Recent and Upcoming Changes to CEQA - BB&K Attorney Amanda Daams Discusses the California Environmental Quality Act in a Riverside Lawyer Article

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The California Environmental Quality Act (CEQA), codified at Public Resources Code section 21000 et seq., is arguably California’s preeminent and most comprehensive environmental law. Adopted in 1970 and patterned after the National Environmental Policy Act, CEQA’s overriding goals are to protect the environment and further public disclosure. Most proposals for physical development in California are subject to the provisions of CEQA, as are many governmental decisions which do not immediately result in physical development, such as adoption of a general plan.
Public agencies are required to comply with CEQA when undertaking an activity defined as a CEQA “project.” A project is an activity undertaken by a public agency or a private activity which must receive some discretionary approval from a government agency, which may cause either a direct or a reasonably foreseeable indirect change in the physical environment. (14 Cal. Code Regs., [hereinafter “Guidelines”] § 15378.) Thus, every development project which requires a discretionary public agency approval will require at least some level of environmental review pursuant to CEQA, unless an “exemption” from CEQA applies. Depending on the proposed project’s potential environmental effects, substantial environmental review may be required in the form of a Negative Declaration, Mitigated Negative Declaration, or Environmental Impact Report. These documents often require a team of expert consultants to prepare, months (or even years) to prepare and publicly circulate, and often come with substantial price-tags well into the six figures or beyond. Ultimately, a project may not be approved if feasible alternatives or feasible mitigation measures are available to avoid or substantially lessen the significant environmental effects of the project while still achieving the project’s basic objectives.
CEQA is self-executing. Public agencies are entrusted with compliance with CEQA, and its provisions are enforced by the public through comments and public participation, or litigation or the threat of litigation. While some argue that CEQA and associated CEQA litigation are used to stop projects, the purpose of CEQA is to ensure that environmental impacts are adequately disclosed and mitigated to the extent possible. When deciding CEQA disputes, the courts have played an important role in filling the gaps left in the CEQA statute and its associated Guidelines by the Legislature, as well as resolving ambiguities and uncertainties in the statutory language. However, courts are not empowered to decide whether a project is a good or bad idea, or to re-weigh the policy implications of public agency decisions. To the contrary, the role of the courts is limited to confirming that CEQA’s procedural mandates are met and that an agency’s decision is supported by substantial evidence in the record.
Given the role of the courts, as well as CEQA’s almost 50-year history, the need for “CEQA reform” is often discussed. While outright “reform” may not be on the horizon just yet, there are a number of important refinements to CEQA that have occurred in the past year and are anticipated to occur in 2018. The following summarizes those developments.
I. Guidelines Updates
One of the biggest anticipated changes to CEQA are the proposed revisions to the State CEQA Guidelines (Cal. Code Regs., tit. 14 § 15000 et seq.) The Guidelines are administrative regulations addressing the implementation of CEQA. The Guidelines reflect and elaborate upon the requirements set forth in the CEQA statute itself, as well as court decisions interpreting CEQA. The Guidelines apply to public agencies throughout California, including local governments, special districts, and state agencies. Minor amendments are made to the Guidelines nearly every year, but comprehensive updates are typically brought forward only every few years. The currently proposed set of updates would be the most comprehensive Guidelines update since 1998.
The Governor’s Office of Planning and Research (OPR) prepares and develops proposed amendments to the Guidelines and transmits them to the Secretary for Resources. The Secretary for Resources is responsible for certification and adoption of the Guidelines and any amendments thereto. The rulemaking process has been ongoing for years, leading up to OPR’s submittal of the comprehensive update package to the Resources Agency, and the release of the proposed Guidelines for pub¬lic review in November 2017. The proposed Guidelines update contains three overarching types of improvements – efficiency improvements, substance improvements, and technical improvements. For further reference, the full Guidelines update package is accessible at: Package_Nov_2017.pdf.
