Amended in Assembly August 5, 2013

Amended in Senate May 2, 2013

Amended in Senate April 15, 2013

Senate BillNo. 1

Introduced by Senator Steinberg

(Coauthor: Senator DeSaulnier)

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.


SB 1, as amended, 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:

P2    1


Part 1.86 (commencing with Section 34191.10)
2is added to Division 24 of the Health and Safety Code, to read:


4PART 1.86.  Sustainable Communities Investment



7Chapter  1. General Provisions




(a) The Legislature finds and declares that better
10economic development patterns in California can contribute to
11greater economic growth by creating good jobs, reducing commuter
12times for employees, reducing the costs of public infrastructure,
13and reducing energy consumption. Better development patterns
14may also result in increased options in the type of housing
P3    1available, more affordable housing, and a reduction in a
2household’s combined housing and transportation costs.

3(b) The construction industry has been one of the sectors hardest
4hit by the economic downturn of recent years. Creating incentives
5for construction can help restore construction and permanent jobs,
6which are essential for a restoration of prosperity.

7(c) Economic development patterns can also help California
8attain some of its long-term strategic environmental objectives
9including reduced air pollution, greater water conservation, reduced
10energy consumption, and increased farmland and habitat

12(d) Implementation of the growth plans identified by the
13metropolitan planning organizations in their sustainable
14communities strategies, and in particular the development of areas
15identified for transit priority projects, is essential if California is
16to achieve the multiple benefits that would result from economic
17development. Implementation of growth plans in transit priority
18project areas requires redevelopment of existing developed areas.

19(e) In addition to economic pressures from the current recession,
20development of transit priority projects remains challenging.
21Infrastructure is often old and inadequate. Sites may suffer from
22contamination that is expensive to remediate. The high construction
23costs in urban areas, particularly for multifamily dwellings, create
24an additional challenge. For these reasons, it is critical to restructure
25and refocus redevelopment in California to assist in achievement
26of these multiple benefits.

27(f) At the same time, California cannot afford a redevelopment
28program that causes schools to lose revenue at a time when
29investing in education is also key to the state’s economic
30prosperity. A growth plan for the state consistent with regional
31sustainable communities strategies must also provide that schools
32are able to play their full role in achieving the future of California.
33In this regard, Section 16 of Article XVI of the California
34Constitution does not require that all taxing agencies set aside their
35portion of future property tax for tax increment. It defines taxing
36agencies disjunctively as “any city, county, city and county, district,
37or other public corporation.”

38(g) The elimination of redevelopment agencies has resulted in
39the loss of approximately one billion dollars ($1,000,000,000)
40annually in low- and moderate-income housing funds for
P4    1communities throughout the state. Communities need alternative
2sources of revenue to support the continued production of
3affordable housing units.

4(h) The Legislature finds that a comprehensive strategy for the
5long-term economic development of the state must encourage the
6creation of good jobs and workforce skills needed to attract and
7retain a high-wage workforce, in addition to public infrastructure
8requirements. Public investments in human capital are as vital to
9the long-term growth of the state’s economy as investments in
10physical capital.



The Legislature further finds and declares that
12inefficient land use patterns cause an increased economic burden
13on taxpayers for the costs of an inefficient transportation
14infrastructure, and create a high combined economic cost of
15housing and transportation for California residents. These
16development patterns have also contributed to declining property
17values and foreclosures in many communities. They create further
18economic risks for the agricultural industry, the largest industry
19in California, through the loss of critical farmland. They also result
20in increased air pollution, energy consumption, and greenhouse
21gas emissions which impose additional costs on business and
22damage public health. They also lead to inefficient consumption
23of water, a critical resource for all of California.



The Legislature finds and declares that the
25interrelated problems identified in this chapter are a form of blight
26that can be addressed through a new Sustainable Communities
27Investment Program.



