BILL ANALYSIS Ó SB 787 SENATE COMMITTEE ON ENVIRONMENTAL QUALITY Senator Jerry Hill, Chair 2013-2014 Regular Session BILL NO: SB 787 AUTHOR: Berryhill AMENDED: April 18, 2013 FISCAL: Yes HEARING DATE: May 1, 2013 URGENCY: No CONSULTANT: Joanne Roy SUBJECT : CALIFORNIA ENVIRONMENTAL QUALITY ACT 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 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.). If there is substantial evidence, in light of the whole record before a lead agency, that a project may have a significant effect on the environment, the lead agency must prepare a draft EIR. (CEQA Guidelines §15064(a)(1), (f)(1)). 2) Requires thresholds of significance adopted as part of a lead agency's environmental review process to be developed through a public review process. A threshold of significance is "an identifiable quantifiable, qualitative or performance level of a particular environmental effect, non-compliance with which means the effect will normally be determined to be significant by the agency and compliance with which means the effect normally will be determined to be less than significant." When adopting thresholds of significance, a lead agency may consider thresholds of significance previously adopted or recommended by other public agencies or recommended by experts. (CEQA Guidelines §15064.7). SB 787 Page 2 This bill creates the Sustainable Environmental Protection Act (SEPA), which does the following: 1) Provides legislative intent that: a) States CEQA was enacted in 1970 to maintain a quality environment, and that in the 40 years following enactment "Congress and the Legislature have each adopted more than 100 laws to protect environmental quality" in 17 environmental topical areas. b) References various environmental laws, "all enacted after 1970 . . ." while asserting that environmental laws and regulations identify compliance obligations of general applicability and provide greater clarity or are beyond the ad hoc review process created by CEQA, and in enacting these measures avoids "the sometimes conflicting and often duplicative ad hoc environmental review and mitigation requirements." 2) Requires an environmental document prepared under CEQA to disclose all applicable environmental laws, and defines "applicable environmental laws" to be those referenced in the measures legislative intent and meets certain requirements. 3) Specifies that the above "disclosure obligations" are intended to foster environmental and public participation in the public review process required under CEQA or other applicable laws, including the Ralph M. Brown Act. 4) Limits environmental review under those topical areas listed in the legislative intent. 5) Prohibits a cause of action under CEQA based on an environmental topical area listed in the legislative intent if the environmental document discloses a requirement of compliance with an applicable environmental law or regulation, plan, permit, license, or authorization application and approval processing procedures. 6) Prohibits a cause of action under CEQA if the project "conforms to the use designation, density, or building SB 787 Page 3 intensity in a land use plan or was included in another applicable plan [as identified under the measure] and the lead agency conditions project approval on compliance with applicable mitigation measures contained in the [environmental document] for the applicable plan." 7) Provides that the above prohibition of causes of action does not prohibit a cause of action to enforce compliance with other existing local, state, and federal law. 8) Provides that a lead agency is not required to evaluate aesthetics under CEQA and that the lead agency is not required to make findings on or relating to aesthetics unless a project has potentially significant aesthetic impacts on an official state scenic highway. 9) Provides that SEPA does not change a lead agency's duty to evaluate effects on Native American resources. 10)Provides that SEPA applies only to projects for which the lead agency or applicant has agreed to provide an annual mitigation compliance report in electronic format. 11)Provides that the above provisions do not preclude an agency from requiring information or analysis, or imposing conditions of approval, under other laws or CEQA. 12)Requires that an environmental review document prepared pursuant to CEQA is limited to considering only the environmental topical areas listed in the legislative intent and only to the extent those topical areas are relevant to the project. COMMENTS : 1) Purpose of Bill . The author states, "When enacting CEQA and subsequent amendments, the Legislature declared its intent to ensure that all public agencies provide substantial consideration to preventing environmental damage while allowing for a satisfying and livable place for every Californian. This bill seeks to further the purposes of CEQA by better integrating applicable planning laws and SB 787 Page 4 regulations that did not exist when CEQA was first passed, while avoiding conflicting and duplicative ad hoc environmental review that is often required by CEQA. This bill appeals to local control and broader environmental law (which is already over complex as it is, see legislative intent language to get a small taste). It also provides for an environmental document in an electronic format, fostering the public's accessibility to full review of the project's impacts." 