Archive for November, 2012


On November 13, 2012, the California Chamber of Commerce filed a petition seeking to block the California Air Resources Board (CARB) from auctioning carbon allowances. The complaint, filed in a Sacramento state court, asserts that CARB lacks the authority under AB 32 to raise money beyond what is needed to cover its administrative costs of implementing a state emissions regulatory program.

The Chamber argues that the California Legislature never authorized CARB to raise fees or taxes through an auction mechanism. Therefore, the program constitutes an unauthorized and unconstitutional tax according to the Chamber. The Chamber cites the California Constitution, which requires a two-thirds vote of the Legislature to raise taxes. In prepared statements regarding the suit, the Chamber states the current CARB proposal “is the most costly way to implement AB 32” and that it will “hurt consumers, the job climate, and the ability of business to expand” in California. The Chamber argues other states will decline to follow California’s AB 32 as a model if it is not designed to be the most cost effective way of reducing carbon emissions.

In the suit, the Chamber did not seek a court order blocking the first auction set for November 14, 2012, and state officials indicated the sale would proceed as scheduled. An affiliate of the Chamber indicated that the organization is trying to eliminate future auctions, which are set for regular intervals over the next eight years. Tim O’Conner, director of the Environmental Defense Fund’s California Climate and Energy Initiative noted that the Chamber’s filing of the suit on the eve of the first auction “seems quite unsavory” and could dampen California’s comprehensive program to curb greenhouse gases. The Chamber insisted the suit was not filed in relation to the specific auction scheduled for November 14, 2012.

CARB spokesperson Stanley Young indicated that the agency is confident the cap-and-trade program will withstand any court challenge. CARB believes the market-based approach to cutting greenhouse emissions gives California business flexibility to best decide now to reduce emissions.

The court must decide whether the auction should be viewed as a tax and whether AB 32 granted CARB discretion to design a mechanism, such as cap and trade, to curb the state’s greenhouse gas emissions. Considering that the Legislature passed legislation directing the State’s Department of Finance and CARB to develop a plan to invest auction proceeds and to set up an account for the deposit of auction funds, it seems the Chamber may have a difficult time convincing a court that the Legislature intended to limit CARB’s discretion in a way that would prohibit the auction of allowances for a cap-and-trade program designed under AB 32.

On November 13, 2012, the Third District Court of Appeal in Stockton Citizens for Sensible Planning v. City of Stockton (2012) __Cal.App.4th__ (Case No. C067164) affirmed a trial court’s judgment that claims brought under the State Planning and Zoning Law were time-barred because the suit was not commenced within 90 days after the City of Stockton approved the project at issue.

On February 17, 2004, the City filed a Notice of Exemption (NOE) regarding the City’s approval of a shopping center project. The NOE identified the project location and indicated that it fell within a fully entitled master planned development adopted on January 9, 2002. The City determined the site plan, grading plan, landscaping plan, and building elevations and design conformed to standards set forth in the master development plan. The City took the position that these determinations of compliance constituted ministerial actions not subject to CEQA review.

On July 22, 2004, the plaintiffs filed a petition for writ of mandate alleging that the City violated CEQA and planning and zoning laws. The Supreme Court ultimately held that the CEQA claims were untimely under the 35-day limitations period set forth in Public Resources Code, section 21167, subdivision (d). The Supreme Court declined to address the timeliness of the remaining causes of action, as neither the trial court nor the Court of Appeal had ruled on the issue. The remaining claims were remanded, and the trial court granted the City’s motion for judgment on the pleadings, holding the non-CEQA claims were barred by Government Code, section 65009, subdivision (c)(1)(E) because they were not brought within 90 days after the City’s approval of the project. The plaintiffs appealed.

On appeal, plaintiffs argued a letter of approval issued for the project did not trigger the 90-day statute of limitations because it was not a permit issued after a decision by a legislative body of the City. The appellate court found that plaintiffs’ argument ignored the express language of Government Code, section 65009, subdivision (c)(1)(E). This subdivision states that the 90-day limitations period applies to actions or proceedings “[t]o attack, review, set aside, void, or annul any decision on the matters listed in Sections 65901 and 65903…” Section 65901 enumerates the powers of the board of zoning adjustment or zoning administrator and states. In part, “The board of zoning adjustment or the zoning administrator may also exercise any other powers granted by local ordinance.”

The court determined the Stockton City Council, by local ordinance, created the office of Community Development Department Director and vested with this office the authority to review development projects “in compliance with” section 65901. The letter of approval was issued by the City’s Director, who the court found clearly qualified as the City’s “zoning administrator.”

The court also rejected the plaintiffs’ assertion that the Director’s letter or approval did not trigger the limitation period because section 65009 is only applicable to the decision of a legislative body. The appellate court found, when considered as a whole, the language of section 65009 supports a finding that the Legislature intended to include decisions by zoning administrators in the 90-day limitations period.

