DOI TODD, Acting P. J.
Plaintiffs and appellants California Communities Against Toxics, Communities for a Better Environment and Coalition for a Safe Environment appeal following a judgment on the pleadings granted in favor of defendants and respondents the South Coast Air Quality Management District (District) and the Energy Resources Conservation and Development Commission (Energy Commission) on claims that the enactment of two statutes enabling the District to issue certain permits for a limited time period violated the principle of separation of powers and failed to comply with the California Environmental Quality Act (Pub. Resources Code, § 21000 et seq.) (CEQA).
We affirm. The legislation did not violate the separation of powers doctrine, as it acted prospectively to abrogate the effect of a judicial decision. Further, legislative intent as reflected by the statutory language and legislative history establishes that the statutes cannot be reasonably construed to require CEQA review. Finally, we find no basis to dismiss the appeal against the Energy Commission.
The federal Clean Air Act (42 U.S.C. §§ 7401-7671) provides a comprehensive regulatory scheme for the reduction and prevention of air pollution by both the states and the federal government. (See generally Natural Resources Defense Council, Inc. v. South Coast Air Quality Management Dist. (C.D. Cal. 2010) 694 F.Supp.2d 1092, 1096 (Natural Resources).) The purpose of the scheme is to achieve and maintain compliance with the Environmental Protection Agency's (EPA) National Ambient Air Quality Standards (NAAQS). (Ibid.) Each state is divided into separate "air quality control regions" which are designated as "attainment" or "nonattainment" depending on whether the region meets the NAAQS for specified pollutants. (42 U.S.C. §§ 7407, subd. (d), 7501, subd. (2); 40 C.F.R. § 81, subd. (C).) The "EPA has designated the `South Coast Air Basin' . . . as an air quality region under the Act. It consists of the urban portions of Los Angeles, Riverside, and San Bernardino Counties, and all of Orange County. [Citation.] The South Coast Basin is currently in attainment for nitrogen dioxide, sulfur dioxide, lead and carbon monoxide. [Citation.] Because of its large population and unique meteorology, however, the Basin is currently nonattainment for ozone and particulate matter . . . . [Citation.]" (Natural Resources, supra, 694 F.Supp.2d at p. 1098, fn. omitted.)
"The NAAQS are maintained in part through `State Implementation Plans' or `SIPs.' [Citation.] SIPs contain specific control measures that are designed to achieve compliance with the NAAQS within the designated air quality control regions." (Natural Resources, supra, 694 F.Supp.2d at p. 1096; see also Latino Issues Forum v. U.S. E.P.A. (9th Cir. 2009) 558 F.3d 936, 938.) States must prepare and submit each proposed "State Implementation Plan" (SIP) to the EPA for review and approval; once approved, a SIP has the force and effect of federal law. (Natural Resources, supra, at p. 1096.) While the Clean Air Act dictates a number of general requirements for the content of a SIP, states maintain substantial discretion to establish specific air pollution control strategies to achieve compliance with the NAAQS. (Ibid.) Notwithstanding this discretion, a SIP for a nonattainment area must contain a "new source review" (NSR) program outlining permit requirements for new or modified major sources of nonattainment emissions. (Id. at p. 1097.) One aspect of NSR is the requirement that "a nonattainment area SIP must require that emission increases from new and modified major sources be offset by corresponding emissions reductions." (Ibid.; see 42 U.S.C. § 7503(c).) "An `offset' is a reduction of nonattainment pollutant emissions in an amount equal to, or somewhat greater than, the emissions increase of the same pollutant from the proposed new or modified stationary source or equipment. [Citation.] A company might be allowed to create offsets, for example, by permanently shutting down a permitted piece of equipment, or curtailing production or operating hours. [Citation.] Once created, companies may also be able to `bank' offsets, use them at a later time, and/or sell them to other companies." (Natural Resources, supra, at p. 1097.)
The District is responsible for preparing and implementing the SIP for the South Coast Air Basin. (Natural Resources, supra, 694 F.Supp.2d at p. 1098; Health & Saf. Code, § 40460.) In large part, the South Coast Air Basin SIP—also known as an air quality management plan (AQMP)—consists of the District's adopted Rules that have been approved by the EPA as part of the SIP. (Natural Resources, supra, at p. 1098 & fn. 8; see 61 Fed. Reg. 64291) Because the South Coast Air Basin is nonattainment for certain pollutants, the SIP contains an NSR program, codified as Regulation XIII and approved by the EPA.
