• The proposed CEQA Guidelines amendments are the most comprehensive update since 1998.
  • The proposal would also adopt the Vehicle-Miles-Traveled (VMT) methodology for transportation impact analysis.
  • Comments on the proposed CEQA Guidelines are due to the Natural Resources Agency by March 15, 2018.

On January 26, 2018, the California Natural Resources Agency released a sweeping set of proposed amendments to regulations implementing the California Environmental Quality Act (CEQA), known as the CEQA Guidelines. The proposal is the product of over four years of development by the Governor’s Office of Planning & Research (OPR) and combines the most comprehensive CEQA Guidelines update since 1998, with changes to transportation impact analysis directed by Senate Bill 743 (2013). The proposed amendments incorporate statutory changes, court decisions and comments from public agencies, developers and business groups, environmental groups and other stakeholders through multiple rounds of public review. The wide range of issues covered includes use of regulatory standards as significance thresholds; environmental baselines; transportation, climate, water supply and energy impacts; and numerous technical improvements.

CEQA requires California state and local agencies to evaluate and, if feasible, avoid or mitigate potentially significant environmental impacts from public projects that they undertake or private projects for which they grant permits, leases, funds and other approvals. The CEQA Guidelines spell out in great detail procedures and content for Environmental Impact Reports (EIRs) and Negative Declarations, and also identify categories of actions exempt from CEQA. Amending the CEQA Guidelines is a two-step process: OPR first develops a proposal, and then the Natural Resources Agency conducts formal rulemaking. The Resources Agency has issued OPR’s proposal, with minor modifications, for comments which are due March 15.

Key Proposed Amendments to the CEQA Guidelines

Using Regulatory Standards as Significance Thresholds. In the CEQA process, “significance thresholds” are the standards used to determine whether or not impacts of a project are “significant” and must be mitigated. For example, most cities and counties have adopted noise standards; if project-generated noise exceeds a standard, the project is considered to cause a significant noise impact. Proposed CEQA Guidelines sections 15064 and 15064.7 authorize lead agencies (that is, agencies conducting CEQA review) to rely on existing environmental standards adopted by other regulatory agencies as significance thresholds. Such use of regulatory standards will promote efficiency and help avoid imposing duplicative or, worse, conflicting burdens on projects subject to both CEQA and regulatory requirements. However, the amendments also provide that the lead agency remains obligated to consider evidence that an impact may still be significant, notwithstanding compliance with a regulatory standard. In addition, amended Guidelines section 15064.7 clarifies that lead agencies may use significance thresholds on an informal case-by-case basis (which is, in fact, a widespread practice of lead agencies throughout the state), without undertaking a formal adoption process.

Environmental Baseline. The environmental setting or “baseline” describes existing conditions in the project vicinity, which are excluded from impacts caused by the project and do not require mitigation. While existing conditions at the start of CEQA review normally constitute the baseline, proposed Guidelines section 15125 allows the use of other baselines supported by appropriate evidence. Representative past conditions may provide a more accurate baseline than a snapshot of existing conditions at an atypical moment. Conversely, for major infrastructure projects that take years to construct, anticipated future conditions at the start of service may provide a more informative baseline. Guidelines section 15301, which exempts minor alterations to existing facilities with no expansion of use from CEQA review, is also amended to clarify that past conditions may be considered in determining whether a project expands the facility’s use.

However, one aspect of the amendments, carried forward from OPR’s November proposal, is inconsistent with current case law. Proposed Guidelines section 15125(a)(2) applies a heightened evidentiary standard to past-conditions baselines, allowing their use only where there is substantial evidence that an existing conditions snapshot would be misleading or without informative value to decision-makers and the public. A recent case (Association of Irritated Residents v. Kern County Board of Supervisors (2017) 17 Cal. App. 5th 708) expressly rejected that argument, as commenters are sure to point out.

Data Dumping. CEQA critics have long complained of the practice of “data dumping” by project opponents who submit massive comments, often on the eve of EIR approval, containing thousands of pages of text and data files, or links to general websites without pointing to specific documents or information. Proposed Guidelines section 15088 allows a lead agency to respond at a level of detail corresponding to the level of detail in the comment, providing only general responses when comments fail to explain the relevance of submitted data or to refer specifically to readily available information.

Exacerbating Existing Hazards. Following a California Supreme Court case (California Building Industry Association v. Bay Area Air Quality Management District (2015) 62 Cal. 4th 369), proposed Guidelines section 15126.2(a) confirms that CEQA review focuses on impacts of the proposed project on the existing environment, not impacts of the existing environment on the proposed project and its future residents or users (sometimes referred to as “reverse CEQA” analysis). However, consistent with the Court’s decision, the revisions emphasize that an EIR must also consider whether the project’s effects may exacerbate existing environmental hazards, such as increasing risks from erosion or wildfires by bringing development into vulnerable areas.

