Filed 12/17/15



      IN THE SUPREME COURT OF CALIFORNIA

CALIFORNIA BUILDING INDUSTRY         )
ASSOCIATION,                         )
                                     )
           Plaintiff and Respondent, )
                                     )                              S213478
           v.                        )
                                     )                           Ct.App. 1/5
BAY AREA AIR QUALITY                 )                        A135335, A136212
MANAGEMENT DISTRICT,                 )
                                     )                         Alameda County
           Defendant and Appellant.  )                   Super. Ct. No. RG10548693
____________________________________)


        We granted review to address the following question: Under what
circumstances, if any, does the California Environmental Quality Act (CEQA)
(Pub. Resources Code,1 § 21000 et seq.) require an analysis of how existing
environmental conditions will impact future residents or users of a proposed
project?
        In light of CEQA‘s text, statutory structure, and purpose, we conclude that
agencies subject to CEQA generally are not required to analyze the impact of
existing environmental conditions on a project‘s future users or residents. But
when a proposed project risks exacerbating those environmental hazards or
conditions that already exist, an agency must analyze the potential impact of such
hazards on future residents or users. In those specific instances, it is the project’s
impact on the environment — and not the environment’s impact on the project —

1       All further statutory references are to this code unless otherwise indicated.



                                           1
that compels an evaluation of how future residents or users could be affected by
exacerbated conditions. Our reading is consistent with certain portions of
administrative guidelines issued by the California Natural Resources Agency
(Resources Agency), to whom we owe a measure of deference in a case such as
this one.
       Moreover, special CEQA requirements apply to certain airport, school, and
housing construction projects. In such situations, CEQA requires agencies to
evaluate a project site‘s environmental conditions regardless of whether the project
risks exacerbating existing conditions. The environmental review must take into
account — and a negative declaration or exemption cannot issue without
considering — how existing environmental risks such as noise, hazardous waste,
or wildland fire hazard will impact future residents or users of a project. That
these exceptions exist, however, does not alter our conclusion that ordinary CEQA
analysis is concerned with a project‘s impact on the environment, rather than with
the environment‘s impact on a project and its users or residents.
       Accordingly, we hold that CEQA does not require an agency to consider
the impact of existing conditions on future project users except in the
aforementioned circumstances. We reverse the Court of Appeal‘s judgment and
remand for proceedings consistent with our decision.
                                  I. BACKGROUND
       The Bay Area Air Quality Management District (District) is a regional
agency authorized to adopt and enforce regulations governing air pollutants from
stationary sources such as factories, refineries, power plants, and gas stations in
the San Francisco Bay Area. The District‘s purpose is to achieve and maintain
compliance, in its regional jurisdiction, with state and federal ambient air quality




                                          2
standards. (Health & Saf. Code, §§ 39002, 40000, 40001, subd. (a), 40200.)2 To
fulfill this purpose, the District monitors air quality, issues permits to certain
emitters of air pollution, and promulgates rules to control emissions. (Id.,
§§ 40001, 42300, 42301.5, 42315.)
       The Resources Agency, meanwhile, is the agency with primary
responsibility for statewide implementation of CEQA. It carries out this task in
part by adopting administrative guidelines (Cal. Code Regs., tit. 14, § 15000 et
seq.)3 that call for other agencies subject to CEQA, such as the District, to develop
―thresholds of significance‖ for determining ―the significance of environmental
effects.‖ (Guidelines, § 15064.7, subd. (a).) In 1999, the District published
thresholds of significance for certain air pollutants, along with its own regional
guidelines concerning the use of the thresholds and CEQA air quality issues in
general, in order to guide those preparing or evaluating air quality impact analyses
for projects in the San Francisco Bay Area. The thresholds set levels at which
toxic air contaminants (TACs) and certain types of particulate matter would be
deemed environmentally significant.
       A decade later, in 2009, the District drafted new proposed thresholds of
significance partly in response to the Legislature‘s adoption of laws addressing
greenhouse gases (GHGs).4 The District cited three factors to justify the new

2      Our recitation of the factual and procedural background is taken largely
from the opinion of the Court of Appeal.
3        All references to ―Guideline‖ or ―Guidelines‖ are to the CEQA Guidelines
in title 14 of the California Code of Regulations.
4       In 2006, the Legislature enacted the California Global Warming Solutions
Act of 2006 (Health & Saf. Code, § 38500 et seq.), which seeks to achieve a
reduction of GHG emissions to 1990 levels by 2020. (Id., § 38550.) In 2008, the
Legislature enacted the ―Sustainable Communities and Climate Protection Act.‖
(Stats. 2008, ch. 728.)



                                           3
thresholds: (1) the existence of more stringent state and federal air quality
standards that took effect after the District adopted its earlier thresholds, (2) the
discovery that TACs present a greater health risk than previously thought, and
(3) growing concerns over global climate change. A number of organizations,
businesses, and local governments participated in public hearings, meetings, and
workshops held by the District regarding the proposed revisions. One such
participant was the California Building Industry Association (CBIA), a statewide
trade association representing homebuilders, architects, trade contractors,
engineers, designers, and other building industry professionals.
       During the public hearing process, CBIA expressed concern that the
District‘s proposed thresholds and guidelines were too stringent and would make it
difficult to complete urban infill projects located near existing sources of air
pollution.5 CBIA claimed the proposed thresholds would require environmental
impact reports (EIRs) for many more projects than before, and would result in
nonapproval of other projects. If these infill projects were not feasible, CBIA
argued, development would occur in more suburban areas and result in even more
pollution from automobile commuter traffic.
       The District was not persuaded. In June 2010, the District‘s board of
directors passed resolution No. 2010-06, adopting new thresholds of significance
for air pollutants, including the TAC ―receptor thresholds‖ and thresholds for
GHGs and PM2.5 (particulate matter with a diameter of 2.5 microns or less). The
District also published new CEQA air quality guidelines, which include the new

5      An urban infill project refers to a project located on a site in an urbanized
area that meets specified conditions, including that a specified percentage of the
immediately adjacent parcels or adjoining parcels to the site are developed with
qualified urban uses, or that the site itself has been previously developed for
qualified urban uses. (See § 21061.3.)



