Opinion ID: 2824890
Heading Depth: 2
Heading Rank: 3

Heading: The Marina dictum.

Text: The discussion just quoted led to the dictum we granted review to reexamine. That dictum appears in the following paragraph, which imagines possible limitations of our holding that the Board shared with other agencies the responsibility to mitigate the off-site environmental effects of its project. The dictum on which the Board relies appears in the sentence set out below in italics: ―To be clear, we do not hold that the duty of a public agency to mitigate or avoid significant environmental effects (Pub. Resources Code, § 21002.1, subd. (b)), combined with the duty to ask the Legislature for money to do so (id., § 21106),[6] will always give a public agency that is undertaking a project with environmental effects shared responsibility for mitigation measures another agency must implement. Some mitigation measures cannot be purchased, such as permits that another agency has the sole discretion to grant or refuse. Moreover, a state agency’s power to mitigate its project’s effects through voluntary mitigation payments is ultimately subject to legislative control; if the Legislature does not appropriate the money, the power does not exist. For the same reason, however, for the [Board] to disclaim responsibility for making such payments before [it has] 6 ― ‗All state agencies, boards, and commissions shall request in their budgets the funds necessary to protect the environment in relation to problems caused by their activities.‘ (Pub. Resources Code, § 21106.)‖ (Marina, supra, 39 Cal.4th at p. 367, fn. 16.) 14 complied with [its] statutory obligation to ask the Legislature for the necessary funds is premature, at the very least. The superior court found no evidence the [Board] had asked the Legislature for the funds. In [its] brief to this court, the [Board] acknowledge[s] [it] did not budget for payments [it] assumed would constitute invalid assessments . . . . That assumption, as we have explained, is invalid.‖ (Marina, supra, 39 Cal.4th at p. 367, italics added.) The italicized sentence embodied dictum rather than a principle necessary to our decision that the Board had erroneously disclaimed responsibility for mitigation. (See Manufacturers Life Ins. Co. v. Superior Court (1995) 10 Cal.4th 257, 287 [― ‗Dictum is the ―statement of a principle not necessary to the decision.‖ ‘ ‖]; see also Marina, supra, 39 Cal.4th at p. 372 (conc. opn. of Chin, J.) [―the discussion is dictum‖].) Indeed, our opinion unmistakably identifies the sentence as dictum by describing the argument to which it responded as ―premature, at the very least.‖ (Marina, at p. 367.) We called the argument ―premature‖ because the Board had not yet asked the Legislature for funding, and ―premature, at the very least,‖ to indicate the argument might lack merit even if properly presented. 1. The Marina dictum does not justify the Board’s position. In any event, the Marina dictum does not justify the Board‘s position that CSU may contribute funds for off-campus environmental mitigation only through an appropriation designated for that specific purpose, i.e., an earmarked appropriation.7 Several reasons lead us to this conclusion: 7 We are aware of no evidence that any other state agency interprets Marina, supra, 39 Cal.4th 341, in the same way as the Board. Significantly, the Legislative Analyst‘s Office has noted that the University of California (UC) and the California Community Colleges (CCC) do not request earmarked appropriations for off-campus environmental mitigation. Instead, UC ―directs (footnote continued on next page) 15 First, to read the Marina dictum as saying anything about earmarked appropriations is strained. No such argument was made by the Board or addressed in the opinion. Neither does the Marina dictum offer useful guidance about a public agency‘s power to mitigate the environmental effects of its projects. The dictum‘s most important clause — ―if the Legislature does not appropriate the money, the power does not exist‖ (id. at p. 367) — is simply an overstatement. In mitigating the effects of its projects, a public agency has access to all of its discretionary powers and not just the power to spend appropriations. (Pub. Resources