California takes significant step toward CEQA reform and simplification of infrastructure projects

On May 19, 2023, California Governor Gavin Newsom introduced a major legislative package and signed an executive order aimed at reforming the California Environmental Quality Act (“CEQA”) and expediting infrastructure projects across the state. .

According to Governor Newsom’s office, the legislative package of 11 bills will seek to reform CEQA with the goal of reducing project deadlines by more than three years. The proposal is also intended to maximize California’s share of federal dollars under the Infrastructure Investment and Jobs Act (“IIJA”) and the Inflation Reduction Act (“IRA”), so that California can invest up to $180 billion over the next decade in clean infrastructure. .

The legislative proposal seeks to achieve these goals by exempting specific categories of projects from the full CEQA process, such as water infrastructure and semiconductor manufacturing. For these projects, the legislation proposes speeding up the time to obtain a final decision by limiting judicial review for environmental challenges to nine months, as well as expediting permits and approval of infrastructure projects.

While the Governor’s office has yet to release all 11 bills, Governor Newsom’s press release identified the following key features:

  • Maximize federal dollars: The proposal intends to establish a “Green Bank Financing Program” within the California Climate Catalyst Fund so that the state can leverage federal dollars under IIJA and IRA to support clean infrastructure projects, such as solar, wind, and storage projects. and batteries. Governor Newsom’s Executive Order N-8-23 also indicated that the state is considering funding projects in the areas of hydrogen, zero emission vehicles, and semiconductors (specifically projects under the CHIPS Act and Science).
  • Expedited Judicial Review: The proposal would be an important step forward in expediting judicial review of legal challenges under CEQA, which have historically blocked projects and dramatically increased project costs. Under the proposal, judicial review would be limited to nine months for projects in the water, clean energy, transportation, semiconductor and microelectronics sectors. This expedited judicial review process already applies to certain projects, such as renewable energy, some homes, and large sports stadiums.
  • Reduce regulatory red tape: The proposal would reduce regulatory red tape by streamlining procedures around document retention and review to minimize the number of documents that must be included in a project’s administrative record. The proposal also aims to simplify the permitting process for certain categories of projects by amending existing law.

Industry players should carefully monitor the proposal’s progress as it has the potential to be an ambitious step forward in reducing the regulatory red tape that has hampered infrastructure projects in California since CEQA’s enactment.