                                           4
thresholds and suggest methods of assessing and mitigating impacts found to be
significant. (District, Cal Environmental Quality Act: Air Quality Guidelines
(June 2010).)
       CBIA filed a petition for writ of mandate challenging these thresholds.
(Code Civ. Proc., § 1085.) After rejecting CBIA‘s contentions that state law
preempts the thresholds, the superior court conducted a hearing on the merits of
the following claims: (1) the District should have conducted a CEQA review of
the thresholds before their promulgation because they constitute a ―project‖ within
the meaning of CEQA; (2) the TAC/PM2.5 risks and hazards thresholds are
arbitrary and capricious to the extent they unlawfully require an evaluation of the
impacts the environment would have on a given project; (3) aspects of the
thresholds are not based on substantial evidence; and (4) the thresholds fail the
―rational basis‖ test because sufficient evidence does not exist for their approval.
       The superior court determined that the District‘s promulgation of the 2010
thresholds was indeed a ―project‖ under CEQA, and that the District was therefore
bound to evaluate the thresholds‘ potential impact on the environment. Because
the District issued the thresholds without the required CEQA review, the court
entered judgment in favor of CBIA without addressing CBIA‘s other arguments.
The court then issued a writ of mandate directing the District to set aside its
approval of the thresholds, without addressing CBIA‘s claim that the District‘s
TAC/PM2.5 thresholds were arbitrary and capricious because they required an
analysis of how a project would impact future residents or users. The court also
awarded CBIA attorney fees under Code of Civil Procedure section 1021.5.
       The Court of Appeal reversed. In ordering the superior court to vacate its
writ of mandate, the Court of Appeal concluded, among other things, that the
District‘s promulgation of the 2010 thresholds was not a project subject to CEQA
review. It also rejected CBIA‘s various challenges to the substance of the

                                          5
thresholds, including its challenge to the validity of the receptor thresholds — the
thresholds for ―new receptors‖ consisting of residents and workers who will be
brought into the area as a result of a proposed project. CBIA had argued the
receptor thresholds are invalid because CEQA does not require analysis of the
impacts that existing hazardous conditions will have on a new project‘s occupants.
The Court of Appeal more narrowly determined that the receptor thresholds have
valid applications irrespective of whether CEQA requires an analysis of how
existing environmental conditions impact a project‘s future residents or users, and
therefore are ―not invalid on their face.‖ Finding that CBIA was ―no longer a
successful party,‖ the Court of Appeal reversed the trial court‘s award of attorney
fees and awarded the District its ordinary costs on appeal.
       We then granted CBIA‘s petition for review, but limited the scope of our
review to the following question: Under what circumstances, if any, does CEQA
require an analysis of how existing environmental conditions will impact future
residents or users (receptors) of a proposed project?6
                                   II. DISCUSSION
       As this case turns on our interpretation of CEQA statutory provisions
implemented through the Resources Agency‘s Guidelines, it is helpful at the outset
to clarify the scope of our analysis before turning to the relevant statutory and
Guidelines provisions. We review the Court of Appeal‘s interpretation of the
statute de novo. (Abatti v. Imperial Irrigation Dist. (2012) 205 Cal.App.4th 650,
668.) Our goal in interpreting CEQA is to adopt the construction that best gives


6      We declined CBIA‘s invitation to review whether the District‘s adoption of
the 2010 thresholds constituted a project subject to environmental review under
CEQA, and do not address the Court of Appeal‘s conclusion that the receptor
thresholds have valid applications.



                                          6
effect to the Legislature‘s intended purpose. (Committee for Green Foothills v.
Santa Clara County Bd. of Supervisors (2010) 48 Cal.4th 32, 45 (Committee for
Green Foothills).) Consistent with that purpose, we interpret CEQA to afford the
most thorough possible protection to the environment that fits reasonably within
the scope of its text. (Laurel Heights Improvement Assn. v. Regents of University
of California (1988) 47 Cal.3d 376, 390 (Laurel Heights).)
       In construing the statute, we also consider the interpretation of the agency
charged with its implementation. Even in the absence of quasi-legislative
regulations,7 we take into account the agency‘s interpretation when we
independently construe the statute, and afford the agency‘s interpretation the
deference that is appropriate under the circumstances. (Yamaha Corp. of America
v. State Bd. of Equalization (1998) 19 Cal.4th 1, 7 (Yamaha).) In deciding how
much weight to give the agency‘s interpretation, we consider the agency‘s
specialized knowledge and expertise — especially relevant where the statute at
issue is a complex, technical one — and whether the agency adopted the
interpretation pursuant to the Administrative Procedure Act. (Yamaha, at pp. 12-
13.) Whether the Guidelines are binding or merely reflect the Resources Agency‘s
interpretation of the statute, we should afford great weight to the Guidelines when
interpreting CEQA, unless a provision is clearly unauthorized or erroneous under
the statute. (Committee for Green Foothills, supra, 48 Cal.4th at p. 48, fn. 12.)
       A. General Overview of CEQA
       CEQA was enacted to advance four related purposes: to (1) inform the
government and public about a proposed activity‘s potential environmental

7      Our court has not decided ― ‗whether the Guidelines are regulatory
mandates or only aids to interpreting CEQA.‘ ‖ (Committee for Green Foothills,
supra, 48 Cal.4th at p. 48, fn. 12.)



