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Streamlined Yet Underutilized: CEQA’s Class 32 Urban Infill Exemption

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Streamlining—the promotion of organizational and systemic efficiency through the simplification of process—has been steadily incorporated into CEQA for years, largely through exemptions. The notion being: why not shorten the lengthy CEQA review where prior planning documents have nearly fully assessed potential impacts of a project? (E.g., CEQA Guidelines, § 15183.3, subd. (a).) These exemptions, categorical or statutory, are intended to save agencies, and by extension the public, time and resources.

Unlike many statutory exemptions that excuse qualifying projects entirely from CEQA consideration, categorical exemptions only discharge a “class” of projects from typical CEQA evaluation via a discretionary preliminary review. (CEQA Guidelines, § 15354.) The “Class 32” exemption is one such class promoting “shovel-ready” urban infill development projects through categorical streamlining. Established in 1998, this urban infill exemption requires projects to be consistent with applicable general plans and zoning designations, located within a city’s limits on a site five acres or less, bordered by urban uses, and without significant impacts to traffic, noise, air quality, or water quality. The project site itself can be either vacant or previously developed, but must be devoid of sensitive habitat and adequately served by public utilities. (CEQA Guidelines, § 15332).

In 2011, additional streamlining provisions included in Senate Bill 226 were intended to balance the interests of the government, business, and the environment by better fast-tracking Class 32 urban infill development by specifying conditions under which these projects would be adequately supported by existing planning documents and land use designations. (Pub. Resources Code, § 21094.5.) Despite SB 226 streamlining and Class 32’s beneficial function, it still goes underutilized. So why aren’t cities using this infill categorical exemption and should that change?

Class 32 and the Balancing Act of Senate Bill 226

The Class 32 infill development exemption was included in the Guidelines as a part of a 1998 revision by the Governor’s Office of Planning and Research (OPR) to clarify project types that are categorically exempt from typical CEQA review. In an effort to promote this exemption, along with other environmental tools such as solar technology, in 2011 State Senator Joseph Simitian penned SB 226 to expand CEQA streamlining provisions for infill development projects. Sen. Simitian intended the bill to balance interests, especially with increasing legislative demands for a reduction in greenhouse gas emissions. He also purported to provide a much-needed boost to industries struggling to recover from the country’s economic recession, specifically construction. (See State Sen. Joseph Simitian, letter to Governor Jerry Brown, Sept. 5, 2011, http://www.senatorsimitian.com/images/uploads/SB_226_CEQA_Letter.pdf; Sen. Rules Com., Off. of Sen. Floor Analyses, Analysis of Sen. Bill No. 226 (2011–2012 Reg. Sess.) as amended September 9, 2011, p. 4.) By June 2012, OPR had effectuated the final proposal, incorporated the bill’s language into CEQA Guidelines, and published its accompanying performance standards as Appendix M, at which time it became an official enhancement to Class 32 exemptions.

Exemption Usage…or Lack Thereof

While a Class 32 exemption and its streamlining provisions can help cities more predictably plan development, it has gone underutilized.

Scott Morgan, OPR Deputy Director of Administration and State Clearinghouse Director, has stated that agencies often choose to prepare negative declarations or even environmental impact reports (EIRs) for projects that meet infill exemption criteria, despite the fact that negative declarations are often litigated and held to an less deferential standard of judicial review (“fair argument” versus “substantial evidence” standard, see below). Mr. Morgan explains some of this underutilization as simple unfamiliarity—city staff often aren’t aware of or comfortable using this exemption and its streamlining possibilities. However, some larger cities like Oakland and San Francisco almost exclusively use this exemption for their smaller-scale infill projects, thereby exemplifying the principle that areas already predetermined for these exact uses by a CEQA-driven planning process need not undergo a more onerous review.

The City of Oakland has developed a Class 32 exemption process that includes a preliminary review with report-style documentation, inclusive of applicable technical analysis and informal findings. In July 2015, for example, the Oakland Bureau of Planning prepared a 54-page Class 32 exemption report for a 24-story, mixed-use project with residential, retail, and restaurants on a previously developed half-acre site at 1700 Webster Street. This report included a detailed project description, CEQA categorical exemption and streamlining criteria, a CEQA exemption checklist demonstrating how this criteria has been met, and seven technical appendices ranging from transportation impact analysis to air quality and noise studies to a wind tunnel analysis. The report led to the planning staff’s December 2015 recommendation for approval and the Planning Commission’s subsequent approval. The project broke ground in the spring of 2017.

Taking Exception: How Unusual Are Unusual Circumstances?

Procedurally, Class 32 exemptions require a fraction of the process prescribed for standard CEQA review, with no required public review period, specific CEQA documents, or mitigation. Exceptions to the exemptions, however, add back in a measure of consideration to the process. (CEQA Guidelines, § 15300.2, subds. (b), (c)–(f).) Under these exceptions, the infill exemption cannot be used if the project would cause cumulatively significant impacts, impact scenic highways or historical resources, involve hazardous waste, or are subject to “unusual circumstances.” While these four exemptions lend themselves to relatively straightforward interpretation and have been largely uncontroversial, the “unusual circumstances” exception has been the subject of much litigation.

