BILL ANALYSIS Ó SENATE COMMITTEE ON ENVIRONMENTAL QUALITY Senator Wieckowski, Chair 2015 - 2016 Regular Bill No: SB 734 ----------------------------------------------------------------- |Author: |Galgiani | ----------------------------------------------------------------- |-----------+-----------------------+-------------+----------------| |Version: |6/21/2016 |Hearing |8/10/2016 | | | |Date: | | |-----------+-----------------------+-------------+----------------| |Urgency: |Yes |Fiscal: |Yes | ------------------------------------------------------------------ ----------------------------------------------------------------- |Consultant:|Joanne Roy | | | | ----------------------------------------------------------------- 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 SB 734 (Galgiani) Page 2 of ? "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 SB 734 (Galgiani) Page 3 of ? 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 SB 734 (Galgiani) Page 4 of ? 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. SB 734 (Galgiani) Page 5 of ? 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 SB 734 (Galgiani) Page 6 of ? 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 SB 734 (Galgiani) Page 7 of ? 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. SB 734 (Galgiani) Page 8 of ? 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: SB 734 (Galgiani) Page 9 of ? 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 SB 734 (Galgiani) Page 10 of ? 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 SB 734 (Galgiani) Page 11 of ? 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 SB 734 (Galgiani) Page 12 of ? 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: SB 734 (Galgiani) Page 13 of ? 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 -- END --