BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
                              Senator Wieckowski, Chair
                                2015 - 2016  Regular 
           
          Bill No:            AB 1886
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          |Author:    |McCarty                                              |
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          |Version:   |5/11/2016              |Hearing      |June 29, 2016   |
          |           |                       |Date:        |                |
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          |Urgency:   |No                     |Fiscal:      |No              |
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          |Consultant:|Joanne Roy                                           |
          |           |                                                     |
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          SUBJECT:  California Environmental Quality Act:  transit priority  
          projects.

            ANALYSIS:
          
          Existing law:  
          
          1) Requires lead agencies with the principal responsibility for  
             carrying out or approving a proposed project to prepare a  
             negative declaration, mitigated 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).   
             (Public Resources Code §21000 et seq.).  

          2) Requires metropolitan planning organizations (MPOs) to include  
             a sustainable communities strategy (SCS), in their regional  
             transportation plans, or an alternative planning strategy  
             (APS), for the purpose of reducing greenhouse gas (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  
             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. 


             a)    Requires a "transit priority project" to meet the  







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                following conditions:


              i)       Contain at least 50% residential use;


              ii)      Provide at least 20 dwellings per acre; and


              iii)     Be within one-half mile of a major transit stop or  
                   high-quality transit corridor.  To qualify, all parcels  
                   within the project must have no more than 25% of their  
                   area farther than one-half mile from transit and not  
                   more than 10% of the residential units or 100 units,  
                   whichever is less, may be farther than one-half mile  
                   from transit.


             b)    Defines "major transit stop" as a site containing an  
                existing rail transit station, a ferry terminal served by  
                either a bus or rail transit service, or the intersection  
                of two or more major bus routes with a frequency of service  
                interval of 15 minutes or less during the morning and  
                afternoon peak commute periods.


             c)    Defines "high-quality transit corridor" as a corridor  
                with fixed route bus service with service intervals no  
                longer than 15 minutes during peak commute hours.


          3) For a transit priority project to meet the requirement for an  
             abbreviated review under the SCS provisions of CEQA, requires  
             all parcels within the project have no more than 25% of their  
             area be located farther than one-half mile from a major  
             transit stop or high-quality transit corridor.


          This bill:  

          For a transit priority project to meet the requirement for an  
          abbreviated review under the SCS provisions of CEQA, revises the  
          definition of "transit priority project" by increasing the  
          percentage, from 25% to 50%, of the project area that may be  








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          farther than one-half mile from a major transit stop or  
          high-quality transit corridor.

            Background
          
          1) Background on CEQA.  

             a)    Overview of CEQA process.  CEQA provides a process for  
                evaluating the environmental effects of a project, and  
                includes statutory exemptions, as well as categorical  
                exemptions in the CEQA guidelines.  If a project is not  
                exempt from CEQA, an initial study is prepared to determine  
                whether a 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.

             If a mitigation measure would cause one or more significant  
                effects in addition to those that would be caused by the  
                proposed project, the effects of the mitigation measure  
                must be discussed but in less detail than the significant  
                effects of the proposed project.

             b)    What is analyzed in an environmental review?  Pursuant  
                to CEQA, an environmental review analyzing the significant  
                direct and indirect environmental impacts of a proposed  
                project may include water quality, surface and subsurface  
                hydrology, land use and agricultural resources,  
                transportation and circulation, air quality and greenhouse  
                gas emissions, terrestrial and aquatic biological  








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                resources, aesthetics, geology and soils, recreation,  
                public services and utilities such as water supply and  
                wastewater disposal, and cultural resources.  The analysis  
                must also evaluate the cumulative impacts of any past,  
                present, and reasonably foreseeable projects/activities  
                within study areas that are applicable to the resources  
                being evaluated.  A study area for a proposed project must  
                not be limited to the footprint of the project because many  
                environmental impacts of a development extend beyond the  
                identified project boundary.  Also, CEQA stipulates that  
                the environmental impacts must be measured against existing  
                physical conditions within the project area, not future,  
                allowable conditions.

             c)    CEQA provides hub for multi-disciplinary regulatory  
                process.  CEQA assists in moving a project through the  
                multi-disciplinary, regulatory process because responsible  
                agencies may rely on the lead agency's environmental  
                documentation in acting on the aspect of the project that  
                requires its approval and must prepare its own findings  
                regarding the project.  A variety of issues, many of which  
                involve permitting and/or regulatory program requirements,  
                should be coordinated and analyzed together as a whole.   
                CEQA provides a comprehensive analysis of a project's  
                impacts in those subject areas. 

