BILL ANALYSIS Ó AB 880 Page 1 Date of Hearing: May 2, 2011 ASSEMBLY COMMITTEE ON NATURAL RESOURCES Wesley Chesbro, Chair AB 880 (V. Manuel Perez) - As Amended: March 25, 2011 SUBJECT : Environmental quality: CEQA: expedited environmental review SUMMARY : Amends the California Environmental Quality Act (CEQA) to expand the authorized use of a "focused" environmental impact report (EIR) for installation of required pollution control equipment also to include projects that consist of new or modified equipment, implementation of other facility process changes, or both, necessary or used to achieve compliance with a rule or regulation adopted pursuant to the California Global Warming Solutions Act (AB 32). EXISTING LAW : 1)Pursuant to CEQA: a) Requires lead agencies with the principal responsibility for carrying out or approving a proposed project to prepare a negative declaration, mitigated negative declaration, or EIR for this action, unless the project is exempt from CEQA. b) Authorizes use of a "focused" EIR (an EIR that evaluates potential impacts on a limited number of environmental issue areas because a prior EIR has evaluated the full range of impacts) for projects that consist solely of the installation of pollution control equipment required by specified agencies Ýi.e., Air Resources Board (ARB), local air districts, state and regional water boards, Department of Toxic Substances Control, and the Integrated Waste Management Board]. 2010 amendments include installation of pollution control equipment that reduces greenhouse gas (GHG) emissions as required by a rule or regulation pursuant to AB 32, including rules or regulations adopted by the California Energy Commission and the Public Utilities Commission. 2)Pursuant to AB 32, requires ARB to adopt a statewide GHG emissions limit equivalent to 1990 levels by 2020 and to adopt AB 880 Page 2 rules and regulations to achieve maximum technologically feasible and cost-effective GHG emission reductions. THIS BILL expands eligibility for the focused EIR from installation of pollution control equipment that is required by regulation to new or modified equipment and implementation of other facility process changes that are "necessary or used to achieve compliance with a performance standard, treatment requirement, energy efficiency standard, or compliance mechanism included in a rule or regulation" adopted pursuant to AB 32. FISCAL EFFECT : Unknown COMMENTS : 1)Background. CEQA provides a process for evaluating the environmental effects of applicable projects undertaken or approved by public agencies. If a project is not exempt from CEQA, an initial study is prepared to determine whether the project may have a significant effect on the environment. If the initial study shows that there would not be a significant effect on the environment, the lead agency must prepare a negative declaration. If the initial study shows that the project may have a significant effect on the environment, the lead agency must prepare an EIR. Generally, an EIR must accurately describe the proposed project, identify and analyze each significant environmental impact expected to result from the proposed project, identify mitigation measures to reduce those impacts to the extent feasible, and evaluate a range of reasonable alternatives to the proposed project. Prior to approving any project that has received environmental review, an agency must make certain findings. If mitigation measures are required or incorporated into a project, the agency must adopt a reporting or monitoring program to ensure compliance with those measures. In 1993, as part of a package of CEQA reforms, the Legislature authorized the use of a "focused" EIR for specified projects, including installation of pollution control equipment pursuant to air, water, toxics, and waste regulations. A focused EIR expedites the review process by limiting the analysis to project-specific significant effects that were not discussed in the analysis of the underlying regulation. A focused EIR is not required to address growth-inducing impacts or AB 880 Page 3 cumulative impacts, and discussion of alternatives is limited to alternative means of compliance. AB 1846 (V. Manuel Perez), Chapter 195, Statutes of 2010, enacted a modest expansion of the focused EIR for pollution control equipment to clarify that pollution control equipment to reduce GHG emissions required by AB 32 is eligible. 2)Focused EIR should be limited to discreet emission reduction measures required by regulation. This bill proposes to redefine eligibility for a focused EIR to include a wide range of measures undertaken to achieve compliance with AB 32. This could include an unpredictable range of projects undertaken by major GHG emitters, such as refinery and power plant upgrades, that may reduce GHG emissions, but have a range of other significant effects that might not be analyzed and mitigated if a focused EIR is used. This bill appears to make the focused EIR available to discretionary projects which may achieve incidental GHG reductions, rather than specific pollution control projects required by a regulation. 3)Is ARB's AB 32 CEQA work an adequate basis for project-specific CEQA relief? Implementation of AB 32 has been suspended due to a recent court ruling in a lawsuit alleging deficiencies in ARB's CEQA analysis. On March 18, 2011, the San Francisco Superior Court issued an opinion in Association of Irritated Residents, et al v. ARB, finding that ARB had failed to comply with CEQA in adopting its AB 32 Scoping Plan and enjoining any further AB 32 rulemaking until ARB remedies its CEQA analysis. The court found that ARB's discussion of alternatives was inadequate and that ARB improperly approved the Scoping Plan prior to completing its environmental review. AB 880 Page 4 REGISTERED SUPPORT / OPPOSITION : Support American Council of Engineering Companies of California California Chamber of Commerce California Construction & Industrial Materials Association California Council for Environmental and Economic Balance California Manufacturers & Technology Association Chamber of Commerce Alliance Fullerton Chamber of Commerce Industrial Environmental Association Oxnard Chamber of Commerce Southern California Edison Opposition American Lung Association Asian Pacific Environmental Network California League of Conservation Voters California Environmental Justice Alliance Center for Biological Diversity City of Richmond Environmental Health Coalition Planning and Conservation League Sierra Club California Analysis Prepared by : Lawrence Lingbloom / NAT. RES. / (916) 319-2092