The “unusual circumstances” exception precludes the use of any categorical exemption when there is a “reasonable possibility” that the project “will have a significant effect on the environment due to unusual circumstances.” (CEQA Guidelines, § 15300.2 (c.).) In reviewing a lead agency’s determination as to whether the exemption applies and if the effects will be significant, the Supreme Court has applied a two-prong test wherein an agency must answer: (1) are there unusual circumstances? And if so, (2) would these unusual circumstances create a potential for significant impact? Further complicating the issue is the bifurcation of the standard of review that applies the “substantial evidence” standard to the first prong of the test and the “fair argument” standard to the second. Under the more deferential first prong, an agency may base its decision on substantial evidence, including conditions in the vicinity of the project. If it determines there is an “unusual circumstance,” then the “fair argument” standard requires an EIR when it can be fairly argued based on substantial evidence that “due to” the unusual circumstances of the project, it may have a significant effect on the environment. Both standards require substantial evidence in the record. And the question of whether a project qualifies for the Class 32 exemption in the first instance is subject to the more deferential “substantial evidence” threshold. (Berkeley Hillside Preservation v. City of Berkeley (2015) 60 Cal.4th 1086, 1114).

Given the above, a prudent agency using a Class 32 exemption should document its determination of whether any “unusual circumstances” are present and resulting potential significant effects (or presumably, the lack thereof) with applicable land use documents (zoning maps, general plans, etc.) and if warranted, some standard preliminary technical analysis (traffic, biology, noise, etc.). With these components on the record, as in the Oakland example, in conjunction with the issuance of an NOE, the outcome of legal challenges should be more favorable for cities and developers.

Conclusion

Although litigation for Class 32 exemption projects is always a possibility for development projects, with fulfillment of applicable CEQA criteria and requirements, agencies would be wise to consider the Class 32 exemption. Based on judicial trends, this exemption may be more likely to survive a legal challenge than a negative declaration at least in some jurisdictions. If these trends continue, over time challenges to these exemptions could even quieted by case law that supports agency discretion with the use of the Class 32 CEQA infill exemption, making it an increasingly viable option for agencies to speed up the development of much needed infill housing and other urban projects.

By: Casey Shorrock Smith

Fourth District Holds that Land Acquisition Agreement Did Not Trigger Duty to Prepare an EIR

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In Bridges v. Mt. San Jacinto Community College District (2017) 14 Cal.App.5th 104, the Fourth District Court of Appeals held that a land acquisition agreement entered into by the Mt. San Jacinto Community College District to purchase property from the Riverside County Regional Park & Open-Space District for potential future use as the site of new campus did not trigger the duty to prepare an EIR.

As a threshold issue, the court held that the appellants were barred from raising objections to the college’s decision because they had failed to exhaust their administrative remedies. The appellants argued that they were excused from objecting to the purchase agreement because the college did not give notice of the meeting at which it approved the agreement. Because the appellants could not establish that the no-notice exception applied—the court relied on the presumption afforded by Evidence Code section 664 to presume that the college had posted the agenda in accordance with the Brown Act requirements because the record contained no evidence to the contrary.

Nonetheless, the court went on to discuss the merits and determined that appellants’ claims were meritless because the purchase agreement required completion of an EIR before the sale could even be finalized. The court found that the purchase agreement complied with CEQA’s land acquisition agreement rule. Unlike the circumstances in the definitive California Supreme Court decision, Save Tara v. City of West Hollywood (2008) 45 Cal.4th 116, here, no funds had been committed to the project and a developer had yet to be identified. The court found nothing in the administrative record to indicate that the college had committed itself to a definitive use of the property.

Finally, the court held the college did not violate CEQA by failing to formally adopt local implementing guidelines. Public Resources Code section 21082 provides an exemption for school districts, if they “utilize” the guidelines of another public agency. Here, the college had chosen to use the local guidelines adopted by Riverside County.

 

Christina Berglund

California Supreme Court Holds that State Agency Compliance with CEQA is Not Preempted By the ICCTA

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In Friends of the Eel River v. North Coast Railroad Authority (2017) 3 Cal.5th 677, the California Supreme Court held that the Interstate Commerce Commission Termination Act (ICCTA) does not preempt CEQA when a California public agency decides to undertake a new railroad project, even if the state agency later authorizes a private entity to operate the new rail line. The Court therefore concluded that the North Coast Railroad Authority (NCRA) was required to comply with CEQA prior to taking steps to reinitiate rail service on a segment of an interstate rail line that had gone out of operation for many years. The Court declined, however, to enjoin the ongoing operations of the railroad by NWPCo, the private operator. Because these operations had been occurring during the course of the litigation against NCRA, any such injunction would intrude into an area of activity that is preempted by the ICCTA, namely, private railroad operations.

