Amended in Assembly March 19, 2013

California Legislature—2013–14 Regular Session

Assembly Bill No. 667

Introduced by Assembly Member Roger Hernández

February 21, 2013

An act to begin delete amend Section 65950 of end delete begin insert add Sections 65928.3, 65928.4, 65928.7, 65935, and 65957.3 to end insert the Government Code, relating to land use.

LEGISLATIVE COUNSEL’S DIGEST

AB 667, as amended, Roger Hernández. Land use: development project begin delete review. end delete begin insert review: superstores. end insert

The Permit Streamlining Act within the Planning and Zoning Law requires the lead agency that has the principal responsibility for approving a development project, as defined, to approve or disapprove the project within a specified number of days from the date of certification of an environmental impact report, the date of the adoption of a negative declaration, or the determination by the lead agency that the project is exempt from the California Environmental Quality Act.

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This bill would, in addition, require a city, county, or city and county, including a charter city, prior to approving or disapproving a proposed development project that would permit the construction of a superstore retailer, as defined, to cause an economic impact report to be prepared, as specified, to be paid for by the project applicant, and that includes specified assessments and projections, including, among other things, an assessment of the effect that the proposed superstore will have on specified designated economic assistance areas, as defined, and an assessment of the effect that the proposed superstore will have on retail operations and employment in the same market area. The bill would also require the governing body to provide an opportunity for public comment on the economic impact report. By increasing the duties of local public officials, the bill would impose a state-mandated local program. The bill would additionally find and declare that these provisions are an issue of statewide concern and not a municipal affair.

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The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

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This bill would provide that no reimbursement is required by this act for a specified reason.

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This bill would make technical, nonsubstantive changes to those provisions.

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Vote: majority. Appropriation: no. Fiscal committee:  begin delete no end delete begin insert yes end insert . State-mandated local program:  begin delete no end delete begin insert yes end insert .

The people of the State of California do enact as follows:

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begin insert SECTION 1. end insert   

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begin insert It is the intent of the Legislature to promote
economic development in all communities of the state and in
particular in identified Economic Assistance Areas, with the goal
of creating good jobs, economically self-sustaining communities,
and promoting a vibrant small business sector. It is the intent of
the legislature to ensure that the superstore retail model meets
these goals and does not undermine efforts toward those ends.
Therefore, the Legislature finds and declares all of the following: end insert

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(a) The state has identified geographically targeted economic
development areas. Each of these areas has related tax incentive
benefits as well as a variety of locally provided incentives and
benefits. The purpose of these benefits is to stimulate business
investment and job creation for qualified disadvantaged individuals
in state-designated economically distressed areas. Similarly, other
redevelopment plan areas have been developed by former
redevelopment agencies and their successor agencies pursuant to
the Community Redevelopment Law (Part 1 (commencing with
Section 33300) of Division 24 of the Health and Safety Code), with
the purpose of revitalizing the economy of local jurisdictions.

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(b) The state and local governments have provided financial
assistance to certain businesses to stimulate business development
and job creation.

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(c) It is in the interest of local governments to promote economic
development in their jurisdictions.

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(d) Land use decisions are frequently linked to fiscal policy
because local governments receive a share of sales tax revenues
generated within their borders. California cities thus often seek
large sales tax revenue sources, such as superstores, without taking
into account all of the external economic effects that superstores
bring to communities.

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(e) Transformations in the big box retail industry have altered
retail business nationwide. The engine of this change is the retail
format known as the superstore, a big box retail store that also
contains the equivalent of a full-service grocery store, with the
total floor space often three to four times as large as that of a
conventional supermarket.

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(f) As a result of the restructuring of retail business, particularly
the grocery sector in California, the following effects may be seen:
local grocers, who yield a greater community return on investment,
are driven out of business; anchor stores to other local businesses
are closed down impacting many small businesses, and resulting
in less community access to viable superstore alternatives; lower
wages and benefits paid to grocery workers by superstore retailers;
and a host of complex land use, traffic, and fiscal impacts.

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(g) Superstores typically combine a large variety of discount
general merchandise with full-service grocery sales to the general
public under one roof, thereby generating more intense land use
and environmental impacts than other large-scale retailers and
wholesale membership clubs.