In order to more effectively address blight, the
29program shall be established to support development in transit
30priority project areas and small walkable communities and to
31support clean energy manufacturing through tax increment revenue.
32This new program shall use tax increment revenue to fight blight
33as it is understood in the contemporary setting without including
34those aspects of the former redevelopment program that created
35so much controversy, including the manipulation of the definition
36of blight and the use of the school share of tax increment revenue,
37such that it became a drain on the General Fund. The new program,
38focused on certain geographic areas and sites, shall require greater
39levels of intergovernmental collaboration.

P5    1


It is the intent of the Legislature in establishing the
2Sustainable Communities Investment Program to create a new,
3collaborative structure for the creation of a governing board for a
4Sustainable Communities Investment Authority and to allow
5governmental entities through a consensual process to invest tax
6increment revenue to relieve conditions of blight as prescribed by
7the Legislature. The new authority shall have new planning
8obligations and, in particular, shall have a new focus on the job
9creation associated with new economic development. To the extent
10not inconsistent with the new program, the authority shall be able
11to exercise the powers of the former redevelopment agencies, but
12only as part of this newly created and reformed program.



For purposes of this part, “authority” or “Sustainable
14Communities Investment Authority” means the entity formed under
15Chapter 2 (commencing with Section 34191.20).


17Chapter  2. Sustainable Communities Investment




(a) A Sustainable Communities Investment
21Authority is a public body, corporate and politic, that may be
22created by the appointment of a governing board as provided in
23subdivision (e). The authority shall comply with the provisions of
24this part, the Community Redevelopment Law (Part 1 (commencing
25with Section 33000)), excluding Sections 33401, 33492.140, 33607,
2633607.5, 33607.7, 33676, and any other similar payment provision
27of that part, Part 1.5 (commencing with Section 34000), Part 1.6
28(commencing with Section 34050), and Part 1.7 (commencing
29with Section 34100), to the extent not inconsistent with this part.
30The authority shall not be subject to the provisions of Part 1.8
31(commencing with Section 34161) and Part 1.85 (commencing
32 with Section 34170).

33(b) The authority shall be deemed to be an “agency” pursuant
34to Section 33003 and shall have all the rights, responsibilities, and
35obligations of an agency. For purposes of this part, a project area
36shall be referred to as a Sustainable Communities Investment Area
37and a redevelopment plan shall be referred to as a Sustainable
38Communities Investment Plan.

39(c) An authority created pursuant to this part may rely on the
40legislative determination of blight and shall not be required to
P6    1make a separate finding of blight or conduct a survey of blight
2within the project area.

3(d) begin insertNotwithstanding any other provision of law, a Sustainable
4Communities Investment Authority shall not be formed under this
5section by either of the following:end insert
begin delete Aend delete

6begin insert(1)end insertbegin insertend insertbegin insertAend insert city or county that created a redevelopment agency that
7was dissolved pursuant to Part 1.85 (commencing with Section
834170) of Divisionbegin delete 24 shall not form a Sustainable Communities
9Investment Authority under this sectionend delete
begin insert 24,end insert unless the successor
10agency or designated local authority for the former redevelopment
11agency has received a finding of completion from the Department
12of Finance pursuant to Section 34179.7.

begin insert

13(2) A city, county, city and county, or special district that has
14declared a fiscal emergency, unless the city, county, city and
15county, or special district subsequently declares that the fiscal
16emergency has been resolved.

end insert

17(e) An authority may be created as follows:

18(1) A city, county, city and county, or a special district may
19create an authority pursuant to this part by entering into a joint
20powers agreement under Chapter 5 (commencing with Section
21 6500) of Division 7 of Title 1 of the Government Code. The joint
22powers agreement shall establish a governing board and designate
23the Sustainable Communities Investment Area.

24(2) A city may create an authority, appoint the authority
25governing board, designate a Sustainable Communities Investment
26Area within the city’s incorporated area, and establish the
27parameters of the proposed economic development within a
28proposed Sustainable Communities Investment Area with county
29approval of the economic development parameters and the
30Sustainable Communities Investment Plan, including any
31amendments to the plan.

