Revamping California’s Infrastructure: Design-Build and CEQA Legislation for Sustainable Progress

04.19.2024

In an effort to modernize infrastructure development in California, the State Legislature passed three bills in 2023 aimed at reforming the regulatory framework governing the design-build procurement process and environmental review procedures:  Senate Bill 706 (Caballero) (“SB 706”), Assembly Bill 400 (Rubio) (“AB 400”), and Senate Bill 149 (Caballero) (“SB 149”).

SB 706: Expanding the Progressive Design-Build Process

SB 706 marks a substantial expansion of progressive design-build (“PDB”) authority for local agencies. The PDB procurement process involves selecting a single entity, typically a design-build team, based on qualifications rather than traditional bidding methods.  This entity is tasked with overseeing both the design and construction phases of a project.

The new legislation extends and broadens the utilization of the PDB process across California.  SB 706 grants additional authority to local agencies, such as cities, counties, cities and counties, or special districts to use the PDB process for up to 10 public works exceeding $5 million.  Notably, the bill extends the sunset date to January 1, 2030.

Furthermore, the bill expands the scope of eligible projects, and unlike Senate Bill 991 (Newman) from the 2021-2022 legislative session, it is not limited to water-related projects. Under these changes, local agencies will have the flexibility to utilize the PDB process for various public works initiatives, offering greater adaptability to meet the diverse needs of communities across California. 

AB 400: Expanding Transit Development

AB 400 expands the pool of eligible entities authorized to utilize design-build contracts for public works projects under Public Contract Code section 22160 et seq.  This legislation revises the definition of “local agency” for design-build contract procurement purposes in Public Contract Code section 22161 (f)(3).  AB 400 expands this definition to include any joint powers authority responsible for constructing transit projects, a change from the former language of “any joint powers authority formed to provide transit service.” 

The complete lists of local agencies authorized to utilize the design-build authority is now compromised of the following:

1. A city, county, or city and county.
2. A special district that operates wastewater facilities, solid waste management facilities, water recycling facilities, or fire protection facilities.
3. Any transit district, included transit district, municipal operator, included municipal operator, any consolidated agency, as described in Section 132353.1 of the Public Utilities Code, any joint powers authority, any county transportation commission created pursuant to Section 130050 of the Public Utilities Code, or any other local or regional agency, responsible for the construction of transit projects.
4. The San Diego Association of Governments, as references in the San Diego Regional Transportation Consolidation Act (Chapter 3 (commencing with Section 132350) of Division 12.7 of the Public Utilities Code).
5. The Stanislaus Regional Water Authority.

AB 400 also extends the sunset date of these provisions to January 1, 2031.

SB 149: Streamlining CEQA Procedures

In an effort to streamline the environmental review process and expedite project approvals, SB 149 introduces significant reforms to the California Environmental Quality Act (“CEQA”) administrative and judicial procedures.  This legislation aims to streamline the process for preparing the record of proceedings and facilitates expedited judicial proceedings for specific projects certified by the Governor. 

CEQA mandates lead agencies to prepare and certify the completion of an Environmental Impact Report (“EIR”) for projects with potential significant environmental effects.  Additionally, it allows for the preparation of a mitigated negative declaration if revisions to the project could avoid or mitigate significant environmental impacts.  SB 149 authorizes public agencies to prepare the record of proceedings even when the petitioner elects to prepare the record of proceeding and provides notice of such election.  Upon receipt of petitioner’s notice, the public agency must notify the plaintiff or petitioner of this decision within 5 business days and cover the costs of preparation, regardless of litigation outcomes.  Moreover, SB 149 mandates the court to schedule a case management conference within 30 days of filing an action to review the scope, timing, and cost of the record of proceedings.

Extensions to the 60-day time limit for record preparation are permissible only by agreement of all parties or court order.  Additionally, the legislation mandates that the record be submitted in an electronic format and clarifies that certain logistical communications are excluded from the scope of “internal agency communications,” such as meeting invitations and scheduling communications.   

The legislation extends the Governor’s authority to certify projects under the Jobs and Economic Improvements Through Environmental Leadership Act of 2021 (“Leadership Act”) until January 1, 2032.  Failure by a lead agency to approve a Governor-certified project by January 1, 2033, invalidates the certification.  The Leadership Act is slated for repeal on January 1, 2034. 

Furthermore, SB 149 establishes procedures for the preparation of proceedings records for projects certified as infrastructure projects by the Governor.  Under Public Resources Code section 21189.81, an “infrastructure project” is defined as (1) an energy infrastructure project, (2) a semiconductor or microelectronic project, (3) a transportation-related project, or (4) a water-related project.  It mandates that resolution of actions or proceedings challenging the certification of EIRs or project approvals within 270 days of filing the record of proceedings with the court.  It allows project applicants to seek certification from the Governor for infrastructure projects and necessitates lead agencies to provide public notice of the project certification within 10 days.  Similar to the changes to the Leadership Act, if a lead agency fails to approve a certified infrastructure project before January 1, 2033, the certification will be invalid.  These provisions are slated for repeal on January 1, 2034. 

Additionally, SB 149 appropriates $1,000,000 from the General Fund to the Judicial Council for judicial officer training in implementing these provisions.

We strongly encourage those who have further questions about the new changes and to reach out and confer with legal counsel. 

Special thanks to Farrah Ghaffarirafi, our FCPPG law clerk, for her extensive work on this alert.

This AALRR publication is intended for informational purposes only and should not be relied upon in reaching a conclusion in a particular area of law. Applicability of the legal principles discussed may differ substantially in individual situations. Receipt of this or any other AALRR publication does not create an attorney-client relationship. The Firm is not responsible for inadvertent errors that may occur in the publishing process. 

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