Major proposed efficiency improvements include several changes to the Guidelines Appendix G Checklist, which is used by most agencies to evaluate project impacts when conducting environmental review. Duplicative questions would be eliminated and some issues would be reorganized. Notably, the Checklist adds new questions related to transportation and wildfire, pursuant to Senate Bill 743 (Steinberg, 2013), and Senate Bill 1241 (Kehoe, 2012), respectively. It also relocates questions related to paleontological resources as directed in Assembly Bill 52 (Gatto, 2014).
Major substantive improvements include guidance regarding how to analyze a project’s energy usage and impacts. Previously located in Guidelines Appendix F and often limited to EIRs, the energy impact analysis would now be included in Guidelines Appendix G – thus more clearly requiring agencies to address energy consumption as part of all of their CEQA processes. Additionally, the updates propose guidance on the water supply impact analysis stemming from the holding of the California Supreme Court in Vineyard Area Citizens for Responsible Growth v. City of Rancho Cordova (2007) 40 Cal.4th 412 (Vineyard). Specifically, the proposed Guidelines would require the consideration of a proposed project’s possible sources of water supply over the life of the project and the environmental impacts of supplying that water to the project. The analysis must consider any uncertainties in supply, as well as potential alternatives. Additionally, the package contains long-awaited updates related to analyzing transportation impacts pursuant to Senate Bill 743, which will require that public agencies use vehicle miles travelled – rather than level of service – for analyzing transportation impacts.
Major technical improvements include clarifications on how agencies should identify the “baseline” conditions against which they compare a proposed project’s impacts, and under what circumstances an agency may utilize historical or future conditions (in lieu of current conditions) as the baseline. Finally, the package includes technical changes to Guidelines Appendices D and E to reflect recent statutory requirements and previously adopted amendments to the CEQA Guidelines, and to correct typographical errors.
The Resources Agency made the proposed Guidelines update available for public review, with the comment period closing on March 15, 2018. Once the Resources Agency responds to the public comments received, the Resources Agency will prepare the final rulemaking file and submit it to the Office of Administrative Law (“OAL”) for review and final approval. Guidelines approved by OAL are deposited with the Secretary of State and go into immediate effect. As the current comprehensive update is far along in the rulemaking process, it is anticipated that a package very close to the proposed Guidelines updates discussed above will be adopted later this year. Finally, as with all Guidelines updates, any modifications to the Guidelines which are enacted will only apply prospectively.
II. Legislative Updates
The 2017 legislative session was dominated by the need to enact legislation related to California’s housing shortage. To that end, the legislature passed 15 housing bills in 2017, many of which have CEQA implications. Several other bills passed in 2017 also have CEQA ramifications in a variety of areas, some of which are highlighted below.
(1) AB 73 (Chiu D) Planning and Zoning: Housing  Sustainability Districts. The Planning and Zoning Law requires a city or county to adopt a general plan for land use development within its boundaries. The general plan must contain seven mandatory elements, including a housing element. Existing law provides for various reforms and incentives intended to facilitate and expedite the construction of affordable housing. This legislation authorizes a city, county, or city and county, including a charter agency to establish by ordinance a housing sustain-ability district that meets specified requirements, including authorizing residential use within the district through the ministerial issuance of a permit. As it relates specifically to CEQA, this bill directs a lead agency, when designating housing sustainability districts, to prepare an EIR for the designation, as specified. The bill exempts from CEQA, however, housing projects undertaken in the housing sustainability districts that meet specified requirements, including if the project satisfies certain design review standards applicable to development projects within the district provided the project is “complementary to adjacent buildings and structures and is consistent with the [agency’s] general plan.”
(2) AB 246 (Santiago D): Environmental Quality:  Jobs and Economic Improvement Through  Environmental Leadership Act of 2011. The Jobs and Economic Improvement Through Environmental Leadership Act of 2011 authorized the Governor, until January 1, 2018, to certify projects that meet certain requirements, including the requirement that the project is certified as LEED silver or better by the United States Green Building Council, achieves a 10% greater standard for transportation efficiency than for comparable projects, and creates high-wage, highly skilled jobs that pay prevailing wages and living wages, for streamlining benefits provided by that act. The act provides that if a lead agency fails to approve a project certified by the governor before January 1, 2019, the certification expires and is no longer valid. AB 246 requires a lead agency to prepare the record of proceedings for the certified project concurrent with the preparation of the environmental documents. The act is repealed by its own terms on January 1, 2019.

