The Case Against SB 123

MEMORANDUM To:

Planning Director, City of Bruin

From:

Planning Staff (Cruz, Garcia, Monaghan, Romero, Salehian)

Re:

The Case Against SB 123

Date:

May 16, 2013

During the 1960ʼs and 70ʼs, a wave of environmentalism swept across the United States prompting the California legislature to design and pass the California Environmental Quality Act (CEQA) in 1970. Since that time, the statute has been described as the nationʼs most stringent environmental protection law. It has been so influential, in fact, that many states have looked to CEQA for guidance. Over the years, CEQA has evolved based on decades of case law interpreting both the statute itself and the state CEQA guidelines. Today, many criticize the law for its inefficiencies and cumbersome procedures, especially those related to the ease with which CEQArelated cases can be brought into the courtroom. Proponents and critics of CEQA all recognize the need for intelligent reform of the law in order to ensure that debates about the environmental consequences of development remain transparent and fair, without being hijacked by politicallyoriented litigation or the threat thereof. While a wide array of reform plans have been made to address these issues, this memorandum presents a description of SB 123, a proposal for the establishment of specialized “Environment and Land Use Courts” across the State of California.

After carefully measuring the intentions and potential consequences of this proposal, the planning staff of the City of Bruin provides a recommendation against the City Councilʼs support for this bill.

BACKGROUND: WHAT IS REALLY AT STAKE? CEQA was originally designed to provide the procedural mechanisms for state and local authorities to debate the environmental impacts of public development projects. Neither the statute itself (see California Public Resources Code section 21000) nor the state guidelines set by the California Secretary for Resources (see the California Code of Regulations, title 14, section 15000) establish criteria for environmental protection. CEQA simply requires governmental agencies to divulge potential environmental impacts of development projects. After a series of procedures involving public disclosure have been completed in a transparent manner, the decision regarding whether or not to proceed with the development project lies in the hands of local authorities. The basic purposes of CEQA, as outlined by the state guidelines, are as follows: 1. Inform governmental decision makers and the public about the potential, significant environmental effects of proposed activities.

2. Identify the ways that environmental damage can be avoided or significantly reduced.

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3. Prevent significant, avoidable damage to the environment by requiring changes in projects through the use of alternatives or mitigation measures when the governmental agency finds the changes to be feasible.

4. Disclose to the public the reasons why a governmental agency approved the project in the manner the agency chose if significant environmental effects are involved.1 In theory, the law should be applied in a cooperative process among the developer (also called the real party in interest), the lead agency that will ultimately approve or deny the project, and the public, which serves to hold both the developer and the lead agency accountable. In practice, however, the 40 years since CEQA was passed have shown the process to be contentious, highly politicized, costly, and clouded by litigation. The legal procedures of CEQA allow any party (that has previously made comments on the project during the official comments period) to challenge the project approval in court. In the best circumstances, this ensures one final opportunity to determine whether or not any CEQA procedure has been violated that would prevent the project from moving forward. In the worst cases, this easy move to litigation allows a project opponent to abuse the procedural mechanism of litigation as a last resort to stall a project by lengthening the development process and increasing expenses for all parties involved. Irrespective of the motivation for utilizing the technical mechanics of CEQA to challenge a project in court, the cumulative results are an interest-group dominated development process and costly administrative burdens placed on a California court system that has been stretched thin by $535 million in budget cuts over the last five years.2 SB 123 – Environmental and Land Use Court Given these circumstances, the current legislative climate surrounding CEQA is one of reform. One such attempt to amend CEQA is a Senate Bill 123 (Corbett). Senator Majority Leader Ellen Corbett initially introduced the bill on January 18, 2013. On May 13 it passed in the Senate Appropriations Committee and has been placed in the Appropriations Suspense File. For a comprehensive breakdown of the requirements that this legislation would impose, see below: •

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The Judicial Council would be directed to create an environmental and land use division within two or more superior courts in each of the six appellate districts, for a minimum total of twelve new divisions.

The new environmental and land use divisions would process civil proceedings brought pursuant to CEQA and any of the six following subject areas: air quality, biological resources, climate change, hazards and hazardous materials, land use planning, and water quality.

The civil proceedings subject to this legislation would be filed at a superior court in the county in which the claim arises, but would be transferred to the nearest superior court within the same appellate district where an environmental and land use division exists.

The Judicial Council would, by rule of court, identify the statutes within the six specified areas that would be subject to the jurisdiction of the new environmental and land use division.

