Senate Bill No. 1

Introduced by Senator Steinberg

December 3, 2012

An act to add Part 1.86 (commencing with Section 34191.10) to Division 24 of the Health and Safety Code, and to amend Section 21094.5 of the Public Resources Code, relating to economic development, and making an appropriation therefor.

LEGISLATIVE COUNSEL’S DIGEST

SB 1, as introduced, Steinberg. Sustainable Communities Investment Authority.

The Community Redevelopment Law authorizes the establishment of redevelopment agencies in communities to address the effects of blight, as defined. Existing law dissolved redevelopment agencies and community development agencies, as of February 1, 2012, and provides for the designation of successor agencies.

Existing law provides for various economic development programs that foster community sustainability and community and economic development initiatives throughout the state.

This bill would authorize certain public entities of a Sustainable Communities Investment Area, as described, to form a Sustainable Communities Investment Authority (authority) to carry out the Community Redevelopment Law in a specified manner. The bill would require the authority to adopt a Sustainable Communities Investment Plan for a Sustainable Communities Investment Area and authorize the authority to include in that plan a provision for the receipt of tax increment funds provided that certain economic development and planning requirements are met. The bill would authorize the legislative body of a city or county forming an authority to dedicate any portion of its net available revenue, as defined, to the authority through its Sustainable Communities Investment Plan. The bill would require the authority to contract for an independent financial and performance audit every 5 years.

The bill would establish prequalification requirements for entities that will receive more than $1,000,000 from the Sustainable Communities Investment Authority and would require the Department of Industrial Relations to monitor and enforce compliance with prevailing wage requirements for specified projects within a Sustainable Communities Investment Area. The bill would deposit moneys received by the department from developer charges related to the costs of monitoring and enforcement in the State Public Works Enforcement Fund. By depositing a new source of revenue in the State Public Works Enforcement Fund, a continuously appropriated special fund, the bill would make an appropriation.

Vote: majority. Appropriation: yes. Fiscal committee: yes. State-mandated local program: no.

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

SECTION 1.  

Part 1.86 (commencing with Section 34191.10)
is added to Division 24 of the Health and Safety Code, to read:

 

PART 1.86.  Sustainable Communities Investment
PROGRAM

 

Chapter  1. General Provisions

 

34191.10.  

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

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

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

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

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

(f) At the same time, California cannot afford a redevelopment
program that causes schools to lose revenue at a time when
investing in education is also key to the state’s economic
prosperity. A growth plan for the state consistent with regional
sustainable communities strategies must also provide that schools
are able to play their full role in achieving the future of California.
In this regard, Section 16 of Article XVI of the California
Constitution does not require that all taxing agencies set aside their
portion of future property tax for tax increment. It defines taxing
agencies disjunctively as “any city, county, city and county, district,
or other public corporation.”

(g) The elimination of redevelopment agencies has resulted in
the loss of approximately one billion dollars ($1,000,000,000)
annually in low- and moderate-income housing funds for
communities throughout the state. Communities need alternative
sources of revenue to support the continued production of
affordable housing units.

(h) The Legislature finds that a comprehensive strategy for the
long-term economic development of the state must encourage the
creation of good jobs and workforce skills needed to attract and
retain a high-wage workforce, in addition to public infrastructure
requirements. Public investments in human capital are as vital to
the long-term growth of the state’s economy as investments in
physical capital.

34191.11.  

The Legislature further finds and declares that
inefficient land use patterns cause an increased economic burden
on taxpayers for the costs of an inefficient transportation
infrastructure, and create a high combined economic cost of
housing and transportation for California residents. These
development patterns have also contributed to declining property
values and foreclosures in many communities. They create further
economic risks for the agricultural industry, the largest industry
in California, through the loss of critical farmland. They also result
in increased air pollution, energy consumption, and greenhouse
gas emissions which impose additional costs on business and
damage public health. They also lead to inefficient consumption
of water, a critical resource for all of California.

34191.12.  

The Legislature finds and declares that the
interrelated problems identified in this chapter are a form of blight
that can be addressed through a new Sustainable Communities
Investment Program.