This bill increases the certification of the project to LEED gold or better and increases the transportation efficiency to a 15% greater standard than for comparable projects. The bill requires the project applicant to demonstrate compliance with requirements for commercial and organic waste recycling, as applicable. The bill extends the authority of the governor to certify a project to January 1, 2020. The bill provides that the certification expires and is no longer valid if the lead agency fails to approve a certified project before January 1, 2021. The bill repeals the act on January 1, 2021. The bill also requires the Judicial Council to adopt a rule of court to establish procedures for judicial review of a lead agency’s certification of the EIR of a certified project or the approval of a project to ensure that the judicial review is completed within 270 days of the certification of the record of proceedings for the project. As a result of this bill, the Judicial Council is instead directed to require the review to be completed within 270 days of the filing of the certified record of proceedings (i.e., administrative record) with the court to the extent feasible.
(3) AB 1218 (Obernolte R) California Environmental  Quality Act: Exemption: Bicycle Transportation  Plans. CEQA exempted from its requirements bicycle transportation plans for an urbanized area for restriping of streets and highways, bicycle parking and storage, signal timing to improve street and highway intersection operations, and related signage for bicycles, pedestrians, and vehicles under certain conditions. CEQA also exempted from its requirements projects consisting of restriping of streets and highways for bicycle lanes in an urbanized area that are consistent with a bicycle transportation plan under certain conditions. This bill extends the two exemptions until January 1, 2021.
III. Case Law Updates
As stated above, the courts play an important role in the interpretation of CEQA, and therefore its implementation. In 2017, the California Supreme Court decided three cases affecting CEQA review going forward.
First, in Banning Ranch Conservancy v. City of Newport Beach (2017) 2 Cal.5th 918, the court held that even where the California Coastal Commission, and not the lead agency (here, a city), will make a final determination regarding Environmentally Sensitive Habitat Areas, or “ESHA” on a project site, the CEQA lead agency could not defer those questions to a subsequent Coastal Commission permitting process. Instead, the lead agency has the obligation to identify and discuss project impacts to those sensitive areas. The case impacts how lead agencies approach regulatory topics that are the subject of permitting by other agencies and provides a cautionary tale of why environmental analysis under CEQA should not defer discussion of such topics to subsequent processes by other agencies.
Second, in Cleveland National Forest Foundation v. San Diego Association of Governments (2017) 3 Cal.5th 497, the Supreme Court reversed the court of appeal decision overturning the San Diego Association of Governments’ (SANDAG) 2050 Regional Transportation Plan and Sustainable Community Strategy for failing to assess the plan’s consistency with the 2050 GHG reduction goal contained in Executive Order S-3-05. In a narrow holding, the court found that SANDAG was not required to use Executive Order S-3-05 targets as a threshold of significance under CEQA, but also confirmed that, in view of rapid changes in science, lead agencies must be nimble in terms of their analysis of GHGs going forward.

Third, in Friends of the Eel River v. North Coast Railroad Authority (2017) 3 Cal.5th 677, the Supreme Court examined whether the federal Interstate Commerce Commission Termination Act (ICCTA) preempted CEQA review. The court held that while ICCTA is broad and preempts CEQA as applied to private rail owners and operators, it does not preempt CEQA in the case of a state subsidiary, like North Coast Railroad Authority, because there was no indication that Congress intended to preempt states’ powers of self-governance. The case is important in that it may weaken claims of federal preemption in instances where a state agency is involved in carrying out a project, beyond merely approving the project.
In summary, proposed CEQA Guidelines, new legislation, and Supreme Court guidance continue to modify and elaborate upon CEQA’s requirements for public agencies. With so much accomplished in 2017 and more changes on the horizon, 2018 looks to be a busy year for CEQA practitioners.

This article originally appeared in the April 2018 edition of Riverside Lawyer magazine, a publication of the Riverside County Bar Association. Reprinted with permission.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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