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AB-3068 Adaptive reuse: streamlining: incentives.(2023-2024)

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Date Published: 04/18/2024 09:00 PM
AB3068:v98#DOCUMENT

Revised  April 25, 2024
Amended  IN  Assembly  April 18, 2024

CALIFORNIA LEGISLATURE— 2023–2024 REGULAR SESSION

Assembly Bill
No. 3068

Introduced by Assembly Member Haney
(Coauthor: Assembly Member Quirk-Silva)

February 16, 2024

An act to amend Section 65585 of, and to add Chapter 8 9 (commencing with Section 51298) 51299) to Part 1 of Division 1 of Title 5 of, and to add Article 11.5 (commencing with Section 65658) to Chapter 3 of Division 1 of Title 7 of, the Government Code, relating to housing.


LEGISLATIVE COUNSEL'S DIGEST


AB 3068, as amended, Haney. Adaptive reuse: streamlining: incentives.
The Planning and Zoning Law requires each county and city to adopt a comprehensive, long-term general plan for its physical development, and the development of certain lands outside its boundaries, that includes, among other mandatory elements, a housing element. That law allows a development proponent to submit an application for a development that is subject to a specified streamlined, ministerial approval process not subject to a conditional use permit, if the development satisfies certain objective planning standards, including that the development is a multifamily housing development that contains two or more residential units.
This bill would deem an adaptive reuse project a use by right in all zones, regardless of the zoning of the site, and subject to a streamlined, ministerial review process if the project meets specified requirements. In this regard, an adaptive reuse project, in order to qualify for the streamlined, ministerial review process, would be required to be proposed for an existing building that is less than 50 years old or meets certain requirements regarding the preservation of historic resources, including the signing of an affidavit declaring that the project will comply with the United States Secretary of the Interior’s Standards for Rehabilitation or receive federal or state historic rehabilitation tax credits, as specified. The bill would require an adaptive reuse project to meet specified affordability criteria. In this regard, the bill would require an adaptive reuse project for rental housing to include either 8% of the unit for very low income households and 5% of the units for extremely low income households or 15% of the units for lower income households. For an adaptive reuse project for owner-occupied housing, the bill would require the development to offer either 30% of the units at an affordable housing cost to moderate-income households or 15% of the units at an affordable housing cost to lower income households. The bill would require an adaptive reuse project to comply with any broadly applicable housing affordability requirement, as defined, adopted by the local government and would require at least one-half of the square footage of the adaptive reuse project to be dedicated to residential uses, unless the project is an office conversion project, as specified. uses. The bill would authorize an adaptive reuse project subject to these provisions to include the development of new residential or mixed-use structures on undeveloped areas and parking areas on the parcels adjacent to the proposed adaptive reuse project site if certain conditions are met. The bill would, if a local government’s planning director or equivalent position determines that the adaptive reuse project submitted pursuant to these provisions is consistent with the objective planning standards, require the local government to approve the adaptive reuse project within specified timeframes. The bill would require the proponent of an adaptive reuse project subject to these provisions to certify to the local government that specified labor prevailing wage, apprenticeship, and health care expenditure requirements are satisfied, as specified.
By requiring local governments to implement the streamlined, ministerial review process for adaptive reuse projects, the bill would impose a state-mandated local program. By requiring certain development proponents of an adaptive reuse project to sign an affidavit regarding the preservation of historic resources, resources and requiring development proponents to certify compliance with certain labor standards under penalty of perjury, the bill would expand the crime of perjury and therefore impose a state-mandated local program.
This bill would exempt an adaptive reuse project from all impact fees that are not directly related to the impacts resulting from the change of use of the site from nonresidential to residential or mixed use and would require any fees charged to be proportional to the difference in impacts caused by the change of use.
The California Environmental Quality Act (CEQA) requires a lead agency, as defined, to prepare, or cause to be prepared, and certify the completion of, an environmental impact report on a project that it proposes to carry out or approve that may have a significant effect on the environment. CEQA does not apply to the approval of ministerial projects.
This bill, by establishing the streamlined, ministerial review process described above, would exempt the approval of adaptive reuse projects subject to those processes from CEQA.
This bill would authorize a city or county, commencing in the 2024–25 fiscal year, to establish an adaptive reuse investment incentive program to pay adaptive reuse investment incentive funds, as defined, to the proponent of an adaptive reuse project approved pursuant to the streamlined, ministerial process described above for up to 15 consecutive fiscal years. The bill would define “adaptive reuse investment incentive funds” to mean an amount up to or equal to the amount of ad valorem property tax revenue allocated to the participating local agency from the taxation of that portion of the total assessed value of the real and personal property of an adaptive reuse project property that is in excess of the qualified adaptive reuse project property’s valuation at the time of the proponent’s initial request for funding.
The bill would include findings that changes proposed by this bill address a matter of statewide concern rather than a municipal affair and, therefore, apply to all cities, including charter cities.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for specified reasons.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

The people of the State of California do enact as follows:


SECTION 1.Chapter 8 (commencing with Section 51298) is added to Part 1 of Division 1 of Title 5 of the Government Code, to read:

SECTION 1.

 Chapter 9 (commencing with Section 51299) is added to Part 1 of Division 1 of Title 5 of the Government Code, to read:
CHAPTER  9. Adaptive Reuse Investment Incentive Program

51298.51299.
 It is the intent of the Legislature in enacting this chapter to provide cities and counties with opportunities to adaptively reuse existing buildings, such as office buildings, in order to facilitate their conversion to housing and mixed uses.

51298.1.51299.1.
 For purposes of this chapter:
(a) “Adaptive reuse investment incentive funds” means, with respect to a qualified adaptive reuse project property for a relevant fiscal year, an amount up to or equal to the amount of ad valorem property tax revenue allocated to the participating local agency, excluding the revenue transfers required by Sections 97.2 and 97.3 of the Revenue and Taxation Code, from the taxation of that portion of the total assessed value of the real and personal property of an adaptive reuse project property that is in excess of the qualified adaptive reuse project property’s valuation at the time of the proponent’s initial request for funding.
(b) “Program” means an adaptive reuse investment incentive program established pursuant to Section 51298.2. 51299.2.
(c) (1) “Proponent” means a party or parties that meet all of the following criteria:
(A) The party is named in the application for a permit to construct a qualified adaptive reuse project submitted to the city or county.
(B) The party will either be the fee owner of the qualified adaptive reuse project property upon the completion of that development or the party enters a sale-leaseback transaction for the qualified adaptive reuse project property. development.
(2) If a proponent that is receiving capital investment incentive amounts subsequently leases the qualified adaptive reuse project property to another party, the lease may provide for the payment to that lessee of any portion of adaptive reuse investment incentive funds. A lessee that receives any portion of adaptive reuse investment incentive funds shall also be considered a proponent for the purposes of this chapter.
(d) “Qualified adaptive reuse project property” means an adaptive reuse proposed pursuant to Article 11.5 (commencing with Section 65658) of Chapter 3 of Division 1 of Title 7 that is located within the city or county.

51298.2.51299.2.
 (a) Commencing in the 2024–25 fiscal year, the governing body of a city or county may, by ordinance or resolution, establish an adaptive reuse investment incentive program pursuant to this chapter.
(b) (1) A city or county that establishes a program shall, upon the approval by a majority of the entire membership of its governing body of a written request therefor, pay adaptive reuse investment incentive funds to the proponent of a qualified adaptive reuse project property to subsidize the affordable housing units, as required pursuant to Article 11.5 (commencing with Section 65658) of Chapter 3 of Division 1 of Title 7, for up to 15 consecutive fiscal years.
(2) A request for the payment of adaptive reuse investment incentive funds shall be filed by a proponent in writing with the governing body of the city or county in the time and manner established by that governing body.
(c) After a city or county approves a request for the payment of adaptive reuse investment incentive funds, payment of adaptive reuse investment incentive funds shall begin with the first fiscal year that commences after the qualified adaptive reuse property is issued a certificate of occupancy.

