Policy Brief CEQA: Making It Work Betterlao.ca.gov/1997/032097_ceqa/ceqa_397.pdf · Legislative Analyst's Office March 20, 1997 Policy Brief CEQA: Making It Work Better SUMMARY The

Legislative Analyst's Office March 20, 1997

Policy Brief

CEQA: Making It Work BetterSUMMARY

The Goals of CEQA

The California Environmental Quality Act (CEQA) was enacted in 1970 inorder to ensure that state and local agencies consider the environmental impactof their decisions when approving a public or private project. Twenty-seven yearslater, CEQA’s basic goals are sound. This view is generally consistent with thatof the broad group of CEQA stakeholders that we interviewed for this report.However, CEQA is not without its problems.

Concerns With CEQA

California’s business community has expressed concerns that CEQA hashad a detrimental effect on economic development in the state. In particular,the business community is concerned about the complexity and unpredictabilityof the CEQA process, the costs of compliance, and the ease for legal challengesto be made to impede development. We find that these problems do exist,although their extent is unclear.

In addition, we find that little information exists about the cost-effectivenessof measures chosen by public agencies to mitigate adverse environmental impactsof individual projects. Furthermore, CEQA has become a substitute for generallong-term planning in some jurisdictions even though it is not well suited to dothe job.

Improving CEQA

In this report, we make recommendations for improving CEQA, potentiallyat a lower cost to both the public and private sectors. These recommendationsfall into three broad categories:

� How to make the CEQA process more efficient, thereby making it lesscostly and less time consuming to project developers and public agencies.

� How to make mitigation of environmental impacts under CEQA morecost-effective.

� How to improve the resolution of CEQA disputes.

These recommendations, if adopted, would in large measure address theconcerns identified by the business community, and would make CEQA workbetter at achieving its goals.

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Legislative Analyst's Office

METHODOLOGY

In this report, we present a numberof findings and make correspondingrecommendations designed toachieve CEQA’s purposes at a lowercost to both the public and privatesectors. These findings and recom-mendations are based on over adozen interviews with various CEQAstakeholders—including businessorganizations, state agencies, localgovernments, and environmentalgroups. For example, we interviewedstaff at the California Chamber ofCommerce, the Trade and CommerceAgency, the American PlanningAssociation (California Chapter), theLeague of Cities, the City of LosAngeles environmental affairs andeconomic development departments,and the Planning and ConservationLeague.

In addition, we reviewed researchconducted by others on CEQAdecision-making at the local level. Inparticular, we reviewed research ofthe University of Illinois-Champaign,and a related report by the CaliforniaPolicy Seminar at the University ofCalifornia-Berkeley, which surveyedover 500 California cities and countiesregarding the number, type, and costof their CEQA reviews. We alsoexamined reports on the variousfactors impacting California’s busi-ness climate, and reports by a numberof organizations—including the BayArea Economic Forum, the Associa-tion of Bay Area Governments, theMilton Marks Commission on Cali-fornia State Government Organiza-

tion and Economy (Little HooverCommission), and the State Bar ofCalifornia—which evaluate and makerecommendations on how to improveCEQA.

PURPOSES OF CEQABased on our review of state law,

and the CEQA Guidelines adoptedby the Resources Agency, we haveidentified three main purposes ofCEQA:

• To inform public decision-mak-ers of potential adverse environ-mental impacts of public orprivate projects carried out orapproved by them.

• To provide for public participa-tion in the environmental re-view process.

• To identify, and require theimplementation of, feasiblealternatives or measures thatwould mitigate (reduce oravoid) a proposed project'sadverse environmental impacts.

While state law does not rank thesepurposes in terms of importance,individual stakeholders have theirown rankings depending on theirown particular interest in the CEQAprocess.

THE CEQA PROCESS

Figure 1 summarizes the CEQAprocess by which environmental

Page 3

The CEQA Process

Does CEQA Apply?

!

!

!

may physically change the environment?

will be carried out / “approved” by a public agency?

is not exempt from CEQA?

Step 1

If CEQA applies, “lead agency” determineswhether the project may have significantenvironmental impacts

Initial Study: Determine Extent of RequiredEnvironmental Review

Lead Agency App roval of Negative Declaration,Mitigated Negative Declaration, or EIR andFinal Decision on ProjectStep 4

Based on findings from the initial study,the lead agency:

Environmental Review/Public CommentStep 3

Negative Declaration

Environmental Impact Report

Mitigated Negative Declaration

Where the project has no possible significantenvironmental impacts

Where the project has possible significantenvironmental impacts

Where the project has possible significantenvironmental impacts that are eliminatedby project modifications

Step 2

Figure 1

Is there a “project” that . . .