Specifically, Rule 1303 provides that, except to the extent Rule 1304 applies, a permit for a new or modified source that results in a net emission increase of a nonattainment air pollutant must be denied unless several requirements are met, including one relating to emission offsets. Relevant here, Rule 1303(b)(2)(A) provides that the emission offset requirement may be satisfied in two different ways: "Unless exempt from offset requirements pursuant to Rule 1304, emission increases shall be offset by either Emission Reduction Credits approved pursuant to Rule 1309, or by allocations from the Priority Reserve in accordance with the provisions of Rule 1309.1." (Natural Resources, supra, 694 F.Supp. at p. 1099.)
Rule 1309 addresses the "application, eligibility, registration, use, and transfer of Emission Reduction Credits" (ERCs) referenced in Rule 1303(b)(2). (Rule 1309; see Natural Resources, supra, 694 F.Supp.2d at p. 1101.) As explained in Natural Resources at page 1099, an offset is created pursuant to Rule 1309 "when a private company applies to [the District] to convert emission reductions into marketable `emission reduction credits' (`ERCs'). [Citation.] Upon approval of an application under Rule 1309(c), the ERCs are registered in the applicant's name. [Citation.] The ERCs then become a marketable commodity that can be used, banked, or sold. [Citations.]" Rule 1309(b) sets forth both the eligibility requirements for emissions reductions an applicant seeks to convert into ERCs and the requirements for issuing ERCs to private applicants. (Natural Resources, supra, at p. 1099 & fn. 11.)
The second type of offset recognized in Rule 1303(b)(2) involves allocations from the Priority Reserve established by Rule 1309.1. (Natural Resources, supra, 694 F.Supp.2d at p. 1099.) That rule is designed to provide offset credits for certain specified "priority sources," including innovative technology, research operations, essential public services and certain types of electrical generating facilities. (Rule 1309.1(a).)
Rule 1304 provides an exemption from both offset requirements for several categories of sources including those with low emissions, that reduce emissions or that provide some other environmental benefit. (Natural Resources, supra, 694 F.Supp.2d at p. 1100.) Examples include sources that are used exclusively as emergency equipment and not operated for more than a specified time period; certain types of portable equipment; facility modifications that are required for regulatory compliance; and energy conservation projects. (Rule 1304.) Because the Clean Air Act does not independently exempt those sources from the offset requirement, the District "provides offsets for these sources from its internal bank when issuing permits for those projects." (Natural Resources, supra, at p. 1100.)
Offset credits from the District's internal bank are utilized "for one of two purposes: 1) to counterbalance emissions from new and modified sources that are exempt from Rule 1303(b)(2)'s offsets requirement pursuant to Rule 1304 [citation]; and 2) to provide offsets to certain `priority' sources that are eligible to receive offsets pursuant to Rule 1309.1 [citation]." (Natural Resources, supra, 694 F.Supp.2d at p. 1100.) The internal bank is funded by emission reductions that have not been converted into private ERCs. (Ibid.) To capture these reductions, the District "tracks" and determines the eligibility of such emission reductions, which result primarily "from `orphan shutdowns,' `orphan reductions,' and certain other activities. . . . Since 1990, [the District] has been converting orphan emissions reductions into offsets and depositing the resulting offsets into an internal bank." (Ibid., fn. omitted.) An "orphan shutdown" occurs when a permitted source is permanently shut down and the owner does not apply for ERCs, while an "orphan reduction" occurs when emissions from a permitted source are reduced due to a physical change or change in method of operations that is neither required by law nor results in an ERC. (Id. at p. 1100, fn. 12.)
Beginning in 2002, the EPA and the District engaged in discussions concerning the District's recordkeeping for its internal bank. Because the District did not have sufficient documentation to track pre-1990 offsets, it proposed to eliminate those from its internal bank balance. To compensate for the loss of those offsets, the District proposed to begin accounting for post-1990 emission reductions resulting from permitted minor source orphan shutdowns and orphan reductions. The EPA ultimately approved the proposal, but with the qualification that the District must improve its tracking system to clarify how offsets are credited and debited to the internal bank.
As a result of these discussions, in September 2006 the District adopted Rule 1315, entitled Federal New Source Review Tracking System, which codified the procedures used to track offsets for the internal bank and the Priority Reserve. The rule's stated purpose was "to specify procedures to be followed by the Executive Officer to make annual demonstrations of equivalency to verify that specific provisions in the District's New Source Review (NSR) program related to sources that are either exempt from offsets or which obtain their offsets from the District's offset accounts meet in aggregate the federal nonattainment NSR offset requirements." Rule 1315 identified the offset accounts required to be maintained for each federal nonattainment air contaminant and specified the initial account balances that represented amounts which had accrued since October 1, 1990. (Rule 1315(c)(1).) It listed the types of offset allocations to be debited from the offset accounts and the types of emission reductions to be credited to the accounts, including "orphan reductions" and "orphan shutdowns" as those terms were defined in the rule.