32(3) A city and a county may create an authority and appoint the
33authority governing board, which shall be comprised of two
34members appointed by the city and two members appointed by the
35county. A fifth member shall be appointed by the two city and the
36two county members. The governing board shall designate the
37Sustainable Communities Investment Area. A Sustainable
38Communities Investment Plan, including any amendments to it,
39shall be approved by both the city and the county. The Sustainable
P7    1Communities Investment Area may include an incorporated area
2or both an incorporated area and an unincorporated area.

3(4) If the Sustainable Communities Investment Area is within
4an unincorporated area, the board of supervisors of a county may
5create an authority and appoint the authority governing board.

6(5) A city may create an authority, which shall constitute a
7legally distinct entity from that city, and appoint the authority
8governing board, which may designate a Sustainable Communities
9Investment Area only within the incorporated limits of that city.

10(f) If an authority is created pursuant to this section by an entity
11that is a city and county the governing body shall be composed of
12five members appointed by the mayor of the city, if that
13appointment is subject to confirmation by the county board of

15(g) Any city or county approval under this section shall be by
16resolution of the legislative body.

17(h) A taxing agency participating in or approving the formation
18of a Sustainable Communities Investment Authority or appointing
19governing board members may authorize an allocation to the
20authority of all or part of the tax increment revenue that otherwise
21would be paid to that taxing agency.

22(i) A governing board appointed pursuant to this section shall
23consist of five members. The members of any governing board
24formed pursuant to this part shall be appointed for four-year terms
25and shall be removed by the appointing authority only for cause.
26The initial appointees to the governing board shall serve either
27two-year or four-year terms and shall draw their terms by lot. An
28authority created pursuant to this section shall be deemed to be a
29local public agency subject to the Ralph M. Brown Act (Chapter
309 (commencing with Section 54950) of Part 1 of Division 2 of
31Title 5 of the Government Code), the California Public Records
32Act (Chapter 3.5 (commencing with Section 6250) of Division 7
33of Title 1 of the Government Code), the Meyers-Milias-Brown
34Act (Chapter 10 (commencing with Section 3500) of Division 4
35 of Title 1 of the Government Code), and the Political Reform Act
36of 1974 (Title 9 (commencing with Section 81000) of the
37Government Code). The governing board shall adopt policies
38regarding the use of personal service contracts to the standards set
39forth in Section 19130 of the Government Code that apply to the
40authority and its employees.

P8    1(j) A school district shall be excluded from participating in a
2Sustainable Communities Investment Authority.


4Chapter  3. Sustainable Communities Investment Areas




A Sustainable Communities Investment Area shall
7include only the following:

8(a) Transit priority project areas, which are areas where a transit
9priority project, as defined in Section 21155 of the Public
10Resources Code, may be constructed, provided that if the
11Sustainable Communities Investment Area is based on proximity
12to a planned major transit stop or a high-quality transit corridor,
13the stop or the corridor must be scheduled to be completed within
14the planning horizon established by Section 450.322 of Title 23
15of the Code of Federal Regulations. For purposes of this paragraph,
16a transit priority project area may include a military base reuse
17plan that meets the definition of a transit priority project area and
18it may include a contaminated site within a transit priority project

20(1) If the Sustainable Communities Investment Area includes
21a high-speed rail station, the radius of the area may be up to one
22mile from a high-speed rail station. If the project area consists of
23a radius greater than one-half of one mile, at least 50 percent of
24tax increment revenue derived from the area shall be used to
25support construction of the high-speed rail station and related

27(2) All or part of a transit priority project area may be included
28in the Sustainable Communities Investment Area or an area may
29include one or more contiguous transit priority project areas. One
30or more Sustainable Communities Investment Areas may be created
31pursuant to subdivision (e) of Section 34191.20.

32(3) Transit priority project areas shall be within the geographic
33boundaries of a metropolitan planning organization in which a
34sustainable communities strategy has been adopted by the
35metropolitan planning organization, and the State Air Resources
36Board, pursuant to subparagraph (H) of paragraph (2) of
37subdivision (b) of Section 65080 of the Government Code, has
38accepted the metropolitan planning organization’s determination
39that the sustainable communities strategy would, if implemented,
40achieve the region’s greenhouse gas emission reduction targets.

