BILL ANALYSIS Ó SB 731 Page 1 Date of Hearing: July 1, 2013 ASSEMBLY COMMITTEE ON NATURAL RESOURCES Wesley Chesbro, Chair SB 731 (Steinberg) - As Amended: May 24, 2013 SENATE VOTE : 39-0 SUBJECT : California Environmental Quality Act and sustainable communities strategy SUMMARY : Makes various clarifications and revisions to CEQA, including limiting the scope of review for certain residential, mixed-use, and commercial "employment center" projects near existing or planned transit stops. EXISTING LAW : 1)CEQA 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 an EIR to identify and analyze: a) Significant effects on the environment that would occur if the project is approved, unless the agency finds that alternatives to the project or mitigation measures would address the effects, or specific overriding economic, legal, social, technological, or other benefits of the project outweigh them. b) Cumulative impacts of a project when, considered in the context of environmental change occurring over time, the incremental effect is cumulatively considerable. 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 SB 731 Page 2 of 2002] 4)Establishes abbreviated CEQA review procedures for specified infill projects, where only specific or more significant effects on the environment which were not addressed in a prior planning-level EIR need be addressed. An EIR for such a project need not consider alternative locations, densities, and building intensities or growth-inducing impacts. Infill projects may include residential, retail, commercial, transit station, school, or public office building projects located within an urban area. Requires the Office of Planning and Research (OPR) to develop CEQA guidelines, including statewide standards to promote smart growth, reduction of greenhouse gas (GHG) emissions, reduction in water use, energy efficiency improvements and protection of public health. [SB 226 (Simitian), Chapter 469, Statutes of 2011] 5)Requires metropolitan planning organizations 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 specified incentives for the implementation of the strategies, including CEQA exemption or abbreviated review for eligible residential projects. [SB 375 (Steinberg), Chapter 728, Statutes of 2008] 6)Authorizes judicial review of CEQA actions taken by public agencies, following the agency's decision to carry out or approve the project. Challenges alleging improper determination that a project may have a significant effect on the environment, or alleging an EIR doesn't comply with CEQA, must be filed in the Superior Court within 30 days of filing of the notice of approval. 7)Establishes that a record of proceeding includes, but is not limited to, all application materials, staff reports, transcripts or minutes of public proceedings, notices, written comments, and written correspondence prepared by or submitted to the public agency regarding the proposed project. Establishes a procedure for the preparation, certification, and lodging of the record of proceedings. THIS BILL : SB 731 Page 3 1)Requires OPR, on or before July 1, 2014, to propose revisions to the CEQA Guidelines to establish thresholds of significance (to determine if an environmental effect justifies preparation of an EIR) for noise, transportation, and parking impacts of residential, mixed-use residential, or employment center projects within transit priority areas. Requires the thresholds to be based upon a project's proximity to a multi-modal transportation network, its overall transportation accessibility, and its proximity to a diversity of land uses. a) Defines "employment center project" as a project located on property zoned for commercial uses, with a floor area ratio of no less than 0.75, located within one-half mile of a major transit stop or high-quality transit corridor included in a regional transportation plan. b) Defines "transit priority area" as an area within one-half mile of a major transit stop that is either existing or planned, if the planned stop is scheduled to be completed with the 20-year planning horizon of a specified federal transportation plan. c) Provides that "aesthetic" impacts of projects subject to this section shall not be considered significant impacts on the environment for purposes of CEQA, while also stating that the authority of a lead agency to consider aesthetic impacts pursuant to local design review ordinances or other discretionary powers in not affected. (Section 9) 2)For purposes of the existing exemption for a residential development project that is consistent with a specific plan for which an EIR has been prepared, clarifies that "new information" which would invalidate the exemption does not include "argument, speculation, unsubstantiated opinion or narrative, evidence that is clearly inaccurate or erroneous, or evidence of social or economic impacts that do not contribute to, or are not caused by, physical impacts on the environment" (making the meaning of "new information" consistent with the existing meaning of "substantial evidence" in CEQA). (Section 5) 3)Requires, when a public agency finds that specific economic, legal, social, technological, or other considerations make infeasible the mitigation measures or alternatives identified in the EIR and finds that specific overriding economic, legal, SB 731 Page 4 social, technological, or other benefits of the project outweigh the significant effects on the environment, that the agency's findings be published for review for at least 15 days prior to approval of the project, and provides specified procedures for publication and transmittal to specified parties. (Section 7) 4)Requires a lead agency to prepare and publish an annual report on a project's compliance with mitigation measures adopted pursuant to CEQA. (Section 8) 5)Provides that the statute of limitations for bringing a CEQA lawsuit may be tolled for successive periods up to four years each by agreement of the parties (petitioner, public agency and real party in interest/applicant). (Section 10) 6)For certain projects and upon a project applicant's request, authorizes a lead agency to prepare concurrently with the administrative process the record of proceedings that would be used in a judicial challenge to an agency's action or decision under CEQA. Specifies procedures for preparation and publication of the record. Requires the project applicant to reimburse the lead agency for the costs incurred to prepare the record. Applies to projects determined to be of statewide, regional, or area-wide environmental significance; infill projects for which an EIR was certified for a city or county's planning level decision; a project implementing a sustainable communities strategy pursuant to SB 375; or any other project for which the lead agency consents to prepare the record of proceedings pursuant to the above requirements. (Sections 11-13) 7)Requires the Attorney General to report annually to the Legislature regarding CEQA lawsuits, including the parties involved, the type of action and violation alleged, and the disposition of the case. (Section 14) 8)Requires, when a court