California Environmental Quality Act lawsuits may be the next victims of the state's ongoing recession. Democratic and Republican lawmakers have introduced legislation that follows up on Gov. Schwarzenegger's call to exempt 100 projects from judicial challenge based on the environmental law. Citing the ongoing recession, both supporters and opponents of the idea say this just might be the year that lawmakers are willing to take a bold strike at CEQA.
Lawmakers produced hundreds of bills during the days leading up to the February 19 deadline for introducing legislation. The new bills, as well as some bills leftover from 2009, touch on a wide variety of topics, including housing elements, redevelopment, permit streamlining, parking, mobile home parks, the Williamson Act, and high-speed rail. Many new bills remain in "spot" form, meaning they contain few details and little meaningful language.
No land use legislation appears more important than the "CEQA litigation protection pilot program" contained in ABx8 37, AB 1805, SBx8 42 and SB 1010. The measures would permit the Business, Transportation and Housing Agency (BTH) secretary to select up to 25 projects annually for four years for exemption from judicial review based on CEQA. In other words, no one – not an environmental group, a landowner, the attorney general or another public agency – could challenge the environmental impact report for the project in court. The legislation was introduced with bipartisan support in both houses, as Democratic lawmakers Assemblyman Charles Calderon of Montebello and Sen. Lou Correa of Santa Ana are co-authors along with Republican lawmakers Assemblyman Brian Nestande of Palm Desert and Sen. Dave Cogdill of Modesto.
Proponents of the bills, who include the governor (see CP&DR Insight, January 1, 2010), cast the CEQA legislation in economic development terms. The California Chamber of Commerce and the California Business Properties Association (CBPA) back the bills, and other business and development interests are likely to sign on.
"This is an opportunity for us to make some reforms in this arena as we try to pull ourselves out of this recession," said Rex Hime, president and chief executive officer of the CBPA. The state simply needs to consider jobs and economic development when it imposes environmental regulation, he said.
"CEQA has gone through amorphous changes over the years. Anything that tries to ensure the process isn't used in an abusive manner is an important thing," Hime said.
Tom White, chief of staff to Assemblyman Calderon, called the bills "pretty modest." The legislation would not exempt projects from ordinary CEQA review. It would only prevent lawsuits over a project's environmental impact report – litigation that White characterized as "abuse."
The California Chapter of the American Planning Association (APA) has not yet taken a position on the bills but is likely to oppose the legislation, according to its lobbyist, Sande George. She said the planning organization may instead offer alternative CEQA reform, such as expanding SB 375's CEQA exemptions or streamlining for infill projects.
Pete Parkinson, APA California's vice president for policy and legislation, expressed frustration with the bill's approach to CEQA because of the potential for political manipulation and because the legislation does not attempt to separate legitimate CEQA challenges from bogus lawsuits.
"I understand where the impulse comes from," Parkinson said of the CEQA bills. "CEQA litigation can be a black hole for projects. EIRs have become more and more costly, and sometimes there is nothing you can do to avoid litigation. And sometimes the litigation has nothing to do with the environmental impacts. It has to do with money or it has to do with jobs or something else."
Still, Parkinson said, the state should not ignore real deficiencies in environmental analyses. "There are jurisdictions around the state that don't take their obligations as seriously as they should," he said.
Attorney E. Clement Shute, Jr., of Shute Mihaly and Weinberger, said proponents' argument about frivolous or abusive CEQA litigation is an old saw of developers – and one that arises every time California's economy goes south. Shute, who has represented environmentalists and public agencies in numerous high-profile CEQA cases since the 1970s, said the proposed legislation is beyond "modest" because the existing statute relies on citizen enforcement.
"Without recourse to the courts, CEQA would be a meaningless, empty statute," Shute said. "If the attorney general or citizens don't have that right (to go to court), EIRs would become 20 pages and be worthless documents."
Although the legislation is likely to evolve, it currently does not specify what sort of projects would be eligible for the exemption. The administration would apparently have a great deal of authority to choose projects. Looking forward, a Brown administration probably would exempt very different projects than a Whitman administration would pick.
White said Calderon is thinking first about large infrastructure projects, such as a component of the proposed high-speed rail system. The CBPA's Hime also pointed first to public works projects. However, nothing in the bills limits the exemption to public projects, and the model for the program is special session legislation approved last fall that exempts a private 500-acre stadium and commercial complex in Industry from judicial review (see CP&DR Capitol Update, October 15, 2009). Housing-only projects appear to be outside the program's likely scope.
"I envision it being pretty big projects – a road project, an energy facility," Hime said. "In Sacramento, maybe something that applied to revitalizing the rail yards or downtown or Cal Expo."
