BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
                            Senator Bob Wieckowski, Chair
                                2015 - 2016  Regular 

          Bill No:          SB 389            Hearing Date:     April 29,  
          2015
           ----------------------------------------------------------------- 
          |Author:   |Berryhill                                             |
          |----------+------------------------------------------------------|
          |Version:  |4/6/2015                                              |
           ----------------------------------------------------------------- 
           ----------------------------------------------------------------- 
          |Urgency:  |No                     |Fiscal:      |Yes             |
           ----------------------------------------------------------------- 
           ----------------------------------------------------------------- 
          |Consultant|Joanne Roy                                            |
          |:         |                                                      |
           ----------------------------------------------------------------- 
          
          Subject:  Environmental quality:  the Sustainable Environmental  
          Protection Act

            ANALYSIS:                                                     
          
          Existing law:Under the California Environmental Quality Act  
          (CEQA), 

          1. Requires lead agencies with the principal responsibility for  
             carrying out or approving a proposed discretionary 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.).  If  
             there is substantial evidence, in light of the whole record  
             before a lead agency, that a project may have a significant  
             effect on the environment, the lead agency must prepare a  
             draft EIR.  (CEQA Guidelines §15064(a)(1), (f)(1)).

          2. Requires thresholds of significance adopted as part of a lead  
             agency's environmental review process to be developed through  
             a public review process.  A threshold of significance is "an  
             identifiable quantifiable, qualitative or performance level  
             of a particular environmental effect, non-compliance with  
             which means the effect will normally be determined to be  
             significant by the agency and compliance with which means the  
             effect normally will be determined to be less than  
             significant."  When adopting thresholds of significance, a  
             lead agency may consider thresholds of significance  







          SB 389 (Berryhill)                                      Page 2  
          of ?
          
          
             previously adopted or recommended by other public agencies or  
             recommended by experts.  (CEQA Guidelines §15064.7).

          This bill creates the Sustainable Environmental Protection Act  
          (SEPA), which does the following:

          1. Provides legislative intent that:

             A.    States CEQA was enacted in 1970 to maintain a quality  
                environment, and that in the 45 years following enactment  
                "Congress and the Legislature have each adopted more than  
                100 laws to protect environmental quality" in 17  
                environmental topical areas.

             B.    References various environmental laws, "all enacted  
                after 1970 . . ." while asserting that environmental laws  
                and regulations identify compliance obligations of general  
                applicability and provide greater clarity or are beyond  
                the ad hoc review process created by CEQA, and in enacting  
                these measures avoids "the sometimes conflicting and often  
                duplicative ad hoc environmental review and mitigation  
                requirements."

          2. Requires an environmental document prepared under CEQA to  
             disclose all applicable environmental laws, and defines  
             "applicable environmental laws" to be those referenced in the  
             measures legislative intent and meets certain requirements.

          3. Specifies that the above "disclosure obligations" are  
             intended to foster environmental and public participation in  
             the public review process required under CEQA or other  
             applicable laws, including the Ralph M. Brown Act.

          4. Limits environmental review under those topical areas listed  
             in the legislative intent.

          5. Prohibits a cause of action for noncompliance with CEQA  
             either:  

             A.    Relates to any topical area or criteria for which  
                compliance obligations are identified; 

             B.    Challenges the environmental document if:  

                (1)        The environmental document discloses compliance  







          SB 389 (Berryhill)                                      Page 3  
          of ?
          
          
                     with applicable environmental law;
                (2)        The project conforms with the use designation,  
                     density, or building intensity in an "applicable  
                     plan," as defined; and,
                (3)        The project approval incorporates applicable  
                     mitigation requirements into the environmental  
                     document.


          6. Provides that the above prohibition of causes of action does  
             not prohibit a cause of action to enforce compliance with  
             other existing local, state, and federal law.

          7. Provides that a lead agency is not required to evaluate  
             aesthetics under CEQA and that the lead agency is not  
             required to make findings on or relating to aesthetics unless  
             a project has potentially significant aesthetic impacts on an  
             official state scenic highway.

