BILL ANALYSIS Ó SB 731 SENATE COMMITTEE ON ENVIRONMENTAL QUALITY Senator Jerry Hill, Chair 2013-2014 Regular Session BILL NO: SB 731 AUTHOR: Steinberg AMENDED: April 23, 2013 FISCAL: Yes HEARING DATE: May 1, 2013 URGENCY: No CONSULTANT: Joanne Roy SUBJECT : CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) AND SUSTAINABLE COMMUNITIES STRATEGY SUMMARY : Existing law , under the California Environmental Quality Act (CEQA): 1) Requires lead agencies with the principal responsibility for carrying out or approving a proposed discretionary project to prepare a negative declaration, mitigated negative declaration, or environmental impact report (EIR) for this action, unless the project is exempt from CEQA (CEQA includes various statutory exemptions, as well as categorical exemptions in the CEQA guidelines). (Public Resources Code §21000 et seq.). 2) States the intent of the Legislature that "all agencies of the state government which regulate activities of private individuals, corporations, and public agencies which are found to affect the quality of the environment, shall regulate such activities so that major consideration is given to preventing environmental damage, while providing a decent home and satisfying living environment for every Californian. (PRC §21000). 3) States the intent of the Legislature to "[t]ake all action necessary to provide the people of this state with clean air and water, enjoyment of aesthetic, natural, scenic, and historic environmental qualities, and freedom from excessive noise." ((PRC §21001(b)). 4) States the intent of the Legislature to "[e]nsure that the SB 731 Page 2 long-term protection of the environment, consistent with the provision of a decent home and suitable living environment for every Californian, shall be the guiding criterion in public decision." (PRC §21001(d)). 5) Exempts from CEQA, a residential development project that is undertaken to implement, and is consistent with, a specific plan for which an EIR has been certified. Provides that this exemption does not apply if, after certification of the EIR for the specific plan, a specified event occurs (as described in PRC §21166), unless a supplemental EIR for the specified plan is certified. (Government Code §65457). 6) Establishes the Strategic Growth Council to award grants and loans for planning and developing sustainable communities' strategies. (Public Resources Code §75121). 7) In making a finding of overriding considerations, requires the public agency to base its finding on substantial evidence in the record. (PRC §21081.5). 8) Requires a public agency to adopt a reporting or monitoring program of mitigation measures and ensure their enforceability. (PRC §21081.6). 9) Defines "environment" as "the physical conditions which exist within the area which will be affected by the proposed project, including land, air, water, minerals, flora, fauna, noise, objects of historic or aesthetic significance." (PRC §21060.5). 10)Establishes a procedure for preparing and certifying the record of proceedings for an action against a public agency on the grounds of noncompliance with CEQA. (PRC §21167). 11)Establishes requirements for a court order for noncompliance. (PRC §21168.9). This bill : 1) States the Legislature's intent to revise various provisions in CEQA. SB 731 Page 3 2) Establishes the position of Advisor on Renewable Energy Facilities in the Governor's office and sunsets the position on January 1, 2017. 3) Expands the exemption for a residential development project that is undertaken to implement a specific plan by providing that "new information" triggering an environmental review does not include "new information consisting solely of argument, speculation, unsubstantiated opinion or narrative, evidence that is clearly inaccurate or erroneous, or evidence of social or economic impacts that do not contribute to, or are caused by, physical impacts on the environment." 4) Authorizes the appropriation of $30 million in the annual state budget to the Strategic Growth Council for Sustainable Communities Strategy project grants. 5) Authorizes a renewable energy project applicant to present to the public agency, orally or in writing, the benefits of the project such as reducing traffic or improving air quality. 6) In making a finding of overriding considerations, requires those findings to be made available in draft form for review by the public at least 15 days prior to approval of the proposed project. Requires the lead agency to provide notice of the draft findings through specified methods, including electronically. 7) Requires a lead agency to prepare an annual report on project compliance with mitigation measures as part of the mitigation monitoring plan. 8) Provides that aesthetic impacts of a residential, mixed-use residential, or employment center project, as defined, within a transit priority area, as defined, shall not be considered significant impacts on the environment. Clarifies that this provision does not affect or change the authority a lead agency's authority to consider aesthetic impacts pursuant to local design review ordinances or other discretionary powers. SB 731 Page 4 9) Requires the Office of Planning and Research to prepare revisions to the CEQA guidelines establishing thresholds of significance for noise, and for transportation and parking impacts on residential, mixed-use residential or employment centers within transit priority areas. Provides that this provision does not affect the authority of a public agency from establishing transportation or parking standards applicable to projects requiring more stringent thresholds of significance. 10)Allows the statute of limitations for an action against a public agency for noncompliance to be suspended, for a maximum of four years, by mutual agreement of the parties. 