New Year, New Laws Impacting Public Agencies in California – Part II

Best Best & Krieger LLP


Housing and Land Use and Environmental Laws Saw Changes in 2019

The California Legislature passed a number of laws last year that will have a significant impact on how public agencies — including cities and counties, special districts, schools and school districts and more — do business. In this Legal Alert series, Best Best & Krieger LLP summarizes these new laws. All laws went into effect Jan. 1, unless otherwise noted.
Housing and Land Use
Affordable Housing, RHNA and Density Bonus
AB 829: Local government: funding: state assisted projects
This bill supports the construction of affordable housing by denying state funding, state tax credits or federal tax credits, administered by the state, to any city that requires a local official to sign a “letter of acknowledgement” or similar document before applying for state assistance.
AB 1771/SB 828: Planning and zoning: regional housing needs assessment/land use: housing element
These bills impose new requirements regarding the preparation of regional housing need allocation plans. Existing Planning and Zoning Law requires counties and cities to adopt a comprehensive long-term plan for the development of the county or city, which includes a housing element. The Department of Housing and Community Development must determine the need for housing for each region, and each council of governments (or equivalent)  must adopt a final regional housing need allocation plan that allocates a share of the regional housing need to each city in the region. These bills makes changes to the objectives, methodology, distribution and appeals process for the RHNA. Among other things, these bills require the RHNA to include an objective to increase access to areas of high opportunity for lower-income residents, while avoiding displacement and affirmatively furthering fair housing. The COG must consult with the HCD about the development of its methodology, and submit the draft allocation methodology to HCD after public input. The bills require the COG to provide data on the rate of overcrowding among households, and the percentage of households that are cost burdened, and take this data into account in the plan methodology. The bill also sets forth the COG’s options after receiving HCD’s findings, and elaborates the grounds and process for an appeal to the COG for revisions to the proposed RHNA. Underproduction of housing in a city or county in a previous housing cycle and stable population numbers in a city or county from the previous cycle may not be used to justify a determination or reduction in that jurisdiction’s share of the regional housing need.
AB 2238: Local agency formation: regional housing need allocation: fire hazards: local health emergencies: hazardous and medical waste
How does a disaster affect a city’s regional housing needs assessment? The primary purpose of AB 2238 is to ensure that cities who suffer a devastating loss of housing stock due to a fire or other Governor-declared emergency are not unfairly penalized for failing to meet their regional housing needs. The bill therefore directs councils of government to include lost units in their computations of housing needs. Additionally, this bill extends the period for declaring local emergencies from 14 to 30 days. It also requires LAFCO to consider information related to very high-hazard severity zones, local hazard mitigation plans and safety elements of general plans if such information is relevant to a proposal for a reorganization or change of organization.
AB 2372: Planning and zoning-density bonus floor area ratio bonus
Planning and Zoning Law requires that the a city or county provide a developer of an eligible housing development with incentives for the construction of lower-income housing or donation of land, such as a density bonus awarded by the number dwelling units per acre. This measure authorizes a city or county to develop a procedure by ordinance to grant the developer, upon request, a floor area ratio bonus in lieu of a density bonus. The measure also defines an eligible housing development as a development that meets certain criteria pertaining to residential use, mixed use, location, zoning, replacement of units and affordability. The bill would also prohibit the city or county from imposing any parking requirement on an eligible housing development in excess of specified ratios.
AB 2797: Planning and zoning: density bonuses
Under the Density Bonus Law, a city council or board of supervisors may provide a developer with a density bonus or other incentives to encourage the construction of lower-income housing units, or the donation of land within an eligible housing development. Existing law provides that the Density Bonus Law does not supersede the California Coastal Act, which regulates development of certain lands within the coastal zone. This bill requires that any density bonus or other incentive to which an applicant is entitled under the Density Bonus Law be permitted in a manner that is consistent with that law and the Coastal Act. The bill and dicta regarding the relationship between the two laws also provides that it is the intent of the Legislature to harmonize the provisions of Density Bonus Law and the Coastal Act, and supersede the holding in the 2016 appellate court case Kanel Gardens, LLC v. City of Los Angeles.
