BILL ANALYSIS SENATE TRANSPORTATION & HOUSING COMMITTEE BILL NO: SB 375 SENATOR ALAN LOWENTHAL, CHAIRMAN AUTHOR: Steinberg VERSION: 8/22/08 Analysis by: Mark Stivers FISCAL: yes Hearing date: August 29, 2008 SUBJECT: Transportation and land use planning and the California Environmental Quality Act (CEQA) DESCRIPTION: This bill 1) requires the Air Resources Board to provide each region with greenhouse gas emission reduction targets for the automobile and light truck sector; 2) requires a regional transportation plan to include a Sustainable Communities Strategy designed to achieve the targets for greenhouse gas emission reduction; 3) requires the California Transportation Commission to maintain guidelines for travel demand models; 4) requires cities and counties, in general, to revise their housing elements every eight years in conjunction with the regional transportation plan and complete any necessary rezonings within a specific time period; and 5) relaxes CEQA requirements for housing developments that are consistent with a Sustainable Communities Strategy. ANALYSIS: AB 32 and greenhouse gas emission reductions In 2006, the Legislature enacted AB 32 (Nu?ez), Chapter 488, the Global Warming Act of 2006, which requires the Air Resources Board (ARB) to establish a statewide greenhouse gas emissions limit such that by 2020 California reduces its greenhouse gas emissions to the level they were in 1990. Thereafter, ARB must adopt the maximum feasible and cost-effective reductions in greenhouse gas emissions for sources subject to the Act. One of the potential strategies for reducing greenhouse gas emissions AB 375 (STEINBERG) Page 2 is to promote more compact land use that reduces the number and length of vehicle trips. This bill requires ARB, by September 30, 2010, to provide each region that has a metropolitan planning organization (MPO) with greenhouse gas emission reduction targets for the automobile and light truck sector for 2020 and 2035, respectively. Specifically, the bill: Requires ARB, no later than January 31, 2009, to appoint a Regional Targets Advisory Committee (RTAC), as specified, to recommend factors to be considered and methodologies to be used for setting greenhouse gas emission reduction targets for the regions. Requires the RTAC to transmit its recommended factors and methodologies to ARB no later than December 31, 2009. Requires ARB, prior to setting the targets for a region, to exchange technical information with the MPO, the Department of Transportation (Caltrans), and the local air district. Requires the MPO to hold at least one public workshop within the region after the RTAC makes its recommendation to ARB. Allows an MPO to recommend a target for the region. Requires ARB to release draft greenhouse gas emission reduction targets for each affected region by June 30, 2010 and final targets by September 30, 2010 for the automobile and light truck sector for 2020 and 2035, respectively. Requires ARB to take into account greenhouse gas emission reductions that will be achieved by improved vehicle emission standards, changes in fuel composition, and other measures it has approved or plans to approve that will reduce greenhouse gas emissions in the affected regions from other sources. Requires ARB, after exchanging technical information with Caltrans, the MPOs, local governments, and affected air districts and engaging in a consultative process with public and private stakeholders, to update the regional greenhouse gas emission reduction targets every eight years consistent with each MPO's timeframe for updating its regional transportation plan under federal law until 2050. Regional transportation plans Current law requires the California Transportation Commission (CTC) to adopt the State Transportation Improvement Plan (STIP), which lists all capital improvement projects that are expected to receive an allocation of state transportation funds from CTC during the following five fiscal years. The STIP includes both AB 375 (STEINBERG) Page 3 the Interregional Transportation Improvement Program (ITIP) and the Regional Transportation Improvement Programs (RTIPs) developed by federally-designated MPOs. Seventy-five percent of STIP funding is programmed by the regions through the RTIPs. Twenty-five percent of STIP funding is programmed by Caltrans through the ITIP. Current law also requires the MPOs to adopt regional transportation plans (RTPs) directed at achieving a coordinated and balanced regional transportation system, including, but not limited to, mass transportation, highway, railroad, maritime, bicycle, pedestrian, goods movement, and aviation facilities and services. The RTP must contain a policy element, an action element, and a financial element and is the source for projects programmed in the RTIP. This bill requires that an RTP include a Sustainable Communities Strategy (SCS) designed to achieve the ARB targets for greenhouse gas emission reduction and that the SCS and all other elements of the RTP be internally consistent. Specifically, the bill: Requires that an SCS: ? Identify the general location of uses, residential densities, and building intensities within the region. ? Consider the state housing goals and identify areas within the region sufficient to house all economic segments of the population over the course of the planning period, including areas sufficient to house the eight-year projection of the regional housing need for the