BILL ANALYSIS �
SB 310
Page 1
Date of Hearing: June 29, 2011
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
Cameron Smyth, Chair
SB 310 (Hancock) - As Amended: June 20, 2011
SENATE VOTE : 22-17
SUBJECT : Local development.
SUMMARY : Allows cities and counties to create incentives for
transit priority projects. Specifically, this bill :
1)States that it is the intent of the Legislature to provide a
process for cities and counties to create development patterns
in the form of transit priority projects that comply with the
implementation of a sustainable communities strategy (SCS),
create good jobs, reduce vehicle miles traveled, expand the
availability of accessible open-space, build the density
needed for transit viability, and meet regional housing
targets.
2)Establishes the Transit Priority Project Program (TPPP).
3)Authorizes a city or county to participate in the TPPP by
adopting an ordinance indicating its intent to participate in
the program.
4)Clarifies that a city, county, or private developer may create
a transit priority project pursuant to an SCS without
participating in the TPPP.
5)Requires a city or county, if it elects to participate in the
TPPP, to amend the general plan and community, if necessary,
to allow participating developers to build at an increased
height of a minimum of three stories.
6)Requires a development project to meet all of the following:
a) Is located in a designated transit priority project and
within one-half of one mile of a transit station consistent
with the implementation of an SCS;
b) Is located within a zone in which buildings of three
stories or more are authorized;
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c) Meets State Air Resources Board land use guidelines with
respect to distance from major emitters;
d) Provides onsite bicycle parking;
e) Provides for car sharing if a car sharing program is
available in the city or county;
f) Provides unbundled parking;
g) Provides to all units transit passes for 10 years as
part of the rent or condo fees if transit passes are
available from local providers;
h) Provides to tenants recycling for bottles, cans, paper,
and plastic containers;
i) Provides open space onsite, including, but not limited
to, accessible roof gardens, or pays a fee into a fund
established for local open space;
j) Provides 20% affordable units in rental or owner
occupied housing for low- or moderate-income persons and
families, or pays a fee in an amount equivalent to the cost
to provide affordable units elsewhere within the city's or
county's jurisdiction, as determined by the city or county.
Built units require an affordability covenant of 55 years
for rental units and 45 years for owner occupied units.
aa) Pays prevailing wages to construction workers for
residential projects over 100 units; and,
bb) Meets the standards for expedited review under
provisions of the Permit Streamlining Act by containing at
least 49% affordable units in the development and applying
for public financial assistance for the project.
7)Requires the following to be applicable to a development
project that is eligible for the streamlined permitting
procedures of a TPPP:
a) The project complies with any local design guidelines
that were adopted prior to the submission of the project
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application; and,
b) If the project is located entirely within the boundaries
of an infrastructure financing district (IFD), the IFD may
pay for any planning related fees.
8)Specifies for the car sharing program the car sharing area may
be onsite, or the developer may pay a fee to the city or
county to cover the cost of providing for car sharing at an
offsite location near the project. The developer is required
to provide one car share for the first
20 units and one car share for every 50 units thereafter.
9)Defines "unbundled parking" as renting a parking space for the
residential units separately from the residential units, or
pays a fee to the appropriate local transit management fund to
cover one-half of the cost of providing a parking space.
10)Prohibits the fee a developer could pay in lieu of providing
space from exceeding 10 cents ($0.10) per square foot.
11)Authorizes an IFD to reimburse a developer of a project that
is both located entirely within the boundaries of that IFD and
qualifies for the streamlined permit procedures of a TPPP, for
any permit expenses incurred pursuant to that TPPP or to
offset additional expenses incurred by the developer in
constructing affordable housing units.
12)Changes the time period that any action or proceeding to
attack, review, set aside, void, or annul the creation of an
IFD or the adoption of an infrastructure financing plan from
30 days after the enactment of the ordinance creating the IFD
to 30 days after the date the legislative body adopted the
resolution adopting the infrastructure financing plan.
13)Changes the time period that any action or proceeding to
attack, review, set aside, void, or annul the issuance of
bonds by the IFD from 30 days after the resolution that the
voters approved the issuance of bonds to 30 days from the date
the legislative body adopted the resolution providing for the
issuance of bonds.
