BILL ANALYSIS                                                                                                                                                                                                    



          SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
                              Senator Wieckowski, Chair
                                2015 - 2016  Regular 
           
          Bill No:            SB 734
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          |Author:    |Galgiani                                             |
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          |Version:   |6/21/2016              |Hearing      |8/10/2016       |
          |           |                       |Date:        |                |
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          |Urgency:   |Yes                    |Fiscal:      |Yes             |
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          |Consultant:|Joanne Roy                                           |
          |           |                                                     |
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          SUBJECT:  Environmental quality:  Jobs and Economic Improvement  
          Through Environmental Leadership Act of 2011.

            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 (PRC) 21000 et seq.).

          2) Sets requirements relating to preparation, review, comment,  
             approval and certification of environmental documents, as  
             well as procedures relating to an action or proceeding to  
             attack, review, set aside, void, or annul various actions of  
             a public agency on the grounds of noncompliance with CEQA.

          3) Requires courts to give CEQA-related actions or proceedings  
             preference over all other civil actions so that the action or  
             proceeding is quickly heard and determined.  (PRC 21167.1).

          4) Under the Jobs and Economic Improvement Through Environmental  
             Leadership Act of 2011 (AB 900, Buchanan, Gordon, Chapter  
             354, Statutes of 2011), which is part of CEQA, establishes  
             CEQA administrative and judicial review procedures for an  







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             "environmental leadership development project."  Among the  
             provisions of AB 900 (PRC 21178 et seq.):

             a)    Establishes procedures for expedited judicial review  
                (i.e., requiring the courts to resolve lawsuits within 270  
                days) for "environmental leadership" projects certified by  
                the Governor and meeting specified conditions, including  
                LEED silver-certified infill site projects, clean  
                renewable energy projects, and clean energy manufacturing  
                projects.

             b)    Defines "environmental leadership" project as a CEQA  
                project that is one of the following:

               i)     A residential, retail, commercial, sports, cultural,  
                 entertainment, or recreational use project that is  
                 certified as LEED silver or better by the United States  
                 Green Building Council and, where applicable, that  
                 achieves a 10% greater standard for transportation  
                 efficiency than for comparable projects. 

                  (1)       Requires that these projects be located on an  
                    infill site. 

                  (2)       Requires a project that is within a  
                    metropolitan planning organization for which a  
                    sustainable communities strategy (SCS) or alternative  
                    planning strategy (APS) is in effect, to be consistent  
                    with specified policies in either the SCS or APS,  
                    which, if implemented, would achieve greenhouse gas  
                    emission (GHG) reduction targets.

               ii)    A clean renewable energy project that generates  
                 electricity exclusively through wind or solar, but not  
                 including waste incineration or conversion.

               iii)   A clean energy manufacturing project that  
                 manufactures products, equipment, or components used for  
                 renewable energy generation, energy efficiency, or for  
                 the production of clean alternative fuel vehicles.

             c)   Allows a person proposing to construct a leadership  
               project to apply to the Governor for certification that the  
               leadership project is eligible for streamlining.  Requires  








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               the person to supply evidence and materials that the  
               Governor deems necessary to make a decision on the  
               application.  Requires any evidence or materials be made  
               available to the public at least 15 days before the  
               Governor certifies a project pursuant to AB 900.

             d)   Authorizes the Governor to certify a leadership project  
               if the Governor finds the project meets all of the  
               following conditions:

               i)     The project will result in a minimum investment of  
                 $100 million in California upon completion of  
                 construction.

               ii)    The project creates high-wage, highly skilled jobs  
                 that pay prevailing wages and living wages, provides  
                 construction jobs and permanent jobs for Californians,  
                 and helps reduce unemployment.

               iii)   The project does not result in any net additional  
                 GHG emissions, including emissions from employee  
                 transportation, as determined by the Air Resources Board  
                 pursuant to the California Global Warming Solutions Act  
                 of 2006.

               iv)    The project applicant has entered into a binding and  
                 enforceable agreement that all mitigation measures  
                 required under CEQA shall be conditions of approval of  
                 the project, and those conditions will be fully  
                 enforceable by the lead agency or another agency  
                 designated by the lead agency.  In the case of  
                 environmental mitigation measures, the applicant agrees,  
                 as an ongoing obligation, that those measures will be  
                 monitored and enforced by the lead agency for the life of  
                 the obligation.

               v)     The project applicant agrees to pay the costs of the  
                 Court of Appeal in hearing and deciding any case,  
                 including payment of the costs for the appointment of a  
                 special master if deemed appropriate by the court, in a  
                 form and manner specified by the Judicial Council.

               vi)    The project applicant agrees to pay the costs of  
                 preparing the administrative record for the project  








