On the last day of the 2011 legislative session, the California legislature passed Senate Bill 226 (SB 226). The bill was signed by Governor Jerry Brown on October 4, 2011. SB 226 implements significant changes to the California Environmental Quality Act (CEQA) by:

  • authorizing limited CEQA review for urban infill projects that meet certain standards to be developed over the next several months
  • creating a new statutory exemption for rooftop and parking lot solar energy projects
  • establishing that greenhouse gas emissions at a project or cumulative level do not disqualify use of categorical exemptions if the project complies with certain regulations and requirements

Other noteworthy provisions of SB 226 clarify the scoping process for referral of action on a general plan and authorize conversion of certain applications for solar thermal technology power plants to solar photovoltaic technology plants, subject to specific environmental review requirements. This alert discusses each of these key SB 226 provisions. Stakeholders with an interest in urban infill and solar energy projects in particular will want to understand the important changes to CEQA implemented by SB 226.

Limited CEQA Review for Qualifying Urban Infill Projects (SB 226, Sections 6 and 7)

SB 226 authorizes limited CEQA review for qualifying urban infill projects after implementation guidelines are adopted that address statewide priorities for infill projects.

Definition of “Infill Project”

Only projects that meet the SB 226 definition of “infill project” are eligible for the limited CEQA review process created by the bill. SB 226 defines “infill project” as a project that (a) consists of one or a combination of the following uses: residential, retail/commercial (where no more than one-half of the project area is used for parking), transit station, school and public office building; and (b) is located within an urban area,1 and is either on a site that has been previously developed, or on a vacant site where at least 75 percent of the perimeter of the site adjoins (or is separated only by an improved public right-of-way from) parcels that are developed with qualified urban uses.2

Implementation Guidelines and Statewide Standards for Infill Projects

The infill provisions of SB 226 do not take effect until the Governor’s Office of Planning and Research (OPR) first develops implementation guidelines that include statewide standards for infill projects (Implementation Guidelines). OPR’s deadline for completing this is July 1, 2012, and the Secretary of the Natural Resources Agency must certify and adopt the Implementation Guidelines by January 1, 2013. Because the process for development of the Implementation Guidelines outlined in SB 226 tracks CEQA’s statutory process for adoption and amendment of the CEQA Guidelines, it can be expected that the Implementation Guidelines will be established as part of the CEQA Guidelines. If the Implementation Guidelines are established as part of the CEQA Guidelines, the process will need to comply with the California Administrative Procedure Act (requiring public comment and agency consideration of reasonable alternatives), as well as Government Code notice and hearing requirements. (CA Pub. Res. Code § 21083(f))

SB 226 identifies the following non-exclusive list of statewide priorities for which the Implementation Guidelines must be adopted:

  • implementation of land use and transportation policies in California’s Sustainable Communities and Climate Projection Act of 2008 (SB 375)
  • state planning priorities specified in Government Code Section 65041.1 and in the recently adopted OPR Environmental Goals and Policy Report supporting infill development
  • the reduction of greenhouse gas emissions under the California Global Warming Solutions Act of 2006 (AB 32)
  • the reduction in per capita water use pursuant to Water Code Section 10608.16
  • the creation of a transit development district consistent with Government Code Section 65460.1
  • substantial energy efficiency improvements, including improvements to projects related to transportation energy
  • protection of public health, including the health of vulnerable populations from air or water pollution, or soil contamination

SB 226 also provides that the statewide standards for projects on infill sites shall be updated as frequently as necessary to ensure protection of the environment.

Limited CEQA Review Process

SB 226 proposes to allow limited CEQA review for certain infill projects through a process that resembles “tiering” of environmental impact reports (EIRs) under CEQA. Tiering refers to environmental review of sequential actions, where general matters and environmental effects are examined in a broad EIR for a decision such as adoption of a policy, plan, program, or ordinance, and subsequent narrower or site-specific EIRs are prepared that incorporate by reference the prior EIR and concentrate on environmental effects that can be mitigated or that were not analyzed in the prior EIR. In such instances, the later narrow EIR “tiers” off the prior broad EIR.