34191.13.  

In order to more effectively address blight, the
program shall be established to support development in transit
priority project areas and small walkable communities and to
support clean energy manufacturing through tax increment revenue.
This new program shall use tax increment revenue to fight blight
as it is understood in the contemporary setting without including
those aspects of the former redevelopment program that created
so much controversy, including the manipulation of the definition
of blight and the use of the school share of tax increment revenue,
such that it became a drain on the General Fund. The new program,
focused on certain geographic areas and sites, shall require greater
levels of intergovernmental collaboration.

34191.14.  

It is the intent of the Legislature in establishing the
Sustainable Communities Investment Program to create a new,
collaborative structure for the creation of a governing board for a
Sustainable Communities Investment Authority and to allow
governmental entities through a consensual process to invest tax
increment revenue to relieve conditions of blight as prescribed by
the Legislature. The new authority shall have new planning
obligations and, in particular, shall have a new focus on the job
creation associated with new economic development. To the extent
not inconsistent with the new program, the authority shall be able
to exercise the powers of the former redevelopment agencies, but
only as part of this newly created and reformed program.

34191.15.  

For purposes of this part, “authority” or “Sustainable
Communities Investment Authority” means the entity formed under
Chapter 2 (commencing with Section 34191.20).

 

Chapter  2. Sustainable Communities Investment
Authority

 

34191.20.  

(a) A Sustainable Communities Investment
Authority is a public body, corporate and politic, that may be
created by the appointment of a governing board as provided in
subdivision (d). The authority shall comply with the provisions of
this part, the Community Redevelopment Law (Part 1 (commencing
with Section 33000)), excluding Sections 33401, 33492.140, 33607,
33607.5, 33607.7, 33676, and any other similar payment provision
of that part, Part 1.5 (commencing with Section 34000), Part 1.6
(commencing with Section 34050), and Part 1.7 (commencing
with Section 34100), to the extent not inconsistent with this part.
The authority shall not be subject to the provisions of Part 1.8
(commencing with Section 34161) and Part 1.85 (commencing
with Section 34170).

(b) The authority shall be deemed to be an “agency” pursuant
to Section 33003 and shall have all the rights, responsibilities, and
obligations of an agency. For purposes of this part, a project area
shall be referred to as a Sustainable Communities Investment Area
and a redevelopment plan shall be referred to as a Sustainable
Communities Investment Plan.

(c) An authority created pursuant to this part may rely on the
legislative determination of blight and shall not be required to
make a separate finding of blight or conduct a survey of blight
within the project area.

(d) An authority may be created as follows:

(1) A city, county, city and county, or a special district may
create an authority pursuant to this part by entering into a joint
powers agreement under Chapter 5 (commencing with Section
6500) of Division 7 of Title 1 of the Government Code. The joint
powers agreement shall establish a governing board and designate
the Sustainable Communities Investment Area.

(2) A city may create an authority, appoint the authority
governing board, designate a Sustainable Communities Investment
Area within the city’s incorporated area, and establish the
parameters of the proposed economic development within a
proposed Sustainable Communities Investment Area with county
approval of the economic development parameters and the
Sustainable Communities Investment Plan, including any
amendments to the plan.

(3) A city and a county may create an authority and appoint the
authority governing board, which shall be comprised of two
members appointed by the city and two members appointed by the
county. A fifth member shall be appointed by the two city and the
two county members. The governing board shall designate the
Sustainable Communities Investment Area. A Sustainable
Communities Investment Plan, including any amendments to it,
shall be approved by both the city and the county. The Sustainable
Communities Investment Area may include an incorporated area
or both an incorporated area and an unincorporated area.

(4) If the Sustainable Communities Investment Area is within
an unincorporated area, the board of supervisors of a county may
create an authority and appoint the authority governing board.

(5) A city may create an authority, which shall constitute a
legally distinct entity from that city, and appoint the authority
governing board, which may designate a Sustainable Communities
Investment Area only within the incorporated limits of that city.

