DWR and Water Board Propose Key Updates to Desalination Policy Framework
As climate variability and drought continue to challenge California’s water supply, the state is renewing its focus on seawater desalination as part of a diversified water portfolio. While only a handful of large-scale desalination facilities have been approved along the California coast — including the Carlsbad, Dana Point, and Marina plants — desalinated water remains a small but potentially expandable component of the state’s water strategy. Over the past year, the Department of Water Resources (DWR) and State Water Resources Control Board (Water Board) have taken significant steps to evaluate and update the regulatory and planning frameworks that govern these projects.
In April 2024, the Department of Water Resources (DWR) released the 2023 California Water Plan Update (Water Plan), a key planning document that informs water resource decisions for water districts, cities, and counties across the state. The Water Plan identified a goal to increase desalinated product water by 28,000 acre–feet per year by 2030 and 84,000 acre–feet per year by 2040. It also included Desalination Resource Management Strategies (Desalination RMS), which assess the current landscape of desalination projects in California and identify both challenges and opportunities for future development.
The Desalination RMS outlines a series of policy recommendations aimed at integrating desalinated water into the state’s water supply portfolio. One notable recommendation calls for identifying potential updates to the Water Board’s California Ocean Plan (Ocean Plan) to address the permitting and operation of offshore desalination facilities. DWR also emphasized the need for increased stakeholder engagement and streamlined permitting processes to support responsible expansion of desalination.
In alignment with these recommendations, the Water Board held a public scoping meeting on October 28, 2024 to explore potential amendments to the Ocean Plan’s seawater desalination provisions. The Ocean Plan sets statewide standards to protect water quality and beneficial uses of the ocean along the California coastline and implements Water Code § 13142.5(b), which requires new or expanded coastal industrial facilities using seawater to use “the best available site, design, technology, and mitigation measures feasible shall be used to minimize the intake and mortality of all forms of marine life.”
At the October meeting, the Water Board presented 11 broad topics under consideration for revision. Some of its key proposals include the following:
Enhanced Stakeholder Engagement and Interagency Coordination: Future projects could be subject to requirements to engage with broader community interests, including Tribal communities and environmental justice groups. The permitting process, however, could be streamlined to require concurrent agency review of necessary approvals to improve overall efficiency.
Clarification on Subsurface Intake Requirements: While subsurface intakes are the preferred method for minimizing marine life intake, the Water Board currently allows exceptions when it is shown that subsurface intake is not feasible. The Water Board is considering amendments that would clarify when exceptions are permitted and what constitutes a valid feasibility analysis.
Protection of Coastal Freshwater Aquifers: The current Ocean Plan lacks guidance on assessing impacts to nearby freshwater aquifers from subsurface intake systems. Proposed revisions could include new instructions on the appropriate siting and design of subsurface intakes, as well as recommended management practices to protect those freshwater resources.
Volumetric Annual Reporting: There is no requirement to report the volume of desalinated seawater produced to the Water Board. While the state tracks volumes of desalinated brackish groundwater and brackish surface water, it does not have similar data for desalinated seawater. The proposed amendment to the Ocean Plan would establish an annual reporting requirement for seawater desalination facilities. This reporting would support a more comprehensive understanding of the state’s water supply portfolio, enable assessment of desalinated seawater efficiency, and advance DWR’s objectives for increased desalinated product water by 2030 and 2040.
Timing and Completion of Mitigation Measures: Under existing rules, facilities must submit a Marine Life Mortality Report and fully mitigate impacts from construction and operation of desalination facilities on marine life — but the timeline for doing so is unclear. The Water Board is proposing to clarify when such reports and mitigation measures must be completed to prevent facilities from beginning operations before risks are adequately assessed.
Although most of the proposed changes would apply to future projects, certain revisions — such as those clarifying mitigation timelines — could affect existing facilities. The Water Board is currently reviewing the comments it received during the public comment period, which closed on November 13, 2024. Although no additional meetings have been announced, further stakeholder engagement is expected as the Board refines its proposals. These ongoing efforts reflect a broader statewide push to balance the potential benefits of desalinated water with California’s environmental protection goals and regulatory clarity for project proponents.
City of Los Angeles Approves New Ordinances to Encourage Housing Development
California’s housing crisis has necessitated innovative legislative solutions at the state and local level to increase the supply of affordable housing across the state. Cities are required by state law to plan for a specified amount of new housing development in accordance with the targets set by the Regional Housing Needs Allocation (RHNA). According to the RHNA Allocation Plan, the City of Los Angeles has an allotment of 456,643 new units for the period from 2021 to 2029, which is more than five times greater than the City’s previous RHNA allotment. The City acknowledged in its 2021-2029 Housing Element that it is experiencing a severe housing crisis and would come up significantly short of its allotment based on its then-existing zoning.
As required by state law, the City designed a Housing Element Rezoning Program (Rezoning Program) to accommodate its housing allotment, which aims to increase the supply of housing across the City. The Rezoning Program includes updates to the Downtown Community Plan and the Hollywood Community Plan as well as the adoption of three related ordinances, which were approved by the Los Angeles City Council on February 7, 2025. These ordinances are referred to as the Citywide Housing Incentive Program (CHIP) Ordinance, the Housing Element Sites and Minimum Density Ordinance, and the Resident Protections Ordinance. These amendments to the Los Angeles Municipal Code are expected to benefit multi-family housing developers by streamlining review processes for project approvals and providing additional incentives for qualifying mixed-income and 100% affordable housing projects.
Some pro-housing advocates believe that the Rezoning Program is inadequate to meet the City’s housing obligations, as evidenced by a recent lawsuit filed by YIMBY Law and Californians for Homeownership against the City of Los Angeles. While the results of that litigation remain to be seen, the CHIP Ordinance does provide a helpful starting point by offering incentives and removing procedural barriers to project approval for qualifying projects across the City.
CITYWIDE HOUSING INCENTIVE PROGRAM ORDINANCE
The CHIP Ordinance includes three options for local density bonus programs, updating the City’s implementation of the State’s Density Bonus Program (DBP), adopting a Mixed-Income Incentive Program (MIIP), and creating an Affordable Housing Incentive Program (AHIP) for 100% affordable housing projects. These programs provide new incentives for qualifying mixed-income and 100% affordable housing projects with an aim towards increasing the supply of housing across the City, particularly near public transit, along major corridors, and in areas identified as Higher Opportunity Areas.
CITY’S DENSITY BONUS PROGRAM
The CHIP Ordinance revises the City’s implementation of the State DBP to align the review processes and incentives under the state and local programs. The DBP incentivizes providing affordable units by offering increased density as well as additional incentives and waivers of certain development standards for qualifying housing projects that include the requisite percentages of affordable housing units.
One upshot of the CHIP Ordinance is that it allows for increased density bonus of up to 100% in line with Assembly Bill (AB) 1287, which Governor Newsom signed into law on October 11, 2023. AB 1287 included an amendment to the State Density Bonus Law to provide an additional density bonus and incentives for qualifying projects providing moderate income units or very low-income units. Specifically, under AB 1287, a project providing the requisite percentage of affordable units can obtain the 50% maximum density bonus under the prior law as a base bonus as well as an additional density bonus up to 100% as an additional bonus in exchange for the provision of the requisite percentage of additional affordable units.
The CHIP Ordinance incorporates the additional bonus and incentives provided by AB 1287 into the City’s implementation of the State’s DBP. Like the State’s DBP, the CHIP Ordinance outlines the requisite percentages of affordable units provided for each income level. For units offered for rent, the minimum percentages of units provided for each income level to qualify for the Program are 5% very low income or 10% lower income. For units offered for sale, the minimum percentages of units are 5% very low income, 10% lower income, or 10% moderate income. The percentage of density bonus units that a project is entitled to depends on the percentage of very-low income, lower income, and moderate income (if for sale) provided. Like the State’s DBP, the maximum density bonus a project is entitled to is a 50% base bonus if it provides 15% very-low income or 24% lower income units for rent or 44% moderate income for sale. In addition, the CHIP Ordinance provides that a project may qualify for an additional bonus ranging from 20% up to 50% if the project provides the requisite percentage of very-low income or moderate-income units.
The CHIP Ordinance also provides new density bonuses and incentives for qualifying projects that provide housing for specified target populations, including senior citizens, transitional foster youth, disabled veterans, homeless persons, and lower income students.
The CHIP Ordinance updates the City’s DBP to reflect that a qualifying project may request up to four on- or off-menu incentives subject to the review process below.