region. ? Identify a transportation network to service the transportation needs of the region. ? Consider the best practically available scientific information regarding resource areas and farmland in the region. ? Consider spheres of influence that have been adopted by the local agency formation commissions within the region. ? Set forth a forecasted development pattern for the region, which, when integrated with the transportation network and other transportation measures and policies, will reduce the greenhouse gas emissions from automobiles and light trucks to achieve, if feasible, the greenhouse gas emission reduction targets approved by ARB. ? Be internally consistent with other elements of the RTP. ? Allow the RTP to comply with the federal Clean Air Act. AB 375 (STEINBERG) Page 4 Requires the MPO, prior to starting the public participation process, to submit a description to ARB of the technical methodology it intends to use to estimate the greenhouse gas emissions from its SCS and requires ARB to respond to the MPO in a timely manner with written comments about the technical methodology. Requires each MPO to conduct at least two informational meetings in each county within the region to solicit and consider the input and recommendations of local elected officials on the SCS. Requires each MPO to adopt a public participation plan for development of the SCS that includes at least one public workshop and, depending on the size of the region, two or three public hearings. Requires an MPO to quantify the reduction in greenhouse gas emissions projected to be achieved by the SCS and set forth the difference, if any, between the amount of that reduction and the target for the region established by ARB. Requires the MPO, if an SCS is unable to reach the ARB target, to prepare an alternative planning strategy (APS) identifying the principal impediments to achieving the targets through the SCS and showing how the ARB targets would be achieved through alternative development patterns, infrastructure, or additional transportation measures or policies. The APS shall be a separate document from the RTP. Requires the MPO, after adoption, to submit the SCS or APS, including the quantification of the greenhouse gas emission reductions the plan would achieve, to ARB for review. Requires ARB to complete its review within 60 days and limits ARB review to acceptance or rejection of the MPO's determination that the strategy submitted would, if implemented, achieve the greenhouse gas emission reduction targets. Requires the MPO, if ARB determines that the SCS would not achieve the greenhouse gas emission reduction targets, to revise its strategy or adopt an APS and submit the new strategy for review. Requires an MPO, at a minimum, to obtain ARB acceptance that an APS would, if implemented, achieve the greenhouse gas emission reduction targets established for that region. States that an SCS or APS does not supersede or interfere with the land use authority of cities and counties, does not require a city or county's land use policies and regulations to be consistent with the SCS or APS, and does not limit ARB's authority under any other provision of law. AB 375 (STEINBERG) Page 5 Provides that an SCS or APS shall not affect any transportation project programmed for funding on or before December 31, 2011, if it is contained in the 2007 or 2009 STIP, funded through the Transportation Congestion Relief Program, or specifically listed in a local transportation sales tax ballot measure approved prior to December 31, 2008. Nor does an SCS or APS require a transportation sales tax authority to change the funding allocations approved by the voters for categories of transportation projects in a sales tax measure adopted prior to December 31, 2010. Allows an MPO, or regional transportation planning agency not within an MPO, that is currently on a five-year RTP cycle to elect to adopt an RTP on a four-year cycle. Requires an MPO or county transportation agency to consider financial incentives for cities and counties that have resource areas or farmland and, in counties with policies to direct new growth towards cities, for counties to address countywide service responsibilities. Specifies how the Metropolitan Transportation Commission and the Association of Bay Area Governments are to collaborate in the preparation of the SCS for the Bay Area. Specifies how the sub-regional councils of governments within the Southern California Association of Governments will be involved in the preparation of the SCS for the region. Authorizes MPOs in San Joaquin Valley counties to work together to develop and adopt a multi-regional SCS. Travel demand models Travel demand models are statistical and algorithmic attempts to model human travel behavior. They endeavor to forecast potential outcomes of various transportation and land use policy options. In developing their RTPs, MPOs use travel demand models to forecast future vehicle and transit usage and associated air quality impacts. This bill : Requires the CTC to maintain guidelines for travel demand models used in the development of regional transportation plans that, to the extent practicable, account for all of the following: ? The relationship between land use density and household vehicle ownership and vehicle miles traveled. ? The impact of enhanced transit service levels on AB 375 (STEINBERG) Page 6 household vehicle ownership and vehicle miles traveled. ? Changes