          8. Provides that SEPA does not change a lead agency's duty to  
             evaluate effects on Native American resources.

          9. Provides that SEPA applies only to projects for which the  
             lead agency or applicant has agreed to provide an annual  
             mitigation compliance report in electronic format.

          10.Provides that the above provisions do not preclude an agency  
             from requiring information or analysis, or imposing  
             conditions of approval under laws other than SEPA or CEQA.

          11.Requires that an environmental review document prepared  
             pursuant to CEQA is limited to considering only the  
             environmental topical areas listed in the legislative intent  
             and only to the extent those topical areas are relevant to  
             the project.

          Background
           
           1.CEQA:  The Environmental Review Process.  

          A CEQA environmental review document is a public document.  It  
            provides for transparency as well as an opportunity for  
            citizens to comment on the document and participate in the  
            environmental review process.  








          SB 389 (Berryhill)                                      Page 4  
          of ?
          
          
          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, then 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 an 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.

          2.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, but is not limited to, water  
            quality, surface and subsurface hydrology, land use and  
            agricultural resources, transportation and circulation, air  
            quality and greenhouse gas emissions, terrestrial and aquatic  
            biological resources, aesthetics, geology and soils,  
            recreation, public services and utilities such as water supply  
            and wastewater disposal, cultural resources such as historical  
            and archaeological resources, and tribal cultural resources.  

            Comments
          
          1. Purpose of Bill.  








          SB 389 (Berryhill)                                      Page 5  
          of ?
          
          
          The author states, "For over 40 years CEQA has protected our  
             environment, spurred informed planning, and assured public  
             input and involvement in community growth decisions.  These  
             aspects of CEQA - the ones that have helped preserve  
             California's natural resources and make it a better,  
             healthier place to raise our families - must be preserved.

          "California's environment is also protected by over 120 federal  
             and state laws - all passed since CEQA became law - and this  
             is where it gets ugly.  Crafty folks with motives other than  
             protecting the environment have figured out how to use CEQA  
             to stall projects, increase expenses for a competitor, or  
             negotiate better labor contracts.  This abuse has done little  
             to improve the environment but has done much to hinder  
             economic growth, waste money - lots of it - and delay or  
             outright kill necessary projects such as housing for seniors  
             and elementary school renovations.  Any honest reform of CEQA  
             absolutely must address these abuses.

          "SB 389 would integrate those laws with California's CEQA review  
             process.  This would eliminate the ability to challenge  
             already adopted environmental standards or endlessly  
             re-challenging approved plans through frivolous lawsuits."

          2. Thresholds of Significance and Regulatory Standards.  

          Under current law, a threshold of significance is "an  
             identifiable quantifiable, qualitative or performance level  
             of a particular environmental effect, non-compliance with  
             which means the effect will normally be determined to be  
             significant by the agency and compliance with which means the  
             effect normally will be determined to be less than  
             significant."

          Under SB 389, Section 21202(a)(1) provides that "compliance with  
             the applicable standards for impacts that occur or might  
             occur as a result of approval of the project shall be the  
             exclusive means of evaluating and mitigating environmental  
             impacts under CEQA regarding the subject of that law,  
             notwithstanding any other provision of law."

          Simply relying on a regulatory standard undercuts the value and  
             benefits of analyzing the multiple layers and potential  
             complexities of a project in a comprehensive manner as  
             provided and intended by the CEQA environmental review  







          SB 389 (Berryhill)                                      Page 6  
          of ?
          
          
             process.  For example, in Kings County Farm Bureau v. City of  
             Hanford, 221 Cal. App. 3d 692, 270 Cal. Rptr. 650 (1990), the  
             court found that a lead agency incorrectly determined that  
             air quality impacts would be less than significant when the  
             smokestack emissions for a proposed cogeneration plant would  
             comply with applicable air quality regulations and standards,  
             because the agency failed to consider "on-site" (smokestack)  
             and "secondary" (train and truck traffic to deliver coal, the  
             proposed fuel) emissions together in assessing the  
             significance of the overall project's impacts.

