BILL ANALYSIS �
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|SENATE RULES COMMITTEE | SB 310|
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THIRD READING
Bill No: SB 310
Author: Hancock (D)
Amended: 4/25/11
Vote: 21
SENATE GOVERNANCE & FINANCE COMMITTEE : 6-3, 4/27/11
AYES: Wolk, DeSaulnier, Hancock, Hernandez, Kehoe, Liu
NOES: Huff, Fuller, La Malfa
SUBJECT : Local development
SOURCE : Author
DIGEST : This bill allows cities and counties to create
incentives for transit priority projects.
ANALYSIS : Transit priority projects . A "transit
priority project" must contain at least 50 percent
residential use, have a residential density of at least 20
dwelling units an acre, and be within a half-mile of a
major transit stop. If the transit priority project meets
additional environmental criteria, it qualifies as a
"sustainable communities project," and is statutorily
exempt from the California Environmental Quality Act (CEQA)
(SB 375 �Steinberg], Chapter 728, Statutes of 2008). Some
builders, community leaders, and legislators want to create
additional incentives to develop projects that help to
reduce greenhouse gas emissions, reduce vehicle travel,
promote transit, and result in more balanced development.
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This bill creates the Transit Priority Project Program and
allows a city or county to participate by adopting an
ordinance. A city or county cannot participate if it:
Prohibits paying prevailing wages for public works.
Prohibits contractors and others from prehire,
collective bargaining, or similar agreements with labor
organizations regarding employment terms and conditions
on construction projects.
A participating city or county must amend its general plan
and community plan to allow participating developers to
build a minimum of three stories.
A development project must:
Be in a designated transit priority project and within a
half-mile of a transit station.
Be within a zone that allows three-story buildings.
Meet State Air Resources Board land use guidelines
regarding distance from major emitters.
Comply with the Gold standard of the United State Green
Building Council Leadership in Energy and Environmental
Design or Standard 189.1 of the American Society of
Heating, Refrigerating and Air Conditioning Engineers.
Provide onsite bicycle parking.
Provide car sharing, if available. The developer must
either provide car sharing onsite or pay a fee to
provide the car sharing offsite. The developer must
provide one car share for the first 20 units and one car
share for every subsequent 50 units.
Provide "unbundled parking," that is, renting parking
spaces separately from residential rents.
Alternatively, the developer can pay a fee to cover half
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the cost of a parking space.
Provide transit passes for 10 years as part of the rent
or condo fees.
Provide recycling for bottles, cans, papers, and plastic
container.
Provide onsite open space, including roof gardens.
Alternatively, the developer can pay a maximum fee of 10
cents per square foot.
Provide 20 percent affordable units for low- or
moderate-income persons and families. Alternatively,
the developer can pay an equivalent amount as a fee to
provide the affordable units somewhere else within the
city or county. Rental housing units must remain
affordable for at least 55 years and owner-occupied
units for 45 years, guaranteed by the developer's
covenants or restrictions.
Pay prevailing wages to construction workers in
residential projects with more than 100 units.
Meet the affordable housing standards set by an existing
law that requires public officials to act more quickly
on applications for qualifying projects.
The project must also comply with any local design
guidelines adopted before the submission of the project
application.
If the project is within an Infrastructure Finance District
(IFD), the IFD may pay for the developer's:
Permit processing fees.
Costs of constructing affordable housing units.
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Infrastructure Financing Districts . Cities and counties
can create IFDs and issue bonds to pay for community scale
public works. To repay the bonds, IFDs divert property tax
increment revenues from other local governments. However,
IFDs can't divert property tax increment revenues from
schools (SB 308 �Seymour], Chapter 1575, Statutes of 1990).
Voter approval . Forming an IFD is cumbersome. The city or
county must develop an infrastructure plan, send copies to
every landowner, consult with other local governments, and
hold a public hearing. Every local agency that will
contribute its property tax increment revenue to the IFD
must approve the plan. Once the other local officials
approve, the city or county must still get the voters'
approval to:
Form the IFD, which requires 2/3-voter approval.
Issue bonds, which requires 2/3-voter approval.
Set the appropriations limit, which requires
majority-voter approval.
This bill repeals the voter approval requirements to form
an IFD, issue IFD bonds, and set the IFD's appropriations
limit. �See Section 2 to Section18 of the bill.]