          2) Infill development.  "Infill development" occurs in already  
             built-up areas with existing transportation and utility  
             infrastructure, often repurposes or replaces existing  
             buildings, parking lots, or other impervious areas, and adds  
             homes and/or businesses near the center of cities and towns.   
             Examples of infill project locations include a disused parking  
             lot, an old commercial property, or a former industrial site.   
             Infill development is considered a vital strategy for  
             efficient growth. 

          Infill builds within an existing footprint of development, which  
             can reduce development pressure on outlying areas, helping to  
             safeguard lands that serve important ecological functions and  
             preserve open space and prevent conversion of agricultural  
             land; can reduce the amount that people drive, improving air  
             quality and reducing GHG emissions; and can lead to the  
             cleanup and reuse of formerly economically viable but now  
             abandoned sites, including those contaminated with hazardous  








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             substances.  Also, by locating new developments near  
             population centers and amenities, communities can take  
             advantage of existing water, sewer, and transportation  
             systems, avoiding the cost of installing expensive new  
             infrastructure.  

          According to the US Environmental Protection Agency (US EPA),  
             several trends point to a sustained increase in demand for  
             infill development and a market opportunity for developers.   
             Consumer preferences for the amenities that infill locations  
             offer are likely to grow as changing demographics affect the  
             housing market.  In the next couple of decades, the needs and  
             preferences of aging baby boomers, new households, and  
             one-person households will drive real estate market trends -  
             and infill locations are likely to attract many of these  
             people.  As more people choose to live in infill  
             neighborhoods, employers are following, and vice versa.  Many  
             corporations are moving to infill locations, in part because  
             they recognize the competitive advantages of being closer to  
             the central city.  (US EPA, "Smart Growth and Economic  
             Success:  Investing in Infill Development," February 2014.)

          The Strategic Growth Council (SGC), as a part of its broader  
             legislative mandate, has identified "infill" development as an  
             important strategy for achieving AB 32 greenhouse gas (GHG)  
             emissions reduction targets.  While contributing to reductions  
             of GHG emissions, achieving infill development can confer a  
             broad range of benefits, such as increased economic vitality  
             of the state's urban centers; decreased consumption of energy,  
             water, and other natural resources; reduced conversion of  
             farmland and natural habitat areas; and the opportunity for  
             more efficient infrastructure investment and delivery of  
             municipal services.

          Over the past several years, MPOs have been preparing SCS plans  
             mandated by SB 375 (Steinberg, Chapter 728, Statutes of 2008)  
             through regional planning efforts.  As part of these planning  
             efforts, MPOs have developed new regional and local population  
             and employment forecasts that envision increasingly clustered  
             future regional land use patterns that likely will provide GHG  
             emissions reductions benefits. 

          3) Infill development and CEQA.  Several changes have been made  
             to CEQA to encourage infill projects, including the following:








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             a)    SB 743.  SB 743 (Steinberg, Chapter 386, Statutes of  
                2013) made several changes to CEQA for projects located in  
                areas served by transit (i.e. transit-oriented development  
                (TOD)).  Among the changes, SB 743 directed the Governor's  
                Office of Planning and Research (OPR) to develop a new  
                approach for analyzing the transportation impacts under  
                CEQA.  SB 743 also created a new exemption for certain  
                projects that are consistent with a Specific Plan and  
                eliminates the requirement to evaluate aesthetic and  
                parking impacts of a project if the project is a  
                residential, mixed-use residential, or employment center  
                project located on an infill site within a transit priority  
                area.


             b)    SB 226.  SB 226 (Simitian, Chapter 469, Statutes of  
                2011) 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 to be  
                addressed.  An EIR for such a project need not consider  
                alternative locations, densities, and building densities or  
                growth inducing impacts.  Any unmitigated effects specific  
                to the project can be analyzed in an "infill" EIR that  
                limits review only to those impacts without the need to  
                analyze alternatives or growth-inducing impacts.  SB 226  
                required OPR to develop CEQA Guidelines for purposes of  
                this bill.



