Thought Leadership 01.29.18
The Natural Resources Agency has initiated formal rulemaking for a comprehensive update to the California Environmental Quality Act Guidelines.
At the end of November 2018, the California Natural Resources Agency (CNRA) posted final adopted text for amendments to the regulations implementing the California Environmental Quality Act (CEQA), known as the CEQA Guidelines. The final text is the result of over five years of development efforts by the Governor’s Office of Planning & Research (OPR) and CNRA. The amendments combine changes to transportation impact analysis as directed by Senate Bill 743 (2013) with the most comprehensive update to the CEQA Guidelines since 1998, incorporating statutory changes, court decisions, and comments from public agencies, business and environmental groups, and other stakeholders through multiple rounds of public review. The wide range of issues covered in the amendments includes use of regulatory standards as significance thresholds; environmental baselines; a new metric for analyzing transportation impacts; climate, water supply and energy impacts; and numerous procedural and technical improvements.
This alert updates our January 29, 2018 alert which described CNRA’s then-proposed amendments to the CEQA Guidelines. As expected, given that OPR had already taken many comments into account during the long gestation of these amendments, the final adopted text did not change much from its proposed form. However, the final text makes some notable changes to the proposed version, as discussed below.
Key Amendments to the CEQA Guidelines
Using Regulatory Standards as Significance Thresholds. CEQA requires public agencies to evaluate and, if feasible, avoid or mitigate potentially significant environmental impacts from public projects that they undertake or private projects for which they grant permits, leases, funds and other approvals. In the CEQA process, “significance thresholds” are the standards which lead agencies (that is, agencies conducting CEQA review) use to determine whether or not impacts of a project are “significant” and must be mitigated. For example, most cities and counties have adopted noise standards; if project-generated noise exceeds a standard, the project is considered to cause a significant noise impact. Revised CEQA Guidelines sections 15064 and 15064.7 authorize lead agencies to rely on existing environmental standards adopted by other regulatory agencies as significance thresholds. Such use of regulatory standards will promote efficiency and help avoid imposing duplicative or conflicting burdens on projects subject to both CEQA and regulatory requirements. However, the amendments also provide that the lead agency remains obligated to consider evidence that an impact may still be significant, notwithstanding compliance with a regulatory standard. In addition, amended Guidelines section 15064.7 clarifies that lead agencies may use significance thresholds on an informal, case-by-case basis (which is, in fact, a widespread practice of lead agencies throughout the state), without undertaking a formal adoption process.
Environmental Baseline. The environmental setting or “baseline” describes existing conditions in the project vicinity, which are not impacts caused by the project and do not require mitigation. While existing conditions at the start of CEQA review normally constitute the baseline, Guidelines section 15125 allows the use of other baselines supported by appropriate evidence. Representative past conditions may provide a more accurate baseline than a snapshot of existing conditions at an atypical moment. Guidelines section 15301, which exempts minor alterations to existing facilities with no expansion of use from CEQA review, is also amended to clarify that past conditions may be considered in determining whether a project expands the facility’s use. Conversely, as the California Supreme Court concluded in Neighbors for Smart Rail v. Exposition Metro Line Construction Authority (2013) 57 Cal.4th 439, anticipated future conditions at project completion may provide a more informative baseline for major infrastructure projects that take years to construct, by which time the default baseline of existing conditions at the start of CEQA review will no longer be relevant.
CNRA’s proposed language was revised in the final Guidelines text to eliminate an inconsistency with case law pointed out by commenters. Since future conditions inherently involve a degree of uncertainty, the Court in Neighbors for Smart Rail required a special showing that the default baseline of existing conditions would be “misleading or without informative value” to decision-makers and the public, before relying exclusively on a future conditions baseline. As initially proposed by CNRA, Guidelines section 15125(a)(2) would have extended the requirement to use of representative past conditions as a baseline. Meanwhile, Association of Irritated Residents v. Kern County Board of Supervisors (2017) 17 Cal.App.5th 708 rejected that extension of Neighbors for Smart Rail, reasoning that known past conditions do not involve the same uncertainty as future conditions, and the final adopted text of Guidelines section 15125(a)(2) was revised to conform to both cases.
VMT Metric for Transportation Impacts. As directed by SB 743, new Guidelines section 15064.3 incorporates an alternative metric for transportation analysis. Critics of the traditional “Level of Service” (LOS) method, measuring delays caused by traffic congestion at intersections and roadways, argued that mitigation to alleviate LOS impacts results in increased traffic and undercuts greenhouse gas (GHG) reduction goals. The new section 15064.3 replaces LOS with “Vehicle-Miles-Traveled” (VMT), measuring the amount and distance of automobile travel attributable to a project, and provides that automobile delay shall not be considered a significant environmental impact. However, lead agencies retain discretion to select analytic methodologies and also to utilize metrics other than VMT, including automobile delay, for projects intended to increase roadway capacity. In addition, projects that decrease VMT compared to existing conditions or are within one-half mile of transit are presumed to have a less than significant transportation impact. In response to comments, CNRA clarified that this is a rebuttable presumption by changing “considered” in the proposed text to “presumed” in the final text; such projects still may have significant impacts in some cases.
Deferred Mitigation. Revised Guidelines section 15126.4 describes circumstances in which agencies may defer specifying the details of mitigation measures until after completion of an Environmental Impact Report (EIR) or mitigated Negative Declaration. As proposed, CEQA Guidelines subsection 15126.4(a)(1)(B) would have allowed deferred mitigation when the lead agency: “(1) commits itself to the mitigation, (2) adopts specific performance standards the mitigation will achieve, and (3) lists the potential actions to be considered, analyzed, and potentially incorporated in the mitigation measure.” In the final text, the last criterion is revised to read: “(3) identifies the type(s) of potential action(s) that can feasibly achieve that performance standard and that will [be] considered, analyzed, and potentially incorporated in the mitigation measure.” This change requires the lead agency to demonstrate that mitigation is feasible, because at least some types of feasible mitigation exist, but does not require the agency to commit to a specified menu of measures from which the ultimate mitigation must be selected, which would undercut the flexibility provided by deferring mitigation.
