I dissent.
The California Environmental Quality Act (Pub. Resources Code, § 21000 et seq.) (hereinafter CEQA) should be read to require preparation of an environmental impact report (hereinafter EIR) only for an agency’s determination to limit or authorize use of land. In considering annexation applications, a local agency formation commission (hereinafter LAFCO) determines questions of political power—i.e., which of several governmental agencies shall regulate an area. The Knox-Nisbet Act creating LAFCO (Gov. Code, § 54773 et seq.) does not give it power to authorize, condition or prohibit development or use of land. Accordingly, LAFCO should not be required to prepare environmental impact reports before determining whether an annexation should be permitted.
Application of the California Environmental Quality Act
CEQA requires that public agencies “shall prepare, or cause to be prepared ... an environmental impact report on any project they propose to carry out or approve which may have a significant effect on *290the environment.” (Pub. Resources Code, §§ 21100, 21151.) In 1972, the Legislature defined “project” in Public Resources Code, section 21065, subdivision (a) to include “[activities directly undertaken by any public agency,” and in subdivision (c) to include “[activities involving the issuance to a person of a lease, permit, license, certificate, or other entitlement for use by one or more public agencies.”
The language of subdivision (a) is so broad as to cover any governmental activity. The mere hiring of governmental employees is an activity directly undertaken by a public agency and thus would ostensibly come within the literal terms. Similarly, the language of subdivision (c) is so broad as to encompass any private activity requiring some form of governmental authorization, including, for example, the licensing of physicians.
Obviously, the Legislature did not intend CEQA to apply to such decisions, and any construction requiring this application would be absurd. Given the breadth of the definition, the majority furnishes no insight by asserting in two paragraphs that the annexation approval comes within the statutory language. Our judicial function requires us to be more searching—to read the act in light of its purposes, other provisions, and this court’s decision in Friends of Mammoth v. Board of Supervisors (1972) 8 Cal.3d 247 [104 Cal.Rptr. 761, 502 P.2d 1049]. Reading the act in this light demands the conclusion that the EIR requirement applies only to land development and use activities, and land use regulation resulting in authorization or limitation of land use.
The Legislature, in first enacting CEQA in 1970, provided only the basic skeletal structure of its present provisions. In Friends of Mammoth v. Board of Supervisors, supra, 8 Gal.3d 247, the question was whether CEQA applied to private as well as public activities. Pointing out that CEQA, as originally enacted, did not define “project,” this court determined on the basis of the act’s purposes that CEQA applies not only to instances in which the “government itself engages in construction, acquisition or other developments but also [to] those instances in which the state regulates private activity.” (Friends of Mammoth v. Board of Supervisors, supra, 8 Cal.3d at pp. 256-257.) Obviously, the private activity referred to was of the same nature as the enumerated governmental activities, and thus this court established that the act applies to land use determinations.
The interpretation in Friends of Mammoth was also based on the guidelines implementing the National Environmental Policy Act. (42 *291U.S.C. § 4321 et seq.) The federal act applies to federal “actions”; one of the subcategories of “actions” as then defined included “projects and continuing activities.” The federal definition of “project” included those “directly undertaken” by federal agencies and those involving a federal “lease, permit, license, certificate or other entitlement for use.” (Friends of Mammoth v. Board of Supervisors, supra, 8 Cal.3d at pp. 261-262.) Thus it was concluded that “before an environmental impact report becomes required the government must have some minimal link with the activity, either by direct proprietary interest or by permitting, regulating or funding private activity.” {Friends of Mammoth v. Board of Supervisors, supra, 8 Cal.3d at pp. 262-263; italics added.) The entire discussion of the federal law (8 Cal.3d at pp. 259-267) is within the context of determining whether the act is limited to “ ‘public works’ ” and governmental “construction, acquisition, or other development” or extends to private works of that nature. There is no suggestion that the act applies to matters other than land use authorization and regulation.
When in response to the Friends of Mammoth decision the Legislature in 1972 adopted the urgency legislation broadly defining “project,” it declared its intent “only to declare and to clarify existing law” (Stats. 1972, ch. 1154, § 17) and adopted almost verbatim the words of the federal guidelines relied on in Friends of Mammoth.
When the Legislature has declared its intent to adopt the rule of a judicial decision, or when legislation is framed in the language of an earlier enactment which has been judicially construed, there is a strong presumption of intent to adopt the judicial construction. (See Baldwin v. State of California (1972) 6 Cal.3d 424, 433-434 [99 Cal.Rptr. 145, 491 P.2d 1121]; Los Angeles Met. Transit Authority v. Brotherhood of Railroad Trainmen (1960) 54 Cal.2d 684, 688-689 [8 Cal.Rptr. 1, 355 P.2d 905].) Thus, in the instant case it must be presumed the Legislature in defining “project” intended to adopt the construction given that term in Friends of Mammoth, i.e., CEQA applies only when a public agency directly engages in construction, acquisition, or development or when it regulates private construction, acquisition, or development.
