SB 1340: California Environmental Quality Act: housing projects.

The California Environmental Quality Act (CEQA) requires a lead agency, as defined, to prepare, or cause to be prepared, and certify the completion of, an environmental impact report on a project that it proposes to carry out or approve that may have a significant effect on the environment or to adopt a negative declaration if it finds that the project will not have that effect. CEQA also requires a lead agency to prepare a mitigated negative declaration for a project that may have a significant effect on the environment if revisions in the project would avoid or mitigate that effect and there is no substantial evidence that the project, as revised, would have a significant effect on the environment. CEQA establishes a procedure by which a person may seek judicial review of the decision of the lead agency made pursuant to CEQA.

This bill would require the Judicial Council, by July 1, 2019, to adopt a rule of court establishing procedures applicable to actions or proceedings seeking judicial review pursuant to CEQA of a lead agencys action, as specified, for a housing project. The bill would prohibit the court, in an action or proceeding brought alleging a violation of CEQA, from staying or enjoining the siting, construction, or operation of a housing project, except as provided.

SENATE JUDICIARY COMMITTEE

Senator Hannah-Beth Jackson, Chair

2017-2018 Regular Session

Bill No: SB 1340 (Author:Glazer)

Version: February 16, 2018

Hearing Date: April 10, 2018

Fiscal: Yes

Urgency: No

Consultant: CK

SUBJECT

California Environmental Quality Act: housing projects

DESCRIPTION

This bill would require the Judicial Council to adopt a rule of court to establish procedures requiring courts to fully adjudicate California Environmental Quality Act actions and proceedings in connection with any housing projects within 270 days of certifying the record of proceedings, to the extent feasible. This bill would also prohibit courts from staying or enjoining challenged projects with two narrow exceptions.

BACKGROUND

Enacted in 1970, the California Environmental Quality Act (CEQA) requires state and local agencies (public agencies) to follow a set protocol to disclose and evaluate the significant environmental impacts of proposed projects and to adopt feasible measures to mitigate those impacts. CEQA itself applies to “projects” undertaken or requiring approval by public agencies, and, if more than one agency is involved, CEQA requires one of the agencies to be designated as the “lead agency.” The environmental review process required by CEQA consists of: (1) determining if the activity is a project; (2) determining if the project is exempt from CEQA; and (3) performing an initial study to identify the environmental impacts and, depending on the findings, prepare either a Negative Declaration (for projects with no significant impacts), a Mitigated Negative Declaration (for projects with significant impacts but that are revised in some form to avoid or mitigate those impacts), or an Environmental Impact Report (for projects with significant impacts).

An Environmental Impact Report (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 pertaining to the project’s environmental impact and any associated mitigation measures. If mitigation measures are required or incorporated into a project, the public agency must adopt a reporting or monitoring program to ensure compliance with those measures. To enforce the requirements of CEQA, a civil action may be brought under several code sections to attack, review, set aside, void, or annul the acts or decisions of a public agency for noncompliance with the act.

This bill would require the Judicial Council to develop rules of court applicable to such challenges that require the actions to be resolved within 270 days of the certification of the record of proceedings to the extent feasible. This bill would also eliminate the power of courts to stay or enjoin challenged projects except in two limited circumstances.

CHANGES TO EXISTING LAW

Existing law, the California Environmental Quality Act (CEQA), requires a public agency to prepare, or cause to be prepared, and to certify the completion of, an environmental impact report (EIR) on a project that it proposes to carry out or approve that may have a significant effect on the environment or to adopt a negative declaration if it finds that the project will not have that effect. (Pub. Resources Code Sec. 21100 et seq.)

Existing law defines “project” to mean an activity which may cause either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment, and which is any of the following:

• an activity directly undertaken by any public agency;
• an activity undertaken by a person which is supported, in whole or in part, through contracts, grants, subsidies, loans, or other forms of assistance from one or more public agencies; or,
• an activity that involves the issuance to a person of a lease, permit, license, certificate, or other entitlement for use by one or more public agencies. (Pub. Resources Code Sec. 21065.)