P9    1(b) Areas that are small walkable communities, as defined in
2paragraph (4) of subdivision (e) of Section 21094.5 of the Public
3Resources Code, except that small walkable communities may
4also be designated in a city that is within the area of a metropolitan
5planning organization. No more than one small walkable
6community project area shall be designated within a city. All or
7part of a small walkable community may be included in the
8Sustainable Communities Investment Area.

9(c) Sites that have land use approvals, covenants, conditions
10and restrictions, or other effective controls restricting the sites to
11clean energy manufacturing, and that are consistent with the use,
12designation, density, building intensity, and applicable policies
13specified for the Sustainable Communities Investment Area in the
14applicable sustainable communities strategy, if those sites are
15within the geographic boundaries of a metropolitan planning
16organization. Clean energy manufacturing shall consist of the
17manufacturing of any of the following:

18(1) Components, parts, or materials for the generation of
19renewable energy resources.

20(2) Equipment designed to make buildings more energy efficient
21or the component parts thereof.

22(3) Public transit vehicles or the component parts thereof.

23(4) Alternative fuel vehicles or the component parts thereof.


25Chapter  4. Sustainable Communities Investment Plan




A Sustainable Communities Investment Plan may
28include a provision for the receipt of tax increment funds according
29to Section 33670, provided that the local government with land
30use jurisdiction has adopted all of the following:

31(a) A sustainable parking standards ordinance that restricts
32parking in transit priority project areas to encourage transit use to
33the greatest extent feasible.

34(b) An ordinance creating a jobs plan that requires all entities
35receiving financial support from the authority to enter into an
36agreement with the authority describing how the project will do
37both of the following:

38(1) Further construction careers that pay prevailing wages and
39create living wage permanent jobs.

P10   1(2) Implement a program for community outreach, local hire,
2and job training that includes disadvantaged California residents,
3including veterans of the Iraq and Afghanistan wars, people with
4a history in the criminal justice system, and single-parent families.

5(c) For transit priority project areas and small walkable
6communities within a metropolitan planning organization, a plan
7consistent with the use designation, density, building intensity,
8and applicable policies specified for the Sustainable Communities
9Investment Area in the sustainable communities strategy.

10(d) Within small walkable communities outside a metropolitan
11planning organization, a plan for new residential construction that
12provides a density of at least 20 dwelling units per net acre and,
13for nonresidential uses, provides a minimum floor area ratio of

15(e) An ordinance that does both of the following:

16(1) Prohibits the number of housing units occupied by extremely
17low, very low, and low-income households, including the number
18of bedrooms in those units, in the Sustainable Communities
19Investment Area at the time the Sustainable Communities
20Investment Authority is established from being reduced during the
21effective period of the Sustainable Communities Investment Plan.

22(2) Requires the replacement of dwelling units that house
23extremely low, very low, or low-income households, upon their
24removal from the Sustainable Communities Investment Area,
25pursuant to subdivision (a) of Section 33413 within two years of
26their displacement.



(a) Upon adoption of a Sustainable Communities
28Investment Plan that includes the tax increment financing provision
29authorized by Section 34191.26, the county auditor-controller shall
30allocate tax increment revenue to the authority as follows:

31(1) If the authority was formed pursuant to paragraph (1) of
32subdivision (e) of Section 34191.20, the authority shall be allocated
33each year specified in the plan that portion of the levied taxes for
34each city, county, city and county, and special district that is a
35party to the joint powers authority in excess of the amount specified
36in subdivision (a) of Section 33670.

37(2) If the authority was formed pursuant to paragraph (2) or (3)
38of subdivision (e) of Section 34191.20, the authority shall be
39allocated each year specified in the plan that portion of the levied
P11   1taxes for the city and the county in excess of the amount specified
2in subdivision (a) of Section 33670.

3(3) If the authority was formed pursuant to paragraph (4) of
4subdivision (e) of Section 34191.20, the authority shall be allocated
5each year specified in the plan that portion of the levied taxes for
6the county in excess of the amount specified in subdivision (a) of
7Section 33670.

