How enviros lost CEQA
SEE YA, CEQA: Environmental groups lost one of California's landmark environmental laws slowly, piece by piece, then almost all at once.
State lawmakers at press time on Monday were poised to pass a bill exempting a wide array of projects from the California Environmental Quality Act, including wildfire fuel breaks, water system upgrades, portions of the high-speed rail project, and advanced manufacturing facilities like semiconductor and EV plants.
Environmental groups are apoplectic. 'They're conditioning the funding of essential services like health care, education, to this huge policy change that would dramatically roll back environmental review for some of the most polluting facilities in California,' said Asha Sharma, the state policy director of the Leadership Counsel for Justice and Accountability.
It's the latest — and one of the most consequential — turns in Sacramento's years-long trend of poking holes in CEQA, a foundational 1970s-era law requiring construction projects to not only analyze their environmental impacts, as federal law also requires, but address those impacts. Environmentalists defend the law as essential and pro-growth advocates deride it as an obstruction to critical housing, infrastructure and industrial development.
The measure, AB 131, triggered a last-ditch lobbying frenzy from environmental and labor groups over the weekend after its introduction on Friday. They were still lobbying as late as Monday morning, with the Teamsters, United Auto Workers and United Steelworkers linking the measure to the Trump administration's rollback of the National Environmental Policy Act and warning it 'would give carte blanche to companies like Tesla to expand without any environmental oversight.'
But they had little leverage: Gov. Gavin Newsom has tied his signature on the state's $320 billion budget to passage of the bill, which he could sign as soon as Monday evening. And one of the biggest labor players, the State Building and Construction Trades Council, stayed out of the fight, having secured the removal of another provision last week that would have likely lowered wages for unionized construction workers.
The maneuver showed even more muscle than Newsom's last big CEQA push, when he convinced lawmakers in a 2023 trailer bill to shorten the time period for CEQA-related lawsuits against key infrastructure projects. 'There's less transparency and more at stake every year,' said longtime environmental lobbyist Jennifer Fearing. She said she hadn't yet fully processed how it might impact other environmental priorities this session, including extension of the state's emissions trading program for greenhouse gases and a proposal to cap prices for transportation emissions.
The short turnaround predictably caused an outcry among environmental advocates and some lawmakers, including Sen. John Laird, who had voted against an earlier version of the bill, Sen. Scott Wiener's SB 607, and progressive Assemblymembers.
But Wiener defended the measure as a compromise, saying he had removed some of his more ambitious CEQA reform ideas from the bill because of pushback from environmental groups.
Sen. Chris Cabaldon went further, suggesting that hammering out the policy through the legislative process would have led to so many trade-offs it wouldn't have yielded the outcome Newsom and pro-building lawmakers wanted.
'I'm not convinced that we could produce a workable, comprehensive bill that would get to the core of what the challenges are,' Cabaldon said.
Case in point: Environmental groups were gearing up for a hard push in the Senate against AB 306, a measure by Assemblymember Nick Schultz to temporarily freeze most building code updates. But the language got folded into one of the housing trailer bills poised to pass on Monday.
Industry and pro-housing groups like the California Chamber of Commerce and California YIMBY are cheering the win.
'The fact that people are so vociferously opposed to this — all of these common-sense solutions to problems that we've all known about for decades — is just more proof that we need leadership on this,' said Louis Mirante, senior vice president of public policy with the Bay Area Council, which represents Intel and Apple, among others.
Opponents were left licking their wounds — and hoping for a second chance later in the legislative session.
In particular, labor groups representing auto workers, machinists and scientists and environmental groups coalesced in opposition to a provision that would remove the CEQA review for advanced manufacturing facilities like semiconductor and EV plants, which they said can leach toxic waste into neighborhoods.
The argument seems to have stuck.
Wiener said on Monday afternoon the Senate is 'committed' to working on provisions related to the advanced manufacturing, tribal consultation and endangered species protections in potential follow-up legislation. — CvK
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SEE YOU IN COURT: The fate of California's nation-leading emissions disclosure law will get put to the test Tuesday in federal court in Los Angeles, when the U.S. Chamber of Commerce, CalChamber and other business groups will argue that the program is unconstitutional and should be struck down.
The arguments tomorrow against SB 253 and SB 261, which compel all large companies operating in California to disclose their carbon footprint and climate-related financial risks starting next year, will center on the business groups' claim that the laws violate the First Amendment and follow months of discovery. Remember: The court already sided with California in the plaintiffs' two other arguments, that the laws violated the Supremacy Clause and limitations on extraterritorial regulation.
The hearing comes on the same day that the Air Resources Board is due out with rules to implement the laws, which won't happen. Chair Liane Randolph told CC last week that she's aiming to finalize the rules by the end of this year. — JW
WINDS ARE BLOWING: Congress is in the throes of a fight over wind and solar incentives as Republicans tee up a vote on President Donald Trump's megabill.
A handful of Senate Republicans are staging a last-minute rally to preserve wind and solar incentives from Democrats' 2022 climate law, report POLITICO's Josh Siegel, Caitlin Oprysko and Meredith Lee Hill.