Code, § 21004.)8 Those discretionary powers include such actions as adopting changes to proposed projects, imposing conditions on their approval, adopting plans or ordinances to control a broad class of projects, and choosing alternative projects. (See CEQA Guidelines, § 15002, subd. (h).) Moreover, some agencies such as CSU enjoy some discretion over the use of appropriations (see, e.g., Ed. Code, §§ 89770, 89771, 89773, 90083 [CSU may use part of general (footnote continued from previous page) funding from within its [own] budget (including nonstate funds) to compensate local agencies for off-campus infrastructure improvements,‖ and CCC ―views local college districts as responsible for negotiating with and funding fair-share payments to local governments.‖ (Legis. Analyst‘s Off., Analysis of the 2008– 2009 Budget Bill, supra, Education, p. E-175.) In the same document, the Legislative Analyst‘s Office also noted that, ―the Marina decision . . . does not explicitly state that CSU is no longer responsible to mitigate off-campus impacts if the Legislature denies funding.‖ (Id., at p. E-173.) 8 ―In mitigating or avoiding a significant effect of a project on the environment, a public agency may exercise only those express or implied powers provided by law other than this division [CEQA]. However, a public agency may use discretionary powers provided by such other law for the purpose of mitigating or avoiding a significant effect on the environment subject to the express or implied constraints or limitations that may be provided by law.‖ (Pub. Resources Code, § 21004.) 16 support appropriation for capital projects]) and access to non-state funds (see ante, at p. 3 & fn. 2). The Board, in its own words, ―has never claimed that it lacks all discretion to prioritize the use of its non-state funds.‖ Second, the proposition that a state agency may pay mitigation costs only through an appropriation earmarked for that purpose is incorrect. Neither CEQA itself, Marina, 39 Cal.4th 341, nor any other decision suggests that mitigation costs for a project funded by the Legislature cannot appropriately be included in the project‘s budget and paid with the funds appropriated for the project. Indeed, such a procedure would appear to represent the most natural interpretation of CEQA, which directs that ―[a]ll state agencies . . . shall request in their budgets the funds necessary to protect the environment in relation to problems caused by their activities.‖ (Pub. Resources Code, § 21106; cf. County of San Diego v. Grossmont-Cuyamaca Community College Dist. (2006) 141 Cal.App.4th 86, 101– 105 [district incorrectly found in EIR that funds appropriated for construction project could not feasibly be used to mitigate project‘s off-site traffic impacts].) Furthermore, all but one of the new physical facilities proposed in the 2007 EIR are to be financed with nonappropriated funds. These facilities include the proposed Adobe Falls Housing, the Alvarado Campus, the Alvarado Hotel, the Campus Conference Center and the Student Union expansion. (See ante, at pp. 5- 6.) The Board‘s power to participate in such projects logically embraces the power to ensure that mitigation costs attributable to those projects are included in the projects‘ budgets. (Cf. Ed. Code, §§ 90064 [Board ―may use for the payment of the costs of acquisition, construction or completion of any project any funds made available to the board by the State of California or any other funds provided by the board from any source‖], 66606 [Board has ―full power and responsibility in the construction and development of any state university campus, and any buildings or other facilities or improvements connected with‖ CSU].) 17 Third, no provision of CEQA conditions the duty of a state agency to mitigate its projects‘ environmental effects on the Legislature‘s grant of an earmarked appropriation. Mitigation is the rule: ―Each public agency shall mitigate or avoid the significant effects on the environment of projects that it carries out or approves whenever it is feasible to do so.