Build More, Faster? Newsom Signs Infrastructure and Budget Legislation 

On July 10, 2023, California Governor Gavin Newsom signed into law a package of bills intended to accelerate critical infrastructure projects across the State aimed at achieving monumental climate and clean energy goals while also creating up to 400,000 jobs. With the goal of “building more, faster,” this infrastructure streamlining package will take effect immediately, and includes portions of Newsom’s previously proposed infrastructure package reforming the California Environmental Quality Act (CEQA)[1].

Governor Newsom’s signature concluded lengthy negotiations surrounding the Senate’s 2023-24 state budget – finalized on June 26, mere days before the constitutional deadline – and included a $310.8 billion spending plan protecting core programs while covering a $32 billion-plus deficit without tapping into reserves. Although Governor Newsom and legislative leaders agreed on the overarching goals of the budget prior to finalizing the budget, negotiations were extended due to contention stemming from Governor Newsom’s insistence on including the entirety of his previously proposed infrastructure package[1] and the Legislatures’ goal to separate CEQA reform from the state budget.

Despite the Senate Budget Committee initially rejecting Newsom’s prior package, the majority of Governor Newsom’s infrastructure trailer bills returned to the Legislative committees for consideration during budget negotiations and, ultimately, found a home in the Senate’s 2023-24 state budget. In total, 9 of the originally proposed 10 infrastructure bills[2] were approved by the state Legislature. The lone bill not approved by the Legislature would have provided permitting exemptions for certain groundwater diversion plans like the controversial Delta Conveyance Project.

This legislation represents an urgent push by Governor Newsom to take full advantage of an unprecedented $180 billion in state, local, and federal infrastructure funding over the next 10 years. By streamlining permitting procedures, cutting red tape, and allowing state agencies to use new project delivery methods, this legislation is aimed at maximizing taxpayer dollars and accelerating project timelines while ensuring appropriate environmental review and community engagement.

Most notably, the package expedites judicial review for projects that have already passed environmental evaluation by refining cumbersome elements of CEQA to reduce development costs, post project approval. The following statutes were signed into law effective immediately:[3]

• Senate Bill (SB) 149 – CEQA: Administrative and Judicial procedures; Record of Proceedings; and Judicial Streamlining
  • Provides authority to extend 2022 funding for CEQA Judicial Streamlining to process CEQA streamlining exemptions reviews pursuant to SB 7 approved in 2021.
  • Regulates the preparation of the administrative record necessary for all judicial CEQA challenges and would reduce the scope and schedule in order to reduce the litigation time.
  • Shortens the time for judicial challenges to 270 days and is intended to resolve CEQA lawsuits (including review by the Courts of Appeal and California Supreme Court) in less than 1 year, instead of the current trend of 4-10 years.
  • The Delta Conveyance Project is not eligible for judicial review.
• SB 146 – Progressive Design Build, Job Order Contracting, NEPA Assignment
  • Authorizes the Department of Water Resources (DWR) and Caltrans to use the progressive design-build procurement process for the construction of up to 8 public works projects per department for a project that is estimated to exceed $25,000,000 in total costs.
    • Does not apply to procurement by DWR for the design or construction of the Delta Conveyance Project.
  • Extends the authorization of the Secretary of Transportation’s assumption of the responsibilities of the federal National Environmental Policy Act of 1969 (NEPA) through December 31, 2033.
  • Authorizes Caltrans until December 31, 2033, to use job order contracting for certain transportation and public works projects, including, among others, those related to highway maintenance, installation of stormwater pollution control devices, and installation of facilities, systems, and traffic control devices needed to comply with the federal Americans with Disabilities Act of 1990.
• SB 145 – Caltrans Advanced Environmental Mitigation and Interstate-15 Wildlife Crossings
  • Requires Caltrans to construct wildlife crossings over Interstate-15 and acquire property that can be preserved and restored to offset the environmental impacts of the state highway system.
• SB 147 – Fully protected species: California Endangered Species Act: authorized take
  • Authorizes the California Department of Fish and Wildlife, until December 31, 2033, to permit projects that could affect protected species by authorizing the take of a fully protected species, assuming the plans meet certain requirements and do not cause the extinction of the species in question.

The hope is that the enactment of these bills will (i) speed up construction, (ii) expedite court review, (iii) streamline permitting, (iv) address the cumbersome CEQA process, and (v) maximize federal dollars. And, although the signing of this legislation is a step in the right direction to reduce CEQA-based delays and ensure California projects receive federal funds for critical infrastructure and clean technology projects, this legislation does not provide the wholesale CEQA reform many have been waiting for.

FOOTNOTES

[1] A detailed discussion of the infrastructure proposals can be found in a prior article here.

[2] Legislative leaders were successful in excluding the fact-tracked Delta tunnel project proposal from the final deal, but the following bills were part of the final budget deal:

[3] The Legislature approved AB 124 – Green Bank and Energy and AB 126 – Clean transportation; however, these bills were not made part of the final budget signed by Governor Newsom.