Climate, business groups clash over Gov. Newsom’s proposed environmental law reforms

Advocates of reforming a key environmental law say it could speed up housing and infrastructure projects, while environmentalists say there are risks.

The debate over reforming California’s trademark environmental review law has raged for decades. But if legislators approve a sweeping set of reforms Gov. Gavin Newsom is pitching as part of the upcoming fiscal year’s budget, that law and related policies could be streamlined by the end of the month.

Business groups say reforming the California Environmental Quality Act, or CEQA, will allow infrastructure and housing projects to advance more quickly, which in turn could help California move closer to its goals for more clean energy and affordable housing.

“We strongly support this plan that will speed up construction, expedite court review, smooth permitting and address the abuse of the CEQA process that has halted key projects,” a coalition of 88 business organizations — including the Los Angeles Chamber of Commerce, Inland Empire Economic Partnership and Orange County Business Council — wrote in a letter Monday, June 5, urging state legislators to approve Newsom’s plan.

But while environmental leaders agree there’s room for some CEQA reforms, more than 100 organizations wrote in a separate letter Monday that some of Newsom’s proposed changes pose risks to residents, wildlife, water and other resources. And they argue that implementing such big changes now, rather than using the traditional legislative process, doesn’t give Californians enough time to understand and weigh in on potential effects.

“This is not about being obstructionist,” said Barbara Barragan-Perea, with the organization Restore the Delta, during a Monday morning press conference.

“We’re really trying to lay the groundwork for adequate environmental protections that will improve environmental and public health.”

The urgency to change California’s 53-year-old environmental zoning law comes as both state Senate and Assembly policy committees hold informational hearings this week to discuss what to do with CEQA and other reforms Newsom proposed last month.

In short, CEQA requires public agencies and decision-makers to evaluate the environmental impact of any proposed project, including everything from housing and office buildings to bike lanes and water reservoirs. The law also requires agencies and others to determine if the project in question will have significant effects on environmental quality issues, disclose those effects to the public, and mitigate them as much as is feasible.

Supporters say the law has blocked or forced changes for hundreds of projects that would have worsened air, water and soil pollution and caused other environmental problems that disproportionately affect the state’s most vulnerable residents. But some business groups and local governments say CEQA creates too many barriers for projects to advance in cost effective and timely ways — if at all. And they argue red tape and lawsuits around CEQA have contributed to California’s housing and homelessness crises.

In February, shortly after CEQA was used to stop a high-profile student housing project for UC Berkeley, Newsom called the environmental review process “clearly broken” and pledged to work with legislators to make changes this year.

In mid-May, Newsom proposed 10 bills that would modify CEQA and related laws in several key ways. One of those proposals would give courts no more than nine months to weigh environmental challenges for some projects, an idea aimed at preventing opponents from using CEQA rules to stall needed water, transportation, clean energy and similar projects for years on end. The governor also pitched cutting back on paperwork required for each CEQA review, and carving out CEQA exemptions for more types of projects.

“We’re never going to advance our transition to clean energy in time to address our climate goals unless we are able to build these damn projects,” Newsom said. And with climate impacts worsening — and federal money for clean energy projects available for a limited time — the governor said there’s no time to waste.

However, no lawmaker introduced any of Newsom’s proposals in time to get them through the regular bill process, which required passage in the chamber it was introduced in by June 2. Both the state Senate and Assembly budget committees voted against Newsom’s plan before that date, saying they didn’t have enough time to fully vet the complicated proposals under deadlines for this legislative session.

The fastest path forward now is for legislators to introduce one or more of these reforms as trailer bills to the 2023-24 state budget, which must be passed by June 15. If that happens, the reforms could take effect with the new budget, on July 1, rather than go through the months-long hearing process that accompanies bills going the traditional legislative route.

But that traditional route offers multiple opportunities for public input and debate by lawmakers, noted Erin Woolley with the Sierra Club.

“These bills are substantial proposals. And they would benefit from the time, discussion and transparency that’s offered by the normal legislative process,” Woolley said, as she urged lawmakers to reject the trailer bill idea.

Legislators could also try using a so-called “gut and amend” tactic to advance the reforms this year. In that scenario they would gut a bill that’s made it through one chamber by the June 2 deadline, and instead write this bill over the top of it. Then, if the next house also approves the bill by this fall, the changes could take effect Jan. 1.

Lastly, lawmakers could introduce the reforms in the next legislative session. That means changes wouldn’t kick in until Jan. 1, 2025.

Most Californians support CEQA reforms, according to a statewide study released Monday night by the Public Policy Institute of California.

Statewide, Republicans are more supportive than Democrats, at 60% vs. 56%. And regionally, the idea is supported by 66% of residents in Los Angeles and 65% of people in the Inland Empire region, while residents in Orange and San Diego counties are evenly split on the idea. The PPIC poll also found that renters (66%) are far more likely than homeowners (53%) to support CEQA reform.

Nearly six in 10 Californians also approve of Newsom’s overall budget plan for the fiscal year that starts July 1, per the PPIC survey.

Lawmakers have until June 15 to approve the budget and related trailer bills, for Newsom to sign by June 30.