(e) If an authority is created pursuant to this section by an entity
that is a city and county the governing body shall be composed of
five members appointed by the mayor of the city, if that
appointment is subject to confirmation by the county board of
supervisors.

(f) Any city or county approval under this section shall be by
resolution of the legislative body.

(g) A taxing agency participating in or approving the formation
of a Sustainable Communities Investment Authority or appointing
governing board members may authorize an allocation to the
authority of all or part of the tax increment revenue that otherwise
would be paid to that taxing agency.

(h) A governing board appointed pursuant to this section shall
consist of five members. The members of any governing board
formed pursuant to this part shall be appointed for four-year terms
and shall be removed by the appointing authority only for cause.
The initial appointees to the governing board shall serve either
two-year or four-year terms and shall draw their terms by lot. An
authority created pursuant to this section shall be deemed to be a
local public agency subject to the Ralph M. Brown Act (Chapter
9 (commencing with Section 54950) of Part 1 of Division 2 of
Title 5 of the Government Code), the California Public Records
Act (Chapter 3.5 (commencing with Section 6250) of Division 7
of Title 1 of the Government Code), and the Political Reform Act
of 1974 (Title 9 (commencing with Section 81000) of the
Government Code).

(i) A school district shall be excluded from participating in a
Sustainable Communities Investment Authority.

 

Chapter  3. Sustainable Communities Investment Areas

 

34191.25.  

(a) A Sustainable Communities Investment Area
shall include only the following:

(1) Transit priority project areas, which are areas where a transit
priority project, as defined in Section 21155 of the Public
Resources Code, may be constructed, provided that if the
Sustainable Communities Investment Area is based on proximity
to a planned major transit stop or a high-quality transit corridor,
the stop or the corridor must be scheduled to be completed within
the planning horizon established by Section 450.322 of Title 23
of the Code of Federal Regulations. For purposes of this paragraph,
a transit priority project area may include a military base reuse
plan that meets the definition of a transit priority project area and
it may include a contaminated site within a transit priority project
area.

(A) If the Sustainable Communities Investment Area includes
a high-speed rail station, the radius of the area may be up to one
mile from a high-speed rail station. If the project area consists of
a radius greater than one-half of one mile, at least 50 percent of
tax increment revenue derived from the area shall be used to
support construction of the high-speed rail station and related
infrastructure.

(B) All or part of a transit priority project area may be included
in the Sustainable Communities Investment Area or an area may
include one or more contiguous transit priority project areas. One
or more Sustainable Communities Investment Areas may be created
pursuant to subdivision (d) of Section 34191.20.

(C) Transit priority project areas shall be within the geographic
boundaries of a metropolitan planning organization in which a
sustainable communities strategy has been adopted by the
metropolitan planning organization, and the State Air Resources
Board, pursuant to subparagraph (H) of paragraph (2) of
subdivision (b) of Section 65080 of the Government Code, has
accepted the metropolitan planning organization’s determination
that the sustainable communities strategy would, if implemented,
achieve the region’s greenhouse gas emission reduction targets.

(2) Areas that are small walkable communities, as defined in
paragraph (4) of subdivision (e) of Section 21094.5 of the Public
Resources Code, except that small walkable communities may
also be designated in a city that is within the area of a metropolitan
planning organization. No more than one small walkable
community project area shall be designated within a city. All or
part of a small walkable community may be included in the
Sustainable Communities Investment Area.

(b) Sites that have land use approvals, covenants, conditions
and restrictions, or other effective controls restricting the sites to
clean energy manufacturing, and that are consistent with the use,
designation, density, building intensity, and applicable policies
specified for the Sustainable Communities Investment Area in the
applicable sustainable communities strategy, if those sites are
within the geographic boundaries of a metropolitan planning
organization. Clean energy manufacturing shall consist of the
manufacturing of any of the following:

(1) Components, parts, or materials for the generation of
renewable energy resources.

(2) Equipment designed to make buildings more energy efficient
or the component parts thereof.

(3) Public transit vehicles or the component parts thereof.