Simultaneously, the District amended Rule 1309.1 to allow for new electricity generating facilities using natural gas to access offset credits from the Priority Reserve.
Appellants are nonprofit organizations that advocate for environmental justice. Initially, they filed an action, National Resources Defense Council, Inc. v. South Coast Air Quality Management District, Los Angeles Superior Court Case. No. BS 105728 (NRDC I ), in which they alleged the District failed to comply with CEQA in promulgating Rule 1315 and amending Rule 1309.1. After unsuccessfully urging that its actions were exempt from CEQA, the District performed an environmental assessment for the rules. In National Resources Defense Council, Inc. v. South Coast Air Quality Management District, Los Angeles Superior Court Case. No. BS 110792 (NRDC II), appellants alleged the District's efforts to comply with CEQA were inadequate. The court ruled that "the adoption of Rule 1315 and the amendment of 1309.1, taken together or separately, are projects subject to CEQA." It further ruled that the District's rulemaking did not comply with CEQA, finding that in its Program Environmental Assessment (PEA) the District failed to provide an adequate project description and failed adequately to analyze the project's potential health, aesthetic and greenhouse gas/global warming impacts. Because of these omissions, the District likewise failed to consider feasible alternatives and/or mitigation measures. The trial court further ruled that the mitigation measures and mitigation monitoring plan adopted by the District were inadequate as a matter of law. Finally, the trial court ruled that the District's notice was inadequate. As a result of these findings, the trial court issued "a writ of mandate vacating the District's approval of the rules and enjoining the District from undertaking any action to further implement these rules pending CEQA compliance."
In November 2008, in addition to the writ of mandate and injunction, the trial court entered judgment in NRDC II commanding the District to set aside its approval of Rule 1315 and amendments to Rule 1309.1 and enjoining the District "from undertaking any action to implement the Project unless and until such time as the District has complied with" CEQA.
The District appealed, but withdrew its notice of appeal in September 2009.
On October 11, 2009, the Governor approved Senate Bill No. 827 (SB 827), special legislation which expressly authorized the District "to issue permits under specified circumstances, notwithstanding [the decision in NRDC II]." (Stats. 2009, c. 206 (SB 827), § 2.) According to the legislative findings, as a result of the NRDC II decision holding that the District violated CEQA as a result of promulgating certain rules, "the district is unable to issue over a thousand pending permits that rely on the district's internal offset bank to offset emissions" and "[t]he district may also have to set aside several thousand permits that were previously issued in reliance on the district's internal offset bank." (Legis. Counsel's Digest, Sen. Bill No. 827 (Stats. 2009), c. 206, § 1, p. 95.) The Legislature determined that "[p]rompt legislative action is necessary as an interim measure; otherwise projects will be stopped from going forward or frozen in place, representing significant losses to the economy and the loss of numerous well-paying jobs." (Ibid.)
SB 827 added section 40440.13 to the Health and Safety Code,
Simultaneously, the Governor also approved Assembly Bill No. 1318 (AB 1318), special legislation requiring "the executive officer of the South Coast Air Quality Management District, upon making a specified finding, to transfer emission reduction credits for certain pollutants from the south coast district's internal emission credit accounts to eligible electrical generating facilities, as described. By imposing these duties on the South Coast Air Quality Management District, the bill would impose a state-mandated local program. The bill would exempt from CEQA certain actions of the district undertaken pursuant to the bill." (Stats. 2009, c. 285 (AB 1318), § 3.)
AB 1318 resulted in the amendment of Public Resources Code section 21080 and the enactment of sections 39619.8 and 40440.14, the latter of which provides in relevant part: "(a) The executive officer of the south coast district, upon finding that the eligible electrical generating facility proposed for certification by the State Energy Resources Conservation and Development Commission meets the requirements of the applicable new source review rule and all other applicable district regulations that must be met under Section 1744.5 of Title 20 of the California Code of Regulations, shall credit to the south coast district's internal emission credit accounts and transfer from the south coast district's internal emission credit accounts to eligible electrical generating facilities emission credits in the full amounts needed to issue permits for eligible electrical generating facilities to meet requirements for sulfur oxides (SO
In December 2009, appellants filed a combined petition for writ of mandate and complaint against the State of California (State) and the District alleging that the legislative and executive branches of government usurped the judiciary's power by enacting SB 827 and AB 1318 and that the statutes enacted as a result of those bills required EPA approval. Appellants filed a first amended petition and complaint in January 2010, adding a cause of action that the District was required to comply with CEQA before taking any action pursuant to SB 827. Concurrently, appellants filed an application for a temporary restraining order which the trial court denied. The District answered the petition and complaint in February 2010.
