BILL ANALYSIS SB 375 Page 1 Date of Hearing: July 9, 2007 ASSEMBLY COMMITTEE ON TRANSPORTATION Pedro Nava, Chair SB 375 (Steinberg) - As Amended: June 27, 2007 SENATE VOTE : 21-15 SUBJECT : Transportation planning: travel demand models: preferred growth scenarios SUMMARY : Links transportation planning and funding to general land use planning and the California Environmental Quality Act (CEQA). Specifically, this bill : 1)Makes findings and declarations relative to greenhouse gas emissions, the emissions that are attributed to the transportation sector, and the expanded uses for planning models and analytical techniques to effect policy choices. 2)Requires the California Transportation Commission (CTC), in consultation with the California Air Resources Board (ARB), to adopt travel demand model guidelines by April 1, 2008, for mandated use by the federally-designated metropolitan planning organizations (MPOs) of which there are 18 within the state, county transportation agencies in areas that have been designated as nonattainment areas under the federal Clean Air Act, and the Southern California Association of Governments (SCAG) - that includes the Counties of Imperial, Los Angeles, Orange, Riverside, San Bernardino, and Ventura. Requires CTC to form an advisory committee and to hold workshops. Requires the California Department of Transportation (Caltrans) to assist CTC in preparing the guidelines upon CTC's request. 3)Requires the guidelines to account, at a minimum and to the extent practicable, the following: a) The relationship between land use density and household vehicle ownership and vehicle miles traveled. b) The impact of enhanced transit service levels on household vehicle ownership and vehicle miles traveled. c) Induced travel and induced land development resulting from highway or passenger rail expansion. SB 375 Page 2 d) Mode splitting that allocates trips between automobile, transit, carpool, and bicycle and pedestrian trips. 4)Requires specified regional transportation planning agencies (RTPAs) and public transportation entities to disseminate the methodology, results, and key assumptions of the travel demand model usable and understandable to the public. Encourages, but does not require, other RTPAs (primarily representing the smaller, rural areas) to use the travel demand models in the development of their regional transportation plans (RTPs). 5)Requires specified RTPAs to report to CTC on how the travel demand model supports corridor planning and small area planning at the time the RTP is submitted to CTC and Caltrans. 6)Requires RTPs to include preferred growth scenario (PGS) that: a) Identifies areas within the region that are sufficient to house all the population of the region for all income categories over the course of the planning period; b) Identifies a transportation network to service the transportation needs of the region; c) Identifies significant resource areas and significant farmland; d) Excludes from development all publicly-owned parks and open space, open space or habitat areas protected by a habitat conservation plan, natural community conservation plan, or other adopted natural resource protection plans, lands subject to conservation easements or Williamson Act contracts, and, except in specified conditions, open space lands, endangered plant or animal species habitat, habitat blocks, linkages, or watershed units, floodplains, and "significant farmland," defined as farmland classified as prime or unique farmland, or farmland that is of statewide importance and located outside all existing spheres of influence; and, e) Allows the regional transportation plan to comply with specified provisions of the federal Clean Air Act. SB 375 Page 3 7)Requires ARB, by an unspecified date, in consultation with the affected transportation agencies and after at least one public workshop, to set greenhouse gas emission reduction targets from the automobile and light truck sector for each region, to be achieved by 2020 and 2035. Requires ARB to update the regional targets consistent with each agency's timeframe for updating its regional transportation plan under federal law until 2050. 8)Requires a preferred growth scenario (PGS) to be consistent with the state planning priorities established by AB 857 (Wiggins), Chapter 1016, Statutes of 2002. 9)Requires an RTPA to prepare a supplement to a PGS showing how those greenhouse gas emission targets could be achieved through additional transportation investments, land use incentives, or other programs and incentives if the PGS is unable to reduce greenhouse gas emissions to achieve the targets established by ARB. 10) States that a PGS does not regulate the use of land, nor shall it be subject to any state review or approval, and that nothing in a PGS shall be interpreted as superseding or interfering with the exercise of the land use authority of cities and counties within the region. 11)Requires that, on and after January 1, 2009, projects and improvements to be funded from the regional transportation improvement programs shall be consistent with the RTPs, but exempts projects programmed for funding on or before December 31, 2011, which are not required to be consistent with the PGS if they are contained in the 2006 or 2008 Federal Transportation Improvement Program or are funded pursuant to Proposition 1B. 12)Defines the phrases "consistent with the preferred growth scenario" or "consistent with the regional transportation plan" to mean that the capacity of transportation projects and improvements does not exceed that which is necessary to provide reasonable service levels to the preferred growth scenario. 