New Laws Benefiting EV Charging and Hydrogen Fueling

New Exemption for EV Charging and Hydrogen Fueling Added to California Subdivision Map Act

On September 25, 2024, the Governor of California signed Senate Bill 347 into law, introducing a new exemption to the California Subdivision Map Act[1] (the “Act”) specifically for EV charging and hydrogen fueling leases (the “Exemption”). Generally speaking, the Act prohibits the transfer of any portion of a legal parcel, including through leases, without a formal legal subdivision. The Exemption offers clarity and reassurance to developers of EV charging and hydrogen fueling projects by confirming that such leases are compliant with the Act, as long as the associated project is subject to discretionary review by the local government. Whether any EV charging or hydrogen fueling project is subject to discretionary review is dependent on the jurisdiction and the permits required.

Background

The Act was passed in 1974 to aid local governments in controlling development by granting local governments the authority to regulate the subdivision of real property. The Act’s primary goals are to “…encourage and facilitate orderly community development, coordinate planning with the community pattern established by local authorities, and assure proper improvements are made.”[2] Violation of the Act carries a risk of a fine (not to exceed $10,000), imprisonment, or both.[3]

The EV Charging & Hydrogen Fueling Exemption

Previously, EV charging and hydrogen fueling leases were not explicitly exempt from the Act, despite existing exemptions for wind, solar, biogas, and energy storage projects.[4] The new Exemption introduces Section 66412(o) to the Act, which specifically exempts: “The leasing of, or granting of an easement to, a parcel of land or any portion thereof for the development of a hydrogen fueling station or an electric vehicle charging station, provided that the project is subject to discretionary action by the advisory agency or legislative body.”[5]

The Exemption will go into effect on January 1, 2025.

EV Charging in California Going Forward

The Exemption paves the way for securing site control through leases for new EV charging and hydrogen fueling projects in California. However, while the Exemption facilitates leases for these developments, an easement or license might be more suitable depending on the specific needs of the developer and the preferences of the landowner. Developers should thoroughly evaluate these alternative options when planning their EV charging or hydrogen fueling projects. Additionally, it’s important to note that any lease in California with a term of 35 years or longer, including any extensions, could trigger transfer taxes and property tax reassessments.[6]

For further information concerning the Act, the Exemption, or other legal questions with respect to EV charging or hydrogen fueling developments, please contact either Shane Devins shane@cleanenergycounsel.com or Ann McAdam ann@cleanenergycounsel.com.

[1] Cal. Gov’t Code § 66410 (West 2024).

[2] 7 Arthur F. Coon, et al., Miller and Starr Cal. Real Estate § 20:1 (4th ed. 2024).

[3] Cal. Gov’t Code § 66499.31 (West 2024).

[4] Id. § 66412(i), (l), (m), (n) (2024).

[5] Id. § 66412(o).

[6] Note that easements could also be affected by transfer taxes if the easement is deemed to be a transfer by the Franchise Tax Board. See Cal. Code Regs. tit. 18, § 462.100 (2024).