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(h) Industry and academic studies indicate superstores rarely
add any retail services not currently provided within a community,
and the majority of sales growth at a superstore comes from a
direct shift of dollars from existing retailers within a community,
primarily from grocery stores.

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(i) Land use decisions regarding superstores fall to city and
county governments, even if the impacts will be regional as well
as local and may impact the efforts by the state and regions in
economic development areas.

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(j) Currently, local governments that desire to perform due
diligence for their constituents by performing an economic analysis
are placed at a disadvantage because a neighboring city or county
may not perform an economic analysis. This situation may result
in the shifting of sales tax and destruction of the business
community in a city or county that simply wants to study the
impacts of the development project before making a final approval
that the permitting of the superstore does not have a material
adverse impact on the impact area.

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begin insert SEC. 2 end insert begin insert . end insert   

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begin insert Section 65928.3 is added to the end insert begin insert Government Code end insert begin insert , to
read: end insert

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begin insert 65928.3. end insert   

“Economic assistance areas” means existing
economic development areas, that may be amended from time to
time by the Legislature, including an enterprise zone established
pursuant to Chapter 12.8 (commencing with Section 7070) of
Division 7 of Title 1, a local agency military base recovery area
established pursuant to Chapter 12.97 (commencing with Section
7105) of Division 7 of Title 1, a manufacturing incentive area
designated pursuant to Section 7073.8, a targeted tax area
designated pursuant to Section 7097, or any redevelopment area
identified by any successor or agency to a former redevelopment
agency, or recipients of over one hundred thousand dollars
($100,000) of financial assistance as defined in this chapter.

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begin insert SEC. 3. end insert   

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begin insert Section 65928.4 is added to the end insert begin insert Government Code end insert begin insert , to
read: end insert

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begin insert 65928.4. end insert   

“Financial assistance” includes, but is not limited
to, any of the following in the amount of one hundred thousand
dollars ($100,000) or greater:

(a) Any appropriation of public funds, including, but not limited
to, loans, grants, or subsidies or the payment for or construction
of parking improvements.

(b) Any tax incentive, including, but not limited to, tax
exemptions, rebates, reductions, or moratoria of a tax, including
any rebate or payment based upon the amount of sales tax
generated from the superstore.

(c) The sale or lease of real property at a cost that is less than
fair market value.

(d) Payment for, forgiveness of, or reduction of fees.

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begin insert SEC. end insert begin insert 4. end insert   

end insert

begin insert Section 65928.7 is added to the end insert begin insert Government Code end insert begin insert , to
read: end insert

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begin insert 65928.7. end insert   

“Impact area” means a five-mile radius surrounding
the proposed location of a superstore.

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begin insert SEC. 5. end insert   

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begin insert Section 65935 is added to the end insert begin insert Government Code end insert begin insert , to
read: end insert

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begin insert 65935. end insert   

“Superstore” means a business establishment that
exceeds 90,000 square feet of gross floor area, sells a wide range
of consumer goods, and devotes 10,000 square feet or more of the
sales floor area to the sale of items that are exempted from the
Sales and Use Tax Law (Part 1 (commencing with Section 6001)
of Division 2 of the Revenue and Taxation Code), pursuant to
Section 6359 of the Revenue and Taxation Code. “Superstore”
shall include a retail establishment with multiple tenants, and the
cumulative sum of related or successive permits that may be part
of a larger project, including piecemeal additions to a building,
where consumer goods and nontaxable items are sold under the
same roof with shared checkout stands, entrances, and exits.
“Superstore” does not include a discount warehouse or retail
store where more than one-half of the items carried by the discount
warehouse or retail store are sold in large quantities or in bulk,
and the discount warehouse or retail store requires shoppers to
pay a membership or assessment fee.

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begin insert SEC. 6. end insert   

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begin insert Section 65957.3 is added to the end insert begin insert Government Code end insert begin insert , to
read: end insert

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begin insert 65957.3. end insert   

(a) Prior to the permitting of the construction of, the
addition to, or the alteration of, any buildings or structures which
would create a superstore in an economic assistance area, in
addition to the findings otherwise required by any ordinance or
regulation of the city, county, or city and county, the legislative
body of the city, county, or city and county shall make a finding
that, based on consideration of all economic benefits and costs,
the superstore will not materially adversely affect the economic
welfare of the impact area. This finding shall be based upon
information contained in an economic impact report, any other
information received or obtained by the designated agency of the
city, county, or city and county, and any other information received
before or at a public hearing conducted as required by this section.