8(4) If the authority was formed pursuant to paragraph (5) of
9subdivision (e) of Section 34191.20, the authority shall be allocated
10each year specified in the plan that portion of the levied taxes for
11the city in excess of the amount specified in subdivision (a) of
12Section 33670.

13(5) Any city, county, city and county, or special district may,
14by resolution of its board, authorize the county auditor-controller
15to allocate that portion of the levied taxes for that entity in excess
16of the amount specified in subdivision (a) of Section 33670.

17(6) Any allocation of revenues to the authority made pursuant
18to this subdivision shall be adjusted to comply with the provisions
19of subdivision (h) of Section 34191.20.

20(7) Proceeds of taxes levied for a school district that are in
21excess of the amount specified in subdivision (a) of Section 33670
22shall not be pledged or allocated to an authority created by any of
23the governance structures specified in subdivision (e) of Section

25(8) Notwithstanding any other law, the county auditor-controller
26shall allocate to the authority a taxing agency’s portion of tax
27increment revenues only if the governing body of the taxing agency
28adopts a resolution authorizing the allocation. A taxing agency
29that adopts a resolution shall not revoke the county
30auditor-controller’s authority pursuant to this section if revocation
31would impair the authority’s ability to honor existing obligations
32secured by tax increment revenues.

33(b) If a Sustainable Communities Investment Area includes, in
34whole or in part, land formerly or currently designated as a part
35of a redevelopment project area, as defined in Section 33320.1,
36any Sustainable Communities Investment Plan adopted pursuant
37to this part that includes a provision for the receipt of tax increment
38revenues according to Section 33670 shall include a provision that
39tax increment amounts collected and received by an authority are
P12   1subject and subordinate to any preexisting enforceable obligation,
2as that term is defined in Section 34171.

3(c) The legislative body of the city or county forming an
4authority may choose to dedicate any portion of its net available
5revenue to the authority through the Sustainable Communities
6Investment Plan. The plan shall state that net available revenue
7from the city or county may be used by the authority in accordance
8with this part, and state the maximum portion of the net available
9revenue to be committed to the authority for each year during
10which the authority will receive these revenues. The portion may
11vary over time. The plan shall state the date upon which the
12authority will cease to receive net available revenue. The city or
13county may direct the county auditor-controller to transfer any
14portion of the net available revenue to the authority and the county
15auditor-controller may collect administrative costs from the

17(d) For purposes of this section, “net available revenue” means
18periodic distributions to the city or county from the Redevelopment
19Property Tax Trust Fund, created pursuant to Section 34170.5,
20that are available to the city or county after all preexisting legal
21commitments and statutory obligations funded from that revenue
22are made pursuant to Part 1.85 (commencing with Section 34170).
23Net available revenue shall include only revenue remaining after
24all current distributions, including, but not limited to, payment of
25enforceable obligations, all distributions to other taxing entities,
26and applicable administrative fees, have been made.

27(e) In accordance with Section 33334.2 and all other applicable
28affordable housing provisions of the Community Redevelopment
29Law (Part 1 (commencing with Section 33000)), an authority that
30includes in its Sustainable Communities Investment Plan a
31provision for the receipt of tax increment revenues according to
32Section 33670 shall dedicate no less than 25 percent of allocated
33tax increment revenues for affordable housing purposes.



A Sustainable Communities Investment Plan, in
35addition to the applicable requirements of Part 1 (commencing
36with Section 33000) shall include all of the following:

37(a) A fiscal analysis setting forth the projected receipt of tax
38increment and other revenue and projected expenses over five-year
39planning horizons for the life of the authority.

P13   1(b) A statement of the principal goals and objectives of the plan
2together with findings of the public purposes and uses that will be

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

5(1) How it will implement the goals of a sustainable
6communities strategy, if the Sustainable Communities Investment
7Area is within a metropolitan planning organization.

8(2) How it will contribute to more efficient transportation.

9(3) How it will contribute to a reduced cost for the combined
10costs of housing and transportation for California residents.

11(4) How it will contribute to improved public health.

12(5) How it will promote more efficient water consumption.