13)Requires that, before an RTPA can identify a significant resource area or significant farmland as a development area, SB 375 Page 4 it must make findings that the area is adjacent to urbanized areas or located on infill sites; the area is served by necessary utilities; there is no feasible alternative; the loss of resource area is fully mitigated; and the land is efficiently used with a minimum of 10 units per acre. 14)Requires the following projects to be consistent with the preferred growth strategy for the region: a) Projects to implement a regional transportation plan; b) Establishing corridors of statewide or regional priority; c) As of January 1, 2009, projects and improvements funded in the five-year STIP; and, d) Congestion Management Plans. 15)Authorize exemptions from specified California Environmental Quality Act (CEQA) requirements for certain projects within an eligible local jurisdiction that has amended the general plan so that the land use, circulation, housing, and open space elements are consistent with the PGS. The CEQA "relief": a) Applies to cities and counties who have amended their general plans (land use, circulation, housing and open space elements) to be consistent with the PGS in the region. b) Allows a shortened review for eligible residential and residential/mixed use projects on infill sites (environmental document need only examine project specific impacts if environmental impact reports (EIRs) have previously been certified on the PGS and the general plan amendments). c) Exempts "sustainable communities" projects designated by legislative body after public hearing. 16)Establishes criteria for sustainable communities project to include: a) Utilities adequate. SB 375 Page 5 b) In lieu or development fees paid. c) No wetlands, riparian areas, habitat value, harm to protected species. d) No hazardous waste. e) No effect on historical resources. f) No wildland fire risk, seismic, landslide, flood, etc. g) Complies with local "green" building standards. h) Located on an infill site. i) Residential or residential/mixed use. j) Not more than 8 acres. aa) Not more than 200 units. bb) No loss in affordable housing in the project area. cc) No single level building over 75,000 square feet. dd) Consistent with general plan. ee) Meets specified affordability criteria, or located within mile of a major transit stop, or provides public open space of at least 5 acres per 1,000 residents. 17)Authorizes legislative bodies of urban cities and counties to adopt traffic mitigation measures that apply to all future residential projects at least 10 units per acre. If adopted, individual projects are relieved from requirement to comply with any additional traffic mitigation measures (except for impacts on pedestrian or bicycle safety). Requires local review of the traffic mitigation measures and upgrade if necessary at least every five years. EXISTING LAW : 1)Under Federal law, 23 United State Codes Section 134, requires an MPO to be designated for each urbanized area with a population of more than 50,000. SB 375 Page 6 2)Requires each RTPA to adopt and submit to CTC and Caltrans an updated RTP every three years in urban regions and every four years in non-urban regions. Sets forth, as part of the regional transportation planning process, development of a regional transportation plan (RTP). RTPs are to reflect the mobility goals and objectives of the region and be 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. RTPAs and MPOs are encouraged to include in their RTPs a discussion on transportation demand management (TDM), which consists of managing how, when, and where people travel. TDM programs include carpools, vanpools, guaranteed rides home, park-and-ride lots, high-occupancy vehicle lanes, public transit, telecommuting, and trip reduction strategies. The RTP must contain a policy element, an action element, and a financial element and is the source for projects programmed in the RTIP. 3)Requires CTC, in cooperation with RTPAs and Caltrans, to prepare RTP Guidelines. 4)Requires Caltrans to prepare various transportation plans, including the California Transportation Plan and the Federal Transportation Improvement Plan. 5)Requires CTC to adopt the 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 the Interregional Transportation Improvement Program (ITIP) and the Regional Transportation Improvement Programs (RTIPs) developed by 48 RTPAs. 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. 6)Authorizes a city or county to designate an infill opportunity zone that must be consistent with any general plan and specific plan. 7)Exempts a residential project, not exceeding 100 units, with a minimum residential density of 20 units per acre and within SB 375 Page 7 one-half mile of a transit stop, on an infill site in an urbanized area, if certain other conditions are met, from the requirements of CEQA. 8)Requires lead agencies with the principal responsibility for carrying out or approving a proposed discretionary project to prepare a negative declaration, mitigated declaration, or environmental impact report (EIR) for this action, unless the project is exempt from CEQA (CEQA includes various statutory exemptions, as well as categorical exemptions in the CEQA guidelines). 