By Robert M. McCormick and Michael J. Maurer
The 2014 Legislative session was notable for the continued inability of the Legislature to resolve a series of high profile real property related issues that were carried over from previous sessions. This inability persisted despite the existence of Democratic Party supermajorities in both houses and indicates either the intractable character of these issues or the existence of divisions on these issues within the Democratic Party. Most likely both factors played a role in the Legislature's ineffectiveness.
One of the most prominent of these issues was reform of the California Environmental Quality Act ("CEQA"). Although there was a general recognition that CEQA reform could be important to facilitate development activity in California, the 2014 session was nevertheless relatively quiet with respect to new CEQA legislature in comparison to the last two years. A total of thirty-one bills relating to CEQA were introduced in the 2013 session, with six bills eventually signed into law. In 2014, only fifteen bills were introduced and only twelve of them were actually new bills, with only five bills eventually being signed into law. The most notable of these bills, AB 52, establishes a new and powerful role for California Native American Tribes in the CEQA process by adding several provisions to CEQA dealing with impacts on "tribal cultural resources." Of course, this is not the type of CEQA reform desired by those who want to streamline the CEQA process to facilitate development.
A second issue of continued concern was how the Legislature would address the void left by the dismantling of California's five billion dollar per year redevelopment programs that took place in 2012. Although Governor Brown vetoed a number of bills meant to address this problem, he did sign legislation that expands the existing mechanisms of infrastructure financing districts to provide tax-increment financing authority for capital improvement projects, many of which may overlap with projects once carried out by redevelopment agencies. While this is only a partial fix, it appears to be as far as the Governor is willing to go in resurrecting what was previously considered an essential development financing tool.
The third major issue of continued concern was Proposition 13 reform. These reform efforts have been a continuing occurrence for many years now. In 2014, these efforts took a different turn, which nearly resulted in the enactment of a historic compromise agreement (AB 2372) regarding change of ownership abuses. However, in the end, this reform effort also failed in the waning hours of the 2014 Legislative session. The expectation is that this issue will resurface in 2015 as both parties prepare for the 2016 election.
To read the entire article in the Spring 2015 California Real Property Journal, click here. First published in the California Real Property Journal, a quarterly publication of the Real Property Section of the State Bar of California. Reprinted with permission.