Either issues one of the following declarationsfor public comment:

Or prepares (or causes to be prepared), andissues for public comment and review byresponsible agencies:

Policy Brief

Page 4


�. . . evidence of

[CEQA] problems

is often anecdotal,

typically pointing

to relatively

egregious cases, . . .

no quantitative

data available . . . �

information relating to a project is possibly significant impacts, then itprovided to and then considered by is required to prepare, or havepublic decision-makers. Currently, prepared by someone else, an envi-any activity that may cause a physi- ronmental impact report (EIR). Ancal change in the environment is a EIR—which courts have called theproject subject to CEQA review. “heart of the CEQA process”—mustProjects include those carried out by provide detailed information aboutpublic agencies themselves, such as a project’s likely effect on the envi-public works construction, and ronment, consider ways to mitigateprivate projects where there is some significant adverse environmentallink with public decision-making, effects, and examine alternatives tosuch as permit approval or granting the project. In addition, the EIR mustof public funds. Certain activities are consider a project’s significantfully or partially exempt from CEQA “cumulative impacts”—that is,requirements either by state law or impacts over time and in conjunctionregulations adopted by the Secretary with related impacts of other past,for Resources. While some exemp- present, and future projects. The leadtions apply to broad categories of agency also solicits and receivesprojects, such as projects necessary comments from other public agen-to prevent or mitigate an emergency, cies that have a role in permitting ormany apply to specific projects (for approving the project—calledexample, carrying out the Olympic “responsible agencies”—and theGames). general public.

As shown in Figure 1, a “lead” Where an EIR finds that a projectpublic agency must first conduct a will have significant adverse envi-preliminary analysis to determine ronmental impacts, a lead agency iswhether a project, if not exempted, prohibited from approving themay have significant adverse environ- project unless one of the followingmental impacts. The lead agency is two conditions is met:a public agency that is carrying outits own project, or, in the case of aprivate project, is the public agencythat has responsibility for overseeingor approving the project. Typically,the lead agency will be a city orcounty.

Findings from the initial studydetermine the nature and extent ofthe environmental review thatfollows. For example, if the leadagency finds that a project will create

• The project developer makesmodifications that substantiallylessen the adverse environmen-tal effects.

• The lead agency finds thateconomic or other project bene-fits override the adverse envi-ronmental effects.

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Policy Brief

CONCERNS WITH CEQAIn our interviews with the various

stakeholders in the process, no oneargued that CEQA should be elimi-nated. However, we found generalagreement that the following areareas of concern with the operationof CEQA:

• The process is cumbersome andunpredictable, mainly for largerprojects that require an EIR.

• Mitigation measures requiredas a condition of project ap-proval are not always effectiveor reasonable in light of a pro-ject’s environmental impacts.

• Processes to challenge decisionsmade under CEQA and toresolve disputes are costly andtime-consuming and are some-times used to create unneces-sary project delays.

While there is general agreementthat these problems exist, the degreeto which they are problems is notclear. This is because evidence of theproblems is often anecdotal, typicallypointing to relatively egregiouscases, while there is no quantitativedata available to enable an assess-ment of the magnitude of theseproblems or measure their overallimpact. As a result, we found thatthere is disagreement among stake-holders as to the extent of the prob-lems and acceptable solutions.

Recent Reforms. In response to theabove concerns, the Legislature hasmade various changes to CEQA.Figure 2 (see next page) highlightsthe major changes made since 1993.For example, the Legislature autho-rized greater use of previouslygenerated information in the EIRprocess to make the process lesscumbersome (Chapter 1130, Statutesof 1993 [AB 1888, Sher]). The Legisla-ture also set time limits for legalchallenges of public agency decisionsunder CEQA in order to reduceuncertainty and costs associated withlitigation (Chapter 1131, Statutes of1993 [SB 919, Dills]).

Generally, these reforms do notchange the basic structure of theCEQA process or its broad policyobjectives. While it is too early to tellhow these reforms are working, wefind that there are additional oppor-tunities to make CEQA work betterto achieve its purposes. In the fol-lowing sections, we discuss:

• How to make the CEQA pro-cess more efficient.

• How to make CEQA’s mitiga-tion of environmental impactsmore cost-effective.

• How to improve resolution ofCEQA disputes.

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Figure 2

Key CEQA Reform Legislation1993-94 and 1995-96

Chapter/YearBill (Author) Area of Reform Key Provisions

Ch 1068/93 • Time limits • Requires lead agency to approve or disapprove projectSB 659 (Deddeh) within specified time periods.

Ch 1130/93 • Streamlining of review • Authorizes use of Master EIRs and mitigated negativeAB 1888 (Sher) declarations.

• Provides for streamlined review of certain pollution controlprojects mandated by environmental regulations.

Ch 1131/93 • Streamlining of review • Requires specified state environmental agencies, whenSB 919 (Dills) • EIR requirement adopting regulations, to provide compliance alternatives

• Litigation and mitigation measures.• Defines “substantial evidence” of potential environmental

impacts needed to trigger EIR requirement.• Specifies time period during which public can object to

project approval.• Authorizes courts, in cases of violations of CEQA provi-

sions, to allow part of project to go forward.

Ch 1230/94 • Streamlining of review • Clarifies the definition of “projects” subject to CEQA.SB 749 (Thompson) • EIR content • States policy that EIRs should focus on a project's poten-

tially significant environmental effects.

Ch 1294/94 • Time limits • Requires public agency contract for preparation of CEQAAB 314 (Sher) • Litigation documents to be executed within specified time periods

after decision that document is required.

• Requires filing of statement of issues by both parties inCEQA litigation.

• Requires court, on request, to establish schedule forbriefings and hearings to take place within specified timeperiods.

Ch 808/96 • Time limits • Reduces time allotted for final decision on projects.AB 1930 (Sweeney) • Sets time limits for adoption of negative declarations.

