University of California Institute of Transportation Studies

Pursuant to Senate Bill 743 (Steinberg, 2013), which reformed the process for California Environmental Quality Act (CEQA) review of transportation impacts to align with greenhouse gas emissions reduction goals, the Governor’s Office of Planning and Research identified vehicle miles traveled (VMT) as the key metric to measure transportation impacts of new developments under CEQA. As a result, project developers will now have to reduce vehicle miles traveled to mitigate significant transportation impacts. In response, state and local policy makers are considering the creation of mitigation “banks” or “exchanges.” This report assesses the structural and legal considerations that could determine which model (i.e., banks or exchanges) and scope are appropriate for each implementing jurisdiction (i.e., city, county, regional, state). This report also analyzes a number of existing programs that provide additional models for implementation.