11)Requires a lead agency, at the request of a project applicant, to prepare a record of proceedings concurrently with the preparation of an environmental review document. Requires all documents in the record of proceedings be posted on the lead agency's Internet web site. 12)Authorizes the statute of limitations to be suspended by mutual agreement of the parties. Provides that the period of time for tolling may not exceed four years in such an agreement but authorizes the extension of the tolling period. 13)Authorizes a court to direct an agency to revise only those portions of a CEQA document found not to be in compliance with CEQA and includes specific requirements to be met for a court to do so. COMMENTS : 1) Purpose of Bill . According to the author, SB 731 is a comprehensive reform measure to strengthen CEQA's protection of the state's environment and residents while modernizing the law to aid California's economic growth. The author states, "today's bill is the result of months of discussion and negotiation with key representatives from the business, environmental, and organized labor communities." These changes were key issues identified by SB 731 Page 5 a CEQA working group of experts brought together by Senator Steinberg this past fall. The author states, "Taken together they will help reduce litigation and delays from CEQA while protecting the legitimate uses of the statute." 2) Background on CEQA . Governor Reagan signed CEQA into law in 1970. Since then, 334 sections have been added, amended or repealed since 1990; 170 sections since 2002; and 83 sections since 2008. For a better understanding of the types of CEQA documents and the numbers of documents produced, the chart below by the State Clearinghouse shows all CEQA documents filed with the State Clearinghouse between 1999 and 2010. Key: NOP Notice of Preparation EIR Draft Environmental Impact Report ND/MND Negative Declaration/ Mitigated Negative Declaration NOD Notice of Determination NOE Notice of Exemption EA Environmental Assessment (Federal) EIS Draft Environmental Impact Report (Federal) OTHER Other types of documents, including Final EIRs, Early Consultation Notices, plans, etc. 3) CEQA: The environmental review process . A CEQA environmental review document is a public document. It provides for transparency as well as an opportunity for citizens to comment on the document and participate in the environmental review process. CEQA provides a process for evaluating the environmental effects of a project, and includes statutory exemptions as well as categorical exemptions in the CEQA guidelines. If a project is not exempt from CEQA, an initial study is prepared to determine whether a project may have a significant effect on the environment. If the initial study shows that there would not be a significant effect on the environment, the lead agency must prepare a negative declaration. If the initial study shows that the project SB 731 Page 6 may have a significant effect on the environment, then the lead agency must prepare an EIR. Generally, an EIR must accurately describe the proposed project, identify and analyze each significant environmental impact expected to result from the proposed project, identify mitigation measures to reduce those impacts to the extent feasible, and evaluate a range of reasonable alternatives to the proposed project. Prior to approving any project that has received an environmental review, an agency must make certain findings. If mitigation measures are required or incorporated into a project, the agency must adopt a reporting or monitoring program to ensure compliance with those measures. If a mitigation measure would cause one or more significant effects in addition to those that would be caused by the proposed project, the effects of the mitigation measure must be discussed but in less detail than the significant effects of the proposed project. 4) CEQA litigation . Enforcement of CEQA is primarily through citizens' lawsuits challenging a project's environmental review in court. Some contend that CEQA litigation delays, if not kills, projects and that vexatious litigation abounds. However, the total number of CEQA cases filed is actually quite small, averaging only about 200 cases per year statewide. CEQA cases make up 0.02% of 1,100,000 civil cases filed annually in California. In addition, the California Attorney General's office conducted a case study of CEQA challenges in the City and County of San Francisco from July 2011 through December 2011 and found that 18 lawsuits were filed out of 5,203 projects considered under CEQA. However, some parties argue that the simple threat of a lawsuit is an impetus for extra costs and delays of a project subject to environmental review. To address litigious concerns, this bill authorizes, among other things, the following: concurrent preparation of a record of proceedings with the preparation of an environmental review document to reduce litigation delays, the statute of limitations to be tolled by mutual agreement of the parties to facilitate settlements, and partial SB 731 Page 7 remand by the court directing an agency to revise only those portions of a CEQA document not in compliance. In addition, SB 731 provides that for specified projects, aesthetic impacts are not considered significant impacts under CEQA and directs OPR to develop uniform thresholds of significance for noise, and transportation and parking impacts of specified projects in transit priority areas. 5) Amendments . The author proposes to add the following amendments: a) Request the Department of Justice to report annually to the Legislature on CEQA litigation in order to provide reliable and unbiased information regarding CEQA lawsuits. b) Provide that funds for appropriating the $30 million for Sustainable Communities Strategy project grants may come from cap and trade revenues, AB 118 funds, or other sources as determined in the annual budget. SOURCE : Author SUPPORT : California Association of Realtors OPPOSITION : None on file