(4) Alternative fuel vehicles or the component parts thereof.

 

Chapter  4. Sustainable Communities Investment Plan

 

34191.26.  

(a) A Sustainable Communities Investment Plan
may include a provision for the receipt of tax increment funds
according to Section 33670, provided that the local government
with land use jurisdiction has adopted all of the following:

(1) A sustainable parking standards ordinance that restricts
parking in transit priority project areas to encourage transit use to
the greatest extent feasible.

(2) An ordinance creating a jobs plan that requires all entities
receiving financial support from the authority to enter into an
agreement with the authority describing how the project will do
both of the following:

(A) Further construction careers that pay prevailing wages and
create living wage permanent jobs.

(B) Implement a program for community outreach, local hire,
and job training that includes disadvantaged California residents,
including veterans of the Iraq and Afghanistan wars, people with
a history in the criminal justice system, and single-parent families.

(3) For transit priority project areas and small walkable
communities within a metropolitan planning organization, a plan
consistent with the use designation, density, building intensity,
and applicable policies specified for the Sustainable Communities
Investment Area in the sustainable communities strategy.

(4) Within small walkable communities outside a metropolitan
planning organization, a plan for new residential construction that
provides a density of at least 20 dwelling units per net acre and,
for nonresidential uses, provides a minimum floor area ratio of
0.75.

(b) For areas referred to in paragraph (4) of subdivision (a), the
authority shall consult with the metropolitan planning organization
to obtain its opinion whether the plan is consistent with the use
designation, density, building intensity, and applicable policies
for the project area in the sustainable communities strategy.

34191.27.  

(a) Upon adoption of a Sustainable Communities
Investment Plan that includes the tax increment financing provision
authorized by subdivision (a) of Section 34191.26, the county
auditor-controller shall allocate tax increment revenue to the
authority as follows:

(1) If the authority was formed pursuant to paragraph (1) of
subdivision (d) of Section 34191.20, the authority shall be allocated
each year specified in the plan that portion of the levied taxes for
each city, county, city and county, and special district that is a
party to the joint powers authority in excess of the amount specified
in subdivision (a) of Section 33670.

(2) If the authority was formed pursuant to paragraph (2) or (3)
of subdivision (d) of Section 34191.20, the authority shall be
allocated each year specified in the plan that portion of the levied
taxes for the city and the county in excess of the amount specified
in subdivision (a) of Section 33670.

(3) If the authority was formed pursuant to paragraph (4) of
subdivision (d) of Section 34191.20, the authority shall be allocated
each year specified in the plan that portion of the levied taxes for
the county in excess of the amount specified in subdivision (a) of
Section 33670.

(4) If the authority was formed pursuant to paragraph (5) of
subdivision (d) of Section 34191.20, the authority shall be allocated
each year specified in the plan that portion of the levied taxes for
the city in excess of the amount specified in subdivision (a) of
Section 33670.

(5) Any city, county, city and county, or special district may,
by resolution of its board, authorize the county auditor-controller
to allocate that portion of the levied taxes for that entity in excess
of the amount specified in subdivision (a) of Section 33670.

(6) Any allocation of revenues to the authority made pursuant
to this subdivision shall be adjusted to comply with the provisions
of subdivision (g) of Section 34191.20.

(7) Proceeds of taxes levied for a school district that are in
excess of the amount specified in subdivision (a) of Section 33670
shall not be pledged or allocated to an authority created by any of
the governance structures specified in subdivision (d) of Section
34191.20.

(8) Notwithstanding any other law, the county auditor-controller
shall allocate to the authority a taxing agency’s portion of tax
increment revenues only if the governing body of the taxing agency
adopts a resolution authorizing the allocation. A taxing agency
that adopts a resolution shall not revoke the county
auditor-controller’s authority pursuant to this section if revocation
would impair the authority’s ability to honor existing obligations
secured by tax increment revenues.