14)Expands the life of an IFD from 30 to 40 years.
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15)Requires the infrastructure financing plan to include a plan
for financing any potential costs that may be incurred by
reimbursing a developer of a project that is both located
entirely within the boundaries of that district and qualifies
for the streamlined permit procedures of a TPPP for any permit
expenses incurred pursuant to that program.
16)Removes the election requirement to form an IFD, adopt an
infrastructure financing plan, or issue bonds.
17)Prohibits a city or county from participating in a TPPP if
it:
a) Prohibits paying prevailing wages for public works; or,
b) Prohibits contractors and others from prehire collective
bargaining or similar agreements with labor organizations
regarding employment terms and conditions on construction
projects.
EXISTING LAW :
1)Requires the regional transportation plan for specified
regions to include an SCS, as specified, designed to achieve
certain goals for the reduction of greenhouse gas (GHG)
emissions from automobiles and light trucks in a region.
2)Provides that a SCS must:
a) Identify the general location of uses, residential
densities, and building intensities within the region;
b) Identify areas within the region sufficient to house all
the population of the region, including all economic
segments of the population, over the course of the planning
period of the regional transportation plan;
c) Identify areas within the region sufficient to house an
eight-year projection of the regional housing need for the
region;
d) Identify a transportation network to service the
transportation needs of the region;
e) Gather and consider the best available scientific
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information regarding resource areas and farmland in the
region;
f) Set forth a forecasted development pattern for the
region, which, when integrated with the transportation
network, and other transportation measures and policies,
will reduce GHG emissions from automobiles and light trucks
to achieve, if there is a feasible way to do so.
g) Quantify the reduction in GHG emissions projected to be
achieved by the SCS and, if the SCS does not achieve the
targeted reductions in GHG emissions, set forth the
difference between the amount that the SCS would reduce GHG
emissions and the target for the region.
3)Requires a transit priority project to (a) contain at least
50% residential use, based on total building square footage
and, if the project contains between 26% and 50%
nonresidential uses, a floor area ratio of not less than 0.75;
(b) provide a minimum net density of at least
20 dwelling units per acre; and (c) be within one-half mile of a
major transit stop or high-quality transit corridor included
in a regional transportation plan.
4)Defines "major transit stop" as a site containing an existing
rail transit station, a ferry terminal served by either a bus
or rail transit service, or the intersection of two or more
major bus routes with a frequency of service interval of 15
minutes or less during the morning and afternoon peak commute
periods.
5)Authorizes cities and counties to create IFDs and issue bonds
to pay for community scale public works: highways, transit,
water systems, sewer projects, flood control, child care
facilities, libraries, parks, and solid waste facilities.
6)Allows an IFD to divert property tax increment revenues from
other local governments, excluding school districts, for up to
30 years, in order to pay back bonds issued by the IFD.
7)Requires that in order to form an IFD a city or county must
develop an infrastructure plan, send copies to every
landowner, consult with other local governments, and hold a
public hearing.
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8)Requires that when forming an IFD, local officials must find
that its public facilities are of communitywide significance
and provide significant benefits to an area larger than the
IFD.
9)Requires that every local agency who will contribute its
property tax increment revenue to the IFD approve the plan.
10)Requires a two-thirds voter approval of the formation of the
IFD and the issuance of bonds.
11)Requires majority voter approval for setting the IFD's
appropriations limits.
12)Specifies that public agencies that own land in a proposed
IFD may not vote on issues regarding the district.
13)Authorizes IFDs to issue a variety of debt instruments,
including bonds, certificates of participation, leases, and
loans.
14)Requires any IFD that constructs dwelling units to set aside
not less than 20% of those units to increase and improve the
community's supply of low- and moderate-income housing
available at an affordable housing cost to persons and
families of low- and moderate-income.
FISCAL EFFECT : None
COMMENTS :
1)SB 375 built on the existing regional transportation planning
process to connect the reduction of GHG from cars and light
trucks to land use and transportation policy. In 2006, the
Legislature passed AB 32, the Global Warming Solutions Act of
2006, which requires the State of California to reduce GhG
emissions to 1990 levels no later than the year 2020.
