BB&K’s New Law Guidance for a Well-Informed Start to 2023

In Part Two of our “In With the New” series, Best Best & Krieger LLP covers important new legislation related to planning, development and real estate; health and safety; public contracts; and education. Below, you will find takeaways and analyses of the following: SB 1425, SB/AB 1214, AB 2234, AB 2097, AB 2322, SB 896, AB 2173, SB 991, AB 1354 and AB 2413.

PLANNING, DEVELOPMENT AND REAL ESTATE

Land Use

SB 1425

Senate Bill 1425 adds a section to the Government Code relating to local government, regarding cities’ and counties’ review and update of local open-space plans to include climate resilience and other benefits of open space.

Noteworthy features of SB 1425 include:

• Creates Government Code Section 65565.5, which requires all cities and counties to update their local open-space plans to include social, economic and racial equity relating to environmental justice by January 1, 2026. (Gov. Code § 65565.5(a)).
• Requires plan updates to include climate resilience and other benefits of open-space, correlated with the safety element by January 1, 2026. (Gov. Code § 65565.5(a)).
• Requires plan updates to include rewilding opportunities, which are considered habitat, recreation, natural resource, historic and tribal resources, water management and aesthetics by January 1, 2026. (Gov. Code § 65565.5(a) and (b)).

Fiscal Impact: Senate Bill 1425 does not appropriate funds for these new requirements and did not classify this change as a “state mandate” reimbursable through Government Code Sections 17500 et. seq. However, the bill allows local agencies or school districts to levy service charges, fees or assessments to pay for the program under Government Code Section 17556.

Planning and Zoning

SB/AB 1214

Senate Bill 1214 adds a section to the Government Code relating to architectural drawings being made available to the public but with protections, restrictions and administrative oversight of those disclosed architectural drawings. This bill was originally introduced at Assembly Bill 1214, however was amended in the Senate, which is why it changed house designations.

Noteworthy features of SB 1214 include:

• Requires local planning agencies to make architectural drawings available to the public in a manner that does not allow any protected information to be copied. (Gov. Code § 65103.5(a)).
• Allows local planning agencies to maintain official copies of architectural drawings with protected information submitted to the agency, with copyright protections. The records are open for inspection and public review only on the premises of the planning agency; no copies to be provided without owner permission. (Gov. Code § 65103.5(b)).
• Under this bill, contracts, site plans or massing diagrams submitted to a local planning agency may be listed on the internet and may be copied by whomever. Design professionals, when submitting architectural drawings, may also submit site plans or massing diagrams for posting online or public distribution. (Gov. Code § 65103.5(e)).
• Imposes a limitation on the public’s right to access to the meetings of public bodies or writings of public officials and agencies, under Section 3 of Article I of the California Constitution. However this protection is a “balancing test” of the public’s right to information versus the copyright and intellectual property rights of the design professionals or owners.

Fiscal Impact: Although Senate Bill 1214 specifies these as state mandates, it does not appropriate funds for these new requirements. If the Commission on State Mandates determines the bill contains costs mandated by the state, it shall reimburse those costs under the California Constitution.

AB 2234

Post-Entitlement, Non-Discretionary Permits Now Covered by Permit Streamlining Act

AB 2234 adds Sections 65913.3 and 65913.3.5 to the Government Code, extending elements of the Permit Streamlining Act to a local agency’s (cities’ and counties’) review of “post-entitlement phase permit” applications for housing development projects.

A post-entitlement phase permit is any “nondiscretionary” permit or “review” that is “filed after the entitlement process has been completed” and that is required to begin construction. Examples include (but are not limited to): building permits, permits for minor or standard off-site improvements, demolition permits and permits for minor or standard excavation and grading.

Noteworthy features of AB 2234 include:

