a) A school mitigation plan to offset losses of property tax
revenue to schools serving the project area as a result of the
imposition of a provision for the receipt of tax increment funds. The
plan may include assessment districts, provisions of covenants,
conditions and restrictions, or other mechanisms. Except as otherwise
specified, the plan shall be approved by the fiscally affected
school districts. If the plan is not approved by the school
districts, it may be submitted by the authority established under
this part to the Department of Finance for approval. The department
shall approve the plan if there is no impact on the state budget
because of the provisions of subdivision (b) of Section 8 of Article
XVI of the California Constitution or if the impacts on the state
budget are not unacceptable.
(b) An analysis of the public service costs and revenue-generating
impact of new development with respect to the provision of basic
public services, including police, fire, and rescue services. The
plan shall include a strategy for mitigating unfunded service
impacts.
(c) A sustainable parking standards ordinance that restricts
parking in transit priority project areas.
(d) A provision requiring that 20 percent of the housing in the
project area be affordable to persons of low- and moderate-income.
(e) For transit priority areas and small walkable communities
within a metropolitan planning organization, a plan consistent with
the use designation, density, building intensity, and applicable
policies specified for the project area in the sustainable
communities strategy and that, for new residential construction,
provides a density of at least 20 dwelling units per net acre and for
nonresidential uses, provides a minimum floor area ratio of 0.75.
(f) Within small walkable communities outside a metropolitan
planning organization, a plan for new residential construction that
provides a density of at least 20 dwelling units per acre and, for
nonresidential uses, provides a minimum floor area ratio of 0.75.
(g) For areas referred to in subdivision (e), the authority shall
obtain the metropolitan planning organization's concurrence that the
plan is consistent with the use designation, density, building
intensity, and applicable policies for the project area in the
sustainable communities strategy.

34191.17. The authority shall approve any bond financing under
this division.

34191.18. The Low and Moderate Income Fund shall be retained in
the Sustainable Economic Development and Housing Trust Fund for uses
authorized under Section 33334.2. If the funds are not contracted for
use within 60 months from the effective date of this section, the
balance shall be transferred to an agency designated by the Governor
for use as grants to the authority for the provision of affordable
housing to low- and moderate-income households. Any funds expended by
the authority for affordable housing from any of the granted funds
shall be credited against the 20-percent set-aside requirement under
Section 33334.2.

34191.16. 34191.19. A state or
local public pension fund system authorized by state law or local
charter, respectively, including, but not limited to, the Public
Employees' Retirement System, the State Teachers' Retirement System,
a system established under the County Employees Retirement Law of
1937, Chapter 3 (commencing with Section 31450) of Part 3 of Division
4 of Title 3 of the Government Code, or an independent system, may
invest capital in the public infrastructure projects and private
commercial and residential developments undertaken by an authority.
34191.17. 34191.20. (a) An
authority may exercise the full powers granted under Chapter 2.8
(commencing with Section 53395) of Part 1 of Division 2 of Title 5 of
the Government Code and the Marks-Roos Local Bond Pooling Act of
1985 (Article 4 (commencing with Section 6584) of Chapter 5 of
Division 7 of Title 1 of the Government Code).
(b) An authority may implement a local transactions and use tax
under Part 1.6 (commencing with Section 7251) of Division 2 of the
Revenue and Taxation code, except that the resolution authorizing the
tax may designate the use of the proceed of the tax.
(c) An authority may issue bonds paid for with authority proceeds,
which shall be deemed to be special funds to be expended by the
authority for the purposes of carrying out this part.
SEC. 2. Section 21094.5 of the Public
Resources Code
is amended to read:
21094.5. (a) (1) If an environmental impact report was certified
for a planning level decision of a city or county, the application of
this division to the approval of an infill project shall be limited
to the effects on the environment that (A) are specific to the
project or to the project site and were not addressed as significant
effects in the prior environmental impact report or (B) substantial
new information shows the effects will be more significant than
described in the prior environmental impact report. A lead agency's
determination pursuant to this section shall be supported by
substantial evidence.
(2) An effect of a project upon the environment shall not be
considered a specific effect of the project or a significant effect
that was not considered significant in a prior environmental impact
report, or an effect that is more significant than was described in
the prior environmental impact report if uniformly applicable
development policies or standards adopted by the city, county, or the
lead agency, would apply to the project and the lead agency makes a
finding, based upon substantial evidence, that the development
policies or standards will substantially mitigate that effect.
(b) If an infill project would result in significant effects that
are specific to the project or the project site, or if the
significant effects of the infill project were not addressed in the
prior environmental impact report, or are more significant than the
effects addressed in the prior environmental impact report, and if a
mitigated negative declaration or a sustainable communities
environmental assessment could not be otherwise adopted, an
environmental impact report prepared for the project analyzing those
effects shall be limited as follows:
(1) Alternative locations, densities, and building intensities to
the project need not be considered.
(2) Growth inducing impacts of the project need not be considered.

