BILL ANALYSIS Ó
AB 667
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Date of Hearing: May 24, 2013
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 667 (Roger Hernández) - As Amended: May 20, 2013
Policy Committee: Local
GovernmentVote:5-4
Urgency: No State Mandated Local Program:
Yes Reimbursable: No
SUMMARY
This bill requires a city or county to prepare an economic
impact report before the local government permits the
construction or conversion of superstore retailers in an
economic assistance area or when a superstore receives economic
assistance, as specified. Specifically, this bill:
1)Establishes the required contents and scope of the economic
impact report and authorizes a city or county to prepare the
economic impact report either themselves or through a contract
with a third party. Requires the applicant for the
development project to pay for the costs of preparing the
economic impact report.
2)Defines "economic assistance areas" to mean existing economic
development areas, that may be amended from time to time by
the Legislature, including an enterprise zone, a local agency
military base recovery area, a manufacturing incentive area, a
targeted tax area or a redevelopment area identified by any
successor or agency to a former redevelopment agency or
recipients of over $100,000 of financial assistance, as
specified.
3)Requires city and county governing bodies to provide the
opportunity for public comment on the economic impact reports
and their findings at regularly scheduled meetings at least 30
days before a decision or action.
4)Makes findings and declarations that the measure applies to
charter cities and charter counties because the effects of
superstore retailers are a matter of statewide concern that
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extend beyond local boundaries.
FISCAL EFFECT
By requiring cities and counties to prepare economic impact
reports on superstore projects, AB 667 creates a new state
mandate. The bill disclaims the state's responsibility for
reimbursing local government, citing local officials' ability to
charge processing fees that will offset their costs. If the
local charges for the new economic impact reports don't exceed
the reasonable costs of preparing and using those reports, those
charges will be permissible local fees that can be adopted
without a vote of the electorate.
COMMENTS
1)Purpose . According to the author, a great deal of concern has
been expressed about the economic impacts caused by large big
box or superstore developments. Among others, concerns have
been expressed by local small businesses, community groups,
other retail grocery stores, workers and labor organizations.
At the same time, millions of dollars in state and local tax
credits and other incentives are being offered to include
these developments in local jurisdictions throughout the State
of California. The author contends the goal of economic
assistance areas is to promote economic development with the
goal of creating good jobs, economically self-sustaining
communities, and promoting a vibrant small business sector and
the purpose of the benefits granted by economic assistance
areas is to stimulate business investment and job creation for
qualified disadvantaged individuals in state-designated
economically-distressed areas.
2)Support . The sponsor, the United Food and Commercial Workers,
Western States Council, argues it is crucial that local
governments making land use economic subsidy decisions have
the information they need to make an informed choice. They
note they have seen superstore after superstore come into
communities with promises of economic benefit only to have the
opposite effect. In fact, they state, studies indicate that
superstores have an adverse impact on workers and the
communities they are sited in. The sponsor concludes AB 667
is needed to ensure there is a procedure and a forum for
decision makers to weigh all of the economic information
available when considering a superstore development.
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3)Opposition . A coalition including the California Retailers
Association, Associated General Contractors, California
Building Industry Association, California Business Properties
Association, California Chamber of Commerce, California
Grocers Association, Commercial Real Estate Development
Association, International Council of Shopping Centers, Retail
Industry Leaders Association, and the Western Electrical
Contractors Association, in opposition, raise the following
concerns.
a) AB 667 has the potential to create significant delays in
the local planning process, tying up local government
resources and delaying job creation.
b) The bill specifically targets economic development areas
such as enterprise and manufacturing zones, in California
communities that are already struggling.
c) Although the stated intent of the bill is to 'promote
economic development,' the real purpose of the bill appears
to be economic protectionism.
d) AB 667 also creates new opportunities for litigation of
projects in an already overly-litigious area.
e) Local consumers, through their elected officials, should
make the decisions about which stores they want in their
communities. AB 667 infringes upon local planning
authority.
This coalition is joined by local governments who argue it
will subject a small group of local development projects to
delay and expanse. They object to the state regulation of
specified types of development and community impacts that are
always considered by local-elected officials. They contend
that each of the state's cities and counties should maintain
the ability to make decisions which best fit their community.
4)Background . At the core of the debate over superstores,
indeed retail in general, is the issue of fiscalization of
land use, meaning land use decisions made for the sales tax
they generate, rather than for the orderly development of
land. Uses that generate sales tax for local governments have
become more important over the years as the state and federal
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government cut financial support for local agencies while
other local source revenues, in particular property tax,
decline. As a result, cities and counties compete to attract
land uses that generate local revenues and shun land uses that
need expensive public services. This fiscalization of land
use distorts local land use decisions by emphasizing sales tax
revenues while discounting traffic problems, air quality, open
space and affordable housing.
5)Local government response . At least a half-dozen cities and
one county already use their land use authority to require
specialized economic impact reports before they act on
superstore permits. Some communities have general plan
policies and land use ordinances that ban big box developments
or impose regulatory and design standards that make them
infeasible. Many cities and counties require urban decay
analyses in the EIRs they prepare for superstore projects,
which look at the impacts on existing development.
6)Previous legislation.
a) SB 469 (Vargas, 2012) would have required a city or
county to prepare economic impact reports before it
approves or disapproves the construction or conversion of
superstore retailers. SB 469 was vetoed by Governor Brown,
citing the adequacy of existing laws and reluctance to add
more requirements to an already cumbersome process.
b) SB 1523 (Alarcón) of 2006 would have required an
economic impact report to be prepared prior to a city's or
county's approval or disapproval of a superstore retailer
with greater than 100,000 square feet. This bill was
vetoed by Governor Schwarzenegger.
c) SB 1056 (Alarcón), of 2004, was similar to AB 1523 and
was also vetoed by Governor Schwarzenegger.
Analysis Prepared by : Roger Dunstan / APPR. / (916) 319-2081