The NCRA is a state agency created in 1989 for the purpose of resuming railroad freight service along a previously-abandoned route through Napa and Humboldt Counties. The northern portion of the line runs along the Eel River, while the southern portion, at issue in the case, runs along the Russian River.  In 2000, the Legislature authorized funding for NCRA’s program, with the express condition of CEQA compliance. NCRA subsequently contracted with NWPCo, a private company, to run the railroad. As part of the lease agreement between the two entities, NWPCo agreed that CEQA compliance by NCRA was a precondition to resumed operation. Accordingly, in 2007, NCRA issued a notice of preparation, and in June 2011, it certified a Final EIR. In July 2011, petitioners sued, challenging the adequacy of the EIR on a number of grounds. Concurrently, NWPCo commenced limited freight service along the Russian River. In 2013, NCRA took the unusual step of rescinding its certification of the Final EIR, asserting in explanation as follows: that ICCTA preempted California environmental laws; that the reinitiation of rail service was not a “project” under CEQA; and that the EIR NCRA had prepared had not been legally required. Although NCRA successfully removed the case to federal court, the case subsequently sent back to state court for a resolution of both the state CEQA claims and NCRA’s ICCTA preemption defense. The Court of Appeal sided with NCRA, finding that ICCTA was broadly preemptive of CEQA. The Supreme Court granted review.

Federal preemption is based on the Supremacy Clause of the United States Constitution, which provides that federal law is the supreme law of the land. Preemption can occur expressly, through the plain words of a federal statute, or can be implied, as when a court discerns that Congress intends to occupy an entire field of regulation, or when a court concludes that a state law conflicts with a federal purpose or the means of achieving that purpose. A federal statute can be preemptive on its face or as applied. There is a presumption against preemption, particularly in areas traditionally regulated by the states, which can only be overcome by a clear expression of intent (the Nixon/Gregory rule). The market participant doctrine is a related concept and holds that a public agency has all the freedoms and restrictions of a private party when it engages in the market (provided that the state does not use tools that are unavailable to private actors). The courts presume that Congress did not intend to reach into and preempt such proprietary marketplace arrangements, absent clear evidence of such expansive intent.

The Court began by recognizing that ICCTA does preempt state environmental laws, including CEQA, that interfere with private railroad operations authorized by the federal government. ICCTA contains an express preemption clause giving the federal Surface Transportation Board (STB) jurisdiction over railroad transportation (including operation, construction, acquisition, and abandonment). ICCTA’s purpose was both unifying (to create national standards) and deregulatory (to minimize state and federal barriers). Although ICCTA is a form of economic regulation, state environmental laws are also economic in nature when they facially, or as applied, dictate where or how a railroad can operate in light of environmental concerns. Such state laws act impermissibly as “environmental preclearance statutes.” These legal principles, however, did not extend to the actions of NCRA in this case. Just as a private railroad company may make operational decisions based on internal policies and procedures, and may even modify its operations voluntarily in order to reduce environmental risks and effects, so too may a state, in determining whether to create a new railroad line, subject itself to its own internal requirements aimed at environmental concerns. In the latter context, though, a state operates through laws and regulations, as opposed to purely private policies. When a state acts in such a manner, its laws and regulations are a form of self-governance, and are not regulatory in character. CEQA is an example of such an internal guideline that governs the process by which a state, through its subdivisions, may develop and approve projects that affect the environment. Viewed in this context, CEQA is part of state self-governance, and is not a regulation of private activity.

Although the market participant doctrine does not directly apply, being mainly applicable in Commerce Clause jurisprudence, the doctrine supports by analogy the view that that California was not acting in a regulatory capacity in this case. CEQA is analogous to private company bylaws and guidance to which corporations voluntarily subject themselves. By imposing CEQA requirements on the NCRA, the state was not “regulating” any private entity, but rather was simply requiring that NCRA, as one of its subdivisions, conduct environmental review prior to making a policy decision to recommence the operation of an abandoned rail line. If Congress had intended to preempt the ability of states to govern themselves in such a fashion, any such intention should have been clear and unequivocal. The Court found no such intent in the ICCTA.

The Court’s remedy, however, was cognizant of the narrowness of its holding. The Court concluded that, because NWPCo is currently operating the line, the California Judiciary could not enjoin that private entity’s operations even if, on remand, the lower state courts found problems with NCRA’s CEQA documentation. An injunction under CEQA against NWPCo would act as a regulation, by having the state dictate the actions to private railroad operator. Such action would go beyond the state controlling its own operations.

