The California Environmental Quality Act (CEQA) requires a lead agency, as defined, to prepare, or cause to be prepared, and certify the completion of an environmental impact report on a project that it proposes to carry out or approve that may have a significant effect on the environment or to adopt a negative declaration if it finds that the project will not have that effect. CEQA also requires a lead agency to prepare a mitigated negative declaration for a project that may have a significant effect on the environment if revisions in the project would avoid or mitigate that effect and there is no substantial evidence that the project, as revised, would have a significant effect on the environment.

The California Environmental Quality Act (CEQA) requires a lead agency, as defined, to prepare, or cause to be prepared, and certify the completion of an environmental impact report on a project that it proposes to carry out or approve that may have a significant effect on the environment or to adopt a negative declaration if it finds that the project will not have that effect. CEQA also requires a lead agency to prepare a mitigated negative declaration for a project that may have a significant effect on the environment if revisions in the project would avoid or mitigate that effect and there is no substantial evidence that the project, as revised, would have a significant effect on the environment.

CEQA requires the Office of Land Use and Climate Innovation, formerly named the Office of Planning and Research, to prepare and develop, and the Secretary of the Natural Resources Agency to certify and adopt, guidelines for the implementation of CEQA. CEQA requires the guidelines to specifically include criteria for public agencies to follow in determining whether or not a proposed project may have a significant effect on the environment.

This bill would require, on or before July 1, 2027, the Office of Land Use and Climate Innovation to prepare and develop, and the Secretary of the Natural Resources Agency to certify and adopt, guidelines in Appendix O of the CEQA guidelines to establish best practices for public agencies to follow in determining whether or not a proposed project may have a significant effect on the environment when completing Appendix G of the CEQA guidelines. The bill would require the best practices to consider, and include identifiable thresholds of significance based on, specified state and federal environmental laws. The bill would authorize the office, in developing those guidelines, to consult with local, regional, state, and federal agencies that have authority and expertise on those subjects.

SENATE COMMITTEE ON APPROPRIATIONS

Senator Anna Caballero, Chair

2025 - 2026 Regular Session

SB 231 (Seyarto) - California Environmental Quality Act: the Office of Land Use and Climate Innovation: technical advisory

Bill Summary:

This bill would require the Office of Land Use and Climate Innovation (LCI) to develop a technical advisory on thresholds of significance for greenhouse gas (GHG) and noise pollution effects under the California Environmental Quality Act (CEQA).

Fiscal Impact:

• LCI estimates one-time costs of about $834,000 spread over two years (General Fund or special fund) for two limited-term positions to conduct research and draft thresholds of significance related to GHG and noise impacts.

Background:

CEQA is designed to (a) make government agencies and the public aware of the environmental impacts of a proposed project, (b) ensure the public can take part in the review process, and (c) identify and implement measures to mitigate or eliminate any negative impact the project may have on the environment. CEQA is enforced by civil lawsuits that can challenge any project’s environmental review.

Under CEQA, projects (unless they have a specific exemption) must undergo environmental analysis. This process starts with an initial study which determines what level of further environmental review is needed for a given project. If a project has no significant effects on the environment, or if those effects can be fully mitigated, the project can move forward with a negative declaration (ND) or mitigated negative declaration (MND). If the initial study finds the project has potential significant effects on the environment, then a full EIR is conducted. An EIR provides a thorough environmental review of a proposed project, analyzing the significant direct and indirect environmental impacts of a proposed project. The EIR also includes proposed mitigation measures for any significant effects that it identifies and considers alternatives to the proposed project.

One of the primary purposes of an EIR is to identify a project’s significant environmental effects and propose mitigation measures for those significant impacts. Significant impacts could affect the physical conditions “existing within the areas which will be affected by the proposed project, including as a substantial, or potentially substantial, adverse change in any of the physical conditions within the area affected by the project including land, air, water, minerals, flora, fauna, ambient noise, and objects of historic or aesthetic significance.”

Ultimately, the lead agency is responsible for determining whether an environmental impact is significant or not. The lead agency also has the authority to set thresholds of significance to use in an EIR, and the lead agency’s threshold of significance should be based to the extent possible on scientific and factual data.