9)Provides ARB, the State Energy Commission, and the California Climate Action Registry with responsibilities with respect to the control of emissions of greenhouse gases, and the Secretary for Environmental Protection is required to coordinate emission reductions of greenhouse gases and climate change activity in state government. 10)Requires ARB to require the reporting and verification of statewide greenhouse gas emissions and to monitor and enforce compliance with this program, as specified. Requires ARB to adopt a statewide greenhouse gas emissions limit equivalent to the statewide greenhouse gas emissions levels in 1990 to be achieved by 2020; AB 32 (Nunez and Pavley) Chapter 488, Statutes of 2006. 11)Enacts Proposition 1C, the Housing and Emergency Shelter Trust Fund Act of 2006, approved by the voters in the November 2006 general election, authorizes the issuance of $2.85 billion in general obligation bonds for various existing housing programs, capital outlay related to infill development, and other purposes. 12)Enacts the Safe Drinking Water, Water Quality and Supply, Flood Control, River and Coastal Protection Bond Act of 2006, approved by the voters as Proposition 84 in the November 2006 general election. Authorizes the issuance of $5.388 billion in general obligation bonds for various public resources projects, including $90,000,000 for planning grants and planning incentives for the development of regional and local land use plans that are designed to promote water conservation, reduce automobile use and fuel consumption, encourage greater infill and compact development, protect natural resources and agricultural lands, and revitalize urban SB 375 Page 8 and community centers. 13)Enacts the Highway Safety, Traffic Reduction, Air Quality, and Port Security Bond Act of 2006, approved by the voters as Proposition 1B on November 7, 2006. Provides nearly $20 billion for transportation and air quality improvements as well as capitol funds for port and transit security. FISCAL EFFECT : According to the Senate Committee on Appropriations: 1)CTC costs associated with the adoption of guidelines would be in the range of $200,000. 2)Caltrans costs for participating in the process for adopting guidelines for travel demand models would be absorbable. 3)ARB would require three positions at a cost of $330,000 and approximately $300,000 in contracted work to develop regional targets and complete site-specific modeling work in order to implement the provisions of this bill. 4)By requiring larger regional planning entities to apply the specified travel demand models to their regional transportation plans, and requiring all RTPAs to include a preferred growth scenario in regional transportation plans, this bill would result in a reimbursable state mandate of unknown significant costs, potential in the range of several million dollars. COMMENTS : Purpose: According to the author, SB 375 provides a mechanism for reducing greenhouse gases from the single largest sector of emissions, cars and light trucks. The environmental organizations sponsoring this legislation maintain that changes in land use and transportation policy must be made to achieve the goals of AB 32. Although greenhouse gas emissions can be reduced by producing more fuel efficient cars and using low carbon fuel, reductions in vehicle miles traveled will also be necessary. Thus, the travel demand models used by metropolitan planning organizations to develop regional transportation plans must assess the effects of land use decisions, transit service, and economic incentives. This bill will help implement AB 32 by amending programs that are beyond the current authority of ARB. SB 375 Page 9 It creates new provisions for the preparation of regional transportation plans and it creates a new subchapter in CEQA to encourage the implementation of plans for greenhouse gas reductions at the local level. Accordingly, this bill contains three principal provisions: 1)The regional transportation plans for each region that will include a PGS in which growth is located where it will achieve greenhouse gas reduction targets set for the region by ARB. The author and sponsors have been at pains to state that the RTPs have no regulatory power over land use. 2)Local governments would have fiscal "incentives" to implement SB 375. This bill provides that future transportation projects would have to be consistent with the PGS. When local governments make land use decisions that implement the PGS, they will be rewarded with transportation funding. Existing transportation projects in the funding pipeline through 2011 will not be affected. 