Existing law provides that an action or proceeding to attack, review, set aside, void, or annul the acts or decisions of a public agency on the grounds of noncompliance with CEQA may be commenced when, among other things, it is alleged that:

• a public agency is carrying out or has approved a project that may have a significant effect on the environment without having determined whether the project may have a significant effect on the environment;
• a public agency has improperly determined whether a project may have a significant effect on the environment;
• an environmental impact report prepared by, or caused to be prepared by, a public agency does not comply with CEQA;
• a public agency has improperly determined that a project is not subject to CEQA; or
• another act or omission of a public agency does not comply with CEQA. (Pub. Resources Code Sec. 21167.)

Existing law requires a plaintiff or petitioner to file a request that the respondent public agency prepare the record of proceedings relating to the underlying subject of the action or proceeding to attack, review, set aside, void, or annul its acts or decisions on the grounds of noncompliance with CEQA. Such request must be served personally within 10 business days from the filing of the action or proceeding. The public agency is then required to prepare a record of proceedings relating to the subject of the action or proceeding. The public agency’s record of proceedings shall include, among other things, any transcript or minutes of the proceedings at which the decisionmaking body of the public agency heard testimony on, or considered any environmental document on, the project, and any transcript or minutes of proceedings before any advisory body to the public agency that were presented to the decisionmaking body prior to action on the environmental documents or on the project. (Pub. Resources Code Sec. 21167.6.)

Existing law states that an action or proceeding to attack, review, set aside, void, or annul the acts or decisions of a public agency on the grounds of noncompliance with CEQA shall not be brought unless the alleged grounds for noncompliance were presented to the public agency orally or in writing by any person during the public comment period provided by CEQA or prior to the close of the public hearing on the project before the issuance of the notice of determination. (Pub. Resources Code Sec. 21177(a).)

Existing law states that a person shall not maintain an action or proceeding to attack, review, set aside, void, or annul the acts or decisions of a public agency on the grounds of noncompliance with CEQA unless that person objected to the approval of the project orally or in writing during the public comment period provided by CEQA or prior to the close of the public hearing on the project before the filing of the notice of determination. (Pub. Resources Code Sec. 21177(b).)

Existing law does not preclude any organization formed after the approval of a project from maintaining an action or proceeding to attack, review, set aside, void, or annul the acts or decisions of a public agency on the grounds of noncompliance with CEQA if a member of that organization has complied with the above two provisions. Existing law provides that the grounds for noncompliance may have been presented directly by a member or by a member agreeing with or supporting the comments of another person. (Pub. Resources Code Sec. 21177(c).)

Existing law provides that if a parcel has been zoned to accommodate a particular density of development or has been designated in a community plan to accommodate a particular density of development and an environmental impact report was certified for that zoning or planning action, the application of CEQA to the approval of any subdivision map or other project that is consistent with the zoning or community plan shall be limited to effects upon the environment which are peculiar to the parcel or to the project and which were not addressed as significant effects in the prior environmental impact report, or which substantial new information shows will be more significant than described in the prior environmental impact report. (Pub. Resources Code Sec. 21083.3(a).)

Existing law provides that if a development project is consistent with the general plan of a local agency and an environmental impact report was certified with respect to that general plan, the application of CEQA to the approval of that development project shall be limited to effects on the environment which are peculiar to the parcel or to the project and which were not addressed as significant effects in the prior environmental impact report, or which substantial new information shows will be more significant than described in the prior environmental impact report. (Pub. Resources Code Sec. 21083.3(b).)

This bill would require the Judicial Council, on or before July 1, 2019, to adopt a rule of court to establish procedures applicable to actions or proceedings brought to attack, review, set aside, void, or annul the certification of the environmental impact report for a housing project or the granting of any housing project approvals that require the actions or proceedings, including any potential appeals therefrom, be resolved, to the extent feasible, within 270 days of certification of the record of proceedings.

