Legal & Legislative Update June 2020

Good morning AEP members,

With COVID-19 continuing to spread and the state economy just beginning to reopen, the biggest priority for the Governor and Legislature this month was passing a state budget for the upcoming fiscal year.  With only a few days to space before the deadline, a deal was reached.  The budget conversation was the most complicated in years with a projected $54 billion deficit and uncertainty about whether the federal government would provide additional support to state and local governments.  The resulting plan will make numerous cuts across the board, shift funds from numerous pots to backfill the general fund, and put in place “triggered” cuts that would take effect in the event that the federal government does not provide financial support to the state by this fall.  A key element of the budget that remains unspent is the Greenhouse Gas Reduction Fund and other environmental funds.  These more discretionary items have been held until August to allow the state to have a better sense of the true budget situation following tax filing on July 15.

In response to COVID-19, Governor Newsom and the Judicial Council stayed via Executive Order all civil court actions until several months following the state of emergency.  This sparked significant concern for housing projects in the pipeline as states of emergency are often left in place for years. Following feedback from AEP and others, Judicial Council amended Emergency Rule 9 to only stay CEQA and related causes of action until August 3.

Following emergency recesses to shelter in place, the Legislature attempted to return to session but limit the bill load.  While members dropped bills, many remain.  Below is a list of the primary bills AEP is monitoring and engaging on this year, as well as two bills that we were monitoring closely that are no longer moving.
  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 remains a work in progress, with many options still being considered, including: (1) revising definitions that limit the scope of infill housing exemptions such as urbanized area and infill site; (2) revising minimum density, maximum units, and maximum parcel size to be consistent; and (3) adding new project conditions to support climate goals. Some advocates are also pushing to limit the existing exemptions to projects with affordable units.  The bill passed from the Assembly and is now in the Senate.
  2. AB 168 (Aguiar Curry) - This bill is sponsored by tribal governments and seeks to inject a form of tribal consultation into the streamlined housing process from SB 35.  The complex language would essentially allow for local tribes to have the final say on whether a proposed project should be eligible for streamlining under the SB 35 process.  The bill is in the Senate and will have a hearing in Senate Housing Committee in July.
  3. SB 288 (Wiener) – This new CEQA bill would grant exemptions for a number of transportation projects to encourage quicker economic activity and growth, including electric vehicle infrastructure, bicycling infrastructure, and transit improvement projects.  The bill is a gut-and-amend and will have its first hearing in the Assembly in July.
  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 has passed from the Senate and is now in the Assembly.
  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 passed unanimously from the Senate and is now in the Assembly.
  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 passed from the Senate and is onto the Assembly.
  7. AB 3279 (Friedman) – This bill would make changes to CEQA’s litigation process by: (1) reducing the deadline for a court to commence hearings from one year to 270 days, (2) providing that a lead agency may decide whether a plaintiff prepares the administrative record, and (3) authorizing a court to issue an interlocutory remand. The bill passed from the Assembly and is now in the Senate, where it faces opposition from labor and environmental groups.
  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 newly amended in the Senate and will have its first hearing in July.
  9. AB 1907 (Santiago), which would have exempted all affordable housing projects from CEQA, failed in the Assembly. 
  10. SB 950 (Jackson), which would have made numerous technical and substantive changes to CEQA, failed in the Senate.

The Legislature returns early from their summer recess in order to make up for time lost this spring.  They will begin the final six weeks of the legislative session on July 13, during which time all of the above bills will receive policy and fiscal hearings.  We will continue to keep AEP members up to date on the happenings in Sacramento.