Charity Schiller is a partner in the law firm of Best Best & Krieger and can be reached at charity.schiller@bbklaw.com. This article is adapted from an earlier feature that appeared in the PublicCEO newsletter.

In the alphabet soup of municipal law, four letters are likely to appear together again and again: CEQA, the California Environmental Quality Act. Join us and our public agency and CEQA consultant co-panelists at the League of California Cities 2018 Annual Conference & Expo, where we will discuss changes to CEQA and how they will impact the entitlement and CEQA processes for future projects. Meanwhile, here is a sneak peek at those changes.

Fundamentals of CEQA

CEQA is intended to protect the environment while furthering public disclosure. The law requires that state and local agencies identify the significant environmental impacts of their actions and mitigate those impacts whenever possible. When conducting CEQA review, agencies can start by asking these three questions:

1. Is it a “project”? A project is a discretionary approval by a California public agency that may result in direct or reasonably foreseeable indirect environmental impacts. If the action doesn’t qualify as a project, then the action is not subject to CEQA.
2. Is it exempt? Exemptions can be statutory, such as those granted by the Legislature, or categorical (classes of projects that have been determined not to have effects on the environment). Projects can also fall within the commonsense exemption, when it can be seen with certainty that no possibility of a significant impact on the environment exists.
3. What level of CEQA review is needed? There are many options depending on a project’s circumstances. The most common routes are: 
   • A negative declaration — when there is no substantial evidence supporting a fair argument that the project will have significant environmental impacts; 
   • A mitigated negative declaration — when the potential impacts can be mitigated to a level of less than significant; or 
   • An environmental impact report (EIR) — when there is substantial evidence supporting a fair argument that a project will have significant impacts. 

Subsequent and supplemental EIRs, addenda, subsequent mitigated negative declarations and other options may also be appropriate.

The Overhaul: CEQA 2.0

The Governor’s Office of Planning and Research (OPR) released a proposed, comprehensive update to the CEQA Guidelines in November 2017. According to OPR, the proposed changes to CEQA “consist of refinements and clarifications of existing requirements.” Several of the proposed changes focus on efforts to account for and reduce greenhouse gas emissions in response to SB 743 (2013), which required a CEQA update to address transportation impacts.

While not yet adopted, these changes are moving through the formal rule-making process and will likely become law later this year. (For the status of the updates, visit http://opr.ca.gov/ceqa.) With that in mind, agencies should take note of the proposed guidelines and what these changes may mean in terms of future CEQA compliance.

Although the proposed guidelines include too many changes to list here, the following major changes may interest municipalities and private developers alike.

1. Thresholds of Significance: Changes to CEQA Guidelines Sections 15064(b)(2) and 15064.7(d) would increase the emphasis placed on thresholds of significance. Agencies would be encouraged to explain, with substantial evidence, why a threshold was selected and how compliance with that set threshold means a project’s impacts are less than significant.
2. Water Supply: Updates to Guidelines Section 15155(f) would require agencies to consider water supply with a degree of certainty throughout the project’s life span. Agencies would also be required to evaluate the pros and cons of a project based on water demand and evaluate potential supply alternatives if water supply cannot be determined for the life of a project.
3. Remedies on Remand: New Guidelines Section 15234 would elaborate on the courts’ existing authority to void or partially void project approval using equitable powers. The rule would also confirm that agencies can continue project activities during a remand period under certain circumstances.
4. Appendix G: The Initial Study Checklist includes many proposed changes that would eliminate duplicative questions (though the issues will still need to be analyzed), reorganize issues, make minor clarifications and add two new categories for impact analysis:
   • Energy — The proposal would require agencies to expressly consider a project’s construction and operational energy usage as part of the Initial Study Checklist process for all projects. This is a change from the existing Appendix F energy analysis, which focuses on EIRs.
   • Wildfire Impacts — The proposal would also require agencies to expressly consider a project’s potential impacts to wildfire hazard impacts. While general wildfire hazards would still be considered as part of an agency’s hazards analysis, more specific impacts related to wildfire impacts would be evaluated in their own category of impact.
5. Transportation: Proposed new Guidelines Section 16064.3 and changes to Appendix G would present a major policy-based paradigm shift from analyzing transportation impacts based on levels of service (LOS) to vehicle miles traveled (VMT). As with other types of CEQA impacts, the shift would require agencies to establish, and support, a VMT threshold with substantial evidence and will make the application of VMT in lieu of LOS mandatory beginning in 2020.

Courts Weigh In on CEQA

CEQA is a self-executing statute requiring direct compliance by public agencies. Therefore, perceived violations of CEQA are often enforced through citizen-suit litigation.

Although the legal standard of review limits court review of an agency’s fact-based determinations to whether those determinations are supported by substantial evidence, courts are applying the substantial evidence test with ever-increasing rigor. Agencies need only look to the Newhall RanchCalifornia Supreme Court decision to see courts are asking the question of “why” factual conclusions were reached as part of judicial review.

Further, CEQA litigants are pressing for an increasingly broad approach to which documents are included in an agency’s administrative record (that is to say, the evidence relied upon in court) under California Public Resources Code Section 21167.6. Often, CEQA litigants press to obtain documents through Public Records Act requests or discovery demands that are arguably outside the statutorily defined CEQA record and even seek evidence beyond what was before the agency at the time its decision was made.

Given these litigation trends, agencies should take note of the following:

• Saying “why” in detail — Agencies are being asked to provide ever-increasing levels of detail as to how their conclusions were reached. By laying out all the evidence in administrative records, agencies can better address why a decision was reached.
• Laying out the reasons — Courts are looking behind expert opinion and seeking to probe the underlying facts and technical details behind those expert opinions. This makes it vital for agencies to thoroughly explain their decision-making process.
• Managing the evidence — Petitioners often seek materials from public agencies under distinct laws (CEQA, the Public Records Act, civil discovery statutes, etc.). The standards for which documents are producible — and what an agency’s obligations are — vary under each law. Thus, it is important for an agency to be clear regarding which law it is responding to before providing materials.
• Knowing what is privileged — Certain items (trade secrets, privileged items, the detailed location of cultural artifacts, ect.) do not have to be included in the administrative record. Agencies should carefully review any documents they are proposing to produce to ensure that all privileges and other applicable production exemptions are preserved.

Annual Conference Session Dives Into This Topic

To learn more about this important issue, plan to attend the “Newly Proposed CEQA Guidelines Are Coming to Your Town” session at the League of California Cities 2018 Annual Conference & Expo. The session will be held Thursday, Sept. 13, from 8:15–9:30 a.m. See the conference program or app for location details.

Photo Credit: Vm.