BILL ANALYSIS Ó SB 226 Page 1 Date of Hearing: August 22, 2011 ASSEMBLY COMMITTEE ON NATURAL RESOURCES Wesley Chesbro, Chair SB 226 (Simitian) - As Amended: August 17, 2011 SENATE VOTE : 36-0 (not relevant) SUBJECT : Environmental quality SUMMARY : Establishes exemptions and limits to environmental review under the California Environmental Quality Act (CEQA) for specified projects. EXISTING LAW : 1)Requires lead agencies with the principal responsibility for carrying out or approving a proposed project to prepare a negative declaration, mitigated negative declaration, or environmental impact report (EIR) for this action, unless the project is exempt from CEQA (CEQA includes various statutory exemptions, as well as categorical exemptions in the CEQA guidelines). 2)Requires the Office of Planning and Research and the Natural Resources Agency to prepare, adopt and periodically update CEQA guidelines, including identifying classes of projects determined to have no significant effect on the environment and therefore eligible for a categorical exemption, as well as guidelines for the mitigation of greenhouse gas (GHG) emissions. 3)Exempts from CEQA specified residential housing projects which meet criteria established to ensure the project does not have a significant effect on the environment, including urban infill housing projects not more than 100 units on a site not more than four acres in size which is within one-half mile of a major transit stop. (SB 1925 (Sher), Chapter 1039, Statutes of 2002) 4)Requires metropolitan planning organizations (MPOs) to include a sustainable communities strategy (SCS), as defined, in their regional transportation plans, or an alternative planning strategy (APS), for the purpose of reducing GHG emissions, aligns planning for transportation and housing, and creates SB 226 Page 2 specified incentives for the implementation of the strategies, including CEQA exemption or abbreviated review for residential or mixed-use residential "transit priority projects" if the project is consistent with the use designation, density, building intensity, and applicable policies specified for the project area in either an approved SCS or APS. (SB 375 (Steinberg), Chapter 728, Statutes of 2008) 5)Requires a lead agency to call at least one scoping meeting for a proposed project of statewide, regional, or area-wide significance. Notice of at least one scoping meeting must be provided to certain entities, including a county or city bordering a county or city within which the project is located. Requires a planning agency to refer a proposed action to adopt or substantially amend a general plan to certain entities for comment, including a city or county within or abutting the area covered by the proposal, prior to legislative body's action on that general plan. THIS BILL : 1)Exempts from CEQA review the installation of a "solar energy system" on the roof of an existing building. "Solar energy system" includes solar electric (photovoltaic) and solar hot water projects, and associated equipment not located on the roof, including connections to the electric grid adjacent to the parcel, but excludes a substation. (Section 3) 2)Requires the Natural Resources Secretary, by March 1, 2012, to amend the CEQA guidelines to exempt from CEQA review solar photovoltaic projects not more than 10 megawatts/100 acres located on disturbed agricultural lands, as defined. Eligible lands must have been used for agricultural production for at least five years and determined by a qualified biologist to have no significant habitat value. Projects may not be located on prime farmland or other farmland designated as important farmlands by the Department of Conservation. This provision sunsets January 1, 2015. (Section 6) 3)Provides that a project's greenhouse gas emissions shall not by itself cause the project to be ineligible for a categorical exemption from CEQA review if the project complies with regulations adopted to implement related statewide, regional, or local plans as provided in the CEQA guidelines. (Section 5) SB 226 Page 3 4)Establishes interim abbreviated CEQA review procedures for specified "transit proximity projects," defined as urban residential mixed-use projects with housing density of at least 20 units per acre located within one quarter mile of a transit stop or corridor. The abbreviated procedures permit transit proximity projects to be reviewed via a sustainable communities environmental assessment (SCEA) or an environmental impact report (EIR) where consideration of cumulative effects and alternatives to the project are limited. This provision applies only to projects within an MPO, ceases to apply once that MPO has adopted a SCS under SB 375, and sunsets January 1, 2015. (Sections 1 and 7) 5)Provides that CEQA does not require a public agency to consider written materials submitted after the close of the public comment period, with specified exceptions for materials addressing new information released after the close of the public comment period, and permits a lead agency to elect to ignore written materials submitted after the close of the public comment period and provides that such material shall not be raised in judicial review. This provision sunsets January 1, 2016. (Section 8) 6)Authorizes referral of a proposed action to adopt or substantially amend a general plan to an adjacent city or county to be conducted concurrently with the scoping meeting required by CEQA for a project of statewide, regional or area-wide significance, and authorize the city or county to submit its comments on the proposed general plan action at the CEQA scoping meeting. (Sections 2 and 4) 7)Contains an urgency clause allowing the bill to take effect immediately upon enactment. (Section 10) FISCAL EFFECT : Unknown SB 226 Page 4 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. A lead agency must base its determination of significant effects on substantial evidence. 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. According to the author, SB 226 responds to concerns relating to scoping meetings for certain projects, use of categorical exemptions for projects resulting in greenhouse gas emissions, environmental review for infill and solar projects, and late public comments on environmental documents. 2)Rooftops, plus? In most cases, installation of solar panels or hot water systems on rooftops of existing buildings would not be subject to CEQA, and the committee has not identified any instance where application of CEQA has been a burden or impediment to rooftop solar projects. As it relates to rooftop solar energy systems and associated ground equipment inside or adjacent to the building, the exemption in this bill is reasonable, though arguably unnecessary. However, the author and the committee may wish to consider whether the bill should more clearly define the extent to which it applies to off-site wires connecting the project to the electric grid so that the exemption doesn't include new transmission lines and towers located on another property. SB 226 Page 5 3)Disturbed lands. By excluding farmland designated by the Department of Conservation as "important," this exemption appears limited to a very small minority of agricultural lands that have been cultivated at some point in the past, but not irrigated for at least several years. Additional conditions, such as limits on project size and acreage, requiring a biologist's determination that the land has no significant habitat value, and prohibiting repeated uses of the exemption in the same vicinity or ownership, further limit the application of the exemption. However, some of these conditions seem arbitrary and have little or nothing to do with CEQA's purposes. The author and the committee may wish to consider letting the absence of significant effects be the standard and instead direct the Secretary to identify a class of solar projects on disturbed agricultural lands that would be eligible for a categorical exemption based on a determination that the class of projects will not have a significant effect on the environment. 4)Prioritizing proximity. This bill's "transit proximity project" provision advances some of the CEQA streamlining available under SB 375 so that it could apply in the next couple years to urban regions within an MPO. Eligibility is limited to dense (20 units/acre) residential projects very near (1/4 mile) transit. In opposition, developers contend that the combination of requiring projects to be within 1/4 mile of a major transit stop or high-quality transit corridor and requiring the project to incorporate all mitigation measures or best practices recommended by the local air district make the provision unusable. They cite mitigation measures recommended by the Bay Area Air Quality Management District that recommend projects be located away from roadway to protect residents from air pollution. However, it appears the bill's conditions can be reconciled with the BAAQMD standards so that this provision could be used to some extent for projects in the Bay Area and other urban regions. REGISTERED SUPPORT / OPPOSITION : Support None on file Opposition SB 226 Page 6 American Council of Engineering Companies California Building Industry Association California Business Properties Association California Chamber of Commerce California Farm Bureau Federation (prior version) Analysis Prepared by : Lawrence Lingbloom / NAT. RES. / (916) 319-2092