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                 concurrent with review and consideration of the project  
                 pursuant to CEQA, in a form and manner specified by the  
                 lead agency for the project.

             e)   Requires the Governor, prior to certifying a project, to  
               make a determination that each of the conditions specified  
               above has been met.  These findings are not subject to  
               judicial review.

             f)   If the Governor determines that a leadership project is  
               eligible for streamlining, requires the Governor to submit  
               that determination, and any supporting information, to the  
               Joint Legislative Budget Committee (JLBC) for review and  
               concurrence or non-concurrence.

             g)   Requires the JLBC to concur or non-concur in writing  
               within 30 days of receiving the Governor's determination.

             h)   Deems the leadership project certified if the JLBC fails  
               to concur or non-concur on a determination by the Governor  
               within 30 days of the submittal.

             i)   Authorizes the Governor to issue guidelines regarding  
               application and certification of projects pursuant to AB  
               900.  These guidelines are not subject to the rulemaking  
               provisions of the Administrative Procedure Act.

             j)   Requires the Judicial Council to adopt a rule of court  
               to establish procedures that require resolution within 270  
               days, including any appeals, of a lawsuit challenging the  
               certification of the EIR or any project approvals for a  
               certified environmental leadership project.

             aa)  Prohibits AB 900 from applying to a leadership project  
               if the applicant fails to notify a lead agency prior to the  
               release of the draft EIR for public comment.  

             bb)  Sets requirements for preparation and certification of  
               the administrative record for a leadership project  
               certified by the Governor.

             cc)  Requires the draft and final EIR to include a specified  
               notice in no less than 12-point type regarding the draft  
               and final EIR being subject to AB 900.  








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             dd)  Provides that provisions of AB 900 are severable.  

             ee)  Provides that nothing in AB 900 affects the duty of any  
               party to comply with CEQA, except as otherwise provided in  
               AB 900.

             ff)  Prohibits AB 900 from applying to a leadership project  
               if the Governor does not certify the project prior to  
               January 1, 2016.  

             gg)  Provides that certification of the leadership project  
               expires and is no longer valid if the lead agency fails to  
               approve the project prior to January 1, 2017.  

             hh)  Requires the Judicial Council to report to the  
               Legislature on or before January 1, 2017, on the effects of  
               AB 900 on the administration of justice.

             ii)  Sunsets January 1, 2017.

          This bill, as approved by the Senate, required the Natural  
          Resources Agency to allow at least 30 days for public comment  
          regarding proposed state land acquisitions, including easements.

          Assembly amendments (May 19, 2016 version of the bill) and the  
          basis for referral back to the Committee on Environmental  
          Quality pursuant to Senate Rule 29.10, delete the provisions  
          related to state land acquisitions, and instead do the  
          following:

          1)Extends the operation of AB 900 by two years, so that the  
            Governor must certify a project prior to January 1, 2018, the  
            project must be approved prior to January 1, 2019, and AB 900  
            sunsets January 1, 2019.


          2)Adds the following prevailing wage conditions and enforcement  
            provisions:


               a)     Requires contractors and subcontractors to pay to  
                 all construction workers employed in the execution of the  
                 project at least the general prevailing rate of per diem  








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                 wages.


               b)     Provides that this obligation may be enforced by the  
                 Labor Commissioner through the issuance of a civil wage  
                 and penalty assessment pursuant to relevant provisions of  
                 the Labor Code, unless all contractors and subcontractors  
                 performing work on the project are subject to a project  
                 labor agreement that requires the payment of prevailing  
                 wages and provides for enforcement through an arbitration  
                 procedure.


          3)Requires a multifamily residential project certified under AB  
            900 to provide unbundled parking, such that private vehicle  
            parking spaces are priced and rented or purchased separately  
            from dwelling units, except for units subject to affordability  
            restrictions in law that prescribe rent or sale prices, where  
            the cost of parking spaces cannot be unbundled from the cost  
            of dwelling units.


            Background
          
          1) 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  








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             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 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,  
             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.

          3) 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. 

          4) Previous, related bills.









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             a)    AB 900 and SB 292.  AB 900 (Buchanan, Gordon) and SB  
                292 (Padilla, Chapter 353, Statutes of 2011) established  
                expedited CEQA judicial review procedures for a limited  
                number of projects.  For AB 900, it was large-scale  
                projects meeting extraordinary environmental standards and  
                providing significant jobs and investment.  For SB 292, it  
                was a proposed downtown Los Angeles football stadium and  
                convention center project achieving specified traffic and  
                air quality mitigations.  The stadium project subject to  
                SB 292 has not proceeded.  