Under the CHIP Ordinance, more projects will be eligible for ministerial review, avoiding uncertain and lengthy review processes, including environmental review under the California Environmental Quality Act (CEQA). The CHIP Ordinance updates the review processes for housing projects depending on the type of request under the DBP. Projects that request only the allotted number of incentives from the base incentives and menu of incentives provided in the CHIP Ordinance are entitled to a ministerial approval by the City’s Department of Building and Safety unless certain limited exceptions apply. This language in the CHIP Ordinance is consistent with the Department of City Planning’s current policy to ministerially review qualifying housing projects requesting only on-menu incentives.
The CHIP Ordinance also creates a new ministerial review process referred to as the Expanded Administrative Review (EAR) process, which applies to projects requesting public benefit options or off-menu incentives. The EAR process entails submitting an application and eligibility checklist to the Affordable Housing Services Section at the Metro/Downtown Development Services Center. The submitted documents are reviewed by the Department of City Planning to assess compliance with applicable regulations and standards. An informational public hearing may be required depending on the project or if otherwise required by the Code. Upon the Department’s determination that the proposed project complies with applicable standards and regulations, projects must be developed in keeping with the approved plans. Modifications of no more than ten percent may be permitted, but, for more extensive modifications, an applicant is required to restart the EAR process.
If the applicant requests to waive or reduce development standards, exceed the maximum density bonuses, or proceed with any other actions requiring discretionary approval, then the applicant will be required to obtain a Class 3 Conditional Use Permit, which is subject to discretionary approval by the City Planning Commission. Note that the CHIP Ordinance does not streamline other discretionary actions that may be applicable to a housing project, such as a General Plan Amendment, Zone Change, Project Review, or other discretionary action.
MIXED-INCOME INCENTIVE PROGRAM
The Housing Element identifies The Mixed-Income Incentive Program (MIIP) consists of three sub-programs designed to incentivize mixed-income housing development near public transit stops and in higher-opportunity areas: the Transit Oriented Incentive Area Program, the Opportunity Corridors Program, and the Opportunity Corridors Transition Program.
To qualify under these sub-programs, the housing project must meet the generally applicable requirements of MIIP as well as the specific requirements of the sub-program. Regardless of which program the project is applying for, the project must meet certain requirements, including providing a baseline of either four or five units depending on the program, meeting specific program requirements, reserving the requisite percentage of affordable units, and meeting applicable zoning and other requirements.
TRANSIT ORIENTED INCENTIVE AREA PROGRAM
The Transit Oriented Incentive Area (TOIA) program is intended to increase the supply of affordable housing near public transportation, particularly in areas identified as Higher Opportunity areas. Eligible projects under the Transit Oriented Incentive Area (TOIA) program are those located within the requisite distance to a major transit stop based on the criteria in the CHIP Ordinance. The TOIA program differentiates projects into particular incentive sets based on proximity to a qualified major transit stop and location within one of the City’s Opportunity Areas as identified on the California Tax Credit Allocation Committee (CTAC) Opportunity Area map. The base incentives are specified for each incentive set. Within each set, projects in Higher Opportunity Areas receive increased density and floor area ratios (FAR) compared to projects located in the Moderate or Lower Opportunity Areas within the same incentive set.
As with the City’s DBP, eligible projects qualify for up to four incentives. Compared to the City’s DBP, the TOIA program offers additional base incentives, including FAR and height, tailored to the incentive sets as well as additional on-menu incentive options. Significantly, the TOIA program allows for density increases beyond the density bonuses provided under the City’s DBP. If the property’s zoning allows for at least five units, then projects are eligible for density bonuses starting at 100% for Moderate and Lower Opportunity Areas in the T-1 incentive set and rising up to density limited only by FAR in Higher Opportunity Areas in the T-2 and T-3 incentive sets.
OPPORTUNITY CORRIDORS PROGRAM AND OPPORTUNITY CORRIDORS TRANSITION PROGRAM
The Opportunity Corridors (OC) program envisions new mid-rise affordable housing developments along major transit-served corridors within the City’s Higher Resource Areas as identified on the CTAC Area map. Like TOIA, OC differentiates projects into particular incentive sets. Like TOIA, OC offers additional base incentives, including FAR and height, and on-menu incentives compared to the City’s DBP. The base incentives are specified for each incentive set for the FAR and height. The OC program provides more generous base incentives than the TOIA program, including density limited only by floor area and increased FAR.
The Opportunity Corridors Transition (OCT) program permits low-rise housing development on properties in higher opportunity areas zoned as R2 or RD, allowing for small-scale development in low-density multi-family zones near Opportunity Corridors. The concept is that these low-rise housing developments will provide transitions between single-family houses and mid-rise multi-family apartment buildings. The OCT program differentiates by subareas based on proximity to an Opportunity Corridor as discussed above (CT-1, CT-2, and CT-3). The number of units required at each income level in order for the project to qualify for incentives depends on the OCT Incentive Area in which it is located. The program allows for between four to sixteen units depending on the subarea in which it is located. The other base incentives are also tailored to the applicable subarea but include a range of FAR and height allowances. Note that the floor area ratio incentives are determined based on the number of density bonus units. A project approved under the OCT program must also meet various performance standards, including satisfying specific requirements related to common open space and entryway standards.
AFFORDABLE HOUSING INCENTIVE PROGRAM
The Affordable Housing Incentive Program (AHIP) provides new incentives for 100% affordable housing projects in addition to the incentives offered under the State DBP. Like the MIIP programs, AHIP is intended to encourage housing development near transit and in areas identified as Higher Opportunity Areas. For example, AHIP provides additional incentives for projects located in Higher or Moderate Opportunity Areas or within a half mile of a major transit stop or very low vehicle travel area, including density limited only by floor area. AHIP also provides tailored incentives for qualifying 100% affordable housing projects citywide. Compared to the other programs in the CHIP Ordinance, AHIP provides an additional incentive for a total of up to five incentives for qualifying projects.
Additionally, AHIP adds “P” Parking zones and “PF” Public Facilities zones to the types of zones eligible for 100% affordable housing projects and covers a variety of project types, including public land projects, faith-based organization projects, and shared equity projects that provide the required percentage of restricted affordable units and meet specific ownership criteria based on the project type. Specifically, AHIP incentivizes 100% affordable housing on Public Facilities “PF” zones and on land owned by public agencies, 80-100% affordable housing on land owned by faith-based organizations, and 80-100% affordable housing on land owned by community land trusts or limited equity housing cooperatives. Under certain circumstances, these project types may be subject to the new ministerial EAR process described above.
STREAMLINED CEQA ENVIRONMENTAL REVIEW
One strategy that opponents of affordable housing projects frequently employ is leveraging the lengthy environmental review process under CEQA to delay and drive up the costs of housing projects. These delay tactics can be fatal, particularly for affordable housing projects which are often already limited by tight cost margins. Even the threat of CEQA-related delays influences whether developers and investors are willing to proceed with an affordable housing project due to uncertainties about timing and costs.
The City’s Housing Element addresses these concerns by streamlining the environmental review process under CEQA for most new housing developments. Pursuant to CEQA, an Environmental Impact Review was approved for the City’s Housing Element, which examines a vast range of environmental impacts from the proposed housing programs, including the potential environmental impacts of housing projects expected to qualify for the programs outlined above. Thus, rather than undergoing a full CEQA review for each individual housing development utilizing these programs, housing developers are permitted to use the standardized CEQA Streamlining Checklist Form (Form CP-4089) as the environmental review document. Streamlining CEQA review significantly reduces the timeline for project approvals and removes another barrier for developers and investors considering moving forward with a housing project.
CONCLUSION
The incentives programs included in CHIP Ordinance and the streamlined CEQA environmental review process are aimed at lowering procedural barriers that steer developers and investors away from affordable housing projects. While some pro-housing advocates believe that these changes are inadequate to meet the City’s obligations under state law, these programs do provide a helpful starting point for developers trying to make affordable housing projects pencil out.
Birds, Trees, and Bees – Oh My! Practical Guidance for Addressing Candidate Species in CEQA Analysis
Several high-profile species — including the burrowing owl, Crotch’s bumble bee, western Joshua tree, western spadefoot toad, and the monarch butterfly — have recently been elevated to candidate status under either the California Endangered Species Act (CESA) or proposed for listing under the federal Endangered Species Act (FESA). This growing list of species carry significant implications for project proponents navigating environmental review under the California Environmental Quality Act (CEQA).
UNDERSTANDING THE LEGAL LANDSCAPE
Under CESA, candidate species receive the same legal protections as listed species, meaning any potential “take” (defined as hunting, pursuing, catching, capturing, or killing) is prohibited without an Incidental Take Permit (ITP) or other express authorization from the California Department of Fish and Wildlife (CDFW). Conversely, species proposed for listing under FESA are not afforded legal protections until and unless formally listed.