                                         7
impacts; (2) identify ways to reduce, or avoid, environmental damage; (3) prevent
environmental damage by requiring project changes via alternatives or mitigation
measures when feasible; and (4) disclose to the public the rationale for
governmental approval of a project that may significantly impact the environment.
(Tomlinson v. County of Alameda (2012) 54 Cal.4th 281, 285-286 (Tomlinson).)
       To further these goals, CEQA requires that agencies follow a three-step
process when planning an activity that could fall within its scope. (Tomlinson,
supra, 54 Cal.4th at p. 286; see Guidelines, § 15002, subd. (k).) First, the public
agency must determine whether a proposed activity is a ―project,‖ i.e., an activity
that is undertaken, supported, or approved by a public agency and that ―may cause
either a direct physical change in the environment, or a reasonably foreseeable
indirect physical change in the environment.‖ (§ 21065.)
       Second, if the proposed activity is a project, the agency must next decide
whether the project is exempt from the CEQA review process under either a
statutory exemption (see § 21080) or a categorical exemption set forth in the
CEQA Guidelines (see § 21084, subd. (a); Guidelines, § 15300 et seq.). If the
agency determines the project is not exempt, it must then decide whether the
project may have a significant environmental effect. And where the project will
not have such an effect, the agency ―must ‗adopt a negative declaration to that
effect.‘ ‖ (Tomlinson, supra, 54 Cal.4th at p. 286, quoting § 21080, subd. (c); see
Guidelines, § 15070.)8
       Third, if the agency finds the project ―may have a significant effect on the
environment,‖ it must prepare an EIR before approving the project. (§§ 21100,

8       A negative declaration is a ―written statement briefly describing the reasons
that a proposed project will not have a significant effect on the environment and
does not require the preparation of an environmental impact report.‖ (§ 21064.)



                                          8
subd. (a), 21151, subd. (a), 21080, subd. (d), 21082.2, subd. (d).) Given the
statute‘s text, and its purpose of informing the public about potential
environmental consequences, it is quite clear that an EIR is required even if the
project‘s ultimate effect on the environment is far from certain. (Communities for
a Better Environment v. California Resources Agency (2002) 103 Cal.App.4th 98,
110 [EIR is required ― ‗ ―whenever it can be fairly argued on the basis of
substantial evidence that the project may have significant environmental impact,‖ ‘
regardless of whether other substantial evidence supports the opposite
conclusion‖], disapproved on another ground in Berkeley Hillside Preservation v.
City of Berkeley (2015) 60 Cal.4th 1086, 1109, fn. 3.) Determining environmental
significance ―calls for careful judgment on the part of the public agency involved,
based to the extent possible on scientific and factual data.‖ (Guidelines, § 15064,
subd. (b).) The Guidelines encourage public agencies to develop and publish
―thresholds of significance‖ (Guidelines, § 15064.7, subd. (a)), which generally
promote predictability and efficiency when the agencies determine whether to
prepare an EIR. (Communities for a Better Environment, at p. 111.)
       When an agency prepares an EIR, it provides public officials and the
general public with details about a proposed project‘s consequences. The EIR also
lists the ways to potentially minimize any significant environmental effects, and
presents alternatives to the project. (§ 21061; see § 21002.1, subd. (a).) By
making this information available to decision makers and the public at a crucial
moment when the merits of a project and its alternatives are under discussion, an
EIR advances not only the goal of environmental protection but of informed self-
government. (In re Bay-Delta etc. (2008) 43 Cal.4th 1143, 1162 [an EIR ―give[s]
the public and government agencies the information needed to make informed
decisions, thus protecting ‗ ―not only the environment but also informed self-
government‖ ‘ ‖].)

                                          9
       The function CEQA assigns to an EIR, in fact, epitomizes the statute‘s
focus on informed decisionmaking and self-government. The statute does not
necessarily call for disapproval of a project having a significant environmental
impact, nor does it require selection of the alternative ―most protective of the
environmental status quo.‖ (San Franciscans Upholding the Downtown Plan v.
City and County of San Francisco (2002) 102 Cal.App.4th 656, 695.) Instead,
when ―economic, social, or other conditions‖ make alternatives and mitigation
measures ―infeasible,‖ a project may be approved despite its significant
environmental effects if the lead agency adopts a statement of overriding
considerations and finds the benefits of the project outweigh the potential
environmental damage. (§§ 21002, 21002.1, subd. (c); Guidelines, § 15093; see
City of Irvine v. County of Orange (2013) 221 Cal.App.4th 846, 855.)

