CEQA Reform Update

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This year has seen more momentum for CEQA reform than in many previous years. California’s economy has placed a spotlight on the burdens that environmental regulations and litigation, particularly CEQA litigation, impose on business activities. This update summarizes the most viable current CEQA reform bills pending in the Legislature and a potentially more effective reform proposal that has not yet been introduced.

CEQA’s burdens on business activities come in two main types. The first is simply the regulatory cost and delay caused by compulsory study of a long list of environmental topic areas (air quality, biology, etc.), even in situations where the project causes no adverse effects, and in situations where many of those topic areas already have been studied and regulated. The second type is CEQA litigation. It is relatively cheap to pursue a CEQA litigation challenge to project approvals, and it is also relatively easy to win a CEQA challenge, because of the very low evidentiary standard in CEQA cases. When a Negative Declaration is used for CEQA compliance, as is most often the case, project opponents will win if they can show that there is merely a “fair argument” that CEQA compliance findings are not supported by substantial evidence. In all other types of administrative writ litigation, petitioners face the substantially more difficult task of showing that there is in fact no substantial evidence supporting the Lead Agency’s approval findings.

Between the two types of CEQA burdens, abuse of litigation is the least difficult to justify, and the easiest to fix. The two main CEQA reform bills in the Legislature, however, address mainly the burden of excessive environmental analysis, by exempting certain topic areas from repetitive study.

SB 731 (Steinberg, D- Sacramento) is fairly modest. It would allow EIR’s and Negative Declarations to omit study of certain environmental topic areas (noise, traffic, aesthetics, etc.) if a project did not exceed specified statewide impact standards. On the positive side, SB 731 would allow shorter, cheaper CEQA compliance documents in many instances. On the negative side, it requires qualifying projects to comply with new regulations favoring renewable energy projects, infill development, transit, bicycle and similar “green” projects.

SB 787 (Berryhill, D- Modesto) reprises a more aggressive reform proposal, supported by the Silicon Valley Leadership Group*, among others. This approach would reduce both regulatory burdens and litigation burdens. It would omit the need for analysis of environmental impacts when they can be shown to comply with existing state and federal limits on pollution, emissions, wetland fill, etc., and it would prohibit CEQA litigation contesting Lead Agencies’ determinations that compliance with existing regulatory standards will adequately mitigate projects’ adverse environmental impacts.

A third pending CEQA reform bill merely tries to make CEQA litigation more efficient, by allowing Lead Agencies to prepare the administrative record simultaneously with a project’s CEQA compliance documents. SB 617 (Evans, D- Santa Rosa) would save time by making these processes coincide, but the additional early expense of preparing an administrative record would be justified only where a litigation challenge is certain. SB 617 also would require additional environmental analysis, by reversing a line of cases which exempted from CEQA study “impacts of the environment on the project,” that is, the effects of locating a project in a sensitive location, as opposed to “impacts of the project on the environment,” CEQA’s primary focus. See Ballona Wetlands Land Trust v. City of Los Angeles (2nd Dist. 2011) 201 Cal App 4th 455.

Analysis of extensive environmental topic areas, while it can be burdensome, at least offers useful information to the public and local decision-makers. A CEQA reform measure that strikes narrowly at litigation abuse, though, would not reduce the environmental information base on which projects get evaluated; it would only place CEQA litigation on the same footing—the same evidentiary standard—as all other administrative writ litigation. Every threat of a CEQA challenge is a threat of a 1-2 year delay and at least a $250,000 litigation defense cost. Amendment of Public Resources Code Sec. 21082.2, for example, to overturn the line of appellate court cases that imposed the “fair argument” evidentiary standard, would eliminate the significant litigation advantage that CEQA project opponents now enjoy. The “fair argument” evidentiary standard was invented by the courts in the early days of CEQA, in order to encourage litigation as a means of policing CEQA compliance statewide. See Friends of “B” Street v. Hayward (1980) 106 Cal App 998. Those days are past, and restoring the litigation balance between CEQA opponents and defenders in a difficult economy could substantially reduce the instances of CEQA litigation abuse, without reducing the public information base on which CEQA decisions are made. Eliminating the “fair argument” evidentiary standard would be the most effective amendment to any of the foregoing bills, as they move through the legislative process.