SB 226 provides that if an EIR was certified for the enactment or amendment of a city or county general plan, community plan specific plan, or zoning code, CEQA review for approval of a qualifying SB 226 infill project is limited to (a) environmental effects that are specific to the project or project site and were not addressed as significant effects in the prior EIR, or (b) substantial new information showing that environmental effects will be more significant than described in the prior EIR. A lead agency’s determination pursuant to new statutory provisions authorizing SB 226 limited CEQA review must be supported by substantial evidence.

Under SB 226, a project’s effect on the environment is not considered a project-specific effect, a significant effect not considered significant in the prior EIR, or an effect that is more significant than described in the prior EIR if (a) uniformly applicable development policies or standards adopted by the city, county, or lead agency would apply to the project, and (b) the lead agency finds, based on substantial evidence, that the development policies or standards will substantially mitigate that effect. In other words, if the lead agency determined that uniformly applicable policies or standards would apply to the qualifying infill project and would substantially mitigate an environmental effect of the project, that effect would not be considered a project-specific effect, a new environmental effect, or a more severe environmental effect triggering preparation of an EIR within the context of limited CEQA review pursuant to SB 226.

If the lead agency determined that an infill project would result in significant project- or site-specific effects, or if significant effects of the infill project were not addressed in the prior EIR or are more significant than the effects addressed in the prior EIR (and if a mitigated negative declaration or sustainable communities environmental assessment could not be otherwise adopted), an EIR would need to be prepared for the project. However, the EIR would not need to consider alternative locations, densities, and building intensities for the project, or growth-inducing impacts of the project.

Availability of Limited CEQA Review Depends on MPO Boundaries and SCS Adoption

Different types of infill projects qualify for limited CEQA review pursuant to SB 226 depending on (1) whether the project is located within one of California’s 18 metropolitan planning organizations (MPOs)3 required to adopt a sustainable communities strategy (SCS) 4 pursuant to California’s landmark Sustainable Communities and Climate Protection Act of 2008 (SB 375), and (2) whether the MPO has adopted its SCS. Below is a summary of the three distinct scenarios in which SB 226 authorizes limited CEQA review.

  1. Limited CEQA Review for Infill Projects Within MPO Boundaries Prior to SCS Adoption

Prior to adoption of an SCS, limited CEQA review under SB 226 is available for an infill project located within an MPO if the project (a) has a residential density of at least 20 units per acre or a floor area ratio of at least 0.75, and (b) satisfies all applicable statewide performance standards contained in the Implementation Guidelines.

  1. Limited CEQA Review for Infill Projects Within MPO Boundaries After SCS Adoption

After adoption of an SCS, limited CEQA review under SB 226 is available for an infill project located within an MPO if the project (a) is consistent with the general use designation, density, building intensity and applicable policies specified for the project area in the SCS, and (b) satisfies all applicable statewide performance standards contained in the Implementation Guidelines.

Although SB 226 provides that an infill project must be consistent with applicable SCS use, density and intensity policies to qualify for limited CEQA review pursuant to SB 226, the bill does not specify which agency is responsible for determining whether the project is consistent with relevant SCS policies. The SCS is part of the MPO’s regional transportation plan (RTP) – it is not a local land use plan adopted by the city or county that would be undertaking CEQA review and granting land use approvals for the qualifying infill project. SB 375 expressly states that an SCS does not regulate the use of land, and that nothing in an SCS shall be interpreted as superseding the exercise of the land use authority of cities and counties within the region (CA Gov’t Code § 65080(b)(2)(K)). Moreover, SB 375 does not require consistency between the SCS and city or county general plan, community plan, specific plan, or local zoning ordinance. In this context, the issue of which agency makes a determination about an infill project’s consistency with the SCS for purposes of determining eligibility for SB 226 limited CEQA review remains unresolved.

While the SCS is not intended to directly regulate land use, creating a limited CEQA review process for infill projects that are consistent with SCS use, density and intensity requirements provides an incentive for local agencies to conform local land use policies to the SCS so urban infill projects within the jurisdiction can qualify for SB 226 limited CEQA review.