       B. Section 21083 and Guidelines Section 15126.2
       Reflecting the need for further elaboration of these requirements in
implementation, CEQA entrusts to the Governor‘s Office of Planning and
Research (OPR) the responsibility of drafting the aforementioned Guidelines.
Once OPR completes this process, the Secretary of the Resources Agency may
certify and adopt the Guidelines in compliance with the Government Code.
(§ 21083, subds. (a), (e), (f); see Guidelines, § 15000 et seq.)9 Section 21083

9       Section 21083 also directs OPR to recommend, at least every two years,
amendments to the Guidelines. The statute likewise directs the Resources Agency
to certify and adopt Guidelines and amendments thereto at least every two years.
(§ 21083, subd. (f).) Prior to final certification and adoption of the Guidelines and
Guidelines amendments, the Secretary of the Resources Agency makes the
proposed language available to the public and provides for at least a 45-day
written comment period and public hearings on the proposals. (§ 21083,
subds. (e), (f); Gov. Code, §§ 11346.4, 11346.5, 11346.8.) These public
comments are considered by the secretary in determining whether to adopt the
OPR‘s proposed amendments.



                                         10
provides the Guidelines ―shall include objectives and criteria for the orderly
evaluation of projects and the preparation of environmental impact reports and
negative declarations in a manner consistent with [CEQA].‖ (§ 21083, subd. (a).)
The Guidelines therefore serve to make the CEQA process tractable for those who
must administer it, those who must comply with it, and ultimately, those members
of the public who must live with its consequences.
       What the Guidelines are supposed to contain is also specified in section
21083. The Guidelines ―shall specifically include criteria for public agencies to
follow in determining whether or not a proposed project may have a ‗significant
effect on the environment.‘ ‖ (§ 21083, subd. (b) (section 21083(b).) Most
relevant is the provision‘s express command that ―[t]he criteria shall require a
finding that a project may have a ‘significant effect on the environment’ if one or
more of‖ a set of certain conditions exist. (Ibid., italics added.) These conditions
include a ―proposed project[‘s] . . . potential to degrade the quality of the
environment, curtail the range of the environment, or to achieve short-term, to the
disadvantage of long-term, environmental goals‖ and circumstances where a
project‘s ―possible effects . . . are individually limited but cumulatively
considerable.‖ (Id., subd. (b)(1), (2).) Section 21083, subdivision (b)(2) defines
―cumulatively considerable‖ as the ―incremental effects of an individual project
. . . when viewed in connection with the effects of past projects, the effects of
other current projects, and the effects of probable future projects.‖ The final
condition listed under section 21083 is where ―[t]he environmental effects of a
project will cause substantial adverse effects on human beings, either directly or
indirectly.‖ (§ 21083, subd. (b)(3) (section 21083(b)(3)), italics added.)
       Through these Guidelines, the Resources Agency gives public agencies a
more concrete indication of how to comply with CEQA — including whether such
agencies must determine the impact of existing environmental conditions on a

                                          11
proposed project‘s residents and users. The Guidelines also prove consequential
given that under section 21082, CEQA requires agencies subject to its provisions
— such as the District — to adopt ―objectives, criteria and procedures‖ for
evaluating projects and preparing environmental documents. These agencies may,
in turn, adopt the Guidelines by reference to fulfill their statutory responsibilities.
(§ 21082; see Guidelines, § 15022, subds. (a), (d).) The Guidelines, in effect,
enable the Resources Agency to promote consistency in the evaluation process
that constitutes the core of CEQA. And because these Guidelines allow the
Resources Agency to affect how agencies comply with CEQA, they are central to
the statutory scheme. (Cf. Citizens of Goleta Valley v. Board of Supervisors
(1990) 52 Cal.3d 553, 566 [noting that certain ―statutory and judicial concepts are
carried forward in the Guidelines‖]; East Peninsula Ed. Council, Inc. v. Palos
Verdes Peninsula Unified School Dist. (1989) 210 Cal.App.3d 155, 171
[―[B]ecause [CEQA] specifically incorporates the Guidelines pertaining to
categorical exemptions, the philosophy and policies underlying the categorical
exemptions should be paramount‖ (italics added)].)
       Especially relevant to the question before us is one such provision of the
Guidelines, section 15126.2, subdivision (a) (Guidelines section 15126.2(a)).
Promulgated pursuant to section 21083 of the statute, Guidelines section
15126.2(a) reflects the Resources Agency‘s interpretation of CEQA. It calls for an
EIR to ―identify and focus on the significant environmental effects of the proposed
project,‖ including ―any significant environmental effects the project might cause
by bringing development and people into the area affected.‖ (Italics added.) The
Guideline then continues by providing an example, indicating that an EIR for a
project ―on a subdivision astride an active fault line should identify as a significant
effect the seismic hazard to future occupants of the subdivision‖ because that
―subdivision would have the effect of attracting people to the location and

                                           12
exposing them to the hazards found there.‖ (Ibid.) The Guideline likewise calls
for an EIR to ―evaluate any potentially significant impacts of locating
development in other areas susceptible to hazardous conditions (e.g., floodplains,
coastlines, wildfire risk areas) as identified in authoritative hazard maps, risk
assessments or in land use plans addressing such hazards areas.‖ (Ibid.)
       Guidelines section 15126.2(a), in short, indicates that CEQA generally
requires an evaluation of environmental conditions and hazards existing on a
proposed project site if such conditions and hazards may cause substantial adverse
impacts to future residents or users of the project. Given that this Guideline seems
to furnish a specific answer to the question before us, it is perhaps not surprising
that the District and CBIA dispute its validity.10
       C.     CEQA‘s General Rule
       The District and CBIA disagree about this Guideline because they diverge
on how to interpret section 21083. The core of their disagreement is what the
statute means when it provides that ―a project may have a ‗significant effect on the
environment‘ ‖ (§ 21083(b)) if ―[t]he environmental effects of a project will cause
substantial adverse effects on human beings, either directly or indirectly.‖
(§ 21083(b)(3).) The District reads the statutory language to encompass the
question of how existing environmental conditions or hazards in the vicinity of a
proposed project might substantially, and adversely, impact future residents or
users. Under this view, when existing environmental conditions on or near the
proposed project site pose hazards to humans brought to the site by the project, the



10     OPR represents it will not suggest any changes to Guidelines section
15126.2 pending this court‘s decision in the instant case. (OPR, Possible Topics
to be Addressed in the 2014 CEQA Guidelines Update (Dec. 30, 2013) § IV, p. 7.)



