BILL ANALYSIS Ó Senate Appropriations Committee Fiscal Summary Senator Kevin de León, Chair SB 731 (Steinberg/Hill) - Environment: California Environmental Quality Act and sustainable communities strategy. Amended: May 7, 2013 Policy Vote: EQ 8-0 Urgency: No Mandate: Yes Hearing Date: May 20, 2013 Consultant: Marie Liu This bill meets the criteria for referral to the Suspense File. Bill Summary: SB 731 makes various changes and clarifications to the California Environmental Quality Act (CEQA). Fiscal Impact: One-time costs of $73,000 for FY 13-14 and $109,000 annually thereafter from the General Fund for the Department of Justice for annual reporting requirements. One-time costs of $500,000 to $750,000 from the General Fund for the Office of Planning and Research (OPR) to develop threshold standards for noise, transportation, and parking impacts. Ongoing costs of approximately $120,000 for the creation of the Advisor on Renewable Energy Facilities within the Office of the Governor. Cost pressure of $30 million to the General Fund for local assistance grants for planning activities administered by the Strategic Growth Council Background: CEQA provides a process for evaluating the environmental effects of a project. Under CEQA, lead agencies with the principal responsibility for carrying out or approving a proposed discretionary project are required to prepare a negative declaration, mitigated negative declaration, or environmental impact report (EIR) for the project, unless the project is exempt. The purpose of CEQA is to identify significant environmental impacts, including impacts on archaeological resources, and then mitigate those impacts to the extent feasible. Proposed Law: This bill makes various changes to CEQA. Specifically, this bill would: Create the position of Advisor on Renewable Energy SB 731 (Steinberg) Page 1 Facilities within the Office of the Governor until January 1, 2017. Expands the CEQA exemption for a residential development project by qualifying the new information that may trigger a supplemental EIR being prepared. Allow a project applicant for a renewable energy project to present benefits onsite or offsite of the project including greenhouse gas emissions mitigations. Require public review of a finding of overriding conditions and specify the process for the public review. Require the lead agency to prepare an annual report on project compliance with mitigation measures. Require OPR to develop thresholds for significance for noise, transportation, and parking impacts for residential, mixed-used residential, or employment center projects within transit priority areas. Aesthetic impacts would be specified as not a significant impact. Allow the statute of limitations for an action against a public agency for noncompliance to be suspended, for a maximum of four years, by mutual agreement of the parties. Require a lead agency, at the request of a project applicant, to prepare a record of proceedings concurrently with the administrative process. Require the Attorney General (AG) to report annually to the Legislature with information on actions or proceedings brought under CEQA. This bill would also allow a $30 million appropriation in the annual Budget Act to the Strategic Growth Council to provide competitive grants to local agencies for planning activities. Staff Comments: This bill would require OPR to develop thresholds for significance for noise, transportation, and parking impacts. OPR estimates costs between $500,000 and $700,000 of General Fund for this activity. This would include 1.5 PY for legal counsel, 1 PY transportation planner, 0.5 PY noise specialist, 0.5 PY for an assistant planner, 0.3 PY for administrative support, and some travel costs. The Department of Justice estimates that the annual reporting provision in this bill would cost approximately $73,000 in FY 2013-14 and $109,000 annually thereafter. Staff notes that this bill would require the lead agency to SB 731 (Steinberg) Page 2 prepare a report on project compliance with mitigation measures. The bill specifies that the report shall be prepared annually. However, it does not specify at which point the report would no longer be needed. While some mitigation activities need ongoing monitoring, others do not. Staff recommends specifying when the lead agency would be released of the responsibility of filing the annual mitigation report. This bill contains language regarding an appropriation of $30 million to the Strategic Growth Council. However, the bill only authorizes the Legislature to make the appropriation in the annual Budget Act rather than actually making the appropriation. Furthermore, it is unclear whether this appropriation is meant to be an ongoing or one-year appropriation. Staff recommends that this provision be clarified.