Nonetheless, CEQA requires evaluation and mitigation of project impacts to all special status species, including candidates and those proposed for listing. This is especially relevant for projects with a federal nexus (e.g., those involving federal funding, permits, or approvals), as federal agencies must ensure their actions do not jeopardize species proposed for listing under FESA. As a result, agencies frequently assess impacts on such species and may incorporate proactive mitigation measures.
CEQA IMPLICATIONS: WHY EARLY REVIEW MATTERS
For project proponents, identifying special-status species during early due diligence is critical under CEQA. Early recognition of such species can help avoid costly delays during biological studies, agency consultation, and permitting.
Biological technical reports should be prepared with an understanding of the evolving regulatory landscape and incorporate agency-approved survey methods and mitigation protocols. These reports have a direct influence on mitigation cost, scope, and timing.
CEQA documents should anticipate the potential for future listings under CESA or FESA. Failure to adequately assess biological resources may lead to unauthorized take, trigger regulatory enforcement or litigation, or necessitate supplemental CEQA review, resulting in further project delays and increased costs.
Accordingly, mitigation measures proposed in CEQA documents should reflect current species — specific requirements and be grounded in applicable regulatory guidance. It is also prudent to include language confirming that additional permits (such as ITPs) will be obtained if necessary, and that mitigation will be implemented in consultation with CDFW or the U.S. Fish and Wildlife Service (USFWS).
CANDIDATE SPECIES SNAPSHOT
As detailed in our previous legal alerts, the western burrowing owl (Athene cunicularia hypugaea) was designated a CESA candidate in October 2024 and remains under review. Full take protections apply during this candidacy period. CDFW’s 2012 Staff Report on Burrowing Owl Mitigation continues to largely guide burrowing owl avoidance, minimization and mitigation approaches. However, CDFW has, in some cases, asserted that ITPs may now be necessary for certain relocation or habitat modification activities.
Crotch’s bumble bee (Bombus crotchii) was initially declared a candidate species in 2019. Following litigation and reinstatement as a CESA candidate species in 2022, CDFW issued new survey protocols for candidate bumble bees in 2023. These require site-specific surveys in areas with suitable habitat and recommend biological monitoring where bees are not observed but habitat remains viable. If bees are detected, project proponents must either avoid impacts entirely or obtain an ITP.
The western Joshua tree (Yucca brevifolia) is currently protected under the Western Joshua Tree Conservation Act (Act), following a deadlocked vote by the California Fish and Game Commission (Commission) in 2022 as to whether to formally list the species under CESA. As detailed in our previous alerts, the Act prohibits take without express authorization and mitigation, and requires CDFW to draft and implement a conservation plan. CDFW first released a draft Conservation Plan in December 2024, which remains under agency and public review. Final adoption is expected by June 30, 2025, though it is possible that it may trail until August. In the meantime, CEQA mitigation should accommodate fee payments, relocation plans, and/or other CDFW-approved measures.
The western spadefoot toad (Spea hammondii) was proposed for listing under FESA in December 2023. While the public comment period closed in February 2024, a final listing decision has not yet been issued. The species remains a candidate, and although no critical habitat has been proposed, it is already recognized as a California Species of Special Concern and must be evaluated under CEQA. While USFWS has not released species-specific guidance, best management practices developed for military installations by the Department of Defense offer practical frameworks for surveys, monitoring, and mitigation.
The monarch butterfly (Danaus plexippus) was proposed for listing as a threatened species under FESA in December 2024, as discussed in our prior legal alert. The proposed rule includes critical habitat designations across seven coastal California counties, as well as a 4(d) rule exempting certain conservation activities from take prohibitions. While the original public comment period closed in March 2025, USFWS subsequently reopened it, and comments last closed on May 19, 2025. A 12-month status is now underway. Although the monarch is not yet listed, CEQA documents — especially for projects with a federal nexus — should evaluate potential impacts and incorporate avoidance or mitigation measures where appropriate.
RECOMMENDATIONS FOR PROJECT PROPONENTS
To reduce permitting risk and ensure CEQA defensibility, project proponents should:
Conduct early biological due diligence, particularly where candidate or proposed species habitat may be present.
Prepare clear, defensible biological technical reports using current survey protocols and best available data.
Incorporate mitigation strategies into CEQA documents that reflect current agency guidance — even while CESA or FESA listing decisions are pending.
Include mitigation language in CEQA documents anticipating the need for future permits and consultation with resource agencies if listings become final.
FINAL THOUGHTS
With multiple listing decisions anticipated over the next one to two years, early planning and adaptive CEQA strategies are essential. By proactively addressing the potential presence of candidate and proposed species, project proponents can reduce regulatory and legal risk while keeping entitlement timelines on track.
Beyond Sackett: California’s Expanding Role in Wetlands Permitting and the Future of “Waters of the State”
California’s regulatory authority over “waters of the state” continues to grow even as the federal definition of “Waters of the United States” (WOTUS) narrows under shifting legal and regulatory frameworks. In Sackett v. EPA (598 U.S. 651 (2023)), the U.S. Supreme Court significantly restricted the scope of federal authority over waters and wetlands under the Clean Water Act (CWA), rejecting the “significant nexus” test from Rapanos v. United States (547 U.S. 715 (2006)). The Court held that only “relatively permanent, standing or continuously flowing” waters with a “continuous surface connection” to navigable, interstate waters qualify as federally jurisdictional WOTUS.
While the full impact of Sackett remains in flux, it is clear that many aquatic features previously protected under federal law are no longer considered jurisdictional WOTUS. This includes non-wetland features such as isolated waters and ephemeral streams, as well as wetlands that do not physically adjoin a jurisdictional waterbody.
In California, the practical result of Sackett is that the state is now poised to take on an expanded role in wetlands protection. Although California has not yet adopted comprehensive regulatory reforms to address the jurisdictional gap left by Sackett, recently proposed Senate Bill 601 (SB 601) signals the state’s intention to assert regulatory authority over formerly federally protected waters. This shift could have significant implications for developers, local governments, and permitting agencies.
FEDERAL DEVELOPMENTS
Building on Sackett, recent federal agency actions signal a further narrowing of federal jurisdiction. In March 2025, the U.S. Environmental Protection Agency (EPA) and U.S. Army Corps of Engineers (Corps) issued a joint memorandum to field staff, clarifying implementation of Sackett’s “continuous surface connection” test. Around the same time, these agencies also published a notice in the Federal Register — colloquially dubbed the “WOTUS Notice: The Final Response to SCOTUS” — announcing a forthcoming public process to solicit stakeholder input on future rulemaking related to WOTUS and wetlands. Both documents reflect an intent to further restrict the federal reach of the CWA.
As a result, more land development activities that involve wetlands or aquatic features may proceed without triggering the need for federal permits under CWA §§ 402 (National Pollutant Discharge Elimination System (NPDES) permitting) or 404 (dredge and fill).
CALIFORNIA’S WETLAND DEFINITION AND POLICY LANDSCAPE
Wetlands no longer regulated under the CWA remain protected in California under the Porter-Cologne Water Quality Control Act (Porter-Cologne), which governs discharges to “waters of the state.” In 2024, Assembly Bill 2875 established a state policy to achieve both no net loss and long-term net gain of California’s wetlands, reinforcing this broader regulatory mandate.
Historically, California collaborated closely with the Corps in the review and permitting of projects impacting wetlands, particularly through the CWA Section 401 water quality certification process. With federal jurisdiction curtailed post-Sackett, this collaboration has diminished, and California agencies — especially the State Water Resources Control Board (State Water Board) and the nine Regional Water Quality Control Boards (Regional Water Boards) — are expected to fill the regulatory void.
Although the State Water Board adopted a wetlands definition and state dredge-and-fill procedures in 2021, these rules predate Sackett. In 2023, the State Water Board issued a set of frequently asked questions (FAQs) acknowledging the Sackett Court’s decision and previewing several of the regulatory issues that have since materialized.
With fewer projects eligible for 401 certification, the Regional Water Boards have shifted toward processing more state-only Waste Discharge Requirements (WDRs). Unlike the streamlined, administrative CWA § 401 process, WDRs typically involve a minimum three-month public process. While General Orders and Programmatic WDRs offer expedited pathways, the most efficient option remains structuring a project to maintain a federal hook, thereby preserving access to the 401 certification route. Post-Sackett, however, this is increasingly difficult for many projects.
PROPOSED SENATE BILL 601
State legislators are seeking to reaffirm California’s commitment to filling any regulatory gaps left by Sackett through SB 601, which would expressly extend protections to “nexus waters”— a newly defined term intended to encompass waters no longer covered by federal law. While many of the bill’s provisions are largely duplicative of existing state authority under Porter-Cologne, several provisions of SB 601 would expand enforcement tools and compliance obligations, raising potential concerns within the development community.