2) Thresholds of significance and regulatory standards . Under current law, a threshold of significance is "an identifiable quantifiable, qualitative or performance level of a particular environmental effect, non-compliance with which means the effect will normally be determined to be significant by the agency and compliance with which means the effect normally will be determined to be less than significant." Under SB 787, Section 21202(a)(1) provides that "compliance with the applicable standards for impacts that occur or might occur as a result of approval of the project shall be the exclusive means of evaluating and mitigating environmental impacts under CEQA regarding the subject of that law, notwithstanding any other provision of law." Such reliance on a regulatory standard, as required under this measure, is inconsistent with current law. For example, in Kings County Farm Bureau v. City of Hanford, 221 Cal. App. 3d 692, 270 Cal. Rptr. 650 (1990), the court found that a lead agency incorrectly determined that air quality impacts would be less than significant when the smokestack emissions for a proposed cogeneration plant would comply with applicable air quality regulations and standards, because the agency failed to consider "on-site" (smokestack) and "secondary" (train and truck traffic to deliver coal, the proposed fuel) emissions together in assessing the significance of the overall project's impacts. The court came to a similar conclusion in Riverwatch v. San Diego County (Palomar Aggregates), 76 Cal. App. 4th 1428, 91 Cal. Rptr. 2d 322 (1999), where the court held that an EIR for a proposed rock quarry failed to evaluate all air quality SB 787 Page 5 impacts resulting from the quarry operation. The county believed emission levels would meet San Diego Air Pollution Control District (APCD) standards, and the court found that the EIR considered only the quarry process emissions and not particulate emissions caused by drilling, handling, storage, and transport of the rock and sand. While the APCD standards were for the stationary source (quarry), CEQA requires the EIR to evaluate significance of all project-related pollution emissions. 3) Project impact "topic areas" . SB 787 specifies that the CEQA Guidelines currently provide that project impacts be evaluated based on 17 topics. Nothing in current law limits CEQA to 17 topic areas. It seems that the author is referencing Appendix G of the CEQA Guidelines, the "environmental checklist form." It is noteworthy, however, that Appendix G is prefaced by the following: NOTE: The following is a sample form and may be tailored to satisfy individual agencies' needs and project circumstances. It may be used to meet the requirements for an initial study when the criteria set forth in CEQA Guidelines have been met. Substantial evidence of potential impacts that are not listed on this form must also be considered. The sample questions in this form are intended to encourage thoughtful assessment of impacts, and do not necessarily represent thresholds of significance. Not only does SB 787 freeze these 17 topics in statute, rather than allowing analysis of any other potential significant impacts, this measure also precludes CEQA from filling in the gaps in existing laws. CEQA also addresses other matters, such as cumulative impacts, direct and indirect impacts, and mandatory findings of significance. Emerging issues addressed under CEQA may also precede a particular state or federal law. For example, the analysis of greenhouse gas (GHG) impacts under laws like CEQA, and its federal counterpart National Environmental Policy Act (NEPA), did not commence with the passage of the California Global SB 787 Page 6 Warming Solutions Act of 2006. Guidance for addressing GHG issues under NEPA for federal environmental documents was provided October 8, 1997. According to the Chairman of the Council on Environmental Quality in 1997, "Because of the potentially substantial health and environmental impacts associated with climate change, the Council on Environmental Quality is issuing this guidance today calling on federal agencies to consider, in the context of the NEPA process, both how major federal actions could influence the emissions and sinks of greenhouse gases and how climate change could potentially influence such actions." In 2003, in Border Power Plant Working Group v. U.S. Department of Energy (S.D. Cal 2003) 20 F.Supp2d 997, 1028-1029, a federal district court found that NEPA requires consideration of potential environmental impacts from a proposed natural gas turbine's generation of carbon dioxide, a greenhouse gas, and rejected the argument that consideration of this impact is not required. Former Attorney General Bill Lockyer also commented on the lack of analysis of GHG issues in environmental documents prior to enactment of the CGWSA. For example, in a letter dated March 30, 2006, regarding the Orange County Transportation Authority 2006 Long-Range Transportation Plan Draft EIR, the Attorney General stated, "Despite the Plan's heavy reliance on vehicular travel and improvements to freeways, roads and streets, and the acknowledged increase in vehicle travel that the Plan will encourage, the DPEIR never analyzes one of the most important environmental impacts of vehicular emissions - greenhouse gases and resulting climate change." SB 97 (Dutton) Chapter 185, Statutes of 2007, subsequently required OPR, on or before July 1, 2009, to prepare, develop, and transmit to the Resources Agency amendments to the CEQA guidelines to assist public agencies in the mitigation of GHG's or the effects of GHG's as required under CEQA, including the effects associated with transportation and energy consumption, and required the Resources Agency to certify and adopt those guidelines by January 1, 2010. SB 787 Page 7 4) Overriding fair argument standard . A