in travel and land development likely to result from highway or passenger rail expansion. ? Mode splitting that allocates trips between automobile, transit, carpool, and bicycle and pedestrian trips. Speed and frequency, days, and hours of operation of transit service. Requires CTC, before revising these guidelines, to form an advisory committee and hold at least two public workshops on the guidelines. Requires MPOs to disseminate the methodology, results, and key assumptions of whichever travel demand models they use in a way that would be useable and understandable to the public. Housing element law The Planning and Zoning Law requires cities and counties to prepare and adopt a general plan, including a housing element to guide the future growth of a community. Cities and counties must revise their housing elements every five years, following a staggered statutory schedule. Before each revision, each community is assigned its fair share of housing for each income category through the regional housing needs assessment (RHNA) process. A housing element must identify and analyze existing and projected housing needs, identify adequate sites with appropriate zoning to meet its share of the RHNA, and ensure that regulatory systems provide opportunities for, and do not unduly constrain, housing development. To the extent that a city or county does not have adequate sites within its existing inventory of residentially zoned land, then it must adopt a program to rezone land at appropriate densities to accommodate the jurisdiction's housing need for all income groups. The rezonings that a city or county commits to in its program often occur after the housing element is adopted and reviewed by HCD, sometimes years into the planning period. The Department of Housing and Community Development (HCD) reviews both draft and adopted housing elements to determine whether or not they are in substantial compliance with the law. Each year, every city and county must submit to HCD a housing element progress report that includes the number of housing units constructed by income category and the progress in implementing programs within the element. This bill requires cities and counties, in general, to revise AB 375 (STEINBERG) Page 7 their housing elements every eight years in conjunction with the region's RTP, identify in the housing element specific sites to be rezoned, and complete any necessary rezonings within a specific time period, generally three years. Specifically, the bill: Changes the RHNA cycle from five years to eight years for regions that adopt an RTP every four years. The RHNA will remain a five-year cycle in regions that adopt an RTP every five years. Notwithstanding these deadlines, a city or county that does not adopt a housing element within 120 days of the regional housing element revision deadline must revise its housing element every four years. Requires that a council of governments (COG) provide HCD with data assumptions about the relationship between jobs and housing in the region, if available, and requires that HCD's determination of the aggregate regional RHNA reflect the achievement of a feasible balance between jobs and housing within the region. Allows a COG to request that HCD use population and household forecast assumptions from the region's RTP. Requires that a COG's allocation of the RHNA to individual cities and counties be consistent with the SCS, provided that the aggregate regional RHNA is maintained and that every jurisdiction receives an allocation of housing need for very low- and low-income households. Requires a city or county to establish for each program in its housing element a timeline for implementation, such that there will be beneficial impacts of the program within the planning period. Requires a city or county to include in its annual housing element progress reports a description of actions taken by the local government to implement the element's programs by the specified deadlines. Requires a city or county, to the extent that rezoning of sites is needed to accommodate its RHNA allocation, to identify in the housing element the specific sites to be rezoned. Requires a city or county under an eight-year planning period to complete the rezoning of any sites needed to accommodate the RHNA no later than three years after either the date the housing element is adopted or the date that is 90 days after receipt of HCD's comments on the draft element, whichever is earlier, except that in no case shall the rezonings be completed later than three years and 120 days from the regional housing element revision deadline. To the extent AB 375 (STEINBERG) Page 8 that the city or county needs to rezone sites to accommodate its very low- and low-income need, these sites must still be zoned to permit multifamily residential use by right. Allows the deadline to complete rezonings to be extended by one year if the local government has completed rezonings at densities sufficient to accommodate at least 75% of the RHNA need for the very low and low-income categories and makes specified findings. Provides that a city or county that fails to complete the rezonings by the deadline may only disapprove or otherwise render infeasible any housing development that is at least 49% affordable to low- and moderate-income households, located on a site required to be rezoned, and in compliance with applicable, objective general plan and zoning standards by making a