BILL ANALYSIS Ó
SENATE COMMITTEE ON GOVERNANCE AND FINANCE
Senator Robert M. Hertzberg, Chair
2015 - 2016 Regular
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|Bill No: |AB 504 |Hearing | 7/15/15 |
| | |Date: | |
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|Author: |Gonzalez |Tax Levy: |No |
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|Version: |6/24/15 |Fiscal: |No |
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|Consultant|Favorini-Csorba |
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LOCAL PLANNING
Allows cities to delegate ministerial planning functions to
nonprofit organizations, subject to appeal to the city's
legislative body, and requires cities to retain other planning
functions.
Background and Existing Law
Delegation of Police Power. The California Constitution allows
a city to "make and enforce within its limits, all local,
police, sanitary and other ordinances and regulations not in
conflict with general laws, known as the police power of
cities." It is from this fundamental power that local
governments derive their authority to regulate land through
planning, zoning, and building ordinances, thereby protecting
public health, safety and welfare.
The Planning and Zoning Law requires every county and city to
adopt a general plan that sets out planned uses for all of the
area covered by the plan. Cities' and counties' major land use
decisions-including development permitting-must be consistent
with their general plans. In this way, the general plan is a
blueprint for future development. Local agencies may also adopt
specific plans and community plans that provide for the
systematic implementation of a general plan in a particular
area. The Planning and Zoning Law also establishes a planning
AB 504 (Gonzalez) 6/24/15 Page 2
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agency in each city and county, which may be a separate planning
commission, administrative body, or the legislative body of the
city or county itself.
The courts have found that a city may contract with other
entities, such as a nonprofit public benefit corporation, to
carry out governmental functions. However, there are limits to
this ability. In particular, a city cannot wholly contract away
all authority over the exercise of its police power-it must
retain ultimate control over the process. Since land use
regulations involve the exercise of police power, these limits
on contracting away police powers apply to a city's land use
regulatory authority.
Civic San Diego. To date, the City of San Diego is the only city
in California that has delegated some land use regulatory
authority to a nonprofit corporation. San Diego formed the
Centre City Development Corporation (CCDC) in 1975 and the
Southeastern Economic Development Corporation (SEDC) in 1980, to
provide economic development services to the Centre City,
Marina, and Gaslamp neighborhoods. The City, over time,
delegated some land use approval functions to both CCDC and SEDC
in those areas. This delegation included the ability to make
some discretionary decisions, such as issuing some conditional
use permits or site development permits.
In 2012, the City renamed CCDC to Civic San Diego (CivicSD) and
merged SEDC into it. In recent years, CivicSD has been carrying
out much of the winding down of the City of San Diego's former
redevelopment agency and has recently expressed an interest in
expanding its scope beyond its current role into the
neighborhoods of Encanto and City Heights.
As a nonprofit, CivicSD is not a city department, and its
employees are not city employees. However, the City of San
Diego approves CivicSD's budget, appoints the President and the
Board of Directors, sets the terms of the agreement that governs
its operations, and passes the ordinances that direct the
decisions that CivicSD can make. In addition, the Attorney
General has opined that nonprofit organizations that perform
activities on behalf of a local government may also be subject
to the same laws that apply the local government itself. These
laws include the Ralph M. Brown Act (Brown Act), which requires
that the meetings of local agencies' legislative bodies be open
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and public. San Diego's City Attorney concurs that this applies
to CivicSD when it acts on behalf of the City.
Land Use Regulation in San Diego. San Diego's municipal code
determines the review process that projects must go through in
order to be permitted. The code classifies land use permitting
decisions into one of five "processes." Approval of projects
that strictly meet standards set out in the code (Process 1) are
reviewed at the staff level, while decisions that require more
discretion (such as general plan amendments) are considered by
higher-level officials, such as the City Council (Process 5).
All decisions, except Process 1 decisions, are appealable.
Within CivicSD's jurisdiction, the CivicSD President or Board of
Directors usually grants approval instead of the City's staff or
Planning Commission, although more significant actions may be
appealed to the City as described in the figure below.