This bill would provide, notwithstanding any other law, that in granting relief in an action or proceeding brought pursuant to CEQA challenging a housing project, the court shall not stay or enjoin the siting, construction, or operation of the housing project unless the court finds either of the following:

• the continued construction or operation of the project presents an imminent threat to public health and safety;
• the project site contains unforeseen important Native American artifacts or unforeseen important historical, archaeological, or ecological values that would be materially, permanently, and adversely affected by the continued construction or operation of the project unless the courts stays or enjoins the construction or operation of the project.

This bill would provide that if the court finds that one of the two conditions above is satisfied, the court shall only enjoin those specific activities associated with the project that present an imminent threat to public health and safety or that materially, permanently, and adversely affect unforeseen important Native American artifacts or unforeseen important historical, archaeological, or ecological values.

COMMENT

1. Stated need for the bill

According to the author:

Last year’s housing legislation made significant strides towards addressing the housing crisis, but much work remains. A lack of housing options has forced 114,000 Californians to homelessness and strained families into spending a larger portion of their income on rent. This has made it more difficult for people to find housing in employment-dense regions forcing them to find housing farther away from work. Building more housing is imperative to solving this problem.

The state must work to ease any burdensome barriers blocking the construction of more housing. One of the most significant of these barriers is the long and cumbersome CEQA process. Although CEQA stands to protect the environment, it often hinders the development of housing needed to alleviate the pressure of rising rents and home prices for California’s most needy residents.

In 2014, SB 743 (Steinberg) granted an expedited CEQA review of the downtown Sacramento King’s NBA Arena. In addition to an expedited CEQA review of the project in court within 270 days, the bill also permitted the construction of the arena in concurrence with the court proceeding.

Throughout the past decade, the legislature has passed legislation expediting the CEQA process for numerous projects in different ways. This bill applies the same provisions SB 743 gave to the King’s stadium to spur the construction of housing.

This bill would require a court to complete a CEQA suit brought against a housing project within 270 days.

This bill would also permit development of housing projects to proceed during any court proceeding unless the court finds that the development of a housing project does one of the following:

• Produces an imminent threat to public health and safety
• Jeopardizes important historical, archaeological, or ecological values associated with construction on specified land including Native American artifacts.

This bill does not limit the public’s ability to object to projects under CEQA—nor does it grant any new exemptions to CEQA. The process of public input, developing an Environmental Impact Report (EIR), and the ability to challenge a project remains intact. This bill simply expedites the time period in which a court overseeing a CEQA challenge to a housing project must be completed. This bill will improve the rate at which housing is built, allowing for more units to exist for struggling Californians, while creating new jobs that will stimulate our state economy.

2. Unintended consequences: negative impacts on the courts and the environment

This bill would make two significant changes to the process for making CEQA challenges to housing projects: (1) setting time limits on the actions or proceedings; and (2) eliminating the power of courts to enjoin or stay projects.

1. Setting impractical expectations for CEQA challenges

This bill would require the Judicial Council to adopt a rule of court to establish procedures applicable to actions or proceedings brought to attack, review, set aside, void, or annul the certification of the environmental impact report for a housing project or the granting of any housing project approvals that require the actions or proceedings, including any potential appeals therefrom, be resolved, to the extent feasible, within 270 days of certification of the record of proceedings. Such a requirement presents several key issues.

First, such a requirement inherently prioritizes such cases over other critically important ones, further delaying justice for parties to those actions. As pointed out by the Judicial Council, this expedited judicial review undermines equal access: “The courts are charged with dispensing equal access to justice for each and every case on their dockets. Singling out this particular type of case for such preferential treatment appears at odds with how our justice system has historically functioned.”

Secondly, the expedited judicial review provision would be impracticable to carry out. Based on the numbers from the Judicial Council, a 270-day timeline triggered at the point of certification of the record is fundamentally infeasible and fails to take into consideration the realities of the court system.

1. Removing an important tool from the courts

This bill would provide that, notwithstanding any other law, in granting relief in an action or proceeding brought pursuant to CEQA challenging a housing project, the court shall not stay or enjoin the siting, construction, or operation of the housing project. There would be two exceptions where the court finds either of the following:

• the continued construction or operation of the project presents an imminent threat to public health and safety; or,
• the project site contains unforeseen important Native American artifacts or unforeseen important historical, archaeological, or ecological values that would be materially, permanently, and adversely affected by the continued construction or operation of the project unless the courts stays or enjoins the construction or operation of the project.