Finally, the plaintiffs argued the application of Government Code section 65009 requires a public procedure and an opportunity for hearing. Plaintiffs asserted this requirement was implied in the section. Real Parties pointed out that this assertion is refuted by the statute’s express language. Section 65009, subdivision (c)(1)(e), specifically applies to matters listed in section 65901. Section 65901 distinguishes cases involving the authority to hear and decide applications for conditional uses or other permits from the exercise of other powers granted by local ordinance. Additionally, section 65901 expressly authorizes local jurisdictions to allow the grant of certain variances without a public hearing. The appellate court agreed. After finding the plaintiffs’ planning and zoning claims time-barred, the court dismissed the remaining derivative claims.

On November 14, 2012, the California Air Resources Board will conduct its first quarterly auction for greenhouse gas allowances under the cap-and-trade program, which is identified in the Assembly Bill 32 Scoping Plan as one of the strategies California will employ to reduce the greenhouse gas emissions that cause climate change.

In 2006, the Legislature passed and Governor Schwarzenegger signed AB 32, the Global Warming Solutions Act of 2006, which requires California to reduce greenhouse gas emissions to 1990 levels by 2020. In complying with AB 32, CARB prepared a Scoping Plan identifying a cap-and-trade program as one of the strategies California will use to reduce the GHG emissions that cause climate change. The cap-and-trade program places a limit on the GHG emissions allowed from pollution producers like refineries and cement manufacturers, and directs all entities subject to the cap (covered entities) to surrender “compliance instruments” equivalent to their GHG emissions to CARB. Compliance instruments include both allowances, which are allocated by CARB or obtained from auctions or secondary markets, and offset credits, which represent GHG emissions reductions achieved in sectors that are not subject to the cap.

This year, the cap-and-trade program covers about 350 industrial businesses operating a total of 600 facilities throughout the state. They include cement plants, steel mills, food processors, electric utilities, and refineries. Starting in 2015, the program will also cover distributors of natural gas and other fuels. For the first two years of the cap-and-trade program, covered entities will receive 90 percent of their allowances for free, with the free amount and the cap declining over time. Covered entities must either cut their GHG production to that level or buy credits to make up the difference. Companies that have more credits than they need can sell them at the auction, and CARB will sell additional credits as well. The proceeds from CARB’s sale of allowances sold at auction will be deposited in CARB’s Air Pollution Control Fund, awaiting appropriation by the Legislature.

The November 14, 2012, auction is the first, major step for CARB in implementing the cap-and-trade program. Though there remains strong opposition to the program from those businesses required to participate in it, CARB’s completion of this first auction signifies its commitment and readiness to enforce compliance with the cap-and-trade program when it comes online in January 2013.

On November 1, 2012, the Fourth District Court of Appeal in Friends of Aviara v. City of Carlsbad (2012) __ Cal.App.4th __ (Case No. D060167), affirmed the trial court’s judgment directing the city to adopt a timeline for proposed changes to its general plan that would correct inconsistencies created by the city’s revision of its housing element. The appellate court found that Government Code section 65583 establishes an exception to the requirement that general plans be facially consistent, as long as the municipality identifies a program with a timeline for resolving any inconsistencies arising from its adoption or revision of a housing element.

Pursuant to the Housing Element Law, the California Department of Housing determines the number and type of housing units each region of the state must provide, and regional planning bodies like the San Diego Association of Governments determine what percentage of the regional allocation individual municipalities must provide. On December 22, 2009, the city council of Carlsbad adopted proposed revisions to the housing element of its general plan to comply with Government Code section 65583. The city council also certified a mitigated negative declaration (MND) because it found the revision would not have a substantial environmental impact. The city’s housing element revisions included an assessment of housing needs and an inventory of sites which could accommodate the city’s assigned share of the region’s low cost housing needs. The adopted revision also identified several amendments to the general plan’s land use element that would be necessary to permit development of affordable housing on the specified sites at higher minimum densities than permitted in the existing version of the land use element.

Friends of Aviara challenged the city’s adoption of the housing element revision, alleging the MND violated CEQA and the revision impermissibly created inconsistency in the general plan. The trial court denied the CEQA claim, but found that the revision did create an improper conflict between the housing element and the land use element of the general plan. Consequently, the trial court issued a writ of mandate directing the city to adopt a timeline for the proposed amendments to the land use elements. Friends of Aviara appealed, contending that adopting a timeline for proposed amendments was not enough to remedy the defect in the revision and that the trial court should have required the city to rescind its adoption of the revision.

The appellate court’s analysis focused on Government Code section 65583, subdivision (c)(7), which requires a housing element to include “an identification of the agencies and officials responsible for the implementation of the various actions and the means by which consistency will be achieved with other general plan elements and community goals.” (Gov. Code, § 65583, subd. (c)(7), italics added.) The court concluded that the Legislature’s use of the future tense in the statute demonstrated a “legislative preference that municipalities promptly adopt housing plans which meet their numerical housing obligations even at the cost of creating temporary inconsistency in general plans.” Therefore, the Fourth District Court of Appeal held the trial court properly required the city to adopt a timeline for the proposed amendments to the general plan’s land use element and was not required to order the city to rescind its adoption of the housing element revision to remedy the resulting inconsistencies in the general plan.

