Blog

Draft EIR of Sacramento Kings Arena Released

General Posted by   

On December 16, 2013, the city of Sacramento released the notice of availability of its draft EIR for the new downtown Sacramento Kings arena. The analysis, promulgated pursuant to SB 743, analyzes the arena’s anticipated environmental impacts related to noise, traffic, and air quality, among other effects. The city will be required to implement mitigation measures for any significant impacts.

The “Entertainment and Sports Center” project site covers a 6-square-block area bordered by 3rd and 7th Streets on the west and east, and J and L Streets on the north and south. The project includes demolition of up to 857,943 square feet of the existing Downtown Plaza buildings and their underground parking garages, and construction of a 780,000-square-foot, 17,500-seat NBA arena and up to 1.5 million square feet of office, retail, housing, and hotel uses at the site. Project developers also plan to use the site for “major entertainment and civic events.” The center will replace the Sleep Train Arena in north Natomas as the home arena of the Kings.

The EIR focuses its analysis on 13 issues, including light and glare, noise and vibration, and transportation and circulation. The issues range from localized concerns – e.g., the change in demand for public utilities such as electricity demand and wastewater collection facilities – to broader concerns like contribution to climate change. The analysis evaluates a range of project alternatives, including different locations for the arena. Woven into this discussion are a number of “areas of controversy” identified by public comment letters that were received during the notice of preparation, such as the management of traffic coming in from the freeway, and the availability of onsite and offsite parking.

The EIR’s 45-day public comment period runs from December 16, 2013 through January 31, 2014. A public EIR workshop will be held Wednesday, December 18th at 6 p.m. in the City Hall lobby, and a public hearing to take comments on the draft EIR is set for 5:30 p.m. on January 23, 2014 in the City Council Chambers.

Court upholds San Francisco’s expansion of plastic bag restrictions in unpublished case

General Posted by   

Save the Plastic Bag Coalition v. City and County of San Francisco, First Appellate District, Division 2, A137056, December 10, 2013.

In 2012, San Francisco enacted an ordinance expanding existing restrictions on the use of plastic checkout bags by retail establishments in the city. Save the Plastic Bag Coalition challenged the ordinance, contending that, first, it did not comply with CEQA, and second, it was preempted by the state Retail Food Code. The trial court denied the Coalition’s petition and decided in favor of the city.

In an unpublished decision, the First District Court of Appeal upheld the trial court’s decision and the revised ordinance. The holding aligned with outcomes in other recent cases involving plastic bag bans in Marin County and Manhattan Beach.

1. CEQA

There was no dispute that the ordinance was a project under CEQA, and therefore subject to further environmental review unless it was exempt. The city had found that the ordinance qualified for two categorical exemptions, and therefore could be adopted without first preparing an EIR. The Coalition argued that the city was precluded by law from relying on a categorical exemption for this project, or, alternatively, that the “unusual circumstances” exception to the categorical exemptions applied to the action.

Categorical exemptions

The Coalition did not dispute that the record contained substantial evidence that the ordinance fell within two categorical exemptions aimed at regulatory actions to protect the environment. Rather, the Coalition argued that the city committed two legal errors by relying on those exemptions. First, it argued no city larger than Manhattan Beach could rely on a categorical exemption for a plastic bag ordinance, based on language in the Supreme Court’s earlier decision in Save the Plastic Bag Coalition v. City of Manhattan Beach. Second, it argued the city was precluded by law from relying on the categorical exemptions in section 15307 and 15308 of the CEQA Guidelines because those exemptions only apply to “regulatory actions,” and the 2012 ordinance was a legislative action.

As to the first issue, the court found nothing in Save the Plastic Bag Coalition v. City of Manhattan Beach decision to support the Coalition’s contention that San Francisco could not rely on a categorical exemption simply because it was larger than Manhattan Beach. In fact, Manhattan Beach was not even a categorical exemption case. Regarding the second issue, the court in the more recent case, Save the Plastic Bag Coalition v. County of Marin, had stated that although ordinances are always legislative in nature, they may also constitute “regulations.”  Thus, the exemptions still applied to the city’s action.

Unusual Circumstances Exception

The Coalition also argued that the 2012 ordinance fell within the “unusual circumstances” exception to the categorical exemptions. The unusual circumstances exception states that a categorical exemption may not be used for an activity where there is a reasonable possibility that the activity will have a significant effect on the environment due to unusual circumstances. (CEQA Guidelines, § 15300.2(c).) “Unusual circumstances” are features of a project that distinguish it from other projects in the exempt class.

