BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 1321
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          Date of Hearing:  April 27, 2009

                       ASSEMBLY COMMITTEE ON NATURAL RESOURCES
                                Nancy Skinner, Chair
                      AB 1321 (Eng) - As Amended:  April 2, 2009
           
          SUBJECT  :  Mitigation of infrastructure project impacts

           SUMMARY  :  Authorize the Natural Resources Agency (NRA) to  
          develop a program to mitigate the impacts of infrastructure  
          projects proposed by a public agency on a regional or statewide  
          scale in advance of project approval.

           EXISTING LAW  :

          1)Pursuant to the California Environmental Quality Act (CEQA),  
            requires a public agency to prepare an environmental impact  
            report (EIR) for a project that may have a significant impact  
            on the environment.  An EIR must identify mitigation measures  
            proposed to minimize significant impacts on the environment  
            and include a monitoring program to ensure compliance with  
            these measures.

          2)Pursuant to the Sacramento-San Joaquin Valley Wetlands  
            Mitigation Bank Act of 1993, requires the Department of Fish  
            and Game (DFG) to establish standards and criteria to qualify  
            mitigation banks within the Sacramento-San Joaquin Valley and  
            evaluate of wetland habitat acreage and values created at the  
            bank sites.  The criteria must, at a minimum, require the  
            newly created wetlands to provide the hydrologic, vegetative,  
            and wildlife characteristics, including the food web  
            components, of a naturally occurring wetland system that is  
            equal to the site being mitigated.

           THIS BILL  :

          1)Defines "infrastructure planning agency" to mean the  
            Department of Transportation (Caltrans), the Department of  
            Water Resources (DWR), a metropolitan planning organization, a  
            regional transportation planning agency, or other public  
            agency that implements infrastructure projects.

          2)Defines "infrastructure project" to mean the construction,  
            repair, or modification of a transportation, flood control,  
            energy, or water facility.








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          3)Defines "planned infrastructure project" to mean a project  
            that Caltrans, DWR or other public agency has concluded is  
            reasonably likely to be constructed within 20 years, and may  
            include projects that have been proposed for approval or  
            approved.

          4)Defines "regional advance mitigation plan" (RAMP) to mean a  
            regional or statewide plan that estimates the potential future  
            compensatory mitigation requirements for one or more planned  
            infrastructure projects and identifies mitigation projects,  
            sites, or credits that would fulfill some or all of those  
            requirements.  A RAMP must propose measures to avoid or  
            minimize impacts, anticipate and mitigate these impacts,  
            estimate greenhouse gas emissions reductions, provide an  
            endowment to manage or monitor lands acquired or protected,  
            provide for the purchase of credits at mitigation banks or  
            payment of mitigation fees, analyze the cost-effectiveness of  
            mitigation alternatives, and measure and evaluate performance.

          5)Establishes the Advance Infrastructure Mitigation Program  
            (Program) and authorizes NRA to:
             a)   Prepare, approve, and implement RAMPs for one or more  
               planned infrastructure projects.

             b)   Acquire, restore, manage, monitor, and preserve lands,  
               or fund the acquisition, restoration, management,  
               monitoring, and preservation of lands, in accordance with a  
               RAMP or irrespective of under specified conditions.

             c)   Establish or fund the creation of mitigation banks or  
               conservation banks; the agency also may purchase credits at  
               these banks.

             d)   Use, or allow infrastructure planning agencies to use,  
               mitigation credits or values created or acquired under the  
               Program to fulfill the mitigation requirements of planned  
               infrastructure projects if the infrastructure planning  
               agency reimburses the Program for all costs of creating the  
               mitigation credits or values.

          6)Authorizes an infrastructure planning agency to identify  
            projects for the purpose of including them in a Mitigation  
            Plan; the agency must analyze project impacts at a level of  
            detail commensurate with available information.








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          7)Creates an Advance Infrastructure Mitigation Fund in the State  
            Treasury.