James G. Moose & Sara Dudley

First District Reversal Allows for Challenge to Local Air District’s Limited Discretionary Approval Under CEQA

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In Friends of Outlet Creek v. Mendocino County Air Quality Management District (2017) 11 Cal.App.5th 1235, the First District Court of Appeal held that a responsible agency air quality management district may be sued under CEQA, but such suit must be limited to the agency’s specific discretionary action and may not challenge prior lead agency approvals. In addition, the court held that such an action must be brought as an administrative mandamus proceeding under Code of Civil Procedure section 1094.5.

In 2014, Grist Creek Aggregates, LLC (Grist Creek), initiated a process with Mendocino County to resume aggregate and asphalt production after years of reduced operation due to market conditions. The site had been used for aggregate and asphalt production since 1972. In 2009, the county updated its general plan and certified an EIR to, among other things, change the land use designation at the site from rangeland to industrial, and in 2010, the county rezoned the site to conform to the updated land use designations. No legal challenges were brought against the county’s actions.

In response to Grist Creek’s request to resume aggregate and asphalt production, the county Board of Supervisors issued a March 2015 resolution declaring that the resumption of asphalt production was neither a new, nor a changed, industrial use, and therefore it was allowed under a previously issued permit. The county issued a notice of exemption and Friends of Outlet Creek (Friends) filed a lawsuit challenging the county’s determination. Grist Creek then applied to the Mendocino County Air Quality Management District for an Authority to Construct (ATC), which the district issued in June of 2015 based on the county’s previous actions as the CEQA lead agency.

After its administrative appeal was denied, Friends filed a lawsuit against the district alleging that the district failed to comply with CEQA because it did not conduct a separate environmental analysis, and alleging the district did not follow its own regulations. The district and Grist Creek filed demurrers asserting that Friends could not sue the district directly under CEQA, and instead could only sue under Health and Safety Code section 40864. The trial court sustained the demurrers and Friends appealed.

The Court of Appeal cited to several cases to support its determination that the district could be sued under CEQA, including those that addressed challenges to individual permit decisions. In addition, the court pointed out that no court has ever declared that Health and Safety Code section 40864 is the only statute that can be invoked in challenging an action by an air quality management district. Therefore, the court held, Friends could sue directly under CEQA and was not required to sue under Health and Safety Code section 40864.

The court then turned to the scope of the CEQA challenge. Relying on the fact that the district’s role was limited to issuing the ATC, the court found that Friends could not challenge any of the county’s land use decisions through this litigation. The court further determined that, because a hearing was required, evidence was taken, and the administrative agency had discretion in determining the facts, the lawsuit must be brought as an administrative mandamus proceeding under Code of Civil Procedure section 1094.5. Thus, the challenge was limited to the record from the administrative appeal and matters judicially noticeable.

For information on Grist Creek’s action against the trial court seeking to vacate its demurrer rulings, see: https://www.rmmenvirolaw.com/2017/07/air-district-boards-tie-vote-on-authority-to-construct-permit-is-effectively-a-decision-not-to-revoke-it-which-is-reviewable-for-prejudicial-abuse-of-discretion/.

[Casey Shorrock Smith]

California Supreme Court Upholds GHG Analysis in SANDAG’s Regional Transportation Plan EIR

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In a 6/1 opinion, the California Supreme Court held that the San Diego Association of Governments (SANDAG) did not abuse its discretion by failing to present a consistency analysis in the EIR for its 2011 regional transportation plan (RTP) comparing anticipated GHG emissions with the long-term reduction goals presented in Executive Order (EO) S-3-05, in Cleveland National Forest Foundation v. San Diego Association of Governments (2017) 3 Cal. 5th 497.  The court reasoned that SANDAG had adequately informed the public, using information available at the time, of inconsistencies with overall state climate goals.

In 2011, SANDAG issued its RTP as a 40-year blueprint for regional transportation planning. The RTP was accompanied by an EIR that used three thresholds of significance to assess GHG impacts. Compared to existing (2010) conditions, the EIR found GHG impacts to be “not significant” in 2020, but significant in both 2035 and 2050. The EIR also analyzed GHG emissions against statutory goals for the years 2020 and 2035, but did not compare emissions against the long-term (2050) goal set forth in EO S-3-5 (80 percent below 1990 levels by 2050).  In response to comments that were critical of the GHG analysis, SANDAG maintained that it had no obligation to analyze projected GHG emissions against the Executive Order.

Several groups filed lawsuits challenging the EIR and the Attorney General later joined the petitioners. The superior court found the EIR inadequate and issued a writ of mandate. The Court of Appeal affirmed, holding that, among other flaws, the EIR violated CEQA by failing to measure GHG impacts against the Executive Order.

The Supreme Court granted review on the following question: “Must the environmental impact report for a regional transportation plan include an analysis of the plan‘s consistency with the greenhouse gas emission reduction goals reflected in Executive Order No. S-3-05 to comply with the California Environmental Quality Act (Pub. Resources Code, § 21000 et seq.)?”