51298.3.51299.3.
 A city or special district may pay to the city or county an amount equal to the amount of ad valorem property tax revenue allocated to that city or special district, but not the actual allocation, derived from the taxation of that portion of the total assessed value of that real property that is in excess of the property’s valuation at the time of the proponent’s initial request for funding. funding, for the purpose of subsidizing the affordable housing units required pursuant to Article 11.5 (commencing with Section 65658) of Chapter 3 of Division 1 of Title 7.

SEC. 2.

 Section 65585 of the Government Code is amended to read:

65585.
 (a) In the preparation of its housing element, each city and county shall consider the guidelines adopted by the department pursuant to Section 50459 of the Health and Safety Code. Those guidelines shall be advisory to each city or county in the preparation of its housing element.
(b) (1) At least 90 days prior to adoption of a revision of its housing element pursuant to subdivision (e) of Section 65588, or at least 60 days prior to the adoption of a subsequent amendment to this element, the planning agency shall submit a draft element revision or draft amendment to the department. The local government of the planning agency shall make the first draft revision of a housing element available for public comment for at least 30 days and, if any comments are received, the local government shall take at least 10 business days after the 30-day public comment period to consider and incorporate public comments into the draft revision prior to submitting it to the department. For any subsequent draft revision, the local government shall post the draft revision on its internet website and shall email a link to the draft revision to all individuals and organizations that have previously requested notices relating to the local government’s housing element at least seven days before submitting the draft revision to the department.
(2) The planning agency staff shall collect and compile the public comments regarding the housing element received by the city, county, or city and county and provide these comments to each member of the legislative body before it adopts the housing element.
(3) The department shall review the draft and report its written findings to the planning agency within 90 days of its receipt of the first draft submittal for each housing element revision pursuant to subdivision (e) of Section 65588 or within 60 days of its receipt of a subsequent draft amendment or an adopted revision or adopted amendment to an element. The department shall not review the first draft submitted for each housing element revision pursuant to subdivision (e) of Section 65588 until the local government has made the draft available for public comment for at least 30 days and, if comments were received, has taken at least 10 business days to consider and incorporate public comments pursuant to paragraph (1).
(c) In the preparation of its findings, the department may consult with any public agency, group, or person. The department shall receive and consider any written comments from any public agency, group, or person regarding the draft or adopted element or amendment under review.
(d) In its written findings, the department shall determine whether the draft element or draft amendment substantially complies with this article.
(e) Prior to the adoption of its draft element or draft amendment, the legislative body shall consider the findings made by the department. If the department’s findings are not available within the time limits set by this section, the legislative body may act without them.
(f) If the department finds that the draft element or draft amendment does not substantially comply with this article, the legislative body shall take one of the following actions:
(1) Change the draft element or draft amendment to substantially comply with this article.
(2) Adopt the draft element or draft amendment without changes. The legislative body shall include in its resolution of adoption written findings that explain the reasons the legislative body believes that the draft element or draft amendment substantially complies with this article despite the findings of the department.
(g) Promptly following the adoption of its element or amendment, the planning agency shall submit a copy to the department.
(h) The department shall, within 60 days, review adopted housing elements or amendments and report its findings to the planning agency.
(i) (1) (A) The department shall review any action or failure to act by the city, county, or city and county that it determines is inconsistent with an adopted housing element or Section 65583, including any failure to implement any program actions included in the housing element pursuant to Section 65583. The department shall issue written findings to the city, county, or city and county as to whether the action or failure to act substantially complies with this article, and provide a reasonable time no longer than 30 days for the city, county, or city and county to respond to the findings before taking any other action authorized by this section, including the action authorized by subparagraph (B).
(B) If the department finds that the action or failure to act by the city, county, or city and county does not substantially comply with this article, and if it has issued findings pursuant to this section that an amendment to the housing element substantially complies with this article, the department may revoke its findings until it determines that the city, county, or city and county has come into compliance with this article.
(2) The department may consult with any local government, public agency, group, or person, and shall receive and consider any written comments from any public agency, group, or person, regarding the action or failure to act by the city, county, or city and county described in paragraph (1), in determining whether the housing element substantially complies with this article.
(j) The department shall notify the city, county, or city and county and may notify the office of the Attorney General that the city, county, or city and county is in violation of state law if the department finds that the housing element or an amendment to this element, or any action or failure to act described in subdivision (i), does not substantially comply with this article or that any local government has taken an action in violation of the following:
(1) Housing Accountability Act (Section 65589.5).
(2) Section 65863.
(3) Chapter 4.3 (commencing with Section 65915).
(4) Section 65008.
(5) Housing Crisis Act of 2019 (Chapter 654, Statutes of 2019, Sections 65941.1, 65943, and 66300).
(6) Section 8899.50.
(7) Section 65913.4.
(8) Article 11 (commencing with Section 65650).
(9) Article 12 (commencing with Section 65660).
(10) Section 65913.11.
(11) Section 65400.
(12) Section 65863.2.
(13) Chapter 4.1 (commencing with Section 65912.100).
(14) Section 65905.5.
(15) Chapter 13 (commencing with Section 66310).
(16) Section 65852.21.
(17) Section 65852.24.
(18) Section 66411.7.
(19) Section 65913.16.
(20) Article 2 (commencing with Section 66300.5) of Chapter 12.
(21) Section 65852.28.
(22) Section 65913.4.5.
(23) Section 66499.41.
(24) Article 11.5 (commencing with Section 65658).
(k) Commencing July 1, 2019, prior to the Attorney General bringing any suit for a violation of the provisions identified in subdivision (j) related to housing element compliance and seeking remedies available pursuant to this subdivision, the department shall offer the jurisdiction the opportunity for two meetings in person or via telephone to discuss the violation, and shall provide the jurisdiction written findings regarding the violation. This paragraph does not affect any action filed prior to the effective date of this section. The requirements set forth in this subdivision do not apply to any suits brought for a violation or violations of paragraphs (1) and (3) to (9), inclusive, of subdivision (j).
(l) In any action or special proceeding brought by the Attorney General relating to housing element compliance pursuant to a notice or referral under subdivision (j), the Attorney General may request, upon a finding of the court that the housing element does not substantially comply with the requirements of this article pursuant to this section, that the court issue an order or judgment directing the jurisdiction to bring its housing element into substantial compliance with the requirements of this article. The court shall retain jurisdiction to ensure that its order or judgment is carried out. If a court determines that the housing element of the jurisdiction substantially complies with this article, it shall have the same force and effect, for purposes of eligibility for any financial assistance that requires a housing element in substantial compliance and for purposes of any incentives provided under Section 65589.9, as a determination by the department that the housing element substantially complies with this article.
(1) If the jurisdiction has not complied with the order or judgment after 12 months, the court shall conduct a status conference. Following the status conference, upon a determination that the jurisdiction failed to comply with the order or judgment compelling substantial compliance with the requirements of this article, the court shall impose fines on the jurisdiction, which shall be deposited into the Building Homes and Jobs Trust Fund. Any fine levied pursuant to this paragraph shall be in a minimum amount of ten thousand dollars ($10,000) per month, but shall not exceed one hundred thousand dollars ($100,000) per month, except as provided in paragraphs (2) and (3). In the event that the jurisdiction fails to pay fines imposed by the court in full and on time, the court may require the Controller to intercept any available state and local funds and direct such funds to the Building Homes and Jobs Trust Fund to correct the jurisdiction’s failure to pay. The intercept of the funds by the Controller for this purpose shall not violate any provision of the California Constitution.
(2) If the jurisdiction has not complied with the order or judgment after three months following the imposition of fees described in paragraph (1), the court shall conduct a status conference. Following the status conference, if the court finds that the fees imposed pursuant to paragraph (1) are insufficient to bring the jurisdiction into compliance with the order or judgment, the court may multiply the fine determined pursuant to paragraph (1) by a factor of three. In the event that the jurisdiction fails to pay fines imposed by the court in full and on time, the court may require the Controller to intercept any available state and local funds and direct such funds to the Building Homes and Jobs Trust Fund to correct the jurisdiction’s failure to pay. The intercept of the funds by the Controller for this purpose shall not violate any provision of the California Constitution.
(3) If the jurisdiction has not complied with the order or judgment six months following the imposition of fees described in paragraph (1), the court shall conduct a status conference. Upon a determination that the jurisdiction failed to comply with the order or judgment, the court may impose the following:
(A) If the court finds that the fees imposed pursuant to paragraphs (1) and (2) are insufficient to bring the jurisdiction into compliance with the order or judgment, the court may multiply the fine determined pursuant to paragraph (1) by a factor of six. In the event that the jurisdiction fails to pay fines imposed by the court in full and on time, the court may require the Controller to intercept any available state and local funds and direct such funds to the Building Homes and Jobs Trust Fund to correct the jurisdiction’s failure to pay. The intercept of the funds by the Controller for this purpose shall not violate any provision of the California Constitution.
(B) The court may order remedies available pursuant to Section 564 of the Code of Civil Procedure, under which the agent of the court may take all governmental actions necessary to bring the jurisdiction’s housing element into substantial compliance pursuant to this article in order to remedy identified deficiencies. The court shall determine whether the housing element of the jurisdiction substantially complies with this article and, once the court makes that determination, it shall have the same force and effect, for all purposes, as the department’s determination that the housing element substantially complies with this article. An agent appointed pursuant to this paragraph shall have expertise in planning in California.
(4) This subdivision does not limit a court’s discretion to apply any and all remedies in an action or special proceeding for a violation of any law identified in subdivision (j).
(m) In determining the application of the remedies available under subdivision (l), the court shall consider whether there are any mitigating circumstances delaying the jurisdiction from coming into compliance with state housing law. The court may consider whether a city, county, or city and county is making a good faith effort to come into substantial compliance or is facing substantial undue hardships.
(n) Nothing in this section shall limit the authority of the office of the Attorney General to bring a suit to enforce state law in an independent capacity. The office of the Attorney General may seek all remedies available under law including those set forth in this section.
(o) Notwithstanding Sections 11040 and 11042, if the Attorney General declines to represent the department in any action or special proceeding brought pursuant to a notice or referral under subdivision (j), the department may appoint or contract with other counsel for purposes of representing the department in the action or special proceeding.
(p) Notwithstanding any other provision of law, the statute of limitations set forth in subdivision (a) of Section 338 of the Code of Civil Procedure shall apply to any action or special proceeding brought by the office of the Attorney General or pursuant to a notice or referral under subdivision (j), or by the department pursuant to subdivision (o).

