AEP Legislative Update June 2023

On Friday, May 19, in front of a solar farm in the Central Valley and flanked by labor union construction workers, Governor Newsom proclaimed that the state needs to do something big to streamline environmental reviews and accelerate infrastructure development in California.  Specifically, the Governor highlighted renewable energy, water, transportation, and advanced manufacturing as key sectors to address.  Notably, he did not mention streamlining housing, later stating that the legislature was doing so much work in that space that he wanted to let them continue to deliberate those solutions.  Importantly, the Governor emphasized that action was needed urgently to help California compete for new Federal dollars and therefore should be done quickly in June as part of the state's budget process.  Following the press conference, the Governor's Office released the 11 proposals contained in his Infrastructure Package that, among other things, include the following:

  1. Expanded NEPA Delegation for transportation projects
  2. Judicial Streamlining of CEQA lawsuits for more types of projects, including clean energy
  3. Accelerating the process for Environmental Mitigation at state agencies
  4. Administrative Record Reforms that no longer require the record to include all internal emails from the lead agency and speed up the record preparation process
  5. Recasting the Fully Protected Species Classification
  6. An executive order, which, among a few other things, creates a Strike Team of state agency leaders that will have 8 smaller working groups that will focus on streamlining infrastructure

The reaction to the Governor's proposals has been mixed.  The Legislature as a whole has expressed frustration with the process, wishing the Governor would have shared these ideas earlier or that he would have these proposals proceed through the traditional bill process.  Additionally, environmental groups have come out in strong opposition on both substantive and procedural grounds.  The business community, clean energy advocates, transit operators and others, however, have strongly supported the Governor's efforts.  While the Governor has proposed this package of changes as part of his budget, the Legislature can decide to consider these proposals as part of a traditional bill process.  As such, we may not know the resolution of these issues until the end of session in September.

During our lobby day in March, the AEP Legislative Review Committee heard repeatedly that there is growing demand for changes to CEQA to support more housing development, specifically in urban, infill environments.  In response, the Legislative Review Committee is working with some key staff in the Capitol to create a list of changes to CEQA statute and OPR Guidelines that could help streamline some housing production without sacrificing environmental consideration and public awareness.

Additionally, several significant CEQA-related bills continue to move through the legislative process.  SB 423 (Wiener) would recast and extend until 2036 the existing multifamily housing project streamlining process that was created by SB 35.  This bill would expand the ministerial process created by the law to also cover the Coastal Zone, which has drawn opposition from the California Coastal Commission.  Additionally, the bill is attempting to relax the labor standards required to utilize the exemption, which is leading to a robust negotiation between the Senator and powerful labor unions.  The bill has passed from the Senate, but must still pass from the Assembly Housing & Community Development and the Natural Resources Committees, as well as the whole Assembly Floor.

AB 1307 (Wicks) would provide that noise generated by occupants shall not be considered a significant impact on the environment for residential projects.  This bill is in response to the People's Park decision earlier this year which stated that UC Berkeley did not properly consider the effects of noise from young people at a proposed student housing project.  The bill passed the Assembly but must still pass the Senate Environmental Quality and Housing Committees as well as the full Senate Floor.

The Legislature has until July 15 to pass all bills from their policy committees, or they will be stalled for the year.  Then, the Legislature takes their summer recess until mid-August, when they will return to attempt to pass around 1,000 bills before the end of Session on September 14.