In a flurry of eleventh-hour activity following Senate President Pro Tem Darrell Steinberg’s withdrawal of SB 731 from consideration (see 9/13/13 post “Steinberg Drops Statewide CEQA Reform Bill (SB 731) After Meeting with Governor Brown,” by Arthur F. Coon), both houses of the California Legislature passed an amended Senate Bill 743 on September 12, 2013. SB 743 enacts a number of changes to the California Environmental Quality Act (“CEQA”; Pub. Resources Code, § 21000, et seq.) that are designed to “modernize” the statute and streamline some of its procedures for certain projects. Demonstrating that politics is “the art of the possible,” Senator Steinberg was successful, in the waning hours of the legislative session, in importing several generally-applicable CEQA reform provisions from former SB 731 into SB 743, whose primary focus theretofore had been easing the CEQA review path for a new Sacramento Kings arena. After this bit of legislative “sausage making” (which is expected to be followed by Governor Brown’s signature), the revised SB 743 includes the following generally-applicable CEQA provisions:

• Immunizes projects in urban areas from challenges based on aesthetics and parking impacts. SB 743 adds Chapter 2.7 to the Public Resources Code, entitled “Modernization of Transportation Analysis for Transit-Oriented Infill Projects.” New section 21099 exempts from environmental consideration “aesthetic and parking impacts of a residential, mixed-use residential, or employment center project on an infill site within a transit priority area.” “Infill site” means a previously-developed urban area lot or a vacant one essentially surrounded on three sides by qualified urban uses. “Transit priority area” is broadly defined by subdivision (a)(7) of the statute to include any area within half a mile of an existing or planned major transit stop. Presumably, the statute’s reach will thus extend to significant portions of urban areas in California, giving this provision some teeth. (Note, however, this exemption does not apply to the exercise of local discretionary authority to consider aesthetic impacts pursuant to local design review laws, or to impacts on cultural or historic resources. Further, it “does not affect the authority of a public agency to establish or adopt thresholds of significance that are more protective of the environment.”)
• Potentially changes the way traffic impacts are evaluated. Subdivision (b) of section 21099 also calls for the state Office of Planning and Research (OPR) to develop new guidelines “for determining the significance of transportation impacts of projects within transit priority areas.” This has the potential to shift traffic analyses from the current “level of service” approach – which focuses on congestion management – to one with more flexibility and which focuses on promoting infill development, active transportation, and GHG emissions reductions. In the words of Senator Steinberg’s press release, “Currently, a project’s traffic impact can be mitigated by increasing surface parking lots and new vehicle lanes, which increases congestion and pollution. A modernized metric allows traffic impacts to be offset by mass-transit stations, which won’t be subject to CEQA litigation.” But it must be borne in mind that SB 743 merely calls for OPR develop new guidelines – it does not in fact stipulate what those guidelines should include.
• Expands exemption for urban projects in areas covered by a specific plan that has already been environmentally reviewed. CEQA currently exempts from environmental review certain residential infill projects in transit priority areas where a specific plan is in place that was itself subject to prior CEQA review. SB 743 expands this exemption to include mixed-use residential/commercial projects in new Public Resources Code section 21155.4. However, it also makes clear that a project will only qualify for the exemption if it is consistent with a “sustainable communities strategy” or “alternative planning strategy” that has been verified by CARB to achieve the required GHG emissions reduction targets. This achieves one of Steinberg’s key aims, i.e., to tie CEQA more closely to his landmark SB 375 land use/transportation planning legislation.
• Expedites judicial review for large-scale “environmental leadership” projects. Last March, Judge Frank Roesch of the Alameda County Superior Court struck down a portion of AB 900, a prior CEQA reform bill, as unconstitutional. (See 4/8/13 post “AB 900 CEQA Reform Law Partially Struck Down,” by Arthur F. Coon.)  That law provided that certain large scale “environmental leadership projects” could be challenged only by direct recourse to California’s District Courts of Appeal. In light of Judge Roesch’s ruling, SB 743 takes a different tack in trying to speed this kind of favored development through environmental review. It includes Public Resources Code section 21185, which requires that the Judicial Council promulgate new Rules of Court to make CEQA challenges to these projects subject to completion within 270 days of certification of the administrative record. Thus, SB 743 does not bypass trial courts entirely, but does aim to create a drastically-accelerated timeframe for CEQA litigation involving this small and select class of “green” mega-projects. It applies to projects for an EIR is certified, and which are certified by the Governor as “environmental leadership development projects,” by January 1, 2016.

While none of these CEQA reforms are earth-shattering, they are nonetheless significant. To be sure major reform issues remain unaddressed, including duplicative CEQA review, “late hit” document dumps, CEQA-in-reverse, and thorny issues of standing. However, SB 743 does move CEQA reform forward incrementally, and avoids “backsliding” by eliminating numerous troublesome provisions of the formerly-proposed SB 731 which would have worked in the opposite direction. While much more remains that could be done, in the current political and regulatory climate, SB 743’s modest steps toward CEQA reform are welcome ones.