CEQA Guidelines (Title 14, Division 6, Chapter 3 of the California Code of Regulations) are regulations governing implementation of the California Environmental Quality Act. The CEQA Guidelines reflect the requirements set forth in the Public Resources Code, as well as court decisions interpreting the statute. In addition to the guidelines, LCI has also developed technical advisory documents that help guide lead agencies in implementing CEQA. These advisories include a technical advisory on evaluating transportation impacts in CEQA with vehicle miles traveled (VMTs), which includes a recommendation for a VMT threshold that would determine whether or not a project has significant transportation impacts.

Proposed Law:

This bill would require LCI to consult with regional, local, state, and federal agencies to develop a technical advisory on thresholds of significance for greenhouse gas and noise pollution effects on the environment to assist local agencies. The bill would require the technical advisory to provide suggested thresholds of significance for all areas of the state, as specified, and would provide that lead agencies may elect to adopt these suggested thresholds of significance. The bill would also require LCI to post the technical advisory on its internet website.

Related Legislation:

SB 607 (Wiener, 2025) would require LCI to develop, by July 1, 2026, objective and measurable thresholds for an effect upon the environment to be considered significant, among other things.

SB 232 (Seyarto, 2025) would require LCI to submit a report to the Legislature, by January 1, 2027, to evaluate how allowing projects to move forward under the CEQA Guidelines in place at the time the project submitted its notice of preparation could impact speed, efficiency, and environmental considerations.

SB 768 (Caballero, Chapter 773, Statutes of 2024) requires the Department of Housing and Community Development (HCD) to study how VMT is used as a metric for measuring transportation impacts of housing projects pursuant to CEQA.

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SENATE COMMITTEE ON ENVIRONMENTAL QUALITY

Senator Blakespear, Chair

2025 - 2026 Regular

Bill No: SB 231

SUBJECT: California Environmental Quality Act: guidelines

DIGEST: This bill requires, by July 1, 2027, the Office of Land Use and Climate Innovation (LCI) to develop and the Secretary of the California Natural Resources Agency (CNRA) to certify and adopt an appendix to the California Environmental Quality Act (CEQA) Guidelines to establish thresholds to determine if a project has certain significant impacts on the environment.

ANALYSIS:

Existing law:

1. CEQA requires a lead agency to spearhead an environmental impact report (EIR) for a project that may have a significant effect on the environment. CEQA also requires a lead agency to prepare a negative declaration (ND) for a project that will have no significant effects on the environment, or a mitigated negative declaration (MND) for a project that has no significant effects after mitigation. (Public Resources Code (PRC) §§ 21000 et seq.)
2. Defines “significant effect” as a substantial, or potentially substantial, adverse change in any of the physical conditions within the area affected by the project including land, air, water, minerals, flora, fauna, ambient noise, and objects of historic or aesthetic significance. Economic and social changes are not significant effects but can be considered in determining whether an effect is significant. (PRC 21068; 21060.5;21100(d))
3. Requires LCI to develop proposed guidelines for the implementation of CEQA by public agencies, and to update the CEQA Guidelines regularly. (PRC § 21083)
4. Requires LCI to prepare proposed revisions to the CEQA Guidelines establishing criteria for determining the significance of transportation impacts within transit priority areas. (PRC § 21099)
5. Requires LCI to develop and the Secretary of the CNRA to certify and adopt, revisions to Appendix G of the Guidelines to :
   1. Separate the consideration of paleontological resources from tribal cultural resources and update the relevant sample questions; and
   2. Add consideration of tribal cultural resources with relevant sample question § (PRC §21083.09)

This bill:

1. Requires LCI to prepare and the CNRA to certify and adopt an Appendix O to the CEQA Guidelines to establish best practices for public agencies to follow in determining whether or not a proposed project may have a significant effect on the environment.
   1. Specifies this shall include thresholds of significance based on:
      1. The California Global Warming Solutions Act of 2006 for greenhouse gas (GHG) emissions;
      2. The federal Clean Air Act for vehicle miles traveled; and
      3. The California Noise Control Act of 1973 for noise pollution.