finds that a public agency has not complied with CEQA, that the court issue a peremptory writ of mandate specifying what action is necessary to comply. Requires the writ include only those mandates necessary to achieve compliance and only those project activities in noncompliance, and permits a writ to direct the agency to revise only those portions of a CEQA document found not to be in compliance, provided the non-compliant issues are severable SB 731 Page 5 from the remainder of the project. (Section 15) 9)Declares the intent of the Legislature to appropriate $30 million to the Strategic Growth Council to provide competitive grants to local agencies for planning activities related to implementing SB 375. (Section 16) 10)Authorizes the applicant for a renewable energy project to present to the public agency the onsite or offsite benefits of the project. (Section 6) 11)Establishes, until January 1, 2017, the position of "Advisor on Renewable Energy Facilities" in the office of the Governor. (Sections 3-4) 12)Declares the intent of the Legislature regarding various CEQA issues, some of which are addressed in the operative provisions of the bill and some of which are not. (Section 1) 13)Titles the bill the "CEQA Modernization Act of 2013". (Section 2) FISCAL EFFECT : According to the Senate Appropriations Committee: 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. 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 SB 731 Page 6 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's office, this bill is a comprehensive reform measure to strengthen CEQA's protection of the state's environment and residents while modernizing the law to aid California's economic growth. The author states, "today's bill is the result of months of discussion and negotiation with key representatives from the business, environmental, and organized labor communities." These changes were key issues identified by a CEQA working group of experts brought together by Senator Steinberg this past fall. The author states, "taken together they will help reduce litigation and delays from CEQA while protecting the legitimate uses of the statute." 2)Intent section doesn't match the bill. The purpose and relevance of the introductory intent section of this bill is unclear. Some of the intent subdivisions describe provisions which are not in the operative sections of the bill [i.e., subdivisions (a), (b) and (f)]. Others essentially restate provisions which are in the bill without adding any additional meaning [i.e., subdivisions (c), (d), (e) and (g)]. The author and the committee may wish to consider striking or revising these subdivisions so the intent section is more germane to rest of the bill. 3)Conclusion that projects near existing or planned transit stops are always "environmentally beneficial" is unsubstantiated. In Section 9, this bill labels a wide range of residential, mixed-use and commercial "employment center" projects as "environmentally beneficial" so long as the project may be located within one-half mile of a major transit SB 731 Page 7 stop, whether the stop is existing, or planned up to 20 years in the future. Apart from being labeled "environmentally beneficial" in the statute, the specific relief offered to these projects seems modest and a little vague. An eligible project's noise, transportation and parking impacts may be measured against statewide thresholds of significance established by OPR, rather than local standards, so long as the local agency does not elect to apply local standards. In addition, aesthetic impacts are specifically barred from consideration under CEQA. The idea that local noise, traffic and aesthetic impacts could in some cases be disregarded seems to be based on the proposition that these projects will occur on infill sites in urban areas, which are already impacted by noise and traffic, and that aesthetic impacts are subjective and not an environmental impact. However, the application of these provisions is not limited to infill sites, or even urban areas. Nor is it tied to compliance with the "smart growth" planning procedures of SB 375 or the environmental performance standards for infill projects adopted pursuant to SB 226. The type of residential or commercial projects that might be eligible is not defined, except that commercial projects must have a floor area ratio of least 0.75, which excludes low-intensity "sprawl" development (e.g. single story/large parking lot). These minimal conditions do not seem adequate to support the conclusion that these projects should always be spared from consideration of local noise and transportation impacts. The author and the committee may wish to consider additional limits on the application of this section, such as limiting to infill sites in urban areas, reducing the 20-year limit for planned transit stops, excluding parking impacts, and clarifying that aesthetic impacts do not include impacts on historical or cultural resources. 4)Where are the parties? Many of the parties that normally engage on CEQA issues, including developers, environmental advocates and labor unions, have not filed letters or otherwise provided substantive comments on the bill. A coalition of local government agencies criticize the bill for not doing enough to streamline CEQA, while imposing new burdens on lead agencies, and note that several of the bill's provisions essentially confirm existing law, while potentially adding confusion. Historic preservation advocates object to removing consideration of aesthetics for projects in transit priority areas because they view consideration of aesthetics in CEQA review as important to protect historic and cultural SB 731 Page 8 resources. 5)Technical and clarifying amendments. The author has a variety of technical and clarifying amendments, which may be presented at the hearing for adoption in conjunction with any committee amendments. These include revisions to the intent section to align it with the operative sections, relocation of Section 6's provisions from Section 21080 to 21081, assigning the CEQA litigation report to the California Research Bureau, rather than the Attorney General, and other minor/non-substantive corrections. 6)Double referral. This bill has been double-referred to the Assembly Local Government Committee. SB 731 Page 9 REGISTERED SUPPORT / OPPOSITION : Support City of Sacramento Civil Justice Association of California Opposition California Preservation Foundation Napa Design Partners Pasadena Heritage Public Works Coalition (unless amended): Association of California Healthcare Districts Association of California School Administrators California Association of Sanitation Agencies California Association of School Business Officials California Special Districts Association California State Association of Counties California State University Coalition for Adequate School Housing Los Angeles Unified School District Small School Districts' Association Rural County Representatives of California Three Valleys Municipal Water District Urban Counties Caucus Analysis Prepared by : Lawrence Lingbloom / NAT. RES. / (916) 319-2092