California, USA - California Gov. Arnold Schwarzenegger signed a bill late Tuesday that will open a new front in the state’s battle to reduce greenhouse gas emissions: land use.

Senate Bill 375 will bring together city and county planners, home builders and public transit agencies to drastically change the way communities grow. The law is the first in the U.S. to reduce greenhouse gas (GHG) emissions by curtailing urban sprawl and traffic congestion through high-density development near transit corridors.

“This is a great gift to the people of California and it will produce a better, healthier and more efficient California for years to come,” Schwarzenegger said at a press conference Wednesday.

The governor called SB 375 a sequel to the state’s landmark Global Warming Solutions Act of 2006, also known as AB 32, which calls for reducing carbon dioxide emissions to 1990 levels by 2020.

Passenger emissions represent the state’s greatest source of greenhouse gas emissions, or 38 percent. The theory behind SB 375 involves reducing vehicle miles by boosting infill development and promoting a sustainable communities strategy. Builders could see relaxed environmental reviews if projects meet certain targets while communities will get an extra three years to update required housing plans. State transportation funds will serve as a carrot to reward smart growth plans.

Although SB 375 will directly impact developers and planners, the greater business community also stands to benefit because of improved delivery of goods and quality of life for the state’s workers, said Matt Regan, director of housing and sustainable development for the Bay Area Council, a business-sponsored public policy advocacy group in the San Francisco area.

“Having the gridlock and the very long commutes benefits no one,” he said. “That includes the business community.”

It also gives companies, as potential stakeholders, an opportunity to participate in business-friendly planning at the local level, including helping local agencies identify optimum areas for mixed-use, sustainable development along designated transit corridors, said Barbara Higgins, a Los Angeles-based land use attorney with the law firm Alston and Bird.

This will impact the value and desirability of these locations for community business interests. “They should view it as they would an opportunity for any development where a city or county is going to engage in a rezone process where there is an opportunity for local business,” Higgins said.

Businesses should also be involved in the hearing processes to help metropolitan planning organizations set emissions reduction goals, she said.

The bill was introduced by Sen. Darrell Steinberg, D-Sacramento, who cobbled together a group of supporters that included environmentalists, home builders and local governments. But not everyone supports the bill, including the state Chamber of Commerce, which called the bill a “job killer.” In an Op-Ed piece in the Sacramento Bee, Auburn City Council member Kevin Hanley predicted SB 375 will threaten future road and highway improvement projects in Placer, El Dorado, Sutter, Yolo and Yuba counties.