Addressing this question, the Supreme Court held that the EIR was not required to include an express analysis of GHG impacts compared to the Executive Order’s goals. The court was careful, however, to limit its holding to the facts before it, explaining that it was holding “only that SANDAG, in analyzing greenhouse gas impacts at the time of the EIR, did not abuse its discretion by declining to adopt the Executive Order as a measure of significance or to discuss the Executive Order more than it did.” The court noted that this level of analysis would not “necessarily be sufficient going forward.”

Finding that an express consistency analysis was not required, the court disagreed that the EIR obscured the statutory framework or statewide goals, although it conceded that SANDAG could have presented the information in “clearer or more graphic” ways. Because the EIR presented anticipated GHG emissions in 2050 and discussed the long-term goals in the Executive Order, the court found that the information was “not difficult” for the public to obtain to conduct a consistency analysis. The court stressed that the inclusion of this information in responses to comments instead of the EIR itself was “not an infirmity” because it would be expected that members of the public “interested in the contents of an EIR will not neglect this section.”

The court acknowledged the parties’ understanding that an executive order does not carry the “force of a legal mandate” when preparing a CEQA document but did not discuss this issue further. Nor did the Court prescribe this specific outcome for other agencies but instead repeatedly asserted the “narrowness” of its ruling and that planning agencies must ensure their analysis keeps up with “evolving scientific knowledge and state regulatory schemes.” In reversing the Court of Appeal’s judgement, the court ruled only that the 2011 analysis of GHGs emissions did not render the EIR inadequate. The court declined to express an opinion on other deficiencies identified by the trial court and Court of Appeal.

In a comprehensive dissent that included a detailed discussion of the legislative framework, Justice Cuéllar maintained that SANDAG’s EIR lacked “good faith reasoned analysis” because it obscured important GHG information. Justice Cuéllar pointed to the “relative clarity of statewide statutory goals” as reasoning why SANDAG did not have the discretion to downplay the GHG consequences of its RTP. Further, he expressed concern that the majority’s ruling could allow other regional planning agencies to “shirk their responsibilities.”

Remy Moose Manley (Whitman F. Manley, Laura M. Harris, and Christopher L. Stiles) submitted an Amicus Curiae brief in support of SANDAG.

[Casey Shorrock Smith]

Air District Board’s Tie Vote on Authority to Construct Permit Is Effectively a Decision Not to Revoke It, Which Is Reviewable for Prejudicial Abuse of Discretion

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On June 14, 2017, Division One of the First Appellate District published its decision in Grist Creek Aggregates, LLC v. The Superior Court of Mendocino County (2017) 12 Cal.App.5th­­­ 979, in which the Court of Appeal held that a county air district board’s tie vote on the petitioner’s administrative appeal of an asphalt production facility’s construction permit, effectively resulted in the appeal’s denial, rendering the denial subject to judicial review.

The appellate court’s decision is the latest in a series of environmental and administrative challenges arising from Grist Creek Aggregate’s construction and operation of an asphalt facility in Mendocino County. At issue here, in November 2015, the Mendocino County Air Quality Management District issued an authority to construct permit (ATC) to Grist Creek Aggregates to build a facility to heat and blend rubber. Friends of Outlet Creek, the petitioner in the related suits, appealed the ATC decision to the District’s five-member Hearing Board. After recusal of one of the Board’s members, the remaining four members were locked in a tie vote. Because it was unable to reach a decision, the Board determined not to hold any further hearings on the appeal. Thus, the ATC remained in place.

Friends filed suit, alleging that the Air District and the Hearing Board violated CEQA in not conducting environmental review for the ATC, and violated the District’s own regulations. The Hearing Board demurred on the ground that because the tie vote was tantamount to no action, there was no agency decision for the court to review. Grist Creek Aggregates also demurred, arguing that Friends could not sue directly under CEQA and had failed to exhaust its administrative remedies. The trial court sustained the Board’s demurrer with leave to amend and overruled Grist Creek’s demurrer, both on the basis that the tie vote was not a Board “decision,” and therefore, there was nothing for the court to review. In the interim, the Board added a fifth member. The trial court noted this, but failed to order that the new Board rehear the ATC permit appeal. Grist Creek filed a writ of mandate in the Court of Appeal seeking to require the trial court to vacate all of its demurrer rulings.

The Court of Appeal granted Grist Creek’s petition. The court first noted that the trial court’s decision was internally inconsistent. The Board was under no obligation to hold another hearing on the appeal, and in fact indicated to opposing counsel that they would not do so. Coupled with the trial court’s conclusion that the tie vote meant that Friends did not have a cause of action, it was unclear how the trial court envisioned that Friend’s writ petition could be cured by amendment.

As the purpose and meaning of a tie vote, the Court of Appeal explained there are two criteria for the Board to reach a decision: a quorum of voting members and a majority decision by those voting members. The Board had a quorum (four voting members out of five) but they failed to reach a majority decision. It does not follow from this result that there is nothing for a trial court to review, since the gravamen of Friends’ petition was a challenge to the District’s underlying approval of the ATC and the Board’s failure to revoke it.