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Policy Brief

�. . . CEQA

works relatively

well . . . to generate

useful information

about potential

environmental

impacts and involve

the public.�

HOW TO MAKE CEQA MORE EFFICIENT

We find that CEQA works rela- In addition to the costs of prepar-tively well in achieving two of its ing the EIR, project developers oftenthree purposes—namely, to generate incur legal costs, costs for projectuseful information about potential modifications and other mitigationenvironmental impacts and involve measures require d by the leadthe public. In part, this is a reflection agency, as well as costs associatedof the substantial amount of direc- with delays while awaiting projecttion set out in statute on how these approval. It is these costs, rather thanpurposes are to be implemented. EIR preparation costs, that are ofHowever, as discussed below, we particular concern to project devel-find that these two purposes can be opers.achieved more effectively, primarilyby making the CEQA process moreefficient, thereby reducing the costand time to both project developersand public agencies to comply withCEQA’s requirements.

Recent research surveys show thatof the 35,000 to 40,000 projects thatare subject to the CEQA processannually, up to 2,000 require an EIR.When an EIR is triggered, the costof public and private sector compli-ance with CEQA can rise signifi-cantly. These costs include costs andtime for various statutorily requiredanalyses, public participation andmandatory consultation of all publicagencies that have some approvalrole or jurisdiction over a project. A1990 university research survey oflocal agencies found that on theaverage, EIR preparation costs areabout $50,000. While the average costof an EIR appears relatively modest,for large complex projects thatpotentially have significant environ-mental impacts, the cost and timeto prepare an EIR can be substantial.

Our review finds that the CEQAprocess—the EIR process in partic-ular—can be made less costly as wellas less time-consuming by makingimprovements in the following fiveareas:

• Coordination between CEQAand other environmental regu-latory processes.

• Clarity of terms and statutoryrequirements.

• Predictability of process withinand among jurisdictions.

• Timeliness of state agencies’review and comments.

• Use of information technology.

Coordination Between CEQAAnd Other EnvironmentalRegulatory Processes

Because most projects, particularlylarge complex ones, are subject toCEQA as well as other (often multi-

Page 8


� Some degree

of coordination

exists now. . . .

other opportunities

for improved

coordination exist.�

ple) environmental regulatory pro- certain state-level environmentalcesses, there exists the potential for protection programs to meet abbrevi-duplication of environmental review ated CEQA requirements if desig-and, sometimes, conflict of environ- nated by the Secretary of Resourcesmental requirements. For example, as a “certified regulatory program.”duplication can occur when relevant Specifically, programs that producefindings and decisions by environ- a review similar to CEQA and in-mental regulatory agencies regard- volve the adoption of environmentaling a project’s environmental im- standards, plans, or regulations, orpacts are not fully used by lead the issuance of a permit or licence,agencies in their CEQA review of the can be certified by the Secretary ofproject. Resources. For example, programs

Conflict occurs when require-ments imposed by environmentalregulatory agencies on project devel-opers are inconsistent with thoseimposed by lead agencies underCEQA. For example, a developer ofa landfill may find that permitrequirements established by a solidwaste management agency raisewater pollution issues that, without Other examples of coordinationa project redesign, render the project include statutory exemptions fromunacceptable under a lead agency's some or all of CEQA’s requirementsCEQA review. Some conflicts are when an agency implements particu-probably inevitable given the broad lar environmental standards—suchfocus of CEQA review relative to as the issuance of a waste dischargeother environmental decision-mak- permit under the federal clean watering. However, we think that some law—or when a project consistsof the conflicting directions to project solely of the installation of pollutiondevelopers may be resolved or control equipment or compliancereduced with better coordination with specific environmental perfor-among environmental agencies in mance standards or treatment re-looking at how to mitigate projects’ quirements. Additionally, currentadverse environmental impacts. law encourages and, in some cases

Some Degree of CoordinationExists Now. Our review finds thatCEQA is, to some degree, set up towork in coordination with the state’senvironmental regulatory agencies.For example, current law allows

regulating timber harvesting opera-tions and the registration of pesti-cides have been certified. When aprogram is certified, certain of theprogram's environmental reviewdocuments are accepted in place ofCEQA documents, such as EIRs,thereby reducing duplication ofreview.

requires, agencies in their CEQAreview of projects to take into ac-count other environmental reviewsthat have been conducted for thesame geographic area. For instance,projects that are consistent with alocal general plan and land use

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Policy Brief

� . . . a number

of . . . definitions

and requirements

are unclear or

imprecise.�

zoning provisions are exempted Recommendation—Fully orfrom certain CEQA requirements.

In addition to these current effortsat coordination, we think otheropportunities for improved coordi-nation exist.

Recommendation—Expand“Certified Regulatory Programs” toLocal Programs. We recommendthat the Legislature expand theconcept of certified regulatory pro-grams to include local programs thatresult in an environmental reviewsimilar to CEQA. Such an approachwould build upon current state lawthat allows a state program to becertified by the Secretary of Re-sources. Local programs that wouldqualify for such certification couldinclude those that thoroughly reviewenvironmental impacts during thelocal long-range planning process,with a reasonable level of publicparticipation. We think that there aresome existing local programs thatcould be candidates for such certifi-cation.

We do not believe that such a localcertification process would lead togreater inconsistency in CEQApractices statewide. This is becausethe actual practices of a local pro-gram would be certified only ifconsistent with CEQA’s require-ments. Accordingly, the more localprograms that are certified, greaterstatewide uniformity in CEQApractices can be expected.