          8)Provides that the Program is intended to improve the  
            efficiency and efficacy of mitigation only and is not intended  
            to supplant the requirements of CEQA or any other  
            environmental law.  The identification of planned  
            infrastructure projects and the identification of mitigation  
            projects does not imply or require approval of those projects  
            under CEQA.

           COMMENTS  :  According to the author's office:

            Proactive regional advance mitigation planning will allow  
            state and federal agencies to  anticipate the environmental  
            impacts of several planned infrastructure projects at once,  
            and to identify regional mitigation opportunities that will  
            satisfy anticipated mitigation requirements before the  
            projects are in the final stages of environmental review, when  
            the need to identify specific mitigation measures can delay  
            project approvals.  Working together, natural resource and  
            infrastructure agencies can identify appropriate mitigation  
            early in the projects' timelines, avoiding permitting and  
            regulatory delays and allowing public mitigation dollars to  
            stretch further by securing and conserving valuable natural  
            resources on a more economically efficient scale and before  
            related real estate values escalate.

           1)RAMP Working Group.   

          The theory behind advanced mitigation goes like this: instead of  
          mitigating project impacts on a case-by-case, isolated basis  
          after project implementation, why not estimate and combine  
          impacts from multiple projects in a similar region or watershed  
          prior to implementation, aggregate those impacts, then mitigate  
          by restoring or acquiring larger or more cohesive habitat  
          consistent with the state or federal conservation priorities.   
          According to the author, the benefits include a capacity to:  
          conserve larger areas of higher quality habitat; leverage other  
          conservation efforts, streamline project approval and reduce  
          delays; ensure greater regulatory and fiscal certainty for a  
          public agency; and potentially, lower mitigation impact ratios  
          (more mitigation acres than impacted acres is sometimes required  
          to account for lower quality habitat or the temporal loss of  








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          habitat between the time of impact and mitigation) because  
          habitat is already protected or temporal impacts are minimized.

          Since the spring of 2008, a working group of state and federal  
          agencies, including Caltrans, DWR, DFG, Parks and Recreation,  
          U.S. EPA, Army Corps of Engineers, U.S. Fish and Wildlife  
          Service, and the Nature Conservancy, the sponsor of this bill,  
          have been exploring the potential for implementing regional  
          advance mitigation in California.  Though not endorsed by these  
          agencies, this bill seeks to further advance the concept of RAMP  
          to giving NRA express authorization to prepare and implement  
          RAMPs.  A pilot program in the Central Valley will begin this  
          fall in order to assess whether certain DWR and Caltrans  
          projects share similar impacts that can be mitigated in advance  
          on a regional basis.

          North Carolina, Georgia and Florida have all implemented  
          variations on this concept but North Carolina's experience is  
          hailed as the most successful; reportedly 90% of the North  
          Carolina Department of Transportation's wetlands mitigation  
          needs have been fulfilled through its RAMP and no projects have  
          been delayed due to mitigation issues since the start of the  
          program.

           2)State already has advance mitigation tools in its toolbox  
           
           As part of the Program, this bill authorizes NRA to establish,  
          fund the creation of, or purchase credits from a mitigation or  
          conservation (e.g., for protected species) bank-one of several  
          advance mitigation approaches contemplated by this bill.   
          Mitigation or conservation banking, in existence for well over a  
          decade, is a market mechanism where a permittee can purchase  
          credits, the value of which is based on habitat function or  
          acreage, in an existing for-profit or non-profit conservation  
          project.  This approach transfers the responsibility and legally  
          liability for the success of a project to the bank's sponsor or  
          owner, an attractive feature for developers.

          Mitigation banking is generally preferred by regulators and  
          developers since it is the most reliable form of compensatory  
          mitigation, is easier to monitor and manage, transfers liability  
          to the banker, and provides more regulatory certainty.  CDF has  
          approved roughly 38 public and private mitigation and  
          conservation banks in the state.  Credits can be purchased for  
          impacts to wetlands, vernal pools, burrowing owls, Giant Garter  








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          Snakes, Swainson's Hawk, Red-legged Frogs, and San Joaquin Kit  
          Fox, for example.  Caltrans is a bank developer (67 acre wetland  
          bank in Sacramento County) and purchaser of credits from private  
          banks.