The State demurred on the ground it was not a proper party to the action. The trial court sustained the demurrer with leave to amend to name the District in the State's place. Appellants' second amended petition and complaint, filed in May 2010, added the Energy Commission as a defendant and respondent in the first cause of action and otherwise remained unchanged. The Energy Commission acts as the state's principal energy policy and planning organization, and has the exclusive power to certify a site for a new power plant. (City of Morgan Hill v. Bay Area Air Quality Management Dist. (2004) 118 Cal.App.4th 861, 879.)
The District moved for judgment on the pleadings on the ground that appellants' first two causes of action for breach of separation of powers and violation of CEQA failed as a matter of law.
After taking the matter under submission following a June 11, 2010 hearing, the trial court issued a statement of decision granting the motion for judgment on the pleadings in its entirety. As part of its ruling, the trial court granted the parties' requests for judicial notice with the exception of certain declarations filed in other matters. Reasoning that SB 827
With respect to the second cause of action, the trial court considered the Legislature's declared purpose in construing SB 827 to mean that "on an interim basis (from January 1, 2010 effective date of SB 827 until May 1, 2012) the District is directed to issue permits for essential public services in accordance with its old tracking system (Rule 1304 and old Rule 1309.1) until the new tracking system is approved by the EPA. [Citation.] In issuing permits under the old tracking system, the District must make use of emission credits from orphan shutdowns since 1990. [Citation.] In other words, until May 2012 the District may issue permits using orphan shutdown emission credits without need for CEQA compliance. After that date, the District will need to comply with the
In view of its ruling, the trial court never ruled on the Energy Commission's demurrer filed in June 2010. The trial court entered a judgment of dismissal in July 2010 and this appeal followed. Before filing its respondent's brief, the Energy Commission moved to dismiss the appeal, and we deferred ruling on the matter.
On appeal, appellants renew the arguments they raised below, contending that SB 827 and AB 1318 improperly readjudicated the NRDC II judgment and cannot be construed so as to avoid CEQA compliance. We find no merit to their contentions. Likewise, we find no merit to the Energy Commission's motion to dismiss, which we address first.
Before the briefs were filed in this matter, the Energy Commission moved to dismiss the appeal against it on two grounds: (1) This court lacks jurisdiction because appellants failed to exhaust their administrative remedies; and (2) the Supreme Court has original jurisdiction over the matter. Both of the Energy Commission's arguments are premised on the assumption that appellants' appeal is limited to challenging the Energy Commission's proposed decision to grant a license for the construction and operation of a single project—the CPV Sentinel Energy Project (Sentinel). On the basis of this assumption, the Energy Commission first argues that appellants may properly seek a remedy only by participating in the Sentinel licensing process, which remains ongoing. (See generally Syngenta Crop Protection, Inc. v. Helliker (2006) 138 Cal.App.4th 1135, 1159 ["The exhaustion of administrative remedies requires a party to pursue and obtain a decision from the final administrative decision maker before suing in court"].) Second, it argues that this court lacks jurisdiction on the basis of Public Resources Code section 25531, subdivisions (a) and (c), which vests the Supreme Court with the power to directly review power plant licensing proceedings.
The Energy Commission's motion mischaracterizes the nature of appellants' claim. In the first cause of action, appellants' allegation against the Energy Commission stated: "By enacting AB 1318, which requires the CEC [Energy Commission] to determine whether the credits transferred by the District for use by the qualifying power plants satisfy all applicable legal requirements and to use that information to determine whether to certify a qualifying power plant, the legislative and executive branches have given a specific duty to the CEC that usurps of the powers [sic] of the Superior Court of the County of Los Angeles." Appellants challenge the delegation of authority to the Energy Commission as usurping the judgment in NRDC II, thereby violating the separation of powers doctrine. Nowhere did they limit their challenge to the certification or licensing of any particular power plant. As such, appellants' participation in the Sentinel licensing process will not resolve the issue raised here, and appellants' claim does not fall within the scope of Public Resources Code section 25531. Accordingly, we deny the Energy Commission's motion to dismiss.
"`The standard of review for a motion for judgment on the pleadings is the same as that for a general demurrer: We treat the pleadings as admitting all of the material facts properly pleaded, but not any contentions, deductions or conclusions of fact or law contained therein. We may also consider matters subject to judicial notice. We review the complaint de novo to determine whether it alleges facts sufficient to state a cause of action under any theory.' [Citation.]" (Reddell v. California Coastal Com. (2009) 180 Cal.App.4th 956, 971-972.) Moreover, we disregard allegations that are contrary to law or to a fact that may be judicially noticed. (C.R. v. Tenet Healthcare Corp. (2009) 169 Cal.App.4th 1094, 1102.)