13(6) How it will avoid loss of prime farmland.

14(7) How it will reduce air pollution, energy consumption, and
15greenhouse gas emissions by reducing vehicle miles traveled.

16(8) How it will reduce energy consumption by facilitating clean
17energy manufacturing.

18(9) How it will ensure compliance with the affordable housing
19maintenance and preservation requirements contained in
20subdivision (e) of Section 34191.26.

21(d) A statement of how the plan will implement the sustainable
22parking standards adopted pursuant to subdivision (a) of Section

24(e) A statement of how the plan will implement the jobs plan
25adopted pursuant to subdivision (b) of Section 34191.26.

26(f) In addition to satisfying the requirements of Part 1
27(commencing with Section 33000), a Sustainable Communities
28Investment Plan may include, to the extent applicable to the area,
29any of the following:

30(1) Farmworker housing.

31(2) Transitional and supportive housing including, but not
32limited to, former foster youth, persons with mental health
33treatment needs, persons with substance use disorder treatment
34needs, and various offender populations.

35(3) Health and safety related infrastructure investments for
36disadvantaged and rural communities.

37(4) Infrastructure investments to support countywide services
38including, but not limited to, health clinics, hospitals, medical
39provider offices, child care facilities, day reporting centers, and
40grocery stores in food desert areas.

begin insert

P14   1(g) If a city, county, city and county, or special district that has
2entered into an agreement pursuant to this part to allocate a
3portion of its tax increment to a Sustainable Communities
4Investment Authority subsequently declares a fiscal emergency,
5that city, county, or city and county, or special district shall develop
6a plan for how the county auditor-controller shall reduce the
7amount of the tax increment revenue allocated to the authority
8during the period of time of the fiscal emergency.

end insert


A state or local public pension fund system
10authorized by state law or local charter, respectively, including,
11but not limited to, the Public Employees’ Retirement System, the
12State Teachers’ Retirement System, a system established under
13the County Employees Retirement Law of 1937 (Chapter 3
14(commencing with Section 31450) of Part 3 of Division 4 of Title
153 of the Government Code), or an independent system, may invest
16capital in the public infrastructure projects and private commercial
17and residential developments undertaken by an authority.



(a) An authority may exercise the full powers
19granted under Chapter 2.8 (commencing with Section 53395) of
20Part 1 of Division 2 of Title 5 of the Government Code and the
21Marks-Roos Local Bond Pooling Act of 1985 (Article 4
22(commencing with Section 6584) of Chapter 5 of Division 7 of
23Title 1 of the Government Code).

24(b) An authority may implement a local transactions and use
25tax under Part 1.6 (commencing with Section 7251) of Division 2
26of the Revenue and Taxation Code, except that the resolution
27authorizing the tax may designate the use of the proceeds of the

29(c) An authority may issue bonds paid for with authority
30proceeds, which shall be deemed to be special funds to be expended
31by the authority for the purposes of carrying out this part.

32(d) School district property tax revenues shall not be pledged
33for the repayment of bonds issued by the authority.



(a) Every five years the authority shall contract for
35an independent financial and performance audit. The audit shall
36be conducted according to guidelines established by the Controller.
37A copy of the completed audit shall be provided to the Controller,
38the Director of the Department of Finance, and to the Joint
39Legislative Budget Committee. The Controller shall not be required
40to review and approve the completed audits.

P15   1(b) The guidelines established by the Controller shall include
2guidelines for determining compliance with the affordable housing
3maintenance and replacement requirements of subdivision (e) of
4Section 34191.26, including provisions to ensure that the
5requirements are met within each five-year period covered by the
6audit. A finding of failure to comply with the requirements of
7subdivision (e) of Section 34191.26 shall require the authority to
8adopt and submit to the Controller, as part of the audit, a plan to
9achieve compliance with those provisions as soon as feasible but
10in not less than two years following the findings. The Controller
11shall review and approve the plan, and require the plan to stay in
12effect until compliance is achieved. The Controller shall ensure
13that the plan includes one or more of the following means of
14achieving compliance:

15(1) The expenditure of an additional 10 percent of gross tax
16increment revenue on increasing, preserving, and improving the
17supply of low-income housing.