On November 14, 2012, the California Air Resources Board will conduct its first quarterly auction for greenhouse gas allowances under the cap-and-trade program, which is identified in the Assembly Bill 32 Scoping Plan as one of the strategies California will employ to reduce the greenhouse gas emissions that cause climate change.

In 2006, the Legislature passed and Governor Schwarzenegger signed AB 32, the Global Warming Solutions Act of 2006, which requires California to reduce greenhouse gas emissions to 1990 levels by 2020. In complying with AB 32, CARB prepared a Scoping Plan identifying a cap-and-trade program as one of the strategies California will use to reduce the GHG emissions that cause climate change. The cap-and-trade program places a limit on the GHG emissions allowed from pollution producers like refineries and cement manufacturers, and directs all entities subject to the cap (covered entities) to surrender “compliance instruments” equivalent to their GHG emissions to CARB. Compliance instruments include both allowances, which are allocated by CARB or obtained from auctions or secondary markets, and offset credits, which represent GHG emissions reductions achieved in sectors that are not subject to the cap.

This year, the cap-and-trade program covers about 350 industrial businesses operating a total of 600 facilities throughout the state. They include cement plants, steel mills, food processors, electric utilities, and refineries. Starting in 2015, the program will also cover distributors of natural gas and other fuels. For the first two years of the cap-and-trade program, covered entities will receive 90 percent of their allowances for free, with the free amount and the cap declining over time. Covered entities must either cut their GHG production to that level or buy credits to make up the difference. Companies that have more credits than they need can sell them at the auction, and CARB will sell additional credits as well. The proceeds from CARB’s sale of allowances sold at auction will be deposited in CARB’s Air Pollution Control Fund, awaiting appropriation by the Legislature. 

The November 14, 2012, auction is the first, major step for CARB in implementing the cap-and-trade program. Though there remains strong opposition to the program from those businesses required to participate in it, CARB’s completion of this first auction signifies its commitment and readiness to enforce compliance with the cap-and-trade program when it comes online in January 2013.

On November 1, 2012, the Fourth District Court of Appeal in Friends of Aviara v. City of Carlsbad (2012) __ Cal.App.4th __ (Case No. D060167), affirmed the trial court’s judgment directing the city to adopt a timeline for proposed changes to its general plan that would correct inconsistencies created by the city’s revision of its housing element. The appellate court found that Government Code section 65583 establishes an exception to the requirement that general plans be facially consistent, as long as the municipality identifies a program with a timeline for resolving any inconsistencies arising from its adoption or revision of a housing element.

Pursuant to the Housing Element Law, the California Department of Housing determines the number and type of housing units each region of the state must provide, and regional planning bodies like the San Diego Association of Governments determine what percentage of the regional allocation individual municipalities must provide. On December 22, 2009, the city council of Carlsbad adopted proposed revisions to the housing element of its general plan to comply with Government Code section 65583. The city council also certified a mitigated negative declaration (MND) because it found the revision would not have a substantial environmental impact. The city’s housing element revisions included an assessment of housing needs and an inventory of sites which could accommodate the city’s assigned share of the region’s low cost housing needs. The adopted revision also identified several amendments to the general plan’s land use element that would be necessary to permit development of affordable housing on the specified sites at higher minimum densities than permitted in the existing version of the land use element.

Friends of Aviara challenged the city’s adoption of the housing element revision, alleging the MND violated CEQA and the revision impermissibly created inconsistency in the general plan. The trial court denied the CEQA claim, but found that the revision did create an improper conflict between the housing element and the land use element of the general plan. Consequently, the trial court issued a writ of mandate directing the city to adopt a timeline for the proposed amendments to the land use elements. Friends of Aviara appealed, contending that adopting a timeline for proposed amendments was not enough to remedy the defect in the revision and that the trial court should have required the city to rescind its adoption of the revision.

 The appellate court’s analysis focused on Government Code section 65583, subdivision (c)(7), which requires a housing element to include “an identification of the agencies and officials responsible for the implementation of the various actions and the means by which consistency will be achieved with other general plan elements and community goals.” (Gov. Code, § 65583, subd. (c)(7), italics added.) The court concluded that the Legislature’s use of the future tense in the statute demonstrated a “legislative preference that municipalities promptly adopt housing plans which meet their numerical housing obligations even at the cost of creating temporary inconsistency in general plans.” Therefore, the Fourth District Court of Appeal held the trial court properly required the city to adopt a timeline for the proposed amendments to the general plan’s land use element and was not required to order the city to rescind its adoption of the housing element revision to remedy the resulting inconsistencies in the general plan.