Partially Exempt From CEQAReview Projects That Are Part ofLarger Plans Subject to CEQA orOther Environmental Review. Inaddition to local general plans,public agencies in California—oftenin conjunction with private land-owners and nonprofit organiza-tions—are currently developing avariety of plans to guide land usedecisions and resource conservationand management. These includeplans to protect wildlife species andtheir habitat. Some of these plans aresubject to environmental review,while others are not. If these plansare subject to CEQA or similarreview, then the projects that arelocated within such plans should bepartially or fully exempt from CEQAreview.

Clarity of Terms andRequirements

Everyone we interviewed agreedthat there are a number of provisionsin CEQA where definitions andrequirements are unclear or impre-cise. In such cases, project developersmay provide too little or the wronginformation. Alternatively, they mayprovide excessive information and“throw the kitchen sink” into thereview, with the belief that doing sowill fend off a legal challenge to theadequacy of compliance. Our reviewfinds ample evidence of CEQAdocuments that contain more infor-mation than decision-makers need(or can reasonably review) in order

Page 10


� . . . local agencies

are more likely to

make CEQA

decisions on an

ad hoc, case-by-

case, and

potentially

inconsistent basis.�

to make informed decisions that include a cumulative impactmeet CEQA’s requirements. analysis—that is, an analysis of

Our interviews identified thefollowing requirements to be partic-ularly unclear or imprecise:

• Master Environmental ImpactReports (MEIR). In 1993, theLegislature authorized the useof MEIRs. Under the MEIRprocess, when an EIR is pre-pared for a “master” project (alead-off project), subsequentprojects which are extensionsof the “master” project aresubject only to abbreviatedCEQA requirements. The objec-tive is to reduce time and costsassociated with the review ofproject impacts that alreadyhave been addressed to somedegree in a prior CEQA docu-ment. A MEIR may be preparedfor projects such as a localgeneral plan or a series ofsmaller individual projects thatwill be carried out in phases.Potentially, a large number ofprojects could qualify to use theMEIR process. However, wefind that there is a reluctanceby public decision-makers touse MEIRs because of uncer-tainty as to exactly how theMEIR must describe subse-quent projects and how cumu-lative impact analyses ought tobe conducted for the subse-quent projects.

• Cumulative Impact Analyses.Current law requires EIRs to

the impacts of the project inconjunction with all relatedpast, present, and reasonablyforeseeable future projects.However, the requirement istoo “open-ended,” creatinguncertainty regarding the scopeof the analysis, particularly forcomplex projects. For instance,no limits are placed on thegeographic area over whichcumulative impacts must beconsidered.

• Alternatives Analyses. An EIRmust include an analysis of theenvironmental impact for arange of reasonable projectalternatives. The CEQA statute,however, provides few guide-lines as to the kinds of alterna-tives that must be consideredand the level of detail required.This has led to analyses ofalternatives that contribute littleto the decision-making of pub-lic agencies. For instance, analternative examined may notbe feasible, such as in the casewhere the alternative consid-ered is development on a sitenot owned (or that cannotpractically be purchased) by thedeveloper. Or, alternatives mayfocus mainly on differences ina project’s scale, rather than onmore substantial differences ina project’s design.

• Thresholds of Significance ofEnvironmental Impacts. An EIR

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Policy Brief

is required when a lead agency workable. This task force approachfinds that a project may have has been used successfully in the“significant” adverse environ- past. For example, Chapter 638,mental impacts. While the Statutes of 1995 (SB 1222, Calderon)CEQA Guidelines provide established a task force of stake-some guidance as to the cir- holders to make recommendationscumstances under which a to the Legislature on reforming theproject would normally have fee structure of the Department ofa significant effect on the envi- Toxic Substances Control.ronment, we found generalagreement that more detailedguidance is needed to providegreater certainty in the applica-tion of this concept.

Recommendation—Clarify Termsand Requirements. In order to pro-mote the use of MEIRs, we recom-mend that the Legislature clarify (1)how specifically future projects mustbe described in the “master” docu-ment and (2) how cumulative impactanalyses ought to be conductedwhen review of a future projectdescribed in the master documenttakes place. We also recommend thatthe Legislature clarify the scope ofalternative analyses in EIRs, includ-ing the reasonable number of alter-natives to be considered and thelevel of detail in the analysis.

We recommend that the Legisla-ture establish task force(s) consistingof CEQA stakeholders from state andlocal agencies, private project devel-opers, and the public to report to theappropriate legislative policy com-mittees, by January 1, 1999, withrecommendations on how the aboverequirements relating to MEIRs andEIRs should be amended to makethem more understandable and

Predictability Within andAmong Jurisdictions

We reviewed university researchstudies which surveyed local govern-ments throughout the state regard-ing their activities related to CEQA.These surveys gathered informationabout the number, type, and cost ofCEQA documents and the CEQApolicies and procedures of these localagencies. Our review of these re-search surveys finds that local agen-cies need to better document—foraccess by the public and projectdevelopers—their policies andprocedures for reviewing projectsunder CEQA.

Without documented policies,local agencies are more likely tomake CEQA decisions on an ad hoc,case-by-case, and potentially incon-sistent basis. This makes the CEQAprocess unpredictable for projectdevelopers and results in time delaysand added costs for project develop-ment. This is because project devel-opers lack information which wouldallow them early on in the processto make necessary adjustments intheir project design to address localissues and preferences.

