This year, over fifty bills were introduced in the Legislature that directly addressed a CEQA issue. Many died in committee, or failed to make it out of their respective houses. The vast majority of those that advanced sought project-specific exemptions. For instance, there were multiple bills to exempt wildfire fuel reduction projects from CEQA review. There were also multiple bills aimed at increasing the scope of housing project exemptions, especially affordable housing and infill. But the one bill that has stuck out as potentially the most consequential has been Senate Bill 607.
As originally proposed, some of SB-607’s more notable changes included: (1) a change to the legal standard for when a negative declaration (or mitigated negative declaration) is appropriate; (2) streamlined review for a new “near miss” category of projects that fail to qualify for a categorical exemption by a single condition; and (3) limited environmental review of projects when a court finds the project was improperly approved under an exemption. SB-607 also placed new limits on the contents of the administrative record in CEQA lawsuits (getting rid of unnecessary “tangential” communications), exempted certain rezoning projects, made substantive changes to the infill exemption, and required the Office of Land Use and Climate Innovation (formerly Office of Planning and Research) to develop thresholds of significance for certain impacts.
All told, the bill proposed reforms that would significantly change agencies’ and project proponents’ approach to CEQA analysis, as well as the amount of—and likelihood of success in—CEQA litigation. The Senate Committee on Environmental Quality analysis dubbed the bill with the Academy Award-winning film title, “Everything Everywhere All at Once,” due to the sheer breadth of the changes proposed.
On May 14, Governor Newsom released his May Revision to the proposed 2025-2026 Budget, a yearly update to the proposed budget based on the most current information. The Governor signaled support for SB-607 and proposed that the bill be included as part of the Budget. As a result, the bill came out of Appropriations with all substantive language removed. The bill, as amended, replaced the myriad changes with simple intent language. The language reads, in part:
Too often, [CEQA] has resulted in delays to essential projects that are key to solving the state’s housing crisis and to strategic development that is necessary to maintain California’s position as the fourth largest economy in the world. … It is the intent of the Legislature to make necessary statutory changes to the California Environmental Quality Act to ensure the state meets its infrastructure needs and is more affordable for all Californians. … Specifically, the Legislature intends to enact legislation as part of the 2025 state budget process that expedites projects such as those that provide housing, clean energy jobs, and critical transportation and lead to economic development for hardworking California families. … It is the intent of the Legislature to ensure that critical projects are not delayed or impeded by the numerous outdated requirements in the California Environmental Quality Act, without compromising environmental protections.
Based on this language, the floor analysis of the amendment, and a joint statement from Senate leader Mike McGuire and the author, Senator Wiener, it appears that the Legislature intends to enact some of the bill’s provisions as a trailer to the Budget. It is not clear what portion of the proposed reforms will be passed with the Budget, and the negotiation of trailer bills largely happens away from the public eye.
So what happens next? The State Constitution requires the Budget to be finalized by June 15. Then, the Governor has twelve business days to review, line-item veto, and sign the bill. As we have seen in recent years, negotiations will continue on the Budget’s final language, including trailer bills, while the Legislature’s Budget waits on the Governor’s desk. Once a deal is reached, the Governor will sign the Budget, and the Budget and trailer bills will be printed. Given that, we may not know what CEQA changes were included with the Budget until early to mid-July. Only then will SB-607’s true impact be known.