Promulgation of Generally Applicable Thresholds is not a "Project" under CEQA

California Building Industry Association v. Bay Area Air Quality Management District

(2013) ___ Cal.App.4th ___

A California Appellate Court has ruled that thresholds of significance are not a "project" under the California Environmental Quality Act ("CEQA"). The decision centered on the Bay Area Air Quality Management District's ("BAAQMD") adoption of new thresholds of significance for air pollutants.

The California Building Industry Association ("CBIA") challenged the BAAQMD's thresholds, arguing in part that the BAAQMD should have conducted a CEQA review because adoption of the thresholds constituted a "project" within the meaning of CEQA. The trial court agreed with CBIA, noting that the thresholds were a "discretionary activity undertaken by a public agency which may cause a reasonably foreseeable indirect physical change in the environment."

The BAAQMD appealed, arguing that the promulgation of thresholds was not a "project" under CEQA and thus did not require environmental review. For two reasons, the appellate court agreed with BAAQMD and reversed the trial court ruling.

First, the court noted that the CEQA Guidelines section 15064.7 establish a specific procedure for enacting generally applicable thresholds of significance such as the ones adopted by the BAAQMD, including that thresholds be formally adopted through a public review process and supported by substantial evidence. The CEQA Guidelines do not, however, require environmental review as a prerequisite for promulgating a threshold. According to the court, requiring environmental review would duplicate the public review process and substantial evidence standard already set forth in the CEQA guidelines.

Second, the court held that the promulgation of the thresholds would not constitute a "project" in any event because the action would have no "reasonably foreseeable indirect physical change in the environment" within the meaning of CEQA Guidelines section 15378, subsection a. CBIA's claim was predicated on the assumption that the thresholds would make it more difficult for developers to build residential projects in urban areas, thus causing more housing to be constructed in suburban and rural areas. CBIA's assumption, according to the court, while possible, was "too attenuated and speculative to be reasonable foreseeable" and thus did not require CEQA review prior to the promulgation of the thresholds.

The court also distinguished cases in which lead agencies conducted CEQA review for plans or codes of general applicability, including a plan that would restrict residential development around a military base thus displacing development to other areas, as well as a uniform code provision allowing builders to use cross-linked polyethylene pipes, which were proven to have deleterious effects on the environment. Those cases, according to the court, involved actions that constituted a "necessary step" in a chain of events resulting in a physical impact on the environment. Here, however, determining the extent to which undefined future projects might be built or abandoned as a result of the thresholds would be inherently speculative. Moreover, thresholds by their very nature are not conclusive even when they are used by another agency. Instead, "they simply set the levels at which an environmental effect will normally be deemed significant or insignificant."

The decision settles the question of whether CEQA review is required before promulgating thresholds of general applicability, and clarifies that lead agencies need only follow the public hearing and substantial evidence requirements as set forth in CEQA Guidelines section 15064.7.

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