          The court came to a similar conclusion in Riverwatch v. San  
             Diego County (Palomar Aggregates), 76 Cal. App. 4th 1428, 91  
             Cal. Rptr. 2d 322 (1999), where the court held that an EIR  
             for a proposed rock quarry failed to evaluate all air quality  
             impacts resulting from the quarry operation.  The county  
             believed emission levels would meet San Diego Air Pollution  
             Control District (APCD) standards, and the court found that  
             the EIR considered only the quarry process emissions and not  
             particulate emissions caused by drilling, handling, storage,  
             and transport of the rock and sand.  While the APCD standards  
             were for the stationary source (quarry), CEQA requires the  
             EIR to evaluate significance of all project-related pollution  
             emissions.

          3. Project Impact "Environmental Topical Areas".

          SB 389 specifies that the CEQA Guidelines currently provide that  
             project impacts be evaluated based on 18 topics.  Nothing in  
             current law limits CEQA to 18 topic areas.  It seems that the  
             author is referencing Appendix G of the CEQA Guidelines, the  
             "environmental checklist form."

          It is noteworthy, however, that Appendix G is prefaced by the  
             following:

               NOTE: The following is a sample form and may be tailored to  
               satisfy individual agencies' needs and project  
               circumstances. It may be used to meet the requirements for  
               an initial study when the criteria set forth in CEQA  
               Guidelines have been met. Substantial evidence of potential  
               impacts that are not listed on this form must also be  
               considered. The sample questions in this form are intended  
               to encourage thoughtful assessment of impacts, and do not  
               necessarily represent thresholds of significance.







          SB 389 (Berryhill)                                      Page 7  
          of ?
          
          

             Not only does SB 389 freeze these 178 topics in statute,  
             rather than allowing analysis of any other potential  
             significant impacts, this measure also precludes CEQA from  
             filling in the gaps in existing laws.  CEQA also addresses  
             other matters, such as cumulative impacts, direct and  
             indirect impacts, and mandatory findings of significance.

             Emerging issues addressed under CEQA may also precede a  
             particular state or federal law.  For example, the analysis  
             of greenhouse gas (GHG) impacts under laws like CEQA, and its  
             federal counterpart National Environmental Policy Act (NEPA),  
             did not commence with the passage of the California Global  
             Warming Solutions Act of 2006 (CGWSA).

             Guidance for addressing GHG issues under NEPA for federal  
             environmental documents was provided October 8, 1997.   
             According to the Chairman of the Council on Environmental  
             Quality in 1997, "Because of the potentially substantial  
             health and environmental impacts associated with climate  
             change, the Council on Environmental Quality is issuing this  
             guidance today calling on federal agencies to consider, in  
             the context of the NEPA process, both how major federal  
             actions could influence the emissions and sinks of greenhouse  
             gases and how climate change could potentially influence such  
             actions."

             In 2003, in Border Power Plant Working Group v. U.S.  
             Department of Energy (S.D. Cal 2003) 20 F.Supp2d 997,  
             1028-1029, a federal district court found that NEPA requires  
             consideration of potential environmental impacts from a  
             proposed natural gas turbine's generation of carbon dioxide,  
             a GHG, and rejected the argument that consideration of this  
             impact is not required.

             Former Attorney General Bill Lockyer also commented on the  
             lack of analysis of GHG issues in environmental documents  
             prior to enactment of the CGWSA.  For example, in a letter  
             dated March 30, 2006, regarding the Orange County  
             Transportation Authority 2006 Long-Range Transportation Plan  
             Draft EIR, the Attorney General stated, "Despite the Plan's  
             heavy reliance on vehicular travel and improvements to  
             freeways, roads and streets, and the acknowledged increase in  
             vehicle travel that the Plan will encourage, the DEIR never  
             analyzes one of the most important environmental impacts of  







          SB 389 (Berryhill)                                      Page 8  
          of ?
          
          
             vehicular emissions - greenhouse gases and resulting climate  
             change." 