The legislation permits exemptions for 10 projects each year in Southern California, five projects in the Bay Area, five in the Central Valley from Sacramento to Kern County, and five elsewhere in the state. Only projects with certified EIRs would be eligible, and the BTH secretary would have to conduct a public hearing before granting an exemption. Up to 25 projects could receive exemptions each year from 2011 through 2014. Although the legislation would sunset after the pilot period, it could be extended in the future.
"It's important to see that it works, and that it won't be abused," Hime said.
Although Republicans and business interests have taken numerous runs at CEQA over the years, ranging from minor amendments to gutting the statute, they have never gotten far. However, there is a sense in Sacramento that 2010 is the year to "do something" about CEQA. No lawmaker wants to get on the wrong side of jobs legislation in a year when one-in-eight Californians is out of work – and in a year with pivotal elections.
"It's a little bit more scary this time," Shute said of the legislation, "because this recession is so severe and the state is just about bankrupt."
Hime declined to characterize the legislation as "CEQA reform." He insisted that the usual CEQA analysis and public review process would remain in tact. The only change would be that environmentalists or business competitors who do not like a project could not resort to CEQA litigation to stall development for years on end, he said.
Proponents introduced the bills into the Legislature's eighth extraordinary session, which the governor called to deal with the current year's budget deficit, and into the regular session, which concludes August 31. If lawmakers approve the extraordinary session legislation, the measures would take effect more quickly.
Tom White, Office of Assemblyman Charles Calderon, (916) 319-2058.
Rex Hime, California Business Properties Association, (916) 443-4676.
Pete Parkinson, California Chapter American Planning Association, (707) 565-1925.
E. Clement Shute Jr., Shute, Mihaly & Weinberger, (415) 552-7272.
Land Use Legislation For 2010
• ABx8 37 and AB 1805 (both Calderon and Nestande) and SBx8 42 and SB 1010 (both Correa and Cogdill). Creates the CEQA litigation protection pilot program that would permit the administration to exempt 100 projects over four years from judicial review based on CEQA.
• AB 2044 (Caballero). Requires the Business, Transportation and Housing Agency (BTH) to rank enterprise zones, with the apparent intent of eliminating the lowest-ranking zones.
• AB 2428 (Buchanan). Expands the definition of an enterprise zone to include green technology zones.
• AB 2518 (V. Manuel Pérez). Requires the Infrastructure and Economic Development Bank to create a local assistance program to provide technical support to small and rural communities seeking funding.
• SBx8 52 (Correa). Creates a special enterprise zone in the City of Fremont, where the NUMMI auto plant is closing, and authorizes the Department of Housing and Community Development (HCD) to create 10 additional special enterprise zones.
Finance and Infrastructure
• AB 1716 (Torlakson). Currently a spot bill regarding school impact fees, this legislation is expected to reduce or eliminate the ability of school districts to charge "level 3" fees. These higher fees apply when state funds run short.
• AB 2579 (Evans). Creates the 11-member Master Plan for Infrastructure Financing and Development Commission.
• AB 2642 (Nestande). Authorizes the City of Riverside to form an infrastructure finance district to fund construction of a medical school on city property.
• SB 10 (Leno). Authorizes counties to seek majority voter approval of increased vehicle license fees for general fund purposes.
• SB 194 (Florez). Modifies how cities and counties spend Community Development Block Grant funds.
• SB 684 (Cogdill). Provides a greater share of future property tax revenues to Alpine, Lassen, Mariposa, Plumas, Stanislaus and Trinity counties, all of which receive less-than-average shares of property taxes.
• SB 1023 (Wiggins). Expedites the procedure for converting archaic resort improvement districts into more useful community services districts with similar powers and service areas. Napa County is behind the legislation, which could be used to advance redevelopment of Lake Berryessa resort and housing facilities (see CP&DR Public Development, October 2006).
• SB 1048 (Hancock). Authorizes use of Mello-Roos bonds to finance green building measures.
• SB 1299 (Torlakson). Requires the Department of Motor Vehicles to implement a pilot program to determine the issues involved with levying a vehicle-miles-traveled fee on motorists.
Housing and Housing Elements
• AB 761 (Calderon). Permits a mobile home park owner subject to local rent control to raise the rent on a new tenant to market rate or double the previous rent, whichever is less.
• AB 1823 (Torres). Permits the expenditure of money in the state mobile home park purchase fund for relocating a park to a new site within the same jurisdiction.
• AB 1867 (Harkey). Expands the definition of "substantially rehabilitated" units that a city or county may count toward meeting its affordable housing obligation.