In reaching this decision, the court emphasized that the meaning of tie votes in administrative proceedings must be viewed in context. The trial court erroneously oversimplified precedent in its finding that a tie vote of an administrative action agency always results in no action. A deeper analysis of the relevant case law demonstrates that a tie vote can mean that the petitioner is entitled to a different remedy—a return to status quo ante, a new hearing, or setting aside the agency decision—not that the agency has not acted.

Viewing the tie vote in context, the Board’s action here was the equivalent of allowing the ATC to stand, which is effectively a decision not to revoke it. That decision was ripe for judicial review under the prejudicial abuse of discretion standard of Code of Civil Procedure section 1094.5.

City’s Decision to Deny Mitigated Negative Declaration Upheld For Small San Diego Subdivision

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On May 23, 2017, the Fourth District Court of Appeal court ordered published Kutzke v. City of San Diego (2017) 11 Cal.App.5th 1034. In a succinct opinion, the court upheld the city’s decision to deny a mitigated negative declaration (MND), initially approved by the planning commission, regarding an application to subdivide two hillside lots and build three residences.

The court emphasized that the standard of review was deferential to the city, and limited to determining whether the city’s findings were supported by substantial evidence. The court interpreted this standard by stating that plaintiff could only prevail if she could demonstrate that no reasonable municipality could have reached the same decision as the city.

Under this standard of review, the court determined that the city presented substantial evidence in the record to support its finding that impacts to land use, geology, and public safety would be detrimental and inadequately mitigated. Flaws and omissions in the project’s geotechnical report cast doubt on the report’s conclusion that homes could be built safely on the steep sandstone hillside. Furthermore, the slope of the shared driveway would not permit access by firetrucks and potentially other emergency response vehicles. Proposed mitigation measures (sprinkler systems and standpipes) were inadequate to mitigate all of these risks.

Regarding the project’s consistency with the community plan, the city properly considered the opinions of neighbors, who stated that the project’s dense development with minimal setbacks was incompatible with the large lot, single-family residential character of the area. Finally, the project was properly rejected under city ordinances, which provide for deviations from the development regulations for qualified sustainable building projects, if the deviations result in a more desirable project. For similar reasons as to why the project was rejected under the community plan and CEQA, the deviations requested here (smaller setbacks, no frontage, and higher walls) would not make the project more desirable.

Use It or Lose It? CEQA’s Bicycle Transportation Exemptions and Legislative Efforts to Preserve Them

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CEQA and the Guidelines’ statutory and categorical exemptions streamline the environmental review process, and can play a key role in project planning and development. The philosophical underpinning of many exemptions is that the environmental impacts for some types of projects are known to be less-than-significant and the public would benefit from having them expeditiously implemented.

Public Resources Code sections 21080.2 and 21080.20.5 typify this philosophy. Comprised of two bills, A.B. 417 and A.B. 2245 (chaptered together as Stats.2013 Chapter 613), they created exemptions for bicycle transportation plans and certain bicycle projects. However, Chapter 613 will sunset in 2018, unless the Legislature acts. Assembly Bill 1218 (2016–2017) seeks to preserve the exemptions. However, Chapter 613 has been underutilized, in favor of older, more time-tested categorical and statutory exemptions. This underutilization may influence the Legislature’s decision whether to extend the sunset provision, remove it, or allow Chapter 613 to simply expire.

Legislative History of Chapter 613: “One petitioner had the power to delay something good from happening for several years.”

The published legislative history of Chapter 613 reflects that it was passed in reaction to a lengthy and expensive CEQA suit against the City and County of San Francisco. In 2005, the San Francisco Board of Supervisors adopted a bicycle transportation plan (Plan). The Plan’s purpose was to promote bicycle transportation and create safe, interconnected routes throughout the city. It called for upgrades to bicycle infrastructure, including separated lanes, painted lanes, and bike parking. It sought to reduce risks to cyclists, pedestrians, and motorists in areas where the data reflected frequent bicycle-involved collisions. In June 2005 the San Francisco County Transportation Authority Commission adopted the Network Improvement Document (Document), a five-year plan to fund and implement the Plan. Believing that there was no possibility that the Plan could have a significant effect on the environment, the agencies proceeded under the “common sense” exemption of CEQA Guidelines, section 15061. (See generally Assem. Com. on Natural Resources, Analysis of Assem. Bill No. 417, (2013–2014 Reg. Sess.).)

A CEQA petition followed, spearheaded by an individual, Rob Anderson. The petition alleged that the Plan and Document together formed a “project” under CEQA, that there was a legitimate question that the project could have an effect on the environment, and that environmental review should be conducted. It took nearly two years for the court to rule in Anderson’s favor, and ultimately enjoin the city proceeding, pending compliance with CEQA. Subsequently, the city prepared a draft EIR in 2008. The EIR was finalized, certified, and a Notice of Determination posted in August 2009. Anderson immediately appealed, alleging deficiencies in the EIR. A year later, in August 2010, the court ruled in favor of the city, upholding the EIR. (Ibid.). In short, it took five years to travel from Plan adoption to implementation. When one considers that the Plan and Document themselves likely took years to draft, the planning and implementation horizon for implementing upgrades to urban bikes lanes spanned close to a decade – half of which was spent in CEQA litigation.

