California lawmakers are finishing another ordinary year. Once again, their budget is a mess, with lawmakers and Gov. Arnold Schwarzenegger arguing about how to close a shortfall that has soared past $10 billion. But somehow, despite the chaos, California keeps managing to turn out sweeping and importantpieces of legislation.

SB 375, a land-use bill enacted this fall may set a new template for both transportation planning and climate-change policy nationwide. The new law is an attempt to begin translating the
greenhouse-gas law that California enacted in 2006 into a specific policy framework -- in this case, land-use planning.

(Incidentally, the California Air Resources Board took a big step toward implementing the 2006 law on Dec. 11, approving a comprehensive set of regulations. The new framework will allow businesses to buy and sell emission credits, impose fees on water use and require utilities to generate a full third of their power from renewable sources -- about three times as much as they do currently.)

SB 375 directs CARB to come up with targets for reducing emissions from cars and trucks. Regional planning boards will then rewrite their master plans in ways that seek to meet those targets. The ones that come closest will be rewarded with extra federal and state transportation dollars.

The best way to meet the standards, argues Tom Adams, president of the California League of Conservation Voters, is to cut down on sprawl. He points out that the number of miles traveled per vehicle is still growing at one-and-a-half times the rate of population growth. (That differs from the picture nationwide, where VMT have been in decline.)

It's only by creating more compact and energy-efficient communities, Adams believes, that the state's long-term environmental goals can be achieved. It's no surprise that SB 375 was backed by environmentalists, but it also had the support of California's home builders, who liked the prospect of more predictability in the zoning process. One of the main goals of the bill is to induce localities to coordinate their major planning tasks -- transportation, land use and housing. Few have been
doing that up to now.

In addition, SB 375 provides relief from certain air-quality standards that had, perversely, discouraged developers from undertaking infill projects. "Builders thrive on certainty, knowing what the rules are," says Tim Coyle, of the California Building Industry Association. Local governments also supported the
law; while it provides incentives and creates a policy-making framework, it doesn't create specific mandates for any individual regions.

The new law will take years to implement, but it already has received lots of attention from other states. "It's really a very important piece of legislation," says Peter Kasabach, of New Jersey Future, a
smart-growth group. "How we develop our land is going to impact our greenhouse-gas targets."