Even if the court finds that one of these conditions is satisfied, the court would only be authorized to enjoin those specific activities associated with the project that present an imminent threat to public health and safety or that materially, permanently, and adversely affect unforeseen important Native American artifacts or unforeseen important historical, archaeological, or ecological values.

The ability to grant injunctive relief is fundamental to the equitable nature of these court proceedings. Generally, injunctive relief is granted by a court to preserve the status quo until a determination of the merits of the CEQA challenge can be made. The ability to stay or enjoin housing projects during the pendency of CEQA actions or proceedings is often necessary to prevent prospective damage as well as to contain ongoing damage. This bill would strip courts of this equitable power except in limited circumstances, seriously undermining the effectiveness of the state’s preeminent environmental law.

Sierra Club California and California League of Conservation Voters write in joint opposition of the bill and address this issue: “Injunctions are important tools to prevent projects from continuing to be built when the law may require the project to change, or not go forward entirely.” They illustrate the importance of this point with the following example:

[A] suit could show that an agency failed to take into account certain types of impacts, which can prejudice the entire CEQA analysis. The usual remedy in this case is to decertify the Environmental Impact Report (EIR) and have the lead agency start over. In doing so, the lead agency may have to make changes to the project design in order to satisfy mitigation requirements under the law. Without an injunction, that project could have already been built, and irreparable harm to the environment could have already been done. Political pressure to not demolish an existing building may taint a lead agency’s handling of a subsequent EIR.

This highlights a dramatic consequence of removing discretion from judges to stay or enjoin projects. For a project that has serious issues that do not meet the high bar of being an “imminent threat,” the court will no longer be capable of halting or pausing its advance. As indicated, the likelihood of serious and legitimate issues being appropriately dealt with in the wake of a favorable ruling is severely diminished if a project’s construction has significantly advanced in the meantime.

The Judicial Council, in opposition, states that this bill “significantly limits the forms of relief that the court may use in any action challenging the housing projects covered by this bill, interferes with the inherent authority of a judicial officer, and raises a serious separation of powers question.”

3. The weight of the evidence undermines the perception that CEQA is a major

impediment to housing and other important projects in California

As indicated in the statement from the author above, underlying this piece of legislation is the proposition that CEQA is “one of the most significant . . . barriers” to “the construction of more housing.” California Community Builders writes in support that CEQA “often hinders the development of housing.” The California Apartment Association and other organizations also rely on this same point as the basis for their support of this bill. This concept of rampant CEQA litigation abuse has been echoed throughout the years.

However, this fundamental premise is not supported by the weight of the evidence. In 2016, BAE Urban Economics did a quantitative analysis of the effects of CEQA on California’s economy, including the effects on housing development. (BAE Urban Economics, CEQA in the 21st Century (August 2016) <https://rosefdn.org/wp-content/uploads/2016/08/CEQA-in-the-21st-Century.pdf> [as of Apr. 5, 2018].) The report found “no evidence” to support the argument that CEQA represents a major barrier to development. To the contrary, the report found that only 0.7 percent of all CEQA projects undergoing environmental review were involved in litigation. The report indicated that California’s affordable housing production ranked ninth among the 50 states. In fact, the report concluded that “[t]he CEQA process also helped ensure that affordable housing is develop[ed] in a way that does not compromise the health and safety of an already vulnerable population.”

Another relevant report produced by the Senate Environmental Quality Committee was recently released that also undercuts the theory that CEQA is hampering development. (Senate Environmental Quality Committee, California Environmental Quality Act Survey (December 2017) <http://senv.senate.ca.gov/sites/senv.senate.ca.gov/files/ceqa_ survey_full_report_-_final_12-5-17.pdf> [as of Apr. 5, 2018].) As the author’s office concedes in its background materials on this bill, the report shows that CEQA litigation abuse is “close to non-existent.”