SB 1227: Density bonuses
Under the Density Bonus law, a city or county is required to provide a developer proposing a housing development with a density bonus and/or other incentives to construct lower-income housing units, or the donation of land within the development. This bill requires cities and counties to grant a density bonus to a developer for a proposed housing development in which all units will be used by full-time college students, subject to certain requirements. Among other things, the developer must enter into an agreement with an institution of higher learning to the effect that at least 20 percent of the total units are for lower-income students at a specified rent level, and the development provides priority for the applicable affordable units for lower-income students experiencing homelessness.
Discrimination and Disability
AB 686: Housing discrimination: affirmatively further fair housing
Since its adoption during the civil rights era, the federal Fair Housing Act has required the Department of Housing and Urban Development to affirmatively further the goals of the Fair Housing Act. In an effort to define what it means to “affirmatively further fair housing,” the Obama administration adopted a regulation requiring local government recipients of HUD funds to perform an assessment of fair housing in their respective jurisdictions. The current administration has suspended the requirement to submit an assessment, pending potential changes and additional public comments. The Legislature adopted AB 686 to replicate the now-suspended federal rule.
This bill requires public agencies to administer programs and activities to housing and community development in a manner “affirmatively furthering fair housing,” and prohibits public agencies to take action that is materially inconsistent with this intent. “Affirmatively furthering fair housing” means: taking meaningful actions that address significant disparities in housing needs; fostering inclusive communities by replacing segregating living patterns with truly integrated and balanced living patterns and transforming racially, ethnically and concentrated areas of poverty into areas of opportunity. As with many recent housing-related bills, AB 686 uses local housing elements to effect its policy goals. Housing elements that are updated after Jan. 1, 2021 will have to incorporate an assessment of fair housing or an analysis of impediments to fair housing.
AB 3002 Disability access requirements: information
Please see or recent Legal Alert on AB 3002 to learn more.
SB 46:Mobilehomes: enforcement actions: sunset provision
Under the Mobilehome Park Maintenance inspection program, the HCD, or a local enforcement agency, proactively inspect mobile home parks where there have been complaints of health and safety violations. This bill extends the MPM inspection program from Jan. 1, 2019 to . Jan. 1, 2024.
Building Code and Permits
AB 565: Building standards: live/work units
This bill began as an effort to develop live/work units specific for artists to use as both a work shop and a residence. After numerous revisions, the Legislature ultimately adopted a simple directive to the Department of Housing and Community Development to develop and submit to the California Building Standards Commission building standards that clarify the requirements to construct live/work units by the next triennial edition of the California Building Standards Code.
AB 2598: Cities and counties: ordinances: violations
This bill provides cities with more teeth to enforce local building and safety codes. Existing law authorizes a city council or county board of supervisors to impose an administrative fine or penalty for infractions of an ordinance or violation of a local building and safety code determined to be an infraction. This measure increases the fines that counties and cities can assess to $130 for a first violation, $700 for a second violation of the same ordinance within 1 year and $1,300 for each additional violation of the same ordinance within 1 year of the first violation. Additionally, it adds a $2,500 fine for repeat violations of building and safety codes on commercial property under certain conditions. The new law also requires the council or board to establish a procedure for granting a hardship waiver to reduce the fine if the party shows a bona fide effort to comply, and demonstrates that payment of the full amount would impose an undue financial burden.
AB 2913: Building standards: building permits: expiration
This measure provides that local ordinances adding or modifying building standards for residencies do not apply to expired permits. Under existing law, building permits expire 6 months after issuance, unless the work has not begun or was abandoned. This measure extends the validity of a building permit to 12 months after its issuance, unless the work was abandoned. The bill also authorizes a building official, upon request, to grant in writing one or more extensions of time not to exceed 180 days for each extension, if the request is in writing and provides justifiable cause.