Conservatives thought they secured a major win ahead of floor action on their megabill when Trump successfully urged Senate Majority Leader John Thune to crack down on tax credits for wind and solar energy from the Inflation Reduction Act.
Now, a diverse group of Republicans — led by conservative Sen. Joni Ernst (R-Iowa) and including Sens. Lisa Murkowski (R-Alaska) and Chuck Grassley (R-Iowa) — are offering an amendment to undo the harsher language that could get a vote during Monday's Senate 'vote-a-rama.' Sens. Thom Tillis (R-N.C.), John Curtis (R-Utah) and Mike Rounds (R-S.D.) also suggested Monday they were sympathetic to the push to ease the gutting of wind and solar credits.
The amendment could set up a clash of Republicans with energy projects planned for their states with staunch conservatives and Trump administration officials, who vehemently oppose continuing subsidies for intermittent wind and solar resources that they claim are unreliable.
INSURANCE INSULT: Former Insurance Commissioner and current Rep. John Garamendi had some words for Insurance Commissioner Ricardo Lara's handling of the Los Angeles wildfires at Consumer Watchdog's 40th anniversary gala on Saturday in Beverly Hills.
'The current insurance commissioner doesn't have the courage to stand up to the insurance companies and hold them accountable,' he said.
'I am disappointed, the consumers of California are disappointed. The commissioner has by law, by Prop 103 and the regulations, the power to hold insurance companies accountable to pay fully on their claims ... and make sure they don't get a rate increase when they're doing badly on paying their claims.'
In response, Lara's office sent us prepared prepared remarks he made in May at an insurance conference held by the Capitol Weekly. In them, Lara hit back, naming Garamendi as one of the members of Congress who was unable to pass the federal funds for home hardening he had requested.
'I'm the clean up guy,' Lara said. 'Past Commissioners left a mess and they have the gall to tell me I missed a spot.' — DK, CvK
SPEAKING OF FIRE: Oregon lawmakers last week voted to repeal the wildfire hazard maps that they ordered in 2022, Adam Aton writes for POLITICO's E&E News.
The repeal, which is now awaiting Gov. Tina Kotek's signature, means property owners in the riskiest areas — about 5 percent of the state's private properties — won't have to meet stronger building codes and defensible space requirements.
The maps had been a political hot potato since their release, getting tangled up in the public's mind with insurance hikes and nonrenewals. Democrats tried to salvage the program — restarting a second mapping effort with more public meetings, and passing a law to explicitly bar insurance companies from using the maps — before Kotek finally froze it in February.
'The rollout of the maps and the perception of the maps on the ground really undermined their effectiveness,' Democratic state Rep. Pam Marsh, one of the maps' architects, said Tuesday before voting to nix them.
The Legislature's lone professional firefighter, Democratic state Rep. Dacia Grayber, was the sole dissenting vote.
'I know that politically this is the right thing to do for a lot of us,' Grayber, a firefighter with Tualatin Valley Fire and Rescue, said on the state House floor before the 50-1 vote. 'We have a tool here that we're walking away from,' she said, 'that could potentially be a game changer.'
— Protecting Marin County's Stinson Beach from sea-level rise could cost the equivalent of $2.4 million apiece for each of its approximately 500 residents.
— Immigration enforcement raids in the agricultural area north of Los Angeles have left fruits and vegetables unharvested.
— The Santa Rosa Press-Democrat goes inside the country's next big dam removal along the Eel River.
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Homeowners in Berkeley sued the University of California over its plans to increase enrollment at the state's flagship university and the traffic and noise that might result. Over time, CEQA negotiations became embedded in California's development regime, known and used by all the major players. Los Angeles Mayor Karen Bass once recalled that as a community organizer in South L.A. in the 1990s she used CEQA to try to stop liquor stores from opening. A company owned by billionaire developer Rick Caruso, Bass' opponent in the most recent mayoral election and normally a CEQA critic, this year filed a CEQA lawsuit challenging a major redevelopment of a television studio near a Caruso shopping mall. For housing, the primary interest group invested in CEQA at the state level has been labor organizations representing construction workers. 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In a rare move, he insisted on tying the approval of the state's entire spending plan for this year to the passage of CEQA reforms. That meant legislators who otherwise would be opposed could only vote no if they were willing to torpedo the budget. What emerged was a clean CEQA exemption for homebuilders in urban multifamily areas. Union-level wages for construction workers only are required for high-rise or low-income buildings, both of which often are paid now because of specialized labor required for taller buildings and other state and local rules for affordable construction. CEQA doesn't affect single-family home construction. How much this is going to matter immediately for homebuilding isn't clear. Studies are mixed on CEQA's effects. One by UC Berkeley law professors found that fewer than 3% of housing projects in many big cities across the state over a three-year period faced any CEQA litigation. 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This week, Gov. Gavin Newsom touched one of the third rails of California politics. He hopes the result sends a shock through the state's homebuilding industry. Newsom strong armed the state Legislature into passing what experts believe are the most significant reforms to the California Environmental Quality Act, or CEQA, since the law was signed in 1970. The changes waive CEQA for just about any proposed low- or mid-rise development in urban neighborhoods zoned for multifamily housing. No more thousand-page studies of soils, the shadows the buildings may cast and traffic they may bring. No more risk of CEQA lawsuits from angry neighbors. Wiping away these rules shows that no matter how challenging the politics, the state will remove the barriers it has built over decades that have ended up stifling housing construction and suffocating Californians' ability to live affordably, the governor said when signing the legislation Monday evening. 