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Our review of research surveys • Establish a competitive grantalso finds that there are important program to provide statedifferences among local jurisdictions matching money to local agen-in determining what constitutes cies to implement measures“significant” environmental impacts that would improve the CEQAand the appropriate mitigation process. The program shouldmeasures to address these impacts. also require the grantingWe believe that local flexibility agency to evaluate how effec-should be maintained in making tively local agencies use thesethese determinations in order to funds to improve their CEQAreflect local geographic circum- processes.stances and preferences. However,the policies behind these local differ-ences need to be better documentedto make the CEQA process morepredictable at the outset for projectdevelopers.

Recommendation—Provide Incen- Infrastructure and Economictives to Local Agencies to Documentand Make Accessible CEQA Policiesand Procedures. We recommend thatthe Legislature provide incentivesfor local governments to documenttheir CEQA policies and proce-dures—on matters such as environ-mental impact “significance” andappropriate mitigation mea-sures—and make them accessible tothe public. By doing this, both pro-ject applicants and the local agenciesreviewing projects can save time andmoney by reducing the need forproject modifications (and relatedreview) in the midst of the CEQAprocess.

The Legislature could providedifferent incentives to local agenciesto document their CEQA policies,including the following:

• Make adequate documentationand dissemination of CEQApolicies one of the criteria forthe allocation of funds to localagencies for environmentalmitigation from the California

Development Bank, establishedby Chapter 94, Statutes of 1994(AB 1495, Peace). We think thatsuch an allocation criterion isconsistent with the goals of thebank, since one of the bank’spurposes is to facilitate theeffective use of public resourcesto promote both economicdevelopment and conservationof natural resources.

It has frequently been suggestedby others that the Legislature requirelocal agencies to adopt standardizedthresholds of significance (of envi-ronmental impacts) and standardizedmitigation measures. We do notrecommend such an approach fora couple of reasons. First, the use ofstandardized measures could reducethe level of flexibility in localdecision-making. Second, standard-ized measures could create new

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Policy Brief

� . . .the

Legislature . . .

[should] hold

departments

accountable for

handling their

CEQA review

workload in a

timely manner.�

avenues for legal challenges, thereby review workload. For example, thecausing further delays in the process. Department of Fish and Game

Timeliness of State Agencies'Review and Comments

The CEQA requires lead agenciesto consult with “responsible” agen-cies which have a role in permittingor approving a project. The law alsoprovides strict time limits for respon-sible agencies’ review and comment.State agencies often act as responsi-ble agencies in the CEQA review ofprojects. For instance, the CaliforniaCoastal Commission and the Califor-nia Department of Fish and Gamefrequently serve as responsibleagencies.

There is widespread agreementthat responsible state agencies oftenraise important concerns aboutproposed projects. However, theseconcerns are often raised later ratherthan earlier in the process. Forexample, even though state agenciessometimes indicate early on that agiven project “may require” mitiga-tion, they often do not specify thekind of mitigation until later in theprocess after much of the CEQAreview has taken place. By raisingconcerns later in the process ratherthan earlier, state agencies can causetime delays and extra costs to projectdevelopers to revise projects accord-ingly.

One reason for late involvementby responsible state agencies maybe the lack of adequate resources tokeep pace with the increase in CEQA

estimates that the number of CEQAreviews it conducts increased byabout 18 percent between 1986 and1996. According to the department,its funding has been insufficient tohandle this increased workload ina timely manner. In addition, statu-tory requirements have been addedto CEQA over time. For example,Chapter 1232, Statutes of 1988(AB 3180, Cortese) requires responsi-ble state agencies such as the Depart-ment of Fish and Game to developfor lead agencies—at their re-quest—programs to monitor andreport on the implementation ofmitigation measures required underCEQA. Such requirements increaseresponsible state agencies’ workload.

However, because responsiblestate agencies typically do not tracktheir CEQA-related workload, it isdifficult to determine the appropriatelevel of funding for this workloadand the extent to which state agen-cies could redirect resources tohandle it.

Recommendation—ProvideFunding to State Agencies Specifi-cally for CEQA Review. We believethat it is important that the Legisla-ture have better oversight over thelevel of funding provided for CEQAreview, and be able to hold depart-ments accountable for handling theirCEQA review workload in a timelymanner. Accordingly, we recom-mend that the Legislature providefunding to state agencies explicitly

Page 14


for CEQA review through the annual data and information.) Currently, thebudget act. This may involve provid- Resources Agency is implementinging additional funds or reprioritizing the California Environmental Re-departmental activities and redirect- sources Evaluation Systeming the savings from lower priority (CERES)—a collection of databasesfunctions to the CEQA review func- of environmental and natural re-tion. Since it is unclear what funds source information—to help stateare currently being spent by state and local governments to moreagencies for CEQA review, we effectively protect and managefurther recommend that the Gover- natural resources.nor’s budget display separatelypersonnel and expenditures forCEQA reviews for each state agency.

