AB 1060 Assembly Bill - Bill Analysis

BILL ANALYSIS �

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| SENATE COMMITTEE ON NATURAL RESOURCES AND WATER |
| Senator Fran Pavley, Chair |
| 2013-2014 Regular Session |
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BILL NO: AB 1060 HEARING DATE: June 25, 2013
AUTHOR: Fox URGENCY: No
VERSION: June 20, 2013 CONSULTANT: Bill Craven
DUAL REFERRAL: Environmental QualityFISCAL: Yes
SUBJECT: Environmental quality: California Environmental quality
Act: filing fees: exemptions.

BACKGROUND AND EXISTING LAW
1. Under the California Environmental Quality Act (CEQA), lead
agencies with the principal responsibility for carrying out or
approving a proposed discretionary project prepare a negative
declaration, mitigated declaration, or environmental impact
report (EIR), unless the project is exempt from CEQA. CEQA
includes various statutory exemptions, as well as categorical
exemptions in the CEQA guidelines. (Public Resources Code �21000
et seq.).

2. The Department of Fish and Wildlife (DFW) is authorized to
charge and collect a filing fee, as provided in Fish and Game
Code (FGC) �711.4. That section also provides that a finding
with respect to each significant effect is not operative,
vested, or final until the filing fee required by FGC �711.4 is
paid. (Public Resources Code (PRC) �21089(b)). The fee is
intended to help defray the costs of managing and protecting
fish and wildlife trust resources in the review of a project
conducted pursuant to CEQA.

3. CEQA also declares that the legislature finds and declares
that CEQA is an integral part of any public agency's decision
making process, including, but not limited to, the issuance of
permits, licenses, certificates, or other entitlements required
for activities undertaken pursuant to federal statutes
containing specific waivers of sovereign immunity." (PRC
�21006).

4. CEQA defines "person" to include "any person, firm,
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association, organization, partnership, business, trust,
corporation, limited liability company, company, district, city,
county, city and county, town, the state, and any of the
agencies or political subdivisions of such entities, and, to the
extent permitted by federal law, the United States, or any of
its agencies or political subdivisions." (PRC �21066), (CEQA
Guidelines �15376).

5. Exemptions to the Fish and Game Code filing fees are provided
if specified conditions are met:

a) The project has no effect on fish and wildlife;

b) The project is being undertaken by DFW;

c) The project costs are payable by DFW from specified funding
sources; or,

d) The project is implemented by DFW through a contract with
either a nonprofit entity or a local government agency.

6. A specific provision for federal agencies requires filing
fees to be paid for federal projects unless federal law
explicitly precludes payment of such state fees. (FGC
�711.7(a)(2)).

PROPOSED LAW
This bill would provide that the CEQA fees required in the Fish
and Game Code do not apply to projects carried out or
implemented by a branch of the United States Armed Forces. It
would further provide that fees would be paid if payment is
specifically authorized by a future act of Congress or a federal
regulation adopted pursuant to an act of Congress. The exemption
would not apply to projects of the Unites States Army Corps of
Engineers if the project benefits a nonmilitary purpose,
including but not limited to, flood control.

The bill also contains findings to the effect that suggest, but
do not explicitly state, the sponsor's belief that the payment
of state fees by the military is preempted by sovereign immunity
unless it is specifically authorized by Congress. Another
finding states that the Legislature recognizes that military
projects are necessary to maintain the mission capability of
military installations and to acknowledge the importance of the
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military to California's economy.

ARGUMENTS IN SUPPORT
The author is of the view that the current provision in the Fish
and Game Code is an impediment to the implementation of critical
infrastructure and military construction projects in California.

The Department of Defense, in an April 11, 2013, letter,
acknowledges that the issue involves payment of a "minor" fee,
but it insists that it cannot pay it because of "federal fiscal
law issues."

The example used in this letter is the pier project at Naval
Base San Diego where the upgrade to accommodate modern vessels
would be a multi-million dollar construction project that could
be held at risk over a filing fee.

The Department of Defense does not believe the bill will
diminish the environmental review of its projects by state
agencies.

ARGUMENTS IN OPPOSITION
An environmental and conservation coalition is opposed. It
includes the California Native Plant Society, the Planning and
Conservation League, and the National Wildlife Federation
(California).

The opposition notes that the Department of Fish and Wildlife
fees were adopted in 1990 to help defray the costs of its review
of public and private projects that are subject to CEQA review.
Fees are only a small fraction of those review costs.

California law is explicit on the point that federal agencies
are subject to these fees unless federal law explicitly
precludes payment. Further, federal agency projects are subject
to CEQA, according to the opposition.

The opposition encourages the military to obtain an exemption
from the fees from Congress.

Sierra Club California is also opposed and notes that if passed,
state agencies that are already underfunded would become even
more underfunded.

COMMENTS
1. Congress has waived preemption of state environmental laws,
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including the Clean Water Act, the Clean Air Act, RCRA (toxics)
and CERCLA (Superfund) among them. Most recently it waived
sovereign immunity for storm water runoff projects for the
entire nation.

2. This issue was before the Legislature in 1998 and the result
was a change in the definition of "person" to specifically
include federal agencies. The military decided that CEQA fees
were still pre-empted by sovereign immunity.

3. There is no indication that the military has ever asked
Congress to pre-empt sovereign immunity or otherwise accommodate
California policy noted above.

4. The number of projects involved is small. The Department of
Defense believes it has 4-6 projects a year in California that
may be subject to the fee. The Department of Fish and Wildlife
believes the number could be higher, and part of that reason
could be because of Army Corps projects. ACOE projects are
exempted from the bill.

5. There is clearly a conflict between those who believe state
CEQA fees are pre-empted and those who believe the military
should pay those fees. State policy, for obvious reasons, seeks
to have its state agency review costs for projects paid for by
the project applicants, whomever they may be. The military does
not pay review costs and has indicated that it would not be able
to do so unless such review costs were charged to all project
applicants.

6. The Committee may determine that this issue needs much
greater clarity and focus before making a final determination.
Staff would suggest the following amendments:

A. Allow the military 4 projects a year of its choice to be
exempt from CEQA filing fees for a period of two years. Written
notification should be provided to the Office of Planning and
Research. This provision would not otherwise change existing
law.

B. During that period, the Legislature would obtain a thorough
review of what federal agencies are paying fees and what federal
agencies are not paying fees under CEQA as well as other
statutes and programs. The Senate Office of Research or the
California Research Bureau could be requested to conduct such a
review.

C. Prior to the end of the two year period, request that the
military demonstrate that it sought to obtain from Congress a
waiver of CEQA and other fees that California law would assess
on its projects. It may also be the case that Congress clarifies
the question in the opposite way, by directing that the military
not pay this or other state fees. Either way, the matter would
be clarified. This process would also provide an opportunity for
the Governor, the Legislature, and others to work with Congress
and propose continuing the recent trend of waiving sovereign
immunity so that federal agencies can pay applicable fees in
California in this instance.

D. A future Legislature may decide not to extend the sunset in
the absence of the demonstration requested in Comment 6C.

SUGGESTED AMENDMENTS

AMENDMENT 1
Draft language that incorporates the provisions of Comment 6.

SUPPORT
Department of Defense

OPPOSITION
Sierra Club California
Planning and Conservation League
California Native Plant Society
National Wildlife Federation (California)