Business & Policy Environmental Policy The California Environmental Quality Act (CEQA): Summary and Impact Most projects in California are assessed for their environmental impacts. By Liz Allen Liz Allen LinkedIn Twitter Writer College of William & Mary Northeastern University Liz is a marine biologist, environmental regulation specialist, and science writer. She has previously studied Antarctic fish, seaweed, and marine coastal ecology. Learn about our editorial process Published July 13, 2021 Karsten May / Getty Images Share Twitter Pinterest Email Business & Policy Corporate Responsibility Environmental Policy Economics Food Issues The California Environmental Quality Act, or CEQA, is a law requiring a thorough environmental review of most projects organized in the state of California. Unlike many other environmental regulations, CEQA does not require projects to obtain a certain permit; instead, the law requires that they go through the CEQA process. What Is a "Project" Under CEQA? A project is defined under CEQA Guidelines as "the whole of an action" that may produce a direct or indirect physical change in the environment. The definition is intentionally broad in order to maximize environmental protection. The primary purpose of CEQA is to engage the public in identifying ways in which a project could significantly affect the environment. Today, projects required to go through CEQA must assess a project's potential impacts in twenty categories, including greenhouse gas emissions, water quality, traffic, and aesthetics, among others. CEQA was modeled after the National Environmental Protection Act (NEPA), the federal law requiring similar environmental reviews of certain federal projects. However, CEQA and NEPA differ today in a number of key ways. For one, NEPA only applies to federal projects and most projects that receive federal funding, whereas CEQA applies to virtually all projects in the state of California. Second, NEPA assesses the effect of federal projects on "the quality of the human environment," while CEQA focuses on "the effect on the environment of the state." The CEQA process culminates in a legally binding document that may include measures a project is required to implement. These measures vary between projects, but often include things like limits on the construction methods a project can use, time periods when work is prohibited to protect wildlife, and requirements for a project to compensate for environmental impacts. However, no state agency is responsible for the enforcement of CEQA measures. Instead, CEQA enforcement typically depends on private entities to take legal action on behalf of the public interest. Summary of the Law In 1970, the California Environmental Quality Act was signed into law by California Governor Ronald Reagan. The law was modeled after the federal National Environmental Policy Act passed the year before. While CEQA included broad statements favoring environmental protection, the law failed to include clear means of implementation. Instead, the law broadly mandated government agencies to develop their own standards and procedures when reviewing, proposing, or planning projects. State and local agencies were required to prepare an Environmental Impact Report (EIR) for all projects that could have a significant effect on the environment. However, it was not immediately clear which projects were required to go through CEQA's environmental review process. Subsequent litigation cleared up much of this confusion. Friends of Mammoth v. Board of Supervisors of Mono County The CEQA process was revised in 1972 by Assembly Bill 889 in response to the Friends of Mammoth v. Board of Supervisors of Mono County court case. The case centered on the development of two multi-story condominiums by a private corporation. The development project received a permit from the Mono County Planning Commission without preparing an EIR. The Board of Supervisors argued CEQA did not apply to private projects but was instead only meant to be implemented for government projects. Ultimately the California Supreme Court ruled against the Planning Commission. The Court stated CEQA was "to be interpreted in such manner as to afford the fullest possible protection to the environment within the reasonable scope of the statutory language," and that "the Legislature necessarily intended to include within the operations of the act, private activities for which a government permit or other entitlement for use is necessary." By clearly ruling that CEQA applied to both public and private projects, the Supreme Court established CEQA to be applicable to nearly all projects in the state of California. 1972 Amendments In addition to establishing CEQA's broad application, the 1972 amendments to the CEQA also developed the first guidelines for assessing whether a project would have a "significant effect" on the environment—a threshold that is now vital in determining the length of the CEQA process for a given project. The significance threshold is also one of the key ways in which CEQA diverges from the federal NEPA process. While NEPA requires federal agencies to consider the environmental consequences of a proposed project and respond to public comments, NEPA does not require environmental impacts to be reduced to a certain level. CEQA, on the other hand, requires projects to make modifications, if needed, to ensure impacts to the environment are "less than significant." Today, projects unable to reach the "less than significant" threshold must undergo a more rigorous environmental review process. How the CEQA Process Works Projects required to go through the CEQA process typically need to produce a "CEQA document." The type of CEQA document a project needs to prepare depends on the degree to which a project is expected to affect the environment. The type of CEQA document is determined and prepared by the "lead agency," the public agency determined to have the primary responsibility for carrying out or approving the project. Depending on the project, the lead agency may be a local government or a California state