finding that the housing development project would have a specific, adverse impact upon the public health or safety and there is no feasible method to satisfactorily mitigate or avoid the adverse impact. This provision is known as the builder's remedy. Permits the developer or any interested person to bring an action to enforce the builder's remedy, places the burden of proof on the city or county, and specifies that if a court finds that the city or county disapproved the project or conditioned its approval in violation of these provisions, the court must issue an order or judgment compelling compliance within 60 days, retain jurisdiction to ensure that its order or judgment is carried out, and, if it determines that its order or judgment has not been carried out within 60 days, issue further orders to ensure that the purposes and policies of the law are fulfilled. Permits any interested person to bring an action to enforce the requirements and deadlines associated with rezonings or the removal of governmental constraints at any time during the planning period, provided that the party provides the city or county with notice at least 60 days prior to filing the action, and specifies that the city or county shall bear the burden of proof. Requires a court, if it finds that a city or county has failed to complete the required rezoning by the deadline, to issue an order or judgment compelling the local government to complete the rezoning within 60 days or the earliest time consistent with public hearing notice requirements, to retain jurisdiction to ensure that its order or judgment is carried out, and, if the court determines that its order or judgment is not carried out, to issue further orders, including sanctions, to ensure that the purposes and policies of the law AB 375 (STEINBERG) Page 9 are fulfilled. Generally requires all regions on an eight-year housing element cycle, other than SANDAG, to begin the next planning period no later than 18 months after the adoption of the first RTP to be adopted after September 30, 2010. SANDAG will move to the eight-year cycle after completing the planning period that is just about to begin. California Environmental Quality Act (CEQA) CEQA requires that local government conduct an analysis of the environmental impacts associated with projects, including private housing developments subject to a discretionary review. In cases where a full analysis is required, the local government must certify an environmental impact report (EIR). CEQA provides, among others, for a limited statutory exemption for qualified infill housing or mixed-use housing developments. To qualify for the exemption, a project must meet all of the following criteria: Be on an infill site in an urbanized area within mile of a major transit stop, Be consistent with any applicable general plan, specific plan, and local coastal program. Be on a site for which a community-level EIR has been certified within the previous five years. Meet various criteria intended to ensure that the project has no apparent significant environmental impacts. Include specified percentages of affordable housing. Be on sites of no more than 4 acres or include no more than 100 units. Attain a density of at least 20 units per acre, or 10 units per acre if that is greater than the average density of other housing within 1500 feet. CEQA regulations also provide for a categorical exemption for infill housing unless the project creates a reasonable possibility of a project-specific impact or leads to a significant cumulative impact. To qualify for the exemption, the project must be located within city limits, be substantially surrounded by urban uses, and meet the following criteria: Be consistent with the general plan and zoning. Can be adequately served by all utilities and services, has no value as habitat for endangered, rare or threatened species, AB 375 (STEINBERG) Page 10 is not a brownfield, would not result in any significant effects relating to traffic, noise, air quality, or water quality, and does not affect historical resources. Be no more than five acres. Current law allows local governments to adopt specific plans, which identify the distribution, location, and extent of the uses of land within the area covered by the plan, and establishes standards and criteria by which development will proceed. Within a specific plan area, any residential development project that is consistent with a specific plan for which an EIR has been certified is exempt from further review under CEQA unless substantial changes have occurred or new information has become available since the EIR was certified. This bill relaxes CEQA requirements for housing developments that are consistent with an SCS or APS. Specifically, the bill: Defines a "transit priority project" as one that: ? Is consistent with the general use designation, density, building intensity, and applicable policies specified for the project area in either an SCS or an APS, for which ARB has accepted an MPO's determination that the SCS or APS would, if implemented, achieve the greenhouse gas emission reduction targets. ? Contains at least 50% residential use, based on total building square footage and, if the project contains between 26% and 50% nonresidential uses, a floor area ratio of not less than 0.75; ? Provides a minimum net density of at least 20 dwelling units per acre; and, ? Is located within one-half mile of an existing or planned