VMT Metric for Transportation Impacts. As directed by SB 743, proposed new Guidelines section 15064.3 incorporates an alternative metric for transportation analysis. Critics of the traditional “Level of Service” (LOS) method, measuring delays caused by traffic congestion at intersections and roadways, argue that mitigation to alleviate LOS impacts results in increased traffic and undercuts greenhouse gas (GHG) reduction goals. The new section 15064.3 replaces LOS with “Vehicle-Miles-Traveled” (VMT), measuring the amount and distance of automobile travel attributable to a project. Projects that decrease VMT or are within one-half mile of transit are considered to have a less than significant transportation impact. Lead agencies retain discretion to select analytic methodology and also to choose a measure other than VMT for projects intended to increase roadway capacity—an exception which is likely to provoke comments from LOS critics. Conversely, critics of VMT are likely to renew concerns that the new Guideline goes beyond SB 743 and promotes unavoidable traffic congestion by imposing the new metric throughout the state, including areas where transit is unavailable.

Climate Impacts. Proposed Guidelines section 15064.4 requires lead agencies to evaluate a project’s contribution to climate change over an appropriate time frame, make good faith efforts to describe or estimate GHG emissions, and incorporate evolving scientific knowledge and regulatory schemes. Again, lead agencies retain discretion to choose quantitative or qualitative analysis, select methodologies and consider consistency with the state’s long-term climate goals and strategies, if supported by substantial evidence that those goals and strategies do address the project’s GHG contribution. These changes, codifying two recent California Supreme Court decisions (Cleveland National Forest Foundation v. San Diego Assn. of Gov’ts (2017) 3 Cal. 5th 497 and Center for Biological Diversity v. Dept. of Fish & Wildlife (2015) 62 Cal. 4th 204), were not included in prior versions circulated for public comment by OPR.

Water Supply Impacts. Proposed Guidelines section 15155(f) incorporates specific elements required for CEQA analysis of water supply impacts following another California Supreme Court decision (Vineyard Area Citizens for Responsible Growth v. City of Rancho Cordova (2007) 40 Cal. 4th 412).

Energy Impacts. Proposed new Guidelines section 15126.2 treats “wasteful, inefficient, or unnecessary” energy consumption as a significant environmental impact. Compliance with building code energy efficiency requirements is a necessary but not exclusive means of addressing energy impacts. CEQA reviews must consider energy consumed by project construction and operation, but need not account for full “lifecycle impacts” such as energy used to produce building materials and consumer products used in a project.

Appendix G Checklist. CEQA Guidelines Appendix G contains a checklist of questions used by many lead agencies both as the format for an Initial Study/Negative Declaration and as a source of significance thresholds in an EIR. The proposed checklist amendments clarify and consolidate numerous questions as well as fixing inconsistencies with other laws and cases. Changes include clarifying that impacts to public (not private) views may be significant under CEQA; wetlands protected by state as well as federal law must be evaluated; and paleontological resources are considered in the geological rather than cultural category consistent with AB 52. New checklist questions on wildfire risk are unhappily timely after California’s recent severe fires.

Mitigation. Proposed Guidelines sections 15126.4 and 15370 respectively describe circumstances in which agencies may defer specifying details of mitigation measures and use conservation easements as mitigation.

Pre-CEQA Agreements. Proposed Guidelines section 15004 describes circumstances in which a lead agency may to enter into pre-CEQA agreements, such as exclusive negotiating and option agreements, contingent on CEQA compliance and without committing to carry out a project.

Other Procedural Changes and Clarifications. Additional proposed Guidelines amendments address a range of topics including use of program EIRs and tiering; clarifying the emergency repair, transit-oriented development and “common sense” CEQA exemptions; coordination among multiple eligible lead agencies and with federal agencies conducting National Environmental Policy Act (NEPA) review; consulting with transit agencies; identifying project applicants in CEQA notices; including project benefits in the EIR’s statement of objectives; and judicial remedies for CEQA errors.

Next Steps

The Natural Resources Agency will accept comments on the proposed CEQA Guidelines amendments until March 15, 2018. Given that OPR has already taken many comments into account during the long gestation of the proposal, the final adopted amendments may not change much from their current proposed form. Nevertheless, agencies, project developers and other stakeholders may wish to comment on amendment language that is new (such as changes reflecting comments on, and court decisions since, OPR’s 2015 and 2016 drafts), as well as reiterating comments on issues affecting their interests.

After receiving and considering comments and incorporating any revisions, the Natural Resources Agency will submit the final CEQA Guidelines amendments to the Office of Administrative Law (OAL) for review and approval. The effective date of the amended Guidelines will be determined when OAL files them with the Secretary of State. For most of the Guidelines, compliance will become mandatory 120 days following the effective date, although agencies may elect to implement conforming changes earlier. The proposed rule allows a grace period until July 1, 2019 (moved forward from the January 1, 2020 compliance date proposed by OPR) before the VMT metric for analyzing transportation impacts becomes mandatory on a statewide basis, though again agencies may elect to comply earlier.