Three important reform bills designed to streamline California Environmental Quality Act (CEQA) processing and review for certain classes of projects have been enacted and will take effect January 1, 2012.  SB 226 creates a new exemption for urban infill and renewable energy projects.  It also makes a variety of amendments to both CEQA and SB 375, the landmark 2008 legislation designed to integrate California’s land use, transportation and greenhouse gas (GHG) reduction policies.   AB 900 shortens the Court review for CEQA challenges to certified “leadership projects” by authorizing lawsuits to be brought directly in the Court of Appeal on an expedited schedule.  “Leadership projects” must be certified LEED silver or higher, be carbon neutral, create “high-wage, highly skilled” jobs, and result in an investment of at least $100 million in California’s economy (among other requirements).  SB 292 is a narrow bill designed to accommodate a new sports stadium and convention center in downtown Los Angeles by  streamlining judicial review in exchange for reductions in GHG emissions and traffic impacts.

At the outset, it is important to note that these three new CEQA bills were rushed through at the very end of a legislative session and were not subjected to legislative staff review.  Each bears some technical flaws and inconsistencies which may create difficulties for agencies applying these new provisions.  Clean up legislation in the future may be warranted.  As a result, we encourage public agencies and developers to consult with legal counsel before relying on the new legislation, especially the exemption for urban infill projects.

SB 226

SB 226  makes a number of changes to both CEQA and SB 375 designed to streamline CEQA review of urban infill projects.  Among other changes, SB 226 adds a brand new statutory provision which establishes standards for CEQA review of urban infill projects that meet certain specified criteria.

First, SB 226 broadens the definition of infill project.   An infill project must include any one, or a combination of, the following uses: residential, retail or commercial (where no more than half of the project area is used for parking), transit stations, schools and public office buildings.   The project must be located within an urban area on a site that has been previously developed, or on a vacant site where at least 75 percent of the perimeter of the site adjoins, or is separated only by an improved public right of way from, parcels that are developed with qualified urban uses.  Urban area is defined as either an incorporated city, or an urbanized unincorporated area that meets the following criteria: the area is completely surrounded by incorporated cities; the population of the unincorporated area and the population of the surrounding cities equals or exceeds 100,000; and the unincorporated area’s population density equals or exceeds the population density of the surrounding cities.

Second, it provides that if an environmental impact report (EIR) was certified for a planning level decision of a city or county, then subsequent CEQA review of an infill project shall be limited to (a) impacts that are specific to the project or to the project site and were not addressed as significant impacts in the prior EIR or (b) substantial new information shows the effects will be more significant than described in the prior EIR.  These criteria are different from the existing standards for supplemental review under Public Resources Code section 21166. The bill further provides that if an agency makes findings that development policies or standards in effect would substantially mitigate an effect of the project, then that effect shall not be considered a new significant impact of the project and no supplemental review will be required.  As a result, the bill likely expands the ability of agencies to use exemptions for infill projects.  In addition, it will be much easier for agencies to rely upon environmental review conducted for prior planning documents and to defend projects that rely on CEQA tiering provisions in court.

Third, if a new or supplemental EIR is still required for an infill project, it is not required to analyze alternative locations, densities and building intensities, or growth inducing impacts.

Fourth, SB 226 provides that a project’s greenhouse gas (GHG) emissions are not sufficient, in and of themselves, to defeat a categorical exemption that would otherwise apply to a project if the project complies with all applicable regulations or requirements adopted to implement statewide, regional or local plans such as climate action plans.

Finally, SB 226 requires the development of new CEQA Guidelines to include statewide standards for infill projects that promote sustainability policies such as smart growth and GHG and per capita water use reductions, among others.

SB 226 also has several provisions unrelated to the urban infill exemption, including an exemption for the installation of solar panels to existing structures from CEQA review as well as several other technical and procedural amendments.

SB 900

SB 900, or the Jobs and Economic Improvement Through Environmental Leadership Act of 2011, provides for streamlined judicial review of “leadership projects.”  The purpose of the bill is to spur job growth and promote green development by reducing litigation-related delays for large public or private projects meeting certain criteria, including a minimum investment of $100 million in California.  Only projects for which no draft EIR has yet been circulated are eligible and the bill’s provisions are short term – projects with EIRs certified after June 1, 2014 will be ineligible.

“Leadership projects” include residential, retail, commercial, sports, cultural, entertainment, or recreational developments that are: (i) certified as LEED silver or better; (ii) achieve a 10-percent greater transportation efficiency than for comparable projects, where applicable; (iii) are located on infill sites, and (iv) are consistent with any applicable sustainable communities strategy or alternative planning strategy and its goals to reduce GHG emissions.  Clean renewable energy (wind and solar) and clean energy manufacturing projects are separately eligible.

Project proponents seeking to take advantage of the new bill must notify the lead agency before publication of the draft EIR and apply to the Governor for certification.  To be certified, the project must result in a minimum investment of $100 million in California upon completion of construction, create high-wage, highly skilled jobs that pay prevailing and living wages and provide construction and permanent jobs for Californians and reduce unemployment, and the project must not result in any net additional GHG emissions.  In addition, the applicant must agree that all mitigation measures for the project shall be conditions of approval, and agree to pay the any litigation costs of preparing the administrative record and court costs.  The Governor’s decision to certify a project is final and not subject to judicial review.

Challenges to certified “leadership projects” are required to be heard directly by the Court of Appeal which is required to issue a decision within 175 days after the litigation is filed unless “good cause” supports an extension.  In addition, the bill requires opponents to raise any other claims related to a project’s land use approval and grants the Court of Appeal original jurisdiction to hear all of them.  This greatly reduces the litigation time and costs for CEQA cases.  Typically, CEQA cases can take anywhere from one to several years if an appeal is filed before final resolution is reached.

Given the short window during which SB 900 is effective and the stringent standards that projects must meet to qualify, this provision may not be widely used.

SB 292

SB 292 is the narrowest of the three bills.  It creates streamlined administrative and judicial review procedures for a specific project – a new event center and sports stadium in downtown Los Angeles.

Conclusion

Of the three bills, SB 226 is likely to have the broadest effects for public agencies and private developers by reducing the time and expense for CEQA review for urban infill projects.  SB 226 expands the definition of urban infill projects, provides that impacts from greenhouse gas emissions are no longer sufficient to defeat the urban infill exemption, and strengthens CEQA’s tiering provisions. In addition, it may lead to the creation of additional streamlining rules for infill projects once new CEQA Guidelines are developed and adopted in 2013.