18(2) An increase in the production, by an additional 10 percent,
19of housing for very low income households as required by
20paragraph (2) of subdivision (b) of Section 33413.

21(3) The targeting of expenditures pursuant to Section 33334.2
22exclusively to rental housing affordable to, and occupied by,
23persons of very low and extremely low income.


25Chapter  5. Prequalification Requirements




All entities that will receive in excess of one million
28dollars ($1,000,000) from the Sustainable Communities Investment
29Authority, including projects undertaken by private developers,
30shall comply with the following prequalification process for all
31construction contracts or subcontracts:

32(a) The entity shall require that each prospective bidder on a
33construction contract complete and submit to the authority a
34standardized questionnaire and financial statement in a form
35specified by the authority that includes a complete statement of
36the prospective bidder’s financial ability and experience in
37performing large construction contracts. The questionnaire and
38financial statement shall be verified under oath by the bidder in
39the manner in which civil pleadings in civil actions are verified.
P16   1The questionnaires and financial statements shall not be public
2records and shall not be open to public inspection.

3(b) The entity receiving funding from the authority shall adopt
4and apply a uniform system of rating bidders on the basis of the
5completed questionnaires and financial statements, in order to
6determine the size of the contracts, if any, upon which each bidder
7shall be deemed qualified to bid.

8(c) The questionnaire described in subdivision (a) and the
9uniform system of rating bidders described in subdivision (b) shall
10cover, at a minimum, the issues covered by the standardized
11questionnaire and model guidelines for rating bidders developed
12by the Department of Industrial Relations pursuant to subdivision
13(a) of Section 20101 of the Public Contract Code.

14(d) For purposes of this section, bidders shall include all
15subcontractors performing work on a contract in excess of 3 percent
16of the total cost.

17(e) A bid shall not be accepted from any person or entity who
18is required to submit a completed questionnaire and financial
19statement for prequalification pursuant to subdivision (a) but has
20not done so by the deadline set by the entity or who has not been
21prequalified by the authority prior to the deadline for submission
22of bids.

23(f) This section shall not prevent an entity or the authority itself
24from establishing additional prequalification requirements.



(a) (1) Within a Sustainable Communities
26Investment Area, the Department of Industrial Relations shall
27monitor and enforce compliance with prevailing wage requirements
28for any project paid for in whole or part out of public funds, within
29the meaning of subdivision (b) of Section 1720 of the Labor Code
30that include funds of a Sustainable Communities Investment
31Authority and shall charge each awarding body or developer for
32the reasonable and directly related costs of monitoring and
33enforcing compliance with the prevailing wage requirements on
34each project.

35(2) All moneys received by the department pursuant to this
36section shall be deposited in the State Public Works Enforcement
37Fund created by Section 1771.3 of the Labor Code.

38(b) Paragraph (1) of subdivision (a) shall not apply to any project
39paid for in whole or part out of public funds if the awarding body
40or developer has entered into a collective bargaining agreement
P17   1that binds all of the contractors performing work on the project
2and includes a mechanism for resolving disputes about the payment
3of wages.


SEC. 2.  

Section 21094.5 of the Public Resources Code is
5amended to read:



(a) (1) If an environmental impact report was
7certified for a planning level decision of a city or county, the
8application of this division to the approval of an infill project shall
9be limited to the effects on the environment that (A) are specific
10to the project or to the project site and were not addressed as
11significant effects in the prior environmental impact report or (B)
12substantial new information shows the effects will be more
13significant than described in the prior environmental impact report.
14A lead agency’s determination pursuant to this section shall be
15supported by substantial evidence.