SEC. 2.SEC. 3.

 Article 11.5 (commencing with Section 65658) is added to Chapter 3 of Division 1 of Title 7 of the Government Code, to read:
Article  11.5. Office to Housing Conversion Act

PART 1. General Provisions

65658.
 This article may be cited as the Office to Housing Conversion Act.

65658.1.
 For purposes of this article:
(a) (1) “Adaptive reuse” means the retrofitting and repurposing of an existing building to create new residential or mixed uses including office conversion projects.
(2) “Adaptive reuse” shall not include the retrofitting and repurposing of any light industrial use, unless the planning director or equivalent position determines that the specific light industrial use is no longer useful for industrial purposes.
(b) “Adjacent portion of the project” means the portion of the project located on a site adjacent to the proposed repurposed existing building.
(c) “Broadly applicable housing affordability requirement” means a local ordinance or other regulation that requires a minimum percentage of affordable units and that applies to a variety of housing development types or entitlement pathways.
(d) “Impact fee” means any fee imposed pursuant to Chapter 5 (commencing with Section 66000).
(e) “Historical resource” means the same as defined in subdivision (j) of Section 5020.1 of the Public Resources Code, or a resource listed in the California Register of Historical Resources as described in Section 5024.1 of the Public Resources Code.
(f) “Light industrial use” means a use that is not subject to permitting by a district, as defined in Section 39025 of the Health and Safety Code.
(g) “Local affordable housing requirement” means either of the following:
(1) A local government requirement that a housing development project include a certain percentage of units affordable to, and occupied by, extremely low, very low, lower, or moderate-income households as a condition of development of residential units.
(2) A local government requirement allowing a housing development project to be a use by right if the project includes a certain percentage of units affordable to, and occupied by, extremely low, very low, lower, or moderate-income households as a condition of development of residential units.

(g)

(h) “Local government” means a city, including a charter city, a county, or a city and county.

(h)

(i) “Mixed use” means residential uses combined with at least one other land use, but not including any industrial use.

(i)

(j) “Office conversion project” means the conversion of a building used for office purposes or a vacant office building into residential dwelling units.

(j)

(k) “Persons and families of low or moderate income” means the same as defined in Section 50093 of the Health and Safety Code.

(k)

(l) “Phase I environmental assessment” means the same as defined in Section 78090 of the Health and Safety Code.

(l)

(m) “Phase II environmental assessment” means the same as defined in Section 25403 of the Health and Safety Code.

(m)

(n) “Preliminary endangerment assessment” means the same as defined in Section 78095 of the Health and Safety Code.

(n)

(o) “Residential uses” includes, but is not limited to, housing units, dormitories, boarding houses, and group housing. “Residential uses” does not include prisons or jails.

(o)

(p) “Use by right” means that the city’s or county’s review of the adaptive reuse project may not require a conditional use permit, planned unit development permit, or other discretionary city or county review or approval that would constitute a “project” for purposes of Division 13 (commencing with Section 21000) of the Public Resources Code. Any subdivision of the sites shall be subject to all laws, including, but not limited to, a city or county ordinance implementing the Subdivision Map Act (Division 2 (commencing with Section 66410)).

65658.3.
 A local government may adopt an ordinance to implement this article and specify the process and requirements applicable to adaptive reuse projects, provided that the ordinance is consistent with, and does not inhibit the objectives of, this article.

65658.4.
 The Legislature finds and declares that this article addresses a matter of statewide concern rather than a municipal affair as that term is used in Section 5 of Article XI of the California Constitution. Therefore, this article applies to all cities, including charter cities.

PART 2. Streamlined, Ministerial Approval

65658.5.
 (a) An adaptive reuse project that meets the requirements of subdivision (b) shall be deemed a use by right in all zones, regardless of the zoning of the site, and subject to the streamlined, ministerial review process described in Section 65658.7, except that the nonresidential uses of a proposed mixed-use adaptive reuse project shall be consistent with the land uses allowed by the zoning or a continuation of an existing zoning nonconforming use.
(b) An adaptive reuse project shall comply with all of the following requirements:
(1) The adaptive reuse project and the site on which it is located satisfy both of the following:
(A) It is a legal parcel or parcels located in a city if, and only if, the city boundaries include some portion of either an urbanized area or urban cluster, as designated by the United States Census Bureau, or, for unincorporated areas, a legal parcel or parcels wholly within the boundaries of an urbanized area or urban cluster, as designated by the United States Census Bureau.
(B) At least 75 percent of the perimeter of the site adjoins parcels that are developed with urban uses. For the purposes of this section, parcels that are only separated by a street or highway shall be considered to be adjoined.