The intent of the Legislature to incorporate the application given in Friends of Mammoth is further shown by Public Resources Code section 21080, subdivision (a), defining the scope of CEQA. This section, merely codifying our holding that CEQA applies to government authorized private construction, states that CEQA applies to “discretionary projects proposed to be carried out or approved by public agencies, including, but not limited to, the enactment and amendment of zoning ordinances, *292the issuance of zoning variances, the issuance of conditional use permits and the approval of tentative subdivision maps.” The enumerated examples all involve governmental regulation authorizing or limiting the use of land.
The function and elements of an EIR also demonstrate the emphasis on land development and land use regulation. The EIR is “intended to enable public agencies to evaluate a project to determine whether it may have a significant effect on the environment, to examine and institute methods of reducing adverse impacts, and to consider alternatives to the project as proposed.” (Cal. Admin. Code, tit. 14, § 15012.) Public Resources Code, section 21100 sets forth the factors the EIR must consider, including adverse environmental effects, mitigation measures and alternatives to the “proposed action.” Clearly those factors are meaningful only in the context of a particular contemplated land use. The requirement of consideration of mitigation measures and alternatives implies the power to condition or alter development plans in accordance with environmental goals; public agencies possess such power only when they directly engage in construction or perform the function of directly regulating private development.
The majority furnishes no substantial reason to reject the legislative declaration that the 1972 legislation is merely declarative of existing law—the Friends of Mammoth opinion describing project as referring to construction, acquisition, or development.
The majority fails to define the limits of CEQA; rather, it implies CEQA is applicable to any decision coming within the definition of “project” that may ultimately affect the environment. This is regretable because “project” is defined so broadly as to apply to any governmental determination, and there is an infinite variety of decisions constituting steps eventually, resulting in the ultimate development or use of land. A decision to hire additional government employees may ultimately affect the use of land because the employees will need a place to work. Granting a permit to issue securities to a land development corporation to fund a subdivision or to a public utility to fund nuclear power plant construction may ultimately affect the environment. Adoption of licensing standards and issuance of driver’s licenses may ultimately result in development of land because more highways may be necessary to handle increased traffic.
Rather than prepare EIRs for such hiring and licensing decisions, the report should be prepared for decisions authorizing use of land to build *293office buildings, subdivisions, nuclear power plants and highways; the responsibility for such preparation should lie with the agencies authorizing or limiting such activities, not with agencies whose decisions might affect use of land but who have neither the responsibility nor the power to authorize or limit land development or use. I do not believe the Legislature intended that hiring agencies, the Corporations Commissioner and the Department of Motor Vehicles should prepare EIRs and hold hearings on environmental issues before acting; but under today’s decision and No Oil, Inc. v. City of Los Angeles, 13 Cal.3d 68, 85 [118 Cal.Rptr. 34, 529 P.2d 66], requiring a report for agency action “ ‘arguably’ ” having an adverse environmental impact, it appears that such report will be required.1
The majority’s failure to face the important question of the reach of CEQA is dramatically illustrated by the reasoning of the opinion. The majority states that “if the adoption of a general plan is a project, as the Guidelines provide, an annexation approval by a LAFCO becomes an a fortiori case.” (Ante, p. 278.) This logic leap completely ignores the differing functions and powers of general plans and of LAFCO annexation approvals. Enactment and amendment of zoning ordinances and adoption of general plans are the very essence of land use regulation. These actions directly control the uses to which land will be put. In passing upon annexation proposals, LAFCO, as will be shown hereinafter, is powerless to regulate land use.
The Knox-Nesbit Act
The Knox-Nesbit Act (Gov. Code, § 54773 et seq.) was designed to curb the wasteful duplication of services resulting from indiscriminate formation of municipalities and special districts and from haphazard annexation of territory to existing local agencies. (City of Ceres v. City of *294Modesto (1969) 274 Cal.App.2d 545, 553 [79 Cal.Rptr. 168].)2 The purpose and responsibility of a LAFCO is “planning and shaping the logical and orderly development and coordination of local governmental agencies so as to advantageously provide for the present and future, needs of the county and its communities . . . .” (Gov. Code, § 54774.) Stated differently, LAFCO constitutes “a single review entity to weigh alternative methods of providing local services, and to work out comprehensive strategies for the governmental structure of an entire area.” (LeGates, Cal. Local Agency Formation Commissions, supra, P- 21.)