"The California Constitution establishes a system of state government in which power is divided among three coequal branches (Cal. Const., art. IV, § 1 [legislative power]; Cal. Const., art. V, § 1 [executive power]; Cal. Const., art. VI, § 1 [judicial power]), and further states that those charged with the exercise of one power may not exercise any other (Cal. Const., art. III, § 3.)"
Identifying the balance between these two core functions, our Supreme Court stated: "Separation of powers principles do not preclude the Legislature from amending a statute and applying the change to both pending and future cases, though any such law cannot `readjudicat[e]' or otherwise `disregard' judgments that are already `final.' [Citations.]" (People v. Bunn, supra, 27 Cal.4th at p. 17; accord, Mandel v. Myers (1981) 29 Cal.3d 531, 549 ["while the Legislature enjoys very broad governmental power under our constitutional framework, it does not possess the authority to review or to readjudicate final court judgments on a case-by-case basis"].)
Though acknowledging that neither SB 827 nor AB 1318 actually readjudicated or disregarded the final judgment in NRDC II, appellants argue that the legislation effectively subverted the judgment by enabling the District to do precisely what the court had prevented. We disagree. Rather, as the trial court ruled, the legislation operated prospectively to address the application of orphan shutdown credits to permits issued in the future. The trial court reasoned: "By enacting SB 827, the Legislature eliminated the need on an interim basis for CEQA review for the District's issuance of permits based on orphan shutdown credits. The Legislature did not readjudicate the merits of the
The trial court relied on the well established principle that the Legislature "`may make a law to prospectively abrogate the effect of a judicial decision. [Citation.]' [Citation.]" (Mendly v. County of Los Angeles (1994) 23 Cal.App.4th 1193, 1212.) Appellants attempt to confound this principle with that prohibiting readjudication by focusing on the prospective nature of the judgment in NRDC II. In other words, because the NRDC II judgment enjoined the District from implementing Rules 1309.1 and 1315 in the future, appellants contend that even legislation operating prospectively impermissibly readjudicated that judgment. The law is to the contrary. Multiple cases have rejected separation of powers challenges to prospective legislation that alters the effect of an injunction.
Early on, the United States Supreme Court in State of Pennsylvania v. Wheeling & Belmont Bridge Co. (1855) 59 U.S. 421, 435-436 (Wheeling), discussed the effect of prospective legislation on a court-ordered injunction. There, Congress passed an act legalizing the Wheeling Bridge after the Supreme Court had previously declared that the bridge unlawfully obstructed navigation and issued an injunction requiring its modification. (Id. at pp. 428-429.) Following the legislation, strong winds destroyed the bridge and the defendant reconstructed the bridge as authorized by Congress. The Wheeling court denied the state's request for a contempt order, reasoning "that the act of congress afforded full authority to the defendants to reconstruct the bridge, and the decree directing its alteration or abatement could not, therefore, be carried into execution after the enactment of this law . . . ." (Id. at p. 436; see Miller v. French (2000) 530 U.S. 327, 329 [Wheeling instructs that "when Congress changes the law underlying the judgment awarding such relief, that relief is no longer enforceable to the extent it is inconsistent with the new law"]; Plaut v. Spendthrift Farm, Inc. (1995) 514 U.S. 211, 232 [distinguishing permissible legislation in Wheeling "that altered the prospective effect of injunctions" from impermissible retroactive legislation that attempted to set aside a final judgment].)
California courts similarly endorse the Legislature's ability to enact prospective legislation that abrogates the effect of a prior judgment that likewise has prospective application. For example, in Mendly v. County of Los Angeles, supra, 23 Cal.App.4th 1193, the plaintiffs initially filed suit challenging the adequacy of the county's general assistance grant and, with court approval, the parties entered into a stipulated judgment that set forth a formula for payments for the next five years. (Id. at p. 1202.) One year into the five-year period, the Legislature passed urgency legislation which found that several counties had entered into stipulated judgments requiring the payment of general assistance at certain levels and that, due to an unanticipated fiscal emergency throughout the state, those counties would suffer serious consequences if forced to maintain those levels. (Id. at p. 1201.) Accordingly, the Legislature declared its intent to "abrogate the provisions of existing agreements, including court-ordered stipulated judgments, that require counties to provide general assistance grants above the current levels" and further "declared the provisions of any such agreement or court-ordered stipulated judgment `null and void.'" (Ibid.) The plaintiffs thereafter moved to enforce the stipulated judgment, arguing in part that the legislation "`represents an impermissible legislative encroachment upon judicial authority in contravention of the separation of powers doctrine under the California Constitution,' because the legislation discarded `a final judgment of a court.'" (Id. at pp. 1203, 1211.) The court disagreed, concluding that the Legislature had properly exercised its power to enact a law that prospectively abrogated the effect of a judicial decision and that the legislation did not amount to a modification of the judgment. (Id. at p. 1212.)