Background

1. The A, B, C’s of CEQA. CEQA is designed to (a) make government agencies and the public aware of the environmental impacts of a proposed project, (b) ensure the public can take part in the review process, and (c) identify and implement measures to mitigate or eliminate any negative impact the project may have on the environment. CEQA is enforced by civil lawsuits that can challenge any project’s environmental review.

Under CEQA, projects (unless they have a specific exemption) must undergo environmental analysis. This process starts with an initial study which determines what level of further environmental review is needed for a given project. If a project has no significant effects on the environment, or if those effects can be fully mitigated, the project can move forward with a negative declaration (ND) or mitigated negative declaration (MND). If the initial study finds the project has potential significant effects on the environment, then a full EIR is conducted. An EIR provides a thorough environmental review of a proposed project, analyzing the significant direct and indirect environmental impacts of a proposed project. The EIR also includes proposed mitigation measures for any significant effects that it identifies and considers alternatives to the proposed project.

1. Significant effects in CEQA. One of the primary purposes of an EIR is to identify a project’s significant environmental effects and propose mitigation measures for those significant impacts. Significant impacts could affect the physical conditions “existing within the areas which will be affected by the proposed project, including as a substantial, or potentially substantial, adverse change in any of the physical conditions within the area affected by the project including land, air, water, minerals, flora, fauna, ambient noise, and objects of historic or aesthetic significance.”

What is the threshold that tips an environmental effect into the “substantial or potentially substantial” category? The effects of a project do not have to be zero to be less than significant (e.g. Oakland Heritage Alliance v. City of Oakland, (2011) 195 CA 4^th 884,899; National Parks and Conserv. Ass’n v. County of Riverside (1999) 71 CA 4^th 1341, 1359).

Ultimately, the lead agency is responsible for determining whether an environmental impact is significant or not. The lead agency also has the authority to set thresholds of significance to use in an EIR, and the lead agency’s threshold of significance should be based to the extent possible on scientific and factual data.

The thresholds for significance can be based on a number of sources including:

• A determination by the lead agency, including reliance on the judgment of experts who prepare the EIR;
• Policies or thresholds of significance adopted and implemented by the lead agency;
• Performance standards adopted and implemented by regulatory agencies;
• Significance standards recommended by regulatory agencies;
• Standards in the initial study checklist in CEQA Guidelines Appendix G; or
• Standards in the CEQA Guidelines triggering preparation of an EIR.

1. CEQA Guidelines, Appendices, and Technical Advisories. The CEQA Guidelines (Title 14, Division 6, Chapter 3 of the California Code of Regulations) are regulations governing implementation of the California Environmental Quality Act. The CEQA Guidelines reflect the requirements set forth in the Public Resources Code, as well as court decisions interpreting the statute. They are organized to present the material in a logical manner, and they provide more detail and guidance on how to implement and interpret CEQA. Among other things, the CEQA Guidelines explain how to determine whether an activity is subject to environmental review, what steps are involved in the environmental review process, and what is the required content of environmental documents.

The Guidelines are supplemented with appendixes, which contain sample forms for performing various CEQA Actions. There are currently 14 appendixes, including Appendix G, which provides an “environmental checklist” for lead agencies to use as a guide in determining whether or not their proposed project has significant environmental impacts.

In addition to the guidelines, LCI has also developed technical advisory documents that help guide lead agencies in implementing CEQA. These advisories include a technical advisory on evaluating transportation impacts in CEQA with vehicle miles traveled (VMTs), which includes a recommendation for a VMT threshold that would determine whether or not a project has significant transportation impacts.

