Despite strenuous opposition from both the state's real estate and business communities,1 near the end of the 2024 Legislative cycle, California Governor Gavin Newsom signed into law Assembly Bill 98 ("AB 98") – a bill that, among other things, creates buffer zones and imposes other statewide design and build standards around new warehouse development.2 The bill, which overrides local land use programs, segregates these standards based on warehouse sizes and location within the state. Purportedly, AB 98 is intended to mitigate the negative health impacts associated with warehouse and logistics facility uses have on nearby communities, namely in the Inland Empire region. Prior to the Governor's signature, the bill passed by fairly narrow margins in both the State Senate and Assembly.
In brief summary, the key provisions of AB 98 include:
- Building design and energy efficiency;
- Setbacks and buffer zones;
- Parking and truck loading bays;
- Truck routing plans;
- Energy gates and signage;
- Zero-emissions technology; and
- Affordable housing replacement.
AB 98 will take effect on January 1, 2025. However, compliance with many of the standards included in the bill is not until January 1, 2026.
AB 98 will not apply to:
- Existing developments, facilities, or expansions so long as an application was filed prior to September 30, 2024. 3
- New expansion or development that is subject to a local entitlement process prior to September 30, 2024 and a new sensitive receptor is constructed, established, or permitted after January 1, 2025.4
- Development that requires a rezoning and the entitlement process for that rezoning began prior to the entitlement process for a sensitive receptor.5
I. Overview
1. AB 98 changes existing law related to warehouse uses in three (3) important ways:
2. Prescribes "various statewide warehouse design and build standards for any proposed new or expanded logistics use development[]"6 including "standards for building design and location, parking, truck loading bays, landscaping buffers, entry gates, and signage." AB 98 targets warehouse/distribution facilities that utilize heavy-duty diesel trucks7 for goods movement. Additional development standards and limitations are placed on logistic projects that are located within 900 feet of a sensitive receptor8 as well as larger-scale projects of 250,000 square feet or more. Any applicable development standards included in AB 98 apply in addition to any applicable local zoning requirements.
3. Requires counties and cities to update their Circulation Element within the General Plan to identify and establish specific travel routes for the transport of goods, materials, or freight for storage, transfer, or redistribution to safely accommodate additional truck traffic and avoid residential areas and concentrations of sensitive receptors.
4. Requires jurisdictions to update their Circulation Element to include truck routes and other related standards, and imposes emission study requirements on the South Coast Air Quality Management District ("AQMD") in San Bernardino and Riverside counties (core counties that make up the "Inland Empire").
In addition to applying new logistics uses, AB 98 would also apply to the "expansion of existing logistics use" projects, which the bill defines as "the expansion of an existing logistics use by 20 percent or more of existing square footage." 9 The bill exempts "office space" from the existing square footage threshold. However, the language is ambiguous, and it will – ultimately – be up to the individual jurisdictions, and potentially courts, to interpret.
Nothing in AB 98 prevents cities, counties, or other state agencies from imposing more stringent requirements on existing logistics uses.
II. Development Standards
AB 98 proposes a variety of new development standards for logistics uses. The requirements are extremely factintensive and apply on a case-by-case basis.
A. Siting Criteria Applicable to All New Logistics Uses
Any new logistics use must be sited on roadways classified as arterial roads, collectors roads, major thoroughfares, and local roads that predominantly serve commercial uses.10 Projects may be granted a waiver from these siting requirements when all of the following are met:
1. There is no feasible alternative site that exists within the designated roadways;
2. A traffic analysis has been completed and submitted to the local approving authority;
3. The site is an existing industrial zone; and .
4. The proposed site will incorporate mitigations to minimize traffic and environmental impacts on residential areas to the greatest extent feasible.11
B. Sensitive Receptor Buffers Applicable to All New and Some Expanded Logistics Uses Near Sensitive Receptors
Any new logistics use within 900 feet of a sensitive receptor must include a buffer of 50 feet in width when located on an industrial-zoned site or on a site where an application for rezoning to industrial has been submitted prior to
September 30, 2024, and the rezone is ultimately approved.12 The buffer shall be 100 feet on a non-industriallyzoned site.13
The buffer areas must fully screen all adjacent sensitive receptors and include a solid decorative wall, landscaped berm and wall, or landscaped berm 10 or more feet in height, and drought tolerant natural ground landscaping with proper irrigation. Finally, the buffer must include specified types of trees (excluding palm trees) planted in 2 rows along the length of the property line with specified spacing. The trees must be evergreen, drought tolerant, a species of low biogenic emission (where feasible), a minimum of 36-inch box size, and spaced no greater than 40 feet apart.14 These standards also apply to expanded logistics uses.15
C. Design and Construction Standards Applicable to All New or Expanded Logistics Uses
AB 98 divides setback, design, construction, and electrification standards into 4 categories of projects based on the size of the use, underlying zoning, and geographic location of a specific project. The implementation of these standards commences on January 1, 2026.
1. Large Logistics Uses Near Sensitive Receptors. New or expanded logistics use development of 250,000 square feet or more where the loading bay is within 900 feet of a sensitive receptor.
Large Logistics Uses Near Sensitive Receptors must meet the "Tier 1 Standards."16 Tier 1 Standards also apply to sites that have applied for a rezone to industrial prior to September 30, 2024, and are ultimately approved.17 AB 98 also requires the following additional development standards in addition to Tier 1 Standards:
a. All truck loading bays shall be oriented on the opposite side of the logistics development from sensitive receptors, where feasible.
b. All truck loading bays shall be a minimum of 300 feet from the property line of the nearest sensitive receptor using a direct straight-line method of measurement.
c. Projects must include a separate entrance for heavy-duty trucks via a truck route, arterial road, major thoroughfare, or local road with predominately commercial uses.
d. Truck entry, exit, and internal circulation shall be sited away from sensitive receptors. Heavy-duty drive aisles are prohibited from utilizing sides of the logistics building that are directly adjacent to the property line of a sensitive receptor.
e. Installation of buffers and screening to reduce light and noise.