             For these eligible projects, the bills provided for original  
                jurisdiction by the Court of Appeal and a compressed  
                schedule requiring the court to render a decision on any  
                lawsuit within 175 days.  This promised to reduce the  
                existing judicial review timeline by 100 days or more,  
                while creating new burdens for the courts and litigants to  
                meet the shortened schedule.  

             AB 900's provision granting original jurisdiction to the  
                Court of Appeal was invalidated in 2013 by a decision in  
                Alameda Superior Court in Planning and Conservation League  
                v. State of California.  

             b)    SB 743 (Steinberg, Chapter 386, Statutes of 2013).   
                Subsequent to the Alameda Superior Court holding mentioned  
                above, SB 743 repealed the provision that gave original  
                jurisdiction to the Court of Appeal and required Judicial  
                Council to adopt a rule of court mandating lawsuits and  
                any appeals to be resolved within 270 days. 

             Also, SB 743 (Steinberg) established special CEQA procedures  
                modeled on SB 292 for the Sacramento Kings arena project.   
                Like SB 292, SB 743 applied to a single project and  
                included specified traffic and air quality mitigations.   
                CEQA lawsuits were filed against the Kings arena, and the  
                lawsuits, including appeals, were resolved 267 days after  
                certification of the record.  

          5) AB 900 projects to date.  Six projects have been certified  
             under AB 900.  The deadline for AB 900 certification under  
             current law has passed (which was January 1, 2016).   
             According to the Office of Planning and Research, the  
             following projects have had AB 900 applications submitted:








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                          McCoy Solar Energy Project (January 12, 2012)
                          Apple Campus 2 (April 19, 2012)
                          Soitec Solar Energy Project (January 7, 2013)
                          8150 Sunset Boulevard (January 31, 2014)
                          Event Center and Mixed-Use Development at  
                     Mission Bay Blocks (The Golden State Warriors Arena)  
                     (February 17, 2014)
                          Qualcomm Stadium Reconstruction Project (August  
                     25, 2015).  

          1) Unbundled parking.  Unbundled parking is the practice of  
             selling or leasing parking spaces separate from the purchase  
             or lease of a commercial or residential use.  According to  
             the University of California Transportation Center policy  
             brief, The Price of Unwanted Parking (2010), "When a city  
             requires on-site parking for all new housing, housing costs  
             rise while the price of driving falls.  This results in less  
             housing and more driving.  Minimum parking requirements are  
             particularly troublesome for old, dense inner city  
             neighborhoods - where land is expensive, and lot sizes are  
             small and irregular - parking can be extraordinarily  
             expensive, if not impossible to provide on-site."   
             Transportation and affordable housing advocates tend to favor  
             unbundling parking from housing in order to provide a  
             disincentive to owning more vehicles while potentially  
             reducing housing costs and increasing supply.  

            Comments
          
          1)Purpose of bill.  According to the author, "California is  
            continually recovering from and preparing for future economic  
            devastation.  SB 734 will help large job producing green  
            projects avoid delay and keep Californians working by  
            extending the Governor's authority to certify a project to  
            January 1, 2018."

          2)Golden State Warriors Arena and two lawsuits.  The proposed  
            Golden State Warriors Arena and related development at Mission  
            Bay in San Francisco, which has received AB 900 certification,  
            has been challenged under CEQA.  The case, Mission Bay  
            Alliance et al. v Office of Community Investment and  
            Infrastructure, was filed March 11, 2016.  One of the  
            plaintiffs, Mission Bay Alliance, which is a coalition of UCSF  








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            stakeholders, donors, faculty, and physicians, argues that the  
            18,500-seat arena would congest area streets with traffic,  
            slowing down access to the UCSF Medical Center at Mission Bay,  
            which is located across the street from the proposed arena.   
            In addition, the plaintiff contends that the basketball arena  
            in Mission Bay is at odds with the cluster of life science  
            research and health care facilities that have been built in  
            the neighborhood.  On July 18, 2016, a trial court ruled in  
            favor of the project sponsor, the Warriors; the decision has  
            been appealed.

          The above lawsuit is one of two legal challenges filed by the  
            Mission Bay Alliance in regards to the Warriors arena; the  
            second of which is not CEQA-related.  In the other lawsuit,  
            filed in Alameda County, the plaintiffs seek to invalidate an  
            agreement between UCSF and the Warriors, which included a $10  
            million Mission Bay Transportation Improvement Fund for  
            controlling traffic flow in the area.  The plaintiffs contend  
            that the UCSF chancellor went beyond his authority in reaching  
            this agreement without UC Regents approval.  This second  
            lawsuit has yet to be decided.  