Among its current provisions, SB 601 would:
Define “nexus waters” broadly to include all waters of the state that are also not navigable waters, with limited exceptions.
Add a citizen suit provision, allowing an action to be brought in the public interest in superior court, by any “person who has suffered an injury in fact,” to enforce either state water quality standards or federal standards in effect as of January 19, 2025.
Eliminate the requirement that Regional Water Boards consider factors such as economic impacts and housing needs when establishing water quality objectives for nexus waters.
Authorize the State Water Board to adopt water quality control plans for all nexus waters.
Make a failure to file a required report of waste discharge under WDRs subject to civil liability and criminal penalties under California law and incorporate analogous provisions of the CWA.
Require the State Water Board’s executive director to increase civil monetary penalties for certain violations of WDRs to account for inflation, but not to exceed 150% each year other than the first year.
LOOKING AHEAD
Taken together, the narrowing of the federal CWA’s reach and proposed SB 601 may impose additional burdens on project proponents, including regulatory uncertainty, permitting delays, and higher compliance costs associated with wetlands and water quality regulation. As SB 601 advances through the legislative process, stakeholders should monitor its progress closely and prepare for continued evolution in California’s approach to wetlands permitting.
Air District Asbestos Rule Will Affect Demolition Activities for Facilities Damaged by the Los Angeles Wildfires
Owners and operators of facilities damaged or destroyed by the recent Los Angeles-area wildfires should be aware of the risks posed by toxic contaminant releases during cleanup and, in particular, the regulatory requirements imposed by South Coast Air Quality Management District (Air District) Rule 1403 to protect the public from such releases. Owners and operators are ultimately responsible for compliance with Rule 1403, even when contractors perform most or all the work.
BACKGROUND
Generally, Rule 1403 imposes survey, notification, work practice, and recordkeeping requirements on owners and operators who engage in “demolition” and “renovation” activities to protect workers and the public from the potential release of airborne asbestos fibers. Rule 1403 is clear that “a facility destroyed by fire… remains subject to this rule’s provisions,” and debris cleanup activities may — and often do — qualify as the “renovation” or “demolition” of the facility.
Asbestos, which is a type of toxic contaminant covered by Rule 1403, is commonly found in facilities built or renovated prior to the early 1980s, particularly in roofing and flooring products, caulks, mastics, and insulation, and may also be found in facilities constructed or renovated after that time. When inhaled, asbestos is known to cause damage to the lungs and may result in long-term serious health problems. It has been classified by multiple federal agencies as a human carcinogen and can also cause asbestosis, a chronic lung disease characterized by shortness of breath, coughing, fatigue, and other serious symptoms. Due to these health hazards and its common use in construction and other industries, asbestos was one of the first hazardous air pollutants to be regulated under the Environmental Protection Agency’s National Emission Standards for Hazardous Air Pollutants (NESHAP) regulations in the early 1970s.
COMPLIANCE
Again, owners and operators are ultimately responsible for compliance with Rule 1403, even when contractors perform most or all the work. The risks of noncompliance are substantial. In addition to the health and safety risks posed by improper handling and release of asbestos-containing materials, civil and even criminal penalties are possible. Civil penalties currently start at $5,000 per violation, per day for strict liability violations, and quickly rise to $25,000 for negligent violations, $75,000 for intentional violations, and up to $1 million for corporations that engage in intentional, willful, or reckless violations that cause great bodily injury or death.
In response to the damage caused by the recent Los Angeles-area wildfires, Governor Newsom recently issued executive orders waiving or suspending certain regulatory requirements that may impede rapid response and rebuilding efforts. Rule 1403 has not been the subject of any such order and may not be included in any future orders because it addresses a serious health risk for the public, relief workers, and contractors, and it implements the federal NESHAP regulations, which are not waivable by the state. In recently issued guidance for cleaning up fire-damaged debris, see here, the Air District confirmed that owners and operators that opt out of the “no-cost-to-residents” debris cleanup being conducted by the U.S. Army Corps of Engineers must comply with Rule 1403.
RULE 1403 REQUIREMENTS
Pre-Activity Survey and Notification
Before any demolition or renovation activity may begin, the owner/operator must contract with a Cal/OSHA certified inspector to survey the facility for the presence of asbestos-containing materials (ACM). If the survey identifies any suspected ACM, a sample of that material must be taken and analyzed in a qualified laboratory according to specified procedures. Analysis of suspected ACM is not required if the owner/operator elects to treat it as ACM. If the asbestos survey identifies ACM that will be disturbed by the renovation or demolition work (or the owner/operator elects to treat building materials as ACM), the owner/operator must contract with a Cal/OSHA registered Abatement Contractor to properly address the ACM. The Abatement Contractor must be from a different entity than the certified inspector.
Notification requirements depend on whether the work is categorized as a demolition (the “wrecking or taking out of any load-supporting structural member”) or renovation (any other alteration of a facility). The Air District must be notified prior to the start of any demolition activities whether the survey identified ACM or not. For non-exempt renovation activities, the Air District must be notified only if the initial survey identified ACM that will be removed. Notification is required no later than 10 working days before any work begins, though shorter notification periods may be available for emergency demolition or renovation operations.
Renovation and Demolition Procedures
Rule 1403 contains specified procedures that Abatement Contractors must implement when removing ACM. Generally, Abatement Contractors are free to choose among these procedures, but where ACM has been damaged in a fire, or an owner/operator elects to treat building materials as ACM without a survey or laboratory analysis, they must use “Procedure 5–Approved Alternative.” Procedure 5 requires an Abatement Contractor to develop a customized plan for the removal of ACM from a facility and, importantly, obtain Air District approval prior to the start of any related renovation or demolition activities. The Air District has affirmatively stated that the review and approval of Procedure 5 plans is required even in emergencies and specifically for the cleanup of wildfire debris. To date, the Air District has not released any approved standardized “Procedure 5” plan for wildfire debris cleanup, which means individual plan development and approval is required.
Once renovation or demolition activities have begun, the Abatement Contractor must follow specific requirements for the removal, handling, and disposal of ACM. The owner or operator of the facility being demolished or renovated must keep certain records for at least three years, including copies of survey-related documents, notifications to the Air District, waste shipment records, and Abatement Contractor qualifications.
Key Exemptions
Owner–occupants of residential single-unit dwellings that personally conduct a renovation are exempt from the Rule 1403 requirements.
Renovations of single-unit dwellings where less than 100 square feet of ACM will be removed or stripped are exempt from the survey requirements of 1403.
Renovations where less than 100 square feet of ACM will be removed or stripped are exempt from the notification requirements of Rule 1403.
Council of the European Union Agrees Mandate to Streamline CSRD and CSDDD Requirements
On 23 June 2025, the Council of the European Union (“Council”) endorsed its negotiating mandate on the European Commission’s Omnibus I proposal, which aims to streamline the Corporate Sustainability Reporting Directive ((EU) 2022/2464) (“CSRD”) and the Corporate Sustainability Due Diligence Directive ((EU) 2024/1760) (“CSDDD”). This initiative forms part of a broader EU strategy to reduce regulatory complexity and enhance the competitiveness of European businesses.
The application of CSRD requirements for companies not yet reporting has already been delayed by two years under the “Stop-the-clock” mechanism adopted on 14 April 2025, with CSDDD’s implementation also delayed. The mandate now agreed by the Council is with regards to the proposed changes in scope of companies needing to comply with CSRD and CSDDD, alongside some of the substantive requirements of CSDDD.
Key Positions in the Council’s Mandate
1. Corporate Sustainability Reporting Directive (CSRD):
Scope Reduction: The Council supports raising the employee threshold to 1,000 employees (up from 250), that must be met as mandatory criteria and excluding listed SMEs from the CSRD’s scope.
New Financial Threshold: A new €450 million net turnover threshold is introduced to further limit the number of in-scope companies — this is a significant uplift from needing to meet either a financial threshold of €50 million in net turnover and/or a balance sheet total exceeding €25 million. It also aligns with the existing threshold for CSDDD.
Review Clause: A provision is included to allow future reassessment of the scope, ensuring sufficient availability of sustainability data across the market.
Postponement Measures:
2. Corporate Sustainability Due Diligence Directive (CSDDD):
Higher Applicability Thresholds: The Council proposes limiting CSDDD to companies with at least 5,000 employees and €1.5 billion in net turnover, focusing on those best equipped to manage due diligence obligations. This is a very significant uplift from €450 million net turnover and 1,000 employees as had previously been proposed.
Risk-Based Approach: The due diligence model shifts from an entity-based to a risk-based approach, targeting areas where adverse impacts are most likely. Companies will therefore conduct a general scoping exercise rather than comprehensive mapping.