SB 721: Building standards: decks and balconies: inspection
This measure was enacted in response to the Berkeley balcony collapse in 2015, which caused the death of several students due to rotting wooden joists. The measure provides inspection requirements for “exterior elevated elements,” including decks and balconies for three or more multifamily units, and establishes reporting and repair requirements. The inspection must be performed by a licensed architect, a licensed civil or structural engineer, a certified building inspector or other designated individuals, and hired by the owner. The inspector must provide a signed or stamped written report to the owner within 45 days of an inspection, and advise the owner which elements pose an immediate threat. The bill also requires that repair or replacement work must be performed by a qualified licensed contractor. Under this measure, the initial inspection must be completed by Jan. 1, 2025, and repeated every 6 years. The bill also sets civil penalties for building owners who do not comply with required repairs.
SB 1226:Building standards: building permits
This measure requires HCD to propose the adoption of a building standard authorizing a local enforcement official to determine the date of construction of a residential unit, apply the appropriate building standard in effect on the date of construction, and issue a retroactive building permit for that unit, where record of the building permit does not exist.
Public Contracts
AB 2762: Public contracts: disabled veteran business enterprises: local small business enterprises: social enterprises
The Public Contract Code authorizes local agencies to grant a 5 percent preference to small businesses in the award of construction, goods and services contracts. This bill expands the preference to 7 percent, with a cap of $150,000. For local agencies within Los Angeles County or certain Bay Area counties, AB 2762 authorizes additional 7 percent preferences for disabled veteran businesses or social enterprises. Qualifying local agencies may stack more than one preference in a single bid, provided the total preference does not exceed 15 percent or $200,000. In general, a social enterprise is an entity whose primary purpose is to benefit the economic, environmental, or social health of the community by providing transitional employment. Only social enterprises that are certified by the administering local agency can be eligible for the preference. Local agencies may define eligibility criteria for each of the preferences.
Map Act
AB 2973: Land use: Subdivision Map Act: expiration dates
This measure provides that a legislative body is authorized, but not required, to extend by 24 months a tentative map, vesting tentative map or a parcel map that involves the construction of single or multifamily housing under the following conditions: the map was approved between Jan. 1, 2006 and July 11, 2013; within a county that meets certain criteria, and whose expiration date was previously extended under specified provisions; and has not expired by the effective date of this measure. This bill also provides that within a 3-year period after the approval of a tentative map or recordation of a parcel map, a local agency is not prohibited from levying a fee, or imposing a condition that requires the payment of a fee, in the amount in effect upon the issuance of a building permit, including an adopted fee not included in an applicable zoning ordinance. The effect of this measure allows developers to utilize existing maps for housing projects, and minimizes delays and costs.
Development Fees
SB 1202: Land use: development fees
If a local agency requires a fee payment pursuant to the Mitigation Fee Act relating to the approval of a development project, the local agency is required to deposit the fee in a separate capital facilities account or fund and to expend those fees solely for the purpose for which they were collected. This measure requires that local governments that have not completed a required report on mitigation fees for 3 consecutive years pay the costs of audits of their mitigation fee funds.
General Plan/Housing Element
SB 765: Planning and zoning: housing
This measure makes several technical changes to a 2017 law that implemented a streamlined ministerial approval process for a developer of a multifamily housing development project, in communities which identified a housing shortage, under certain conditions. Among other things, this measure addresses requirements relating to when a qualifying development is subject to a minimum percentage of below market rate housing, the timing of the recording of affordability covenants, the applicability of objective subdivision standards in the local subdivision ordinance, CEQA streamlining, and parking standards. The measure also makes changes to the Shelter Crisis Act by providing that when one of the authorized jurisdictions declares a shelter crisis, actions taken by the local government to lease, convey or encumber land owned by the locality for a shelter, are exempt under CEQA.
SB 1035: General plans
Under the Planning and Zoning Law, a city or county is required to adopt a long-term general plan that includes a safety element to protect the community from unreasonable risks associated with the effects of various geological hazards. This measure revises the safety element to identify new information on fire hazards, flood hazards and climate adaptation and applicable resiliency strategies that were not available during the last revision of the safety element, and requires review and revision no less than every 3 years.
