Come gather ‘round people, wherever you roam… The nation’s two oldest comprehensive environmental protection laws are being, or perhaps poised to be, dramatically redrawn. Right around the same time that the second Trump administration moved to dismantle longstanding NEPA regulations, California State Senator Scott Weiner (D-San Francisco) proposed legislation that would significantly reform CEQA.

Goodbye NEPA Regulations…

Come writers and critics, who prophesize with your pen… Everyone from law firm bloggers to the Rolling Stone are reporting on the Trump Administration’s recent evisceration of the National Environmental Policy Act (NEPA) regulations and standards. On January 20, 2025, President Trump issued Executive Order 14154, “Unleashing American Energy,” which, most notably: (i) revoked a 1977 Carter Administration executive order directing the Council on Environmental Quality (CEQ) to adopt binding NEPA regulations; (ii) provided 30 days for CEQ to propose rescinding its NEPA regulations; and (iii) directed CEQ to issue guidance on NEPA implementation “to expedite and simplify the permitting process.” A day later, President Trump issued Executive Order 1417, “Ending Illegal Discrimination and Restoring Merit-based Opportunity,” rescinding a Clinton-era executive order requiring federal agencies to address environmental justice issues in minority and low-income populations, which ultimately has resulted in nearly 30 years’ worth of NEPA documents including environmental justice analyses. Then, as a kind of regulatory hat trick, in order to comply with Executive Order 14154, on February 25, 2025, CEQ published its interim final rule, “Removal of National Environmental Policy Regulations,” to take effect 45 days from publication and remove “all iterations” of CEQ’s NEPA regulations, including the version changed during the first Trump Administration in 2020 and the version promulgated thereafter by the Biden Administration.

On February 19, when CEQ first announced its interim final rule, it also published a “Memorandum for Heads of Federal Departments and Agencies” providing some much-needed guidance for navigating this unique and rapidly changing situation. The memorandum instructs that federal agencies should rely on current agency-specific NEPA implementing procedures and voluntarily rely on the 2020 regulations (rescinded by the interim final rule) for projects currently undergoing NEPA analysis or for defending projects in litigation that have completed the NEPA process. CEQ gave federal agencies 12 months to revise or develop new agency-specific NEPA implementing procedures, suggesting, among other things, that the new procedures should: (i) use the NEPA regulations changed by the first Trump Administration as a framework; (ii) include processes for emergency actions; and (iii) establish protocols for engaging with state, tribal, and local agencies. Revised or new agency-specific NEPA implementing procedures also should exclude environmental justice analyses from all NEPA documents.

The seeds for this action were sown late last year when, as we reported, the D.C. Circuit in Marin Audubon Society v. Federal Aviation Administration held that CEQ lacks the authority to issue binding regulations implementing NEPA. The court made this determination on its own accord, without the issue being raised by any party to the litigation. This ruling was followed by a similar one in Iowa v. Council on Envtl. Quality, 1:24-cv-089 (D.N.D. Feb. 3, 2025), where the issue was raised by the petitioner. The Iowa court went a few steps further than the D.C. Circuit and held that the executive order issued by President Carter in 1977 authorizing CEQ to issue binding regulations was not a valid exercise of the President’s power under the U.S. Constitution, and “therefore the entire 2024 rule [issued by CEQ in an effort to rewind NEPA regulation changes made during the first Trump Administration] exceeded its authority.” The court then completely foreclosed the issue, holding that even if CEQ had authority to alter NEPA regulations with issuance of its 2024 rule, specific changes made in the rule were arbitrary and capricious in violation of the Administrative Procedure Act.

It is safe to say that legal challenges to this new rule and guidance, and the promulgation of revised and new agency-specific NEPA implementing procedures, are expected. In the interim—or more accurately stated, in the many years it will take to litigate these actions—practitioners preparing and reviewing NEPA documents and engaging in litigation should plan to rely on the language and requirements of the statute itself, the decades of court decisions interpreting the statute and requiring agencies to take a “hard look” at a proposed action’s environmental consequences, and, until further direction otherwise, existing agency-specific NEPA procedures and guidance.

…Hello CEQA Reform?

Come senators, congressmen, please heed the call… Senator Wiener, long a proponent of the California Environmental Quality Act (CEQA) reform (see Senate Bill [SB] 1227 (2024) and SB 288 (2020)), introduced SB 607 on February 20, 2025. If passed, SB 607 would make several significant changes to the statute and its guidelines to further streamline housing development, limit environmental review, and make it more difficult to win a lawsuit challenging certain CEQA documents, among other things.