The Judicial Council would, by rule of court, establish standards and protocols, including educational requirements and other qualifications for specialized judges assigned to the environmental and land use divisions, in order to accomplish the objectives of consistency, expediency, and expertise.

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DEBATE: TO SUPPORT OR OPPOSE SB 123?

SB 123 cites a 2009 report by the World Resources Institute titled, “Greening Justice: Creating and Improving Environmental Courts and Tribunals,” which states that a new wave of environmentalism and the increasingly complex environmental regulations enacted over the past decade have led to a world-wide doubling of the number of specialized environmental courts. The authors of this law argue that complicated issues of environmental management and natural resource protection should be decided by expert judges in specialized environmental and land use courts. Advocates of this measure, such as the California Chapter of the American Planning Association, East Bay Municipal Utility District, and the Enhanced CEQA Team, support the creation of such a specialized court with the goal of streamlining judicial proceedings and producing more consistent outcomes. While the overall number of CEQA and CEQA-related subject-area civil proceedings may not immediately decrease, the removal of delays and uncertainty from judicial proceedings could positively impact the viability of development projects in local jurisdictions. If holdings handed down by the specialized courts began to reflect certain patterns based on the decisions of well-educated justices that are trained as environmental experts, the number of appeals could conceivably decrease over time. Fewer CEQA and CEQArelated appeals in the court system could therefore reduce the overall administrative burden – and the associated costs – on the California court system as a whole.

It is important to note that SB 123 has been modified since it was originally introduced to include a funding mechanism that would provide supplemental support for the creation and operation of the environmental and land use court division. The new provision would raise the fees for issuance and renewal of an environmental license plate, each by $10. The initial cost will increase from $48 to $58, while the cost to renew the plate will increase from $38 to $48. As such, the additional $10 collected for every environmental license plate transaction will be transferred to a newly created “Environmental and Land Use Court Support Account,” which will be created within the California Environmental License Plate Fund.

A Well Intentioned, but Flawed, Proposal SB 123, as it currently stands, is a well-intentioned effort to ensure that CEQA experts – with the education, resources, and experience to deal with environmental issues – preside over cases involving CEQA, air quality, biological resources, climate change, hazards and hazardous materials, land use planning, and water quality matters in specialized courts. After careful review, however, it is clear that the bill presents several potential drawbacks. First, SB 123 calls for the creation of at least twelve specialized courts with trained CEQA experts, yet it fails to acknowledge that a similar concept already exits under current law. The California Judicial Council – which happens to be the body directed to implement the majority of the reforms – opposes the proposed bill on these grounds. Before creating redundant legislation, the efficiency and effectiveness of the existing system should be carefully examined. Currently, state law requires the superior courts of counties with populations over 200,000 to designate at least one judge as a CEQA specialist to be available to hear related cases. As of the 2010 U.S. Census, approximately half of all counties meet this population requirement (See Appendix).2 Therefore, at any given time there should be about 30 justices across the state with CEQA expertise. The creation of twelve specialized courts has the potential, over time, to actually reduce the number of judges designated as CEQA specialists. In addition, the as yet unknown educational and training requirements that the legislation would impose on current judges could undermine the billʼs goal of streamlining environmental and land use planning cases by placing onerous requirements on courts and 3

justices already struggling to ensure cases pass through the calendar in a timely manner. SB 123 could inadvertently create a scenario where there are fewer judges across the state with CEQA expertise that, despite attaining higher levels of education and receiving more training due to the more stringent requirements, would actually hear fewer cases because of the increased administrative burdens.

A second flaw existing in SB 123 is related to the concept of access to justice. It is logical that the new environmental and land use courts created as a result of this legislation would be housed in superior courts in the larger counties of each appellate district. These larger counties simply have greater capacity to absorb the administrative burden and increased costs associated with the creation of specialized courts. As previously noted, under the new system, any claim would be filed at a superior court in the county in which the claim arises, but would be transferred to the nearest superior court within the same appellate district where an environmental and land use division exists. As such, the Rural Counties Representatives of California (RCRC) oppose the proposed legislation on the grounds that the new system would limit access to justice for people in rural areas. Rural governments would be placed at a disadvantage by having to litigate cases in distant urban venues. Litigation costs for all parties in the rural counties (located far from the appellate district superior court with the environmental and land use division) would increase due to travel costs and potential reliance on costly outside counsel. In addition, the bill would deprive parties the ability to have their cases heard locally. The RCRC notes that, “local decisions involve local agency discretion and require both judicial deference and an understanding of the community sensibilities underlying the decisions.”3 The existing rural-urban divide would only be exacerbated by the proposal.