There is currently a split of authority over the proper standard of review for determining whether an otherwise exempt project falls within the exception. The court assumed for the sake of argument, without deciding, that the “fair argument” rather than “substantial evidence” standard applied. The Coalition argued that the ordinance was an unusual circumstance because it would increase the use of single-use paper and compostable bags without decreasing the use of other reusable bags, since the large number of tourists and commuters in the city would not bring their own bags or would underuse them before throwing them away. The court found no fair argument supporting this theory.

The court agreed with Manhattan Beach that studies on paper versus plastic bag life cycles, which suggested compostable and underused reusable bags were worse for the environment than single-use plastic bags, did not create a fair argument that the ordinance would negatively impact the environment; the court was not convinced global impact studies were a fair or accurate mechanism for measuring the impacts of a local ordinance. Even if the life cycle studies were arguably relevant in evaluating a plastic bag ban, the 2012 ordinance was not a flat-out plastic bag ban, but rather, a checkout bag ordinance that regulated all bags, not just single-use plastic bags.

2. Retail Food Code

Finally, the Coalition argued that the city’s ordinance was preempted by state law. The Retail Food Code stated it was the intent of the Legislature to occupy the field of health and sanitation standards relating to retail food facilities. The ordinance, however, did not establish health or sanitation standards for retail food establishments. The court concluded that the code did not regulate the field of retail food to the extent it precluded this ordinance, noting that “a field, even an entire field, has some ending point.” The fact that certain provisions of the code also addressed carryout bags did not alter the conclusion, since preemption doctrine does not preclude a city from exercising its police power on a subject simply because the Legislature has enacted a law on the same subject.

Requests for publication are expected to be filed.

Canada will link its cap-and-trade program with California’s in 2014

General Posted by   

The Air Resources Board (ARB) has announced that California and the Quebec province are scheduled to link their cap-and-trade programs on January 1, 2014.

Quebec recently held its first auction for cap-and-trade allowances. ARB Chairman Mary Nichols praised the Canadian province for its hard work developing a cap-and-trade program and bringing about the successful auction. She stated that linking the regions’ programs will “show our respective nations, and the world, how states and provinces can work together to reduce greenhouse gases and fight climate change.”

A joint auction is expected later in 2014.

California Releases Draft Climate Change Preparation Plan

General Posted by   

On December 10, 2013, Governor Brown’s administration released a draft of its climate change adaption strategy, the “Safeguarding California Plan.” The plan addresses the state’s preparedness for the effects of extreme weather, rising sea levels, shifting snowpack, and other climate-related concerns. It outlines risk management options needed in sectors such as public health, energy, agriculture, and water.

The plan lists fires, floods, severe storms, and heat waves as some of the weather events California must be prepared to withstand, as those events will only become more frequent and dangerous as global temperatures rise. To combat these events, according to the plan, we must increase habitat resilience, strengthen the emergency response system, and improve coordination between local, state, and federal governments and private entities.

The plan focuses on sustainable strategies, such as local water sourcing, localized smart grids, and long-term mitigation funding, which will serve as the foundation for a clean energy economy in the state. The plan also calls for a reduced carbon footprint going forward.

The plan is an update to the 2009 California Climate Adaptation Strategy.

Supreme Court Grants Review to Determine Whether CEQA Requires Analysis of the Effect of the Environment on a Project

General Posted by   

On November 26, 2013, the California Supreme Court granted review of California Building Industry Association v. Bay Area Air Quality Management District (“CBIA v. BAAQMD”) to settle the following issue: Under what circumstances, if any, does CEQA require an analysis of how existing environmental conditions will impact future residents or users (receptors) of a proposed project?

Prior to the CBIA case, this issue most recently arose in Ballona Wetlands Land Trust v. City of Los Angeles (2011) 201 Cal.App.4th 455. There, the petitioner argued that the EIR for a real estate development project failed to address the impacts that future sea level rise could have on the project. The court disagreed that the EIR needed to address this issue, stating that “the purpose of an EIR is to identify the significant effects of a project on the environment, not the significant effects of the environment on the project.” The court concluded that identifying the effects on a project and its users of locating the project in a particular environmental setting was neither required by CEQA nor consistent with the statute’s legislative purpose. The court found that Guidelines section 15126.2, which encourages such analysis, was unauthorized by the CEQA statute and therefore invalid. Section 15126.2 would require analysis of the seismic hazard to future occupants of a subdivision astride an active fault line, or the effect of locating development in a floodplain or on a coastline.

