Implementing SB 743: An Analysis of Vehicle Miles Traveled Banking and Exchange Frameworks


October 2018

Senate Bill 743 (Steinberg, Chapter 386, Statutes of 2013) requires project reviews under the California Environmental Quality Act (CEQA) to evaluate the transportation impacts of new developments in terms of greenhouse gas emissions, rather than automobile delay. As a result, the Governor’s Office of Planning and Research has recommended the adoption of vehicle miles traveled (VMT) as the metric to determine the significance of transportation impacts under CEQA.

Accounting for VMT impacts as required under CEQA may require innovative approaches to mitigation, such as local or regional “banks” or “exchanges” that allow developers to fund mitigation efforts not directly related to their projects. 

Our new report, Implementing SB 743, provides a comprehensive review of key legal and policy considerations for local and regional agencies tasked with crafting these innovative mechanisms, including:

  • Legal requirements under CEQA and Constitutional case law;
  • Criteria for mitigation project selection and prioritization;
  • Methods to verify VMT mitigation and “additionality”; and
  • Measures to ensure equitable distribution of projects.

The report recommends that decision makers launching new VMT banks and exchanges consider including:

  • Measures to verify the legitimacy of claimed VMT reductions, as well as their “additionality”;
  • Prioritization of individual mitigation projects, in order to ensure that reductions are achieved as quickly and efficiently;
  • Rigorous backstops to ensure that disadvantaged communities are not negatively impacted by—and ideally can benefit from—the ability of developers to move mitigation off-site; and
  • Demonstration of both a reasonable substantive relationship and financial proportionality between the proposed development and the fee or condition placed on it.

Ultimately, SB 743 will require a range of approaches from jurisdictions of varying sizes, densities, and development patterns throughout California. Local, regional, or even statewide mechanisms may evolve as mitigation programs mature and potential efficiencies are identified. Implementing SB 743 offers a guidebook to agencies and developers navigating the law’s new approach.

Watch the Webinar:

Hosted by CLEE’s Ethan Elkind and Ted Lamm, and featuring Senior Planner Chris Ganson and Senior Counsel Jeannie Lee of the Governor’s Office of Planning and Research

Download the Report:

Implementing SB 743: An Analysis of Vehicle Miles Traveled Banking and Exchange Frameworks (October 2018)

For More Information:

Contact Ethan Elkind, Director of the Climate Program, Center for Law, Energy & the Environment at UC Berkeley Law or Ted Lamm, Research Fellow in the Climate Program