The Question

Should California create new environmental review, permitting, and court challenge procedures for certain projects and require those reviews to be completed within specified timelines?

The Situation

Before many projects can be built in California—including housing developments, schools, transportation projects, water systems, health facilities, and energy projects—government agencies must review how those projects could affect the environment. This review process is primarily governed by the California Environmental Quality Act, known as CEQA.

Under CEQA, agencies evaluate potential environmental and community impacts before projects are approved. These impacts can include effects on air quality, drinking water, traffic congestion, noise levels, wildfire risk, public health, wildlife habitat, and cultural or tribal resources. For some projects, agencies must prepare a detailed Environmental Impact Report (EIR).

After a project is approved, people may challenge the decision in court if they believe environmental laws were not properly followed. These reviews and legal challenges can sometimes take years to complete. Supporters argue that lengthy reviews, permitting delays, and litigation increase the cost of housing and infrastructure. Opponents argue that environmental review and public participation help protect communities, public health, and natural resources.

The Proposal

Proposition 45 creates a new optional review process for projects it defines as “essential.” Eligible projects include housing, water systems, clean energy facilities, schools, broadband infrastructure, health facilities, wildfire prevention projects, fire, police, and sheriff’s stations, and many transportation projects. Developers could choose either the new procedures or existing procedures. Prop 45 would:

• Establish new timelines for environmental review and permit decisions.
• Limit the number of project alternatives that must be analyzed during environmental review.
• Require agencies to apply the environmental standards in effect when a project application is submitted, rather than those adopted later.
• Limit the information courts may consider when reviewing certain challenges.
• Restrict courts’ ability to stop an entire project when only part of the environmental review is found to be deficient.
• Create deadlines for courts to resolve legal challenges.

Fiscal Effects

According to the Legislative Analyst’s Office, state and local governments would likely incur initial implementation costs in the high tens of millions of dollars annually, potentially exceeding $100 million. Some of these costs would be offset by fees paid by project applicants and people filing lawsuits.

Over the longer term, the fiscal effects are uncertain. Faster project approvals could reduce government costs and increase tax revenue if more projects are built. However, governments could also face costs if projects create negative environmental impacts that otherwise might have been avoided or reduced.

Supporters Say

• Prop 45 would reduce delays in building housing, water systems, schools, hospitals, clean energy projects, and wildfire-prevention projects.
• The measure would maintain environmental review laws while creating more predictable timelines.
• Taxpayers could benefit if public projects are completed more quickly and with fewer delays.
• Faster approvals and court decisions could lower project costs and help address California’s high cost of living.

Opponents Say

• Prop 45 would reduce environmental review and limit public input on projects built in local communities.
• The measure could make it harder to identify or address project impacts related to air pollution, drinking water quality, wildfire risk, and other public health exposures.
• Environmental review is only one factor affecting project development costs. Prop 45 does not require housing, utility, or other consumer costs to be reduced.