1. Significant Effect Checklist in the CEQA Guidelines. Appendix G of the CEQA guidelines serves as a tool to help lead agencies determine whether a project may have a significant effect on the environment (it provides a template of what should be considered in the initial study). The checklist identifies four categories of effect for each environmental factor: “No impact,” ”Less than significant impact,” “Less than significant with mitigation incorporated,” and “Potentially significant impact” and asks a series of questions for the lead agency to consider in determining if the project has significant impacts. This checklist includes a series of questions for every environmental impact, including transportation, noise, and GHGs. For GHGs, the checklist asks of the project: “Generate greenhouse gas emissions, either directly or indirectly, that may have a significant impact on the environment? Conflict with an applicable plan, policy, or regulation adopted for the purpose of reducing the emissions of greenhouse gases?” For noise, it asks lead agencies to consider if the project results in “Generation of a substantial temporary or permanent increase in ambient noise levels in the vicinity of the project in excess of standards established in the local general plan or noise ordinance, or applicable standards of other agencies?” among other questions.

Comments

1. Purpose of Bill. According to the author, “In 1970, California was at the forefront of environment protection in a largely industrialized and less regulated development climate. That year, California Governor Ronald Reagan signed the California Environmental Quality Act (CEQA) requiring the state government as well as county and local governments to perform an environmental impact review for all projects that they plan to carry out. The requirements of this law have since grown significantly through decades of case law.

Today, California finds itself in the middle of an energy transition and a housing crisis. Ironically, the expansion of CEQA regulations intended to protect the environment have now oftentimes become a difficult obstacle to green infrastructure developments. Furthermore, it has become an even greater obstacle to housing production at a time when the state is grappling with sky-high home prices and increasing homelessness.”

SB 231 seeks to uphold California’s tradition of environmental consciousness by further clarifying “significant impacts” so critical projects can spend less time litigating and more time building responsibly to meet the needs of our state.”

1. Local significance thresholds are tailored to local problems. Significance thresholds for CEQA are determined by the lead agency, which often relies on local public agencies to develop thresholds that are well-suited to the area where the public agencies are located. This approach allows the lead agency to use thresholds that make sense for their jurisdiction. For example, local public agencies often use thresholds for air pollution established as recommendations by their local air district, acting as a commenting agency. Since air districts consider the overall load of air pollution in the areas they oversee, following local criteria can at least in theory, help ensure projects do not contribute to tipping pollution past thresholds that could impact human health. In this way, thresholds to mitigate environmental impacts can consider the environmental burdens that already exist in some areas when developing criteria for how much pollution is significant for that jurisdiction.
2. Technical Advisory: statewide coverage, local control. While giving lead agencies the option to choose significance thresholds allows the use of thresholds to better account for the environment where the projects are located, a threshold developed by the state could help standardize development of projects. It can also offer protection against lawsuits for lead agencies. CEQA is enforced through civil actions, and lead agencies could be sued for the significance threshold that they choose to use. A threshold recommended by LCI, while not as binding as a set threshold in the CEQA guidelines, can provide legal coverage for lead agencies to justify their decision on selecting a given significance threshold. This has already been put into practice for transportation impacts: LCI has developed a technical advisory document which recommends a threshold for VMT to be considered significant (15 percent lower per capita (for residential projects) or per employee (for office projects) VMT than existing development. The author and committee may wish to amend the bill to strike the requirements create a new appendix in the CEQA Guideline’s, and instead require LCI to develop technical assistance on thresholds of significance for GHG and noise impacts. Recognizing that LCI has already developed a technical advisory document for VMT thresholds for significant transportation impacts under CEQA, the author and committee may wish to remove the provisions of the bill related to VMT.
3. Committee amendments. Staff recommends the committee adopt the bolded amendments contained in comment 3 above.

Related/Prior Legislation

SB 607 (Wiener, 2025) among other items, requires LCI to develop by July 1, 2026, objective and measurable thresholds for an effect upon the environment to be considered significant. SB 607 is pending in the Senate Environmental Quality Committee.

SB 232 (Seyarto, 2025) requires LCI to submit a report to the Legislature by January 1, 2027, to evaluate how allowing projects to move forward under the CEQA Guidelines in place at the time the project submitted its notice of preparation could impact speed, efficiency, and environmental considerations. SB 232 is pending in the Senate Environmental Quality Committee.

SOURCE:

SUPPORT:

Abundant Housing LA
Bay Area Council
California Yimby
Circulate San Diego

OPPOSITION:

State Building & Construction Trades Council of California

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