Tier 1 Limitation: Obligations to be confined to a company’s own operations, subsidiaries and direct business partners, with a review clause for potential future expansion.
Climate Transition Plans: Companies must adopt climate change mitigation transition plans, but the obligation is deferred by two years. Supervisory authorities will be empowered to advise on their design and implementation.
Civil Liability: The Council maintains the Commission’s proposal to remove the EU-wide harmonised liability regime, leaving enforcement to national legal systems.
Transposition Deadline: The deadline for Member States to transpose the CSDDD is postponed to 26 July 2028.
Next Steps
The Council’s mandate paves the way for interinstitutional negotiations with the European Parliament and the European Commission. However, formal discussions can only commence once the European Parliament has established its own negotiating position, which is ongoing.
California Battery Energy Storage Update
California has set ambitious clean energy standards, mandating that 100% of the state’s electricity be supplied by renewable and zero-carbon resources by 2045, with interim targets of 60% by 2030 and 90% by 2035. In order to meet these goals, California must be able to successfully store solar and wind energy generated only when the sun is shining, and the wind is blowing. In 2024, California made significant progress, bringing more than 7,000 megawatts of clean energy and over 4,000 megawatts of new battery storage online. Battery storage systems are key to California’s ability to meet energy demand, but the current installed battery storage capacity is over 20% of California’s peak demand. The state’s projected need for battery storage capacity is estimated at 52,000 megawatts by 2045.
To help achieve this ambitious target, since 2022, the California Energy Commission (CEC) was given temporary authority to permit certain renewable energy projects, including energy storage facilities capable of storing 200 megawatt-hours or more, through its Opt-In Certification Program originally enabled under AB 205. The Opt-In Certification Program is an optional permitting process through which project developers receive a permit from the CEC in lieu of any local permit and most, but not all, state permits. Since the enactment of the program, Allen Matkins has developed significant experience supporting Opt-In projects. As of this publication, there are eight Opt-In projects in the CEC’s queue.
The January 2025 fire that destroyed a portion of the 300-megawatt Moss Landing energy storage facility near Santa Cruz, California has brought increased attention to safety standards at storage facilities. This legislative session, three bills, AB 303, AB 434, and SB 283 were introduced, each proposing different standards for energy storage safety.
AB 303: BATTERY ENERGY SAFETY & ACCOUNTABILITY ACT
AB 303, introduced by Assemblymember Dawn Addis, proposes to remove energy storage facilities from the CEC’s Opt-In Certification Program and return land use authority back to local agencies. Additionally, AB 303 would establish restrictions for locations of new energy storage facilities. If passed, new facilities could not be constructed in high fire and high flood zones and a 3,200-foot setback from environmentally sensitive sites, such as homes, schools, hospitals, and prime agricultural land would be required. As drafted, AB 303 would not impact existing energy storage facilities but would seek to address safety concerns for new facilities across the state. At the beginning of June, AB 303 became a two-year bill by not passing through to the Senate by the applicable deadline.
AB 434
AB 434, introduced February 5th by Assemblymember Carl DeMaio, would similarly exclude energy storage facilities from the CEC’s Opt-In Certification Program. However, AB 434 would further prohibit, until January 1, 2028, a public agency from authorizing the construction of new energy storage facilities and would require the State Fire Marshal, on or before January 1, 2028, to adopt guidelines and minimum standards for the construction of energy storage facilities. Further, AB 434 would require public agencies authoring new energy storage facilities on or after January 1, 2028, to require the facility to meet either the standards adopted by the State Fire Marshal or more stringent guidelines as determined appropriate by the public agency. At the beginning of June, AB 343 became a two-year bill by not passing through to the Senate by the applicable deadline.
SB 283
SB 283, introduced February 5th by Senator John Laird, would require new energy storage facilities to meet the National Fire Protection Association (NFPA) 855 standards for battery storage safety and hazard mitigation. Further, prior to submitting an application for a new energy storage facility through either the CEC’s Opt-In Certification Program or a local approval process, developers would be required to engage and confer with local fire authorities to address facility design, assess potential risks, and integrate emergency response plans. As of this writing, SB 283 is being considered in the Assembly and will be heard before the Energy, Utilities and Communications and Local Government committees.
Legislature’s Report Captures California’s Permitting Reform Zeitgeist and Creates the Launchpad for More Than 20 New Housing Bills
In the summer of 2024, the State Assembly Select Committee on Permitting Reform began convening public hearings, interviews, and forums to understand how to reform land use permitting to address California’s ongoing “housing crisis and climate crisis.” This effort culminated in two parts: on March 4, 2025 the Select Committee released its Final Report on Permitting Reform, and on March 27, legislators operationalized the Final Report’s recommendations in a sweeping “Fast Track Housing package” of over 20 bills intended to make housing “more affordable by slashing red tape, removing uncertainty, and drastically diminishing the time it takes to get new housing approved and built.” We separately review these bills here.
The Final Report itself does not propose specific legislation. Instead, it reiterates that California needs to build more housing, renewable energy facilities, and climate-resilient infrastructure “at an unprecedented scale” to achieve its climate and housing goals. And to do so, the Final Report explains that California must transform its permitting processes from “time-consuming, opaque, confusing” endeavors into “timely, transparent, consistent, and outcome-oriented” sequences.
The Final Report unpacks four areas of permitting that underpin the housing and climate crises: Housing, Electricity, Water, and Transportation. Key recommendations for each topic are summarized below.
HOUSING
The Final Report lists five recommendations to improve permitting for housing development projects:
Eliminate uncertainty in the application process.
Minimize uncertainty in the entitlement process.
Create more consistency across permitting entities.
Focus CEQA review of housing developments on addressing potential environmental harms (versus nonenvironmental concerns often raised by project opponents).
Minimize uncertainty for post-entitlement permits.
Echoing the Final Report’s overarching themes, these recommendations focus on increasing certainty for housing developers throughout the permitting process. Stakeholders testifying about permitting challenges emphasized the need for clear, predictable local permitting requirements and decreased permitting timelines.
Regarding CEQA, the Final Report explains that “CEQA has proven highly susceptible to being leveraged to prevent development of projects for nonenvironmental reasons, such as dislike of development by those living near the proposed project, desire to lock in labor agreements by labor unions, desire for community benefits by community groups, and as a way for businesses to hurt their competitors. To facilitate the best environmental outcomes, and facilitate necessary projects, the environmental review of projects must be focused on those aspects of the project that are potentially harmful to the environment.”
ELECTRICITY
The Final Report identifies five opportunities to improve permitting for electrical infrastructure projects:
Improve implementation of Assembly Bill (AB) 205 (which allows the California Energy Commission, rather than a local agency, to permit a clean energy project).
Facilitate conversion of fallowed agricultural land to clean energy purposes.
Minimize unnecessary restrictions on battery storage.
Reduce barriers to reconductoring.
Facilitate alignment between local, state, and federal agencies.
Emphasizing the need to “deploy new electricity infrastructure at a scale and speed never before seen,” these recommendations focus on removing unnecessary or redundant barriers to constructing new energy facilities. As one stakeholder put it: “Meeting [California’s clean energy goals] is literally a moonshot. It requires a total of 70 gigawatts of utility-scale solar, 48 gigawatts of utility-scale battery storage by 2045 by the state’s own projections. And to succeed, we have to figure out how to build, on average, three times more than the fastest year we’ve ever built before.”
WATER
The Final Report identifies three opportunities to improve permitting for water storage, conveyance, and flood control projects:
Eliminating uncertainty in the application process.
Enhancing interagency coordination and consistency.
Creating distinct permitting pathways for drought resilience and flood risk reduction projects.
Stakeholders testifying about the challenges of permitting water infrastructure projects emphasized that long, complex, and multi-jurisdictional permitting processes can compound rather than surmount the urgent need to increase water capture and protect other critical infrastructure.
TRANSPORTATION
The Final Report notes that the transportation sector is California’s largest producer of greenhouse gas emissions and identifies three opportunities to improve permitting for transportation projects:
Increase consistency across local permitting entities.
Remove inefficiencies in repeat engagements.
Create distinct permitting pathways for important transit projects.
According to the Final Report, shifting trips from personal vehicles to alternative modes of transportation is an essential step in reducing greenhouse gases from California’s transportation sector. However, such projects often require approvals from multiple agencies, and that process is not always coordinated or consistent. Stakeholders testifying about these challenges recommended that the state legislature require local and state agencies to standardize the permitting process for transit projects.