          Another advance mitigation tool is the state's Natural  
          Communites Conservation Planning Act, the goal of which is to  
          conserve natural communities at the region or ecosystem scale  
          while accommodating compatible land use.  According to DFG, a  
          NCCP "seeks to anticipate and prevent the controversies and  
          gridlock caused by species' listings by focusing on the  
          long-term stability of wildlife and plant communities and  
          including key interests in the process."

           3)Concerns with the bill  

             a)   This bill authorizes NRA to prepare RAMPs for a project  
               that Caltrans, DWR, or other public agency concludes is  
               reasonably likely to be constructed within 20 years.  NRA  
               is also authorized to acquire, restore, and manage lands,  
               establish mitigation or conservation banks, fund the  
               creation of banks, or buy credits at a bank, all which it  
               currently can do under existing law.

             b)   Anticipating or accurately assessing the impacts of a  
               project (yet to be approved) with sufficient confidence in  
               order to mitigate these impacts in advance is challenging.   
               It is even more challenging without an adequate project  
               description, which can change throughout project design and  
               review process, or without the benefit of biological field  
               surveys, for example.  Of course, a RAMP won't be  
               appropriate for all projects or agencies.  It's possible  
               that the impacts of levee or highway widening can be  
               predicted with more than 50% confidence.

             c)   This bill makes clear that RAMP is not intended to  
               supplant CEQA or other laws nor does it imply or require  
               approval of a project under CEQA.  However, an  
               infrastructure agency will obviously need sufficient  
               certainty that a project will obtain CEQA or other  
               regulatory compliance before investing scarce public  
               resources into a mitigation project.  Would CEQA,  
               endangered species, or other laws provide sufficient  
               flexibility to accommodate advance mitigation?  What if  
               advance mitigation does not adequately compensate for  








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               losses that turn out to be greater or more significant?

             d)   The bill defines an infrastructure project as one that  
               is reasonably likely to be constructed within 20 years.   
               Projects with such a long lead time may ultimately not be  
               necessary or materialize; moreover, how can an agency be  
               certain that impacts identified now will remain impacts 20  
               years from now, especially given species migration,  
               sea-level rise or habitat degradation due to climate  
               change; thus, the state may be investing scarce mitigation  
               or bond resources without the certainty the mitigation will  
               be necessary.  The author has indicated that a 2-5 project  
               lead time is probably more realistic.

             e)   This bill only authorizes NRA to create a mitigation  
               bank, something the state is already doing, but should it  
               expand its current role in creating mitigation banks, given  
               the liabilities it would assume for the success or failure  
               of a bank?  Could the state effectively compete with  
               private banks?

             f)   Would advance mitigation relieve put less pressure on  
               agencies to avoid impacts?  This bill, however, does not  
               change existing requirements to avoid or minimize impacts  
               when feasible.

           4)Suggested amendments  

            This bill only refers to the acquisition, restoration, and  
            preservation of lands.  The  author and committee may wish to  
            consider  adding water, aquatic resources and fisheries.

            Page 9, lines 29-34 should be amended to read:

            The identification of planned infrastructure projects and the  
            identification of mitigation projects or measures for planned  
            infrastructure projects under this division does not imply or  
            require approval of those projects for purposes of the  
            California Environmental Quality Act (Division 13 (commencing  
            with Section 21000))  or any other environmental law  .













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           REGISTERED SUPPORT / OPPOSITION  :

           Support 
           
          Audubon California
          California Council of Land Trusts
          California League of Conservation Voters
          Nature Conservancy
          1 individual

           Opposition 
           
          None on file


           Analysis Prepared by  :  Dan Chia / NAT. RES. / (916) 319-2092