IFD spending . An IFD can fund public capital facilities of
community-wide significance which benefit an area that's
larger than the district, including highways, transit,
sewer projects, water systems, flood control, child care
facilities, libraries, parks, and solid waste facilities.
This bill allows an IFD to reimburse the permit expenses
and affordable housing costs of a developer of a project
located within the IFD and qualifies for streamlined permit
procedures under an existing statute. �Section 1]
IFD plan . When local officials want to establish an IFD,
they must propose an infrastructure financing plan,
including a detailed financing section. If local officials
want to reimburse the permit expenses and affordable
housing costs of a qualified developer, this bill requires
the proposed infrastructure financing plan's financing
section to include that information. �Section 4]
Bond terms . The term of IFDs' bonds cannot be more than 30
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years. This bill extends the maximum term of IFDs' bonds
from 30 years to 40 years. �Section 4]
California has a goal of reducing greenhouse gas emissions
(AB 32 �Nu�ez and Pavley], Chapter 488, Statutes of 2006).
Reducing vehicle emissions involves multiple strategies,
including clean technology as well as reducing the amount
of vehicle miles traveled. Among the ways to reduce
vehicle miles is better coordination of transportation and
land use plans and increasing the density in existing areas
and new development projects. To those ends, the
Legislature linked transportation planning and land use
planning by state, regional, and local agencies.
Metropolitan planning organizations and their constituent
counties and cities are preparing sustainable communities
strategies. Among the incentives to implement those
policies is the opportunity for developers to gain
accelerated approval for projects that promote those goals
(SB 375 �Steinberg], Chapter 728, Statutes of 2008).
Building better communities in the new century requires
intense collaboration among willing developers, local
leaders, and supportive neighbors. The statewide goals
launched by AB 32 (Nu�ez and Pavley, 2006) need to be
translated into well-designed and economically feasible
development projects in downtowns, older suburbs, and new
development. SB 375 (Steinberg, 2008) pointed the way to
this future by linking transportation and land use planning
programs. SB 375 contained incentives for developers who
want to build projects that fit state, regional, and local
growth policies. This bill encourages builders with
projects that meet these goals by allowing local officials
to use funds from infrastructure financing districts to pay
for the developer's processing fees and the costs of
affordable housing.
The California Constitution requires 2/3-voter approval
before cities or counties can issue long-term debt backed
by local general purpose revenues; school districts need 55
percent-voter approval. That is why local general
obligation bonds need 2/3-voter approval. The courts have
explained that cities need 2/3-voter approval before they
dedicate portions of their general funds to pay for bonds.
That is why local limited obligation bonds need 2/3-voter
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approval. However, because that constitutional limit
doesn't mention redevelopment agencies, local officials do
not need voter approval before they issue tax allocation
bonds. Redevelopment agencies are not diverting local
general funds, they pay for their bonds with property tax
increment revenues. When Governor Deukmejian signed the SB
308 (Seymour, 1990) that created IFDs, there was a
political agreement that local officials should get
2/3-voter approval before they could issue IFD bonds. That
requirement is statutory and not based on a constitutional
limitation. There is no constitutional requirement for
IFDs to seek 2/3-voter approval (or any voter-approval)
before they issue bonds backed by property tax increment
revenues. This bill repeals the statutory requirement for
2/3-voter approval of IFDs' bonds.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 5/13/11)
American Federation of State, County and Municipal
Employees
State Building and Construction Trades Council of
California
OPPOSITION : (Verified 5/13/11)
American Forest and Paper Association
American Wood Council
California Forestry Association
California Taxpayers Association
ARGUMENTS IN SUPPORT : According to the author, "Senate
Bill 310 builds on Infrastructure Financing District (IFD)
law (Government Code 53395.3) to allow local municipalities
to fund economic development through tax increment
financing, and aims to facilitate the development of
Transit Priority Projects, as defined in S.B. 375. The
Transit Priority Project Program seeks to encourage
development that expands the availability of open space and
environmentally sustainable affordable housing near
transit."
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ARGUMENTS IN OPPOSITION : California Taxpayers
Association states in their opposition, "Eliminating voter
approval for infrastructure financing removes the people
from the decision process of what their communities will
look like, how bonds are issued, and how property tax
revenues are spent. Tax increment financing also produces
unfavorable results for local school districts and public
safety, since property taxes are earmarked for specific
purposes."
AGB:kc 5/13/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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