(b) The city, county, or city and county may prepare the
economic impact report or contract with a private entity, other
than the permit applicant, or with another public agency for the
preparation of the report. Any private entity or other public agency
contracted to prepare the economic impact report shall be qualified
by education, training, and experience to conduct economic and
fiscal impact analyses.

(c) The applicant for the proposed superstore shall pay the city,
county, or city and county for the costs of preparing the economic
impact report.

(d) The economic impact report shall include, but is not limited
to, all of the following:

(1) An assessment of whether the proposed superstore will meet
the purposes of any designated economic assistance areas,
including an enterprise zone, a local agency military base recovery
area, a manufacturing enhancement area, a targeted tax area, or
any plan area administered by a successor agency to a former
redevelopment agency, in which the superstore is proposed to be
located.

(2) An assessment of whether the proposed superstore will
negatively impact any retailer that is the beneficiary of any benefits
from any program adopted in connection with any designated
economic development area, including an enterprise zone, a local
agency military base recovery area, a manufacturing enhancement
area, a targeted tax area, or any program adopted by a successor
agency to a former redevelopment agency, in which the superstore
is proposed to be located.

(3) An assessment of the extent to which the proposed superstore
will capture a share of retail sales in the impact area.

(4) An assessment of the extent to which the construction and
operation of the proposed superstore will affect the supply and
demand for retail space in the impact area.

(5) An assessment of the extent to which the construction and
operation of the proposed superstore will affect employment in
the impact area, including all of the following:

(A) The number of persons employed in existing retail stores in
the impact area.

(B) An estimate of the number of people who will likely be
employed by the proposed superstore.

(C) An analysis of whether the proposed superstore will result
in a net increase or decrease in employment in the impact area.

(D) The effect on wages and benefits of employees of other retail
businesses, and community income levels in the impact area.

(6) A projection of the costs of public services and public
facilities resulting from the construction and operation of the
proposed superstore and the incidence of those costs, including
the cost to the state, city, or county of any public assistance that
employees of the proposed superstore will be eligible for based
on the wages and benefits to be paid by the proposed superstore.

(7) A projection of the public revenues resulting from the
construction and operation of the proposed superstore retailer
and the incidence of those revenues.

(8) An assessment of the effect that the construction and
operation of the proposed superstore will have on retail operations,
including grocery stores or retail shopping centers, in the impact
area, including the potential for blight resulting from retail
business closures and the nature of any businesses displaced.

(9) An assessment of the effect that the construction and
operation of the proposed superstore will have on the ability of
the city, county, or city and county to implement the goals
contained in its general plan, including, but not limited to, local
policies and standards that apply to land use patterns, traffic
circulation, affordable housing, and natural resources, including
water supplies, open-space lands, noise problems, and safety risks.

(10) An assessment of the effect that the construction and
operation of the proposed superstore will have on average total
vehicle miles traveled by retail customers in the same impact area.

(11) An assessment of the potential for long-term vacancy of
the property on which the superstore is proposed in the event that
the business vacates the premises, including any restrictions that
exist on the subsequent use of the property on which the superstore
is proposed to be located, including the provisions of any lease
that, in the event the owner or operator of the proposed superstore
vacates the premises, would require the premises to remain vacant
for a significant amount of time.

(12) An assessment of whether the superstore would require the
demolition of housing or any other action or change that would
result in a decrease or negative impact on the creation of extremely
low-, very low-, low-, or moderate-income housing.

(13) An assessment of whether the superstore would result in
the destruction or demolition of park or other green space,
playgrounds, child care facilities, or community centers.

(14) An assessment of whether the superstore would result in
any other adverse or positive economic impacts or blight in the
impact area.

(15) An assessment of whether any measures identified by the
superstore are available that may mitigate any materially adverse
economic impacts of the superstore.

(e) At any regularly scheduled meeting or meetings of the
legislative body of a city, county, or city and county, following the
completion and approval of the economic impact report required
by this section, and 30 days prior to the issuance of any entitlement,
including, but not limited to, a building permit, a city, county, or
city and county shall provide the opportunity for public comment
on the economic impact report and its findings.