(1)

(2) The adaptive reuse project is proposed for any of the following, as applicable:
(A) The project is proposed for an existing building that is less than 50 years old.
(B) The project is proposed for an existing building that is listed on a local, state, or federal register of historic resources and the adaptive reuse project proponent complies with Section 65658.7.
(C) The project is proposed for an existing building that is more than 50 years old and the local government has evaluated the site through a preliminary application submitted pursuant to subdivision (a) of Section 65658.7 and either of the following are satisfied:
(i) The local government determines that the building or site is a historic resource and the adaptive reuse project proponent complies with Section 65658.7.
(ii) The local government determines that the building or site is not a historic resource.

(2)The project complies with any broadly applicable housing affordability requirement adopted by the local government. Notwithstanding any other law, a local government shall not impose or enforce any broadly applicable housing affordability requirement on the housing units of an adaptive reuse project that requires the project to restrict more than 10 percent of retrofitted or repurposed units as affordable.

(3) The adaptive reuse project meets the following affordability criteria, as applicable:
(A) (i) An adaptive reuse project for rental housing shall include either of the following:
(I) Eight percent of the units for very low income households and 5 percent of the units for extremely low income households.
(II) Fifteen percent of the units for lower income households.
(ii) The development proponent shall agree to, and the local government shall ensure, the continued affordability of all affordable rental units included pursuant to this subdivision for 55 years. Rents shall be set at an affordable rent, as defined in Section 50053 of the Health and Safety Code.
(B) (i) An adaptive reuse project for owner-occupied housing shall comply with either of the following:
(I) Thirty percent of the units shall be offered at an affordable housing cost, as defined in Section 50052.5 of the Health and Safety Code, to moderate-income households.
(II) Fifteen percent of the units shall be offered at an affordable housing cost, as defined in Section 50052.5 of the Health and Safety Code, to lower income households.
(ii) The development proponent shall agree to, and the local government shall ensure, the continued affordability of all affordable ownership units for a period of 45 years.
(C) If the local government has a local affordable housing requirement, the housing development project shall comply with all of the following:
(i) The development project shall include the percentage of affordable units required by this section or the local requirement, whichever is higher.
(ii) The development project shall meet the lowest income targeting required by either this section or the local requirement.
(iii) If the local affordable housing requirement requires greater than 15 percent of the units to be dedicated for lower income households and does not require the inclusion of units affordable to very low and extremely low income households, then the rental housing development shall do both of the following:
(I) Include 8 percent of the units for very low income households and 5 percent of the units for extremely low income households.
(II) Fifteen percent of units affordable to lower income households shall be subtracted from the percentage of units required by the local policy at the highest required affordability level.
(D) Affordable units in the development project shall have the same bedroom and bathroom count ratio as the market rate units, be equitably distributed within the project, and have the same type or quality of appliances, fixtures, and finishes.

(3)(A)

(4) If the adaptive reuse project includes mixed uses, at least one-half of the square footage of the adaptive reuse project shall be dedicated to residential uses. For purposes of this subparagraph, square footage of the project does not include underground space, including basements or underground parking garages.

(B)If the adaptive reuse project is also an office conversion project that creates at least one new housing unit, the development proponent may elect for subparagraph (A) to not apply to the project. Both of the following restrictions shall apply to a project subject to this subparagraph:

(i)The adaptive reuse project shall not be eligible to include adjacent uses pursuant to Section 65658.6, unless the adjacent uses are separately approved projects that do not utilize the provisions of this article.

(ii)The streamlined approval process established pursuant to this article shall apply only to the new housing units created.

(4)

(5) (A) The adaptive reuse project proponent completes a Phase I environmental assessment, and a Phase II environmental assessment, if warranted.
(B) If a recognized environmental condition is found, the adaptive reuse project proponent shall undertake a preliminary endangerment assessment prepared by an environmental assessor to determine the existence of any release of a hazardous substance on the site and to determine the potential for exposure of future occupants to significant health hazards from any nearby property or activity.
(i) If a release of hazardous substance is found to exist on the site, prior to occupancy, the project proponent shall agree to remove the release or any significant effect of the release shall be mitigated to a level of insignificance in compliance with state and federal requirements.
(ii) If a potential for exposure to significant hazards from surrounding properties or activities is found to exist, the effects of the potential exposure shall be mitigated to a level of insignificance in compliance with current state and federal requirements.
(c) An adaptive reuse project that meets all the requirements of subdivision (b) may include rooftop structures that exceed any applicable height limitation imposed by the local government, provided that the rooftop structure does not exceed one story and is used for shared amenities.

65658.6.
 (a) An adaptive reuse project that satisfies the requirements of Section 65658.5 may include the development of new residential or mixed-use structures on undeveloped areas and parking areas on the parcels adjacent to the proposed adaptive reuse project site if all of the following requirements are met:
(1) The adjacent portion of the project on the site adjacent to the proposed repurposed existing building complies with the requirements of any of the following:
(A) The requirements of paragraph (5) of subdivision (a) of Section 65913.4.
(B) The requirements of the Affordable Housing and High Road Jobs Act of 2022 (Chapter 4.1 (commencing with Section 65912.100)).
(C) The requirements of the Middle Class Housing Act of 2022 (Section 65852.24).
(2) The adjacent portion of the project is located on a parcel that satisfies the requirements specified in subparagraphs (A) and (B) of paragraph (2) of subdivision (a) of Section 65913.4.
(3) The adjacent portion of the project is located on a parcel that satisfies the requirements specified in subparagraphs (B) to (K), inclusive, of paragraph (6) of subdivision (a) of Section 65913.4.
(4) The adjacent portion of the project is located on a parcel that satisfies the requirements specified in paragraph (7) of subdivision (a) of Section 65913.4.
(5) The applicant and local agency comply with the requirements of subdivision (b) of Section 65913.4.
(6) Any existing open space on the proposed project site is not a contributor to a historic resource.
(b) The adjacent portion of the project shall be eligible for a density bonus, incentives or concessions, waivers or reductions of development standards, and parking ratios pursuant to Section 65915.
(c) For purposes of this section, “adjacent portion of the project” means the portion of the project located on a site adjacent to the proposed repurposed existing building.

65658.7.
 (a) (1) Before submitting an application for an adaptive reuse project pursuant to Section 65658.5 for a structure that is more than 50 years old and not listed on a local, state, or federal register of historic resources, the development proponent shall submit to the local government a notice of its intent to submit an application. The notice of intent shall be in the form of a preliminary application that includes all of the information described in Section 65941.1.
(2) Upon receipt of a notice of intent to submit an application described in subdivision (a), the local government shall evaluate the project site for historical resources. The local government shall make a historic resource significance determination within 90 days of submission of the notice of intent for purposes of paragraph (1) of subdivision (b) of Section 65658.5.
(b) If the adaptive reuse project is proposed for an existing building that is listed on a local, state, or federal register of historic resources or if the local government has determined that the project site is a significant historic resource pursuant to subdivision (a), the adaptive reuse project proponent shall sign an affidavit declaring that the project will only move forward if it complies with either of the following:
(1) The United States Secretary of the Interior’s Standards for Rehabilitation, as found in Part 67 of Title 36 of the Code of Federal Regulations.
(2) The project is awarded federal historic rehabilitation tax credits pursuant to Section 47 of the Internal Revenue Code, or state historic rehabilitation tax credits pursuant to Section 17053.91 or 23691 of the Revenue and Taxation Code.
(c) (1) Notwithstanding subdivision (b), if the adaptive reuse project is proposed for a site that is listed on a local, state, or federal historic register and the adaptive reuse project proponent does not sign an affidavit pursuant to subdivision (b), the local government shall process the adaptive reuse project pursuant to Section 65658.5, but the local government may deny or conditionally approve the project if the local government makes a finding that the project will cause a significant adverse impact to historic resources. A local agency may impose conditions of approval to mitigate impacts to historic resources and to comply with the United States Secretary of the Interior’s Standards for Rehabilitation, as found in Part 67 of Title 36 of the Code of Federal Regulations, but shall not impose other conditions of approval.
(2) Review of an adaptive reuse project pursuant to this section shall not constitute a “project” for purposes of Division 13 (commencing with Section 21000) of the Public Resources Code.