(b) If a Sustainable Communities Investment Area includes, in
whole or in part, land formerly or currently designated as a part
of a redevelopment project area, as defined in Section 33320.1,
any Sustainable Communities Investment Plan adopted pursuant
to this part that includes a provision for the receipt of tax increment
revenues according to Section 33670 shall include a provision that
tax increment amounts collected and received by an authority are
subject and subordinate to any preexisting enforceable obligation,
as that term is defined in Section 34171.

(c) The legislative body of the city or county forming an
authority may choose to dedicate any portion of its net available
revenue to the authority through the Sustainable Communities
Investment Plan. The plan shall state that net available revenue
from the city or county may be used by the authority in accordance
with this part, and state the maximum portion of the net available
revenue to be committed to the authority for each year during
which the authority will receive these revenues. The portion may
vary over time. The plan shall state the date upon which the
authority will cease to receive net available revenue. The city or
county may direct the county auditor-controller to transfer any
portion of the net available revenue to the authority and the county
auditor-controller may collect administrative costs from the
authority.

(d) For purposes of this section, “net available revenue” means
periodic distributions to the city or county from the Redevelopment
Property Tax Trust Fund, created pursuant to Section 34170.5,
that are available to the city or county after all preexisting legal
commitments and statutory obligations funded from that revenue
are made pursuant to Part 1.85 (commencing with Section 34170).
Net available revenue shall include only revenue remaining after
all current distributions, including, but not limited to, payment of
enforceable obligations, all distributions to other taxing entities,
and applicable administrative fees, have been made.

(e) In accordance with Section 33334.2 and all other applicable
affordable housing provisions of the Community Redevelopment
Law (Part 1 (commencing with Section 33000), an authority that
includes in its Sustainable Communities Investment Plan a
provision for the receipt of tax increment revenues according to
Section 33670 shall dedicate no less than 20 percent of allocated
tax increment revenues for affordable housing purposes.

34191.28.  

A Sustainable Communities Investment Plan, in
addition to the applicable requirements of Part 1 (commencing
with Section 33000) shall include all of the following:

(a) A fiscal analysis setting forth the projected receipt of tax
increment and other revenue and projected expenses over five-year
planning horizons for the life of the authority.

(b) A statement of the principal goals and objectives of the plan
together with findings of the public purposes and uses that will be
achieved.

(c) A statement of how the plan will relieve blight as follows:

(1) How it will implement the goals of a sustainable
communities strategy, if the Sustainable Communities Investment
Area is within a metropolitan planning organization.

(2) How it will contribute to a more efficient transportation
infrastructure.

(3) How it will contribute to a reduced cost for the combined
costs of housing and transportation for California residents.

(4) How it will contribute to improved public health.

(5) How it will promote more efficient water consumption.

(6) How it will avoid loss of prime farmland.

(7) How it will reduce air pollution, energy consumption and
greenhouse gas emissions by reducing vehicle miles traveled.

(d) A statement of how the plan will implement the sustainable
parking standards adopted pursuant to paragraph (1) of subdivision
(a) of Section 34191.26.

(e) A statement of how the plan will implement the jobs plan
adopted pursuant to paragraph (2) of subdivision (a) of Section
34191.26.

(f) In addition to satisfying the requirements of Part 1
(commencing with Section 33000), a Sustainable Communities
Investment Plan may include, to the extent applicable to the area,
any of the following:

(1) Farmworker housing.

(2) Transitional and supportive housing including, but not
limited to, former foster youth, persons with mental health
treatment needs, persons with substance use disorder treatment
needs, and various offender populations.

(3) Health and safety related infrastructure investments for
disadvantaged and rural communities.

(4) Infrastructure investments to support countywide services
including, but not limited to, health clinics, hospitals, medical
provider offices, child care facilities, day reporting centers, and
grocery stores in food desert areas.

34191.29.  

A state or local public pension fund system
authorized by state law or local charter, respectively, including,
but not limited to, the Public Employees’ Retirement System, the
State Teachers’ Retirement System, a system established under
the County Employees Retirement Law of 1937, Chapter 3
(commencing with Section 31450) of Part 3 of Division 4 of Title
3 of the Government Code, or an independent system, may invest
capital in the public infrastructure projects and private commercial
and residential developments undertaken by an authority.

