BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                            



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          |SENATE RULES COMMITTEE            |                        SB 673|
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                                    THIRD READING


          Bill No:  SB 673
          Author:   DeSaulnier (D)
          Amended:  4/15/13
          Vote:     21

           
           SENATE GOVERNANCE & FINANCE COMMITTEE  :  4-2, 4/24/13
          AYES:  Wolk, Beall, DeSaulnier, Liu
          NOES:  Knight, Emmerson
          NO VOTE RECORDED:  Hernandez

           SENATE APPROPRIATIONS COMMITTEE  :  Senate Rule 28.8


           SUBJECT  :    Land use:  development project review

           SOURCE :     Author


           DIGEST  :    This bill requires a city or county to have a  
          cost-benefit analysis prepared for any proposed retail or  
          commercial facility that receives $1 million or more in  
          subsidies. 

           ANALYSIS  :    Existing law bans counties and cities from  
          subsidizing big box retailers or vehicle dealers to relocate  
          within the same market area (SB 114, Torlakson, Chapter 781,  
          Statutes of 2003).  

          In efforts to promote dense, walkable communities, mass transit,  
          and greenhouse gas emission reductions, the Legislature enacted  
          the Sustainable Communities and Climate Protection Act (SB 375,  
          Steinberg, Chapter 728, Statutes of 2008) and the Global Warming  
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          Solutions Act (AB 32, Nuñez, Chapter 488, Statutes of 2006).  

          This bill requires a city, county, or city and county, including  
          a charter city, to have a cost benefit analysis prepared before  
          approving or disapproving a permit for construction of a retail  
          or other commercial facility project estimated to receive over  
          $1 million in subsidies.  The bill defines "subsidy" as any  
          contribution made by the state or local government to a project  
          considered to be in the interest of the public, including tax  
          credits, low-interest loans, state or federal grants, land  
          donations or acquisitions, or remediation or environmental  
          cleanup activity.  

           The cost-benefit analysis  .  This bill authorizes a city, county,  
          or city and county to prepare the cost-benefit analysis or  
          contract for its preparation with a private entity, other than  
          the permit applicant, or a public entity.  The private entity or  
          public agency must be qualified by education, training, and  
          experience to conduct cost-benefit analyses. 

          This bill requires the development project applicant to pay the  
          city, county, or city and county, for the costs of preparing or  
          contracting for the cost-benefit analysis. 

          This bill requires the cost-benefit analysis to include:

           A projection of public costs, resulting from the proposed  
            development's construction and operation, and the incidence of  
            those costs;
          
           A projection of the public revenues from the proposed  
            development's construction and operation, and the incidence of  
            those revenues;
          
           The cost of subsidies provided by a city, county, or city and  
            county;
          
           An assessment of the proposed development's construction and  
            operation impact on the city, county, or city and county's  
            ability to implement its general plan goals;
          
           An assessment of whether the proposed development's  
            construction and operation will be consistent with policies  
            specified for the project area's sustainable communities  

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            strategy or alternative planning strategy;
          
           An assessment of whether the development would require housing  
            demolition, or would decrease or negatively impact extremely  
            low, very low, low-, or moderate-income housing creation;
          
           An assessment of whether the development would destroy or  
            demolish parks, green space, playgrounds, child care  
            facilities, or community centers;
          
           An assessment on whether the development would create adverse  
            or positive economic impact or blight; 
          
           An assessment of whether the proposed development would  
            adversely impact a state transportation facility, and the  
            extent it would degrade the facility's service; and,
          
           An assessment of any available measures to mitigate any  
            material adverse economic impact, as identified by the  
            applicant. 
          
          This bill contains three legislative findings and declarations  
          to support its purpose.  This bill also provides that the review  
          and regulation of retail and commercial facilities is a matter  
          of statewide concern, so charter cities must comply with  
          requirements set forth in the bill. 
          
           Related Legislation

           SB 469 (Vargas, 2011) would have required cities and counties to  
          have economic impact reports on permits for superstores.   
          Governor Brown vetoed the measure, citing local governments  
          existing ability to assess whether these projects are in a  
          community's best interests. 

          Governor Schwarzenegger vetoed SB 1056 (Alarcón, 2004) and SB  
          1523 (Alarcón, 2006), which would have required a city or  
          county, including a charter city, to have an economic impact  
          report prepared, prior to approving a superstore development. 

          SB 1641 (Alarcón, 2004) would have required a city or county to  
          contract with a private entity or public agency to prepare a  
          business impact report on a proposed big box retail development.  
           The bill died in the Senate Local Government Committee.

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           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes    
          Local:  Yes

           SUPPORT  :   (Verified  5/6/13)

          California Labor Federation AFL-CIO
          California Professional Firefighters

           
          OPPOSITION  :    (Verified  5/6/13)

          American Council of Engineering Companies, California
          Associated Builders and Contractors of California
          Building Owners and Managers Association of California
          California Association for Local Economic Development
          California Building Industry Association
          California Business Properties Association
          California Chamber of Commerce
          California Retailers Association
          Cities of:  Cypress, Lakewood, Norwalk, Sacramento, Selma, and  
          Vista
          Construction Employers Association
          International Council of Shopping Centers
          League of California Cities
          Los Angeles County Division of The League of California Cities
          National Association of Industrial Office Parks of California,  
          the Commercial Real Estate Development Association

           ARGUMENTS IN SUPPORT  :    According to the author's office, this  
          bill helps communities better understand the costs and benefits  
          of businesses coming to their city or county by requiring an  
          independent cost benefit analysis on development projects that  
          will receive a subsidy valued at over $1 million. The  
          independent analysis will be paid for by the business seeking to  
          come to the city or county.  SB 673 requires the cost benefit  
          analysis to include:  1) an assessment on whether the  
          development would adversely impact a state transportation  
          facility, and the extent it would degrade the facility's service  
          and 2) an assessment of any available measures to mitigate any  
          material adverse economic impact, as identified by the  
          applicant.  By providing local government decision makers with  
          an independent cost benefit analysis as part of the land use  
          planning process, SB 673 will ensure that cities and counties  

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          have the information necessary to make more informed and  
          knowledgeable decisions.

           ARGUMENTS IN OPPOSITION  :    The opposition state that local  
          governments are currently able to make decisions regarding such  
          projects in a well-informed way.  The analysis required by SB  
          673 is already required under the California Environmental  
          Quality Act and/or can be required by the local government  
          approving the project.  This bill will increase expenses for  
          local governments and make it more difficult for the private and  
          public sectors to work together.  By adding redundant and/or  
          unnecessary steps for a local government to approve development  
          and infrastructure projects, this will add to the already  
          uncompetitive regulatory environment we have in California and  
          make it more difficult for local governments to provide livable  
          communities and induce much needed job creating development and  
          infrastructure projects.   
           

          AGB:nl  5/8/13   Senate Floor Analyses 

                           SUPPORT/OPPOSITION:  SEE ABOVE

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