65658.8.
 (a) (1) Notwithstanding any local law, if a local government’s planning director or equivalent position determines that an adaptive reuse project submitted pursuant to this article is consistent with the objective planning standards specified in Section 65658.5 and Section 65658.6, if applicable, the local government shall approve the adaptive reuse project. Upon a determination that an adaptive reuse project submitted pursuant to this section is in conflict with any of the objective planning standards specified in Section 65658.5 or Section 65658.6, if applicable, the local government staff or relevant local planning and permitting department that made the determination shall provide the development proponent written documentation of which standard or standards the development conflicts with, and an explanation for the reason or reasons the development conflicts with that standard or standards, as follows:
(A) Within 60 days of submittal of the adaptive reuse project to the local government pursuant to this section if the project contains 150 or fewer housing units.
(B) Within 90 days of submittal of the adaptive reuse project to the local government pursuant to this section if the project contains more than 150 housing units.
(2) If the local government’s planning director or equivalent position fails to provide the required documentation pursuant to paragraph (1), the adaptive reuse project shall be deemed to satisfy the objective planning standards specified in Section 65658.5 and Section 65658.6, if applicable.
(3) For purposes of this section, an adaptive reuse project is consistent with the objective planning standards specified in Section 65658.5 and Section 65658.6, if applicable, if there is substantial evidence that would allow a reasonable person to conclude that the project is consistent with the objective planning standards. The local government shall not determine that an adaptive reuse project, including an application for a modification under subdivision (f), is in conflict with the objective planning standards on the basis that application materials are not included, if the application contains substantial evidence that would allow a reasonable person to conclude that the project is consistent with the objective planning standards.
(4) Upon submittal of an application for streamlined, ministerial approval pursuant to this section to the local government, all departments of the local government that are required to issue an approval of the adaptive reuse project before the granting of an entitlement shall comply with the requirements of this section within the time periods specified in paragraph (1).
(b) (1) Any design review of the adjacent portion of the project may be conducted by the local government’s planning commission or any equivalent board or commission responsible for design review. That design review shall be objective and be strictly focused on assessing compliance with criteria required for streamlined projects. That design review shall be completed, and if the project is consistent with all objective standards, the local government shall approve the project as follows and shall not in any way inhibit, chill, or preclude the ministerial approval provided by this article or its effect, as applicable:
(A) Within 90 days of submittal of the adaptive reuse project to the local government pursuant to this section if the project contains 150 or fewer housing units.
(B) Within 180 days of submittal of the qualified adaptive reuse project to the local government pursuant to this section if the project contains more than 150 housing units.
(2) If the adaptive reuse project is consistent with the requirements of Section 65658.5 and Section 65658.6, if applicable, and is consistent with all objective subdivision standards in the local subdivision ordinance, an application for a subdivision pursuant to the Subdivision Map Act (Division 2 (commencing with Section 66410)) shall be exempt from the requirements of the California Environmental Quality Act (Division 13 (commencing with Section 21000) of the Public Resources Code) and shall be subject to the public oversight timelines set forth in paragraph (1).
(3) If a local government determines that an adaptive reuse project submitted pursuant to this article is in conflict with any of the standards imposed pursuant to paragraph (1), it shall provide the project proponent written documentation of which objective standard or standards the adaptive reuse project conflicts with, and an explanation for the reason or reasons the project conflicts with with, that objective standard or standards consistent with the timelines described in paragraph (1) of subdivision (a).
(c) (1) Notwithstanding any law, a local government, whether or not it has adopted an ordinance governing automobile parking requirements in multifamily developments, shall not impose automobile parking standards for an adjacent portion of the project that was approved pursuant to this article in any of the following instances:
(A) The adjacent portion of the project is located within one-half mile of public transit.
(B) The adjacent portion of the project is located within an architecturally and historically significant historic district.
(C) When on-street parking permits are required but not offered to the occupants of the adjacent portion of the project.
(D) When there is a car share vehicle located within one block of the adjacent portion of the project.
(2) If the adjacent portion of the project does not fall within any of the categories described in paragraph (1), the local government shall not impose automobile parking requirements for the adjacent portion of the project approved pursuant to this article that exceed one parking space per unit.
(d) Notwithstanding any other law, a local government shall not require any of the following prior to approving an adaptive reuse project that meets the requirements of this article:
(1) Studies, information, or other materials that do not pertain directly to determining whether the adaptive reuse project is consistent with the objective planning standards applicable to the development.
(2) (A) Compliance with any standards necessary to receive a postentitlement permit.
(B) This paragraph does not prohibit a local agency from requiring compliance with any standards necessary to receive a postentitlement permit after a permit has been issued pursuant to this section.
(C) For purposes of this paragraph, “postentitlement permit” has the same meaning as provided in subparagraph (A) of paragraph (3) of subdivision (j) of Section 65913.3.
(e) (1) If a local government approves an adaptive reuse project pursuant to this article, then, notwithstanding any other law, that approval shall not expire if the project satisfies both of the following requirements:
(A) The project includes public investment in housing affordability, beyond tax credits.
(B) At least 20 percent of the units are affordable to households making at or below 80 percent of the area median income.
(2) (A) If a local government approves an adaptive reuse project pursuant to this article, and the project does not satisfy the requirements of subparagraphs (A) and (B) of paragraph (1), that approval shall remain valid for three years from the date of the final action establishing that approval, or if litigation is filed challenging that approval, from the date of the final judgment upholding that approval. Approval shall remain valid for a project provided construction activity, including demolition and grading activity, on the development site has begun pursuant to a permit issued by the local jurisdiction and is in progress. For purposes of this subdivision, “in progress” means one of the following:
(i) Construction has begun and has not ceased for more than 180 days.
(ii) If the project requires multiple building permits, an initial phase has been completed, and the project proponent has applied for and is diligently pursuing a building permit for a subsequent phase, provided that once it has been issued, the building permit for the subsequent phase does not lapse.
(B) Notwithstanding subparagraph (A), a local government may grant a project a one-time, one-year extension if the project proponent can provide documentation that there has been significant progress toward getting the adaptive reuse project construction ready, such as filing a building permit application.
(3) If the qualified adaptive reuse project proponent requests a modification pursuant to subdivision (f), then the time during which the approval shall remain valid shall be extended for the number of days between the submittal of a modification request and the date of its final approval, plus an additional 180 days to allow time to obtain a building permit. If litigation is filed relating to the modification request, the time shall be further extended during the pendency of the litigation. The extension required by this paragraph shall only apply to the first request for a modification submitted by the development proponent.
(f) (1) (A) A development proponent may request a modification to a qualified adaptive reuse project that has been approved under the streamlined approval process provided in this article if that request is submitted to the local government before the issuance of the final building permit required for construction of the adaptive reuse project.
(B) Except as provided in paragraph (3), the local government shall approve a modification if it determines that the modification is consistent with the objective planning standards specified in subdivision (a) that were in effect when the original adaptive reuse project application was first submitted.
(C) The local government shall evaluate any modifications requested pursuant to this subdivision for consistency with the objective planning standards using the same assumptions and analytical methodology that the local government originally used to assess consistency for the adaptive reuse project that was approved for streamlined, ministerial approval pursuant to subdivision (a).
(2) Upon receipt of the adaptive reuse project proponent’s application requesting a modification, the local government shall determine if the requested modification is consistent with the objective planning standard and either approve or deny the modification request within 60 days after submission of the modification, or within 90 days if design review is required.
(3) Notwithstanding paragraph (1), the local government may apply objective planning standards to an adjacent portion of the project adopted after the project application was first submitted to the requested modification in any of the following instances:
(A) The adjacent portion of the project is revised such that the total number of residential units or total square footage of construction changes by 15 percent or more. The calculation of the square footage of construction changes shall not include underground space.
(B) The adjacent portion of the project is revised such that the total number of residential units or total square footage of construction changes by 5 percent or more and it is necessary to subject the project to an objective standard beyond those in effect when the project application was submitted in order to mitigate or avoid a specific, adverse impact, as that term is defined in subparagraph (A) of paragraph (1) of subdivision (j) of Section 65589.5, upon the public health or safety and there is no feasible alternative method to satisfactorily mitigate or avoid the adverse impact. The calculation of the square footage of construction changes shall not include underground space.
(C) Objective building standards contained in the California Building Standards Code (Title 24 of the California Code of Regulations), including, but not limited to, building plumbing, electrical, fire, and grading codes, may be applied to all modification applications that are submitted prior to the first building permit application. Those standards may be applied to modification applications submitted after the first building permit application if agreed to by the development proponent.
(4) The local government’s review of a modification request pursuant to this subdivision shall be strictly limited to determining whether the modification, including any modification to previously approved density bonus concessions or waivers, modify the project’s consistency with the objective planning standards and shall not reconsider prior determinations that are not affected by the modification.

