On December 17, 2015 the California Supreme Court unanimously ruled that the California Environmental Quality Act (CEQA) generally does not require public agencies to analyze the impact of existing environmental conditions on a project or its future users during the CEQA regulatory process.  The decision is a disruptive interpretation of CEQA brought on by California Building Industry Association v. Bay Area Air Quality Management District (Case No. S213478) and will impact how many agencies prepare environmental documents related to the CEQA process.

CEQA is a California-specific law enacted in 1970 to provide public disclosure and environmental protection from projects requiring discretionary action by a public agency.  The California Natural Resources Agency issues guidelines to provide public agencies with criteria to determine if a project may have a significant impact on the environment, feasible mitigation strategies, and how to conduct the CEQA process.  The disputed CEQA statue, 21083(b)(3), states that a project has a significant effect on the environment if "the environmental effects of a project will cause substantial adverse effects on human beings, either directly or indirectly."  The California Building Industry Association (CBIA) asserted that this statue only applies to the project's effects on the environment, and not the environment's effects on the project.  Conversely, the Bay Area Air Quality Management District (BAAQMD) interpreted the statue to encompass both a project's effect on the environment and the existing environmental effects on future users brought into the project vicinity.  The Supreme Court ruled in favor of CBIA and concluded that the statue does not provide enough basis to extend the term "environmental effects" to include the environment's effect on a project or its future users.

There are several exceptions to this ruling, clearly documented within the CEQA guidelines and noted in the court disposition.  The first exception is when a project presents the possibility to exacerbate existing environmental conditions, an agency must review the impacts such exacerbation would pose to future users.  For example, if a project requires digging that could potentially disrupt isolated hazardous waste, the project would exacerbate the existing environmental conditions by exposing waste that would otherwise remain undisturbed.  The second exception is when a proposed project applies to areas such as airports, schools, or housing developments the agency must review the existing environmental conditions regardless of whether the project will exacerbate existing environmental conditions.