                                          13
project may have potentially significant environmental effects requiring
evaluation.
       CBIA takes a contrasting view. It asserts that section 21083(b)(3)‘s
reference to the ―environmental effects of a project‖ only applies to a project‘s
effects on the environment, and does not include the effects of a site‘s
environment on a project, or on its residents and users.11 CBIA contends that the
District‘s construction contradicts CEQA‘s clear language and distorts the intent
of the statutory scheme, and that adopting it would ―impose[ ] procedural or
substantive requirements beyond those explicitly stated‖ in CEQA or its
Guidelines. (§ 21083.1.)
       In light of CEQA‘s text and structure, we conclude that CEQA generally
does not require an analysis of how existing environmental conditions will impact
a project‘s future users or residents. The District emphasizes, correctly, that
CEQA addresses human health and safety. Section 21083(b)(3)‘s express
language, for example, requires a finding of a ― ‗significant effect on the
environment‘ ‖ (§ 21083(b)) whenever the ―environmental effects of a project will
cause substantial adverse effects on human beings, either directly or indirectly.‖
(§ 21083(b)(3), italics added.) And the Legislature has made clear — in
declarations accompanying CEQA‘s enactment — that public health and safety are
of great importance in the statutory scheme. (E.g., §§ 21000, subds. (b), (c), (d),
(g), 21001, subds. (b), (d) [emphasizing the need to provide for the public‘s



11      CBIA uses the term ―reverse CEQA‖ to refer to an evaluation of how
existing conditions might impact a project‘s future residents or users. We find this
term misleading and inapt. Because CEQA does sometimes require analysis of the
effect of existing conditions on a project‘s future residents or users, such analysis
is not the ―reverse‖ of what CEQA mandates. (See pp. 21-22, post.)



                                         14
welfare, health, safety, enjoyment, and living environment].) Still, the District
reads too much into the phrase ―environmental effects of a project.‖
       The District‘s reading of that phrase goes too far despite all the reasons for
us to give the Resources Agency‘s interpretation — an interpretation broadly
consistent with that of the District — special weight. The statute does not provide
enough of a basis to suggest that the term ―environmental effects‖ as used in this
context is meant, as a general matter, to encompass these broader considerations
associated with the health and safety of a project‘s future residents or users.
Section 21060.5 defines ―environment‖ as ―the physical conditions which exist
within the area which will be affected by a proposed project, including land, air,
water, minerals, flora, fauna, noise, objects of historic or aesthetic significance.‖
(§ 21060.5.) Given the text of section 21083 and other relevant provisions of the
statutory scheme to which it belongs — including CEQA‘s statute-wide definition
of ―environment‖ — the phrase in question is best interpreted as limited to those
impacts on a project‘s users or residents that arise from the project‘s effects on the
environment. Even if one reads into CEQA‘s definition of ―environment‖ a
concern with people — a reading that, notwithstanding section 21060.5, is
conceivable given the Legislature‘s interest in public health and safety — section
21083 does not contain language directing agencies to analyze the environment‘s
effects on a project. Requiring such an evaluation in all circumstances would
impermissibly expand the scope of CEQA.
       The rest of the statute‘s relevant provisions underscore why. Despite the
statute‘s evident concern with protecting the environment and human health, its
relevant provisions are best read to focus almost entirely on how projects affect
the environment. (E.g., §§ 21060.5 [defining environment], 21068 [― ‗Significant
effect on the environment‘ means a substantial, or potentially substantial, adverse
change in the environment‖], 21083(b)(1) [directing that a project shall be found

                                          15
to have a ― ‗significant effect on the environment‘ ‖ if it ―has the potential to
degrade the quality of the environment‖].) Indeed, the key phrase ―significant
effect on the environment‖ is explicitly defined by statute in a manner that does
not encompass the environment‘s effect on the project. (§ 21068 [― ‗Significant
effect on the environment‘ means a substantial, or potentially substantial, adverse
change in the environment‖].) And nowhere in the statute is there any provision
that cuts against the specificity of that definition by plainly delegating power for
the agency to determine whether a project must be screened on the basis of how
the environment affects its residents or users.
       Consider the alternative: stretching the definition so it encompasses the
analysis of how environmental conditions could affect a project‘s future residents
— the kind of analysis that the Guidelines purport to require — would require us
to define ―environmental effects of a project‖ in a manner that all but elides the
word ―environmental.‖ That approach, in turn, would allow the phrase to
encompass nearly any effect a project has on a resident or user. Given the
sometimes costly nature of the analysis required under CEQA when an EIR is
required, such an expansion would tend to complicate a variety of residential,
commercial, and other projects beyond what a fair reading of the statute would
support.
       With this holding in mind, we must distinguish between requirements that
consider the environment’s effects on a project and those that contemplate the
project’s impacts on the existing environment. The former, in light of our analysis
of section 21083 and other relevant language in CEQA, are invalid. The latter,
however, are valid and entirely consistent with CEQA‘s concerns about
environmental protection, public health, and deliberation. Moreover, and