The function of LAFCO is to determine which local agency should exercise jurisdiction over a particular area consistent with orderly growth and capacity to extend needed services. While LAFCO may consider traditional environmental factors such as population density, land area and use, and topography, these are evaluated not with an eye toward the physical environmental impact of a proposed development but merely toward assessing which local entity should govern the area in light of existing and possible local agency service capabilities and “local conditions and circumstances.” (Gov. Code, § 54774.) LAFCO’s lack of power to control land development beyond fixing political boundaries is evident from Government Code section 54790, subdivision (a)(3), prohibiting LAFCO in annexation proceedings from imposing “any conditions which would directly regulate land use or subdivision requirements.” Moreover, LAFCO is not in a position to regulate land development or use in approving or disapproving a proposed annexation. Annexation is frequently sought either at a time when ultimate use of the land has not been determined or at a time when the character of the area has become fixed by development. Even where changes in existing land use are contemplated and plans have been formulated, LAFCO has no say in the land’s ultimate use, for plans may change after approval and there is no provision for further consideration by LAFCO.
The Two Statutes
Because CEQA applies only to land use determinations and because LAFCO, in considering annexation proposals, does not regulate land use *295but only determines which agency shall make land use determinations, it must be concluded that LAFCO annexation decisions are not subject to CEQA. Annexation approval does not constitute a “project” within the meaning of Public Resources Code, section 21065, subdivision (a) or subdivision (c). It is not an activity “directly undertaken” by a public agency, for LAFCO does not directly engage in construction or development. Neither is annexation approval an activity involving issuance by a public agency of an entitlement for use because LAFCO does not and cannot regulate private land use.
The conclusion is fortified when we consider that LAFCO annexation approval furnishes no assurance that the contemplated development will be accomplished. Similarly, LAFCO disapproval does not assure that the proposed development will not be accomplished. In view of the reality that much of California’s urban area has been subdivided and developed in unincorporated areas under the regulation of county planning commissions and county boards of supervisors, there is no reason to believe that annexation approval—rather than disapproval—tends to further development.
Although before approving annexation LAFCO may require the city to prezone, LAFCO is prohibited from specifying the zoning or imposing conditions on annexation (Gov. Code, § 54790, subd. (a)), and should annexation be approved after prezoning, the city may later change zoning. On the other hand, disapproval of annexation leaves the county free to regulate land use as it sees fit. Without conducting psychological evaluations and compiling psychological profiles of city and county planning commission members, and of members of the city council and board of supervisors, LAFCO members are unable to determine whether approval or disapproval of annexation will further environmental quality. Such psychological studies hopefully will not be made, and an EIR without the studies would not provide LAFCO with any meaningful indication of the environmental effects of its approval or disapproval.3
The majority invoke the policy, enunciated in the guidelines, of encouraging preparation of an EIR “as early in the planning process as possible.” (Cal. Admin. Code, tit. 14, § 15013.) But early preparation is not an end in itself, particularly when the insufficiency of data or plans *296precludes drawing any meaningful conclusions in the report. The “planning process” should be viewed as the process of land use determination, when the reporting serves a mature and useful purpose.
Conclusion
CEQA requires preparation of an EIR only when a public agency directly engages in construction, acquisition or development, or regulates such activities of private parties. It does not apply to agency determinations which may ultimately affect land use but which neither authorize nor limit the use of land. In considering a proposed annexation, LAFCO determines only a political question, does not directly engage in development, and is prohibited from regulating private development activities. The majority has therefore improperly imposed on LAFCO a wasteful requirement.
I agree with the majority that the guidelines are confusing in some respects. However, most of the confusion is due to the majority’s failure to recognize that the activities referred to in subdivisions (a) and (c) of section 21065 must be read as land use determinations. When we recognize that activities as used in the subdivisions are land use determinations, the convoluted reasoning and complex distinctions found in footnotes 16 and 19 of the majority opinion become unnecessary. The provision in 14 California Administrative Code, section 15037, subdivision (c), that “ ‘project’ refers to the underlying activity and not to the governmental approval process” becomes evident. The reference to “underlying” is to make clear that we must look to what is authorized, not merely whether there is a step in the governmental approval process which will ultimately result in a development affecting the environment. The guideline makes clear that the determination requiring preparation of an EIR is the approval of the construction of the nuclear power plant, not the approval of the issuance of shares to fund it.
The Knox-Nesbit Act was primarily a response to three undesirable conditions prevailing in California local government prior to its enactment. These were: (1) shortsighted municipal annexations, often motivated by a desire to bring within the city a high tax base area and resulting in odd and irrational municipal boundary configurations; (2) the proliferation of special districts to service unincorporated areas; and (3) municipal incorporations benefiting special interests or “defensively” initiated. (See LeGates, Cal. Local Agency Formation Commissions (1972) pp. 2-8; Note, LAFCO: Is It In Control of Special Districts? (1972) 23 Hastings L.J. 913, 914-921.)
At oral argument it was stated without dispute that the developer in the instant case first sought to develop under county regulation but the county refused to proceed until LAFCO determined whether development should be regulated by a municipality. Thereafter the developer went to the city, and the city requested annexation.