(f) This section shall not preclude a city, county, or city and
county from conducting additional studies of the effects of the
construction and operation of a proposed superstore.

(g) (1) The Legislature finds that the construction and operation
of a superstore has land use, environmental, economic, fiscal, and
social equity effects that extend beyond the boundaries of the city,
county, or city and county in which it is located and may impact
the goals and objectives of economic development areas, including
enterprise zones, local agency military base recovery areas,
manufacturing enhancement areas, targeted tax areas, and any
plan area administered by a successor agency to a former
redevelopment agency, and beyond the borders of the city, county,
or city and county, where financial assistance is provided to a
superstore.

(2) The Legislature finds that it is essential for the statewide
public health, safety, and welfare to require cities, counties, and
cities and counties to understand the potential spillover effects of
approving the construction and operation of superstores.

(3) The Legislature further finds and declares that the review
and regulation of superstores is a matter of statewide concern and
not merely a municipal affair, as that term is used in Section 5 of
Article XI of the California Constitution. Therefore, this section
shall apply to charter cities and to charter cities and counties.

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begin insert SEC. 7. end insert   

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No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
a local agency or school district has the authority to levy service
charges, fees, or assessments sufficient to pay for the program or
level of service mandated by this act, within the meaning of Section
17556 of the Government Code.

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SECTION 1.  

Section 65950 of the Government Code is amended
to read:

65950.  

(a) Any public agency that is the lead agency for a
development project shall approve or disapprove the project within
whichever of the following periods is applicable:

(1) One hundred eighty days from the date of certification by
the lead agency of the environmental impact report, if an
environmental impact report is prepared pursuant to Section 21100
or 21151 of the Public Resources Code for the development project.

(2) Ninety days from the date of certification by the lead agency
of the environmental impact report, if an environmental impact
report is prepared pursuant to Section 21100 or 21151 of the Public
Resources Code for the development project and all of the
following conditions are met:

(A) At least 49 percent of the units in the development project
are affordable to very low or low-income households, as defined
by Sections 50105 and 50079.5 of the Health and Safety Code,
respectively. Rents for the lower income units shall be set at an
affordable rent, as that term is defined in Section 50053 of the
Health and Safety Code, for at least 30 years. Owner-occupied
units shall be available at an affordable housing cost, as that term
is defined in Section 50052.5 of the Health and Safety Code.

(B) Prior to the application being deemed complete for the
development project pursuant to Article 3 (commencing with
Section 65940), the lead agency received written notice from the
project applicant that an application has been made or will be made
for an allocation or commitment of financing, tax credits, bond
authority, or other financial assistance from a public agency or
federal agency, and the notice specifies the financial assistance
that has been applied for or will be applied for and the deadline
for application for that assistance, the requirement that one of the
approvals of the development project by the lead agency is a
prerequisite to the application for or approval of the application
for financial assistance, and that the financial assistance is
necessary for the project to be affordable as required pursuant to
subparagraph (A).

(C) There is confirmation that the application has been made
to the public agency or federal agency prior to certification of the
environmental impact report.

(3) Sixty days from the date of adoption by the lead agency of
the negative declaration, if a negative declaration is completed and
adopted for the development project.

(4) Sixty days from the determination by the lead agency that
the project is exempt from the California Environmental Quality
Act (Division 13 (commencing with Section 21000) of the Public
Resources Code), if the project is exempt from that act.

(b) This section does not preclude a project applicant and a
public agency from mutually agreeing in writing to an extension
of any time limit provided by this section pursuant to Section
65957.

(c) For purposes of paragraph (2) of subdivision (a),
“development project“ means a use consisting of either of the
following:

(1) Residential units only.

(2) Mixed-use developments consisting of residential and
nonresidential uses in which the nonresidential uses are less than
50 percent of the total square footage of the development and are
limited to neighborhood commercial uses and to the first floor of
buildings that are two or more stories. As used in this paragraph,
“neighborhood commercial” means small-scale general or specialty
stores that furnish goods and services primarily to residents of the
neighborhood.

(d) For purposes of this section, “lead agency” and “negative
declaration” have the same meaning as defined in Sections 21067
and 21064 of the Public Resources Code, respectively.

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