                                          16
consistent with CEQA‘s general rule, we note that the statute does not proscribe
consideration of existing conditions.12 In fact, CEQA calls upon an agency to
evaluate existing conditions in order to assess whether a project could exacerbate
hazards that are already present. Accordingly, we find that the following
sentences of Guidelines section 15126.2(a) — challenged by CBIA as
unauthorized under the statute13 — are valid under CEQA: ―The EIR shall also
analyze any significant environmental effects the project might cause by bringing
development and people into the area affected. . . . Similarly, the EIR should
evaluate any potentially significant impacts of locating development in other areas
susceptible to hazardous conditions (e.g., floodplains, coastlines, wildfire risk
areas) as identified in authoritative hazard maps, risk assessments or in land use
plans addressing such hazards areas.‖


12      Nor, for that matter, does CEQA prohibit an agency from considering –– as
part of an environmental review for a project it proposes to undertake –– how
existing conditions might impact a project‘s future users or residents. Indeed, it
appears that such an analysis had been widely understood to be an integral aspect
of CEQA review for three decades. (OPR, CEQA: The California Environmental
Quality Act: Law and Guidelines 1984 (Jan. 1984) Discussion of amendments,
Guidelines former § 15126, p. 137 [dismissing as early as 1983 the alleged
―artificial distinction‖ between examining ―the effects of the project on the
environment‖ and ―the effects of the environment on the project‖].)
13     CBIA contends that the following sentences of Guidelines section
15126.2(a) are invalid: ―The EIR shall also analyze any significant environmental
effects the project might cause by bringing development and people into the area
affected. For example, an EIR on a subdivision astride an active fault line should
identify as a significant effect the seismic hazard to future occupants of the
subdivision. The subdivision would have the effect of attracting people to the
location and exposing them to the hazards found there. Similarly, the EIR should
evaluate any potentially significant impacts of locating development in other areas
susceptible to hazardous conditions (e.g., floodplains, coastlines, wildfire risk
areas) as identified in authoritative hazard maps, risk assessments or in land use
plans addressing such hazards areas.‖ (Guidelines, § 15126.2(a).)



                                          17
       These sentences are valid to the extent they call for evaluating a project‘s
potentially significant exacerbating effects on existing environmental hazards —
effects that arise because the project brings ―development and people into the area
affected.‖ Both CEQA and the Guideline call explicitly for an analysis of a
project‘s effects on the environment. In this respect, the Resources Agency‘s
directive is consistent with section 21083(b)(3)‘s plain language, as the Guideline
contemplates analyzing those existing conditions impacted directly by a project‘s
siting or development. Moreover, both sentences reflect the Resources Agency‘s
reasonable construction of CEQA. We defer to that interpretation, finding it not to
be proscribed by the statutory language.
       Indeed, the statutory language emphasizes how the analysis of a project‘s
potential to exacerbate existing conditions is not an exception to, but instead a
consequence of, CEQA‘s core requirement that an agency evaluate a project‘s
impact on the environment. An example may be illuminating. Suppose that an
agency wants to locate a project next to the site of a long-abandoned gas station.
For years, that station pumped gasoline containing methyl tertiary-butyl ether
(MTBE), an additive — now banned by California — that can seep into soil and
groundwater. (See Western States Petroleum Assn. v. State Dept. of Health
Services (2002) 99 Cal.App.4th 999, 1003; Cal. Code Regs., tit. 13, § 2262.6,
subd. (a) [prohibiting the addition of MTBE to gasoline starting Dec. 31, 2003].)
Without any additional development in the area, the MTBE might well remain
locked in place, an existing condition whose risks — most notably the
contamination of the drinking water supply — are limited to the gas station site
and its immediate environs. But by virtue of its proposed location, the project
threatens to disperse the settled MTBE and thus exacerbate the existing
contamination. The agency would have to evaluate the existing condition — here,
the presence of MTBE in the soil — as part of its environmental review. Because

                                           18
this type of inquiry still focuses on the project’s impacts on the environment —
how a project might worsen existing conditions — directing an agency to evaluate
how such worsened conditions could affect a project‘s future users or residents is
entirely consistent with this focus and with CEQA as a whole.
       These Guideline sentences reflect the Resources Agency‘s reading of
CEQA — a reading made clear in 2009 when the agency added the final sentence
of Guidelines section 15126.2(a). (Cal. Natural Resources Agency, Final
Statement of Reasons for Regulatory Action: Amendments to the State CEQA
Guidelines Addressing Analysis and Mitigation of Greenhouse Gas Emissions
Pursuant to SB97 (Dec. 2009) pp. 42-43 [―[A] lead agency should analyze the
effects of bringing development to an area that is susceptible to hazards such as
flooding and wildfire, both as such hazards currently exist or may occur in the
future. . . . [¶] . . . [T]he addition to [Guidelines section 15126.2(a)] contemplates
hazards which the presence of a project could exacerbate‖].)
       Two factors add weight to the Resources Agency‘s interpretation of the
statute. First, an agency‘s expertise and technical knowledge, especially when it
pertains to a complex technical statute, is relevant to the court‘s assessment of the
value of an agency interpretation. (Yamaha, supra, 19 Cal.4th at p. 12.) Because
of its longstanding statutory role as the agency with primary responsibility for
statewide implementation of CEQA, the Resources Agency is precisely the kind of
agency that accumulates specialized knowledge of such an intricate statute and the
trade-offs involved in its implementation. (Cf. Western States Petroleum Assn. v.
Superior Court (1995) 9 Cal.4th 559, 572-573 [administrative agency
implementing CEQA merits deference]; In re Dannenberg (2005) 34 Cal.4th
1061, 1108 (dis. opn. of Moreno, J.) [―deference is particularly owing when the
statutory interpretation implicates administrative agency expertise‖].) The statute
itself recognizes the primacy of the Resources Agency: the agency must certify