‖ (Pub. Resources Code, § 21002.1, subd. (b).) The Legislature has expressly subjected the Board‘s decisions concerning campus master plans to the requirements of CEQA (id., § 21080.09, subd. (b)), including the requirement of mitigation (id., § 21002.1, subd. (b)). When the Legislature has wanted to exempt the Board from those requirements, it has done so explicitly. (See id., § 21080.9 [concerning adoption by CSU and other agencies of long-range land use plans subject to California Coastal Act (id., § 30000 et seq.)].) No such exception can reasonably be inferred from the statute the Marina dictum purported to interpret (Pub. Resources Code, § 21106; see Marina, 49 Cal.4th at p. 367), which simply directs state agencies to include mitigation costs in their budgets. Fourth and finally, the Board‘s interpretation of the Marina dictum is mistaken because it depends on a legally unsupportable distinction between environmental impacts occurring on the project site and those occurring off-site. CEQA draws no such distinction for purposes of mitigation. Instead, CEQA defines the ―environment‖ as ―the physical conditions which exist within the area which will be affected by a proposed project‖ (Pub. Resources Code, § 21060.5, italics added) and mandates that ―[e]ach public agency shall mitigate or avoid the significant effects on the environment of projects that it carries out or approves whenever it is feasible to do so‖ (id., 21002.1, subd. (b), italics added). Indeed, this point represents one of Marina‘s main holdings. (See Marina, supra, 39 Cal.4th at pp. 359–360, 367.) In the 2007 EIR, the Board commits to undertake a wide variety of mitigation measures on the SDSU campus (e.g., constructing noise 18 barriers, preserving on-site native plant habitats, creating wetlands, and incorporating flow control measures to prevent erosion). If these on-site mitigation measures can be properly funded through the project budget without an earmarked appropriation, then so too can off-site mitigation measures. 2. The Board’s proposed rule entails unreasonable consequences. Unreasonable consequences would follow from the Board‘s proposed rule that fair-share payments for off-site mitigation may be funded only with an appropriation earmarked for that purpose, and that without such an appropriation mitigation is infeasible. First, such a holding would logically apply to all state agencies, thus in effect forcing the Legislature to sit as a standing environmental review board to decide on a case-by-case basis whether state agencies‘ projects will proceed despite unmitigated off-site environmental effects. Yet CEQA has never been applied in this manner, and nothing in its language or history suggests it should be so applied. CEQA requires not the Legislature but the responsible agency to determine whether and how a project‘s effects can feasibly be mitigated (Pub. Resources Code, § 21081, subd. (a)(1)–(3)), to include mitigation costs in the budget (id., § 21106), and if mitigation is infeasible to decide whether the project should nevertheless proceed based on a statement of overriding considerations (id., § 21081, subd. (b)). The Board suggests we should treat CSU differently than other agencies in this respect because CSU has different missions and funding directives than other agencies. But the Board has identified no statute or regulation that modifies the requirements of CEQA for projects undertaken by CSU. Rather, the Legislature has declared that the whole of CEQA applies to the Board‘s decision to approve the long-range development plan for a campus. (Id., § 21080.09, subd. (b).) 19 Second, under the rule the Board proposes, if the Legislature did not make an earmarked appropriation for mitigating the off-site effects of a particular state project but the responsible state agency nevertheless decided to proceed without mitigation, the cost of addressing that project‘s contribution to cumulative impacts on local infrastructure would fall upon local and regional governmental agencies. (Cf. Marina, supra, 39 Cal.4th at pp. 349–350.) Such a rule would impose a financial burden on local and regional agencies, which may not recover fees to mitigate the environmental impacts of state projects from other developers. This is because mitigation fees imposed on a project must be reasonably related and roughly proportional to that project‘s impacts. (See Gov. Code, § 