SB 1333: Planning and zoning: general plan: zoning regulations: charter cities
Under the Planning and Zoning Law, each county and city is required to adopt a comprehensive, long-term general plan for the physical development of the county or city, and include a housing element in the plan. Existing law also specifies procedures and requirements regarding the preparation and adoption of the general plan. This measure applies various provisions of the Planning and Zoning Law to charter cities, including general plans, specific plans and the adoption and review of housing elements, and provides that provisions of the Planning and Zoning Law regarding ordinances, regional housing need, mobile home parks and certain development agreements also apply to charter cities.
AB 747: State Water Resources Control Board
Effective July 1, this bill creates an Administrative Hearings Office within the State Water Resources Control Board composed of attorneys qualified to act as impartial hearing officers to adjudicate over water rights matters. The Hearing Office oversees hearings on civil complaints issued for water use and diversion provisions, proposed cease and desist orders for water use violations, the revocation of a permit or license to appropriate water, and water-related cannabis enforcement matters. The new law requires the Board to designate a presiding hearing officer to supervise the office, and sets procedures for the hearings, including the adoption of a final order for matters imposing administrative civil liability, and a proposed order submitted for final review to the Board for all other matters.
AB 1668: Water management planning
AB 1668 requires the State Water Resources Control Board, in coordination with the Department of Water Resources, to establish long-term water efficiency standards for indoor and outdoor residential use, and performance measures for commercial, industrial, institutional use by June 30, 2022. The measure requires the Department and board to make recommendations for the standards and performance measures by Oct. 1, 2021, and initially establishes a per person indoor residential water use standard of 55 gallons per day until 2025, 52.5 gallons until 2030, and 50 gallons per day beginning Jan. 1, 2030. This bill further requires an agricultural water supplier to update its agricultural water management plan to include an annual water budget and drought plan by April 1, 2021, with subsequent updates due every 5 years in years ending in “six” and “one” (previously, updates were due by Dec. 31 of each 5-year period). The bill also creates incentives for water suppliers to recycle water. The bill also requires the Board and Department to identify small water suppliers and rural communities at risk of drought, and provide drought and water shortage contingency plans by Jan. 2, 2020 to address their needs. The bill imposes civil liability for a violation of an order or regulation issued in accordance with these provisions. Civil liability may be as much as $10,000 per day in critically dry years.
AB 2501: Drinking water: state administrators: consolidation and extension of service
Existing law and policy establish the right to safe, clean, affordable and accessible water for every individual in the State. This measure ensures that a disadvantaged community is supplied with safe drinking water by authorizing the State Water Resources Control Board to order consolidation with a nearby municipality if a water system or well consistently fails to adequately provide safe water to a disadvantaged community. The new law also requires the state board to develop and adopt a policy that allows members of a disadvantaged community to petition the state board for consolidation. If consolidation is not appropriate or feasible, the new law also authorizes the Board to contract for managerial services for a designated public water system and requires the designated public water system to receive those services if sufficient funding is available. Existing law requires the Board to hold a public meeting before ordering consolidation, and a public hearing after, to address delays. This bill replaces the public hearing with a second public meeting.
SB 606: Water management planning
This bill imposes new reporting requirements on urban retail water suppliers. By Nov. 1, 2023, an urban retail water supplier must calculate water use objectives (an estimate of aggregate efficient water use) and actual water use and report the same by Nov. 1, 2023 and annually thereafter to the Department of Water Resources. The report must include its progress in meeting those objectives, its actual water use and document its CII performance measure. The Board can issue informational orders and written notices to suppliers who fail to meet objectives, and can impose civil liability for any violation of an order.
This bill also amends certain provisions of the Urban Water Management Planning Act. Previously, every public and private supplier of water for municipal purposes was required to update its UWMP by Dec. 31 in years ending in “five” and “zero.” SB 606 requires the plan to be updated on or before July 1, in years ending in “six” and “one,” and requires the plan to include a drought risk assessment and a water shortage contingency analysis. The supplier must also submit an annual water shortage assessment report to the Department. This bill also provides that a water supplier that fails to comply with the requirements of the UWMPA would be ineligible for any water grant or loan funding.