                                          19
and adopt the Guidelines that bind public agencies as they navigate the often
technical and complex waters of CEQA. (§ 21083, subd. (e); see Guidelines,
§ 15000 [―These Guidelines are binding on all public agencies in California‖].)
       Second, the Resources Agency adopted the Guidelines pursuant to the
California Administrative Procedure Act (APA). (Gov. Code, § 11340 et seq.)
The APA subjects potential agency interpretations to procedural safeguards that
foster accuracy and reliability. (See Yamaha, supra, 19 Cal.4th at p. 13.) Section
21083 prohibits the Resources Agency from adopting the Guidelines without
certain of these APA safeguards, including notice, public discussion, and an
opportunity to comment. (§ 21083, subd. (e); Gov. Code, §§ 11346.4, 11346.5,
11346.8.) The Guidelines are a product of this process, promulgated in
accordance with these important safeguards. (See, e.g., Cal. Reg. Notice Register
97, No. 41-Z, pp. 1956-1957 [notice of proposed regulatory action, setting forth
the dates and specifications of public hearings, and inviting comments from
interested persons].) As a result, the Resources Agency‘s interpretation, as
embodied in Guidelines section 15126.2(a), carries additional weight.
       But such weight may sometimes fail to tip the interpretive scale. While
these two sentences withstand scrutiny, the remainder of the challenged portion of
the Guidelines goes astray, imposing a requirement too far removed from
evaluating a project‘s impacts on the environment. Accordingly, whatever
deference we owe to the Resources Agency‘s interpretation is not enough to save
the following sentences of section 15126.2(a), which we find clearly erroneous
and unauthorized under CEQA: ―[A]n EIR on a subdivision astride an active fault
line should identify as a significant effect the seismic hazard to future occupants of
the subdivision. The subdivision would have the effect of attracting people to the
location and exposing them to the hazards found there.‖ These sentences are



                                         20
inconsistent with section 21083‘s consideration of significant environmental
effects.
       D. Exceptions to the General Rule
       Although CEQA does not generally require an evaluation of the effects of
existing hazards on future users of the proposed project, it calls for such an
analysis in several specific contexts involving certain airport (§ 21096) and school
construction projects (§ 21151.8), and some housing development projects
(§§ 21159.21, subds. (f), (h), 21159.22, subds. (a), (b)(3), 21159.23,
subd. (a)(2)(A), 21159.24, subd. (a)(1), (3), 21155.1, subd. (a)(4), (6).
       Section 21096 requires a lead agency to use certain technical resources
when addressing airport-related safety hazards and noise problems in EIRs for
projects near airports (§ 21096, subd. (a)), and prohibits a lead agency from
adopting a negative declaration without considering ―whether the project will
result in a safety hazard or noise problem for persons using the airport or for
persons residing or working in the project area.‖ (§ 21096, subd. (b).) Section
21151.8 mandates certain methods to determine if school sites are located on or
near sources of hazardous substances or waste or in close proximity to freeways or
other operations that might emit hazardous emissions. (§ 21151.8, subd. (a),
(a)(2)(A) [detailing health and safety risks and hazardous conditions and setting
forth the process for consulting with air quality districts and other agencies].)
       A separate cluster of statutes limits the availability of CEQA exemptions
where future residents or users of certain housing development projects may be
harmed by existing conditions. These limits on exemptions extend to projects
located on sites that will expose future occupants to certain hazards and risks —
including the release of hazardous substances and sites subject to wildland fire,
seismic, landslide or flood hazards — unless (in some cases) the hazards and risks
can be removed or mitigated to insignificant levels. (E.g., §§ 21159.21, subds. (f),

                                          21
(h), 21159.22, subds. (a), (b)(3) [agricultural employee housing], 21159.23,
subd. (a)(2)(A) [affordable to low-income housing], 21159.24, subd. (a)(1), (3)
[infill housing].) Transit priority projects are treated in similar fashion, subject to
the same health and safety constraints that limit exemptions for other housing
projects. (E.g., § 21155.1, subd. (a)(4), (6) [project meeting same environmental
criteria, including where the project site is not subject to onsite hazardous
substances or fire or seismic risk, may qualify as a sustainable communities
project, which excuses further CEQA compliance].) Like the statutes governing
certain school and airport construction projects, these statutes reflect an express
legislative directive to consider whether existing environmental conditions might
harm those who intend to occupy or use a project site.
       The District argues that these statutes ―demonstrate the legislative
understanding that exposing people to [certain existing hazards and] conditions is
a potentially significant environmental effect.‖ We find otherwise: these statutes
constitute specific exceptions to CEQA‘s general rule requiring consideration only
of a project‘s effect on the environment, not the environment‘s effects on project
users. Accordingly, we cannot, as the District urges, extrapolate from these
statutes an overarching, general requirement that an agency analyze existing
environmental conditions whenever they pose a risk to the future residents or users
of a project.