• AB 2085 (Saldaña). Authorizes the state auditor to audit the Proposition 1C infill incentive and the transit-oriented development grant programs, and the housing-related parks program.
• AB 2425 (Hagman). Exempts the City of La Habra Heights from the next regional housing needs assessment.
• AB 2508 (Caballero). Changes the definition of "suburban" to include jurisdictions of up to 175,000 people for the purpose of determining regional housing need.
• AB 2709 (Blumenfield). Authorizes the California Housing Finance Agency to make loan guarantees to nonprofit housing developers and local public agencies.
• SBx8 28 (Yee). Revises criteria for awarding $87.5 million in unallocated Proposition 1C funds with an emphasis on "shovel ready" projects that could create jobs.
• SB 326 (Strickland). Requires a city or county that fails to identify adequate sites for affordable housing required in its housing element to identify and zone additional sites in the next housing element update.
• SB 812 (Ashburn). Requires cities and counties when updating their housing elements to analyze housing needs of people with developmental disabilities.
• SB 518 (Lowenthal). Permits cities and counties to adopt an ordinance to reduce or eliminate subsidies for parking. The measure would also establish a voluntary system in which the state Air Resources Board would award points to jurisdictions that adopt measures to reduce free parking. Jurisdictions that achieve a certain number of points would be eligible for carbon reduction credits through a cap-and-trade program and for air board loans and grants.
• SB 959 (Ducheny). Establishes a streamlined system for project applicants who need state agency permits. The bill would also require cities and counties to coordinate project reviews and decision-making through a "single administrative entity," and require the Office of Planning and Research to prepare guidelines for cities and counties to use for streamlining permit processing.
• SB 1174 (Wolk). Requires cities and counties to address in their general plans the presence of unincorporated islands, fringe communities and "legacy unincorporated communities" near city borders.
• SB 1207 (Kehoe). Revises the general plan safety element requirements for very high fire hazard severity zones and territory protected by CalFire. Similar bills have been voted each of the past two years.
• AB 1791 (Monning). Exempts the Fort Ord Reuse Authority from having to make blight findings before exercising certain redevelopment powers on vacant lands.
• AB 1870 (Norby). Currently a spot bill carried by longtime redevelopment opponent Chris Norby, this measure could contain restrictions on redevelopment activities.
• SB 2043 (Torrico). Authorizes redevelopment agencies to loan up to $75,000 to reduce the principle mortgage balance of homeowners participating in the federal home affordable modification program.
• AB 2050 (Fong). Permits redevelopment agencies to finance green technology facilities and capital equipment.
• AB 2759 (Nestande). Authorizes redevelopment agencies in contiguous cities to create a joint powers authority for the purpose of pooling housing set-aside fund to pay for emergency homeless shelters.
• SB 530 (Dutton). Attempts to expand the redevelopment pass-through reporting and repayment requirements that were in last year's state budget to all redevelopment project areas.
• SB 1374 (Kehoe). Modifies the information a redevelopment agency must provide to the legislative body when the agency seeks a 10-year time extension.
• AB 266 (Carter). Requires the California Transportation Commission to develop an assessment of transportation funding and needs every five years.
• AB 726 (Nielsen). Specifies that local road rehabilitation projects are eligible for regional project funds under the State Transportation Improvement Program.
• AB 744 (Torrico). Authorizes the Metropolitan Transportation Commission to create a "Bay Area express lane network" of high-occupancy and toll lanes.
• AB 1375 (Galgiani). Creates the Department of High-Speed Trains within BTH, and specifies that the governor shall appoint the department director.
• AB 1747 (Galgiani). Encourages the High-Speed Rail Authority to consider California job creation when awarding major contracts or purchasing trains.
• AB 2658 (Conway). Creates a short-line railroad program to improve goods movement.
• SB 409 (Ducheny). Attempts to increase oversight of the High-Speed Rail Authority by requiring Senate approval of the governor's appointees to the authority board, requiring the authority to submit an annual funding plan to the California Transportation Commission, and requiring BTH to prepare a five-year rail connectivity plan.
• SB 1245 (Simitian). Ensures that existing toll-free high-occupancy vehicle lanes remain free to high-occupancy vehicles.
• AB 2530 (Nielsen). Funds Williamson Act subventions to counties with fees collected from Williamson Act contract cancellations.
• SB 715 (Wolk). Gives local government more authority for enforcing Williamson Act contract compliance and conditioning the subdivision of land under contract.
• SB 1042 (Walters). Repeals the authority of counties to take property by eminent domain for the purpose of conveying the land to the federal government for military uses.