AEP Legislative Update July 2020

Following an extended summer recess due to several legislators and staff contracting COVID-19 (all have recovered), the Legislature returned to Sacramento on July 27 for a five-week dash before the end of session on August 31. Due to delays from earlier in the year, the legislature must move remaining bills through policy committees, fiscal committees, and the full Senate and Assembly in just five weeks, a process that normally lasts closer to three months.

Governor Newsom remains focused on the state’s response to COVID-19. He is grappling with a recent spike in virus cases and hospitalizations in many parts of the state, growing frustration among Californians trying to access unemployment insurance benefits through the EDD, a lag in testing timing, and determining how to proceed with education in the fall.

Regarding the state budget, the tax filing deadline was moved to July 15. This meant that the state budget had to be passed before final returns were received. In the end, the state received about $2.7 billion more than it projected, but is still about $2.5 billion below 2019 levels. It is important because the state must still decide how to spend some limited discretionary money on environmental programs, most notably the Greenhouse Gas Reduction Fund, which provides funding to High Speed Rail, transit, healthy soils, clean vehicles, and other programs. This and other Budget Trailer Bills will need to be passed before the August 31 deadline if they are to be acted upon this session.

Along with the budget trailer bills, the legislature must also dispense with hundreds of policy bills. While the legislature has somewhat limited bills to those related to COVID-19, many bills remain that are not, especially as it relates to homelessness and housing. Additionally, there are numerous efforts to provide economic stimulus to the economy. A group of about two dozen legislators from the Senate and Assembly have proposed ideas to generate revenue without raising taxes: to offer credits to taxpayers to pay future year taxes now and to borrow against certain special revenue sources like the gas tax and cap & trade revenues. These funds would then be used to accelerate development of EV charging, water and recycling infrastructure, wildfire prevention, housing and roads. The proposal policy changes to speed up development, which I’ve noted below. It is likely these concepts will coalesce into a package of bills for consideration. Below are a few of the key bills AEP is tracking closely.

  1. AB 2323 (Friedman) - This bill aims to align, simplify, and improve the numerous CEQA exemptions that currently exist for infill housing projects. The bill is before the Senate Environmental Quality Committee, where numerous amendments are set to be made, though they are not yet final. Amendments will likely align the various infill exemptions are consistent definitions and qualifiers. Should the bill pass from the Senate EQ Committee, it will need to then pass from the Appropriations Committee before heading to the full Senate Floor.
  2. AB 168 (Aguiar Curry) - This bill is sponsored by tribal governments and seeks to add a form of tribal consultation into the streamlined housing process from SB 35. The language would add tribal cultural resources to the list of resources that cannot be impacted by a project for it to be eligible for ministerial approval. This will require a slightly modified and condensed form of consultation before a project can move forward under SB 35. The bill will be heard in Senate Housing Committee before heading to the Appropriations Committee.
  3. SB 288 (Wiener) – This bill would grant exemptions for a number of transportation projects to encourage quicker development as a form of economic stimulus, including, bicycling infrastructure and transit improvement projects. The bill is a gut-and-amend and will have its first hearing in the Assembly Natural Resources Committee in early August. It would then need to pass from the Appropriations Committee before going to the Assembly Floor.
  4. SB 995 (Atkins) - This bill would extend the AB 900 program that allows expedited review for CEQA challenges on projects that obtain certification from the state. This bill would adjust the program to focus on housing projects. It is set for hearing in the Assembly Natural Resources Committee in early August, before going to the Appropriations Committee. It is also included in the Economic Stimulus proposal discussed above.
  5. SB 1385 (Caballero) – This bill would allow housing projects meeting certain density and other requirements to be built on property zoned for office or retail use and makes corresponding changes to SB 35. The bill is awaiting hearing in the Assembly Local Government Committee before going to the Appropriations Committee.
  6. SB 902 (Wiener) – This housing bill would provide a CEQA exemption for local governments to zone residential properties up to ten units/acre if certain conditions are met. The bill is awaiting hearing in the Assembly Local Government Committee before going to the Appropriations Committee.
  7. AB 3279 (Friedman) – This bill would have made numerous changes to CEQA’s process. However, following opposition from environmental and labor groups, the bill has been narrowed to clean up several sections of the CEQA code, allow a lead agency to reject a petitioner’s request to prepare the record of proceedings, and require a court to schedule a case management conference within 30 days of filing. The bill is set for Senate EQ Committee before going to the Appropriations Committee.
  8. AB 609 (Levine) – This newly introduced bill would add online noticing requirements for CEQA documents, including posting on lead agency websites and filing with OPR. The bill is new and it is unclear if it will receive a hearing this year.
  9. SB 55 (Jackson) – This bill is another gut and amend. It is essentially a repeat of Senator Jackson’s bill from earlier in the session, SB 950, which failed in its first hearing. SB 55 contains many of the same provision and would make significant changes to CEQA. It is unclear if the bill will receive a hearing this year.

With hundreds of bills to consider, tough budget decisions to make, and considerable political strike, the final month of the 2020 legislative session will be a memorable one. To further complicate matters, legislators are only allowed a single staff person in the building, may only utilize certain large hearing rooms, and the public can largely only participate remotely. The Senate and Assembly are allowing differing versions of remote voting for legislators in an attempt to accommodate those at increased risk from COVID-19. Already different than any legislative year in member, the final weeks of session will likely make it even more notable.