IMPLEMENTING THE FINAL REPORT’S RECOMMENDATIONS
Legislators have sought to promptly implement the Final Report’s recommendations. The “Fast Track Housing package” unveiled on March 27 is based on the Final Report and includes over 20 bills aimed at reducing housing production delays. According to Assemblymember Buffy Wicks, who chaired the Select Committee on Permitting Reform, “The Fast Track Housing package is about making our systems work better: clearer rules, faster timelines, and fewer bureaucratic hoops.” Our full analysis of the new bills is available here.
Challenging the Industrial Exodus: Legal Lessons from Santa Ana’s Planning Reboot
The City of Santa Ana (City) has recently undertaken an ambitious — and highly controversial — effort to reshape the landscape of its historically industrial-centric Transit Zoning Code (TZC) district. Through the adoption of a development moratorium and the introduction of Zoning Ordinance Amendment (ZOA) No. 2024-02 (the Zoning Code Update), the City has sought to restrict, phase out, and ultimately eliminate industrial uses within the TZC area. Together, these legislative tools illustrate a growing trend among municipalities to leverage interim ordinances and zoning amendments as instruments of long-range planning, often to the detriment of long-established industrial users. Similar efforts have been pursued in recent years by a number of other Southern California cities – including Pomona, Redlands, Rialto, Pico Rivera, Rancho Cucamonga, and Lynwood – through the use of zoning overlays, targeted use restrictions, and industrial moratoria. This list is not exhaustive, but reflects a broader regional shift in policy toward phasing out legacy industrial activity.
This article examines the legal underpinnings of the City’s approach, with particular focus on the statutory limits governing moratoria, the erosion of legal nonconforming rights under the Zoning Code Update, and the vested rights framework that enabled certain property owners to successfully defend against overreach. For landowners, developers, and practitioners across California, the City of Santa Ana case study offers timely insights into the risks — and opportunities — of navigating land use regulations in a shifting policy landscape.
DEVELOPMENT MORATORIA AS PLANNING TOOLS AND THEIR LEGAL LIMITS
A growing trend has emerged among Southern California municipalities: the use of moratoria to freeze industrial development while more permanent land use regulations are drafted and baked into existing zoning codes. Many cities have expressed concern that their industrial zoning codes — often decades old — are no longer equipped to address the intensity, scale, and externalities associated with modern warehousing and logistics operations. Often styled as temporary “pauses,” these moratoria are increasingly being deployed to sidestep political or procedural delays in controversial rezonings. The City’s approach is emblematic of this shift.
In April 2024, the City adopted Urgency Ordinance No. NS-3063, establishing an immediate 45-day moratorium on industrial use approvals in the TZC area. The urgency measure term was initially extended to April 15, 2025 via the City’s adoption of Ordinance No. NS-3064, ostensibly to provide the City with time to “alleviate conditions” associated with industrial impacts on surrounding neighborhoods. Yet, in practice, the moratorium functioned less as a temporary regulatory pause and more as a de facto blanket ban on industrial activity blocking even ministerial permits for minor tenant improvements and routine facility upgrades for existing facilities. In some jurisdictions, such as Pomona, staff went even further — interpreting local moratoria as grounds to withhold business licenses altogether, compounding the regulatory chilling effect.
While cities are authorized by State law to impose interim ordinances under California Gov. Code § 65858, that authority is narrowly tailored. Subsection (a) requires a city to make express findings that “there is a current and immediate threat to the public health, safety, or welfare,” and that the approval of certain land uses “would result in that threat to public health, safety, or welfare.” These findings must be supported by specific and demonstrable facts, not merely policy preferences or speculative concerns. Notably, establishing a moratorium requires a higher approval threshold (a four-fifths vote), yet many cities routinely adopt moratoriums without adequately substantiated findings meeting this elevated standard.
Moreover, Gov. Code § 65858(c) limits extensions (moratoria may be in place for up to a maximum of two years) of interim ordinances to cases where the city adopts “new findings” evidencing continued urgency. Courts have interpreted this to mean that local governments may not simply recycle generalized concerns from the original ordinance; instead, they must produce fresh and substantial evidence justifying continued restrictions. As one court observed, the power to adopt moratoria “must not be used as a subterfuge to accomplish through interim action what would otherwise require permanent legislation subject to full procedural safeguards.” (See San Diego Gas & Electric Co. v. City of Carlsbad (1998) 64 Cal.App.4th 785, 792.)
The City’s blanket application of its moratorium — even to longstanding industrial businesses performing non-expansion work — ultimately tested the boundaries of lawful urgency regulation. In practice, we have observed in multiple jurisdictions that planning and building department staff frequently misapply moratoria by freezing all permit activity, regardless of whether a proposed action would establish a new industrial use or expand or intensify an existing one. This overreach leads to delays for purely ministerial work, such as tenant improvements, equipment upgrades, or basic maintenance for long-standing businesses, even when no land use intensification is proposed.
Such was the case for Adams Iron Co., whose long-operating facility at 811 N. Poinsettia Street was denied a ministerial permit for internal dust collection upgrades during the moratorium period. Allen Matkins submitted a formal letter to the City Attorney on September 4, 2024, later covered by various media outlets, arguing that the City’s refusal to issue the permit violated Adams Iron’s vested rights under California law. The letter cited long-standing case law, including Avco Community Developers, Inc. v. South Coast Regional Com. (1976) 17 Cal.3d 785, and emphasized that Adams Iron had expended significant resources in reliance on existing zoning and permits. The City’s blanket denial, we argued, was not only unsupported by the moratorium’s express terms but also exposed the City to potential liability for unconstitutional takings and inverse condemnation.
Ultimately, the City relented. Adams Iron received its permit — one of the few granted during the moratorium — illustrating how careful legal positioning and a clear articulation of vested rights can successfully overcome unlawful regulatory applications.
This episode illustrates a broader caution: moratoria are not planning shortcuts. They are statutory tools of last resort, meant to address genuine emergencies — not a means for incrementally phasing out disfavored uses without going through appropriate legislative processes.
REZONING AND THE EROSION OF NONCONFORMING RIGHTS
While the moratorium temporarily paused industrial activity in the City’s TZC area, the City simultaneously moved to make such restrictions permanent through a sweeping legislative overhaul. Specifically, the City initiated the Zoning Code Update, consisting of Zoning Ordinance Amendment (ZOA) No. 2024-02 and Amendment Application (AA) No. 2024-03. These measures proposed major revisions to permitted land uses, nonconforming use regulations, and operational standards within the TZC.
The centerpiece of the Zoning Code Update is a dramatic reclassification of large swaths of formerly industrially zoned land — including M1 (Light Industrial) and M2 (Heavy Industrial) designations — into a newly created “Urban Neighborhood” zoning. Industrial uses are no longer permitted under the Urban Neighborhood zoning designation and existing industrial businesses (including standard warehousing) are reclassified as legal nonconforming uses, subject to heightened scrutiny and eventual phase-out.
Among the most concerning features of the Zoning Code Update were:
Amortization provisions allowing the City to forcibly terminate nonconforming uses after an undefined “reasonable” period.
Transfer restrictions that prohibit the continuation of a nonconforming use upon sale or lease to a new operator, effectively undermining financing, succession planning, and property value.
Operational standards that retroactively impose new noise, environmental, and performance obligations on existing businesses.
These mechanisms pose an existential threat to industrial operators. As California courts have long recognized, the right to continue a legal nonconforming use is a “vested right that runs with the land” (Edmonds v. County of Los Angeles (1953) 40 Cal.2d 642). By conditioning continued operation on an arbitrary amortization timeline or restricting successor use rights, the Zoning Code Update risked unlawfully extinguishing these protected interests.
Equally problematic was the City’s attempt to justify the Zoning Code Update by relying on its Transit Zoning Code Environmental Impact Report (EIR No. 2006-02), certified in 2010. That EIR was prepared 15 years ago and does not evaluate the displacement, cumulative socioeconomic, or environmental impacts of a wholesale elimination of industrial land uses. Nevertheless, the City merely prepared an addendum to that EIR, claiming that the proposed changes fell within the scope of prior review under CEQA Guidelines section 15162.
Allen Matkins, on behalf of multiple affected property owners — including Adams Iron — submitted formal comment letters, provided public testimony, and engaged in direct negotiation with City staff to raise legal concerns with the procedural and substantive adequacy of the EIR addendum and the substantive legal risks embedded in the Zoning Code Update.
While these advocacy efforts did not halt the Zoning Code Update entirely, they produced meaningful improvements. The City ultimately incorporated several clarifying provisions and exceptions in response to public comments — including a more flexible approach to abandonment determinations, refined amortization language, and narrowly tailored allowances for specific industrial sites. These changes significantly reduced the burden on our clients and preserved key operational rights.
