Building California: Deal that will speed up infrastructure projects signed into law

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Gov. Gavin Newsom today signed into law a package of bills that aim to speed up lawsuits that entangle large projects, such as solar farms and reservoirs, and relax protection of about three dozen wildlife species.

The bills included an urgency clause so the new laws take effect immediately.

Newsom and Senate and Assembly leaders unveiled the five bills at the end of June as they negotiated the state’s $310 billion 2023-24 budget. The deal ended a standoff over Newsom’s infrastructure package, which he revealed last month in an effort to streamline solar and wind facilities, reservoirs, bridges, railways and similar energy, water and transportation projects.

The Assembly last week approved four of the five bills without a single no vote, while 11 Republicans voted against the fifth bill. In the Senate, three of the bills sailed through without any no votes, although two — one about contracting and the other about wildlife protection — were more controversial, with 13 Republicans voting no on them.

Much of debate in the Senate centered on the bill that grants the state Department of Fish and Wildlife new authority to issue permits which will allow species that are designated “fully protected,” such as the greater sandhill crane and golden eagle, to be harmed by certain projects, such as repairs to water aqueducts and wind and solar installations.

Sen. Shannon Grove, a Republican from Bakersfield, voted against the wildlife bill, raising concerns that it would allow eagles to be endangered by wind turbines. 

“Sometimes I just can’t tolerate stupidity at all, at any level. And I’m calling it stupidity, because the bottom line is  I would hate to think that any of my colleagues were doing this on purpose,” Grove said. 

Sen. Nancy Skinner, a Democrat from Oakland, pushed back, noting that harm to a species would only be allowed “if it can be fully mitigated. If it cannot be fully mitigated, then the taking would not occur.” 

Another new law sets a time limit for legal challenges for certain water, transportation and energy projects under the landmark California Environmental Quality Act (CEQA), which can entangle projects in court for years. The Senate approved the bill without any no votes. 

The package already had been negotiated by Newsom and lawmakers behind closed doors.

“California is one step closer to building the projects that will power our homes with clean energy, ensure safe drinking water and modernize our transportation system,” Newsom said last week, adding that they will spur “a clean construction boom.”

The negotiations focused on how to speed up major projects that benefit the public while ensuring the environment is protected.

The new laws take aim at environmental policies that shape how state agencies approve large projects. For instance, the plan to build the Sites reservoir to add dams and store more Sacramento River water has been stalled for years as it undergoes environmental reviews and engineering planning.

The proposals “are really going to help move the needle on water infrastructure projects that are needed to address the impacts of climate change.”

Adam Quinonez, Association of California Water Agencies

The compromise that Newsom and lawmakers reached seems to have accomplished what compromises rarely do: Environmentalists who initially criticized Newsom’s package say they are satisfied with the changes, and businesses and water agencies, which have backed the package from the beginning, support the changes, too.

The laws are “really going to help move the needle on water infrastructure projects that are needed to address the impacts of climate change,” said Adam Quinonez, director of state legislative and regulatory relations at the Association of California Water Agencies. 

The changes won over the Natural Resources Defense Council, which had pages of concerns about the potential environmental harms caused by Newsom’s original proposals, such as provisions that might have expedited the deeply divisive Delta tunnel. 

“It’s good that it’s resolved, and that it’s better than it was and that the budget was able to move forward,” said Victoria Rome, the Natural Resource Defense Council’s director of California government affairs. “But I would say to accelerate clean energy infrastructure, we have a lot more to do as a state.” 

Although the wildlife law will ease some existing protections, Mike Lynes, Audubon California’s director of public policy, hopes that in practice it would actually increase enforcement. “Ultimately, it really will fall on the Department of Fish and Wildlife to make sure that these are good permits, and that the law is enforced,” he said.

So what’s in these laws? And what impact will they have on infrastructure projects and the environment?

What’s happening with CEQA? 

SB 149 takes aim at the often lengthy lawsuits brought under CEQA, which tasks public agencies with assessing possible harms of proposed development. Lawsuits by the public and advocacy groups can entangle projects like housing developments, highway interchanges, and solar farms for years. 

The law sets a 270-day limit for wrapping up these environmental challenges for water, energy, transportation and semiconductor projects. The projects must be certified by the governor by 2033 and meet certain criteria. These could potentially include water recycling plants, aqueduct repair, bikeways and railways, wildlife crossings, solar and wind farms, zero-emission vehicle infrastructure, among others.

In a nod to concerns that this would expedite the Delta tunnel, there’s now an explicit carveout saying that particular water project no longer qualifies for the faster timeline. 

There’s a big caveat, though: The 270-day limit only applies “to the extent feasible” — a decision that judges would make. 

So will the time limit actually speed up cases? That remains to be seen, said David Pettit, senior attorney at the Natural Resources Defense Council. “I think it sends a signal to the judiciary that the Legislature wants these cases hustled up,” Pettit said. 