discretionary project, which is not exempt from CEQA, requires a Lead Agency to prepare an initial study to determine whether the project may have a significant adverse effect on the environment. If there is substantial evidence, in light of the whole record before a lead agency, that a project may have a significant effect on the environment, the lead agency must prepare a draft EIR. If not, then a negative declaration or mitigated negative declaration is appropriate. This is known as the fair argument standard. In other words, a negative declaration is inappropriate if it can be "fairly argued" that the project may cause significant environmental impacts and therefore an EIR is appropriate. SB 787 overrides the fair argument standard because under this measure "compliance with the applicable standards for impacts that occur or might occur as a result of approval of the project shall be the exclusive means of evaluating and mitigating environmental impacts under [CEQA] regarding the subject of that law, notwithstanding any other provision of law." Also, under SB 787, "A cause of action shall not be commenced . . . for noncompliance with [CEQA] based on an environmental topical area [listed in these measures] for which the environmental document prepared for purposes of [these measures] discloses a requirement of compliance with an applicable environmental law . . .". This issue was addressed when Communities for A Better Environment, Environmental Protection Information Center, and Desert Citizens Against Pollution challenged several 1998 revisions to the CEQA Guidelines. The California Building Industry Association was allowed to intervene in the action. Communities for a Better Environment v. California Resources Agency, 103 Cal. App. 4th 98, 126 Cal. Rptr. 441 2d (2002). The trial court invalidated several Guidelines sections, including a provision where a lead agency is directed to determine that an effect is not significant, regardless of whether other substantial evidence would support a fair argument that the effect may be environmentally significant, if a proposed project has an environmental effect that complies with a regulatory standard as defined under the SB 787 Page 8 Guidelines provision. On appeal, the Court of Appeal agreed with the trial court on this matter: "The direction [of this Guidelines change] relieves the agency of a duty it would have under the fair argument approach to look at evidence beyond the regulatory standard, or in contravention of the standard, in deciding whether an EIR must be prepared. Under the fair argument standard, any substantial evidence supporting a fair argument that a project may have a significant effect would trigger the preparation of an EIR. A well-known CEQA treatise recognized this dilemma as well, stating: '[S]ubdivision (h) . . . appears to dispense with the traditional 'fair argument' standard otherwise applicable to the decision whether to prepare a[n] . . . EIR . . . Notably, where existing regulatory standards, as defined, address a particular category of impact, the lead agency need not treat the impact as potentially significant whenever any substantial evidence in the record supports a conclusion.'" 5) Prohibiting CEQA cause of action for conformance with certain planning matters . SB 787 also prohibits a cause of action under CEQA if the project "conforms to the use designation, density, or building intensity in a land use plan or was included in another applicable plan [as identified under the measure] and the lead agency conditions project approval on compliance with applicable mitigation measures contained in the [environmental document] for the applicable plan." Under SB 787, an "applicable plan" is either: a) a land use plan, such as a general plan, specific plan, or sustainable communities strategy that establishes use designations, densities, and building intensities"; or b) a plan to improve or maintain public facilities or infrastructure to be funded in whole or in part by public funds and is adopted by a local, regional, or state agency. A general plan, however, addresses far more issues than simply the "use designation, density, or building intensity." A general plan must include seven mandated elements, including land use, circulation, housing, conservation, open space, noise, and safety elements. (Government Code §65302). Yet, SB 787 prohibits a cause of action under CEQA if a project SB 787 Page 9 merely conforms to the use designation, density, or building intensity in the plan and complies with "applicable mitigation measures" in the environmental document for that plan. An "applicable plan" under SB 787 could also include a capital facilities plan. Environmental impacts addressed under CEQA for such a plan may be quite limited, and thereby restrict environmental analysis of subsequent projects conforming to that plan and any mitigation measures needed for subsequent projects. This provision could apply to an outdated plan with inadequate CEQA analysis and ineffective mitigation measures, which also fails to consider changed conditions and more recent circumstances such as hazardous wastes and climate change. This provision would also enable use of outdated plans that are inconsistent with a recent general plan or sustainable communities plan under SB 375, for example, or a plan with a certified environmental document that was challenged and found to be inadequate. SOURCE : Author SUPPORT : California Chamber of Commerce California Citizens Against Lawsuit Abuse California Retailers Association Silicon Valley Leadership Group OPPOSITION : Planning and Conservation League Sierra Club California