             In order for infill projects to qualify for the CEQA benefits  
                in SB 226, they must meet statewide performance standards  
                developed by OPR.  The statute required that these  
                performance standards promote the state's GHG emissions  
                reductions goals in AB 32 (Núñez, Pavley) and SB 375  
                (Steinberg), state planning priorities, water conservation  
                and energy efficiency standards, transit-oriented  
                development policies, and public health.
             c)    SB 375.  SB 375 (Steinberg, Chapter 728, Statutes of  
                2008) established the Sustainable Communities and Climate  
                Protection Act of 2008.  SB 375 directed the California Air  








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                Resources Board (ARB) to set regional targets for reducing  
                GHG emissions, setting up a "bottom up" approach to ensure  
                that cities and counties are involved in the development of  
                regional plans to achieve those targets.  SB 375 tied  
                together the regional allocation of housing needs and  
                regional transportation planning in an effort to reduce GHG  
                emissions from motor vehicle trips.  According to ARB,  
                transportation accounts for approximately 40% of GHG  
                emissions, with cars and light trucks making up a  
                significant majority of those emissions (30% overall).  

             SB 375 established a collaborative process between regional  
                and state agencies to set regional GHG reduction targets,  
                and provided CEQA incentives for development projects that  
                are consistent with a regional plan that meets those  
                targets.  SB 375 has three major components: (i) Using the  
                regional transportation planning process to achieve  
                reductions in GHG emissions consistent with AB 32 goals;  
                (ii) Offering CEQA incentives to encourage projects that  
                are consistent with a regional plan that achieves GHG  
                emission reductions; and, (iii) Coordinating the regional  
                housing needs allocation process with the regional  
                transportation process while maintaining local authority  
                over land use decisions.           

             d)    SB 1925.  SB 1925 (Sher, Chapter 1039, Statutes of 2002)  
                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.


            Comments
          
          1) Purpose of Bill.  According to the author, "Infill housing  
             development, is the key to creating sustainable communities  
             across California, unfortunately the vast majority of  
             California cities are unable to take advantage of efforts to  
             promote infill.  This bill will expand the number of cities,  
             like Sacramento, which can promote infill development."

          2) Is CEQA a major hindrance to infill development?  








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             a)    From whose point of view?  Ethan Elkind, Director of  
                Climate Change and Business, with a  joint appointment at  
                UC Berkeley School of Law and UCLA School of Law, states,  
                "[W]hen it comes to the big factors stopping infill, at  
                least in California, CEQA ranks below a host of other  
                barriers, such as local zoning codes that outlaw infill,  
                lack of infrastructure investment, high construction costs,  
                tax incentives that favor strip malls over housing, and  
                poor neighborhood schools.

              "So why do infill developers make such a big deal about CEQA?  
                 My theory is that individual developers will be focused  
                solely on their own projects, and if CEQA is a threat to  
                their investment and risk-taking, they will understandably  
                become CEQA haters.  But perhaps this project-based focus  
                distorts the view of the larger forces that stifle business  
                opportunities throughout the state, such as in the suburb  
                with the major rail line that won't zone for more downtown  
                development or the rundown neighborhood near jobs and  
                services that needs new infrastructure.  Ending CEQA  
                tomorrow won't magically lift these barriers and create new  
                infill opportunities, and it won't convince local  
                communities to support new downtown development."  (Ethan  
                Elkind, "Why Developers Shouldn't Blame Environmental  
                Review for the Lack of Infill," Legal Planet:  Insight &  
                Analysis:  Environmental Law and Policy, September 24,  
                2012).

             b)    OPR survey shows CEQA is not a significant barrier to  
                infill projects.  OPR's "2012 Annual Planning Survey  
                Results" asked city and county planners to explain the  
                primary barriers their jurisdictions have experienced to  
                implementing infill projects. The chart from the survey  
                (below) shows the relative unimportance of CEQA as a  
                barrier to infill development.  Instead, infrastructure  
                constraints, lot issues, lack of funding, community  
                opposition, and the economy, among others ranked higher.  














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               Based on 238 responses, 25% of jurisdictions reported that  
               infrastructure constraints were a primary barrier to  
               implementing infill projects.  Just under 25% reported that  
               they had problems with assembling parcels of the right size  
               and configuration for infill development.  Only 4% of  
               respondents identified CEQA as a barrier.  