major transit stop or high-quality transit corridor included in the RTP. Exempts a transit priority project from CEQA if all of the following conditions are met: ? The project site is not more than eight acres in total area. ? The project does not contain more than 200 residential units. ? The project does not result in any net loss in the number of affordable housing units. ? The project does not include any single level building AB 375 (STEINBERG) Page 11 that exceeds 75,000 square feet. ? Any applicable mitigation measures or performance standards set forth in prior environmental impact reports will be incorporated into the project. ? The project is determined not to conflict with nearby operating industrial uses. ? The project and other approved projects can be adequately served by existing utilities, and the project applicant has committed to pay all applicable in-lieu or development fees. ? The site of the project does not contain wetlands or riparian areas and does not have significant value as a wildlife habitat, and the transit priority project does not harm any protected species. ? The project is not located on developed open space. ? The project does not have a significant impact on historical resources. ? The site of the project is not included on any list of contaminated facilities and sites. ? A preliminary endangerment assessment has been prepared for the site and any hazardous substances have been mitigated to a level of insignificance. ? The site is not subject to unusually high risk of fire or explosion from materials stored or used on nearby properties, risk of an excessive public health exposure, or unmitigated wildland fire, seismic, landslide, or flood risk. ? The project provides one of the following: 1) At least 20 percent of the units affordable to moderate income households, at least 10 percent of units affordable to low income households, or at least 5 percent of units affordable to very low income households, or the developer will pay an equivalent amount of in-lieu fees; or 2) public open space of at least five acres per 1,000 residents of the project. Provides that a transit priority project that has incorporated all feasible mitigation measures and performance standards set forth in prior applicable EIRs may be reviewed through a sustainable communities environmental assessment that identifies, analyzes, and mitigates to a level of insignificance all potentially significant environmental effects. In the event of a challenge, a court shall review the local government's decision to review a transit priority project with a sustainable communities environmental assessment under the substantial evidence standard. AB 375 (STEINBERG) Page 12 Provides that a transit priority project that has incorporated all feasible mitigation measures and performance standards set forth in prior applicable EIRs may be reviewed by an EIR that identifies and mitigates to a level of insignificance all potentially significant environmental effects other than growth inducing impacts and cumulative impacts from vehicles on global warming or the regional transportation network. Such an EIR need not analyze off-site alternatives to the transit priority project. Authorizes a city or county to adopt special traffic mitigation measures for transit priority projects and exempts projects that implement these measures from complying with any other mitigation requirements related to traffic impacts of the project on intersections, streets, highways, freeways, or mass transit. Provides that any residential development, or any mixed-use development that devotes at least 75% of the square footage to residential uses, that is consistent with an ARB-approved SCS or APS and incorporates the mitigation measures required by an applicable prior environmental document need not describe or discuss in any CEQA document growth inducing impacts, any project specific or cumulative vehicle impacts on global warming or the regional transportation network, or a reduced residential density alternative to vehicle impacts. COMMENTS: 1.Purpose of the bill . According to the author, this bill will help implement AB 32 by aligning planning for housing, land use, transportation, and greenhouse gas emissions for the 17 MPOs in the state. The environmental organizations sponsoring this legislation maintain that AB 32 goals cannot be met without changes in land use. Fuel-efficient cars and low-carbon fuels can reduce greenhouse gas emissions, but reducing driving by building housing closer to jobs, schools, and shopping venues will also be necessary. This bill seeks to change land use practices in California by giving each region a greenhouse gas emission reduction target and requiring the regions to adopt regional growth strategies that can achieve these targets. The regions will then assign housing needs to cities and counties under housing element law in a manner consistent with the growth strategy and ensure that regional transportation spending plans are consistent AB 375 (STEINBERG) Page 13 with the strategy. While local governments are not required to implement the growth strategy directly, they will be required to rezone land needed to accommodate their housing needs within three years of the beginning of the housing element planning period. Lastly, the bill facilitates infill development by granting CEQA relief to housing developments that are consistent with the growth strategy. 