SACRAMENTO -- For years, California's business leaders have lamented that the state's 43-year-old environmental law is too often used to protect everything but the environment.

According to critics, businesses use it to kill their competitors' projects; homeowners use it fight aesthetic changes to their neighborhoods; and labor unions use it to blackmail developers until they get a labor agreement to their liking.

"This great law has been greatly abused," said Carl Guardino, CEO and president of the Silicon Valley Leadership Group.

Gov. Jerry Brown, who chafed against the law's strictures as mayor of Oakland, promised to fix it. But suddenly it appears the momentum has stalled for meaningful reform of the California Environmental Quality Act, known as CEQA (pronounced see-kwa).

Gov. Jerry Brown has promised to fix California’s 43-year-old environmental law that too often is used to protect everything but the environment.
Gov. Jerry Brown has promised to fix California's 43-year-old environmental law that too often is used to protect everything but the environment. Brown is shown here speaking at a press conference at San Jose State University in San Jose, Calif. on Tuesday, January 15, 2013. (Gary Reyes/ Staff)

"The forces have already organized to block it," Brown said recently.

The forces include powerful labor groups -- which bankrolled Brown's tax-hike campaign last fall -- and environmental groups, who signaled that any attempt to make significant changes to CEQA would be met with fierce resistance.

"We know businesses have complaints, but CEQA is by far not the primary thing getting in the way of development," said Abigail Okrent, legislative director for the Planning and Conservation League.

California's core environmental law, signed in 1970 by Gov. Ronald Reagan, requires environmental studies of projects that could affect land, air, water and other elements of the environment. The public is given a chance to weigh in on developments -- and developers are required to "mitigate" any potential damage.


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Sounds simple. But the reality might make Reagan spin in his grave.

Take the case of Moe's Stop, a gas station at McKee Road and North 33rd Street in San Jose.

In 2009, Moe tried to add three gas pumps and got the blessing of the city's planning commission after studies showed no significant environmental impacts.

But a competing gas station across 33rd Street, Andy's BP, filed a lawsuit under CEQA claiming that a full study of traffic impacts was necessary.

An environmental impact report in September 2011 concluded that the traffic impact was insignificant, and the City Council approved the project. But Andy's ownersimply filed a new lawsuit, which is still pending.

The owner of Moe's Stop estimates that the overall cost of the project delay was at least $500,000 in attorneys' fees, the cost of the EIR and lost business when the gas station had to close for eight months awaiting litigation.

With California's job picture still bleak, the argument that CEQA is preventing businesses from creating jobs is resonating more these days.

Proponents of what reformers call CEQA "modernization" appeared to be on track until Michael Rubio, a Democratic senator from Bakersfield who had been shepherding reform legislation as chairman of a key environmental committee, resigned from the Legislature six weeks ago to become a Chevron lobbyist. He was replaced by Sen. Jerry Hill, D-San Mateo, who told this newspaper he's open to improving CEQA but has "no desire to change the fundamental law passed 40 years ago."

Joel Fox, chairman of the Small Business Action Committee, said, "The stars were in line, but have been knocked out of alignment."

But Rubio may have seen the writing on the wall as far back as last fall, when his last-minute effort at taking on CEQA was quashed by Senate President Pro Tem Darrell Steinberg, D-Sacramento, who insisted that any fixes to the premier environmental law wouldn't happen in the dark of night under the Capitol dome.

That gave opponents time enough to regroup and formulate a campaign to stop the forces of change.

The state's construction trade unions, which have been quick to file CEQA lawsuits, hurriedly commissioned a report by a University of Utah professor showing that CEQA has actually produced more jobs than states with fewer environmental regulations. Labor and environmental leaders held a Capitol rally decrying what they said was businesses' rush to gut the law by exploiting Californians' anxieties over jobs.

"What we really have here is a cry by business for deregulation," said Robbie Hunter, president of the state Building and Construction Trades Council of California. "Deregulation is never in the interest of everyday workers."

The same day that Rubio resigned, Steinberg released a CEQA reform bill, SB731, but its vague "intent language" is a far cry from Rubio's original bill. Steinberg abandoned Rubio's main thrust, which would have been to forbid lawsuits over projects that already comply with existing environmental standards.

Still, Steinberg has insisted that change is on the way. One of the first people Steinberg called after Rubio's resignation was Silicon Valley Leadership Group's Guardino.

"He tracked me down when I was with my family at Disneyland and said, 'Carl, I need to know you're still in this and you won't walk away,'" Guardino recounted. "He told me, 'I'm not going to do this half-way. We won't do something small.'"

Guardino added that he wasn't interested in a "one-yard gain and a cloud of dust, where everyone claims victory and we're back fighting a year later. If that's where we'll end up, I'm not interested."

Contact Steven Harmon at 916-441-2101. Follow him at Twitter.com/ssharmon. Read the Political Blotter at IBAbuzz.com/politics.