34191.30.  

(a) An authority may exercise the full powers
granted under Chapter 2.8 (commencing with Section 53395) of
Part 1 of Division 2 of Title 5 of the Government Code and the
Marks-Roos Local Bond Pooling Act of 1985 (Article 4
(commencing with Section 6584) of Chapter 5 of Division 7 of
Title 1 of the Government Code).

(b) An authority may implement a local transactions and use
tax under Part 1.6 (commencing with Section 7251) of Division 2
of the Revenue and Taxation Code, except that the resolution
authorizing the tax may designate the use of the proceeds of the
tax.

(c) An authority may issue bonds paid for with authority
proceeds, which shall be deemed to be special funds to be expended
by the authority for the purposes of carrying out this part.

(d) School district property tax revenues shall not be pledged
for the repayment of bonds issued by the authority.

34191.31.  

Every five years the authority shall contract for an
independent financial and performance audit. The audit shall be
conducted according to guidelines established by the Controller.
A copy of the completed audit shall be provided to the Controller,
the Director of the Department of Finance, and to the Joint
Legislative Budget Committee. The Controller shall not be required
to review and approve the completed audits.

 

Chapter  5. Prequalification Requirements

 

34191.35.  

All entities that will receive in excess of one million
dollars ($1,000,000) from the Sustainable Communities Investment
Authority, including projects undertaken by private developers,
shall comply with the following prequalification process for all
construction contracts or subcontracts:

(a) The entity shall require that each prospective bidder on a
construction contract complete and submit to the authority a
standardized questionnaire and financial statement in a form
specified by the authority that includes a complete statement of
the prospective bidder’s financial ability and experience in
performing large construction contracts. The questionnaire and
financial statement shall be verified under oath by the bidder in
the manner in which civil pleadings in civil actions are verified.
The questionnaires and financial statements shall not be public
records and shall not be open to public inspection.

(b) The entity receiving funding from the authority shall adopt
and apply a uniform system of rating bidders on the basis of the
completed questionnaires and financial statements, in order to
determine the size of the contracts, if any, upon which each bidder
shall be deemed qualified to bid.

(c) The questionnaire described in subdivision (a) and the
uniform system of rating bidders described in subdivision (b) shall
cover, at a minimum, the issues covered by the standardized
questionnaire and model guidelines for rating bidders developed
by the Department of Industrial Relations pursuant to subdivision
(a) of Section 20101 of the Public Contract Code.

(d) For purposes of this section, bidders shall include all
subcontractors performing work on a contract in excess of 3 percent
of the total cost.

(e) A bid shall not be accepted from any person or entity who
is required to submit a completed questionnaire and financial
statement for prequalification pursuant to subdivision (a) but has
not done so by the deadline set by the entity or who has not been
prequalified by the authority prior to the deadline for submission
of bids.

(f) This section shall not prevent an entity or the authority itself
from establishing additional prequalification requirements.

34191.36.  

(a) (1) Within a Sustainable Communities
Investment Area, the Department of Industrial Relations shall
monitor and enforce compliance with prevailing wage requirements
for any project paid for in whole or part out of public funds, within
the meaning of subdivision (b) of Section 1720 of the Labor Code
that include funds of a Sustainable Communities Investment
Authority and shall charge each awarding body or developer for
the reasonable and directly related costs of monitoring and
enforcing compliance with the prevailing wage requirements on
each project.

(2) All moneys received by the department pursuant to this
section shall be deposited in the State Public Works Enforcement
Fund created by Section 1771.3 of the Labor Code.

(b) Paragraph (1) of subdivision (a) shall not apply to any project
paid for in whole or part out of public funds if the awarding body
or developer has entered into a collective bargaining agreement
that binds all of the contractors performing work on the project
and includes a mechanism for resolving disputes about the payment
of wages.

SEC. 2.  

Section 21094.5 of the Public Resources Code is
amended to read:

21094.5.  