       E. Previous Case Law
       CBIA cites four Court of Appeal decisions in support of its position: Baird
v. County of Contra Costa (1995) 32 Cal.App.4th 1464; City of Long Beach v. Los
Angeles Unified School Dist. (2009) 176 Cal.App.4th 889; South Orange County
Wastewater Authority v. City of Dana Point (2011) 196 Cal.App.4th 1604; and
Ballona Wetlands Land Trust v. City of Los Angeles (2011) 201 Cal.App.4th 455.



                                          22
The conclusion that we reach today is not inconsistent with these cases, all of
which implicitly held that CEQA does not generally require an agency to analyze
how existing hazards or conditions might impact a project‘s users or residents.
Further, these Courts of Appeal did not have occasion to consider — and therefore
did not rule out — the exceptions to the general rule that we elucidate here.




                                         23
                                  III. DISPOSITION
        For the foregoing reasons, we hold that CEQA does not generally require
an agency to consider the effects of existing environmental conditions on a
proposed project‘s future users or residents. What CEQA does mandate,
consistent with a key element of the Resources Agency‘s interpretation, is an
analysis of how a project might exacerbate existing environmental hazards.
CEQA also requires such an analysis where the project in question falls into
certain specific statutory categories governing school, airport, and certain housing
projects under sections 21151.8, 21096, 21159.21, 21159.22, 21159.23, 21159.24,
and 21155.1. Accordingly, we find Guidelines section 15126.2(a) valid only in
part.
        The Court of Appeal denied CBIA‘s request for writ relief on a variety of
grounds, and it reversed the superior court‘s decision awarding CBIA attorney
fees. But the court‘s analysis of CBIA‘s petition for writ relief did not address
certain potentially important arguments for and against such relief in light of
CEQA‘s requirements as we interpret them here. We reverse the Court of
Appeal‘s judgment and remand so that it may have an opportunity to address these
issues to the extent necessary in light of today‘s holding.

                                                  CUÉLLAR, J.


WE CONCUR:

CANTIL-SAKAUYE, C. J.
WERDEGAR, J.
CHIN, J.
CORRIGAN, J.
LIU, J.
KRUGER, J.



                                         24
See last page for addresses and telephone numbers for counsel who argued in Supreme Court.

Name of Opinion California Building Industry Association v Bay Area Air Quality Management District
__________________________________________________________________________________

Unpublished Opinion
Original Appeal
Original Proceeding
Review Granted XXX 218 Cal.App.4th 1171
Rehearing Granted

__________________________________________________________________________________

Opinion No. S213478
Date Filed: December 17, 2015
__________________________________________________________________________________

Court: Superior
County: Alameda
Judge: Frank Roesch

__________________________________________________________________________________

Counsel:

Brian C. Bunger, Randi L. Wallach; Shute, Mihaly & Weinberger, Ellison Folk and Erin B. Chalmers for
Defendant and Appellant.

Matthew Vespa and Kevin P. Bundy for Sierra Club, Center for Biological Diversity, the Natural
Resources Defense Council and the Planning and Conservation League as Amici Curiae on behalf of
Defendant and Appellant.

Burke, Williams & Sorensen, Thomas B. Brown and Matthew D. Visick for League of California Cities
and California State Association of Counties as Amici Curiae on behalf of Defendant and Appellant.

Kurt R. Wise, Barbara B. Baird, Veera Tyagi and Ruby Fernandez for South Coast Air Quality
Management District as Amicus Curiae on behalf of Defendant and Appellant.

Earthjustice and Adriano L. Martinez for Communities for a Better Environment as Amicus Curiae on
behalf of Defendant and Appellant.

Wittwer Parkin, William P. Parkin and Jonathan Wittwer for California Chapter of the American Planning
Association and California Association of Environmental Professionals as Amici Curiae on behalf of
Defendant and Appellant.

Thomas E. Montgomery, County Counsel, and Paula Forbis, Deputy County Counsel, for San Diego
County Air Pollution Control District as Amicus Curiae on behalf of Defendant and Appellant.

Paul Campos; Cox, Castle & Nicholson, Michael H. Zischke, Andrew B. Sabey and Christian H. Cebrian
for Plaintiff and Respondent.




                                                   1
Page 2 – counsel continued – S213478

Counsel:

Perkins Coie, Stephen L. Kostka and Geoffrey L. Robinson for Center for Creative Land Recycling,
Burbank Housing, Bridge Housing, First Community Housing, Nonprofit Housing Association of Northern
California, San Francisco Housing Action Coalition, California Infill Builders Federation, Bay Area
Council, Bay Planning Coalition, East Bay Leadership Council, Orange County Business Council, San
Mateo County Economic Development Association and Silicon Valley Leadership Group as Amici Curiae
on behalf of Plaintiff and Respondent.

Miller Starr Regalia, Arthur F. Coon and Matthew C. Henderson for League of California Cities , County
of Tulare, County of Kings and County of Solano as Amice Curiae.




                                                   2
Counsel who argued in Supreme Court (not intended for publication with opinion):

Ellison Folk
Shute, Mihaly & Weinberger
396 Hayes Street
San Francisco, CA 94102
(415) 552-7272

Andrew B. Sabey
Cox, Castle & Nicholson
555 California Street, 10th Floor
San Francisco, CA 94104-1513
(415) 262-5100




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