The court in Anderson v. Superior Court (1998) 68 Cal.App.4th 1240 employed similar reasoning to uphold legislation specifically directed at overturning an appellate decision. There, a prior final judgment had ordered the Director of the Department of Social Services (DSS) to cease utilizing foster care eligibility provisions because they failed to track federal law. The federal administrator of the program found that the proposed amendments to the eligibility requirements were inadequate to comply with federal law. While the DSS sought review of that determination, it also helped initiate urgency legislation codifying eligibility requirements which required that foster care payments on behalf of children determined to be eligible under the prior judgment be withheld until federal financial participation had been obtained. (Id. at pp. 1243-1244.) The stated purpose of the legislation was to ensure compliance with federal law. (Id. at p. 1248.) The court ruled that the legislation did not violate the separation of powers doctrine and that the prospective legislation appropriately fostered harmony between the state and federal systems. (Id. at p. 1250.)
Finally, Sagaser v. McCarthy (1986) 176 Cal.App.3d 288 (Sagaser) is particularly instructive. There, the plaintiffs unsuccessfully challenged an environmental impact report (EIR) for the construction of a prison. While their appeal was pending, the Legislature introduced and the governor signed a bill containing an urgency clause that had the effect of exempting the prison site from CEQA compliance.
Here, similarly, the Legislature exercised its core function to determine that public policy considerations required that the District have the ability to utilize emission credits from minor source shutdowns and reductions in issuing permits for exempt projects and essential public services and in supporting eligible electrical generating facilities. The Legislature determined that such action was necessary in order to prevent the cessation of numerous projects and consequent economic loss. Accordingly, it mandated that until May 2012 the District "make use of any emission credits that have resulted from emission reductions and shutdowns from minor sources since 1990"—a process which had previously been subject to the District's discretionary rulemaking. The legislation did not reopen or readjudicate a final judgment. Rather, it prospectively abrogated the effect of the NRDC II decision for a finite time period.
For this reason, appellants' reliance on Mandel v. Myers, supra, 29 Cal.3d 531 is misplaced. In that case, the plaintiff had received a $25,000 attorney fee award against the state as part of a final judgment. (Id. at p. 537.) Although the amount was included as part of an omnibus claim bill introduced several years later, the Legislature in committee proceedings ultimately deleted the specific appropriation for that amount in the budget bill. (Id. at p. 538.) Acting on the plaintiff's motion, the trial court entered an order directing the state controller to pay the award. (Id. at pp. 538-539.) The state challenged the court order as violating the separation of powers doctrine and the Supreme Court held that it was the Legislature's action in deleting the appropriation that constituted a separation of powers violation. (Id at pp. 545-549.)
Specifically, the court examined the Legislative Analyst's report recommending the deletion of the award amount and determined the recommendation was based on the committee's reassessment of the validity of the plaintiff's claim. (Mandel v. Myers, supra, 29 Cal.3d at p. 546 ["the Legislative Analyst's comments and recommendation on this measure took no note of the binding nature of the final court judgment but instead explicitly resurrected the very arguments concerning the validity of the attorney fee claim that had been raised and fully litigated by the state defendants in the judicial proceedings"].) In light of this legislative history, the court determined that the Legislature had improperly disregarded a final court judgment by taking it upon itself to readjudicate the merits of the judgment.
Here, in contrast, SB 827 and AB 1318 did not reach back and readjudicate the NRDC II decision. Rather, for public policy reasons, the Legislature enacted prospective legislation which enabled the District to issue permits going forward using its prior tracking system as well as minor source emission credits. The Legislature specifically avoided addressing the issues resolved in NRDC II, providing that "[n]othing in this section affects the decision in the case described in subdivision (a) concerning the adoption, readoption, or amendment, or environmental review, of south coast district Rule 1315." (Health & Saf. Code, § 40440.13, subd. (b).) Because SB 827 and AB 1318 established standards to be applied prospectively, their enactment did not violate separation of powers principles. (See Miller v. French, supra, 530 U.S. at pp. 345-346.) We agree with the trial court that "SB 827 is prospective because it affects the future application of the court's decision by eliminating the need for CEQA review of the use of orphan shutdown credits on an interim basis. It does not purport to review the merits of the
Appellants contend that even if the Legislature had the power to enact SB 827, the plain language and legislative history of that provision requires that the District comply with CEQA before acting pursuant to either provision.
