California Streamlines CEQA Process for Infrastructure Projects

On July 10, 2023, Governor Newsom signed into law a package of bills aimed at supporting the development of infrastructure projects, including clean energy projects needed to meet California’s aggressive climate goals. At the core of the package was SB 149, which amends the California Environmental Quality Act (“CEQA”) to expedite the environmental review process for infrastructure projects.

SB 149 defines “infrastructure projects” as (1) energy infrastructure projects, including energy storage systems of 20 megawatts or more, (2) semiconductor or microelectronic infrastructure projects, (3) transportation-related projects, including rail projects and infrastructure for zero-emission vehicles, and (4) water-related projects, including water storage and desalination projects. To be eligible for the abbreviated review process, an applicant must submit its proposed project to the Governor for certification that it is eligible under one of the above categories. The Governor must then submit the proposed certification to the Joint Legislative Budget Committee, which must issue its concurrence or nonconcurrence within 30 days or the Governor’s certification is deemed approved.

The bill’s benefits for infrastructure projects, which are codified in a new Chapter 7 of Division 13 of the California Public Resources Code (Section 21189.80 et seq.), primarily relate to CEQA challenges in court. They include:

• Expedited CEQA Challenge Process (Section 21189.85): Any CEQA challenges to certified infrastructure projects must be resolved, to the extent feasible, within 270 days. The California Judicial Council is required to adopt a rule of court implementing this provision by the end of 2023.
• Expedited Record Preparation Process (Section 21189.86): The lead agency for the project must prepare the record of any CEQA litigation proceedings concurrently with the administrative process, and must make all records, including the draft environmental impact report, available to the public in accessible electronic format. The lead agency must encourage that any written comments be submitted electronically and must make any comments received in other formats available electronically within seven days. The lead agency must certify the final record of proceedings within five days after it approves the project.

To receive the bill’s streamlining benefits, the applicant must agree to pay court costs and the costs of the expedited record preparation process for any CEQA challenges to the proposed project. Applicants also must prepare an analysis of greenhouse gas emissions resulting from the proposed project (except for water projects), and the Governor may not certify a project if it would result in any net additional greenhouse gas emissions. 

California’s efforts to streamline the CEQA environmental review process mirror similar efforts at the federal level to expedite environmental reviews under the National Environmental Policy Act (“NEPA”). On May 31, 2023, Congress passed the Fiscal Responsibility Act of 2023, which included amendments to NEPA to shorten and simplify the review process. The Act imposed a two-year time limit on the development of environmental impact statements (“EIS”), which is significantly shorter than the historical average of 4.5 years. The Act also added page limits for certain NEPA documents, adopted certain categorical exclusions that had been developed by federal agencies, and codified the practice of using programmatic NEPA documents for multiple projects with similar impacts. 

Most recently, the White House Council on Environmental Quality (“CEQ”) proposed a rule that would allow multiple federal agencies to develop joint categorical exclusions to NEPA’s EIS requirement for actions that do not normally have significant impacts on the environment. To accelerate the deployment of clean energy and water infrastructure projects, the CEQ rule would further clarify that projects that only have significant, long-lasting positive impacts do not require an EIS. The CEQ rule would also roll back a 2020 Trump administration rule that made it more difficult to submit public comments, and it would require federal agencies to consider environmental justice as part of the NEPA review process. The public comment period for the CEQ rule will end on September 29, 2023.

This memorandum is a summary for general information and discussion only and may be considered an advertisement for certain purposes. It is not a full analysis of the matters presented, may not be relied upon as legal advice, and does not purport to represent the views of our clients or the Firm. John Rousakis, an O'Melveny partner licensed to practice law in New York and Chris Bowman, an O'Melveny associate licensed to practice law in California, contributed to the content of this newsletter. The views expressed in this newsletter are the views of the authors except as otherwise noted.

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