Exacerbating Existing Hazards. Following California Building Industry Association v. Bay Area Air Quality Management District (2015) 62 Cal.4th 369, revised Guidelines section 15126.2(a) confirms that CEQA review addresses impacts of the proposed project on the existing environment, not impacts of the existing environment on the proposed project and its future residents or users (sometimes referred to as “reverse CEQA” analysis). However, consistent with the Court’s decision, the revisions emphasize that a lead agency must also consider whether the project’s effects risk exacerbating existing environmental hazards, such as increasing risks from erosion or wildfires by bringing development into vulnerable areas.
Climate Impacts. Revised Guidelines section 15064.4 requires lead agencies to evaluate a project’s contribution to climate change over an appropriate time frame, make good faith efforts to describe or estimate GHG emissions, and incorporate evolving scientific knowledge and regulatory schemes. Again, lead agencies retain discretion to choose quantitative or qualitative analysis, select methodologies and consider consistency with the state’s long-term climate goals and strategies, if supported by substantial evidence that those goals and strategies do address the project’s GHG contribution. These changes codify two California Supreme Court decisions, Cleveland National Forest Foundation v. San Diego Assn. of Gov’ts (2017) 3 Cal.5th 497 and Center for Biological Diversity v. Dept. of Fish & Wildlife (2015) 62 Cal.4th 204.
Water Supply Impacts. New Guidelines section 15155(f) incorporates specific elements required for CEQA analysis of water supply impacts following another California Supreme Court decision, Vineyard Area Citizens for Responsible Growth v. City of Rancho Cordova (2007) 40 Cal.4th 412.
Energy Impacts. New Guidelines section 15126.2(b) treats “wasteful, inefficient, or unnecessary” energy consumption as a significant environmental impact. Compliance with building code energy efficiency requirements is a necessary but not exclusive means of addressing energy impacts. CEQA reviews must consider energy used in project construction and operation, but need not account for full “lifecycle impacts” such as energy used to produce building materials and consumer products used in a project. (CNRA Final Statement of Reasons for Regulatory Action – Amendments to the State CEQA Guidelines (November 2018) at 41-42.)
Appendix G Checklist. CEQA Guidelines Appendix G contains a checklist of questions used by many lead agencies both as the format for an Initial Study/Negative Declaration and as a source of significance thresholds in an EIR. Amendments to Appendix G clarify and consolidate numerous questions as well as fixing inconsistencies with other laws and cases. Changes include clarifying that impacts to public (but not private) views may be significant under CEQA; wetlands protected by state as well as federal law must be evaluated; and paleontological resources are considered in the geological rather than cultural category (consistent with AB 52). Added checklist questions on wildfire risk are unhappily timely after California’s recent severe fires.
Pre-CEQA Agreements. Revised Guidelines section 15004 describes circumstances in which a lead agency may enter into project-related agreements, such as exclusive negotiating and option agreements, prior to CEQA review, if contingent on completing CEQA review and not committing to carry out the project.
Data Dumping. CEQA critics have long complained of the practice of “data dumping” by project opponents who submit massive comments, often on the eve of project approval, containing thousands of pages of text and data files, or links to general websites without pointing to specific documents or information. Revised Guidelines section 15088 allows a lead agency to respond at a level of detail corresponding to the level of detail in the comment, providing only general responses when comments fail to explain the relevance of submitted data or to refer specifically to readily available information.
Judicial Remedies. New Guidelines section 15234 notes that courts may fashion equitable remedies for CEQA noncompliance and may exercise equitable discretion to allow some or all project activities to proceed during remand to the lead agency to correct CEQA errors. The final text deletes a proposed provision that would have allowed courts to leave project approvals in place only if doing so would benefit the environment, because that is not a requirement in the CEQA statute.
Other Changes and Clarifications. Additional Guidelines amendments address a range of topics including identifying project applicants in CEQA notices; use of program EIRs and tiering; inclusion of project benefits in an EIR’s statement of objectives; use of conservation easements as mitigation; clarifying emergency repair, transit-oriented development and “common sense” CEQA exemptions; identifying the lead agency; consulting with transit agencies; and coordinating CEQA review with federal agencies conducting National Environmental Policy Act (NEPA) review.
Finally, for those disappointed at the rejection of comments from all points of the stakeholder spectrum proposing numerous (and sometimes conflicting) improvements to the CEQA process, CNRA ruefully observes that it “had to reject suggestions for changes to the Guidelines that it simply is not authorized to make…. While the Agency is sympathetic to economic concerns, and appreciates the value of public participation, the Agency cannot re-write CEQA. That is the province of the legislature.” (CNRA Final Statement of Reasons for Regulatory Action, at 96-97.)
CNRA has submitted the final CEQA Guidelines amendments to the Office of Administrative Law (OAL) for review and approval. The OAL has established a deadline of December 28, 2018 to review the rulemaking record for consistency with the California Administrative Procedure Act and OAL regulations. The effective date of the amended Guidelines will be determined when OAL files them with the Secretary of State. For most of the Guidelines, compliance will become mandatory 120 days following the effective date, although agencies may elect to implement conforming changes earlier. However, lead agencies will have a grace period until July 1, 2020 before the VMT metric for analyzing transportation impacts becomes mandatory on a statewide basis, though again agencies may elect to comply earlier.