Separately construing the subdivisions of Health and Safety Code section 40440.13 so as to harmonize each part, the trial court interpreted the statute to mean that "until May 2012 the District may issue permits using orphan shutdown emission credits without [the] need for CEQA compliance. After that date, the District will need to comply with the
The court in People v. Murphy (2001) 25 Cal.4th 136, 142, summarized our role in resolving a question involving statutory interpretation: "[O]ur fundamental task here is to determine the Legislature's intent so as to effectuate the law's purpose. [Citation.] We begin by examining the statute's words, giving them a plain and commonsense meaning. [Citation.] We do not, however, consider the statutory language `in isolation.' [Citation.] Rather, we look to `the entire substance of the statute . . . in order to determine the scope and purpose of the provision . . . . [Citation.]' [Citation.] That is, we construe the words in question `"in context, keeping in mind the nature and obvious purpose of the statute . . . ." [Citation.]' [Citation.] We must harmonize `the various parts of a statutory enactment . . . by considering the particular clause or section in the context of the statutory framework as a whole.' [Citations.]" Where statutory language is unambiguous, we presume the Legislature meant what it said, and we apply the plain meaning of the statute without resort to extrinsic sources. (People v. Superior Court (Zamudio) (2000) 23 Cal.4th 183, 192.)
We cannot conclude that imposing the requirement of CEQA compliance is consistent with the statutory language enacted by SB 827 or the legislative intent reflected by that language. Reading section 40440.13 as a whole, it is apparent that the statute was intended to authorize the District to issue permits both to sources exempt from the offset requirements as specified in Rule 1304 and to essential public services as specified in Rule 1309.1, "[n]otwithstanding" the NRDC II decision. (§ 40440.13, subd. (a).) In issuing those permits, the Legislature imposed two mandatory provisions. (§ 40440.13, subd. (c); see Ramos v. Superior Court (2007) 146 Cal.App.4th 719, 729 [presumption is that the term "shall" in a statute is interpreted as mandatory].) The first required the District to rely on the tracking system utilized prior to the adoption of Rule 1315, until the District adopted and the EPA approved a new tracking system. (§ 40440.13, subd. (c)(1).) The second required the District to "make use of any emission credits that have resulted from emission reductions and shutdowns from minor sources since 1990" and to make any necessary submission to the EPA regarding those credits. (§ 40440.13, subd. (c)(2).) The Legislature specified that these requirements did not affect the NRDC II decision "concerning the adoption, readoption, or amendment, or environmental review, of south coast district Rule 1315." (§ 40440.13, subd. (b).) Rather, because the statute was scheduled to sunset on May 1, 2012 (§ 40440.13, subd. (d)), the Legislature would need to extend the statute's provisions or the District would need to comply with the NRDC II decision to utilize Rule 1315 for the issuance of permits relying on minor source emission credits after that date.
We construe these provisions to enable the District, for a limited time period, to issue permits in reliance on the process employed prior to the adoption of Rule 1315 and prior to the NRDC II decision requiring that the rule undergo CEQA compliance. Adopting the interpretation advocated by appellants—one requiring CEQA compliance for the process that preceded Rule 1315—would essentially render the statute meaningless. Indeed, the NRDC II decision enjoined the District from undertaking any action to implement Rule 1315 and the amendments to Rule 1309.1 pending CEQA compliance. Construing the statute enacted through SB 827 to require that the District comply with CEQA before issuing permits utilizing the prior tracking system and minor source emission credits would simply put the District in the same position as if there had been no legislation. "Well-established canons of statutory construction preclude a construction which renders a part of a statute meaningless or inoperative." (Manufacturers Life Ins. Co. v. Superior Court (1995) 10 Cal.4th 257, 274.) Because requiring CEQA compliance would render all, not merely part, of the challenged legislation meaningless, we agree with the trial court that the District may rely on section 40440.13 without the need for CEQA compliance because "[n]o other interpretation could give effect to the plain meaning and purpose of SB 827."
We are not persuaded by appellants' argument that the absence of language expressly creating an exemption from CEQA reveals a contrary legislative intent. (See Mountain Lion Foundation v. Fish & Game Com. (1997) 16 Cal.4th 105, 116 [observing CEQA exemptions should not be implied given that the Legislature knows how to create such an exception when one is intended].) We may infer an exemption where we discern a clear legislative intent to exempt an activity from CEQA. (Plastic Pipe & Fittings Assn. v. California Building Standards Com. (2004) 124 Cal.App.4th 1390, 1413 [urgency alone does not show clear intent to create CEQA exemption].) Here, the mandatory nature of the legislative directive in section 40440.13 establishes that the statute was designed to remove the District's discretion from any decision concerning the use of its prior tracking system and emission credits from minor sources. CEQA applies only to discretionary projects and approvals, and not to purely ministerial decisions. (Pub. Resources Code, § 21080, subds. (a), (b)(1); Cal. Code Regs., tit. 14, § 15268, subd. (a); Health First v. March Joint Powers Authority (2009) 174 Cal.App.4th 1135, 1142-1143.) "If, under the applicable substantive law, an agency's approval is ministerial rather than discretionary, evaluation of environmental impact is unnecessary and CEQA does not apply. [Citation.]" (Prentiss v. City of South Pasadena (1993) 15 Cal.App.4th 85, 90.)
