In Protecting Our Water and Environmental Resources v. County of Stanislaus (Case No. S251709) (“POWER”), the California Supreme Court recently found that the long-standing practice of treating all well construction permits as “ministerial” and therefore, not requiring review under the California Environmental Quality Act (“CEQA”), violated CEQA.
As the Court explained, ministerial projects are those “for
which the law requires an agency to act in a set way without allowing the agency
to use its own judgment,” while discretionary projects are those where the lead
agency “is empowered to disapprove or condition approval of a project based on
environmental concerns that might be uncovered by CEQA review.” Environmental
review is thus only required when an agency is authorized to respond to
environmental concerns by conditioning the project (i.e., by exercising
discretion).
Some background on well permits may be helpful here. The
Department of Water Resources (“DWR”) Bulletin 74 delineates minimum technical standards
for the construction of new groundwater wells. Although well permitting
agencies have authority to adopt standards that are more stringent than
Bulletin 74, most jurisdictions, including Stanislaus County (“County”), directly
incorporate Bulletin 74 standards into their local well ordinances. In our
experience, where a proposed well complies with Bulletin 74 standards, the agency
typically treats the permit as a ministerial project not requiring CEQA review.
The petitioners, Protecting Our Water and Environmental Resources (“POWER”), challenged
this categorical treatment, claiming Bulletin 74 gives the County discretion to
address concerns relating to environmental impacts, and arguing that all new well construction permits should
be treated as discretionary projects under CEQA.
While the court did not go as far as POWER requested, it
found that the County cannot treat all well construction permits as ministerial
because, in some cases, Bulletin 74 authorizes the County to exercise judgment
over environmental issues. For example, Bulletin 74 gives the permitting agency
discretion to determine the appropriate well location when the well is near a
source of contamination.
Notably, the Court rejected POWER’s contention that all well
construction permits should be deemed discretionary projects. The Court found
that where the County issues a well construction permit under Bulletin 74 standards
that do not authorize County discretion—e.g., where the well is not near a
contamination source—issuance of the well permit may be treated as a
ministerial project.
What to expect from here?
The Court’s decision will impact well permitting authorities
across the state. Agencies will need to determine if and when their ordinances
and regulations grant them authority to condition approval or deny a well
construction permit, and undertake actions to ensure compliance with CEQA. We
see several possible responses.
One practical response may be to revise the well ordinances
to omit discretion and add more detail as to how to issue well construction
permits. For example, agencies may amend ordinances to provide fixed well
siting standards in the vicinity of a contamination source under any scenario,
and require a variance permit (a discretionary project) to deviate from those
standards. This course of action, however, could require a significant amount
of agency investment to develop the necessary standards.
Agencies may also choose to leave their well construction
ordinances and regulations as-is and consider whether a CEQA categorical exemption
may apply on a case-by-case basis. In that scenario, project applicants could
carry a significant financial burden in undertaking the level of environmental
review deemed necessary by the permitting agency.
If local agencies find adapting their ordinances too onerous, or if there is an uptick in CEQA litigation related to well permit issuance, agencies could look to the state for a fix, such as a statutory exemption from CEQA for issuance of well permits in certain circumstances, or for DWR to develop new “ministerial” well permit standards. DWR is currently in the process of updating Bulletin 74, creating the possibility that agencies lobby DWR to omit language providing discretion in Bulletin 74 and the Statewide Model Well Ordinance.
Some of you may be wondering whether the POWER decision will impact the state’s
implementation of the Sustainable Groundwater Management Act (“SGMA”). In a
word, yes. Water Code section 10726.4 allows counties to give a local
groundwater sustainability agency (“GSA”) the authority to issue new well
permits. Although permit authority may be critical for some GSAs to implement
SGMA, a newly formed GSA must consider whether it has the institutional
capacity to manage CEQA review for discretionary well permits. Further, even if
a GSA does not assume well permit authority from the lead agency, a GSA can
impose spacing requirements on new wells to minimize well interference.
Following POWER, a GSA must consider
whether its proposed well spacing requirements would require discretionary
review by the lead agency and trigger CEQA. Either way, this decision will
force GSAs and local agencies to assess how POWER
may affect new well permits going forward.
Finally, looking beyond well permits, the court’s critique of the County’s well permit ordinance may trigger additional soul-searching for lead agencies with respect to other permits agencies traditionally view as ministerial.
Authors
Mack Carlson, Associate; Elisabeth L. Esposito, Associate; Christopher R. Guillen, Associate; Ryan Waterman, Shareholder