We think that these recommenda- the ability of parties involved in thetions will enhance the Legislature’s process—project developers, publicability to evaluate both the CEQA- agencies, and the public—fromrelated workload of state agencies making the most efficient use ofand the level of resources that state information generated through theagencies need to accomplish that CEQA review process. For example,workload. In addition, the Legisla- CEQA requires that informationture will be better able to determine developed by lead agencies in indi-the appropriate sources of this vidual EIRs be incorporated intofunding—including the General databases in order to reduce delayFund, special funds, and fees and duplication in the preparationcharged to project developers or lead of subsequent EIRs. However, onlyagencies—and establish any neces- a few EIRs are currently availablesary statutory authority to provide electronically. Consequently, therethis funding. is no easy way to refer to or draw

Use of Information Technology

Information technology is usedincreasingly in the implementationof the state's natural resources andenvironmental protection programs.Such technology includes theInternet as well as GeographicInformation Systems (GIS). (A GISis a collection of computer hardwareand software designed to store andanalyze geographically designated

However, information technologyis not widely applied to the imple-mentation of CEQA. This reduces

upon the data and analytical modelscontained in other EIRs conductedfor the same geographic area or forsimilar types of projects. When EIRsare not accessible on-line, this alsoincreases the cost of distributingEIRs, and diminishes the ease withwhich interested parties includingthe public can review EIRs.

Recommendation—Require CEQADocuments to Be Made Electroni-cally Accessible. As a first step tomaking more efficient use of previ-

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Policy Brief

ously generated information, we resources information technologyrecommend that CEQA documents projects—such as CERES, GIS, andsuch as EIRs be made accessible other resources databases—is toelectronically to project developers, improve statewide implementationinterest groups, state and local of CEQA. This would provide prior-government agencies, and the public. ity direction to state departmentsThis could be done by putting docu- and agencies in their developmentments on-line on the Internet. Addi- and funding for such informationtionally, the CEQA Guidelines systems. To encourage local agenciesshould provide guidance on the in this regard, the Legislature couldavailability and use of state, regional require state agencies to provideand local GIS and other information such technical assistance to localtechnology systems that will facili- agencies. Additionally, the Legisla-tate the implementation of CEQA. ture could authorize state and local

We also recommend that theLegislature specify in law that oneof the objectives of state-funded

agencies to charge user fees to coverthe cost of providing the informationelectronically.

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� . . . there is . . .

little information

available on . . .

cost . . . of

implementing

mitigation. . . or

the effectiveness of

those measures in

protecting the

environment.�

HOW TO MAKE MITIGATION MORE COST-EFFECTIVE

One of CEQA’s three main pur- ual mitigation measures are relativeposes is to mitigate the impacts of to their cost, and how mitigationpublic and private projects on the measures can be made more cost-environment where feasible. How- effective in the future.ever, we are not able to determinehow effectively CEQA meets thispurpose. This is because there isrelatively little information availableon either (1) the cost to project devel-opers of implementing mitigationmeasures required under CEQA or(2) the short and long-term effective-ness of those measures in protectingthe environment. Our review findsthat mitigation of environmentalimpacts under CEQA can be im-proved by:

• Generating information on thecost-effectiveness of requiredmitigation.

• Basing mitigation on statewidepriorities and objectives.

• Addressing cumulative andregional impacts of develop-ment.

Evaluating Cost-EffectivenessOf Mitigation Measures

While CEQA requires publicagencies to monitor the implementa-tion of the mitigation measures, itdoes not require the agencies toevaluate the effectiveness of thesemitigation measures. As a result, itis difficult to assess how well CEQAis working overall to protect theenvironment, how effective individ-

Recommendation—Require Peri-odic Assessment of the Effectivenessof Required Mitigation Measures.The Legislature should require theSecretary of Resources to periodi-cally assess and report on the typesof mitigation measures requiredunder CEQA and the measures’relative costs and effectiveness inprotecting the environment. Thisassessment should include not onlymitigation measures required bystate agencies, but a representativesample of locally required measures.This information will assist publicdecision-makers to identify effectivemitigation measures, promotegreater consistency in the develop-ment of mitigation measures, andenable project developers to incorpo-rate effective mitigation measuresup front in project design. In addi-tion, the Legislature will have betterinformation with which to evaluateCEQA’s overall effectiveness inprotecting the environment.

Mitigation BasedOn Statewide Priorities

Even though current law requiresthe Governor to prepare and updateevery four years a comprehensivestate environmental goals and policyreport, no report has been submittedsince 1978. The report is intended to

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Policy Brief

lay out the state’s environmental retain the flexibility under CEQA togoals and objectives, the actions develop mitigation requirementsneeded to attain those objectives, and based on local conditions, we alsoserve as a guide for state expendi- think it is important that state agen-tures for environmental purposes. cies require mitigation measures that

In the absence of such a plan, theability of state agencies to developmitigation measures that reflectstatewide environmental goals isreduced. Individual state agen-cies—each with its own statutorymission—are more likely to work atcross-purposes. For example, theOffice of Planning and Researchfound in a 1992 study entitled State-wide Plan Coordination in Californiathat the long-term plans preparedby a variety of state agencies suchas the Department of Housing andCommunity Development and theDepartment of Fish and Game werenot coordinated with one anotherto ensure that issues of statewideimportance—including land use andenvironmental issues—were ad-dressed consistently. The lack ofconsistency in the approach of stateagencies to land use and environ-mental issues creates problems in theCEQA process. For example, theLittle Hoover Commission found ina 1995 report that the lack of coordi-nation at the state level can result incostly conflicts at the project reviewlevel, and reduce the effectivenessof required mitigation in addressingadverse environmental impacts.