(c) This section applies to an infill project that satisfies both
of the following:
(1) The project satisfies any of the following:
(A) Is consistent with the general use designation, density,
building intensity, and applicable policies specified for the project
area in either a sustainable communities strategy or an alternative
planning strategy for which the State Air Resources Board, pursuant
to subparagraph (H) of paragraph (2) of subdivision (b) of Section
65080 of the Government Code, has accepted a metropolitan planning
organization's determination that the sustainable communities
strategy or the alternative planning strategy would, if implemented,
achieve the greenhouse gas emission reduction targets.
(B) Consists of a small walkable community project located in an
area designated by a city for that purpose.
(C) Is located within the boundaries of a metropolitan planning
organization that has not yet adopted a sustainable communities
strategy or alternative planning strategy, and the project has a
residential density of at least 20 units per acre or a floor area
ratio of at least 0.75.
(2) Satisfies all applicable statewide performance standards
contained in the guidelines adopted pursuant to Section 21094.5.5.
(d) This section applies after the Secretary of the Natural
Resources Agency adopts and certifies the guidelines establishing
statewide standards pursuant to Section 21094.5.5.
(e) For the purposes of this section, the following terms mean the
following:
(1) "Infill project" means a project that meets the following
conditions:
(A) Consists of any one, or combination, of the following uses:
(i) Residential.
(ii) Retail or commercial, where no more than one-half of the
project area is used for parking.
(iii) A transit station.
(iv) A school.
(v) A public office building.
(B) Is located within an urban area on a site that has been
previously developed, or on a vacant site where at least 75 percent
of the perimeter of the site adjoins, or is separated only by an
improved public right-of-way from, parcels that are developed with
qualified urban uses.
(2) "Planning level decision" means the enactment or amendment of
a general plan, community plan, specific plan, or zoning code.
(3) "Prior environmental impact report" means the environmental
impact report certified for a planning level decision, as
supplemented by any subsequent or supplemental environmental impact
reports, negative declarations, or addenda to those documents.

(4) "Small walkable community project" means a project that is in
an incorporated city, which is not within the boundary of a
metropolitan planning organization and that satisfies the following
requirements:

(A) Has a project area of approximately one-quarter mile diameter
of contiguous land completely within the existing incorporated
boundaries of the city.

(B) Has a project area that includes a residential area adjacent
to a retail downtown area.

(C) The project has a density of at least eight dwelling units per
acre or a floor area ratio for retail or commercial use of not less
than 0.50.

(4) "Small walkable community project" means a project that is
located in a small walkable community project area. A small walkable
community project area means an area within an incorporated city that
is not within the boundary of a metropolitan planning organization
and meets all the following requirements:

(A) Has a project area of approximately one-quarter-mile diameter
of contiguous land completely within the existing incorporated
boundaries of the city.

(B) Has a project area that includes a residential area adjacent
to a retail downtown area.

(C) The project area has an average net density of at least eight
dwelling units per acre or a floor area ratio for retail or
commercial use of not less than 0.50. For purposes of this
subparagraph: (i) "Floor area ratio" means the ratio of gross
building area (GBA) of development, exclusive of structured parking
areas, proposed for the project divided by the total net lot area
(NLA); (ii) "gross building area" means the sum of all finished areas
of all floors of a building included within the outside faces of its
exterior walls; and (iii) "net lot area" means the area of a lot
excluding publicly dedicated land, private streets that meet local
standards, and other public use areas as determined by the local land
use authority.

(5) "Urban area" includes either an incorporated city or an
unincorporated area that is completely surrounded by one or more
incorporated cities that meets both of the following criteria:
(A) The population of the unincorporated area and the population
of the surrounding incorporated cities equal a population of 100,000
or more.
(B) The population density of the unincorporated area is equal to,
or greater than, the population density of the surrounding cities.