3)Local governments would have regulatory incentives to implement SB 375. Those local governments who choose to amend their land use plans to conform to the PGS, will be authorized to utilize new provisions of CEQA which are designed to assist in implementing the PGS, while preserving public participation and transparency. Preferred Growth Scenario (PGS): According to the author, the PGS will be adopted by all regional transportation planning agencies using the procedures now utilized for the adoption of RTPs. These procedures include local government participation and extensive public outreach. Each region will have the flexibility to design the PGS that best meets its needs within four general parameters set by the state. First, each PGS must identify housing sites for the region's population, including all economic segments of the population and including all the population growth. Second, the housing sites must be located to achieve that region's share of the greenhouse gas reduction targets. Third, the housing sites must avoid significant natural resource areas unless certain orderly growth findings are made. Fourth, the housing sites must avoid significant farmland unless certain findings are made. Each region must attempt to achieve the greenhouse gas reduction targets established by ARB to the greatest extent feasible. If, SB 375 Page 10 however, a region cannot design a preferred growth scenario that will accomplish the necessary reductions, the region must prepare a supplement that will identify how that region could achieve the targets if it had additional resources or programs. The author maintains that the PGS is an evolutionary step beyond the regional blueprints or visions that have been adopted in some regions. Regional blueprints in Los Angeles and Sacramento suggest that future growth could meet these criteria of the PGS with about 50% of new housing being constructed on infill sites and about 50% being constructed in greenfield subdivisions. These new subdivisions tend to be closer to the urban core and slightly more dense. These designs will reduce greenhouse gas emissions by resulting in shorter vehicle trips and increased transit use. In their letter of concern, Housing California indicates that a major concern centers on "how the PGS will interact with the statutorily-mandated housing element. Will the PGS reflect important factors that currently apply to the housing needs allocation process, including reducing income segregation/increasing integration? What measurement of housing need will the PGS be based on? If it uses the Regional Housing Needs Assessment numbers produced by the Department of Housing and Community Development every five years, how will they sync up with the four-year RTP schedule?" This bill requires that the regional transportation plans include a preferred growth scenario and that the regional transportation improvement programs be consistent with the regional transportation plans in order to receive state transportation funds. The bill further requires that only the 18 metropolitan planning organizations, counties within air quality non-attainment areas, and SCAG use the travel demand computerized models that are essential in the development of PGSs. However, the smaller rural areas in the state that are currently in air quality attainment areas are not required to use the computerized travel demand models. Accordingly, could an adequate PGS be developed by these rural entities without the use of the travel demand models and still meet the test of regional transportation improvement program conformity with the regional transportation plan to the extent that state transportation funding would not be curtailed? The committee or author may wish to consider amending this bill to exclude these SB 375 Page 11 rural areas from the provisions of the bill or to allow participation on a voluntary basis and, if an entity options to participate in the development of a PGS, then the applicable provisions on funding restrictions would apply. On the matter of locally-funded transportation projects, as approved by the local voters, should such projects be exempt from the bill's provisions and treated currently in the same manner as projects funded by Proposition 1B or identified in the current or 2008 federal transportation improvement program? CEQA incentive: SB 375 enacts a new subchapter to CEQA, "Implementation of the Preferred Growth Scenario." The provisions of this subchapter apply to land use decisions within local jurisdictions that have amended their general plans to conform to the PGS. There are three new provisions. First, if a residential or mixed use project can satisfy the environmental and land use criteria on a sustainable communities checklist, it does not have to engage in any further compliance with CEQA. Second, for projects that do not qualify as sustainable communities projects, those projects will only have to analyze their project specific impacts under CEQA. Third, local governments will be authorized to establish traffic mitigation polices for residential projects in advance. Developed as "incentives" the CEQA exemptions and streamlining provisions appear overly prescriptive and unworkable. The author may wish to amend the bill to have its CEQA exemption provisions be less prescriptive, especially as CEQA currently allows for limited infill exemptions, in order to actualize such incentives. Greenhouse gas emissions: SB 375 is one of the first attempts in the post-AB 32 world to attempt to implement programs to achieve that landmark bill's goals. It chooses to do so through the regulation of land use. While the sense of urgency underlying the rapid development of this bill is understandable, the