             A variety of factors affect the production of infill housing  
             and commercial land uses.  Notable infill development  
             constraints include market conditions, physical conditions,  
             infrastructure (e.g., sewer, water, streets), and other  
             community conditions (e.g., schools, public facilities).  In  
             places where market demand, physical conditions, existing  
             infrastructure, and community conditions are problematic,  
             current funding and financing options are commonly inadequate,  
             which hinders local and regional agencies' ability to  
             implement infill development plans.  For the assorted issues  
             mentioned above that may hinder infill development, this bill  
             would not alleviate any of them.



          3) Substantial changes made to CEQA for infill projects - Need  
             time to see how they work.  As shown above in Background #3,  
             substantial changes have been made to CEQA in recent years for  
             infill projects.  Some of which necessitate changes to the  
             CEQA Guidelines which can take a fair amount of time to go  
             through OPR's vetting process and the Administrative  
             Procedures Act. 

          For example, SB 226, which was enacted in 2011, required OPR to  
             revise the CEQA Guidelines.  The process of developing the  
             guidelines included extensive public outreach efforts such as  
             hundreds of individual meetings and conversations with  
             stakeholders, presentations at numerous conferences, three  
             public workshops, and two rounds of public review on OPR's  








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             preliminary proposals.  The revised CEQA Guidelines took  
             effect in February 2013.  

          In addition, SB 743 required OPR to amend the CEQA Guidelines to  
             provide an alternative to LOS for evaluating transportation  
             impacts.  Particularly within areas served by transit, those  
             alternative criteria must "promote the reduction of greenhouse  
             gas emissions, the development of multimodal transportation  
             networks, and a diversity of land uses (PRC §21099(b)(1)).   
             Measurements of transportation impacts may include vehicle  
             miles traveled, vehicle miles traveled per capita, automobile  
             trip generation rates, or automobile trips generated.  Once  
             the CEQA Guidelines are amended to include those alternative  
             criteria, auto delay will no longer be considered a  
             significant impact under CEQA. SB 743 also amended congestion  
             management law to allow cities and counties to opt out of  
             level of service standards within certain infill areas.  Aside  
             from changes to transportation analysis, SB 743 also included  
             several changes to CEQA that apply to transit oriented  
             developments including aesthetics and parking.  OPR is  
             currently working on updating the CEQA Guidelines to implement  
             SB 743.

          Considering the many changes made to CEQA over the recent years  
             to abbreviate the environmental review process for infill  
             projects, and the time it takes to update the CEQA Guidelines  
             accordingly, the Committee may wish to consider whether it  
             would be prudent to allow more time for these changes to come  
             to fruition and see how infill projects benefit from them  
             before amending CEQA again. 

          4) Walkability and 50% beyond one-half mile.  According to the US  
             EPA, infill sites are usually more walkable than other areas  
             because many older parts of cities were built when most people  
             moved around by foot, and many destinations are within easy  
                                                                   reach.  For purposes of infill, one-half mile is generally  
             considered the limit for walkability distance.  

          Current law allows a maximum of 25% of the project area be  
             located beyond one-half mile of a major transit stop or  
             high-quality transit corridor in order to qualify for limited  
             CEQA review or exemption for transit priority projects.  This  
             bill would double the amount to 50% of project area being  
             allowed to be located outside of one-half mile from a major  








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             transit stop for the limited CEQA review.

          Project areas are not always simple rectangles and can be oddly  
             shaped, such as narrow and long.  Depending on the shape of  
             the project area, 50% of a project area could go well beyond  
             one-half mile of a major transit stop or high-quality transit  
             corridor.

          Also, there are no considerations made for other factors to  
             determine whether the project area is a walkable distance from  
             a major transit stop.  For whom is this project area, beyond  
             the one-half mile point, walkable - Is it easily walkable for  
             a senior citizen or a person with a small child and carrying  
             groceries?  Also, are there steep hills to climb?  Is walking  
             beyond the one-half mile mark unbearable in 100-plus degree  
             heat?  A question arises as to whether it is appropriate to  
             label a project as a "transit priority project" if up to half  
             of the project area is not within walking distance to a major  
             transit stop or high-quality transit corridor.
          