          The Warriors team has stated that the lawsuits have delayed the  
            opening of the arena by a year, to 2019.  One lawsuit has  
            special, fast-tracking CEQA-related litigation privileges and  
            the other does not.  Although AB 900 may speed up the  
            litigation process for the CEQA case, the second lawsuit  
            demonstrates that CEQA is not the only body of law for which  
            there is to sue; rather, there is a cavalry of  
            non-CEQA-related causes of action from which a plaintiff may  
            choose and that are subject to standard civil procedure rules.  
             AB 900 cannot expedite or insulate a project from  
            non-CEQA-related litigation and does not guarantee that a  
            project will be completed faster.  

          3)Should we expect more from AB 900 projects?  SB 743  
            (Steinberg) required the Kings arena to be certified  
            Leadership in Energy and Environmental Design (LEED) Gold, as  
            well as minimize traffic and air quality impacts through  
            project design or mitigation measures, including reducing to  
            at least zero the net GHG emissions from private automobile  
            trips to the arena, achieve reductions in GHG emissions from  
            automobiles and light trucks that will exceed the GHG emission  
                                                              reduction targets for 2020 and 2035 adopted for the Sacramento  








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            region pursuant to SB 375 (Steinberg, Chapter 728, Statutes of  
            2008), and achieve a 15% reduction in vehicle-miles traveled  
            (VMT) per attendee.  



          In contrast to SB 743, AB 900 requires lower LEED Silver  
            certification, a 10% improvement in transportation efficiency  
            over comparable projects, and zero net GHG emissions, with no  
            requirement that the GHG emission reductions be from local  
            sources.  

          In comparing the requirements of SB 743 and AB 900, a question  
            arises as to whether it would be more environmentally  
            beneficial to the state to require AB 900 projects to meet  
            similar standards as required in SB 743.
          4)Equal justice for all?  Court calendar preference and  
            guaranteed time frames.  Current law requires the courts to  
            give CEQA-related cases preference over "all other civil  
            actions? so that the action or proceeding shall be quickly  
            heard and determined."  (PRC 21167.1).  In addition to this  
            existing mandate, SB 734 provides that the courts must  
            complete the judicial review process in a given time frame for  
            certain CEQA-related actions or proceedings when specified  
            criteria are met.  



          As a consequence, such mandates on a court delay access for  
            other cases as well as potentially exacerbating a court's  
            backlog on civil documents such as filing a new civil  
            complaint, processing answers and cross complaints, or  
            processing a demurrer or summary judgment.  As Judicial  
            Council notes, "[S]etting an extremely tight timeline for  
            deciding these cases has the practical effect of pushing other  
            cases on the courts' dockets to the back of the line.  This  
            means that other cases, including cases that have statutorily  
            mandated calendar preferences, such as juvenile cases,  
            criminal cases, and civil cases in which a party is at risk of  
            dying, will take longer to decide."

          This bill requires a court to make room on its calendar,  
            potentially pushing other cases aside, to ensure that  
            specified time frames are met on certain CEQA cases.  Calendar  








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            preferences and guaranteed time frames create additional  
            demands and burden on our courts that have very limited  
            resources and a never-ending supply of cases to hear.  

          5)Projects queuing up.  Although this bill is not specific to  
            any particular projects, proponents of SB 734 have identified  
            four projects that may apply for AB 900 certification if this  
            bill is enacted:


             a)   6701 Sunset/Crossroads in Hollywood - Nine new mixed-use  
               buildings, including residential, hotel, commercial office,  
               retail, and restaurant uses, including up to 308 hotel  
               rooms and 950 residential units, 84 of which will be  
               affordable to low-income households (to replace 84  
               rent-controlled units the project will demolish).


             b)   Yucca-Argyle Project in Hollywood - Mixed-use project  
               with hotel, residential, and commercial uses, including 260  
               hotel rooms and 191 residential units, 39 of which will be  
               affordable to low-income households.


             c)   Barlow Hospital Project in Echo Park - Hospital  
               replacement and residential development on a 25-acre site  
               near Dodgers Stadium, including 400 new single-family  
               homes, with no commitments to affordable housing to date.


             d)   Hollywood Central Park - A 38-acre regional street level  
               park created by capping US 101 between Hollywood and Santa  
               Monica Boulevards.



            SOURCE:                    State Building and Construction Trades  
                         Council  

           SUPPORT:               

          California Chamber of Commerce  

           OPPOSITION:    








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          Air Conditioning Trade Association
          American Fire Sprinkler Association
          Associated Builders and Contractors - San Diego Chapter
          California League of Conservation Voters
          Judicial Council of California
          Plumbing-Heating-Cooling Contractors Association of California
          Sierra Club California  
           Western Electrical Contractors Association
           
           
                                          
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