Amend 2 Cal. Code of Regs. Section 18704.2 to read:

18704.2. Determining Whether Directly or Indirectly Involved in a Governmental

Decision: Interest in Real Property.

(a) An interest in real property Real property in which a public official has an economic interest, is directly involved in a governmental decision under the following circumstances: if that real property is the subject of the governmental decision, or if any part of that real property is located within 500 feet of the boundaries (or proposed boundaries) of the real property which is the subject of the governmental decision. Real property is the "subject of the governmental decision" if:

(1) The governmental decision involves the zoning or rezoning, annexation or deannexation, sale, purchase, or lease, or inclusion in or exclusion from any city, county, district or other local governmental subdivision, of the real property in which the official has a direct or indirect interest (other than a leasehold interest) of $1,000 or more, or a similar decision affecting such real property;

(2) The governmental decision involves the issuance, denial or revocation of a license, permit or other land use entitlement authorizing a specific use or uses of such property;

(3) The governmental decision involves the imposition, repeal or modification of any taxes or fees assessed or imposed on such property; or

(4) The governmental decision is to designate the survey area, to select the project area, to adopt the preliminary plan, to form a project area committee, to certify the environmental document, to adopt the redevelopment plan, to add territory to the redevelopment area, or to rescind or amend any of the above decisions; and real property in which the official has an interest, or any part of it is located within the boundaries (or the proposed boundaries) of the redevelopment area. For purposes of this subsection, real property is located "within 500 feet of the boundaries (or proposed boundaries) of the real property which is the subject of the governmental decision" if any part of the property is within 500 feet of the boundaries (or proposed boundaries) of the redevelopment project area.

(5) The decision involves construction of, or improvements to, streets, water, sewer, storm drainage or similar facilities, and the real property will receive new or improved services. As used in this subdivision, "new or improved services" do not include repairs, replacement, or maintenance of existing services.

(5) (6) For purposes of this subdivision, the terms "zoning" and "rezoning" shall refer to the act of establishing or changing the zoning or land use designation on the subject property. The terms "zoning" and "rezoning" shall not refer to an amendment of an existing zoning ordinance or other land use regulation (such as changes in the uses permitted, or development standards applicable, within a particular zoning category) which is applicable to all other properties designated in that category, which shall be analyzed under Title 2, California Code of Regulations, section 18705.2(b)(3).

(b) Determining the applicable materiality standard.

(1) If a the real property in which the public official has an economic interest is directly involved in a governmental decision, apply the materiality standards in California Code of Regulations, Title 2, section 18705.2(a).

(2) If a real property interest is not directly involved in a governmental decision, apply the materiality standards in California Code of Regulations, Title 2, section 18705.2(b) or (c).

Note: Authority: Section 83112, Government Code.

Reference: Sections 87100, 87102.5, 87102.6, 87102.8 and 87103, Government Code.

Amend 2 Cal. Code of Regs. Section 18705.2 to read:

18705.2. Materiality Standard: Economic Interests in Real Property.

(a) Directly involved real property. interests. Any reasonably foreseeable financial effect on real property in which a public official has an economic interest, and which real property is directly involved in a decision before the official's agency, is deemed material.

(1) Real property, other than leaseholds. The financial effect of a governmental decision on the real property is presumed to be material. This presumption may be rebutted by proof that it is not reasonably foreseeable that the governmental decision will have any financial effect on the real property.

[DECISION POINT 1]

(2) Real property, leaseholds. The financial effect of a governmental decision on the real property in which an official holds a leasehold interest is presumed to be material. This presumption may be rebutted by proof that it is not reasonably foreseeable that the governmental decision will have any effect on any of the following:

(A) The termination date of the lease;

(B) The amount of rent paid by the lessee for the leased property, either positively or negatively;

(C) The value of the lessee’s right to sublease the property, either positively or negatively;

(D) The legally allowable use or the current use of the property by the lessee; or

(E) The use or enjoyment of the leased real property by the lessee.

[DECISION POINT 2]

[(3) Leasehold interests of the public official with a term of [two][ten][twenty-five] years or more [shall][in addition to being analyzed under subdivision (a)(2) above, shall also] be analyzed as an ownership interest in real property under subdivision (a)(1) above.]

[DECISION POINT 3]

(b) Indirectly involved real property interests.

(1) Real property, other than leaseholds. The financial effect of a governmental decision on real property which is indirectly involved in the governmental decision is presumed not to be material. This presumption may be rebutted by proof that there are specific circumstances regarding the governmental decision, its financial effect, and the nature of the real property in which the public official has an economic interest, which make it reasonably foreseeable that the decision will have a material financial effect on the real property in which the public official has an interest. Specific circumstances that will be considered include, but are not limited to, circumstances where the decision effects:

(A) The development potential or income producing potential of the property;

(B) The use of the property, such as by resulting in a change in the use of the real property;

(C) The character of the neighborhood including, but not limited to, [substantial] effects on: traffic, view, privacy, intensity of use, noise levels, air emissions, or similar traits of the neighborhood.]