With the City Council scheduled to vote on final adoption of the Zoning Code Update on May 5, 2025, continued attention is warranted. The City’s approach illustrates the increasing use of comprehensive rezoning as a policy tool to phase out disfavored uses. For industrial property owners, it also underscores the importance of early engagement, robust legal analysis, and clear documentation of vested rights when facing existential regulatory change.
TERMINATION OF THE MORATORIUM AND LESSONS LEARNED
Faced with vocal opposition and detailed legal scrutiny, the City Council surprisingly allowed the moratorium to expire on April 15, 2025, after failing to achieve the required statutorily required four-fifths vote for extension. This termination represented a significant legal victory, validating the arguments advanced by businesses and highlighting the necessity for municipal transparency and statutory adherence.
City Council recently adopted the permanent Zoning Code Update for the Transit Zoning Code (TZC) area on June 3, 2025, after introducing several last-minute amendments during the public hearing. We are actively assisting clients in navigating the newly enacted regulations, interpreting their impacts, and developing strategies to protect vested rights and maintain operational continuity.
Looking forward, the City is now in the initial stages of stakeholder outreach and drafting a broader Comprehensive Zoning Code Update. Unlike the TZC update, this forthcoming comprehensive revision will affect zoning citywide, impacting property owners and businesses throughout Santa Ana. Businesses and property owners should proactively engage in this planning process, clearly document and assert their vested rights, and remain prepared to leverage precise legal arguments grounded in statutory compliance and constitutional protections. Continued vigilance will be essential to successfully navigating these extensive zoning reforms.
PRACTICAL IMPLICATIONS AND FORWARD–LOOKING GUIDANCE
The City of Santa Ana’s recent experiences offer critical insights:
Municipalities must strictly adhere to statutory standards: Property owners should scrutinize local governments’ “findings” supporting urgency ordinances, challenging vague or insufficient evidence.
Documentation of vested rights is crucial: Clear records demonstrating continued use and permits become essential to asserting constitutional and statutory rights against municipal overreach.
CEQA compliance matters: Advocating against reliance on outdated EIRs ensures legally adequate environmental review and protects against arbitrary zoning amendments.
In navigating similar municipal strategies elsewhere, proactive and assertive legal engagement remains critical. As municipalities increasingly adopt aggressive planning tools, particularly those targeting industrial uses, businesses and property owners must remain informed and strategically prepared to defend their vested rights.
California’s New Climate-Related Disclosure Laws: Requirements, Compliance Costs, and Deadlines for Impacted Businesses
California is often the vanguard of climate-related policies and programs. From legislation requiring the state to reduce overall greenhouse gas (GHG) emissions and procure electricity from renewable and carbon-free sources to the Cap-and-Trade Program and Low Carbon Fuel Standard, businesses operating in California must constantly stay informed of the shifting regulatory landscape.
In 2023, California enacted two laws continuing this trend. Senate Bill (SB) 253, known as the Climate Corporate Data Accountability Act, is the first law in the United States to require businesses to disclose their GHG emissions in an annual report submitted to the California Air Resources Board (CARB). SB 261, known as the Climate-Related Financial Risk Act, requires businesses to assess and report every two years to CARB on how climate-related financial risks may impact their market position, operations, and supply chains. In 2024, SB 219 amended both SB 253 and SB 261 to clarify reporting requirements and extend certain deadlines.
SB 253 requires businesses to begin reporting emissions data in 2026, while SB 261’s climate-related financial risk reports are due on January 1, 2026. If they haven’t already, covered businesses should begin preparing now. This article summarizes SB 253’s and SB 261’s reporting requirements, processes, and penalties for noncompliance. It also provides an update on litigation challenging both laws in federal court and steps taken by CARB to implement SB 253 and SB 261.
SB 253: CLIMATE CORPORATE DATA ACCOUNTABILITY ACT
SB 253, as amended by SB 219, directs CARB to adopt regulations by July 1, 2025, requiring “reporting entities” — businesses with total annual revenues over $1 billion that are formed under state or federal law and do business in California — to annually disclose their Scope 1, Scope 2, and Scope 3 emissions. SB 253 defines each scope as follows:
Scope 1 emissions are “all direct greenhouse gas emissions that stem from sources that a reporting entity owns or directly controls, regardless of location, including, but not limited to, fuel combustion activities.”
Scope 2 emissions are “indirect greenhouse gas emissions from consumed electricity, steam, heating, or cooling purchased or acquired by a reporting entity, regardless of location.”
Scope 3 emissions are “indirect upstream and downstream greenhouse gas emissions, other than Scope 2 emissions, from sources that the reporting entity does not own or directly control. These may include, but are not limited to, purchased goods and services, business travel, employee commutes, and processing and use of sold products.”
Examples of Scope 1 emissions (direct emissions) include company-owned vehicles or heavy machinery; on-site fuel combustion (e.g., diesel backup generators or natural gas boilers); and process emissions (e.g., from cement production or refining operations). Scope 2 emissions (indirect) are associated with the generation of purchased energy.
Scope 3 emissions, typically the largest share of a company’s GHG footprint, are the most complex and resource-intensive to measure. These emissions result indirectly from a company’s operations and are not directly emitted by the company. Upstream examples include employee travel, waste disposal, capital goods, and inbound transportation. Downstream examples include delivery, use, and disposal of sold products, franchises, and investments. SB 219’s amendments to SB 253 delayed Scope 3 reporting requirements until 2027.
To accurately measure emissions, reporting entities will likely need legal counsel, environmental consultants, and accounting/auditing support. The California Chamber of Commerce estimates initial compliance costs exceed $1 million per company, with ongoing annual costs between $300,000 and $900,000, plus additional costs for supply chain data collection and verification. SB 253 allows penalties up to $500,000 for misreporting but includes a safe harbor provision for good-faith Scope 3 emissions reporting through 2030. The law also requires third-party assurance of emissions reports, with specific requirements to be defined by CARB.
SB 261: CLIMATE-RELATED FINANCIAL RISK ACT
SB 261 applies to any “covered entity” with total annual revenues over $500 million that is formed under state or federal law and does business in California. Beginning January 1, 2026, covered entities must biennially disclose on their website a report covering two categories of climate-related financial risk information, defined as information related to the “material risk of harm to immediate and long-term financial outcomes due to physical and transition risks.” This report must also be submitted to CARB.
The two required categories are:
The covered entity’s climate-related financial risk, following the framework and disclosures recommended in the Final Report of Recommendations of the Task Force on Climate-related Financial Disclosures (June 2017); and
The covered entity’s measures adopted to reduce and adapt to the disclosed risks.
Unlike SB 253, SB 261 is self-executing and does not depend on CARB regulations, although the law directs CARB to adopt rules specifying administrative penalties — capped at $50,000 — for failure to publish a report or for inaccuracies. Business groups estimate initial compliance costs to range from $300,000 to $750,000, with recurring biennial costs between $150,000 and $500,000.
CARB’S IMPLEMENTATION OF SB 253 AND SB 261
On December 5, 2024, CARB issued an Enforcement Notice stating that it would “exercise its enforcement discretion” for the first reporting cycle, provided that reporting entities demonstrate good-faith efforts to comply. CARB explained that it understood businesses “may need some lead time to implement new data collection processes” and that, for the first reporting year, businesses may rely on information already in the businesses’ possession to determine their scope 1 and scope 2 emissions.
This prompted criticism from SB 253 and SB 261 authors, California State Senators Scott Wiener and Henry Stern, in a December 11, 2024 letter. They stated they were “beyond frustrated” with CARB’s lack of progress and warned that, unless CARB acts swiftly, they would consider calling leadership before the Legislature for oversight hearings in 2025.
On December 16, 2024, CARB issued an Information Solicitation requesting stakeholder input on the implementation of SB 253 and SB 261 (as amended by SB 219). Though the comment deadline (February 14, later extended to March 21) has passed, the questions and stakeholder feedback offer valuable insight for affected businesses who will have another opportunity to comment during CARB’s formal rulemaking process.
As of this publication, CARB has not yet issued its notice of proposed rulemaking in the California Regulatory Notice Register, which would initiate the formal rulemaking process and a 45-day public comment period. CARB conducted a widely attended virtual workshop on May 29, 2025, to further discuss the rulemaking efforts and its current views of potential regulatory approaches. Rulemaking proceedings, especially for proposed regulations that generate substantial public interest often require close to the full year allowed by statute to promulgate the regulations.
LEGAL CHALLENGES TO SB 253 AND SB 261
After the enactment of SB 253 and SB 261 in October 2023, the U.S. Chamber of Commerce and various other business groups filed suit in January 2024 in the U.S. District Court for the Central District of California. The motion for preliminary injunction is currently scheduled to be heard on July 1, 2025, though a ruling may not issue until later this summer.