Summarizing public frustration, a legislator noted that “one petitioner had the power to delay something good from happening for several years.” (Senate Rules Comm. Analysis of A.B. 416 (2013–2014 Reg. Sess.), p. 4).

To prevent the San Francisco scenario from repeating throughout the state, the Legislature passed Chapter 613. The legislation garnered overwhelming support from both houses – passing unanimously in the Senate and with only three no votes in the Assembly.

Chapter 613’s Provisions and Underutilization

Chapter 613 seemingly strikes a careful balance between the benefits of environmental review and the public interest in promoting bicycle transportation, by exempting qualified bicycle transportation plans from CEQA (§ 21080.20), but only exempting one limited class of bicycle project (§ 21080.20.5.)

Regarding bike plans, Public Resources Code section 21080.20 states that CEQA does not apply to bicycle transportation plans, as defined. To qualify for the exemption, the plan must be prepared pursuant to the Streets and Highways Code section 891.2; be situated in an urban area; and relate to bicycle transportation. The exemption expressly includes plans that have provisions for the restriping of roadways for bike lanes, bicycle parking and storage, signal timing, and related signage.

For bike projects, Public Resources Code section 21080.20.5 only explicitly exempts highway restriping for bike lanes, done pursuant to a bicycle transportation plan. Presumably, other projects implemented under bicycle transportation plans are not exempt.

Under both sections, the lead agency must hold public hearings, solicit input from local residents, and prepare an assessment of the plan or restriping project’s and traffic and safety impacts, including mitigation measures. If the project or plan is approved, the government must file notice with the state and county clerk. Because traffic and safety impacts were the focus in the San Francisco litigation, by mandating disclosure and mitigation measures the exemption directly and proactively addresses the key concerns that a CEQA environmental review process, or lawsuit, would raise. And by only exempting restriping, projects that are more likely to negatively impact the environment are still required to complete an environmental review process.

Despite the promise of Chapter 613, according to OPR data cited by the Natural Resources Committee in its analysis, the bike plan provision it has never been used, and the bike lane project provision has only been utilized three times. (Comm. Analysis, supra., pp. 3–4.) All three times were by the City of Los Angeles, the provision’s original proponent. (It is worth noting that bill’s author statement cites a different statistic, and states that 17 bike projects have utilized the exemptions, although it is not clear if the bill’s author is referring to Chapter 613, or all of CEQA’s exemptions that have been applied to bike projects. (Id. at p. 4.) The underutilization of the exemption is significant for two reasons: 1) five years after passage, it is uncertain as to how it would be applied by local government and interpreted by the courts; and 2) given its lack of use, begs the question of whether the community considers the exemptions to be necessary or if agency staff are aware of or feel encouraged to use them.

A New Hope? A.B. 1218

Chapter 613 will sunset on January 1, 2018. There is legislative momentum in continuing the exemptions, through A.B. 1218. At issue is whether to: renew the exemptions, but strike the sunset provision; to extend the sunset provision for another term; or allow Chapter 613 to sunset, citing its underutilization.

As originally drafted, A.B. 1218 would have removed the sunset provision entirely, and allowed the law to be codified permanently. However, the current version (as of May 2017, amended in Assembly) preserves the exemptions, but only until 2021. The Assembly Natural Resources Committee addressed this issue in its March 30, 2017 Committee Analysis, citing the exemption’s potential utility, but lack of actual use, and recommending that the bill be amended to sunset in 2021.

The Committee seemed to imply that underutilization does not evince a lack of interest in bicycle plans or projects. Rather, government entities have been relying on other, more “established and frequently used categorical exemptions” in CEQA and the Guidelines. CEQA section 21080.19, passed in 1984, exempts projects that restripe streets to relieve traffic congestion. The Committee notes that the CEQA Guidelines have two applicable categorical exemptions: Guidelines section 15301(c), the Class 1 exemption, for development of existing facilities, where there is negligible expansion of an existing use, which specifically includes existing bicycle trails; and Guidelines section 15304 (h), the Class 4 exemption, for minor alternations to land that do not involve removing mature and scenic trees, and specifically includes the creation of bicycle lanes on existing roadways.

A.B. 1281 passed the Assembly in May 2017, and given its overwhelming support in the Senate in 2013, is likely to pass muster there, too.