But in practice, he said, there are other major time sinks for the legal process beyond the length of litigation, such as preparing the paperwork behind an agency’s environmental assessment to create what’s called the administrative record. This is critical ammunition in legal challenges. 

“It’s good that it’s resolved, and that it’s better than it was and that the budget was able to move forward.”

Victoria Rome, Natural Resources Defense Council

Newsom’s original version of the bill sparked a battle over which emails should be disclosed in the administrative record by excluding any internal communications that didn’t make it to the final decision makers. Assembly consultants warned this could allow state agencies to pick and choose which documents to disclose. 

Now, under the latest iteration, all emails related to the project must continue to be revealed in the administrative record, and only emails over minutia like scheduling can be excluded. 

“The bottom line is most emails that are actually pertinent to the project — not like, ‘How about those Dodgers?’ — they will go into the record,” Pettit said. “That is important, because sometimes people will talk candidly over email in a way that others might not.” 

What are the effects on wildlife?

SB 147 allows projects to receive permits to kill certain wildlife species that are classified as “fully protected.” Thirty-seven species — including the golden eagle, greater sandhill crane,  bighorn sheep, several coastal marsh birds, 10 fish and several reptiles and amphibians — are listed as fully protected.

Only certain types of projects that are considered beneficial to the public could get the new permits, including repairing aqueducts and other water infrastructure, building wind and solar installations, and transportation projects, including wildlife crossings, that don’t increase traffic. 

State and federal Endangered Species Acts will still protect rare wildlife and be unaffected by the bill. But it would alter another, stronger protection under state law: “Fully protected” species began in the 1960s as part of an early effort to protect California’s animals, such as the California condor and southern sea otter. Of those, all but 10 are also listed under the California Endangered Species Act. 

Unlike the endangered species acts, which allow wildlife agencies to grant permission to “take” or harm a species, so-called “fully protected” species cannot be killed except in rare cases, such as scientific research. 

Under the new law, that will change.

In a Senate committee hearing last week, Grove asked if the wildlife agency would be able to issue take permits to harm eagles. Fish and Wildlife Director Chuck Bonham responded yes, that “the opportunity would exist.” But he added that the new permit process would allow his agency to require developers “to avoid the impact to begin with.”

Developers will need to show that their plans to compensate for the harm to these species actually improves conservation — a more stringent standard than required by the California Endangered Species Act.   

This addresses an enforcement gap: Regulators have little authority to make developers work with them to ensure projects take steps to avoid harming species. “There’s no hook for the regulatory agencies to demand avoidance and mitigation measures, because they’re unwilling to enforce the laws as written,” Audubon’s Lynes said.  

Last month, Bonham told senators that project developers are left with little recourse if their projects could disrupt these animals. As a result, “every project proponent faces an unnecessary risk for project planning, financing and construction.” 

Three species also will lose their status as fully protected: the American peregrine falcon, brown pelican and a fish called the thicktail chub. The falcon and pelican had been listed as endangered species but are now considered recovered, largely due to the 1972 ban on the pesticide DDT; the chub is considered extinct.

“We certainly don’t want to be reducing protections for pelicans and peregrine falcons, but it’s also understandable to be looking to transition them off the list,” Lynes said.

The latest version overhauls Newsom’s original proposal to scrap the “fully protected” designation entirely, which environmentalists worried would significantly weaken protections for these species. Delta communities were especially concerned, seeing it as one of several moves to push the Delta tunnel project forward by targeting the greater sandhill crane, which winters in the region. 

The new law explicitly says that a Delta tunnel project would not qualify for permits to take the crane or any other fully protected species. 

Will this actually streamline projects? 

The multi-billion dollar question is will these regulations actually help California build big things faster.  

The Newsom administration said they are critical to bolster California’s chances when competing against other states for $28 billion in discretionary funds from the federal Infrastructure Investment and Jobs Act and the Inflation Reduction Act. 

“It’s going to be extremely difficult if not impossible to draw a straight line that if you pass judicial streamlining, we get the federal dollars here in California,” said Adam Regele, a vice president at the California Chamber of Commerce. “But what it does do is it makes us more competitive.” 

The Natural Resources Defense Council’s Pettit is skeptical that this will in fact streamline lengthy and litigious approvals under CEQA. He pointed to the loophole establishing a 9-month time limit for court challenges only “to the extent feasible.” 

“How do we know that this package will actually speed things up? Because I’m not seeing it,” Pettit said. 

Newsom’s deputy communications director, Alex Stack, said he couldn’t name any specific projects that would benefit or ones that had been specifically denied federal funding because of California’s existing laws. 

But he said he expects the bills to cut the timeline for major builds in California by up to almost a third. That includes for transit projects, wind and solar installations, semiconductor plants and water storage projects like Sites reservoir. 

“It’s climate denial to preserve the status quo — to delay these projects is to delay climate action, clean energy, safe drinking water, and put millions more Californians at risk of devastating climate impacts,” Stack told CalMatters last week.