NEXT STEPS
Amid active litigation and delayed regulatory implementation, significant uncertainty remains around SB 253’s reporting requirements and general compliance timelines. However, consistent with CARB’s Enforcement Notice, reporting entities and covered entities should begin good-faith efforts to comply with both SB 253 and SB 261 by 2026. Companies subject to California’s new climate disclosure laws should take immediate steps to engage consultants and establish internal systems to collect the required data.
Every Drop Counts: Urban Water Retailers and the Future of California Water Conservation
Beginning January 1, 2025, the “Making Conservation a California Way of Life” regulatory framework requires urban retail water suppliers — not individual households or businesses — to adopt a series of “urban water use objectives.” And beginning January 1, 2027, the regulations require urban retail water suppliers to annually demonstrate compliance with those objectives. The objectives are calculated based on indoor residential water use; outdoor residential water use; commercial, industrial and institutional irrigation use; and potable reuse. Implementation of the objectives includes setting and meeting specific targets for reducing water use per capita, improving system efficiency, and reporting progress to state regulators. Urban retail water suppliers are also required to implement water conservation programs, support the development of drought–resilient infrastructure, and encourage customers to adopt water-saving practices such as using “climate ready” landscapes.
The regulation, adopted in 2018 by the California State Water Resource Control Board, is part of the 2018 California Water Conservation Legislation (Senate Bill 606, Assembly Bill 1688) which is a comprehensive effort by the state to address ongoing challenges of water supply and environmental sustainability due to climate change. The framework targets inefficient urban water use and aims to reduce use by 500,000 acre-feet per year by 2040, consistent with the goals of the Water Supply Strategy, the California Water Plan, the Water Resilience Portfolio, and the Climate Adaptation Strategy which all recognize the importance of “Making Conservation a California Way of Life” in safeguarding water resources and preparing California communities for more extreme drought and precipitation conditions.
Under the regulation, most large urban retail water suppliers are required to comply with individualized water conservation targets. However, certain coastal cities with mild climates and historically lower per capita water usage are projected to meet their 2040 conservation goals without additional reductions. These cities include San Francisco, San Diego, San Luis Obispo, and Oceanside. In contrast, inland regions such as the community of Atwater in Central Valley, face stringent conservation requirements due to higher water use and climate conditions.
While the regulation seeks to secure California’s water future, the framework will present challenges for urban retail water suppliers including balancing the demands of indoor residential use; outdoor residential use; and commercial, industrial, and institutional irrigation use with supply amid drought conditions, aging infrastructure, and evolving climate patterns. During drought conditions, there may also be disparities in how water restrictions impact different communities, particularly those with fewer resources. Thus, ensuring equitable access to water-saving technologies and managing customer compliance can be complex.
This framework will also present challenges for individuals, developers, and businesses in various industries. Not only will these stakeholders have to adapt to more water-efficient practices, they may also be subject to new regulations on the use of land, water, and natural resources and face new costs or restrictions that affect project timelines, environmental assessments, or resource allocation.
The “Making Conservation a California Way of Life” regulation is a key initiative to ensure the preservation of the State’s natural resources, but they could bring significant challenges for urban retail water supplies and stakeholders. These sectors will need to adapt to new policies and practices that prioritize sustainability while balancing economic and operational demands.
Citizen Suit Enforcement Under the Industrial General Permit: How Businesses Can Avoid Substantial Costs Associated with Notice Letters
Each year, many California businesses receive letters from private entities, typically environmental nongovernmental organizations (Citizen Groups), alleging that those businesses’ facilities are in violation of applicable stormwater permits. The letters, commonly referred to as Notices of Violations and Intent to File Suit (Notice Letters), are authorized by the Clean Water Act’s citizen suit provision and often threaten litigation with steep civil monetary penalties up to $68,445 per violation, per day.
Resolving Notice Letters is costly and typically requires a business to retain legal counsel and an environmental consultant. Although most Notice Letters are resolved through settlement and do not result in extensive litigation, settlement payments can be substantial. Settlement agreements also often include terms for injunctive relief that obligate the owner/operator of a facility (or discharger) to make certain stormwater-related improvements, further adding to the costs associated with resolving Notice Letter allegations.
Receiving a Notice Letter that threatens legal action is a stressful experience for any business owner. This article provides an overview of California’s Clean Water Act permitting programs for industrial dischargers, including the Industrial General Permit (IGP), and offers practical tips on how dischargers subject to those permits can reduce the risk of receiving a Notice Letter. A copy of the IGP and its attachments is available here.
BACKGROUND
The Clean Water Act (CWA) prohibits discharges from point sources to waters of the United States unless the discharges are in compliance with a National Pollutant Discharge Elimination System (NPDES) permit. Section 402(p) of the CWA specifically regulates discharges of stormwater associated with industrial activity. Like most states, California has been delegated permitting authority under the CWA and, through the State Water Resources Control Board, develops its own NPDES permits for stormwater discharges associated with industrial activities, which are then implemented by one of California’s nine Regional Water Quality Control Boards.
California has a “general” industrial discharge permit — the IGP — which allows many prospective permittees to obtain NPDES coverage in a fairly consistent and uniform manner in exchange for agreeing to a similarly consistent and uniform set of permit conditions and requirements. The IGP applies to a wide variety of industries such as heavy manufacturing (paper mills, petroleum refineries, and chemical plants); mineral mining and oil and gas exploration and processing; and metal fabricators, scrapyards, and automobile junkyards. A comprehensive discussion of covered facilities is found in Attachment A to the IGP, available here.
For permittees that do not qualify or otherwise choose not to seek coverage under the IGP, California also issues site-specific industrial discharge permits. These site-specific permits are often utilized by large manufacturing facilities and/or dischargers with unusual or complex operations and ideally provide permit conditions tailored to the facility and operations at issue.
Under the IGP and virtually all site-specific industrial discharge permits, dischargers are required to take certain actions to protect waters of the United States from facility discharges, including the following:
Develop a Stormwater Pollution Prevention Plan (SWPPP) (a site-specific document that identifies potential sources of pollutants in stormwater and Best Management Practices (BMPs) to reduce any discharges associated with those pollutants).
Adequately train on-site personnel (and maintain training log documentation) to implement the BMPs identified in the SWPPP.
Collect and analyze stormwater samples (up to four times per year under the IGP) to confirm the effectiveness of the SWPPP and BMPs.
Finally, the IGP requires permittees to upload documentation to a publicly accessible database maintained by the SWRCB and known as the Stormwater Multiple Application and Report Tracking System (SMARTS), while site-specific permittees are typically required to upload documentation to a similar database known as the California Integrated Water Quality System (CIWQS).
BEST PRACTICES FOR AVOIDING A NOTICE LETTER
The best approach for dischargers to avoid a Notice Letter is to be proactive with compliance at their facilities, particularly with regard to submitting timely and correct documentation to SMARTS and/or CIWQS. Citizen groups seldom identify a facility with potential violations by visiting or personally observing that facility. Instead, citizen groups will often search SMARTS and CIWQS for signs that facilities are not in compliance with permit conditions.
Below are some of the most common reasons facilities are targeted by citizen groups:
Outdated SWPPPs: Numerous facilities operate under a SWPPP that is several years old and does not contain permit-required information or accurately reflect current facility operations.
Lack of Sampling: A failure to sample the requisite number of times, usually twice between July 1 and December 31 and twice between January 1 and June 30, may constitute a violation of the IGP. Of course, if a storm event does not have sufficient precipitation to produce a discharge, or occurs outside the facility’s operating hours, then no sampling is required. However, a prolonged lack of sampling in an area with documented storm events will draw the attention of citizen groups.
Overdue Ad Hoc Monitoring Reports and Annual Reports: Under the IGP, stormwater sampling results are required to be submitted to SMARTS within 30 days of receiving the lab report while the Annual Report must be submitted no later than July 15 following each reporting year. Facilities that submit required reports after these deadlines are attractive targets for citizen groups.
As the above points illustrate, many facilities become targets for citizen suits not based on actual discharge violations or egregious harm to the environment, but from the failure to properly and timely follow procedural requirements set forth in the applicable permit. Ensuring compliance with these procedural requirements is one of the most simple and cost-effective ways dischargers can reduce the risk of receiving a Notice Letter and becoming a target for citizen suit enforcement.
CONCLUSION
Clean Water Act permit requirements can be onerous and industrial dischargers, in particular, face significant scrutiny from citizen groups. Taking proactive steps to ensure compliance with the procedural requirements of these permits can be an efficient and highly effective method of dissuading citizen groups from issuing Notice Letters and bringing citizen suits. If a discharger is either unaware of its compliance status or is having difficulty ensuring compliance, it should consider retaining an outside environmental consultant to assist with this work.