agency. While many projects that go through the CEQA process also require federal agency approval, such as permits from the U.S. Army Corps of Engineers under the Clean Water Act or the U.S. Fish and Wildlife Service under the Endangered Species Act, federal agencies cannot serve as the lead agency for the CEQA process. Here are the most common types of CEQA documents: Notice of Exemption (NOE) Projects that qualify for certain exemptions to the CEQA process must file a Notice of Exemption (NOE) in lieu of a full CEQA document. An NOE does not include an analysis of a project's environmental impacts; it simply notifies the appropriate county or the California Office of Planning and Research (OPR) that a project is planned, but that the project will not be undergoing the environmental review process required by CEQA. The Notice of Exemption can be legally challenged for 35 days, after which time a statute of limitation applies. Bypassing the CEQA process allows projects to move forward faster and with reduced cost. However, projects exempt from CEQA may still be required to go through the federal process NEPA. There are three primary types of CEQA exemptions: statutory exemptions, categorical exemptions, and "common sense" exemptions. Statutory exemptions are determined by the California Legislature and apply to specific projects regardless of their environmental impact. Statutory exemptions can apply to entire projects or to just a portion of a project. Examples of projects that may qualify for a statutory exemption include emergency transportation and demolition projects. Categorical exemptions apply to certain projects deemed to not have an impact on the environment. There are more than thirty types of categorical exclusions including exemptions for small restoration projects, for building accessory structures, and for various transfers of land ownership. A complete list of CEQA categorical exemptions can be found in the State CEQA Guidelines, Sections 15301 through 15333. Common sense exemptions (previously known as "general rule" exemptions) apply to projects that do not qualify for any statutory or categorical exemptions, but "where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment." Initial Statement/Mitigated Negative Declaration (IS/MND) Projects that are required to go through the CEQA process, but where environmental impacts are not known or where specific modifications to the project can reduce all environmental effects to a "less than significant" level, prepare an Initial Study, or IS. The primary purpose of the Initial Study is to determine a project's anticipated environmental impacts. If the Initial Study finds a project is likely to result in significant environmental impacts, the project may be required to prepare an Environmental Impact Report (EIR). If it finds the project would not result in adverse environmental impacts in any of the twenty CEQA categories, the project can move to adopt a "Negative Declaration." If it finds the project would have significant impacts to one or more of the CEQA categories, but that all significant impacts can be mitigated to where they reach the "less than significant" threshold, the project can move to adopt a "Mitigated Negative Declaration." In both cases, the lead agency must submit the CEQA study, Negative Declaration or Mitigated Negative Declaration, and a Notice of Intent (NOI) to adopt the CEQA document to the California State Clearinghouse to initiate the public review process. The NOI is also mailed to nearby property owners, posted at the proposed project's location, and published in the newspaper. The NOI must include a description of the project and information on the dates and times of public meetings being held by the lead agency to discuss the project. While the IS/MND process does not require the lead agency to hold public hearings except under specific circumstances, hearings are encouraged. The public has the opportunity to submit comments on the IS/MND for 30 days. The lead agency is required to publish responses to all comments received during this 30-day period. If public comments require substantial changes to the IS/MND, the CEQA document may have to repeat the public review period. If responding to public comments does not result in substantial changes to the IS/MND, the project can move forward with filing a Notice of Determination (NOD) with the State Clearinghouse. The 30 days following the publication of the NOD is the last opportunity for the IS/MND to be legally challenged after which time a statute of limitations protects the project and the CEQA process is deemed complete. Environmental Impact Report (EIR) Projects that are unable or potentially unable to mitigate their environmental impacts to a "less than significant" level must prepare an Environmental Impact Report instead of a Mitigated Negative Declaration. The EIR process is similar to that of an IS/MND, except the EIR process requires more substantial environmental review and extended public review periods. For example, unlike the IS/MND process, projects that prepare an Environmental Impact Report must hold a public hearing and instead of 30-day public comment periods, the EIR process requires 60-day windows. Like the IS/MND process, an EIR process culminates in the publication of a Notice of Determination. Criticism of the Law Since the law's implementation, critics have accused the California Environmental Quality Act of hampering the state's economic growth. Many are particularly critical of how the CEQA process can impede the development of additional housing desperately needed in much of California. Opponents of new housing projects—typically residents living nearby—are known to use the CEQA process to delay or even dismantle efforts to create new housing. In 2011, the Jobs and Economic Improvement Through Leadership Act was passed to streamline the CEQA review process for certain projects, including housing development projects. To qualify, projects must be certified by California's governor. The law was recently extended to 2024 by California Governor Gavin Newsom.