Recommendation—Require StateAgencies to Base Mitigation Mea-sures on Statewide Goals. While wethink that state agencies should

contribute to the accomplishmentof statewide goals. Accordingly, werecommend that the Legislaturerequire that (1) the Office of Plan-ning and Research submit to theLegislature the state environmentalgoals and policy report requiredunder current law, and (2) stateagencies, where possible, base themitigation measures they requireunder CEQA on the statewide goalsidentified in the report. We believethat this will provide guidance tostate agencies in reconciling theirdifferent mitigation requirementsand promote consistency in stateagencies’ implementation of CEQA.

Cumulative and RegionalImpacts of Development

As we have observed elsewhere(please see our The 1989-90 Budget:Perspectives & Issues, page 101), localissues of growth in California haveevolved over time into regional issueswhich are beyond the scope of anysingle city or county authority toresolve. In addition, many problemsassociated with growth are cumula-tive in nature, in that the relativelyminor environmental impacts ofindividual projects can be collec-tively large, within a local jurisdic-tion or regionally. For example, airand wildlife habitat are two re-sources that are particularly suscepti-

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� . . . CEQA . . .

is a poor substitute

for the general

plan process . . . �

ble to cumulative and regional ing in advance the environmentalimpacts of development. impact of alternative land uses over

Current law requires local govern-ments to adopt and periodicallyupdate local general plans. Generalplans, covering multiple years,consider among other things, thelong-term environmental impact ofalternative land uses and develop-ment of the area. This focus facili-tates the identification and mitiga-tion by local governments of thecumulative and regional impacts ofdevelopment. Within the frameworkof the general plan, projects are Recommendation—Reexaminereviewed under CEQA.

Due in part to fiscal constraints,however, local governments oftenfind themselves unable to developand update general plans on acomprehensive and timely basis.Accordingly, local governments areless able to use general plans to takeinto account the cumulative andregional impacts of development.Instead, local governments increas-ingly rely on CEQA review of indi-vidual projects to address theseimpacts. This is because local gov-ernments are reimbursed for muchof their CEQA review costs (but notgeneral planning costs) by projectdevelopers.

However, because CEQA’s focusis on individual projects, it is a poorsubstitute for the general plan pro-cess in assessing and mitigating thecumulative and regional impact ofland use decisions on the environ-ment. Specifically, without consider-

time, a lead agency may requireinsufficient mitigation for a project.This could result in an increasedmitigation burden on subsequentfuture projects to compensate for theinsufficient mitigation. Furthermore,this shift in the use of the CEQAprocess could result in individualproject reviews requiring moreextensive documentation and analy-sis, thereby adding to the reviewtime and costs of the process.

Role of CEQA in Land Use Planning.Given the limitations of substitutingCEQA for the general plan process,the Legislature should reexamine theappropriate role of CEQA in landuse planning and development. Inthe long term, the Legislature shouldimprove and reform CEQA basedon the role it envisions CEQA shouldplay in shaping land use decision-making relative to other decision-making mechanisms.

Two broad options are availableto improve the state’s capacity toidentify and mitigate adverse cumu-lative and regional impacts of devel-opment. First, the Legislature couldstrengthen CEQA as a tool for ad-dressing these impacts by furtherdeveloping the use of MEIRs. TheMEIR is a step in moving CEQAtowards focusing not only on individ-ual projects, but also considering theenvironmental impacts of multipleprojects at one time.

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Policy Brief

Alternatively, the Legislature the costs of regional environmentalcould keep CEQA focused primarily impacts.on individual projects but strengthenother mechanisms for addressingcumulative and regional impacts ofdevelopment. For example, theLegislature could provide incentivesto local governments to strengthentheir local planning mechanisms andparticipate in the development ofregional plans to protect wildlifehabitat and air quality. Other optionsavailable to the Legislature includereforming regional planning organi-zations, encouraging better coordina-tion among local governments, andadjusting state economic policies toprovide appropriate signals to themarket and local governments about

Whichever option the Legislatureselects, we think it is important thatthe Legislature take steps to ensurethat adequate funding is availablefor local and regional efforts toaddress the adverse cumulative andregional impacts of development.Options available to the Legislatureinclude providing state funds for thispurpose and strengthening localfunding mechanisms—such as byproviding authority to local govern-ments to levy fees to support generalplanning or master environmentalreviews such as MEIRs.

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�. . . too many

resources are

spent either in

litigation or in

trying to avoid

litigation . . .�

IMPROVE RESOLUTION OF CEQA DISPUTES

A common concern with CEQA Two recent developments shouldis that too many resources are spent help to address the problem ofeither in litigation or in trying to lawsuits motivated by non-environ-avoid litigation, and that there is no mental concerns. First, recent courtgood mechanism short of litigation decisions suggest that the courts arefor resolving disputes. In particular, more likely today than in the pastdevelopers are concerned about to dismiss such lawsuits. Second,lawsuits that are brought mainly to recent statutory changes spell outdelay or prevent projects from more clearly the type of evidenceproceeding, rather than to raise needed to challenge CEQA decisionssubstantive environmental concerns. and require parties to CEQA litiga-Project developers indicate that the tion to substantiate their case earlierease with which opponents can on in the process. For example,challenge the adequacy of an EIR has Chapter 1131, Statutes of 1993 (SBoften caused project proponents to 919, Dills) clarified what constitutesproduce voluminous, perhaps exces- “substantial evidence” to supportsive, CEQA documentation designed a challenge that an EIR should haveto withstand legal challenge. Such been prepared in light of a project’s“bullet-proofing” tends to increase possible significant environmentalthe time and cost required to prepare impacts. Also, Chapter 1230, StatutesCEQA documents. of 1994 (SB 749, Thompson) and