In CBIA v. BAAQMD, the California Building Industry Association challenged the Bay Area Air Quality Management District’s significance thresholds for receptors affected by certain air pollutants as unauthorized by CEQA. These thresholds establish significance levels for certain air pollutants for both new sources (projects) and new receptors (residents and workers brought into the area as a result of the project). CBIA argued that the receptor thresholds were invalid under Ballona because the thresholds could require an EIR based solely on the effects of the existing environment on a proposed project and its occupants. The District argued that it made “no sense to require analysis of the health risks to residents if a freeway is built next to them, but not to require analysis of the exact same risks if new homes are built next to an existing freeway.” The District also argued that disregarding the effect of the environment on people who will occupy a new development is contrary to CEQA’s purpose of providing “a decent home and suitable living environment for every Californian.”

The court considered CBIA’s challenge a facial one, and held that BAAQMD’s thresholds were not invalid on their face because case law did not bar their application in all or even most cases. The court stated that it did not need to decide whether Ballona had been correctly decided because the thresholds could be used to determine not just the effect of a project on project receptors, but also could be used to evaluate the increase in pollutants from a project itself.

The parties will file their opening briefs with the Supreme Court in early 2014.

[Case No. S213478]

Sacramento Superior Court Finds State Water Resources Control Board Fees Not Fairly Distributed Among Permit Holders

General Posted by   

In 2003, the California Legislature shifted funding sources for certain State Water Resources Control Board activities, and mandated the board assess fees at a level sufficient to collect for the appropriate board work. The Legislature only authorized fees on water rights permit and license holders, rather than all water users, so the board assessed fees only on those groups. The California Farm Bureau Federation and the Northern California Water Association sued, claiming the board was imposing an unconstitutional tax because permit holders bore a disproportionate amount of the fee relative to benefits received. In 2011, the California Supreme Court upheld the fee statutes as facially constitutional, but remanded the matter to determine their constitutionality “as applied” by the board.

In California Farm Bureau Federation v. State Water Resources Control Board, Sacramento County Superior Court Case No. 03CS01776, the court found that the allocation of fees among actual and potential payors was invalid given the insufficient connection between the amount charged and benefits received.

The court found that the fees were reasonably related to the total costs of the Division of Water Rights’ regulatory program, and that the petitioners had not carried their burden to prove otherwise. But following 10 days of testimony taken in late 2012, the court analyzed whether the fees were properly allocated among actual payors (those holding licenses and permits) and potential payors (those not paying the fee but receiving benefits from the division’s activities).

The petitioners argued that the fee scheme was not fair or reasonable because no fees were assessed against the holders of approximately 38% of the total acre-feet of California water rights under the board’s jurisdiction, including those holding riparian, pueblo, and pre-1914 rights, none of which are subject to the permit and license process. Although these holders received benefits from the board’s Water Rights Division, the board had no statutory authority to impose fees on them. The court held that it was improper for the board to shift those fees to other permit holders to make up the deficiency. To do so would force permit and license holders to pay more than a de minimis amount for regulatory activities benefitting non-paying water rights holders and the general public.

The court also found that requiring Central Valley Project contractors to cover payments for all of the Bureau of Reclamation’s permits and licenses was invalid because it did not reflect the true beneficial interests of the contractors. The Bureau, which holds 22% of the total permitted or licensed water rights in California, claimed exemption from the board’s fees under the doctrine of sovereign immunity. To compensate, the board imposed fees on the recipient contractors (various irrigation and water storage agencies) based on a prorated portion of the total volume of water represented by the Bureau’s permits and licenses. The court stated that this method would be valid only if it represented a fair assessment of the recipient contractors’ actual beneficial interests in the Bureau’s water rights. The court found that while some of the Bureau’s water could be fairly attributed to the value of its project  delivery contracts, it did not follow that all of the water benefitted the contractors. (For example, Bureau project water is also released for environmental and water quality purposes.) Because the board had conducted no analysis of the contractors’ beneficial or possessory interest in the permits for the Bureau’s largest operation, the Central Valley Project, the court held the allocation unconstitutional.

