BILL ANALYSIS Ó SB 674 Page 1 Date of Hearing: June 16, 2014 ASSEMBLY COMMITTEE ON NATURAL RESOURCES Wesley Chesbro, Chair SB 674 (Corbett) - As Amended: January 6, 2014 SENATE VOTE : 33-0 SUBJECT : California Environmental Quality Act: exemption: residential infill projects SUMMARY : Increases the maximum retail use from 15 to 25 percent in the definition of "residential" for purposes of an existing California Environmental Quality Act (CEQA) exemption for infill housing projects meeting specified criteria. EXISTING LAW : 1)CEQA requires lead agencies with the principal responsibility for carrying out or approving a proposed project to prepare a negative declaration, mitigated negative declaration, or environmental impact report (EIR) for this action, unless the project is exempt from CEQA (CEQA includes various statutory exemptions, as well as categorical exemptions in the CEQA guidelines). 2)Exempts from CEQA specified residential housing projects which meet criteria established to ensure the project does not have a significant effect on the environment (SB 1925 (Sher), Chapter 1039, Statutes of 2002). The SB 1925 exemptions are available to: a) Affordable agricultural housing projects not more than 45 units within a city, or 20 units within an agricultural zone, on a site not more than five acres in size; b) Affordable urban housing projects not more than 100 units on a site not more than five acres in size; and, c) Urban infill housing projects not more than 100 units on a site not more than four acres in size which is within one-half mile of a major transit stop. Among other criteria, retail uses may not exceed 15 percent of the total floor area of these projects. SB 674 Page 2 3)Establishes abbreviated CEQA review procedures for specified infill projects, where only specific or more significant effects on the environment which were not addressed in a prior planning-level EIR need be addressed. An EIR for such a project need not consider alternative locations, densities, and building intensities or growth-inducing impacts. Infill projects may include residential, retail, commercial, transit station, school, or public office building projects located within an urban area (SB 226 (Simitian), Chapter 469, Statutes of 2011). SB 226 requires OPR to develop CEQA guidelines to implement its infill provisions, including statewide standards to promote smart growth, reduction of greenhouse gas (GHG) emissions, reduction in water use, energy efficiency improvements and protection of public health. 4)Requires metropolitan planning organizations to include a sustainable communities strategy (SCS), as defined, in their regional transportation plans, or an alternative planning strategy (APS), for the purpose of reducing GHG emissions, aligns planning for transportation and housing, and creates specified incentives for the implementation of the strategies (SB 375 (Steinberg), Chapter 728, Statutes of 2008). As it relates to the provisions of this bill, SB 375 specifies that, if a residential or mixed-use residential project (defined as a project where at least 75 percent of the total building square footage of the project consists of residential use or a project that is a transit priority project) is consistent with the use designation, density, building intensity, and applicable policies specified for the project area in either an approved SCS or APS, and if the project incorporates the mitigation measures required by an applicable prior environmental document, any findings or other determinations for an exemption, a negative declaration, a mitigated negative declaration, an EIR, or addenda prepared or adopted for the project pursuant to CEQA shall not be required to reference, describe, or discuss growth inducing impacts or any project specific or cumulative impacts from cars and light-duty truck trips generated by the project on global warming or the regional transportation network. THIS BILL increases the maximum retail use from 15 to 25 percent for purposes of the SB 1925 infill housing exemption referenced above and changes the metric in the calculation from "floor area" to "building square footage." SB 674 Page 3 FISCAL EFFECT : According to the Senate Appropriations Committee, pursuant to Senate Rule 28.8, negligible state costs. COMMENTS : 1)Background. CEQA provides a process for evaluating the environmental effects of applicable projects undertaken or approved by public agencies. If a project is not exempt from CEQA, an initial study is prepared to determine whether the project may have a significant effect on the environment. If the initial study shows that there would not be a significant effect on the environment, the lead agency must prepare a negative declaration. If the initial study shows that the project may have a significant effect on the environment, the lead agency must prepare an EIR. Generally, an EIR must accurately describe the proposed project, identify and analyze each significant environmental impact expected to result from the proposed project, identify mitigation measures to reduce those impacts to the extent feasible, and evaluate a range of reasonable alternatives to the proposed project. Prior to approving any project that has received environmental review, an agency must make certain findings. If mitigation measures are required or incorporated into a project, the agency must adopt a reporting or monitoring program to ensure compliance with those measures. SB 1925, enacted in 2002, exempts from CEQA certain residential projects providing affordable urban or agricultural housing, or located on an infill site within an urbanized area, and meeting specified unit and acreage criteria. The stated intent of the Legislature in enacting those provisions included "creating a streamlined procedure for agricultural employee housing, affordable housing, and urban infill housing projects that do not have an adverse effect on the environment." SB 674 Page 4 2)Author's statement: Over the last decade, smart growth planning principles have continued to encourage the integration of residents' day-to-day needs within close proximity of where they live. This type of design encourages lower vehicle miles traveled (VMT) due to local residents' ability to access these services by walking or biking, instead of traveling by car. Lowering VMT improves air quality, reduces greenhouse gas (GHG) emissions, lessens the need for new roads and extends the life of existing roads. One method pursued by many local jurisdictions to implement these VMT-reducing policies is by encouraging building design that incorporates ground-floor retail, such as coffee shops and corner stores, with residential housing on the floors above. For projects using this design, however, the current 15% (or 1/7) limit for neighborhood-serving uses confines the use of this exemption to only those projects that are at least seven (7) stories tall. This is much taller than many jurisdictions allow, even though the project would otherwise meet all other infill and environmental review requirements. An increase to 25% (or ) of the total building square footage would allow for a four (4) story project of this type to meet the exemption requirements. 3)Double referral. This bill is double-referred to the Assembly Local Government Committee. REGISTERED SUPPORT / OPPOSITION : Support Association of California Cities - Orange County California Building Industry Association California Business Properties Association California Chapter of the American Planning Association California Chamber of Commerce California State Association of Counties City of Brea Urban Counties Caucus Opposition SB 674 Page 5 None on file Analysis Prepared by : Lawrence Lingbloom / NAT. RES. / (916) 319-2092