             SB 97 (Dutton), Chapter 185, Statutes of 2007, subsequently  
             required the Office of Planning and Research, on or before  
             July 1, 2009, to prepare, develop, and transmit to the  
             Resources Agency amendments to the CEQA Guidelines to assist  
             public agencies in the mitigation of GHG's or the effects of  
             GHG's as required under CEQA, including the effects  
             associated with transportation and energy consumption, and  
             required the Resources Agency to certify and adopt those  
             guidelines by January 1, 2010.

          4. "Environmental Topical Areas":  One of These Things is Not  
             Like the Others.

          17 of the "environmental topical areas" in the bill include a  
             variety of environmental factors such as water quality, air  
             quality, geology, or transportation.  An environmental review  
             analyzes whether a project will have a significant impact on  
             that issue area, like a construction project may have a  
             significant impact on traffic.  

          SB 389 adds an 18th environmental topical area - "[m]andatory  
             findings of significance".  This is an action taken by a lead  
             agency; it is not a subject or issue area to be analyzed.   
             The action is to require a lead agency to find that a project  
             may have a significant effect on the environment thereby  
             requiring an EIR to be prepared for a project. 

          How is "mandatory findings of significance" a substantive issue  
             area like the others listed in the bill?

          5. "Environmental Topical Areas":  Tribal Cultural Resources is  
             Missing.

          SB 389 specifies "environmental topical areas" in an  
             environmental review that are subject to the provisions of  
             this bill.  However, this bill does not include the latest  
             environmental topical area added to the CEQA statute last  
             year by AB 52 (Gatto), Chapter 532, Statutes of 2014, which  
             relates to tribal cultural resources.  

          Tribal cultural resources may include sites, features, places,  
             cultural landscapes, sacred places, and objects with cultural  







          SB 389 (Berryhill)                                      Page 9  
          of ?
          
          
             value to a California Native American tribe or a resource  
             determined by the lead agency, in its discretion and  
             supported by substantial evidence, to be significant, as  
             specified.  

          Is it an oversight or the intent of the author to not include  
             tribal cultural resources in the provisions of this bill?

          6. Overriding Fair Argument Standard.  

          A discretionary project, which is not exempt from CEQA, requires  
             a Lead Agency to prepare an initial study to determine  
             whether the project may have a significant adverse effect on  
             the environment.  If there is substantial evidence, in light  
             of the whole record before a lead agency, that a project may  
             have a significant effect on the environment, the lead agency  
             must prepare a draft EIR.  If not, then a negative  
             declaration or mitigated negative declaration is appropriate.  
              This is known as the fair argument standard.  In other  
             words, a negative declaration is inappropriate if it can be  
             "fairly argued" that the project may cause significant  
             environmental impacts and therefore an EIR is appropriate. 

          SB 389 overrides the fair argument standard because under this  
             measure "compliance with the applicable standards for impacts  
             that occur or might occur as a result of approval of the  
             project shall be the exclusive means of evaluating and  
             mitigating environmental impacts under CEQA regarding the  
             subject of that law, notwithstanding any other provision of  
             law."  Also, SB 389 prohibits a cause of action for  
             noncompliance with CEQA if the environmental document  
             discloses compliance with an applicable environmental law  
             pertaining to a topical area; the project conforms with the  
             use designation, density, or building intensity in an  
             applicable plan; and, the project approval incorporates  
             applicable mitigation requirements into the document.

          This issue was addressed when Communities for A Better  
             Environment, Environmental Protection Information Center, and  
             Desert Citizens Against Pollution challenged several 1998  
             revisions to the CEQA Guidelines.  The California Building  
             Industry Association was allowed to intervene in the action.   
             Communities for a Better Environment v. California Resources  
             Agency, 103 Cal. App. 4th 98, 126 Cal. Rptr. 441 2d (2002).








          SB 389 (Berryhill)                                      Page 10  
          of ?
          
          
          The trial court invalidated several Guidelines sections,  
             including a provision where a lead agency is directed to  
             determine that an effect is not significant, regardless of  
             whether other substantial evidence would support a fair  
             argument that the effect may be environmentally significant,  
             if a proposed project has an environmental effect that  
             complies with a regulatory standard as defined under the  
             Guidelines provision.