Committee may wish to consider some of the serious policy implications of its provisions, and whether rushing forward without taking at least a little more time to work through some of these implications is a prudent course, given the potentially profound impacts SB 375 would have, especially in terms of the mandate placed upon ARB to develop emission targets for each region by the proposed amended date of June 30, 2008. The author or the committee may wish to clarify whether the "targets" carry the same connotation as statewide greenhouse gas "limits" that are required to be adopted by ARB by January 1, SB 375 Page 12 2008, pursuant to AB 32? Coordination or impacts upon other local and state plans: 1)Strategic Growth Plan (SGP) calls for a $222 billion infrastructure improvement program to fortify the state's transportation system, education, housing, and waterways. The SGP includes a historic and comprehensive transportation investment package designed to decrease congestion, improve travel times, and increase safety, while accommodating future growth in the population and the economy. The SGP deploys demand-management strategies, such as dedicated truck lanes and high occupancy toll lanes, and builds new capacity. It will enable more traffic to move through existing roadways, rehabilitate thousands of lane miles of roads, add new lanes, and increase public transportation ridership. This requires innovation in transportation planning, construction and management, sustained coordination between regional transportation agencies and the state, and dedicated funding. The SGP, however, does not include specific considerations for greenhouse gas emission and criteria air pollutant reductions. 2)The Southern California Association of Governments (SCAG) is engaged in a land use/growth plan entitled "The Compass Blueprint 2% Strategy." It is a guideline for how and where SCAG can implement the growth vision for Southern California's future. The strategy calls for modest changes to current land use and transportation trends on only 2% of the land area of the region - the 2% Strategy Opportunity Areas. The 2% Strategy proposes increasing the region's mobility by: a) Encouraging transportation investments and land use decisions that are mutually supportive. b) Locating new housing near existing jobs and new jobs near existing housing. c) Encouraging transit-oriented development and promoting a variety of travel choices. 1)MTC: According to MTC, "Proposition 1C (the statewide housing bond) contains $850 million for a "Regional Planning, Housing and Infill Incentive Account" while Proposition 84 (the park bond) includes $90 million for planning grants and revolving SB 375 Page 13 loan funds for local and regional agencies to reduce automobile use, among other goals. In coordination with the Joint Policy Committee, MTC will work to ensure that legislation adopted to guide the distribution of these funds complements and rewards the region's ongoing smart growth efforts, such as our Transportation for Livable Communities and Housing Incentive Program, our Transit Oriented Development Policy, and the Focusing Our Vision effort spearheaded by the Association of Bay Area Governments. 2)California Transportation Commission: The CTC has recently initiated efforts in June 2007 to update the RTP guidelines to incorporate meeting AB 32 greenhouse gas emission reduction targets and to enhance the use of regional blueprint plans. According to CTC, "Senator Perata has requested that CTC report back its findings and recommendations to the Legislature by the end of 2007." ARGUMENTS IN SUPPORT: According to the author, "Current planning models used for transportation decisions and air quality planning must be improved to assess policy choices. This includes encouraging more compact development patterns, expanding transit service, creating walkable communities, and providing incentives. It is also necessary to achieve significant greenhouse gas reductions from changed land use patterns and improved transportation to meet AB 32 standards." The author notes that "transportation and CEQA incentives are needed for greater housing choices, shorter commutes, reduced climate emissions, less air pollution, less fossil fuel consumption, and greater conservation of farmlands and habitat." ARGUMENTS IN OPPOSITION: According to numerous groups opposed to this bill, "SB 375 could seriously compromise the existing long-term funding rules for a broad spectrum of state and local transportation programs and projects including critical long-term funding through the State Transportation Improvement Program (STIP). "SB 375 changes the well-established criteria for funding transportation projects through the STIP by imposing new, limiting criteria to determine if a project qualifies for funding. That new criteria focuses primarily on the location of a project. If a project is located within a preferred growth are it will likely qualify for funding. If the project is SB 375 Page 14 outside of a preferred growth area it doesn't even qualify to be considered for funding. "The most recent amendments to SB 375 acknowledge the impact on STIP funding by modestly exempting projects programmed to be funded in the 2006 and 2008 STIP. Beyond this narrow band of exempted projects, projects included