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By Charity Schiller and Amanda Daams

Businesses seeking discretionary approvals or development permits are often subject to the California Environmental Quality Act. CEQA, the state’s environmental protection law, requires California public agencies to analyze and mitigate potential environmental impacts of proposed projects before issuing any project approvals.

While CEQA comes with the laudable goal of environmental protection, businesses should be aware that compliance also comes with certain costs. The document preparation and public review requirements of many CEQA processes mean that businesses must plan ahead to meet both time and financial demands.

Alleged failures to comply with CEQA can expose businesses to increased costs and delays as a result of litigation. Indeed, many project opponents — and even economic competitors — may seek to use a CEQA lawsuit to slow down developments and drive up costs. Because of these risks, business owners should be aware of, and confirm with, compliance with CEQA’s requirements.

The most recent example of changes to CEQA’s requirements was the December 2018 adoption of a comprehensive update to the state’s CEQA guidelines by the California Natural Resources Agency. The CEQA guidelines are regulations that interpret and elaborate on the statute, often by capturing the holdings of the scores of judicial decisions handed down since CEQA was enacted in 1970. The update also includes a technical advisory offering even further, non-binding guidance on how to analyze a project’s transportation impacts under Senate Bill 743 (2013).

In the comprehensive update, changes or additions to nearly 30 sections of the guidelines were made, and major amendments were made to the widely used Appendix G – the initial study “checklist.” Among others, these amendments include:

  • Clarification of the existing CEQA exemptions for consistency with case law and the “emergency” statutory exemption.
  • Amendment of the widely used “existing facilities” categorical exemption to allow agencies to consider the historical use of a facility when deciding whether a proposed re-use is exempt from further CEQA review.
  • Elaboration on the elimination of redundancy in environmental review through the use of “tiering,” as well as clarification on the difference between “tiering” and CEQA’s more specific “streamlining” provisions.
  • Clarification of baseline requirements for consistency with recent case law, including elaborating on the use of historic conditions as the baseline where environmental conditions fluctuate, and describing exceptions to the general rule and hypothetical conditions.
  • Guidance on “pre-commitment” issues consistent with the 2008 California Supreme Court case Save Tara v. the city of West Hollywood, including the types of activities that an agency may (or may not) typically engage in prior to the completion of CEQA review.
  • Addressing the California Supreme Court’s 2007 decision in Vineyard Area Citizens for Responsible Growth v. the city of Rancho Cordova regarding the analysis of water supply impacts, by requiring analysis of a proposed project’s possible sources of water supply over the life of the project as well as consideration of the impacts of supplying that water to the project.
  • Clarification of consultation requirements for notices of intent to adopt a negative declaration or mitigated negative declaration, as well as for draft environmental impact reports, by providing that “the lead agency should also consult with public transit agencies with facilities within one-half mile of the proposed project.”
  • Adding new “energy” and “wildfire” resource categories to the Initial Study/Appendix G checklist. The addition of “Energy” arguably broadens the obligations of public agencies to consider energy impacts, which previously were often reviewed only in EIRs pursuant to Guidelines Appendix F. The addition of “wildfire,” in response to SB 1241, focuses on the effects of new projects in creating or exacerbating wildfire risks.

Additionally, the updated package includes long-anticipated revisions under SB 743, which will require that lead agencies evaluate traffic impacts based on vehicle miles traveled, or VMT, instead of a more traditional level of service, or LOS, basis. New guideline section 15064.3 phases in the use of VMT on a statewide basis, mandating its use no later than mid-2020. The concurrently issued technical advisory includes guidance on how to assess VMT, develop thresholds of significance, analyze safety issues and develop mitigation measures.

Pursuant to CEQA guidelines section 15007, these changes to the guidelines apply prospectively only. However, public agencies must comply no later than the 120th day after the effective date of the guideline amendments – making the guidelines binding in April 2019.

While amendments to the CEQA guidelines may seem technical, the potential for increased costs, time delays, and even potential legal challenges make it imperative for businesses to stay abreast of the current requirements and keep their projects on track.

This article first appeared in The OC Register and other Southern California Newspaper Group publications online on March 15, 2019. Republished with permission.

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