The petitioners also established that for at least some payors, the fee regulations operated in an arbitrary manner, charging some permit holders multiple times for the same water.

The board was afforded one small victory: The court allowed the $100 minimum annual fee per permit  to stand. But as the court observed, the petitioners had never really presented any evidence concerning the minimum annual fee; the Court of Appeal had okayed it, and the Supreme Court had not addressed it.

The trial court stayed the board’s enforcement of its 2003-2004 regulations. Because the regulations have been modified over the years, the regulations for the period 2005-2013 may need further review. Under the stay agreement, subsequent proceedings will address the issue of whether permit and license holders that have been paying the fees under protest since 2003 should receive refunds for overpayment.

 

Fourth District holds County’s funding application was not a project under CEQA

General Posted by   

This case originates from a long-standing dispute between the County of Orange and the City of Irvine over the County’s plans to substantially increase the capacity of one of its existing prison facilities. The County approved an application for state funding to expand the facility, and the City of Irvine sued, arguing the approval constituted a “project” under CEQA requiring preparation of an EIR. The trial court denied the City’s petition for writ of mandate, and the Fourth Appellate District affirmed in City of Irvine v. County of Orange (2013) __ Cal.App.4th __ (Case No. G047895). The court concluded that a mere funding application was not a sufficient commitment to a proposal to constitute a project under CEQA.

The County has operated the James A. Musick Jail Facility for over 40 years. The facility is located on 100 acres of unincorporated land owned by the County but adjacent to the City of Irvine. The jail facility was originally designed to house about 700 minimum-security inmates, but in recent years had housed more than 1,200 inmates. The controversy began back in 1996, when the County prepared an EIR for the phased expansion of the facility to a maximum capacity of 7,584 inmates ranging from minimum to maximum security.

After some legal wrangling between the City and the County over the 1996 EIR, the County certified a revised EIR and authorized “the pursuit of funding” for the expansion of the Musick Jail Facility in accordance with the revised EIR. For a long time, no expansion took place, as the County lacked funding. But in 2007, the Legislature passed AB 900 to provide funding for local jail construction. The County submitted an application in 2011 seeking funds to expand the Musick Jail Facility by 512 medium-security beds. The County explained that it anticipated circulating an addendum to the 1996 EIR as the CEQA document for this proposed expansion. In 2011, the County Board of Supervisors adopted a resolution approving the application for funding. The application stated that County resolved to comply with CEQA before accepting any state funds.

The City of Irvine sued. In its petition, the City argued that the County’s approval of the application for state funding constituted a project under CEQA requiring preparation of an EIR or other CEQA documents prior to the action. The trial court denied the City’s petition, and the City appealed.

The Fourth Appellate District explained that the narrow issue before it was whether the County should have prepared and certified a CEQA document before approving an application for state funding. For guidance, the Fourth District looked to the California Supreme Court’s decision in Save Tara v. City of West Hollywood (2008) 45 Cal.4th 116. In Save Tara, a developer proposed constructing low-income, senior housing on city-owned property. The city entered into a conditional development agreement with the developer and subsequently granted substantial assistance to the developer in its efforts to obtain a federal grant for the project. This assistance included an option to purchase the property from the city “at negligible cost” and a loan of nearly half a million dollars for use in the approval process. The developer was under no obligation to repay this loan if the city did not ultimately approve its project. The Supreme Court determined that under these circumstances, the city had committed itself to a definite course of action that precluded the consideration of alternatives or mitigation measures that CEQA might otherwise require. Therefore, the Supreme Court concluded that the development agreement was an approval under CEQA requiring environmental review.

In this case, the Fourth District ultimately distinguished between “advocating or proposing a project” and “committing to” a project. In the court’s view, the former would not be a project but the latter would.  The court concluded that in this case, the County was advocating for and proposing a project rather than committing to it. For example, under AB 900, agencies are required to use a detailed application prescribed by the bill. Further, the bill made clear that if the applications were approved, the funds would be conditionally awarded. The court emphasized that the conditions to payment were substantial. The applying agencies would have to complete numerous additional steps, including CEQA review, before they could then seek reimbursement for the costs authorized by the amount of the conditional funds. The court found this to be an important distinction from the circumstances in Save Tara.