• Online Posting Requirements. Local agencies must list the specific information required for an application to be considered complete. Local agencies must also post examples of a complete, approved application and a complete set of post-entitlement phase permits for accessory dwelling units, duplexes, multifamily projects, mixed-use projects and townhomes. These materials must be posted on the local agency’s internet website no later than January 1, 2024.
• Required Timeline for Application Completeness Determination. Local agencies must determine whether a post-entitlement phase permit application is complete within 15 business days of submittal. If the local agency misses this deadline, the application is deemed complete.
• Review and Decision Timeline. Local agencies must approve a post-entitlement phase permit application or return a full set of written comments to the applicant: (1) within 30 business days of the application being deemed complete if the housing development project has 25 or fewer units; or (2) within 60 business days if the project has more than 25 units. The local agency may extend these deadlines only if it makes specific health and safety findings, requires outside-agency review of the application or with the applicant’s consent. The new law does not prevent multiple reviews, subject to the timeline each time.
• Housing Accountability Act (HAA) Liability. A local agency’s failure to meet the new time limits is a violation of the HHA, which can result in various civil penalties, including attorney’s fees.
• Online Permitting System.
  • Local agencies that are located in counties with a population of 250,000 or greater (as of January 1, 2019) must implement an online permitting system allowing applicants to apply for, check status, complete and retrieve permits online. Local agencies in counties with a population of less than 250,000 are exempt from this requirement.
  • The compliance deadlines for local agencies subject to the online permitting system requirements (i.e., located in a county with 250,000 or more residents) are as follows:
    • January 1, 2024: for any local agency with a population of 75,000 or greater, or that is located in a county with a population of 1.1 million or greater.
    • January 1, 2028: all other local agencies not covered by the bullet above.
  • The January 2024 and 2028 compliance deadlines can be extended for up to two years and five years, respectively, if an agency makes specified findings.

An agency without a compliant online permitting system by the applicable deadline must accept and process applications by email.

AB 2097

New Limits on Parking Requirements Near Transit

AB 2097 adds Section 65863.2 to the Government Code generally prohibiting public agencies from requiring parking for any development projects (residential, commercial or other) within a half-mile of public transit. “Public transit” means an existing rail or bus rapid transit station, a ferry terminal served by either bus or rail or a bus stop with two or more major bus routes with buses coming at least every 15 minutes during peak periods.

The new law does allow an exception if the agency makes (and supports) written findings about the lack of parking having a substantial negative impact on: (1) the agency’s ability to meet its regional housing needs for low- and very low-income households; (2) its ability to meet special housing needs for the elderly or persons with disabilities; (3) any existing residential or commercial parking facilities that are located within a half-mile of the project. The findings must be made within 30 days of receiving a complete application.

Noteworthy features of AB 2097 include:

• No Exception for Certain Projects. The exception does not apply to a “housing development project” if (1) at least 20% of the units is for lower-income households, students, the elderly or persons with disabilities; (2) the project has 20 or fewer dwellings; or (3) the project is subject to other applicable parking reductions provided by law.
• Voluntarily Provided Public Parking. Developers may still voluntarily provide public parking and, if they do, an agency may require spaces for car-share vehicles, require spaces to be shared with the public or require parking owners to charge for parking.
• Electric Vehicle (EV) and ADA Accessible Parking. Agencies may still require EV charging and accessible parking under other laws. And there is a narrow exemption allowing agencies to enforce minimum parking requirements for employees and other workers at event centers.
• Pre-2023 Carve-Out and Attorney General Enforcement. Public agencies should examine their parking ordinances to confirm that they comply with Section 65863.2, as well as review any pre-2023 parking contracts which may be exempt. Agencies should proceed carefully and consult legal counsel prior to enforcing minimum parking requirements on developments near public transit because violating the new law may result in the attorney general bringing legal action.

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HEALTH AND SAFETY

Fire Safety

AB 2322

Assembly Bill 2322 adds a section to the Health and Safety code relating to fire safety requiring the state fire marshal to research and provide input to the California Building Standards Commission (the Commission). This bill requires that every three years, when the Commission drafts a new California Building Standards Code, the state fire marshal must research, develop and propose to the Commission, mandatory building standards for fire resistance based on occupancy risk in different fire zones. The state fire marshal is authorized to propose those changes, but is not required to propose changes if he or she feels none are necessary. Lastly, this bill requires the Commission to consider for adoption, the building standards proposed by the state fire marshal. (Health and Safety Code § 13108.5.1).

Fiscal Impact: None.

SB 896

Senate Bill 896 amends sections of the Public Resources Code relating to fire prevention regarding defensible spaces and grant programs to local governments. This bill changes Public Resources Code Sections 4124.5 and 4291.5 to require local governmental entities that are qualified to conduct assessments of defensible spaces in very high and high fire hazard zones, and report that information, to report their findings using the common reporting platform. (Pub. Resources Code § 4291.5(g)). The Department of Forestry would be required to report that data on December 31, 2023, and annually thereafter, through the common reporting platform. (Pub. Resources Code § 4291.5(h)(1)).

Additionally, existing law requires the Department of Forestry to establish a local assistance grant program for fire prevention and home hardening education activities for local agencies. This bill would require the Department of Forestry to give priority to any local governmental entity, qualified to perform defensible space assessments in very high and high fire hazard zones, using the common reporting platform, priority review of their applications for grants. Therefore, if the local fire authority reports data using the common reporting platform and applies for a grant under this program, their application would be processed before those agencies that do not report data. (Pub. Resources Code § 4124.5(f)).