2.Going on faith . The ultimate success of this bill in reducing greenhouse gas emissions depends on two things: 1) the aggressiveness and appropriateness of the targets set by ARB, and 2) the degree to which cities and counties conform their land use decisions to the regional growth strategy. While the bill establishes a process for ARB to use in setting its regional targets, it does not establish any standard that the targets must meet. If the targets are set too high, regions will not be able to develop consensus and the SCS process will either fall apart or fail to meet the target. If the targets are set too low, however, the regions will not be required to alter the status quo much. This bill is built on faith that ARB will be able to set aggressive and appropriate targets. In general, cities and counties are not obligated to follow the SCS. The fact that a region's RHNA allocation will reflect its SCS means that cities and counties slated for growth in the SCS will be required to zone additional land for housing. This could help implement the SCS, but because cities and counties maintain discretion over how and where they zone additional land, this new capacity ultimately may or may not be consistent with the SCS. Moreover, cities and counties may continue to approve large job centers, megamalls, and other large trip generators far from residential centers. They may also continue to approve low-density subdivisions far from job centers and outside the SCS footprint. This bill is also built on faith that cities and counties will voluntarily implement the SCS or at least respond to regional political pressure to do so. 3.Concurrence hearing . This bill was referred to the committee under Senate Rule 29.10 in order for the committee to review the significant amendments taken in the Assembly. On a concurrence hearing such as this, the committee may only take one of two actions: 1) hold the bill; or 2) return the bill to the Senate Floor for concurrence in Assembly amendments. AB 375 (STEINBERG) Page 14 Assembly Votes: Floor: 49-22 Appr: 11-4 Local Gov: 5-1 POSITIONS: (Communicated to the Committee before 9 am on Friday August 29, 2008) SUPPORT: California League of Conservation Voters (sponsor) Natural Resources Defense Council (sponsor) Alpine Meadows American Farmland Trust American Lung Association of California Association of Bay Area Governments Audubon California Bay Area Air Quality Management District Bay Area Council Bay Area Rapid Transit Breathe California California Association of Local Area Formation Commissions California Business Industry Association California Chapter, American Planning Association California Council of Land Trusts California Interfaith Power and Light California League of Cities California Major Builders Council California Nurses Association California Professional Firefighters California Rural Legal Assistance Foundation California State Association of Counties Chrysler City of Citrus Heights City of Folsom City of Huntington Beach City of Roseville City of Sacramento Coalition for Clean Air Congress for a New Urbanism County of Los Angeles County of Napa County of Sacramento AB 375 (STEINBERG) Page 15 Defenders of Wildlife Douglas Emmett, Inc. Endangered Habitats League Environment California Environmental Defense Fund Environmental Entrepreneurs Ford Motor Company Fulcrum Properties General Motors Health Officers Association of California Homewood Mountain Resort Housing California JMA Ventures League of Women Voters Los Angeles Mayor Antonio Villaraigosa Merced/Mariposa County Asthma Coalition Metropolitan Transportation Commission of San Francisco Bay Area Moller International New Voice of Business Non-Profit Housing Association of Northern California PG&E Sacramento Area Council of Governments Sacramento Area Fire Fighters Local 522 Sacramento Metro Chamber Sacramento Regional Transit Sacramento Regional Transit District San Diego Association of Governments San Francisco Mayor Gavin Newsom Santa Cruz County Regional Transportation Commission Silicon Valley Leadership Group South Coast Air Quality Management District State Association of Electrical Workers State Building and Construction Trades Council State Pipe Trades Council Toyota Transportation and Land Use Coalition Trust for Public Land Western State Council of Sheet Metal Workers OPPOSED: Associated General Contractors of California Automobile Club of Southern California California Association of Councils of Government AB 375 (STEINBERG) Page 16 California Association of Realtors California Business Properties Association California Chamber of Commerce California Contract Cities Association California Hotel & Lodging Association California Manufacturers & Technology Association California Retailers Association Consulting Engineers & Land Surveyors of California Contra Costa Transportation Authority County of Orange Department of Finance Howard Jarvis Taxpayers Association Inland Empire Transportation Coalition Kern County Board of Supervisors Merced County Association of Governments Orange County Transportation Authority Orange County Business Council Resource Landowners Coalition San Bernardino Local Agency Formation Commission San Joaquin Valley Regional Policy Council Self-Help Counties Coalition Sonoma County Transportation Authority Southwest California Legislative Council Transportation Agency for Monterey County Ventura Council of Governments Western Riverside Council of Governments