Legislation Update, Part III: Gov. Newsom's Modest CEQA Reforms and the Promise of the 2023–24 Legislative Session

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Governor Newsom recently signed into law several bills that modestly reform the California Environmental Quality Act (“CEQA”) as part of the 2023–2024 budget deal reached with lawmakers.  (See https://www.gov.ca.gov/2023/07/10/governor-newsom-signs-infrastructure-budget-legislation-to-build-more-faster/.)  CEQA has proven to be a notoriously hard law to reform, with multiple interest groups ensuring that most bills passed are limited by compromises.  Nevertheless, the Legislature has proposed some major revisions this legislative session, with multiple bills aiming to address CEQA misuse, a practice that is unfortunately not new, but has recently been spotlighted and chastised by various California courts. As one Court recently observed in Tiburon Open Space Committee v. County of Marin (2022) 78 Cal.App.5th 700—a case in which real party in interest was successfully represented by Cox, Castle & Nicholson—“something is very wrong with [the current] picture [of CEQA].”  

The CEQA bills signed into law by Governor Newsom, include:

Modifications to Preparation of CEQA Administrative Record.  SB 149 introduces minor modifications to the timing of and process to prepare administrative records for CEQA litigation. Preparing these records often takes months and can cost in the high six figures or more.

SB 149 includes a requirement that a court schedule a case management conference within 30 days of the filing of the petition to review the scope, timing, and cost of the administrative record and clarifies that records should be electronic. Existing law allows a petitioner to elect to prepare the administrative record or pay to have the respondent agency prepare the record. Now the agency can deny the petitioner’s election to prepare the record within five business days of receiving the petitioner’s election notice if the public agency or the real party in interest agrees to waive the right to seek reimbursement of its costs from the petitioner.

Furthermore, consistent with existing law, this bill states that the administrative record does not include “communications that are of a logistical nature, such as meeting invitations and scheduling communications,” privileged material, or documents that are exempt from disclosure under the California Public Records Act.

Extension and Expansion of Environmental Leadership Development Project Provisions to Infrastructure Projects.  In addition to addressing administrative records, SB 149 extends Environmental Leadership Development Projects (“ELDP”), which are projects that meet a number of stringent environmental criteria and result in a minimum investment in California of $100 million (or $15 million in the case of certain housing development projects) and create construction jobs that pay prevailing wages. Existing law authorizes the Governor to certify projects that meet the ELDP requirements for judicial streamlining benefits related to CEQA. These benefits include that an action or proceeding challenging the certification of an environmental impact report or the granting of project approvals for those certified projects, including any potential appeals to the court of appeal or the Supreme Court, to be resolved, to the extent feasible, within 270 days of the filing of the administrative record with the court. This bill extends that authorization until January 1, 2032 (from January 1, 2024) and expands its application to defined Infrastructure Projects, which include: (1) an “energy infrastructure project”; (2) a “semiconductor or microelectronic projects”; (3) a “transportation-related project”; and (4) a “water-related project.” Accordingly, an array of clean energy, water, transportation, and semiconductor projects will now be eligible for judicial streamlining if a project is challenged under CEQA, which should help get needed infrastructure through litigation and developed faster.

As an urgency statute, this bill takes effect immediately upon being chaptered into law (rather than waiting until January 1 of the following year to take effect).  

Pending CEQA bills introduced by the Legislature, include:

Protecting Housing

Identification of Contributors to CEQA Actions that Challenge Housing Project.  

SB 393 (Glazer, Dahle, Nguyen, Niello, Seyarto, & Stern) would require a petitioner challenging a housing development project (as defined under the Housing Accountability Act) under CEQA to disclose the identity of a person or entity (and other related information, as specified) that contributes $10,000 or more to the costs of the action (as specified). This bill would provide that a failure to comply with these identification requirements may be grounds for dismissal of the action by a court and authorize the identification information disclosed to be used by a court to determine whether the financial burden of private enforcement supports the award of private attorney general attorneys’ fees in actions brought to enforce CEQA compliance. Such information could also be useful in a bond motion under Code of Civil Procedure Section 529.2.

This bill would also prohibit a CEQA action from being brought against a housing project (as currently undefined) included in a master environmental impact report or other plan or project already approved following the completion of CEQA review on grounds of noncompliance with CEQA, as specified. This bill would provide that further environmental review relating to the housing project would not be subject to this prohibition.