--------------------------------------------------------------
| |Within CivicSD Area |Outside CivicSD Area |
|----------+-------------------------+-------------------------|
|Process 1 |CivicSD President |City staff decision, not |
| |decision, not appealable |appealable (ministerial) |
| |(ministerial) | |
|----------+-------------------------+-------------------------|
|Process 2 |CivicSD President |City staff decision, |
| |decision, appealable to |appealable to Planning |
| |Planning Commission |Commission |
| |(CivicSD Board in Centre | |
| |City) | |
|----------+-------------------------+-------------------------|
|Process 3 |CivicSD hearing officer |City hearing officer |
| |decision, appealable to |decision, appealable to |
| |Planning Commission |Planning Commission |
| |(CivicSD Board in Centre | |
| |City) | |
|----------+-------------------------+-------------------------|
|Process 4 |Planning Commission |Planning Commission |
| |decision, appealable to |decision, appealable to |
| |City Council |City Council |
|----------+-------------------------+-------------------------|
|Process 5 |City Council decision |City Council decision |
| | | |
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The specific actions that fall under Processes 1 through 5 are
set by the City's municipal code, and how a project is
classified can vary in different parts of the City. As a
result, CivicSD can approve some large projects, such as hotels,
pursuant to Process 1-by issuing a "Centre City Development
Permit" (CCDP)-because the projects meet the requirements set
out in the municipal code sections that apply to the Centre City
area. Those decisions cannot be appealed to the CivicSD board
or to the City. The CivicSD board conducts "design review" of
CCDP-permitted projects above a certain size. This review is
limited to the project's aesthetics and architectural details.
Outside of CivicSD's area, an identical project could be subject
to a different process.
Some local organizations want to ensure that all projects within
CivicSD's jurisdiction are appealable to the City Council.
Proposed Law
Assembly Bill 504 allows all cities, including charter cities,
to delegate ministerial planning functions to nonprofit public
benefit corporations. However, cities must retain all other
planning functions. The bill provides lists specific actions
that are considered "planning functions," such as amending
general plans, issuing development or other land use permits,
and making determinations under the California Environmental
Quality Act. It also defines "ministerial" to mean a plain and
mandatory duty involving the execution of a set task that is to
be performed without the exercise of discretion.
AB 504 requires a nonprofit that performs planning functions to
comply with all applicable state and local laws, including the
Public Records Act, the Brown Act, the city's charter, local
ordinances, and any contracting rules. It also requires the
nonprofit to submit a report annually, beginning on July 1,
2016, that describes the planning functions it has undertaken in
the previous year and how those functions are consistent with
applicable state and local laws. The legislative body of the
city must review and approve the report at a noticed public
hearing.
AB 504 allows the planning actions taken by a nonprofit to be
appealed to the legislative body of the city.
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State Revenue Impact
No estimate.
Comments
1. Purpose of the bill . AB 504 codifies case law in order to
clarify the legal status of nonprofit entities that perform
planning functions for cities in California. Under current law,
these nonprofit entities can make decisions with significant
effects on local communities and entire cities without the
ability of citizens to appeal those decisions to their elected
leaders. Of particular concern is CivicSD's ability to permit
large developments by issuing Centre City Development Permits
administratively, without the ability to appeal the decision or
review the environmental and community impacts of the project.
This amounts to an improper delegation of local government's
police powers and minimal opportunity for public input. These
concerns are magnified by potential plans to expand CivicSD's
jurisdiction to other parts of the city. By prohibiting
nonprofit organizations that perform planning functions from
making decisions that require discretion, AB 504 ensures that
cities retain the required control over the land use permitting
decisions that nonprofit entities make on their behalf and
prevents legal challenges to the status of those entities. At
the same time, the bill enhances the transparency of the
permitting process and allows citizens to provide input on major
development decisions that would otherwise proceed without any
opportunity for the interests of the community to be heard.
2. Unnecessary economic harm . CivicSD has been successfully
promoting development of blighted areas in San Diego since 1975.
On behalf of the City of San Diego, CivicSD has been involved
in the creation of nearly 7,000 affordable housing units and
brought in large amounts of private capital to boost the
public's investment in the area. With the end of redevelopment,
CivicSD's ability to leverage private funds and encourage
development in the city's urban communities is more important
than ever. The City of San Diego already retains extensive
control over CivicSD because it appoints key positions, oversees
the budget, and sets the terms of the operating agreement. AB
504 adds unnecessary layers of bureaucracy that would jeopardize
CivicSD's ability to process permit applications. While some
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projects could withstand the additional time and cost of the
additional appeals process, others will fail. The bill also
severely limits the types of permits CivicSD can issue by
prohibiting it from taking actions that require any discretion.