The CEQA Guidelines define "[m]inisterial" as "a governmental decision involving little or no personal judgment by the public official as to the wisdom or manner of carrying out the project. The public official merely applies the law to the facts as presented but uses no special discretion or judgment in reaching a decision. A ministerial decision involves only the use of fixed standards or objective measurements, and the public official cannot use personal, subjective judgment in deciding whether or how the project should be carried out." (Cal. Code Regs., tit. 14, § 15369.) By directing that the District "shall rely on the offset tracking system used prior to the adoption of Rule 1315" and "shall also make use of any emission credits that have resulted from emission reductions and shutdowns from minor sources since 1990," the Legislature employed language demonstrating its intent to bring the District's actions within an established CEQA exemption. (See Stein v. City of Santa Monica (1980) 110 Cal.App.3d 458, 460 [city's placing rent control initiative on the ballot and certifying the results as a charter amendment qualified as non-discretionary, ministerial acts not covered by CEQA where statute required that the city "`shall submit the amendment . . . to the electors'"].)
Though the intent of section 40440.13 is clear from its language, the statute's legislative history confirms our plain meaning construction. (See Hughes v. Pair (2009) 46 Cal.4th 1035, 1046 [court may examine legislative history and other extrinsic matters to confirm a statute's plain meaning]; Barratt American, Inc. v. City of Rancho Cucamonga (2005) 37 Cal.4th 685, 697 [legislative history may provide additional authority for construction of a statute's plain language].)
Appellants contend that legislative intent not to provide a CEQA exemption may be inferred from the inclusion of an express CEQA exemption in Senate Bill 696 (SB 696), a predecessor bill to SB 827. They argue that the absence of any exemption in SB 827 demonstrates an intent to eliminate any exemption. (See, e.g., Hess v. Ford Motor Co. (2002) 27 Cal.4th 516, 532 ["`Generally the Legislature's rejection of a specific provision which appeared in the original version of an act supports the conclusion that the act should not be construed to include the omitted provision'"].) But we must not evaluate the elimination of the CEQA exemption language in isolation, as "[t]he evolution of a proposed statute after its original introduction in the Senate or Assembly can offer considerable enlightenment as to legislative intent. [Citation.]" (Tarpy v. County of San Diego (2003) 110 Cal.App.4th 267, 274.)
SB 696 differed from SB 827 in multiple significant respects. SB 696 would have retroactively resurrected Rule 1315 and Rule 1309.1 as amended; established two offset credits accounts in the District's internal bank and allocated specific starting balances in each account; and remained in effect indefinitely, having no sunset provision. On the other hand, SB 827, which three months later assumed the subject matter previously covered by SB 696, did not reinstate either Rule 1315 or the amendment to Rule 1309.1 and left the NRDC II judgment intact; mandated that the District use it prior tracking system and minor source emission credits; and included a May 1, 2012 sunset provision. (Stats. 2009, c. 206 (SB 827), § 2.) Read as a whole, the evolution of the legislative proposal indicates that the statute was modified and limited so as to obviate the need for the previous CEQA exemption. The juxtaposition of the Legislature's comments describing SB 827 confirms the Legislature's intent: "In [NRDC II], the superior court found the promulgation of certain of these district rules to be in violation of CEQA. [¶] This bill would authorize the district to issue permits under specified circumstances, notwithstanding this court decision. The provisions of the bill would be repealed on May 1, 2012." (Legis. Counsel's Digest, Sen. Bill No. 827 (Stats. 2009), c. 206, § 1, p. 95.)
Under these circumstances, where SB 696 as originally proposed was essentially a wholly different bill than the one that was ultimately enacted, we agree with the trial court that the elimination of the CEQA exemption in SB 827 is not indicative of any intent to require CEQA compliance. To the contrary, the Legislature's decision to allow the District to issue certain permits for a specified time period "[n]otwithstanding" the NRDC II decision reflects an intent to permit District action without CEQA review. (§ 40440.13, subd. (a).)
The judgment is affirmed. The District is entitled to recover its costs on appeal; the Energy Commission to recover costs except those related to the motion to dismiss.
We concur:
ASHMANN-GERST, J.
CHAVEZ, J.