  1. Limited CEQA Review for Infill Projects Not Located Within MPO Boundaries

SB 226 also authorizes limited CEQA review for certain small infill projects not located within the boundaries of an MPO. Limited CEQA review is available for projects that meet the SB 226 definition of a “small walkable community project” and that are located in an area designated by a city for that purpose. A “small walkable community project” is defined as a project in an incorporated city not within the boundary of an MPO with (a) a project area of approximately one-quarter-mile diameter of contiguous land completely within the existing incorporated city boundaries, (b) a project area that includes a residential area adjacent to a retail downtown area, and (c) a density of at least eight dwelling units per acre or a floor area ratio for retail or commercial use of not less than 0.50. In addition, to qualify for limited CEQA review under SB 226, a small walkable community project must satisfy all applicable statewide performance standards contained in the Implementation Guidelines.

New CEQA Statutory Exemption for Rooftop and Parking Lot Solar Energy Projects (SB 226, Section 3)

SB 226 creates a new CEQA statutory exemption for solar energy systems installed on the roof of an existing building or at an existing parking lot.5 The exemption applies to the solar energy system and all associated equipment. Associated equipment covered by the exemption includes: parts and materials that enable the generation and use of solar electricity or solar-heated water; any monitoring and control, safety, conversion and emergency responder equipment; and any equipment necessary to connect the energy generated to the electrical grid through an onsite connection or a connection on an adjacent parcel of the building and separated only by an improved right-of-way. Associated equipment does not include a substation.

The new CEQA statutory exemption for rooftop and parking lot solar energy projects contains several limitations. Under the exemption, associated equipment cannot occupy more than 500 square feet of ground surface and the site of the associated equipment may not contain plants protected by the California Native Plant Protection Act (CA Fish & Game Code §§ 1900 et seq.). In addition, the exemption does not apply if the associated equipment would require certain types of permits or if installation of the solar energy system would involve removal of certain trees.6 Finally, the exemption does not apply to any transmission or distribution facility or connection.

Greenhouse Gas Emissions Do Not Preclude Application of CEQA Categorical Exemptions (SB 226, Section 5)

SB 226 includes a brief but important amendment to CEQA’s categorical exemption provisions. Specifically, SB 226 establishes that a project’s greenhouse gas emissions “in and of themselves” do not render a CEQA categorical exemption inapplicable if the project complies with all applicable regulations or requirements adopted to implement statewide, regional, or local plans consistent with CEQA Guidelines Section 15183.5 (regulations for tiering and streamlining greenhouse gas emissions analysis).

Other Noteworthy SB 226 Provisions

SB 226 contains several other noteworthy provisions, in addition to the substantial amendments discussed above.

Scoping Process for Referral of Action on General Plan (SB 226, Section 4)

SB 226 provides that referral of a proposed action to adopt or substantially amend a general plan to an abutting city or county, as required by Government Code Section 65352(a)(1), may be conducted concurrently with the required scoping meeting. In addition, SB 226 authorizes the city or county to submit its comments at the scoping meeting.

Authorization to Convert Certain Applications for Solar Thermal Power Plant to Solar Photovoltaic Energy (SB 226, Section 8)

SB 226 amends the Warren-Alquist State Energy Resources Conservation and Development Act (CA Pub. Res. Code §§ 25000 et seq.) to authorize owners of certain proposed solar thermal power plants7 to petition the California Energy Commission (CEC) no later than June 30, 2012 to amend the facility’s certificate to convert the facility to solar photovoltaic energy, without the need to file a new application for certification or notice of intent. The CEC is required to prepare supplemental environmental review documentation, provide public notice and comment on supplemental environmental review, and hold at least one public hearing. The California Department of Fish and Game and State Water Resources Board are required to provide to the CEC comments on water resource and water quality effects of the proposed power plants, and the CEC is required to incorporate all feasible mitigation measures identified by these agencies.

Conclusion

SB 226 implements significant CEQA amendments relevant to urban infill and certain solar energy projects. The bill also makes important changes to CEQA relating to greenhouse gas emissions and use of categorical exemptions, as well as the scoping process for referral of actions on general plans. In particular, stakeholders with an interest in urban infill projects will want to monitor OPR’s development of the Implementation Guidelines and statewide standards for infill projects pursuant to SB 226, and may consider submitting comments when the draft guidelines are released.

--------------------------------------------------------------------------------