As a result, CivicSD could not approve community gardens, live
entertainment, or other community-building activities within its
area. This bill would undo much of the progress made to date on
attracting economic development to the parts of San Diego that
need it most and would make it more difficult to meet the City's
goals for affordable housing.
3. A middle ground . AB 504 would allow appeals of even the
smallest projects within CivicSD's area. While some of those
projects may require additional scrutiny, others may not. In
order to limit the scope of appeals to those projects that truly
warrant a closer look, the Committee may wish to consider
amending AB 504 to change the appeals process to ensure that the
City Council reviews only those developments that are of broader
concern to the San Diego community at large.
4. Statewide implications . While CivicSD is currently the only
nonprofit organization in the state that performs this type of
land use permitting on behalf of a city or county, other local
agencies might decide to use this model in the future. AB 504
creates statewide rules that would apply to other jurisdictions
based on a single case. Since AB 504 addresses issues that
relate specifically to CivicSD (such as the ability to permit
certain large projects without an appeals process), it is
unclear whether this is the best set of rules to apply
statewide.
5. Lawyer up . On April 10, 2015, the San Diego County Building
& Construction Trades Council, AFL-CIO, and Murtaza Baxamusa,
Ph.D., a Director on the CivicSD Board of Directors filed a
petition in the Superior Court of California, County of San
Diego against CivicSD and the City of San Diego. The lawsuit
asks the court to rule on a number of topics related to the
provisions of this bill, including whether (1) the City
improperly delegated authority to CivicSD without appropriate
oversight, and (2) decisions made by Civic San Diego must be
allowed to be appealed to the City Council. Accordingly, the
Committee may wish to consider whether legislation is necessary,
or whether this issue is best left to the Courts to decide.
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6. Charter city . The California Constitution allows cities that
adopt charters to control their own "municipal affairs." In all
other matters, charter cities must follow the general, statewide
laws. Because the Constitution doesn't define "municipal
affairs," the courts determine whether a topic is a municipal
affair or whether it's an issue of statewide concern. AB 504
says that it applies to all cities, including charter cities.
To support this assertion, the bill includes a legislative
finding and declaration that authorizing a city to delegate
authority to perform planning functions is a matter of statewide
concern because maintaining uniformity in the planning
responsibilities of cities has a direct impact on the well-being
of all residents of the state. Ultimately, the courts may
decide whether AB 504 applies to charter cities.
7. Technical amendment. AB 504 refers to "planning function" in
all but one case, where it refers to "planning action taken by a
nonprofit." In order to ensure that the terminology is
consistent throughout the bill, the Committee may wish to
consider a technical amendment to change "action" to "function."
Assembly Actions
Assembly Local Government Committee: 6-3
Assembly Floor: 53-27
Support and
Opposition (7/9/15)
Support : California State Association of Electrical Workers;
California State Pipe Trades Council; Center on Policy
Initiatives; City Heights Community Development Corporation;
City of San Diego Council President Pro Tem; Environmental
Health Coalition; International Brotherhood of Electrical
Workers Local #569; Marti Emerald, State Building and Trades
Council; Roofers, Waterproofers Local Union # 45; Plumbers and
Steamfitters Local Union #230; San Diego and Imperial Counties
Labor Council; San Diego County Building and Construction Trades
Council; UNITE HERE Local #30; United Food & Commercial Workers
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Union Local 135; United Taxi Workers of San Diego; Western
States Council of Sheet Metal Workers.
Opposition : Alliance for Habitat Conservation; Associated
Builders and Contractors, San Diego; AVRP Studios, Inc.;
California Restaurant Association; Building Industry Association
of San Diego County; Chelsea Investment Corporation; The City of
Hope International; City of San Diego; Civic Link Strategies;
Cortez Hill Active Residents Group; Downtown Community Planning
Council; Downtown San Diego Partnership; East Village
Association; East Village Residence Group; Encanto Neighborhood
Community Planning Group; Muhammad Mosque #8, San Diego;
National Black Contractors Association; San Diego County
Taxpayers Association; San Diego Downtown Residents Group; San
Diego Regional Chamber of Commerce; St. Stephen's Cathedral
Church of God in Christ; United Missionary Baptist Church;
Wakeland Housing and Development Corporation.
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