The court noted additional factors which influenced its analysis: (1) the County had in the past rejected state funding previously approved under an AB 900 request due to conditions imposed by the state; (2) the County had been using the land identified for expansion as a jail for more than 40 years, so resources spent identifying the project site for expansion did not amount to an approval for CEQA purposes; and (3) even the presence of detailed design plans for the proposed facility expansion did not represent commitment to a definite course of action by the County. Since the commitment element was lacking, the Fourth District affirmed the trial court’s judgment dismissing the City of Irvine’s petition.

Sacramento Superior Court Upholds State’s Cap-and-Trade Program

General Posted by   

On November 14, 2013, Judge Timothy Frawley of the Sacramento Superior Court rejected two industry challenges to California’s cap-and-trade program.

The Air Resources Board adopted regulations in 2011 to implement AB 32, the Global Warming Solutions Act. The 2006 Act authorized ARB to implement various mechanisms, including a market-based mechanism, such as a cap-and-trade program, to reduce the state’s GHG emissions. The cap-and-trade program is based on an initial “cap” on the total amount of GHG emissions that can be released by regulated sources. That cap is lowered over time.

Under the program, regulated entities must get a permit (referred to as an “allowance”) for every ton of GHG emissions they emit. The allowances will be distributed, under ARB’s regulations, through quarterly auctions for emissions, which will each consist of one round of sealed bidding. Allowances may subsequently be banked, or bought and sold on a new auction-based carbon market. Sale proceeds will be deposited into a special fund and available for uses designated in AB 32. The Legislative Analyst’s Office estimates that auctions will raise as much as $12 to $70 billion over the life of the program for the State.

The California Chamber of Commerce and the Morning Star Packing Company both challenged the cap-and-trade program in related lawsuits. Petitioners made two main claims: (1) the cap-and-trade provisions of ARB’s regulations are invalid because the Legislature never authorized ARB to raise billions of dollars by auctioning allowances, and thus cap-and-trade exceeds ARB’s delegated scope of authority, and (2) the charges for emissions allowances constitute illegal taxes adopted in violation of Proposition 13, which requires a two-thirds vote in the Legislature to pass a tax increase.

On the first issue, the court concluded that AB 32 specifically delegated to ARB the discretion to adopt a cap-and-trade program and to design a system of emissions reductions that meets the statutory goals. Even without the express delegation of authority, the court concluded that ARB would have had to make the inevitable choice as how to allocate the allowances. The court also pointed to post-AB 32 legislation, which reflected a legislative understanding that AB 32 permitted the sale of allowances.

As to the second issue, after acknowledging the question was a close one, the court declined to find the money collected by the auction is a tax. Instead, the court concluded the proceeds are more like regulatory fees. Ultimately, the court was persuaded by the fact that the primary purpose of the fees is regulation, not revenue generation. Furthermore, the court found that Prop. 13’s goal of providing effective tax relief was not subverted by shifting the costs of environmental protection to those who seek to impact natural resources. The sale of allowances helps to achieve AB 32’s regulatory goals by gradually increasing the cost of compliance, thereby creating a financial incentive to reduce emissions.

ARB approves first forest carbon offsets under cap-and-trade protocols

General Posted by   

On November 13, 2013, the California Air Resources Board (ARB) announced that it had approved forest carbon offsets under the cap-and-trade program’s Forest Offset Protocol.

The protocol is designed to address the forest sector’s unique capacity to capture and store carbon dioxide. Whether forests function as net source of carbon dioxide emissions or as a net sink depends on their management as well as natural events. Sequestered carbon stays in the trees, plants, and soil for a long time, which slows the accumulation of greenhouse gases in the atmosphere and ocean. Thus, with sustainable management and protection, forests can play a significant role in addressing global climate change.

Under the forestry protocol, ARB provides offset credits for certain “Forest Projects.” These offsets may be used to comply with the cap-and-trade program. A Forest Project is a planned set of activities designed to increase removal of carbon dioxide from the atmosphere (“removal enhancement”) or reduce or prevent emissions of carbon dioxide (“emission reductions”) by increasing or conserving forest carbon stocks. To qualify for carbon offset credits, the projects must reduce greenhouse gas emissions or enhance greenhouse gas removal beyond any reductions or removals required by law or that would occur under business as usual. The forestry protocol provides methods for quantifying the net climate benefits of activities that sequester carbon on forest land.

Forest Projects eligible for offsets include reforestation, improved forest management, and avoided conversion. Offset projects using this protocol can be credited for up to 25 years after the project commences.

4142434445