SB 375 asserted that "without improved land use and
transportation policy, California will not be able to achieve
the goals of AB 32."
2)SB 310 seeks to further the objectives of SB 375 by creating a
voluntary option for cities and counties to encourage
transit-oriented development in IFDs. SB 310 builds on IFD
law by allowing IFD funding to help incentivize TPPPs thus
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promoting denser residential and mixed use development closer
to transit stations. The author "believes that insufficient
incentives exist to surmount certain financial and procedural
barriers to construct infill and transit- oriented
development. Additionally, the author seeks to require
developers to reciprocate incentives to construction workers
and residents of transit priority projects."
3)Cities and counties can create IFDs and issue bonds to pay for
community scale public works: highways, transit, water
systems, sewer projects, flood control, child care facilities,
libraries, parks, and solid waste facilities. To repay the
bonds, IFDs divert property tax increment revenues from other
local governments for 30 years. However, IFDs are prohibited
from diverting property tax increment revenues from schools.
4)Public officials continue to search for ways to raise the
capital they need to invest in public works projects, like
public transit facilities, infill development, or clean water.
One concept recognizes that expanded public structures can
boost the value of nearby property. Higher property values
produce higher property tax revenues. Property tax increment
financing captures those property tax increment revenues.
When redevelopment officials use property tax increment
financing to eradicate blight, state law does not require
voter approval. When local officials use IFDs to capture
property tax increment revenues, state law requires a
two-thirds approval.
5)Recognizing these barriers, SB 310 removes key impediments to
IFDs, such as the voting requirements to form and bond the
IFD. In addition, the bill extends the term of the IFD bonds
from 30 to 40 years, allowing for a longer debt repayment
period lowering monthly payments.
6)To qualify for the economic subsidies offered by SB 310, a
builder must propose a project that meets more than a dozen
conditions, from car sharing to prevailing wages. Some of
these requirements may be difficult for builders and local
officials to adapt to specific projects. Cities regularly ask
builders for concessions in return for lowering fees or
expediting decisions. The Committee may wish to consider
whether the incentives in SB 310 are enough to convince
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builders to use the bill.
7)In SB 310 there are specific requirements that the project
meet the standards for expedited review by containing at least
49% affordable units in the development and applying for
public financial assistance for the project. However, the
bill also requires that the project contain 20% affordable
units with affordability covenants of 45-55 years. The
Committee may wish the author to clarify if these affordable
unit requirements can overlap or will the project be required
to have 69% of the units be affordable? The amount of IFD
increment eligible to be used to pay for affordable housing is
unclear. Is it just to meet the 20% required under one of the
provisions of the bill or could the funding also pay for the
49% affordable units that are required for the expedited
review? The Committee may wish to ask the author to clarify
this point.
8)This measure, AB 485 (Ma), AB 910 (Torres), and SB 214 (Wolk)
all contain similar provisions in IFD law and will need to
contain double-jointing language in order to not have
chaptering out issues if the measures move forward.
9)Support arguments: Supporters argue that SB 310 creates a
more flexible development tool to finance needed affordable
housing and transit-oriented development projects. Given the
"opt-in" nature of IFDs tax increment financing, more local
governments will have a voice in if their growth in property
tax is allocated, a luxury currently not provided to them
under redevelopment law.
Opposition arguments: Opposition could say that by removing
the voter approval requirements for the creation of an IFD and
the issuance of tax allocation bonds will remove any input or
direct voter oversight. Moreover, with the removal of the
voting requirement the measure is creating more of a
redevelopment type agency without the requirement of making a
finding of blight.
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REGISTERED SUPPORT / OPPOSITION :
Support
American Federation of State, County and Municipal Employees,
AFL-CIO
Metropolitan Transportation Commission
Natural Resource Defense Council
San Francisco Bay Area Rapid Transit District
Santa Clara Valley Transportation Authority
State Building and Construction Trades Council of California
TransForm
Opposition
California Building Industry Association (unless amended)
California Business Properties Association (unless amended)
California Taxpayers Association
Howard Jarvis Taxpayers Association
Analysis Prepared by : Katie Kolitsos / L. GOV. / (916)
319-3958