On September 27, 2011, Governor Brown signed two bills into law that amend the California Environmental Quality Act ("CEQA") in an attempt to help improve the state's economy. These bills aim to curtail delays attributed to CEQA litigation and to produce much-needed economic growth, jobs and tax revenues for the state. "It's time for big thinking and big projects that put Californians back to work," said Governor Brown.
The most significant change comes from Assembly Bill 900 ("AB 900"), which expedites judicial review for development projects that incorporate various environmental features. More narrowly, Senate Bill 292 ("SB 292") establishes administrative and judicial review procedures specifically tailored for the proposed football stadium in downtown Los Angeles. The Governor, however, has not signed Senate Bill 226 ("SB 226"), which would create CEQA exemptions and/or limited review for qualified "green projects", such as urban infill developments and rooftop solar projects.
AB 900: Streamlined Judicial Review for Environmental Leadership Projects
AB 900, which is titled The Jobs and Economic Improvement Through Environmental Leadership Act of 2011, benefits large development projects that are potentially delayed by litigation, despite their potential to generate thousands of jobs and yield environmental benefits. AB 900 fast-tracks CEQA litigation for large-scale "green" projects approved by the Governor by allowing litigants to skip trials in Superior Courts and instead proceed to trials before the Courts of Appeals under a shortened timeline for judicial review.
Specifically, AB 900 empowers the Governor to certify "environmental leadership development projects" for expedited judicial review, which are the following:
- Residential, retail, commercial, sports, cultural, entertainment, or recreational use infill projects that are certified LEED silver or better;
- Wind or solar energy projects; and
- Projects that result in renewable energy generation, energy efficiency or the production of clean alternative fuel vehicles.
The process for certification is relatively straightforward. A developer with a proposed environmental leadership development project may apply for expedited judicial review to the Governor. In order to certify that a project is eligible for expedited judicial review, the Governor must confirm that an applicant's project (1) results in a minimum investment of $100 million in California; (2) avoids creating net emissions of greenhouse gases; and (3) creates high-wage, high-skilled jobs.
If the Governor determines that a leadership project is eligible for expedited judicial review, then the project is passed on to the Joint Legislative Budget Committee ("JLBC"), which consists of eight members of the State Senate and eight members of the State Assembly. The JLBC is permitted to review the Governor's determination for a period of 30 days for concurrence or non-concurrence with the Governor's determination. The JLBC's failure to respond within 30 days is deemed a concurrence. A party may not appeal the certification decision.
If the project is certified as an environmental leadership development project (1) original jurisdiction will be in the California Courts of Appeal for challenges to an EIR and/or project approvals (thus circumventing trial courts); and (2) the Appellate Court must render a decision within 175 days of the filing of a petition or claim by a party.
Despite its apparent benefits, because AB 900 was drafted and approved quickly, it includes errors that will require correction and clarification. In fact, Senate Pro Tem Darrel Steinberg (D., 6th District) has publicly stated that AB 900 will require "clean-up legislation" within the next year.
One apparent problem with the legislation relates to project eligibility. One of the three classes of eligible projects requires LEED certification prior to the Governor's approval of expedited judicial review certification, but the U.S. Green Building Council will not certify a project as LEED certified until after it is constructed. Therefore, it is impossible to qualify for expedited judicial review under this prong of stated eligibility.
A second issue is that while AB 900 enumerates streamlining standards for the Appellate Court level, a project opponent maintains the right to appeal an adverse decision to the California Supreme Court without expedited timelines. Furthermore, a "good cause" exception exists to the streamlining benefits at the Appellate Court level, which would permit the Appellate Court to grant time extensions past the 175-day cap.
Third, the bill applies only to projects that have not yet circulated an EIR, which reduces its potential for immediate job creation. In addition, an EIR must be certified prior to June 1, 2014 to take advantage of the streamlined litigation process. This brief period will significantly limit the number of projects that will be able to apply for certification.
SB 292: Los Angeles Football Stadium Exemption
While AB 900 provides CEQA litigation reform to a broad range of projects, SB 292 expedites the environmental review process for one project, the AEG Convention Center modernization and Farmer's Field football stadium planned for downtown Los Angeles. This bill will permit expedited environmental review in exchange for the project's commitment to carbon-neutral development. AB 292 requires AEG to implement specified measures to minimize traffic congestion and air quality impacts that may result from spectators driving to the stadium.
SB 226: Governor Has Not Signed New CEQA Exemptions and Limited Review
The Governor has not signed SB 226, which would, among other things, (i) allow qualified infill projects that meet new statewide performance standards to undergo tiered environmental review for impacts that local governments have already analyzed in prior planning decisions or mitigated through local development standards; and (ii) amend CEQA to allow a project to use a categorical exemption regardless of the project's greenhouse gas emissions so long as certain conditions are satisfied.
The Governor has until October 9, 2011 to either sign or veto SB 226. If the Governor does not act by October 9, 2011, SB 226 will automatically become law.
Conclusion
Enacted CEQA reform bills will likely affect the preparation of EIRs and litigation strategy for projects in California. Paul Hastings will continue to monitor and stay abreast of newly enacted laws.
The content of this article does not constitute legal advice and should not be relied on in that way. Specific advice should be sought about your specific circumstances.