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 --