Fiscal Impact: This bill would allow local governments to receive expedited grant funds for defensible space and fire prevention activities if they report data, giving the local agencies’ additional funding to carry out fire safety objectives without having to appropriate more local budget for those same activities.

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PUBLIC CONTRACTS

AB 2173

AB 2173 eliminates the current sunset date in Public Contracting Code Sections 7201 and 10261, which were set to expire on January 1, 2023. Prior to Sections 7201 and 10261, public owners typically retained 10% of a contract to allow the public agency to maintain some control over the project and ensure that the contractor performed the work on time and within a budget. In response to construction industry concerns about retention rates, the Legislature enacted Sections 7201 and 10261 to restrict retention rates in most cases to a maximum of 5%. Public owners may require more than 5% if the governing body makes findings prior to the bid that the project is substantially complex and requires a higher retention. Importantly, determining whether a project is substantially complex must be analyzed and approved on a project-by-project basis and the finding and the designated retention amount must be included in the project’s bid documents. Thus, this bill makes the 5% percent retention cap and exception for substantially complex project permanent.

Moving forward, public entities should maintain the status quo of not exceeding the 5% retention cap unless their governing bodies find that the project is substantially complex.

Design-Build Contracts

SB 991

SB 991 authorizes, until January 1, 2029, local agencies that provide for the production, storage, supply, treatment or distribution of water to use the progressive design-build process for up to 15 specified water projects each over $5 million. Progressive design-build allows the agency to select a single company to perform design and construction services. However, unlike traditional design-build, the progressive design-build process enables selection of the design-builder primarily on qualifications and involving the design-builder at the earliest possible phase. This bill creates a new procurement process that eligible local agencies may use to account for the fact that construction costs might be unknown at the time of procurement. The bill allows local agencies to establish a guaranteed maximum price for the project, and provides that the design-build entities are responsible for the costs for completing projects exceeding the guaranteed maximum price. SB 991 also authorizes local agencies using the progressive design-build authority for specified water projects to withhold up to 5% of project costs, less the work performed to establish the guaranteed maximum price, from the design-build entity if the solicitation requires a performance and payment bond. However, the percentage of retention proceeds must not exceed the percentage the local agency and design-build entity agreed to in their contract.

Local agencies that take advantage of the progressive design-build authority will need to adhere to the procurement process outlined in Public Contracting Code Section 22172. Further, local agencies that use the progressive design-build process must submit, no later than January 1, 2028, a report containing specified information, including a description of the projects awarded using the progressive design-build process.

AB 1354

SB 1354 authorizes cities and counties to use the design-build contract procurement process to award contracts for the construction of projects necessary to comply with the accessibility standards of the American with Disabilities Act (ADA). Prior to SB 1354, local agencies could only use the traditional government procurement process of design-bid-build when constructing ADA-compliant infrastructure. Unlike the traditional process, design-build procurement allows a public agency to package the design and construction components of a project into a single contract. Additionally, public agencies do not necessarily need to award a design-build contract to the lowest bidder after competitive bidding; rather, a “best value” assessment may be considered when making the award. The more streamlined design-build approach is often preferable to the traditional procurement method as it typically reduces costs and shortens the time to project completion.

Current law requires specified information submitted by an entity in the design-build procurement process to be certified under penalty of perjury. By expanding design-build authority to include additional ADA-related projects, the bill consequently expands the scope of the crime of perjury. While the state is generally required to reimburse local agencies for certain costs associated with implementing state-mandated programs, this bill does not require reimbursement under the California Constitution since this additional authorization by the state is optional rather than mandatory.

SB 1354 provides local agencies with an alternative and often more efficient process to comply with the ADA, which will continue to make public spaces accessible to all.

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EDUCATION

Government Employees

AB 2413

Assembly Bill 2413 amends sections of the Education Code relating to the school and community college employee disciplinary actions. This bill creates a prohibition on the suspension without pay, suspension or demotion with a reduction in pay, or dismissal of a permanent employee of a school district or community college district employee who timely requests a hearing on charges against the employee. The only exception of this is that if the governing board or impartial third-party hearing officer finds at the time discipline was imposed at the conclusion of the initial review process, that the employer demonstrated a “preponderance of the evidence” (more likely than not) that the employee engaged in misconduct (criminal, hazardous or habitual violations) in violation of district’s policies or regulations. Lastly, if the employee requests a hearing pursuant to a collective bargaining agreement, the school or community college districts can stop paying the employee before a decision is rendered after 30 calendar days from the request, unless stopping conflicts with a collective bargaining agreement entered before January 1, 2023 until expiration or renewal of the agreement.

Fiscal Impact: No appropriation and no cost reimbursement stated.

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