State Permitting Reforms to Watch This Year

It's really happening

State legislative season is in full swing, and it’s shaping up to be an exciting year for permitting reform. I’ve been amazed by how widely FAI’s State Permitting Playbook has circulated, and it has been a real joy to support legislators, governors, and their teams as they look to make it easier for their states to build.

I certainly do not have my finger on the pulse of every state—but the following all stand out as major opportunity areas.

Utah

A big win is already on the board thanks to Governor Cox’s Executive Order—his first of the year—which directs Utah's environmental agencies to expand the use of streamlined permitting processes. The order requires both DEQ and the Division of Oil, Gas and Mining to identify new opportunities for permit-by-rule and general permitting while also improving the process for plantwide applicability limitation (PAL) permits. For an explanation of how these different flexible permits work, head on over to the State Permitting Playbook.

Isn’t it beautiful?

Also coming out of Utah is HB85, sponsored by Rep. Tyler Clancy. Rep. Clancy is a very impressive young legislator—I'm convinced he'll be a member of Congress in the not too distant future—and his bill provides crucial statutory authority for the Governor’s reforms, in addition to more specificity and direction around permit-by-rule categories and PAL rules.

Montana

Montana has been feeling the pain of permitting—and in particular their state NEPA, “MEPA”—for a very long time. The Black Butte Copper Mine spent nearly 14 years fighting through the permitting process, only securing its final permit in February 2024 after a contentious Supreme Court battle. The Coyote Wind Project, which would have powered over 27,500 homes, was abandoned after MEPA litigation delays made the project unfeasible. These aren't isolated incidents – Montana's environmental review process has become a reliable tool for project opponents to create delays and uncertainty that can kill even the most environmentally conscious developments.

Montana's MEPA problems are driven by two key forces: a line in the state constitution that guarantees Montanans a "right to a clean and healthful environment," and a left-leaning Montana Supreme Court that has interpreted that line exceptionally broadly, striking down the legislature's efforts at MEPA reform on more than one occasion. In Lucky Minerals, the court declared unconstitutional a 2011 MEPA amendment that would have prevented courts from voiding or suspending permits after they had been issued. This year, the Held v. Montana decision blocked several legislative reforms that would have limited the scope of MEPA reviews.

All of this means that MEPA reform is both a) pressing and b) must be narrowly tailored to avoid running up against the state constitution. In my opinion, workable reforms in Montana fall into two main categories:

1. Categorical Exclusions: MEPA needs a clearer framework for allowing agencies to identify and exempt certain routine actions from full environmental review when they demonstrably lack significant impacts. This would codify existing administrative practices and mirror the successful federal NEPA provisions.

2. Judicial Review: MEPA could be drastically improved by targeted reforms that streamline post-decision proceedings. This could include specific timelines for agency responses to court remands, requirements to raise new issues rather than re-litigate settled ones, and measured adjustments to litigation procedures that would maintain access to courts while discouraging duplicative challenges. All reforms would have to be carefully tailored to avoid running afoul of Montana’s constitution.

I’ve been watching the draft bills populate the state legislature’s website, and I would flag the following:

• LC3109: “Generally revise permitting laws”, sponsored by Senate energy committee chair Daniel Zolnikov

• LC2333: “Provide for environmental permitting reform act,” sponsored by House Majority Whip Braxton Mitchell

There are a few others I’ve heard about, too, but they don’t seem to be up on the website yet. And I also wouldn’t be surprised to see Montana make an attempt at Clean Air Act reform along similar lines to Utah.

Finally, I should take this opportunity to shout out the Frontier Institute—and in particular Kendall Cotton and Tanner Avery—who are doing excellent work in the state to push for permitting reform. Montana will be better off thanks to their efforts.

California

Hold onto your hats here folks, it might actually be happening. Several factors are working in favor of CEQA reform this year: load growth, urgency around cleantech deployment (particularly as Texas gets buzz for eating California’s lunch on renewable buildout), and the recent negative publicity around California’s failures to permit wildfire prevention activities.

You’re also seeing influential and historically reform-shy organizations like the Rocky Mountain Institute stick their neck out and recommend CEQA reform—and in particular judicial review reform. That’s what I’d keep my eye out for: some light litigation reform for certain clean energy and/or clean industrial projects. These specific industry carve-outs are to be expected in a state like California, and that’s fine by me—any state NEPA reform is good!

A great candidate to lead the charge here is Rep. Buffy Wicks. Rep. Wicks represents the East Bay in the California State Assembly as a Democrat and chairs the Assembly Select Committee on Permitting Reform. She has also recently taken to X in support of reform, tweeting that, "CEQA and other permitting regimes, once envisioned as protections for our environment, have morphed into obstacles for meeting our housing and climate goals."

Very promising stuff.

Arizona

Arizona has been at the forefront of administrative reforms to speed up permitting, and I would not be surprised to see the momentum around general permits and permits-by-rule catch on in the Grand Canyon State.

Virginia

On the east coast, Governor Youngkin has made permitting efficiency a high priority, and is entering his last year in office. I’m hoping to see some efforts to expand general permits for air and water in Virginia via executive orders.

West Virginia

Right next door, West Virginia has a new governor in Patrick Morrisey, and it’s not clear what the priorities will be for the year. But West Virginia has a super-duper-majority and can pass whatever it wants, so you might expect something on flexible permitting here too.

And more!

I’ve seen early indications of permitting reform interest in Louisiana, Tennessee, Wyoming, South Dakota, and Rhode Island. I can’t make any specific predictions yet, but I’m hopeful that some bills and/or executive orders will turn up in a few of these states.

All in all, it has been an exceptionally promising start. I’ll be covering more of this here on Green Tape as the legislative season progresses.