65658.9.
 (a) A local government shall issue a subsequent permit required for an adaptive reuse project approved under this article if the application substantially complies with the project as it was approved pursuant to Section 65658.8. Upon receipt of an application for a subsequent permit, the local government shall process the permit without unreasonable delay and shall not impose any procedure or requirement that is not imposed on projects that are not approved pursuant to this article. The local government shall consider the application for subsequent permits based upon the applicable objective standards specified in any state or local laws that were in effect when the original adaptive reuse project application was submitted, unless the proponent agrees to a change in objective standards. Issuance of subsequent permits shall implement the approved project, and review of the permit application shall not inhibit, chill, or preclude the adaptive reuse project. For purposes of this paragraph, a “subsequent permit” means a permit required subsequent to receiving approval under subdivision (a) of Section 65658.8, and includes, but is not limited to, demolition, grading, encroachment, and building permits and final maps, if necessary.
(b) (1) If a public improvement is necessary to implement a project subject to this article, including, but not limited to, a bicycle lane, sidewalk or walkway, public transit stop, driveway, street paving or overlay, a curb or gutter, a modified intersection, a street sign or street light, landscape or hardscape, an above-ground aboveground or underground utility connection, a water line, fire hydrant, storm or sanitary sewer connection, retaining wall, and any related work, and that public improvement is located on land owned by the local government, to the extent that the public improvement requires approval from the local government, the local government shall not exercise its discretion over any approval relating to the public improvement in a manner that would inhibit, chill, or preclude the project.
(2) If an application for a public improvement described in paragraph (1) is submitted to a local government, the local government shall do all of the following:
(A) Consider the application based upon any objective standards specified in any state or local laws that were in effect when the original adaptive reuse project application was submitted.
(B) Conduct its review and approval in the same manner as it would evaluate the public improvement if required by a project that is not eligible to receive ministerial or streamlined approval pursuant to this section.
(3) If an application for a public improvement described in paragraph (1) is submitted to a local government, the local government shall not do either of the following:
(A) Adopt or impose any requirement that applies to a project solely or partially on the basis that the project is eligible to receive ministerial or streamlined approval pursuant to this article.
(B) Unreasonably delay in its consideration, review, or approval of the application.

65658.10.
 (a) A local government shall not adopt or impose any requirement, including, but not limited to, increased fees or inclusionary housing requirements, that applies to a project solely or partially on the basis that the project is eligible to receive ministerial or streamlined approval pursuant to this article.
(b) This article shall not affect a project proponent’s ability to use any alternative streamlined by right permit processing adopted by a local government.
(c) This article shall not prevent a project from also qualifying as a housing development project entitled to the protections of Section 65589.5.
(d) Alterations to an existing building necessary to comply with the California Building Standards Code, International Existing Building Code, or California Historical Building Code shall not disqualify a qualified adaptive reuse project from the streamlined, ministerial review process established under this article.

65658.11.
 An adaptive reuse project approved by a local government pursuant to this part shall meet all of the following labor standards:
(a) The development proponent shall require in contracts with construction contractors, and shall certify to the local government, that the standards specified in this section will be met in project construction.
(b) A development that is not in its entirety a public work for purposes of Chapter 1 (commencing with Section 1720) of Part 7 of Division 2 of the Labor Code and approved by a local government pursuant to Sections 65658.8 and 65658.9 shall be subject to all of the following:
(1) All construction workers employed in the execution of the development shall be paid at least the general prevailing rate of per diem wages for the type of work and geographic area, as determined by the Director of Industrial Relations pursuant to Sections 1773 and 1773.9 of the Labor Code, except that apprentices registered in programs approved by the Chief of the Division of Apprenticeship Standards may be paid at least the applicable apprentice prevailing rate.
(2) The development proponent shall ensure that the prevailing wage requirement is included in all contracts for the performance of the work for those portions of the development that are not a public work.
(3) All contractors and subcontractors for those portions of the development that are not a public work shall comply with both of the following:
(A) Pay to all construction workers employed in the execution of the work at least the general prevailing rate of per diem wages, except that apprentices registered in programs approved by the Chief of the Division of Apprenticeship Standards may be paid at least the applicable apprentice prevailing rate.
(B) Maintain and verify payroll records pursuant to Section 1776 of the Labor Code and make those records available for inspection and copying as provided in that section. This subparagraph does not apply if all contractors and subcontractors performing work on the development are subject to a project labor agreement that requires the payment of prevailing wages to all construction workers employed in the execution of the development and provides for enforcement of that obligation through an arbitration procedure.
(c) (1) The obligation of the contractors and subcontractors to pay prevailing wages pursuant to this section may be enforced by any of the following:
(A) The Labor Commissioner through the issuance of a civil wage and penalty assessment pursuant to Section 1741 of the Labor Code, which may be reviewed pursuant to Section 1742 of the Labor Code, within 18 months after the completion of the project.
(B) An underpaid worker through an administrative complaint or civil action.
(C) A joint labor-management committee through a civil action under Section 1771.2 of the Labor Code.
(2) If a civil wage and penalty assessment is issued pursuant to this section, the contractor, subcontractor, and surety on a bond or bonds issued to secure the payment of wages covered by the assessment shall be liable for liquidated damages pursuant to Section 1742.1 of the Labor Code.
(3) This subdivision does not apply if all contractors and subcontractors performing work on the development are subject to a project labor agreement that requires the payment of prevailing wages to all construction workers employed in the execution of the development and provides for enforcement of that obligation through an arbitration procedure.
(d) Notwithstanding subdivision (c) of Section 1773.1 of the Labor Code, the requirement that employer payments not reduce the obligation to pay the hourly straight time or overtime wages found to be prevailing does not apply to those portions of development that are not a public work if otherwise provided in a bona fide collective bargaining agreement covering the worker.
(e) The requirement of this section to pay at least the general prevailing rate of per diem wages does not preclude use of an alternative workweek schedule adopted pursuant to Section 511 or 514 of the Labor Code.
(f) For purposes of this section, “project labor agreement” has the same meaning as set forth in paragraph (1) of subdivision (b) of Section 2500 of the Public Contract Code.