66001, subds. (a)(3)–(4), (b) & (g) [the Mitigation Fee Act]; Dolan v. City of Tigard (1994) 512 U.S. 374, 391 [5th Amend. requires ― ‗rough proportionality‘ ‖]; Ehrlich v. City of Culver City (1996) 12 Cal.4th 854, 866–867 [construing the Mitigation Fee Act in light of Dolan]; CEQA Guidelines, §§ 15041, subd. (a) [incorporating Dolan standard], 15126.4, subd. (a)(4)(B) [incorporating Dolan and Ehrlich standards].) Third, under the Board‘s proposed rule, off-site mitigation would likely be found infeasible for many, if not all, state projects that receive non-state funding, and more such projects would proceed without mitigation pursuant to statements of overriding considerations. Because a state agency‘s power to participate in such projects9 logically entails the power to ensure that mitigation costs are included in the projects‘ budgets, state agencies cannot necessarily expect the Legislature to appropriate state funds to mitigate such projects‘ environmental effects. In any event, a decision by this court adopting the Board‘s proposed rule 9 Here, for example, the proposed Adobe Falls Housing, Alvarado Campus, Alvarado Hotel, and Campus Conference Center. (See ante, at pp. 5-6.) 20 could not compel the Legislature to make any such appropriation. (See Mandel v. Myers (1981) 29 Cal.3th 531, 540 [separation of powers generally prohibits a court from directly ordering the Legislature to enact a specific appropriation].) Taken together, the consequences of adopting the Board‘s proposed rule that off-site mitigation may be funded only through appropriations for that specific purpose would substantially impair the fundamental statutory directive that ―[e]ach public agency shall mitigate or avoid the significant effects on the environment of projects that it carries out or approves whenever it is feasible to do so.‖ (Pub. Resources Code, § 21002.1, subd. (b).) To adopt the proposed rule would also represent a sharp, unwarranted departure from prior decisions recognizing ―the Legislature intended [CEQA] to be interpreted in such manner as to afford the fullest possible protection to the environment within the reasonable scope of the statutory language‖ (Friends of Mammoth v. Board of Supervisors (1972) 8 Cal.3d 247, 259; see Mountain Lion Foundation v. Fish & Game Com. (1997) 16 Cal.4th 105, 112 [same]). We thus decline to adopt it. 3. The Board’s new arguments. In support of its finding that off-site mitigation may be funded only through an appropriation for that specific purpose, the Board offers three new arguments not presented below. None of these arguments has merit.
First, the Board argues the Legislature codified the Board‘s understanding of Marina, supra, 39 Cal.4th 367, in a 2009 amendment to Education Code section 67504. The new provision, which does not amend CEQA, was part of a comprehensive amendment to the Education Code intended to ―refine higher education reporting requirements to provide for more effective, manageable, and transparent reporting by the higher education segments.‖ (Stats. 2009, ch. 386, § 2 21 [uncodified provision].) The specific provision applicable to CSU refers to Marina only as the occasion for expressing ―the intent of the Legislature that [CSU] take steps to reach agreements with local public agencies regarding the mitigation of off-campus impacts related to campus growth and development.‖ (Ed. Code, § 67504, subd. (d)(1).) The statute refers to the Marina decision, and not to its dictum or the Board‘s interpretation of that dictum, and indicates no limitation on the Board‘s duty to mitigate off-site impacts. Indeed, the statute requires CSU to ―take steps to reach agreements with local public agencies regarding the mitigation of off-campus impacts related to campus growth and development‖ (Ed. Code, § 67504, subd. (d)(1)) and to report on ―payments made by the campus for the mitigation of off-campus impacts‖ (id., subd. (d)(2), italics added), thereby suggesting the Legislature assumed the Board would in fact make such payments. The statute‘s legislative history mentions Marina only in setting out the text of the proposed statutory language and contains nothing to suggest the Legislature intended to incorporate the Board‘s view of that case.