16(2) An effect of a project upon the environment shall not be
17considered a specific effect of the project or a significant effect
18that was not considered significant in a prior environmental impact
19report, or an effect that is more significant than was described in
20the prior environmental impact report if uniformly applicable
21development policies or standards adopted by the city, county, or
22the lead agency, would apply to the project and the lead agency
23makes a finding, based upon substantial evidence, that the
24development policies or standards will substantially mitigate that

26(b) If an infill project would result in significant effects that are
27specific to the project or the project site, or if the significant effects
28of the infill project were not addressed in the prior environmental
29impact report, or are more significant than the effects addressed
30in the prior environmental impact report, and if a mitigated negative
31declaration or a sustainable communities environmental assessment
32could not be otherwise adopted, an environmental impact report
33prepared for the project analyzing those effects shall be limited as

35(1) Alternative locations, densities, and building intensities to
36the project need not be considered.

37(2) Growth inducing impacts of the project need not be

39(c) This section applies to an infill project that satisfies both of
40the following:

P18   1(1) The project satisfies any of the following:

2(A) Is consistent with the general use designation, density,
3building intensity, and applicable policies specified for the project
4area in either a sustainable communities strategy or an alternative
5planning strategy for which the State Air Resources Board,
6pursuant to subparagraph (H) of paragraph (2) of subdivision (b)
7of Section 65080 of the Government Code, has accepted a
8metropolitan planning organization’s determination that the
9sustainable communities strategy or the alternative planning
10strategy would, if implemented, achieve the greenhouse gas
11emission reduction targets.

12(B) Consists of a small walkable community project located in
13an area designated by a city for that purpose.

14(C) Is located within the boundaries of a metropolitan planning
15organization that has not yet adopted a sustainable communities
16strategy or alternative planning strategy, and the project has a
17residential density of at least 20 units per net acre or a floor area
18ratio of at least 0.75.

19(2) Satisfies all applicable statewide performance standards
20contained in the guidelines adopted pursuant to Section 21094.5.5.

21(d) This section applies after the Secretary of the Natural
22Resources Agency adopts and certifies the guidelines establishing
23statewide standards pursuant to Section 21094.5.5.

24(e) For the purposes of this section, the following terms mean
25the following:

26(1) “Infill project” means a project that meets the following

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

29(i) Residential.

30(ii) Retail or commercial, where no more than one-half of the
31project area is used for parking.

32(iii) A transit station.

33(iv) A school.

34(v) A public office building.

35(B) Is located within an urban area on a site that has been
36previously developed, or on a vacant site where at least 75 percent
37of the perimeter of the site adjoins, or is separated only by an
38improved public right-of-way from, parcels that are developed
39with qualified urban uses.

P19   1(2) “Planning level decision” means the enactment or
2amendment of a general plan, community plan, specific plan, or
3zoning code.

4(3) “Prior environmental impact report” means the
5environmental impact report certified for a planning level decision,
6as supplemented by any subsequent or supplemental environmental
7impact reports, negative declarations, or addenda to those

9(4) “Small walkable community project” means a project that
10is located in a small walkable community project area. A small
11walkable community project area means an area within an
12incorporated city that is not within the boundary of a metropolitan
13planning organization and meets all of the following requirements:

14(A) Has a project area of approximately one-quarter mile
15diameter of contiguous land completely within the existing
16 incorporated boundaries of the city.

17(B) Has a project area that includes a residential area adjacent
18to a retail downtown area.

19(C) The project area has an average net density of at least eight
20dwelling units per net acre or a floor area ratio for retail or
21commercial use of not less than 0.50. For purposes of this
22subparagraph: (i) “floor area ratio” means the ratio of gross
23building area (GBA) of development, exclusive of structured
24parking areas, proposed for the project divided by the total net lot
25area (NLA); (ii) “gross building area” means the sum of all finished
26areas of all floors of a building included within the outside faces
27of its exterior walls; and (iii) “net lot area” means the area of a lot
28excluding publicly dedicated land, private streets that meet local
29standards, and other public use areas as determined by the local
30land use authority.

31(5) “Urban area” includes either an incorporated city or an
32unincorporated area that is completely surrounded by one or more
33incorporated cities that meets both of the following criteria:

34(A) The population of the unincorporated area and the
35population of the surrounding incorporated cities equal a population
36of 100,000 or more.

37(B) The population density of the unincorporated area is equal
38to, or greater than, the population density of the surrounding cities.