To facilitate housing development, SB 607 would revise the existing Class 32 infill development categorical exemption, found in Section 15332 of the CEQA Guidelines, which currently exempts urban projects from CEQA review if they meet certain criteria, as relevant here, that the project: (i) be consistent with the applicable general plan designation and zoning for the site (subdivision (a)); (ii) occur on a site of no more than five acres that is substantially surrounded by urban uses (subdivision (b)); and (iii) not result in significant effects relating to “traffic, noise, air quality, or water quality” (subdivision (d)). The bill would create a new statutory provision—proposed Public Resources Code section 21083.03—requiring the Office of Land Use and Climate Innovation (LCI) to “prepare, develop, and transmit to the Natural Resources Agency for certification and adoption refinements to the” Class 32 categorical exemption with a directive to make a project eligible for this exemption if it is consistent with the zoning designated by the local jurisdiction’s most recently adopted housing element certified by the Department of Housing and Community Development, even if the specific project site has not yet been formally rezoned. SB 607 would further revise the Class 32 exemption to forgo the current requirement that a project site be surrounded by urban uses if it is located within an area that the LCI “has determined to be an eligible urban infill site,” a map of which the agency must prepare by July 1, 2026. Further, the bill would require “[o]bjective and measurable thresholds” for determining significant effects to the resources areas listed in subdivision (d) of the exemption and would eliminate the application of exemption exceptions to Class 32 (see CEQA Guidelines section 15300.2), including the amorphous “unusual circumstances” exception. The proposed new provision expressly excludes distribution centers and oil and gas infrastructure and projects. By making it easier to claim the Class 32 exemption, SB 607 purports to increase housing in the state.

For projects that fail to qualify for any CEQA categorical exemption, including the Class 32, SB 607 would modify Public Resources Code section 21080.1 (subdivision (a)) to limit the scope of environmental review of any required environmental impact report (EIR) to the “condition of a categorical exemption that the lead agency determines … disqualifies the project from eligibility under the categorical exemption … .” Exceptions would apply to distribution centers and oil and gas infrastructure and projects that do not meet two or more exemption conditions. This change could ultimately result in truncated EIRs for a wide array of project types.

On the litigation front, SB 607 would likewise modify Public Resources Code section 21080.1 to change the judicial standard of review for a lead agency’s determination to adopt a negative declaration—conventionally known as the “fair argument” standard—to the standard of review applied to EIRs, known as the “substantial evidence” standard. The substantial evidence standard for determining whether an EIR is inadequate is relatively high, requiring that a court defer to a lead agency’s substantive factual conclusions if they are supported by substantial evidence (i.e., fact, a reasonable assumption predicated upon fact, or expert opinion supported by fact). By contrast, the fair argument standard requires that an EIR be prepared if a fair argument can be made that a project evaluated in a negative declaration may have a significant impact on the environment—a much lower threshold. This change would likely result in a dramatic shift in the number of negative declarations that are upheld in litigation. The conventional wisdom is that negative declarations are difficult to defend because of the low threshold for preparing an EIR.[1] The bill also would revise Public Resources Code section 21167.6 (subdivision (e)(10)) to limit the administrative record prepared for CEQA litigation “by excluding communications of persons tangential to or far removed from project decisionmaking,” with exceptions for distribution centers or oil and gas infrastructure, likely reducing the size and cost of records.

[1] This is confirmed by studies of CEQA litigation. See Holland & Knight’s CEQA Judicial Outcomes: Fifteen Years of Reported California Appellate and Supreme Court Decisions, demonstrating an EIR success rate in litigation of 57% versus a negative declaration success rate of 44% in all CEQA published appellate decisions between 1997 and 2012.

So, what are the odds of this legislation passing? Hard to say. Historically, despite numerous attempts at CEQA reform, there has not been much legislative appetite for substantive change. But, after the Little Hoover Commission’s report on targeted CEQA reforms, which incidentally cited a legal blog written years ago on the Class 32 exemption by the author of this eAlert (see footnote 41), and which was partial inspiration for SB 607, reform may be on the horizon. The expansion of the Class 32 exemption for accelerating housing construction will find support in the evolving public sentiment for new residential development in response to the state’s housing crisis. In recent years, organizations like California YIMBY (Yes In My Backyard) have surfaced to advocate for increased housing within the state, which makes sense considering that California is now contending with at least two generations struggling to find and afford housing in their home state.

The change in judicial standard of review for negative declarations is less likely to find support. CEQA’s backbone is the environmental protection it guarantees to current and future generations. A negative declaration generally provides less robust review than an EIR, making it important to have a more onerous standard of judicial review. Lowering the standard would shield inferior review from judicial oversight and inevitably result in, at least some, irreversible environmental damage that might have been otherwise avoided or mitigated. And, while requiring shorter EIRs for projects that are almost exempt from CEQA review seems progressive, it will surely raise the eyebrows of environmental watchdogs who see the potential for abuse by large projects that require large reviews. The provision to limit the administrative record for CEQA litigation by omitting the communications of tangential persons may be well received. Indeed, parties to CEQA litigation often voluntarily agree to the same limitation.

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The line it is drawn, the curse it is cast… While there is currently plenty of uncertainty with NEPA, and to some extent CEQA, one thing seems certain—change, or arguments for change, will dominate the conversation. NEPA implementation is evolving before our eyes, and, even if SB 607 fails to pass, there will be another bill attempting CEQA reform, and then another after that.

…for the times they are a-changin’.

For inquiries or additional information, please contact:

• Casey A. Shorrock, cshorrock@somachlaw.com
• Kelley M. Taber, ktaber@somachlaw.com

Somach Simmons & Dunn provides the information in its Environmental Law & Policy Alerts and on its website for informational purposes only. This general information is not a substitute for legal advice, and users should consult with legal counsel for specific advice. In addition, using this information or sending electronic mail to Somach Simmons & Dunn or its attorneys does not create an attorney-client relationship with Somach Simmons & Dunn.