Earlier this year, we reported on Senate President Pro Tem Darrell Steinberg's CEQA modernization bill, SB 731.  As the legislative session nears its end, SB 731 has again been amended - most recently on August 6 - and is scheduled for hearing in the Assembly Appropriations committee tomorrow morning.  Unfortunately, although the year started out with a great deal of optimism for comprehensive CEQA reform, the hoped-for reforms have not materialized.  In fact, in many ways this latest iteration of SB 731 takes a significant step backwards for project proponents.  As we highlighted in our May 23, 2013 newsalert, new noticing requirements, heightened local agency oversight of project implementation, and provisions requiring concurrent preparation of an administrative record with project processing are potentially bad for business.

Attentive CEQA watchers will recall that the original intent of SB 731, The CEQA Modernization Act of 2013, was to (1)  provide greater certainty for smart infill development, (2) potentially expand the definition of infill and accommodate infill development in the Central Valley, (3) streamline CEQA for renewable energy projects, advanced manufacturing projects, and transit, bike, and pedestrian projects, (4) establish statewide thresholds of significance for noise, aesthetics, parking, and traffic, (5) potentially expand CEQA's plan streamlining processes, (6) and prohibit or restrict the disfavored late hits and document dumps. 

As explained below, the latest iteration of SB 731 strays further and further from comprehensive CEQA reform in that: (1) so-called "late hits" and "document dumps" are no longer part of the bill; (2) the eligible range of projects has continued to shrink; and (3) the bill's definition of "infill site" could create confusion.

SB 731 No Longer Proposes To Prohibit Or Restrict Late Hits or Document Dumps.  The latest version of SB 731 has been stripped of almost all of the previous intent language, including the intent language related to prohibiting or restricting "late hits" and "document dumps."  While it is disappointing this intent language has been deleted, we note that the original bill did not actually contain any operative statutory amendments that would have effectuated the original intent to prohibit or restrict late hits and document dumps.  So although not much was lost here substantively, many of us are disappointed that late hits and document dumps are officially off the table in SB 731.

The Range Of Projects Covered By SB 731 Continues To Shrink.  Whereas the previous version of SB 731 proposed that aesthetic impacts would no longer be considered significant impacts on the environment, the most recent version of SB 731 would remove this subjective matter from environmental review only under limited circumstances.  The specific prerequisites are that (1) the project is a residential, mixed-use residential, or employment center project, (2) located on an infill site, (3) within a transit priority area.  The revised bill would also remove parking impacts from CEQA's purview in the same manner.  The limiting factor in the revised bill is its new definition of "infill site," as "a lot located within an urban area that has previously been 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." 

The New Definition Of "Infill Site" Could Create Confusion.  As noted above, the most recent version of SB 731 includes a new definition of "infill site."  (Other existing sections of CEQA refer to "infill projects" - for example, Pub. Resources Code, § 21094.5.)  The new definition includes a term not defined in SB 731 -  "urban area." While "urban area" is defined elsewhere in CEQA, that definition (Pub. Resources Code, § 21094.5) only applies to that specific statute.  Further, it appears the use of "urbanized area" (Pub. Resources Code, § 21071.) was intentionally avoided.  This new term could create confusion for CEQA practitioners attempting to implement SB 731.

With only a few more weeks left in the legislative session, additional last-minute amendments to SB 731 are likely.  Further, should SB 731 be voted off the Assembly Appropriations suspense file, it still faces a full Assembly vote, followed by a Senate concurrence vote.  The legislative session officially adjourns on September 13, 2013, and the Governor has until October 14 to act on pending bills.  If passed by the Legislature and signed by the Governor, SB 731 would take effect on January 1, 2014.