AEP Legislative Update June/July 2022Good morning AEP Members,
We are nearing the end of another Legislative Session in Sacramento. Beginning July 1, the Senate and Assembly are on a month-long recess before returning for the final stretch on August 1. Session must end by August 31 at midnight, pursuant to the State Constitution. Before taking their break, however, the Legislature was quite busy. Democratic Leadership among the “Big 3” reached a deal on the State Budget. The Governor, Senate and Assembly were able to draft and pass a new budget before the June 30 fiscal deadline that totals over $300 billion, beating last year’s record setting budget. However, with the potential for recession and a lack of federal stimulus dollars in the coming years, the budget deal limited ongoing funding obligations and set aside additional money for the rainy day fund. The budget deal includes $19 billion for climate and energy, but the majority of the funding has not yet been allocated to specific programs. There will be several trailer bills in August to determine how to allocate this funding.
As usual, the budget deal did not just include funding, but also included numerous policy changes that implement the programs being funded. SB 205, one of these trailer bills, created numerous new energy programs in an attempt to boost grid reliability in the face of expected energy shortfalls over the next several summers. Along with directing DWR to procure resources, including new and existing fossil fuel resources, the bill created an alternative permitting process for large renewable energy, storage and transmission projects. The new process will be housed at the California Energy Commission (CEC), who will also serve as the lead agency for projects that elect to use this process. The major feature of this alternative permitting process is that it would serve as an alternative to any local permit and would eliminate the need for any local approvals. Exempt as provided in the bill, the CEC would be required to prepare an EIR for each project.
In addition to being the deadline to pass a balanced budget, June 30 was also the last day for bills to be passed from policy committees in their second house or be dead for the year. The AEP Legislative Committee is also monitoring numerous CEQA-related bills in the Legislature that had varying fates ahead of this deadline.
One such bill was SB 33 (Cortese), which was gutted and amended in June. The bill, which was being pushed by the State Building and Constructions Trades Council, would have stated that the statute of limitations would not begin to run for a project until the lead agency had delivered notice to any individual who had requested notice. The bill was in response to the Organizacion Comunidad De Alviso v. City of San Jose decision, which held that the statute of limitations does not wait until notification has been provided to all who requested it. However, the bill was not set for a hearing before the June 30 deadline and will not move forward this year.
AEP was also involved with AB 1001 (C. Garcia), which would have required air quality mitigation to be done in any impacted disadvantaged community and would have added some environmental justice consideration into CEQA. AEP offered suggested language to resolve some concerns with how the bill would be implemented, but the bill ended up stalling due to significant opposition from the business and developer communities.
AEP is also watching AB 2011 (Wicks), which would create a CEQA exemption for 100% affordable housing projects built on land zoned for commercial development if certain conditions are met. The bill is set to be a significant battle in August, with developers, housing advocates, and some labor unions supporting the bill while other labor unions and local governments oppose it. The bill is in the Senate Appropriations Committee.
SB 1410 (Caballero) would have rolled back the requirement to use a VMT analysis to assess transportation impacts pursuant to SB 743 and would have replaced it with a LOS analysis for any housing project outside of a transportation priority area. However, in the Assembly, the bill was amended to just direct OPR to study the impacts of the VMT requirement and to provide grants for local governments to implement guidelines. The bill awaits a vote in the Assembly Appropriations Committee in August.
Finally, we are watching two bills by Senator Wiener. SB 886 would exempt from CEQA student housing and worker housing projects built by colleges and universities on campus property. Sen. Wiener is primarily focused on trying to help address housing affordability for students and faculty. SB 922 would extend and expand the exemptions from SB 288 for both planning and projects related to advanced transportation, bicycle transportation, transit prioritization, and other similar projects. SB 288 is awaiting a vote in the Assembly Appropriations Committee and SB 922 is on the Assembly Floor.
Despite rising case numbers in California and in the Capitol, no new restrictions have been put in place for public participation. Some committees have ended remote testimony and require all participants to be in person, while others continue to allow remote testimony. The final month of the Legislative Session is certain to be an interesting one as several legislators have had to miss floor sessions due to COVID exposures or positivity over last month.