65658.12.
 In addition to the requirements of Section 65658.11, a development of 50 or more housing units approved by a local government pursuant to this part shall be subject to all of the following:
(a) The development proponent shall require in contracts with construction contractors and shall certify to the local government that each contractor of any tier who will employ construction craft employees or will let subcontracts for at least 1,000 hours shall satisfy the requirements in subdivisions (b) and (c). A construction contractor is deemed in compliance with subdivisions (b) and (c) if it is signatory to a valid collective bargaining agreement that requires utilization of registered apprentices and expenditures on health care for employees and dependents.
(b) A contractor with construction craft employees shall either participate in an apprenticeship program approved by the California Division of Apprenticeship Standards pursuant to Section 3075 of the Labor Code, or request the dispatch of apprentices from a state-approved apprenticeship program under the terms and conditions set forth in Section 1777.5 of the Labor Code. A contractor without construction craft employees shall show a contractual obligation that its subcontractors comply with this subdivision.
(c) Each contractor with construction craft employees shall make health care expenditures for each employee in an amount per hour worked on the development equivalent to at least the hourly pro rata cost of a Covered California Platinum level plan for two 40-year-old adults and two dependents 0 to 14 years of age for the Covered California rating area in which the development is located. A contractor without construction craft employees shall show a contractual obligation that its subcontractors comply with this subdivision. Qualifying expenditures shall be credited toward compliance with prevailing wage payment requirements set forth in Section 65912.130.
(d) (1) The development proponent shall provide to the local government, on a monthly basis while its construction contracts on the development are being performed, a report demonstrating compliance with subdivisions (b) and (c). The reports shall be considered public records under the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1), and shall be open to public inspection.
(2) A development proponent that fails to provide the monthly report shall be subject to a civil penalty for each month for which the report has not been provided, in the amount of 10 percent of the dollar value of construction work performed by that contractor on the development in the month in question, up to a maximum of ten thousand dollars ($10,000). Any contractor or subcontractor that fails to comply with subdivision (b) or (c) shall be subject to a civil penalty of two hundred dollars ($200) per day for each worker employed in contravention of subdivision (b) or (c).
(3) Penalties may be assessed by the Labor Commissioner within 18 months of completion of the development using the procedures for issuance of civil wage and penalty assessments specified in Section 1741 of the Labor Code, and may be reviewed pursuant to Section 1742 of the Labor Code. Penalties shall be deposited in the State Public Works Enforcement Fund established pursuant to Section 1771.3 of the Labor Code.
(e) Each construction contractor shall maintain and verify payroll records pursuant to Section 1776 of the Labor Code. Each construction contractor shall submit payroll records directly to the Labor Commissioner at least monthly in a format prescribed by the Labor Commissioner in accordance with subparagraph (A) of paragraph (3) of subdivision (a) of Section 1771.4 of the Labor Code. The records shall include a statement of fringe benefits. Upon request by a joint labor-management cooperation committee established pursuant to the Federal Labor Management Cooperation Act of 1978 (29 U.S.C. Sec. 175a), the records shall be provided pursuant to subdivision (e) of Section 1776 of the Labor Code.
(f) All construction contractors shall report any change in apprenticeship program participation or health care expenditures to the local government within 10 business days, and shall reflect those changes on the monthly report. The reports shall be considered public records pursuant to the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1) and shall be open to public inspection.
(g) A joint labor-management cooperation committee established pursuant to the Federal Labor Management Cooperation Act of 1978 (29 U.S.C. Sec. 175a) shall have standing to sue a construction contractor for failure to make health care expenditures pursuant to subdivision (c) in accordance with Section 218.7 or 218.8 of the Labor Code.

PART 3. Impact Fees

65658.15.
 (a) Notwithstanding any other law, an adaptive reuse project shall be exempt from all impact fees that are not directly related to the impacts resulting from the change of use of the site from nonresidential to residential or mixed use. Any fees charged shall be proportional to the difference in impacts caused by the change of use.
(b) This section shall not apply to any adjacent portion of the project.

65658.16.
 Notwithstanding Chapter 5 (commencing with Section 66000), any impact fees imposed on an adaptive reuse project pursuant to this article shall, at the request of the project proponent, be collected on the date the certificate of occupancy is issued.

65658.17.
 (a) An adaptive reuse project proponent that utilizes Section 65658.16 shall be required to execute a contract to pay the fees, or applicable portion thereof, within the time specified.
(b) The obligation to pay the fees pursuant to this part shall inure to the benefit of, and be enforceable by, the local government that imposed the fee or charge, regardless of whether it is a party to the contract. The contract shall contain a legal description of the property affected, shall be recorded in the office of the county recorder of the county and, from the date of recordation, shall constitute a lien for the payment of the fees, which shall be enforceable against successors in interest to the property owner or lessee at the time of issuance of the building permit. The contract shall be recorded in the grantor-grantee index in the name of the public agency issuing the building permit as grantee and in the name of the property owner or lessee as grantor. The local government shall record a release of the obligation, containing a legal description of the property, in the event the obligation is paid in full, or a partial release in the event the fee or charge is prorated.
(c) The contract executed pursuant to subdivision (a) may require the property owner or lessee to provide appropriate notification of the opening of any escrow for the sale of the property for which the building permit was issued and to provide in the escrow instructions that the fee or charge be paid to the local government imposing the same from the sale proceeds in escrow prior to disbursing proceeds to the seller.

SEC. 3.Section 65585 of the Government Code is amended to read:
65585.

(a)In the preparation of its housing element, each city and county shall consider the guidelines adopted by the department pursuant to Section 50459 of the Health and Safety Code. Those guidelines shall be advisory to each city or county in the preparation of its housing element.

(b)(1)At least 90 days prior to adoption of a revision of its housing element pursuant to subdivision (e) of Section 65588, or at least 60 days prior to the adoption of a subsequent amendment to this element, the planning agency shall submit a draft element revision or draft amendment to the department. The local government of the planning agency shall make the first draft revision of a housing element available for public comment for at least 30 days and, if any comments are received, the local government shall take at least 10 business days after the 30-day public comment period to consider and incorporate public comments into the draft revision prior to submitting it to the department. For any subsequent draft revision, the local government shall post the draft revision on its internet website and shall email a link to the draft revision to all individuals and organizations that have previously requested notices relating to the local government’s housing element at least seven days before submitting the draft revision to the department.

(2)The planning agency staff shall collect and compile the public comments regarding the housing element received by the city, county, or city and county and provide these comments to each member of the legislative body before it adopts the housing element.

(3)The department shall review the draft and report its written findings to the planning agency within 90 days of its receipt of the first draft submittal for each housing element revision pursuant to subdivision (e) of Section 65588 or within 60 days of its receipt of a subsequent draft amendment or an adopted revision or adopted amendment to an element. The department shall not review the first draft submitted for each housing element revision pursuant to subdivision (e) of Section 65588 until the local government has made the draft available for public comment for at least 30 days and, if comments were received, has taken at least 10 business days to consider and incorporate public comments pursuant to paragraph (1).

(c)In the preparation of its findings, the department may consult with any public agency, group, or person. The department shall receive and consider any written comments from any public agency, group, or person regarding the draft or adopted element or amendment under review.

(d)In its written findings, the department shall determine whether the draft element or draft amendment substantially complies with this article.

(e)Prior to the adoption of its draft element or draft amendment, the legislative body shall consider the findings made by the department. If the department’s findings are not available within the time limits set by this section, the legislative body may act without them.

(f)If the department finds that the draft element or draft amendment does not substantially comply with this article, the legislative body shall take one of the following actions:

(1)Change the draft element or draft amendment to substantially comply with this article.

(2)Adopt the draft element or draft amendment without changes. The legislative body shall include in its resolution of adoption written findings that explain the reasons the legislative body believes that the draft element or draft amendment substantially complies with this article despite the findings of the department.

(g)Promptly following the adoption of its element or amendment, the planning agency shall submit a copy to the department.