'The world we invented has been competing against us,' Newsom said. 'We have got to perform.' Californians won't have to wait long for the effects of the reforms. They took effect with the stroke of the governor's pen. At least in the short term, the result may be less of an immediate impact on construction and more of a revolution in how development in California cities gets done. Numerous hurdles both within and outside of the control of local and state governments — interest rates, availability of labor, zoning, material prices and tariffs among them — still will determine if housing is built. What's changed is that the key point of leverage outside groups have wielded, for good and for ill, over housing construction in California communities is gone. It can be hard to understand how CEQA became, in the words of one critic, 'the law that swallowed California.' At base, all CEQA says is that proponents of a project must disclose and, if possible, lessen its environmental effects before being approved. Yet the process CEQA kicks off can take years as developers and local governments complete reams of studies, opponents sue them as inadequate and judges send everyone back to start all over again. Time is money, and project opponents soon realized that they could use this uncertainty to their advantage. Sometimes, if their complaints fell on deaf ears at City Hall, threatening a CEQA challenge was the only way to get themselves heard and avoid harmful outcomes. But in other circumstances, the law became a powerful cudgel wielded to influence concerns that at best had a tangential relationship to the environment. Examples are legion. The owner of a gas station in San Jose sued a nearby rival gas station that wanted to add a few more pumps. Pro-life advocates sued a proposed Planned Parenthood clinic in South San Francisco. Homeowners in Berkeley sued the University of California over its plans to increase enrollment at the state's flagship university and the traffic and noise that might result. Over time, CEQA negotiations became embedded in California's development regime, known and used by all the major players. Los Angeles Mayor Karen Bass once recalled that as a community organizer in South L.A. in the 1990s she used CEQA to try to stop liquor stores from opening. A company owned by billionaire developer Rick Caruso, Bass' opponent in the most recent mayoral election and normally a CEQA critic, this year filed a CEQA lawsuit challenging a major redevelopment of a television studio near a Caruso shopping mall. For housing, the primary interest group invested in CEQA at the state level has been labor organizations representing construction workers. Their leaders have argued that if legislators grant CEQA relief to developers, which boosts their bottom lines, then workers should share in the spoils through better pay and benefits. This union opposition was enough in 2016 to prevent a proposal from then-Gov. Jerry Brown to limit CEQA challenges to urban housing development from even getting a vote in a legislative committee. A year later, a version of Brown's bill passed but only because developers who wanted to take advantage were required to pay union-level wages to workers. Just about every year since, lawmakers have engaged in this dance with labor groups. In 2022, the California Conference of Carpenters defected from the State Building and Construction Trades Council and supported a less-strict version of labor standards, which lawmakers ushered into multiple bills. But housing construction hasn't followed. The number of projects that have been issued permits are millions less than what Newsom promised to build on the campaign trail in 2017. Californians continue to pay record prices to house themselves, and those fleeing the state often cite the cost of living as the reason. Newsom and legislators decided they needed to do more. 'We don't want to sit here and ram our head against the wall on the politics and then have nothing to show for it,' said Assemblymember Buffy Wicks (D-Oakland) at Monday's signing ceremony. Wicks authored legislation this year that waived CEQA rules for urban housing development without any labor requirements and was working it through the regular process. In May, Newsom grabbed Wicks' bill and additional CEQA reform legislation and said he wanted them to pass as part of the budget. Doing so would fast-track the bills into law without the normal whittling down that happens in committee hearings. As budget negotiations heated up, Newsom doubled down. In a rare move, he insisted on tying the approval of the state's entire spending plan for this year to the passage of CEQA reforms. That meant legislators who otherwise would be opposed could only vote no if they were willing to torpedo the budget. What emerged was a clean CEQA exemption for homebuilders in urban multifamily areas. Union-level wages for construction workers only are required for high-rise or low-income buildings, both of which often are paid now because of specialized labor required for taller buildings and other state and local rules for affordable construction. CEQA doesn't affect single-family home construction. How much this is going to matter immediately for homebuilding isn't clear. Studies are mixed on CEQA's effects. One by UC Berkeley law professors found that fewer than 3% of housing projects in many big cities across the state over a three-year period faced any CEQA litigation. Another found tens of thousands of housing units challenged under CEQA in just one year. Still, more advocates of reform argue that it's impossible to quantify the chilling effect that the threat of CEQA lawsuits have on development in California and how much the law has dominated the debate. 'This signals a seismic shift in Democratic politics in California from NIMBYism to abundance,' said Mott Smith, board chair of the Council of Infill Builders, a real estate trade group that advocates for urban housing. 'You can touch this mythical third rail and live to see another day.' Those who live across the street from a proposed five-story apartment building and oppose the housing will have to find way other than a 55-year-old environmental law to stop it.