Conclusion

Within weeks of the court upholding San Francisco’s bike transportation EIR, bike lanes began sprouting up around the city. Areas that had never had bike lanes became connected to established routes. Established routes on prominent streets, many of which were identified as high collision risks in the Plan, were widened, separated, or re-routed to increase safety. Cal. Bike, an advocacy organization, and SFMTA state that bike usage in San Francisco has increased 10% since 2013. Whether one enjoys cycling or not, this infrastructure is heavily utilized, and cycling is becoming an increasingly important segment of our urban transportation mix. Yet, despite the increase in popularity of urban cycling, the future vitality of the bicycle lane exemptions remain in doubt. Supporters of the exemptions should take heed of the Committee Analysis, and be on notice that may face challenges in the Legislature in 2021 if Chapter 613’s muscle does not start getting flexed on the local level.

First District Applies Fair Argument Standard of Review to Addendum to Negative Declaration on Remand from Supreme Court in Friends of the College of San Mateo Gardens

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On remand from the Supreme Court’s holding in Friends of the College of San Mateo Gardens v. San Mateo County Community College (2016) 1 Cal.5th 926 (San Mateo I ), the First District interpreted the Supreme Court’s direction as requiring the application of the fair argument standard of review to claims challenging an addendum to a negative declaration in Friends of the College of San Mateo Gardens v. San Mateo County Community College District (2017) 11 Cal. App.5th 596.

The Supreme Court’s holding in San Mateo I

The San Mateo cases concern the San Mateo County Community College District’s campus renovation project, approved with a mitigated negative declaration (MND) in 2006. In 2011, the College decided to demolish an area of the campus (the Building 20 Complex) that was planned for renovation under the 2006 plan, and construct a parking lot in its place. The updated plan was analyzed in an addendum to the 2006 MND. The suit in San Mateo I followed, with the petitioner alleging that the updated plan was a “new project” under CEQA, and not a modified project subject to CEQA’s subsequent review provisions (Pub. Resources Code, § 21166; CEQA Guidelines, § 15162.). Both the trial court and the First District held that it was a new project, and therefore, the District was not entitled to rely on an addendum.

The Supreme Court reversed, noting first that the proper inquiry under CEQA was not whether or not a project is new or modified, but whether or not the initial environmental document retains informational value in light of the proposed modifications, or if it had become irrelevant.  This is a factual determination to be made by the agency and reviewed for substantial evidence.

If the agency’s decision to proceed under CEQA’s subsequent review provisions is supported by substantial evidence, a court may consider the type of subsequent document prepared by the agency. The standard of review applied by the court in reviewing that decision turns on the nature of the original documents. The agency must first determine if there are substantial changes to the project that require “major revisions” in the original environmental analysis. This determination is reviewed for substantial evidence. When the project was previously reviewed in an EIR, there are no “major revisions” if the initial EIR has already adequately addressed any additional environmental effects expected to result from the proposed modifications. In contrast, when a project is initially approved with a negative declaration, a “major revision” to the negative declaration will necessarily be required if the proposed modification may produce a new or previously unstudied significant environmental effect. If there is no major revision required, the agency can issue a subsequent mitigated negative declaration, addendum, or no further documentation.

Application in San Mateo II

The court applied the two-part test of San Mateo I to the College’s decision to rely on an addendum to the 2006 MND. First, the court conceded that the agency determination—that the MND retained informational value in light of the revised campus plan—was supported by substantial evidence. It retained informational value because the revised plan considered in the addendum did not affect plans to demolish 14 buildings cited in the original plan. The revised plan added one more building complex to the demolish list, but the College had previously removed two others, deciding to renovate them instead. The mitigation measures adopted with the original plan remained in place.

Applying the second prong of the Supreme Court’s test, however, the court held that the College violated CEQA’s subsequent review provisions by preparing an addendum to the MND, because the removal of gardens in the Building 20 Complex could result in a significant aesthetic impact, under the fair argument standard of review.

Interpreting this second prong of the San Mateo I test, the San Mateo II court stated that when the initial environmental review document is an negative declaration, the court must apply the more exacting standard applicable to negative declarations—whether there is substantial evidence to support a fair argument that the proposed changes to the project might have a significant effect on the environment. The court acknowledged that aesthetic impacts are necessarily subjective, but agreed with the petitioner that substantial evidence of a fair argument could be found in the opinions based on direct observation. The impact is not determined by the size of the area, but measured in light of the context in which it occurs, and this can vary by setting.

Here, the court relied on the opinions of campus employees and students regarding the garden’s aesthetic value and quality. Although not a significant portion of the campus’ open space (less than one-third of one percent), the garden’s vegetation and landscaping were alleged by its admirers to be unique. The garden’s social value as a gathering space was also considered. Because the court determined that this lay testimony qualified as substantial evidence to support a fair argument of a potentially significant aesthetic impact, the College’s decision to rely on an addendum violated CEQA’s subsequent review provisions, as an addendum is only appropriate if there are no new or more severe significant impacts than were previously analyzed.  However, the court declined to order the preparation of an EIR, stating that the College could choose to prepare a subsequent MND if the impacts to the garden could be mitigated to a less-than-significant level.

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