On July 10, 2023, Governor Newsom signed into law a number of bills aimed at streamlining and accelerating the construction of critical infrastructure projects needed to achieve California’s ambitious climate and clean energy goals. Among the many bills was SB No. 149, CEQA legislation that amended Public Resources Code §§ 21167.6, 21181, 21183, 21189.1, and 21189.3; added Chapter 7 (commencing with § 21189.80); and became effective immediately as an urgency measure “[t]o promote environmental protection and safeguard economic development of California’s diverse public resources and people, and enhance the state’s ability to maximize federal funding to support those efforts[.]”  The full text of SB 149 can be found here.

Streamlining Benefits for Favored Infrastructure Projects

The bulk – and heart – of SB 149 is its new Chapter 7, which aims to provide “unique streamlining benefits” to critical infrastructure projects while maintaining CEQA’s “environmental and public engagement benefits.”  The Legislature’s accompanying findings, codified at Public Resources Code §21189.80, include findings that historic state and federal investments in infrastructure will lead to transportation-related, water-related, technology and energy facility development throughout the state that will reduce GHGs, protect people from the worst extremes of climate change, fix aging transportation infrastructure, and generate jobs.

Section 21189.81 then sets forth numerous definitions, including definitions of “infrastructure projects” that may be certified by the Governor pursuant to the statute to receive streamlining benefits, and which may be “energy infrastructure” projects, “semiconductor or microelectronic” projects, “transportation-related” projects, or “water-related” projects, all as defined in detail by the statute.  (Notably, a “water-related project” is defined not to include the design or construction of through-Delta conveyance facilities of the Sacramento-San Joaquin Delta[,]” i.e., the infamous “twin tunnels” project that has seemingly been proposed, studied and debated for decades.) 

Generally, to receive the statute’s streamlining benefits, a private applicant must agree to pay trial and appellate court costs, and costs of the expedited record preparation required for the streamlined proceedings in any CEQA litigation challenges to the certified projects.  OPR may issue guidelines regarding applications for and certification of projects under the new law that are not subject to APA rulemaking provisions. In addition, applicants for energy infrastructure, semiconductor or microelectronic, or transportation-related projects must fund GHG analyses and meet stringent GHG reduction requirements as specified, demonstrated to the Governor’s satisfaction.  The Governor’s certification decision is not subject to judicial review, but must be submitted for review and concurrence or nonconcurrence of the Joint Legislative Budget Committee, which must act within 30 days or the project is deemed certified.

The substance of the procedural streamlining benefits for certified projects is contained in Section 21189.85 – which provides for resolution of CEQA challenges within 270 days to the extent feasible (including trial, appellate, and Supreme Court proceedings) – and in Section 21189.86, which lays out in detail the requisite streamlined administrative record preparation process, which is to be followed by the lead agency and paid for by the applicant.  The Judicial Council is required to adopt a rule of court to implement Section 21189.85 by the end of 2023. The law remains in effect until January 1, 2034, and lead agencies can approve certified projects up until January 1, 2033.

Changes to CEQA Applying to Ordinary Folks

Apart from the streamlining benefits provided to the Governor-certified infrastructure projects considered critical to the State’s climate agenda, SB 149 makes a few noteworthy revisions to CEQA that apply generally to all projects and actions.  Public Resources Code § 21167.6(b)(1)(A) is amended to require the public agency to lodge an electronic copy of the administrative record with the court, and new subdivision (b)(1)(B) requires the court to schedule a CMC within 30 days of the filing of the CEQA action “to review the scope, timing, and cost of the record of proceedings” and also notes “[t]he parties may stipulate to a partial record” that does not include all the documents listed in the statute as comprising the record “if approved by the court.”

Further, a public agency is now empowered to deny a CEQA petitioner’s request to prepare the administrative record if it does so within 5 business days of receipt of the petitioner’s election to prepare the record, but if it does so then it or the real party must bear the costs of record preparation and certification and cannot recover those costs from the petitioner.  (See Pub. Resources Code, § 21167.6(b)(3).)

Finally, and perhaps most significantly, the statute now excludes from the administrative record’s contents non-substantive internal agency communications through an amendment to Section 21167.6(e)(10).  That subpart of the statutory subdivision describing the contents of the administrative record in CEQA actions now contains a qualification to the provision that the record includes “all internal agency communications, including staff notes and memoranda related to the project or to compliance with [CEQA];” more specifically, it adds the proviso:  “ . . . but not including communications that are of a logistical nature, such as meeting invitations and scheduling communications[.]”  This new language should help prevent the heretofore pervasive and inefficient bloating of records with useless scheduling and non-substantive emails and other such “sticky-note” type documents.  The amendment also explicitly provides that “any material that is subject to privileges contained in the Evidence Code, or exemptions contained in the California Public Records Act … shall not be included in the record of proceedings under this paragraph, consistent with existing law.”

Conclusion and Implications

The infrastructure project streamlining benefits portion of SB 149 essentially applies the CEQA amendment playbook previously employed by the Legislature for “environmental leadership” and other favored projects. The Governor and Legislature realized that without these benefits, which significantly shorten the normal CEQA litigation process, the projects would not be finally approved and under construction in time to benefit from necessary federal funding.

As for the generally applicable CEQA amendments, they will probably operate to reduce delay and expense in preparation of the record, but in the case of denying petitioner’s election to prepare the record, that benefit comes at a cost, i.e., the cost of preparing the record that will then be borne solely by the agency or real party with no opportunity to recoup it even if they prevail in the action.

All in all, SB 149 represents modest and incremental CEQA reform at best, which is perhaps the best we can realistically expect from the state legislature.

Questions? Please contact Arthur F. Coon of Miller Starr Regalia. Miller Starr Regalia has had a well-established reputation as a leading real estate law firm for more than fifty years. For nearly all that time, the firm also has written Miller & Starr, California Real Estate 4th, a 12-volume treatise on California real estate law. “The Book” is the most widely used and judicially recognized real estate treatise in California and is cited by practicing attorneys and courts throughout the state. The firm has expertise in all real property matters, including full-service litigation and dispute resolution services, transactions, acquisitions, dispositions, leasing, financing, common interest development, construction, management, eminent domain and inverse condemnation, title insurance, environmental law and land use. For more information, visit www.msrlegal.com.