Existing law authorizes the governing body of a distributor of a public water supply to declare a water shortage emergency condition when water supply is insufficient for ordinary consumer demands. This law now requires declaration of an emergency under those conditions.
SB 966: Onsite treated non-potable water systems
Existing law requires the State Water Resources Control Board to establish recycling criteria for each type of recycled water to protect public health. This measure addresses the State’s water shortage by diversifying water usage to include the onsite treatment and reuse of non-potable water for irrigation and other purposes, while protecting public health. The measure requires the Board and the Department of Housing and Community Development to enact risk-based regulations to implement the on-site treatment and reuse of non-potable water in multifamily residential, commercial and mixed use buildings, and allows local communities to establish an onsite treatment and reuse program by adopting by ordinance the risk-based standards. The bill also requires the Department and Board to develop and propose for adoption any necessary building standards to support the risk-based water quality standards.
SB 998: Discontinuation of residential water service: urban and community water systems
Effective in 2020, this bill requires public water systems with more than 200 service connections to have a written policy on the discontinuation of residential water service for nonpayment. The policy must be available in multiple specific languages and be available on the system’s website, as well as upon request. In addition, the bill expands procedural protections regarding the discontinuation of water service for nonpayment. These protections include, among other things, no discontinuation for nonpayment unless payment has been delinquent for 60 days, and the customer named on the account has been properly notified at least 7 business days before discontinuation. The bill also requires public water systems that discontinue water service to provide the customer with information on how to restore service, and limits reconnection fees for customers who demonstrate a household income below 200 percent of the poverty line. The bill also requires public water systems to annually report the number of discontinuations for inability to pay. The bill imposes monetary penalties for each day a violation occurs, and requires that money collected for the violations be deposited in the Safe Drinking Water Account.  For more information, see our previous Legal Alert on SB 998.
SB 1215: Provision of sewer service: disadvantaged communities
Recognizing the relationship between safe drinking water and adequate wastewater treatment, SB 1215 authorizes the regional water control boards to order the provision of a sewer service by a special district, city or county to a disadvantaged community with inadequate onsite sewage treatment systems, in much the same manner that AB 2501 consolidates water systems to provide safe drinking water to disadvantaged communities. The bill requires the applicable regional board to take certain actions before making its order, and requires a policy allowing members of a disadvantaged community to petition the regional board for the provision of sewer service. The bill imposes a state mandated local program that provides for reimbursement of costs in some instances.
California Environmental Quality Act
AB 1804: California Environmental Quality Act: exemption: residential or mixed use housing projects
To promote housing developments in California, this bill expands the categorical infill exemption of CEQA that has been applied to development projects in our cities, to residential or mixed-use housing projects in unincorporated areas of counties, if the project meets certain requirements. The measure requires a lead agency to file a notice of exemption with the Office of Planning and Research and with the county clerk of the county where the project is located. A project that is categorically exempt under CEQA may not qualify for an exemption if it falls within a CEQA exception to the exemption. This provision remains in effect until Jan. 1, 2025.
AB 2341: California Environmental Quality Act: aesthetic impacts
This bill provides that aesthetic effects need not be evaluated and may not be considered significant effects on the environment under CEQA for housing projects involving the refurbishment, conversion, repurposing or replacement of an existing building that meets certain requirements. The bill does not apply to projects involving potentially significant aesthetic effects to scenic highways or to projects with potentially significant aesthetic effects to historical or cultural resources. The bill also does not change the authority of a lead agency to require the mitigation or avoidance of an adverse aesthetic effect pursuant to other laws. This provision remains in effect until Jan. 1, 2024.
AB 2782: California Environmental Quality Act
This bill authorizes lead agencies evaluating the environmental impact of a proposed project under CEQA to consider non-environmental benefits, such as economic, legal, social or technological, as well as the nonlocal region-wide or statewide environmental benefits, and the negative impacts of denying the project. The lead agency’s considerations must be supported by substantial evidence from the administrative record.
More in the New Public Agency Law Legal Alert Series:

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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