(h)The department shall, within 60 days, review adopted housing elements or amendments and report its findings to the planning agency.

(i)(1)(A)The department shall review any action or failure to act by the city, county, or city and county that it determines is inconsistent with an adopted housing element or Section 65583, including any failure to implement any program actions included in the housing element pursuant to Section 65583. The department shall issue written findings to the city, county, or city and county as to whether the action or failure to act substantially complies with this article, and provide a reasonable time no longer than 30 days for the city, county, or city and county to respond to the findings before taking any other action authorized by this section, including the action authorized by subparagraph (B).

(B)If the department finds that the action or failure to act by the city, county, or city and county does not substantially comply with this article, and if it has issued findings pursuant to this section that an amendment to the housing element substantially complies with this article, the department may revoke its findings until it determines that the city, county, or city and county has come into compliance with this article.

(2)The department may consult with any local government, public agency, group, or person, and shall receive and consider any written comments from any public agency, group, or person, regarding the action or failure to act by the city, county, or city and county described in paragraph (1), in determining whether the housing element substantially complies with this article.

(j)The department shall notify the city, county, or city and county and may notify the office of the Attorney General that the city, county, or city and county is in violation of state law if the department finds that the housing element or an amendment to this element, or any action or failure to act described in subdivision (i), does not substantially comply with this article or that any local government has taken an action in violation of the following:

(1)Housing Accountability Act (Section 65589.5).

(2)Section 65863.

(3)Chapter 4.3 (commencing with Section 65915).

(4)Section 65008.

(5)Housing Crisis Act of 2019 (Chapter 654, Statutes of 2019, Sections 65941.1, 65943, and 66300).

(6)Section 8899.50.

(7)Section 65913.4.

(8)Article 11 (commencing with Section 65650).

(9)Article 12 (commencing with Section 65660).

(10)Section 65913.11.

(11)Section 65400.

(12)Section 65863.2.

(13)Chapter 4.1 (commencing with Section 65912.100).

(14)Section 65905.5.

(15)Section 65852.2.

(16)Section 65852.21.

(17)Section 65852.22.

(18)Section 65852.23.

(19)Section 65852.24.

(20)Section 65852.26.

(21)Section 66411.7.

(22)Section 65913.16.

(23)Article 2 (commencing with Section 66300.5) of Chapter 12.

(24)Section 65852.28.

(25)Section 65913.4.5.

(26)Section 66499.41.

(27)Article 11.5 (commencing with Section 65658).

(k)Commencing July 1, 2019, prior to the Attorney General bringing any suit for a violation of the provisions identified in subdivision (j) related to housing element compliance and seeking remedies available pursuant to this subdivision, the department shall offer the jurisdiction the opportunity for two meetings in person or via telephone to discuss the violation, and shall provide the jurisdiction written findings regarding the violation. This paragraph does not affect any action filed prior to the effective date of this section. The requirements set forth in this subdivision do not apply to any suits brought for a violation or violations of paragraphs (1) and (3) to (9), inclusive, of subdivision (j).

(l)In any action or special proceeding brought by the Attorney General relating to housing element compliance pursuant to a notice or referral under subdivision (j), the Attorney General may request, upon a finding of the court that the housing element does not substantially comply with the requirements of this article pursuant to this section, that the court issue an order or judgment directing the jurisdiction to bring its housing element into substantial compliance with the requirements of this article. The court shall retain jurisdiction to ensure that its order or judgment is carried out. If a court determines that the housing element of the jurisdiction substantially complies with this article, it shall have the same force and effect, for purposes of eligibility for any financial assistance that requires a housing element in substantial compliance and for purposes of any incentives provided under Section 65589.9, as a determination by the department that the housing element substantially complies with this article.

(1)If the jurisdiction has not complied with the order or judgment after 12 months, the court shall conduct a status conference. Following the status conference, upon a determination that the jurisdiction failed to comply with the order or judgment compelling substantial compliance with the requirements of this article, the court shall impose fines on the jurisdiction, which shall be deposited into the Building Homes and Jobs Trust Fund. Any fine levied pursuant to this paragraph shall be in a minimum amount of ten thousand dollars ($10,000) per month, but shall not exceed one hundred thousand dollars ($100,000) per month, except as provided in paragraphs (2) and (3). In the event that the jurisdiction fails to pay fines imposed by the court in full and on time, the court may require the Controller to intercept any available state and local funds and direct such funds to the Building Homes and Jobs Trust Fund to correct the jurisdiction’s failure to pay. The intercept of the funds by the Controller for this purpose shall not violate any provision of the California Constitution.

(2)If the jurisdiction has not complied with the order or judgment after three months following the imposition of fees described in paragraph (1), the court shall conduct a status conference. Following the status conference, if the court finds that the fees imposed pursuant to paragraph (1) are insufficient to bring the jurisdiction into compliance with the order or judgment, the court may multiply the fine determined pursuant to paragraph (1) by a factor of three. In the event that the jurisdiction fails to pay fines imposed by the court in full and on time, the court may require the Controller to intercept any available state and local funds and direct such funds to the Building Homes and Jobs Trust Fund to correct the jurisdiction’s failure to pay. The intercept of the funds by the Controller for this purpose shall not violate any provision of the California Constitution.

(3)If the jurisdiction has not complied with the order or judgment six months following the imposition of fees described in paragraph (1), the court shall conduct a status conference. Upon a determination that the jurisdiction failed to comply with the order or judgment, the court may impose the following:

(A)If the court finds that the fees imposed pursuant to paragraphs (1) and (2) are insufficient to bring the jurisdiction into compliance with the order or judgment, the court may multiply the fine determined pursuant to paragraph (1) by a factor of six. In the event that the jurisdiction fails to pay fines imposed by the court in full and on time, the court may require the Controller to intercept any available state and local funds and direct such funds to the Building Homes and Jobs Trust Fund to correct the jurisdiction’s failure to pay. The intercept of the funds by the Controller for this purpose shall not violate any provision of the California Constitution.

(B)The court may order remedies available pursuant to Section 564 of the Code of Civil Procedure, under which the agent of the court may take all governmental actions necessary to bring the jurisdiction’s housing element into substantial compliance pursuant to this article in order to remedy identified deficiencies. The court shall determine whether the housing element of the jurisdiction substantially complies with this article and, once the court makes that determination, it shall have the same force and effect, for all purposes, as the department’s determination that the housing element substantially complies with this article. An agent appointed pursuant to this paragraph shall have expertise in planning in California.

(4)This subdivision does not limit a court’s discretion to apply any and all remedies in an action or special proceeding for a violation of any law identified in subdivision (j).

(m)In determining the application of the remedies available under subdivision (l), the court shall consider whether there are any mitigating circumstances delaying the jurisdiction from coming into compliance with state housing law. The court may consider whether a city, county, or city and county is making a good faith effort to come into substantial compliance or is facing substantial undue hardships.

(n)Nothing in this section shall limit the authority of the office of the Attorney General to bring a suit to enforce state law in an independent capacity. The office of the Attorney General may seek all remedies available under law including those set forth in this section.

(o)Notwithstanding Sections 11040 and 11042, if the Attorney General declines to represent the department in any action or special proceeding brought pursuant to a notice or referral under subdivision (j), the department may appoint or contract with other counsel for purposes of representing the department in the action or special proceeding.

(p)Notwithstanding any other provision of law, the statute of limitations set forth in subdivision (a) of Section 338 of the Code of Civil Procedure shall apply to any action or special proceeding brought by the office of the Attorney General or pursuant to a notice or referral under subdivision (j), or by the department pursuant to subdivision (o).

SEC. 4.

 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because a local agency or school district has the authority to levy service charges, fees, or assessments sufficient to pay for the program or level of service mandated by this act or because costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.
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