Failure to Make Certain CEQA Determinations for a Housing Development Project are Violations of the Housing Accountability Act. 

The Housing Accountability Act (“HAA”) prohibits a local agency from disapproving a housing development project absent specified findings based on a preponderance of the evidence in the record. AB 1633 (Ting) would amend the HAA’s definition of “disapprove the housing development project” to include any instance in which a local agency fails to make a determination that the project is exempt from CEQA for which there is substantial evidence in the record that the project is eligible for an exemption sought by the applicant. This bill would further amend the definition of “disapprove the housing development project” to include any instance in which a local agency fails to adopt a negative declaration or addendum for the project, to certify an environmental impact report for the project, or to approve another comparable environmental review document, for which such environmental review document, as applicable, has been prepared and that, if duly adopted, approved, or certified by the local agency, would satisfy the requirements of CEQA.

Among other conditions, this bill would require certain project siting criteria be met and that the project meets or exceeds 15 dwelling units per acre.

This bill would provide that a local agency’s failure to make a determination that the project is exempt from CEQA or failure to adopt, approve, or certify an environmental review document, as applicable, is deemed a final disapproval of the housing project for purposes of filing a petition to enforce the provisions of the HAA.  To use this provision, the applicant must give timely written notice to the local agency, as specified, and the agency must not issue the exemption or adopt, approve, or certify the environmental review document, as applicable, within the applicable prescribed time of the applicant’s notice.

This bill would also require a court in considering an award of attorneys’ fees in actions brought challenging a local agency’s approval of a housing development project to give due weight to the degree to which the local agency’s approval furthers the policies of the HAA when weighing whether a significant benefit has been conferred on the general public or a large class of persons and whether the necessity of private enforcement makes an award appropriate.

The Effects of Noise Generated by Project Occupants and Their Guests of a Residential Project on Human Beings is Not a Significant Effect on the Environment. 

CEQA requires that a public agency discloses and evaluates the significant environmental effects of a non-exempt proposed project. AB 1307 (Wicks & Luz Rivas) clarifies that the effects of noise generated by project occupants and their guests on human beings is not a significant environmental effect for residential projects. This bill appears to be a direct response to the recent ruling in Make UC A Good Neighbor v. Regents of University of California (2023) 88 Cal.App.5th 656, which invalidated an EIR for a student housing project over this issue.

This bill also would provide that institutions of public higher education (as defined) would not need to consider, in an environmental impact report, alternatives to the location for a residential or mixed-use housing project, if the proposed project is located on a site that is no more than five acres and is substantially surrounded by qualified urban uses as well as if the proposed project has already been evaluated in the environmental impact report for the most recent long-range development plan for the applicable campus.

Extension of Existing Exemption for Conversion of Transient Structures to Supportive or Transitional Housing. 

Existing law, until January 1, 2025, exempts from CEQA projects related to the conversion of a structure with a certificate of occupancy as a motel, hotel, residential hotel, or hostel to supportive or transitional housing (as defined) that meet certain conditions. SB 91 (Umberg) would extend that exemption indefinitely.


Enhanced CEQA Notification Requirements. 

CEQA authorizes a local agency that approves or determines to carry out a project to file a notice of determination or a notice of exemption with the county clerk of each county in which the project will be located, as provided. SB 69 (Cortese) would require a public agency to also submit a notice of determination or notice of exemption for all projects to the “State Clearinghouse in the Office of Planning and Research.” This bill provides that it is the intent of the Legislature that the applicable CEQA statute of limitations period only commences when the local agency complies with these requirements.

These CEQA bills are just a few of the significant number of bills introduced during the 2023 – 2024 California legislative session related to land use controls and processing. See our recent Client Alerts, “ Legislation Update: New Land Use Bills Introduced in the 2023 California Legislative Session” and “ Legislation Update, Part II: New Land Use Bills Under Consideration in the 2023 California Legislative Session,” for more of those proposed related bills.

**Please note that the legislative situation is fluid and is subject to change throughout the legislative session. While this alert aims to provide an introduction to these CEQA bills, please keep in mind that some of these bills are not final—and we encourage you to check back for further updates and/or consult with any of our experienced land use attorneys who are tracking these bills (and more) as they progress through the legislative lifecycle.**

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