With the election-year session coming to a close, the California Legislature has not moved aggressively on most issues associated with planning and development. A deal to place a multibillion-dollar school bond on the November ballot may still materialize - and if it does it could repeal or reform the state's long-standing Mira doctrine on school impact fees. A constitutional amendment to permit sales-tax sharing is still moving forward, as it a minor revision of the housing element law and a few other bills. By and large, however, the 1998 legislature has chosen not to tackle major planning and development issues. No major revision of the California Environmental Quality Act or related environmental laws appears to be under way. And several high-profile attempts to change planning and development laws have gone down to defeat, including an effort to bolster the connection between water supplies and land-use planning and an attempt to restrict neighboring cities from raiding each other's "big box" retailers. Meanwhile, cities and counties may still reach agreement on a "revenue neutrality" bill, but the substance of such an agreement has not yet been publicly released. Probably the most interesting battle in Sacramento this year was the attempt by the East Bay Municipal Utilities District and the California Farm Bureau Federation to expand the influence of water agencies over land-use permitting decisions - this time through the actions of local agency formation commissions. In an effort led by East Bay MUD, the legislature passed a bill in 1995 requiring local governments to consult with water purveyors when large residential development projects are proposed. The bill arose out of East Bay MUD's struggle with Contra Costa County over the approval of the 11,000-home Dougherty Valley project, which the East Bay MUD board at the time opposed. The bill was supported by the Farm Bureau because of concerns in the Central Valley that urban developers would provide water to their projects by purchasing farms and/or water rights from farmers. This year, East Bay MUD attempted to broaden the water/land-use connection by sponsoring a bill to place water issues in the middle of the sphere of influence and annexation processes controlled by each county's LAFCO. Assemblyman Mike Sweeney, D-Hayward, who is chair of the Assembly Local Government Committee amended his bill AB 1476 so that it would have required LAFCOs, when acting on all sphere and boundary changes, to determine that sufficient water supplies are available to accommodate the proposed development within those areas. East Bay MUD lobbyist Randy Kanousee said the proposed bill was strongly supported by his board - even though many of the board members were elected with strong building industry sponsorship after the passage of the earlier water/land-use bill. In June, Kanouse aggressively lobbied to move the bill forward at the Senate Local Government Committee, and his efforts even generated editorials in the Sacramento Bee and San Jose Mercury News. However, Sweeney pulled the bill after the building industry weighed in on the issue. Kanouse said he received a telephone call from Secretary of State Bill Jones asking that he lay off. According to Kanouse, the building industry threatened to withdraw support from a potential November water bond if Sweeney's bill moved forward. However, Rex Hime, executive director of the California Business Properties Association, told a somewhat different story about what happened to the Sweeney bill. Hime called the bill East Bay MUD's attempt to get "a second bite of the apple" on the Dougherty Valley project. Him confirmed Kanouse's amendments came in late in the session and violated an agreement made among all the parties to the 1995 law that they would negotiate any future changes. Hime confirmed that the building industry indicated that there would be "serious implications in the water bond negotiations" if the bill moved forward. Richard Lyon of the California Building Industry Association did not go so far as to say the water bond negotiations would have been stalled as a result, but he agreed that it was a "late hit" that represented a breach of lobbying etiquette on Kanouse's part. Here is a rundown of other pending bills of interest: Sales Tax Competition Assemblyman Tom Torlakson, R-Contra Costa County, attempted to make a serious run at reducing competition among neighboring jurisdictions for sales-tax competition with AB 1835, which would have prohibited cities and counties from offering financial inducements to an auto dealer or a "big box" retailer that relocates from one jurisdiction to another within the same market area. Though motivated by an apparent attempt to subsidize a big-box move within his district, Torlakson struggled to find a meaningful approach. He finally limited the bill to auto dealers and retailers of 75,000 square feet or more, and his bill would have required a city or county to identify such businesses when they are subsidizing them and make a finding that the business is not relocating within the same market area. The bill also sought to define a subsidy as an appropriation, a tax incentive, or a "nontax" incentive. The bill passed the Assembly but died on a 4-4 tie in the Senate Local Government Committee. Hime, who was active in opposing the bill, said he was concerned that it might prevent large retailers with several types of retail stores from closing one store (for example, Dayton-Hudson-owned Mervyn's) in one city and opening a different store (for example, Dayton-Hudson-owned Target) in another city with financial incentives. Meanwhile, however, Assemblyman George Runner's constitutional amendment on tax-sharing is still alive. ACA 10 would permit local governments to share tax revenues if voters in the affected cities approved the idea. The bill passed the Assembly on July 10 and is now in the Senate. Housing Elements While Assemblyman Torlakson has not gotten very far on big-box retailers, he is moving forward a little more successfully on housing elements. Torlakson's AB 438 appears likely to pass. It makes only minor revisions in the housing element law, however, leaving more substantive changes for another time. As currently written, the bill makes several minor changes in housing element law, including the following: o 25% of a city's "fair share" of affordable housing can take the form of existing, rehabilitated units, so long as those units meet certain criteria. They must be "substantively" rehabilitated and they must remain affordable for a 20-year period. o Existing market-rate units and federally subsidized units threatened with a loss of federal subsidy can be counted toward "fair share" if certain conditions are met. o At the request of the state's councils of government, which must devise the "fair share" housing numbers, the mathematical formulas calculating "fair share" will be altered to include transportation data - a change that will supposedly make the figures more accurate. Other Bills of Interest o Yet another bill by Torlakson, AB 270, would give LAFCOs more financial and political independence by requiring cities and special districts to bear some of their costs, rather than just counties. LAFCOs are administratively run by counties, which sometimes leads to allegations of bias. The bill has passed the Assembly and is still under consideration by the Senate. o A bill that would have greatly affected local governments' ability to impose exactions has been shelved for the year. AB 2621 (Cardoza), which was sponsored by the California Chamber of Commerce, would have required that exactions be "feasible" and that there be a "reasonable relationship" between exactions and projects. The Senate Local Government Committee staff analysis suggested that the bill might have reversed a long series of exactions cases, including Arnel, Hart/Mira/Murrieta, and perhaps even Associated Homebuilders, a 1970s court case that established the original nexus rules for exactions. o A bill by Assemblyman Kevin Murray, D-Los Angeles, would amend the pedestrian mall law - but it appears to be tied to a roiling development controversy in Westwood. AB 1768 would update the 1960 law to allow cities and counties to take possession of property to be used as a pedestrian mall, if the property is being taken by eminent domain and there is a dispute over the property's value. The bill would make the law conform with other, similar laws, but it is opposed by Westwood activists who oppose a developer who would be able to take advantage of the law if it passed.