On January 26, 2018, the California Natural Resources Agency (Resources Agency) released a Notice of Proposed Rulemaking for changes to the California Environmental Quality Act (CEQA) Guidelines. After holding public comment sessions, the Resources Agency revised its proposed changes and issued further proposed amendments on July 2, 2018. The public comment period for these amended revisions ended on July 20. The Resources Agency also amended its statement of reasons for the proposed changes to better explain its reasoning. The Resources Agency’s materials can be viewed here.

A quick note, though, about something this rulemaking does not address and an issue that has troubled many people involved with CEQA. These amendments should include a requirement that Notices of Determination (NODs) and Notices of Preparation (NOPs) be posted online, thereby starting the statute of limitations or the public comment period. The Natural Resources Agency and the Office of Planning and Research that develops the CEQA Guidelines posted the CEQA amendments online, but the agencies fail to require the online posting of the actual documents that are to inform the public. If a lead agency posts a NOD with the State Clearinghouse in Sacramento, it is actually “posted” on a clipboard which starts the 30-day statute of limitations to challenge the decision. One must physically visit the facility to view the posting. The same is true for local agency projects that are posted in the county clerk’s office. Not everyone can travel to Sacramento or across a county to view a posting and it is very frustrating when one has done so and it is not yet posted. The amendments should include a change that requires electronic posting of NODs and NOPs, which then triggers the statute of limitations or public comment period.

While the Resources Agency is reviewing the comments on the amended revisions, let’s take a look at what changes may be coming and provide some practice tips to help you prepare.

§ 15004. Time of Preparation

This section’s new language proposes that a lead agency’s mere interest in a project or initial actions taken do not mean approval of the project. A public agency entering into preliminary agreements regarding a project prior to approval shall not, as a practical matter, commit the agency to the project.

The section then notes that any project pre-approvals made by the lead agency “should, for example,”

1. Condition the agreement on compliance with CEQA;
2. Not bind any party, or commit to any definite course of action, prior to CEQA compliance;
3. Not restrict the lead agency from considering any feasible mitigation measures and alternatives, including the “no project” alternative; and
4. Not restrict the lead agency from denying the project.

Practice Tip: The practice tip here is that the proposed language in Section 15004 states that the pre-approvals “shall not . . . commit the agency to a project.” Yet the Resources Agency uses the word “should” for the examples and the project proponent “should” read that as “shall.” The lead agency would be wise to be wary of pre-approval actions that will ultimately invite legal challenges, and therefore using the language from the examples is strongly advised. Note, however, that by simply inserting the language into a pre-approval action does not insulate the lead agency and project proponent. The lead agency must actually avoid actions that would commit the agency to, or can be reasonably argued that have committed the agency to, the project without complying with CEQA.

§ 15064. Determining the Significance of the Environmental Effects Caused by a Project

The Guidelines encourage lead agencies to use thresholds of significance. A lead agency can devise its own thresholds or can rely on another agency’s developed thresholds.

The proposed change adds the language: “When using a threshold, the lead agency should briefly explain how compliance with the threshold means that the project's impacts are less than significant. Compliance with the threshold does not relieve a lead agency of the obligation to consider substantial evidence indicating that the project’s environmental effects may still be significant.”

Practice Tip. Courts will defer to a lead agency’s analysis that is based upon substantial evidence and having a threshold in place creates more certainty for lead agencies and project proponents. The Guideline change is important because it also clarifies that the lead agency cannot be myopic and just rely on the threshold. The lead agency must consider other substantial evidence that a project’s environmental effects may still be significant. Project proponents should insist that the lead agency do so. 

§ 15064.3. Determining the Significance of Transportation Impacts

Starting in the year 2020, lead agencies will transition from relying upon Level of Service to determine significant impacts for evaluating a project’s transportation impacts to “vehicle miles traveled” (VMT). Projects that reduce VMT will be presumed to have a less than significant impact. This section also discusses the modeling that may be used to analyze VMT.

Practice Tip. Project proponents should focus upon reducing VMT by including transit, bike and pedestrian options.

§ 15064.4. Determining the Significance of Impacts from Greenhouse Gas Emissions

Perhaps the most expected proposed change to the Guidelines is found in this section. The change replaces “should” with “shall” in the following sentence:

“(a) The determination of the significance of greenhouse gas emissions calls for a careful judgment by the lead agency consistent with the provisions in section 15064. A lead agency shall make a good-faith effort, . . . .” Other changes to this section include “In determining the significance of a project’s greenhouse gas emissions, the lead agency . . . .”

In its July 2, 2018 Update of Initial Statement of Reasons for the proposed changes, the Resources Agency explains that “[T]his clarification is necessary because some agencies continue to provide information regarding climate change in their projects’ environmental documents without actually determining whether the projects’ greenhouse gas emissions are significant. A similar clarifying change is proposed in subdivision (b), replacing the word “assessing” with the word “determining.” CEQA requires a lead agency to determine the significance of all environmental impacts. (Pub. Resources Code, § 21082.2; CEQA Guidelines, § 15064.)

Practice Tip: As the Resources Agency’s explanation states, agencies will no longer be able to avoid making a GHG significance determination by saying it was too speculative (CEQA Guidelines section 15145); they must make a determination. The language states you “shall” make a good faith effort . . . in “determining” the significance. To reduce challenges to projects, lead agencies and project proponents should focus upon ensuring their project will (1) not negatively impact the goals of AB 32, the California Global Warming Solutions Act of 2006, (2) participate in the cap-and-trade program, and/or (3) identify mitigation measures such as carbon sequestration.

§ 15125. Environmental Setting

The definition of what the proper baseline to use to describe a project’s environmental setting, has been the subject of much litigation during the past few years. The Resources Agency’s changes incorporate the judicial decisions and leave the lead agency with several options. For example,

1. Generally, the lead agency should describe physical environmental conditions as they exist at the time the notice of preparation is published, or if no notice of preparation is published, at the time environmental analysis is commenced, from both a local and regional perspective. Where existing conditions change or fluctuate over time, and where necessary to provide the most accurate picture practically possible of the project’s impacts, a lead agency may define existing conditions by referencing historic conditions, or conditions expected when the project becomes operational, or both, that are supported with substantial evidence. In addition, a lead agency may also use baselines consisting of both existing conditions and projected future conditions that are supported by reliable projections based on substantial evidence in the record.
2. A lead agency may use either a historic conditions baseline or a projected future conditions (beyond the date of project operations) baseline as the sole baseline for analysis only if it demonstrates with substantial evidence that use of existing conditions would be either misleading or without informative value to decision-makers and the public. Use of projected future conditions as the only baseline must be supported by reliable projections based on substantial evidence in the record.

Practice Tip: It is smart to always include a description of existing conditions even if you are not going to identify them as the baseline. It is also wise to discuss impacts on existing conditions as you go through the analysis. A lead agency can always discuss the conditions and establish why they are not identifying them as the baseline analysis. Environmental reviews that solely focus upon future dates and full buildout as baseline without adequately describing existing conditions and possible impacts will provide low hanging fruit for a legal challenge.

Beveridge & Diamond's NEPA and Historic Preservation Reviews practice group has been involved with NEPA and state analogues (like New York’s SEQRA and California’s CEQA) since the earliest implementation of these statutes. We help clients navigate the environmental review and permitting process to help them build their projects. For more information on these developments, please contact the authors.