In recognition of the complexity and political rancor surrounding CEQA reform, Governor Jerry Brown quipped this week that CEQA reform was "the Lord's work."  Concurrent with his comments, major CEQA reforms were being debuted in draft bill language intended for late session inclusion into SB 317 (Rubio), and a letter co-signed by 33 legislators opposed to CEQA reform was circulating the Capitol. 

Within hours of the Governor's comment, the latest effort to reform CEQA was summarily shelved by the Legislature.  While there is broad bi-partisan recognition of the need for CEQA reform, history has shown the difficulty of translating that need into substantive reform.  Instead of SB 317 moving forward in 2012, working groups will be assembled to discuss CEQA reform throughout the fall for possible consideration in 2013.  A pre-print bill containing the text of SB 317 will be introduced by Senator Michael Rubio (D-Bakersfield) to serve as a starting point for these conversations.

So what is in this latest CEQA reform proposal?  And, what impact could it have on efforts to both protect our environment while also providing jobs and moving construction projects forward in California?

What Does the Proposed CEQA Reform in Senator Rubio's Bill Mean to Agencies and Applicants?
If enacted, the language proposed in Senator Rubio's bill would accomplish a rare feat – it would maintain substantial environmental protection while eliminating duplicative environmental analysis and providing a higher level of certainty for project proponents, be they public agencies or private applicants.  The proposed language does this by relying on more than 100  existing environmental protection laws, regulations and codes for impact analysis and mitigation, eliminating duplicative analysis in CEQA environmental documents.  The vast majority of projects are already required to comply with many of these existing laws, so the elimination of extra CEQA analysis will substantially streamline the CEQA clearance process for those projects.  In addition, limitations on CEQA litigation will provide certainty for project proponents where their projects are in compliance with, and conform to specific environmental laws and land use plans.  At the same time, environmental protections will be maintained through the multitude of existing laws and regulations, which must be disclosed in the environmental document.

The CEQA Reform Proposal: Key Provisions
The primary focus of  this reform language is to integrate environmental and planning laws and regulations adopted during the last 40 years, minimize conflicting review and reduce duplication between existing laws and CEQA analysis by limiting CEQA impact and mitigation analysis to the standards in existing federal and state environmental laws.  For example, if a project complies with the state or federal Endangered Species Act, the significance of impacts to listed species would be based on such compliance and not on any other thresholds.

In addition to focusing CEQA significance thresholds on a threshold of compliance with existing laws, the proposed reform language eliminates evaluation of aesthetics except in the limited circumstance where a project would have a potentially significant aesthetic impact on an official state scenic highway.  For the vast majority of projects, this eliminates a whole category of CEQA impact analysis, one which is highly subjective and therefore represents a considerable litigation risk for project proponents.

The proposed reform language lists several state and federal environmental protection laws and if certain requirements are met, provides that compliance with the applicable standards in those laws "shall be the exclusive means of evaluating and mitigating environmental impacts under CEQA."  To invoke this limitation, the environmental document must disclose the applicable environmental laws, the applicable compliance requirements of those laws, the analytical methods or approaches, and the applicable mitigation and minimization methods or approaches typically used by implementing agencies as part of their review and approval, permits, licenses, or authorizations.

These new provisions are only applicable where an annual compliance report (pursuant to the mitigation monitoring and reporting program) will be prepared and available in readily accessible electronic format.  This increases the visibility and accessibility of mitigation monitoring and documenting the status of the mitigation measures.
The proposed language limits the environmental topical areas in an environmental document to those listed in the bill, which are the 17 topical areas listed in the CEQA Guidelines Appendix G checklist (with some wording and order differences).  This means that if a new hot-button issue arises, a CEQA amendment would be necessary to require that environmental documents address the new issue.

On CEQA litigation, the proposed language  limits the circumstances under which a challenge for noncompliance with CEQA can be filed, preventing challenges related to one of the listed topical areas where compliance with applicable environmental law is disclosed or where the project conforms to designations, density or intensity in a land use plan and applicable mitigation from the environmental document adopted for the plan, permit, etc. is incorporated.  These limitations would dramatically reduce the grounds for a CEQA suit.

Another provision focuses on the administrative record, requiring that, where the respondent agency's record of proceeding is maintained by the agency in an electronic format, "timely production of the record of proceedings requires that the record be prepared by the respondent agency."  If enacted, this would reduce the time and expense of protracted arguments over which party is preparing the record, although arguments about the content of the administrative record are not resolved by the proposed language.

The proposal provides fundamental CEQA reform which goes far above and beyond any amendments  to CEQA since 1972.  In evaluating what this means for project applicants and lead agencies, there are two key questions:

1. Whether the procedure will eliminate duplication and thus streamline the CEQA compliance process, and;
2. Whether a substantial number of projects will be subject to the list of environmental protection laws, and thus be able to take advantage of those laws providing the exclusive means for evaluating and mitigating impacts.

On Question 1, in practice, the vast majority of environmental documents already disclose the myriad laws listed in the bill and utilize the analytical methods and approaches in those laws.  From a pure impact analysis standpoint, the bill likely won't dramatically reduce impact analysis requirements (except for aesthetic impacts).  But, by identifying these laws as the exclusive evaluation means, the bill will allow CEQA practitioners and lead agencies to focus the analysis and avoid lengthy and costly additional analysis beyond those laws.  This will provide a higher level of certainty and should dramatically limit CEQA compliance costs and time.

On Question 2, many projects will be subject to these laws (and other laws related to the listed environmental topics that qualify as an "applicable environmental law" under the reform language), and will be able to take advantage of the streamlining sought by the reform language. 

Nossaman's public policy advisors and CEQA practitioners can help you create the most effective strategy for participation in the CEQA reform debate.

Important note – this e-alert provides an analysis of the draft legislative language intended for SB 317 dated August 21, 2012.  This is being reported as the starting point for conversations by working groups this Fall.  The political process is extremely dynamic and any CEQA reform language to be considered in 2013 is subject to significant changes.