Finally, while SB 123 does incorporate a strategy to financially support the specialized environmental and land use division, there is not enough evidence to say with certainty whether the funding mechanism could generate enough revenue to support the heavy operational costs that the creation of such a court system would impose. One issue is that the language in the bill is ambiguous at best. It states that any revenue coming from the newly created “Environmental and Land Use Court Support Account” would only serve to supplement funding of the specialized court division. There is no mention of where the rest of the funding would come from. Another issue is with the proposed funding source itself. An April 2013 report released by the California State Auditor charges that, “the State has not collected all revenue due from special plates and has spent some of the special plate revenue on expenditures that were unallowable or unsupported.”4 (See Figure 1 for more details of financial mismanagement from the audit). The billʼs authors have not produced enough clarity around the funding issue to satisfy the California Chamber of Commerce, the Associated Builders and Contractors of California, the American Council of Engineering Companies, or the California Manufacturers and Technology Association, all of whom oppose the bill primarily on fiscal grounds. These four groups advocate that

“We estimate that the California Department of Motor Vehicles (Motor Vehicles) did not collect $12 million in revenue from retention fees related to special plates during fiscal years 2010– 11 and 2011–12. Further, for the fees Motor Vehicles collected during these two fiscal years, it potentially undercharged some special plate owners by a total of nearly $10.2 million. Motor Vehicles has also not accurately charged special plate programs for its administrative costs.”

– State Auditor Elaine M. Howle, CPA, Special Interest License Plate Funds, Report 2012-110

Figure 1: Mismanaged funds by the proposed source of supplemental funding for SB 123

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any new revenue streams dedicated to the California court system should be assigned to rebuilding and strengthening the existing, resource-starved system.

CONCLUSION: STAFF RECOMMENDATION IN OPPOSITION OF SB 123 After close examination of the proposed benefits and potential outcomes, the planning staff of the City of Bruin, California respectfully recommends that the City Council oppose SB 123.

While the effort on the part of the billʼs authors is well-intentioned, and few would argue against the need to increase efficiency and consistency throughout the judicial process with regard to CEQA, the particular measures proposed in SB 123 are unlikely to produce the desired outcomes (See Figure 2). The proposed legislation merely repackages existing legislation, exaggerates the existing divide between rural and urban counties, and, in todayʼs economic climate, is too costly an experiment.

There are still opportunities to investigate the potential alternatives for improving the current environmental judicial system, especially as it relates to CEQA. As it currently stands, SB 123 is an overly ambitious and under-researched idea. If it were to pass now, it could negatively impact the state judicial system by exacerbating the very conditions it proposes to combat in the first place by decreasing the number of CEQA-expert judges, increasing case backlogs, decreasing access to justice (especially in rural counties), and increasing financial strain on all parties involved.

Instead, a more suitable proposal would be to support and strengthen the existing court system by (a) making the appropriate corrections to the financial and administrative systems of the environmental licensing program (in light of the previously mentioned California State Auditorʼs report), (b) maintaining the funding mechanism, but directing the new revenue stream to an education and training program for the 28 existing CEQA expert justices in counties with populations larger than 200,000, and (c) examining the efficiency and effectiveness of the education program for CEQA justices after five years to decide if it is viable to extend the provision for superior courts to designate one CEQA specialist to the remaining rural counties with populations of less than 200,000. These measures would strengthen and expand the existing cadre of judges with CEQA training throughout the state and empower judges in rural counties to solve environmental and land use matters locally, all without imposing burdensome administrative requirements that would increase litigation costs for all parties.

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FIGURE 2: SUMMARY OF FINDINGS State law already requires the superior courts of counties with populations over 200,000 to designate at least one judge as a CEQA specialist to be available to hear related cases.

The proposed system would limit access to justice for people living in rural areas placing rural governments at a disadvantage.

There is not enough evidence to determine whether the funding mechanism could generate enough revenue to support the costs that the creation of such a court system would impose.

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California Code of Regulations, Title 14, Chapter 3, Article 1, § 15002(a) California Senate Judiciary Committee Report, SB 123 (Corbett). 7 (2013).

3 Proposed: California Government Code, Title 8 Chapter 5, Article 2, § 69540(b) 4 California State Auditor (2013, April 18). Special Interest License Plate Funds, Report 2012-110 2

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APPENDIX CALIFORNIA COUNTY POPULATION/APPELLATE DISTRICTS MAP

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