(1) The effect of a decision is material as to real property in which an official has a direct, indirect or beneficial ownership interest (not including a leasehold interest), if any of the following applies:

(A) The real property in which the official has an interest, or any part of that real property, is located within a 300 foot radius of the boundaries (or the proposed boundaries) of the property which is the subject of the decision, unless the decision will have no financial effect upon the official's real property interest.

(B) The decision involves construction of, or improvements to, streets, water, sewer, storm drainage or similar facilities, and the real property in which the official has an interest will receive new or substantially improved services.

(C) The real property in which the official has an interest is located outside a radius of 300 feet and any part of the real property is located within a radius of 2,500 feet of the boundaries (or the proposed boundaries) of the property which is the subject of the decision and the decision will have a reasonably foreseeable financial effect of:

(i) Ten thousand dollars ($10,000) or more on the fair market value of the real property in which the official has an interest; or

(ii) Will affect the rental value of the property by $1,000 or more per 12 month period.

(2) The reasonably foreseeable effect of a decision is not considered material as to real property in which an official has a direct, indirect or beneficial interest (not including a leasehold interest), if the real property in which the official has an interest is located entirely beyond a 2,500 foot radius of the boundaries (or the proposed boundaries) of the property which is the subject of the decision; unless:

(A) There are specific circumstances regarding the decision, its effect, and the nature of the real property in which the official has an interest, which make it reasonably foreseeable that the fair market value or the rental value of the real property in which the official has an interest will be affected by the amounts set forth in subdivisions (b)(1)(C)(i) or (ii); and

(B) Either of the following apply:

(i) The effect will not be substantially the same as the effect upon at least 25 percent of all the properties which are within a 2,500 foot radius of the boundaries of the real property in which the official has an interest; or

(ii) There are not at least 10 properties under separate ownership within a 2,500 foot radius of the property in which the official has an interest.

(3) For decisions which may affect an interest in real property but which do not involve a subject property from which the distances prescribed in subdivisions (b)(1) and (b)(2) can be determined, the monetary standards contained in subdivision (b)(1)(C)(i) and (ii) shall be applied.

(4) For a decision which is covered by subdivision (b)(1)(C) or (b)(2)(A) or (b)(3), factors which shall be considered in determining whether the decision will have the effects set forth in subdivision (b)(1) and (b)(2) include, but are not limited to:

(A) The proximity of the property which is the subject of the decision and the magnitude of the proposed project or change in use in relationship to the property in which the official has an interest;

(B) Whether it is reasonably foreseeable that the decision will affect the development potential or income producing potential of the property;

(C) In addition to the foregoing, in the case of residential property, whether it is reasonably foreseeable that the decision will result in a change to the character of the neighborhood including, but not limited to, effects on traffic, view, privacy, intensity of use, noise levels, air emissions, or similar traits of the neighborhood.

(5) Redevelopment Decisions: For purposes of this section "the boundaries (or proposed boundaries) of the property which is the subject of the decision" are the boundaries (or proposed boundaries) of the redevelopment project area whenever the decision is a redevelopment decision to designate the survey area, to make findings of blight, to select the project area, to adopt the preliminary plan, to form a project area committee, to certify the environmental document, to adopt the redevelopment plan, to add territory to the redevelopment area, or to rescind or amend any of the above decisions.

[DECISION POINT 4]

(c) (2) Real property, leaseholds. Indirectly involved leasehold interests in real property. The effect of a decision is material as to a leasehold interest in real property if any of the following applies: The financial effect of a governmental decision on real property in which a public official has a leasehold interest and which is indirectly involved in the governmental decision is presumed not to be material. This presumption may be rebutted by proof that there are specific circumstances regarding the governmental decision, its financial effect, and the nature of the real property in which the public official has an economic interest, which make it reasonably foreseeable that the governmental decision will:

(A) (1) The decision will change Change the legally allowable use of the leased real property, and the lessee has a right to sublease the property;

(B) (2) It is reasonably foreseeable that the lessee will change Change the lessee’s actual use of the property as a result of the decision;

(C) (3) It is reasonably foreseeable that the governmental decision will result in a change in the actual use of property within 300 feet of the leased property, and the changed use will significantly Substantially enhance or significantly decrease the lessee’s use or enjoyment of the leased property;

(D) (4) The governmental decision will increase Increase or decrease the amount of rent for the leased property by $250 or 5+percent, whichever is greater, during any 12-month period following the decision; or

(E) (5) The governmental decision will result Result in a change in the termination date of the lease.

Note: Authority: Section 83112, Government Code.

Reference: Sections 87100, 87102.5, 87102.6, 87102.8, 87103, Government Code.