          On appeal, the Court of Appeal agreed with the trial court on  
             this matter:  "The direction [of this Guidelines change]  
             relieves the agency of a duty it would have under the fair  
             argument approach to look at evidence beyond the regulatory  
             standard, or in contravention of the standard, in deciding  
             whether an EIR must be prepared.  Under the fair argument  
             standard, any substantial evidence supporting a fair argument  
             that a project may have a significant effect would trigger  
             the preparation of an EIR.  A well-known CEQA treatise  
             recognized this dilemma as well, stating:  '[S]ubdivision (h)  
             . . . appears to dispense with the traditional 'fair  
             argument' standard otherwise applicable to the decision  
             whether to prepare a[n] . . . EIR . . . Notably, where  
             existing regulatory standards, as defined, address a  
             particular category of impact, the lead agency need not treat  
             the impact as potentially significant whenever any  
             substantial evidence in the record supports a conclusion.'"

          7. Prohibiting CEQA Cause of Action for Conformance with Certain  
             Planning Matters.  
                                                            
          SB 389 also prohibits a cause of action under CEQA if the  
             project conforms to the use designation, density, or building  
             intensity in a land use plan or was included in another  
             applicable plan [as identified under the measure] and the  
             lead agency incorporates applicable mitigation requirements  
             into the environmental document.

          Under SB 389, an "applicable plan" is either:  a) a land use  
             plan, such as a general plan, specific plan, or sustainable  
             communities strategy that establishes use designations,  
             densities, and building intensities; or b) a plan to improve  
             or maintain public facilities or infrastructure to be funded  
             in whole or in part by public funds and is adopted by a  
             local, regional, or state agency.








          SB 389 (Berryhill)                                      Page 11  
          of ?
          
          
          A general plan, however, addresses far more issues than simply  
             the "use designation, density, or building intensity."  A  
             general plan must include seven mandated elements, including  
             land use, circulation, housing, conservation, open space,  
             noise, and safety elements.  (Government Code §65302).  Yet,  
             SB 389 prohibits a cause of action under CEQA if a project  
             merely conforms to the use designation, density, or building  
             intensity in the plan and complies with "applicable  
             mitigation measures" in the environmental document for that  
             plan.

          An "applicable plan" under SB 389 could also include a capital  
             facilities plan.  Environmental impacts addressed under CEQA  
             for such a plan may be quite limited, and thereby restrict  
             environmental analysis of subsequent projects conforming to  
             that plan and any mitigation measures needed for subsequent  
             projects.

          This provision could apply to an outdated plan with inadequate  
             CEQA analysis and ineffective mitigation measures, which also  
             fails to consider changed conditions and more recent  
             circumstances such as hazardous wastes and climate change.   
             This provision would also enable use of outdated plans that  
             are inconsistent with a recent general plan or sustainable  
             communities plan under SB 375, for example, or a plan with a  
             certified environmental document that was challenged and  
             found to be inadequate.

            Related/Prior Legislation

          SB 834 (Huff, 2014), which created the Sustainable Environmental  
          Protection Act, and made several substantial changes to CEQA.   
          SB 834 died in the Senate Committee on Environmental Quality.
          
          SB 787 (Berryhill, 2013), which created the Sustainable  
          Environmental Protection Act, and made several substantial  
          changes to CEQA.  SB 787 failed in the Senate Committee on  
          Environmental Quality (2-7).  

          SB 1380 (Rubio, as amended March 29, 2012 and April 10, 2012),  
          would have enacted the California Public Health and  
          Environmental Standards Act, which is substantially similar to  
          SEPA as proposed in SB 389.  SB 1380 died on the Assembly Floor.
          
          SOURCE:                    Author  







          SB 389 (Berryhill)                                      Page 12  
          of ?
          
          

           SUPPORT:               
          None on file  

           OPPOSITION:    
          None on file  

           DOUBLE REFERRAL:    

          If this measure is approved by the Senate Environmental Quality  
          Committee, the do pass motion must include the action to  
          re-refer the bill to the Senate Judiciary Committee.  

           
                                          
                                      -- END --