(a) (1) If an environmental impact report was
certified for a planning level decision of a city or county, the
application of this division to the approval of an infill project shall
be limited to the effects on the environment that (A) are specific
to the project or to the project site and were not addressed as
significant effects in the prior environmental impact report or (B)
substantial new information shows the effects will be more
significant than described in the prior environmental impact report.
A lead agency’s determination pursuant to this section shall be
supported by substantial evidence.

(2) An effect of a project upon the environment shall not be
considered a specific effect of the project or a significant effect
that was not considered significant in a prior environmental impact
report, or an effect that is more significant than was described in
the prior environmental impact report if uniformly applicable
development policies or standards adopted by the city, county, or
the lead agency, would apply to the project and the lead agency
makes a finding, based upon substantial evidence, that the
development policies or standards will substantially mitigate that
effect.

(b) If an infill project would result in significant effects that are
specific to the project or the project site, or if the significant effects
of the infill project were not addressed in the prior environmental
impact report, or are more significant than the effects addressed
in the prior environmental impact report, and if a mitigated negative
declaration or a sustainable communities environmental assessment
could not be otherwise adopted, an environmental impact report
prepared for the project analyzing those effects shall be limited as
follows:

(1) Alternative locations, densities, and building intensities to
the project need not be considered.

(2) Growth inducing impacts of the project need not be
considered.

(c) This section applies to an infill project that satisfies both of
the following:

(1) The project satisfies any of the following:

(A) Is consistent with the general use designation, density,
building intensity, and applicable policies specified for the project
area in either a sustainable communities strategy or an alternative
planning strategy for which the State Air Resources Board,
pursuant to subparagraph (H) of paragraph (2) of subdivision (b)
of Section 65080 of the Government Code, has accepted a
metropolitan planning organization’s determination that the
sustainable communities strategy or the alternative planning
strategy would, if implemented, achieve the greenhouse gas
emission reduction targets.

(B) Consists of a small walkable community project located in
an area designated by a city for that purpose.

(C) Is located within the boundaries of a metropolitan planning
organization that has not yet adopted a sustainable communities
strategy or alternative planning strategy, and the project has a
residential density of at least 20 units per begin insert net end insert acre or a floor area
ratio of at least 0.75.

(2) Satisfies all applicable statewide performance standards
contained in the guidelines adopted pursuant to Section 21094.5.5.

(d) This section applies after the Secretary of the Natural
Resources Agency adopts and certifies the guidelines establishing
statewide standards pursuant to Section 21094.5.5.

(e) For the purposes of this section, the following terms mean
the following:

(1) “Infill project” means a project that meets the following
conditions:

(A) Consists of any one, or combination, of the following uses:

(i) Residential.

(ii) Retail or commercial, where no more than one-half of the
project area is used for parking.

(iii) A transit station.

(iv) A school.

(v) A public office building.

(B) Is located within an urban area on a site that has been
previously developed, or on a vacant site where at least 75 percent
of the perimeter of the site adjoins, or is separated only by an
improved public right-of-way from, parcels that are developed
with qualified urban uses.

(2) “Planning level decision” means the enactment or
amendment of a general plan, community plan, specific plan, or
zoning code.

(3) “Prior environmental impact report” means the
environmental impact report certified for a planning level decision,
as supplemented by any subsequent or supplemental environmental
impact reports, negative declarations, or addenda to those
documents.

(4) “Small walkable community project” means a project that
is begin delete in an incorporated city, which end delete begin insert located in a small walkable end insert
begin insert community project area. A small walkable community project area end insert
begin insert means an area within an incorporated city that end insert is not within the
boundary of a metropolitan planning organization and begin delete that satisfies end delete
begin insert meets all end insert the following requirements:

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

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

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

(5) “Urban area” includes either an incorporated city or an
unincorporated area that is completely surrounded by one or more
incorporated cities that meets both of the following criteria:

(A) The population of the unincorporated area and the
population of the surrounding incorporated cities equal a population
of 100,000 or more.

(B) The population density of the unincorporated area is equal
to, or greater than, the population density of the surrounding cities.