These studies call into question whether CEQA is the real culprit for California’s housing woes, undermining the need for the drastic provisions of this bill. In fact, others have made the case that the focus should be on other factors in the process. (See Dillon, Liam, Blame California’s cities and counties for housing delays, not state environmental law, new study says (Feb. 20, 2018) Los Angeles Times <http://www.latimes.com/ politics/essential/la-pol-ca-essential-politics-updates-blame-cities-and-counties-for-housing-1519168035-htmlstory.html> [as of Apr. 5, 2018].)

It should be noted that those in support of this bill point to another study conducted by a partner from the law firm Holland & Knight who represents a number of clients, including real estate developers. That study recommended moderate reforms to the CEQA process to encourage and facilitate additional housing development. (See Jennifer Hernandez, In the Name of the Environment < http://issuu.com/hollandknight/ docs/ceqa_litigation_abuseissuu?e=16627326/14197714> [as of Apr. 5, 2018].)

Support: American Institute of Architects, California Council; BizFed; California Apartment Association; California Association of Realtors; California Building Industry Association; California Business Properties Association; California Chamber of Commerce; California Community Builders; California Council for Affordable Housing; California Housing Alliance; California YIMBY; El Concilio of San Mateo County; Habitat for Humanity; National Federation of Independent Business; Non-Profit Housing Association of Northern California; Silicon Valley Leadership Group; The Two Hundred

Opposition: California League of Conservation Voters; Judicial Council; Sierra Club California

HISTORY

Source: Author

Related Pending Legislation:

SB 922 (Nguyen, 2018) would impose limits on the court’s ability to issue injunctive relief in CEQA cases challenging specified affordable housing projects built upon former surplus state real property. It would also impose time limits on the courts for the resolution of such cases. This bill is currently in the Senate Governmental Organization Committee.

SB 948 (Allen, 2018) would extend exceptions to CEQA to community plan projects, as defined. This bill is currently in the Senate Environmental Quality Committee.

SB 1052 (Bates, 2018) would require detailed information on any plaintiffs bringing CEQA challenges to acts or decisions of a public agency, including the source and amount of all contributions to the action. This bill is currently in the Senate Rules Committee.

SB 1341 (Glazer, 2018) would require detailed information on any plaintiffs bringing CEQA challenges to acts or decisions of a public agency, including the source and amount of all contributions to the action. This bill is currently in the Senate Rules Committee.

AB 1905 (Grayson, 2018) would impose limits on the court’s ability to issue injunctive relief in CEQA cases challenging specified transportation projects. This bill is currently in the Assembly Natural Resources Committee.

AB 2279 (Fong, 2018) would impose limits on the court’s ability to issue injunctive relief in CEQA cases challenging specified housing projects. This bill is currently in the Assembly Natural Resources Committee.

AB 2856 (Melendez, 2018) would impose limits on the court’s ability to issue injunctive relief in CEQA cases challenging specified housing projects. This bill is currently in the Assembly Natural Resources Committee.

Prior Legislation:

SB 743 (Steinberg, Ch. 386, Stats. 2013) established specified administrative and judicial review procedures for review of the EIR and public agency approvals granted for a project related to the development of an entertainment and sports center in the City of Sacramento. Additionally, this bill provides that aesthetic and parking impacts of a residential, mixed-use residential, or employment center project on an infill site within a transit priority area shall not be considered significant impacts on the environment under CEQA, as specified.

SB 292 (Padilla, Ch. 353, Stats. 2011) established specified administrative and judicial review procedures for review of the EIR and public agency approvals granted for a project related to the development of a stadium in the City of Los Angeles.

AB 30 (Caballero, 2017) would have imposed limits on the court’s ability to issue injunctive relief in CEQA cases challenging specified strip mall conversion housing projects. This bill died in the Assembly Natural Resources Committee.

AB 900 (Buchanan, Ch. 354, Stats. 2011), the Jobs and Economic Improvement Through Environmental Leadership Act of 2011, established specified administrative and judicial review procedures for the review of the EIR and public agency approvals granted for designated residential, retail, commercial, sports, cultural, entertainment, or recreational use projects, or clean renewable energy or clean energy manufacturing projects.

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