It is difficult to assess fullywhether concerns about CEQAlitigation act as a major impedimentto business development becausethere has not been any study ofCEQA’s economic impact on busi-ness statewide. While a researchsurvey found that CEQA-relatedlawsuits are relatively few—withabout one lawsuit being filed per 354initial studies at the local level—our We believe that many of thereview finds anecdotal examples, at recommendations discussed abovethe individual project level, where would also reduce the time and costslitigation or the fear of litigation associated with CEQA litigation, andresulted in substantial added costs would do so without stifling legiti-and time for project approval, with mate public participation, therebyfew, if any, added environmental ensuring compliance with CEQA’sbenefits. requirements. For example, by

Chapter 1294, Statutes of 1994(AB 314, Sher) both clarify andexpand information to be filed witha court in CEQA litigation. Thisshould provide parties with a betterunderstanding of their opponent’scase. While it is too early to tell howeffectively these reforms are work-ing, they are intended to weed outfrivolous lawsuits more quickly.

making the definition and applica-

Page 21

Policy Brief

tion of CEQA's terms and require- process to challenge is made simplerments more certain, opportunities and less costly.)to challenge CEQA decisions on thebasis of procedural deficienciesshould be reduced.

Recommendation—Explore the mend that the Legislature evaluateUse of Alternative Dispute Resolu-tion Mechanisms. Even if the num-ber of CEQA challenges is reduced,legitimate disputes will continue tooccur. These disputes should beresolved efficiently. Currently, theonly alternative under CEQA tocostly litigation is a requirement fora mandatory settlement conferencefor parties prior to a CEQA lawsuitbeing scheduled.

The Legislature should exploreother mechanisms for resolvingCEQA disputes. Currently, CEQAdoes not prohibit parties from usingdispute resolution mechanisms, suchas mediation, as an alternative tolitigation. We think that certain typesof disputes may be particularlyappropriate candidates for the useof alternative dispute resolutionmechanisms. For example, disputesdealing with procedural issues—acommon CEQA dispute—may beappropriate candidates providedthey do not involve substantivequestions of law that call for judicialresolution. However, it is not knownhow an expanded use of these mech-anisms will impact the overall costsconnected with CEQA challengesand the frequency of such chal-lenges. (For example, it is not knownif more challenges would occur if the

In order to assess the potentialeffectiveness of alternative disputeresolution mechanisms, we recom-

the current use of these mechanismsin other states, including Florida andGeorgia, that have a CEQA-likeprocess. We also recommend that theLegislature establish a pilot programto test the use of these mechanismsin California.

CONCLUSION

Our review finds that CEQA canbe made to work better to achieveits goals. In particular, the CEQAprocess can be made more efficientso as to reduce the time and expenseof compliance for project developersand the public agencies reviewingprivate and public projects. This willalso enhance CEQA’s effectivenessin informing public decision-makersand the public about the environ-mental impacts of development. Wealso find that the mitigation of theadverse environmental impacts ofdevelopment can be made more cost-effective, and the resolution ofdisputes under CEQA can be im-proved. Our recommendations forimproving CEQA, including refer-ences to the problems addressed, aresummarized in Figure 3 (see nextpage).

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Figure 3

Legislative Analyst’s OfficeRecommendations for Improving CEQA

Problem Area Addressed

Recommendation CEQA Process Mitigation Efforts CEQA DisputesEfficiency of Effectiveness of Resolution of

Expand “certified regulatory programs” to local programs � �

Fully or partially exempt projects that are partof larger plans subject to CEQA or otherenvironmental review � �

Clarify terms and requirements � � �

Provide incentives to locals to document andmake accessible their CEQA policies andprocedures � � �

Provide funding to state agencies specificallyfor CEQA review � � �

Require CEQA documents to be madeelectronically accessible � � �

Require periodic assessment of the effectiveness of mitigation measures � �

Require state agencies to base mitigation measures on statewide goals � � �

Reexamine role of CEQA in land useplanning �

Explore the use of alternative disputeresolution mechanisms � �

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Policy Brief

As shown in Figure 3, many of our Our recommendations wouldindividual recommendations address make use of a range of mechanismsmultiple problem areas with CEQA. available to the Legislature in im-

For example, clarifying particularstatutory requirements and encour-aging local agencies to better dissem-inate their CEQA policies and proce-dures should make the process moreefficient, improve mitigation, andhelp reduce disputes. Also, many ofour recommendations seek to resolveconflict among environmental re-view agencies by enhancing thecoordination of these agencies.

proving CEQA, including amendingstatute, exercising budgetary author-ity with regard to state agencies, andproviding fiscal and policy incen-tives to local agencies. Finally, ourrecommendations would preservelocal flexibility in CEQA decision-making and facilitate the meetingof statewide environmental goals.

This report was prepared by Cameron Keyes and Mark C. Newton, under the supervision of Dana Curry.

The Legislative Analyst’s Office (LAO) is a nonpartisan office which provides fiscal and policy informationand advice to the Legislature. To request publications call (916) 445-2375.

This report and others are available on the LAO's World Wide Web site at http://www.lao.ca.gov.The LAO is located at 925 L Street, Suite 1000, Sacramento, CA 95814.