in the 2010 STIP (and beyond) must comply with the requirements of SB 375." According to the Department of Finance they state that "This bill could result in a potentially costly reimbursable state mandate by requiring local agencies to either alter existing travel models or acquire new travel models to include new assumptions. Few or none of the existing models currently in use by RTPAs could comply, so most or all would need to either reprogram existing models or develop new models. It is possible that substantial data collection would be required in order to develop the new formulas in these models and to populate them with data on local attributes. Development of improved models is underway by Caltrans and several other agencies. There is no accepted best practice at present and further research efforts are needed before any new modeling technique is mandated." Author's amendments: The author proposes the following amendment to allow the individual counties within the SCAG area to develop transportation objectives to serve their own county residents, providing an option to having the preferred growth scenario independently developed through SCAG's regional governance perspective: Within a multi-county regional transportation agency, a county and the cities within the county may propose to the regional transportation agency a preferred growth scenario for that county. The regional transportation planning agency may adopt the county preferred growth scenario as part of the region's preferred growth scenario provided that the region's preferred growth scenario is consistent with the other provisions subparagraph (b)(2). Related bills: AB 842 (Jones) 2007, would provide implementing language for the expenditure of funds from Proposition 1C (Regional Planning, Housing, and Infill Incentives Account and the Transit-Oriented Development Account) and Proposition 84 (funds earmarked for local and regional planning). Among its other provisions, would require CTC to update its RTP guidelines SB 375 Page 15 to include a requirement that each RTP provide for a 10% reduction in the growth increment of vehicle miles traveled. The bill is a two-year bill. AB 665 (DeSaulnier) 2007, would require the Governor's Office of Planning and Research to review and provide comments on existing and future regional transportation plans. That bill passed out of the Senate Transportation and Housing Committee and has been referred back to the Senate Rules Committee. AB 867 (Davis) 2007, would require MPOs and most RTPAs when preparing an RTP, to factor the mobility of low-income and minority residents into the travel demand forecast underlying the RTP. That bill passed out of the Senate Transportation and Housing Committee as amended and is scheduled for hearing in the Senate Appropriations Committee. SB 303 (Ducheny) 2007, would require the housing element of the general plan to identify land to accommodate a 10-year supply of housing, requires local governments to zone for five years of housing within one year of adopting the housing element, changes requirements related to the conservation and open-space elements of the general plan, and specifies that all other general plan elements be updated every 10 years. That bill was held in Assembly Local Government Committee. AB 1020 (Hancock) 2006, would have required the CTC to adopt guidelines related to the travel demand models used by RTPAs in the development of regional transportation plans. The travel demand models would be capable, to the extent practicable, of evaluating a number of specified policy choices related to land use decisions, transit use, and economic incentives on travel demand. The Governor vetoed that bill indicating that the bill would impose costly and unnecessary requirements upon the CTC, Caltrans, and RTPAs. Further, he indicated that his administration is already moving forward with a comprehensive approach to integrating land use and transportation planning through the Strategic Growth Plan. REGISTERED SUPPORT / OPPOSITION : Support California League of Conservation Voters (co-sponsor) Natural Resources Defense Council (co-sponsor) SB 375 Page 16 American Farmland Trust American Lung Association of California Breathe California California Coalition for Rural Housing California Council of Land Trusts California Nurses Association Coalition for Clean Air Defenders of Wildlife Environment California New Voice of Business Planning and Conservation League Southern California Association of Governments Trust for Public Land Opposition Asphalt Pavement Association of California Associated General Contractors of California California Association of Realtors California Building Industry Association California Business Properties Association California Chamber of Commerce California Hotel and Lodging Association California Major Builders Council California Manufacturers and Technology Association California Retailers Association Consulting Engineers and Land Surveyors of California Contra Costa Transportation Authority County of San Diego Department of Finance Housing California (concerned) Inland Empire Transportation Council Orange County Business Council Orange County Transportation Authority Resource Landowners Coalition Transportation California Analysis Prepared by : Ed Imai / TRANS. / (916) 319-2093