Next, the Board contends the Legislature‘s failure to grant its request for an earmarked appropriation to mitigate off-site environmental effects has the effect of prohibiting CSU from spending any other public funds for that purpose, even funds generally appropriated for campus expansion. The Board relies on Government Code section 13332.15, which provides that ―[n]o appropriation may be combined or used in any manner . . . to achieve any purpose which has been denied by any formal action of the Legislature.‖ Neither the judiciary nor the Legislature has defined ―formal action‖ (ibid.) in this context. At a minimum, 22 however, the plain meaning of the statutory language would seem to require an official action of the Legislature acting as such, that is, as a body.10 Consistent with this understanding, courts have assumed the statutory requirement of formal action has been satisfied when the Legislature has deleted an appropriation proposed in a budget bill (e.g., County of Sacramento v. Loeb (1984) 160 Cal.App.3d 446, 459 [ultimately holding Government Code section 13332.15 did not apply retroactively]) or when the Legislature has included in the Budget Act language barring a specific use of funds (e.g., Tirapelle v. Davis (1993) 20 Cal.App.4th 1317, 1324 [Budget Act‘s direction that funding reductions be applied to employee compensation implicitly barred agencies from using funds allotted for other purposes to compensate employees]). Here, in contrast, the Board has not shown the Legislature took any action, let alone a formal one acting as a body, on the Board‘s request during the 2008– 2009 budget process to create a fund to mitigate the off-site environmental effects of campus expansion. The Legislature had no occasion to act on the request because, as noted, the Board‘s request did not appear in the Governor‘s proposed budget, the May revision or the Budget Act. The Board does not assert that its similar requests in each of the following two years produced any different result. 10 In Mandel v. Myers, supra, 29 Cal.3d 531, 545–546, we declined to decide whether a legislative committee’s deletion of a proposed appropriation from a budget bill amounted to ―formal action‖ within the meaning of a provision (Stats. 1978, ch. 359, § 15, p. 1006 [1978–1979 Budget Act]) similar to, but predating, Government Code section 13332.15 (added by Stats. 1983, ch. 323, § 44, p. 970). We did not reach the issue because we decided that language in the act barring the State Controller from paying a judgment against the Department of Health Services out of funds appropriated from that agency‘s operating expenses violated the separation of powers (Cal. Const., art. III, § 3) by impermissibly readjudicating the merits of a final judgment. 23
In its final new argument on this point, the Board contends the Legislature in Education Code section 66202.5 has signaled its intent that CSU‘s ―enrollment expansion,‖ including off-campus environmental mitigation related to expansion, is to be funded only through ―Budget Act appropriations.‖ To the contrary, the cited statute as relevant here provides only that ―[t]he State of California reaffirms its historic commitment to ensure adequate resources to support enrollment growth, within the systemwide academic and individual campus plans to accommodate eligible California freshmen applicants and eligible California Community College transfer students . . . .‖ (Ibid.) The statute does not say that only appropriated funds may be used for campus expansion. So construed, the statute would contradict Education Code section 90064, which expressly permits the Board to use, in addition to appropriated funds, ―any other funds provided by the board from any source‖ to pay for capital projects. So construed, section 66202.5 would also be very difficult to reconcile with the Board‘s decision to use nonappropriated funds for five of the six construction projects proposed in the 2007 EIR. (See ante, at pp. 5-6.) Not conceding the point, the Board argues that ―when the Legislature intends CSU to use non-state funding or a mixture of state and non-state sources to accomplish statutory objectives, the Legislature expressly states that intention.‖ In support, the Board cites statutes encouraging the Board to seek additional sources of revenue to ensure equal athletic opportunities for male and female students (Ed. Code, § 66016), and to fund programs for disabled students (id., § 67310, subd. (e)). But nothing in those statutes purports to limit Education Code section 90064, which expressly authorizes the Board to use nonappropriated funds for capital projects. 24 In conclusion, we reject the Board‘s assumption that the feasibility of mitigating its project‘s off-site environmental effects depends on a legislative appropriation for that specific purpose. The erroneous assumption invalidates the Board‘s finding of infeasibility because the use of an erroneous legal standard constitutes a failure to proceed in a manner required by law. (See Marina, supra, 39 Cal.4th at p. 355; Pub. Resources Code, § 21168.5.) The error also invalidates the Board‘s statement of overriding considerations, because ―CEQA does not authorize an agency to proceed with a project that will have significant, unmitigated effects on the environment, based simply on a weighing of those effects against the project‘s benefits, unless the measures necessary to mitigate those effects are truly infeasible.‖ (Marina, pp. 368–369.) For these reasons, the Court of Appeal correctly directed the issuance of a writ of mandate ordering the Board to vacate its decision certifying the 2007 EIR.