          5) Losing sight of the the bigger purpose.  Studies by the  
             California Department of Transportation, the US EPA, and the  
             Metropolitan Transportation Commission have found that  
             focusing development in areas served by transit can result in  
             local, regional, and statewide benefits, including;

                       Increased transportation choices
                       Increased public safety
                       Increased transit ridership
                       Reduced vehicle miles traveled
                       Increased household disposable income
                       Reduced air pollution and energy consumption
                       Conservation of natural resources and open space
                       Increased economic development
                       Increased affordable housing
                       Reduced local infrastructure costs.

             The purpose of providing special treatment to transit priority  
             projects is to encourage development in areas served by  
             transit and achieve the benefits noted above.   How does  
             allowing half of a project area to be located beyond walking  
             distance from a major transit stop contribute to those  
             benefits?  For example, the people living in housing or  
             working in businesses located in the development but beyond  








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             walking distance from a major transit stop - How are they  
             served by transit?  Will they likely drive to where they need  
             to go rather than walk to the major transit stop because it is  
             beyond walking distance even though the project is labeled as  
             a "transit priority project"?  How does calling this project a  
             "transit priority project" benefit the environment?  At what  
             point does lowering the standard render the term, "transit  
             priority project," meaningless?

             If up to 50% of a project area is farther than one-half mile  
             away from a major transit stop or high-quality transit  
             corridor, would that not potentially increase the number of  
             vehicle miles traveled, air pollution, and local  
             infrastructure costs than the current requirement of at least  
             75% of the project is located within that one-half mile range?

             To double the percentage of project area to 50% that is  
             permitted to be farther than a half-mile away from a major  
             transit stop or high-quality transit corridor, and still be  
             considered a "transit priority project," a question arises as  
             to whether this bill loses sight and falls short of the  
             long-term goals and environmental benefits of being a "transit  
             priority project" and served by transit.

          1) CEQA litigation.  It is not unusual for certain interests to  
             blame CEQA lawsuits for causing problems to a project.   
             However, it should be noted that the only tool for enforcing  
             CEQA is litigation.  Those citing CEQA litigation as a problem  
             do not indicate the result of that litigation.  For example,  
             were significant impacts that were not evaluated in the  
             initial document ultimately addressed?  What would have been  
             the result if those impacts had not been mitigated (e.g.,  
             flooding, exposure of people to hazards, inadequate public  
             services, congestion)?

          The total number of CEQA cases filed averages about 200 cases per  
             year statewide and make up approximately 0.02% of 1,100,000  
             civil cases filed annually in California.  

          The California Attorney General's office conducted a case study  
             of CEQA challenges in the City and County of San Francisco  
             from July 2011 through December 2011 and found that 18  
             lawsuits were filed out of 5,203 projects considered under  
             CEQA. 








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          According to the Natural Resources Defense Council, a review of  
             CEQA challenges in the City of Los Angeles from January 2011  
             through July 20, 2012, shows that of 1,182 projects reviewed  
             under CEQA, 18 were challenged, which is a litigation rate of  
             1.5%.

             Although certain interests believe CEQA litigation to be a  
             swathing impediment to some projects, the numbers above seem  
             to indicate otherwise.  And if a project is the subject of  
             litigation, perhaps the cause of action has merit and ensures  
             compliance with the law.  The volume of CEQA litigation is low  
             considering the thousands of projects subject to CEQA each  
             year as well as the volume of civil litigation in general  
             statewide.  

          2) Conclusion.  Increasing infill development, particularly  
             projects served by transit, is a laudable goal.  Some  
             environmental benefits could include reduced vehicle miles  
             traveled, air pollution, and energy consumption, and  
             conservation of natural resources and open space.  However, if  
             a project is to be considered transit-oriented, is it  
             reasonable to allow up to half of the project area to not be  
             served by transit?  In such a case, are the environmental  
             benefits fully achieved?  If not, the Committee may wish to  
             consider whether such a project should be allowed to receive  
             the same special treatment under CEQA meant for  
             transit-oriented projects where a significant majority of the  
             project area is served by transit.
          
            SOURCE:                    Author  

           SUPPORT:               

          California Association of Realtors
          California Building Industry Association
          California Transit Association
          San Francisco Bay Area Rapid Transit District
          Southwest California Legislative Council  

           OPPOSITION:    

          California League of Conservation Voters
          Natural Resources Defense Council








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          Sierra Club California   
                                           
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