2. Logistics Uses in Non-Industrial Location Near Sensitive Receptors. New or expanded logistics use on land that is not zoned industrial, whether developed or undeveloped, or land that needs to be rezoned, where loading bay is within 900 feet of a sensitive receptor.
Logistics Uses in Non-Industrial Location Near Sensitive Receptors require implementation of either Tier 1 Standards or "Base Standards"18 depending on the size of the project. Large logistics uses greater than 250,000 square feet require Tier 1 Standards while logistics uses under 250,000 square feet require the Base Standards.19, 20 AB 98 also requires the following additional:
a. All truck loading bays shall be oriented on the opposite side of the logistics development from sensitive receptors, where feasible.
b. All truck loading bays shall be a minimum of 500 feet from the property line of the nearest sensitive receptor using a direct straight-line method of measurement.
c. Provide a separate entrance for heavy-duty trucks via a truck route, arterial road, major thoroughfare, or local road with predominately commercial uses.
d. Truck entry, exit, and internal circulation shall be sited away from sensitive receptors. Heavy-duty drive aisles are prohibited from utilizing sides of the logistics building that are directly adjacent to the property line of a sensitive receptor.
e. Install buffers and screening to reduce light and noise.
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Footnotes
1. NAIOP SoCal warned that the bill will have "sweeping negative impacts on the supply chain, jobs and greenhouse gas emissions." Daniel Parra, president of California League of Cities, stated: "AB 98 represents a massive, unfunded mandate that would not only stifle local economies, but also seriously damage our local communities. It's a bill that was rushed through the legislature in the final week of the session with little regard for the impact it would have on cities." Conversely, a coalition including the California Chamber of Commerce called the bill "a compromise that avoids the negative economic and environmental impacts that would arise from much more stringent and unworkable legislation while still addressing community concerns."
2. AB 98 was initially introduced earlier in the cycle as a shell bill, and the final product is considered a "gut and amend" bill. Surprised by the extent and scope of the modifications, critics of the bill have pointed out a number of inconsistencies amongst the various definitions and compliance triggers throughout the bill.
3. Govt. Code §§ 65098.1, 65098.1.5.
4. Govt. Code § 65098.1.5.
5. Govt. Code § 65098.1.5(b)(1).
6. Govt. Code § 65098(d) defines "Logistics Use" as:
A building in which, cargo, goods, or products are moved or stored for later distribution to businesses or retail customers, or both, that does not predominately serve retail customers for onsite purchases, and heavy-duty trucks are primarily involved in the movement of the cargo, goods, or products.
Logistics use" does not include any of the following:
1. Facilities where food or household goods are sold directly to consumers and are accessible to the public.
2. A building primarily served by rail to move cargo goods or product.
3.
A. A Strategic Intermodal Facility.
B. For purposes of this subdivision, "Strategic Intermodal Facility" means a project that satisfies all of the following requirements:
i. Logistics facilities, including warehousing and transloading facilities, served by rail.
ii. Intermodal freight transport services.
iii. All facility structures and related rail operations are located within a single site footprint.
7. Govt. Code § 65098(c) defines "Heavy-Duty Truck" as a class 7 or class 8 truck. A "Class 7 truck" means a truck with a gross vehicle weight rating of 26,001 to 33,000 pounds. A "Class 8 truck" means a truck with a gross vehicle weight rating of greater than 33,000 pounds.
8. Govt. Code § 65098(e)(1) defines "Sensitive Receptor" as including one or more of the following:
A residence, including, but not limited to, a private home, apartment, condominium unit, group home, dormitory unit, or retirement home. (2) A school, including, but not limited to, a preschool, prekindergarten, or school maintaining kindergarten or any of grades 1 to 12, inclusive. (3) A daycare facility, including, but not limited to, in-home daycare. (4) Publicly owned parks, playgrounds, and recreational areas or facilities primarily used by children, unless the development of the park and recreation areas are included as a condition of approval for the development of a logistics use. (5) Nursing homes, long-term care facilities, hospices, convalescent facilities, or similar live-in housing. (6) Hospitals, as defined in Section 128700 of the Health and Safety Code.
9. Govt. Code § 65098(b).
10. Govt. Code § 65098.2.7 (b)(2) defines local roads as predominantly serving commercial uses if more than 50% of the properties fronting the road within 1000 feet are designed for commercial or industrial use according to the local zoning ordinance.
11. Govt. Code § 65098.2.7(c).
12. Govt. Code § 65098.2(a)(1).
13. Govt. Code § 65098.2(a)(2).
14. Govt. Code § 65098.2(c).
15. Govt. Code § 65098.2(h).
16. In addition to the "Base Standards" (as identified below), Govt. Code § 65098(g) defines Tier 1 Standards" as including:
a. Meet or exceed all Title 24 California Green Building Standards.
b. Photovoltaic system installation and associated battery storage. The standards assume for purposes of Title 24 that all project warehouse space is "conditioned" space.
c. Cool roof.
d. Medium and heavy-duty vehicle charging readiness.
e. Light-duty electric vehicle charging readiness and installed charging stations.
f. Skylights covering at least 1% of the roof area, or the equivalent LED lighting.
g. Micro-grid ready switchgear system to support distributed energy resources.
h. dvanced smart metering ready.
i. 50% of all passenger vehicle parking stalls preinstalled with conduit and infrastructure to support future electric vehicle (EV) charging stations.
j. 10% of all passenger vehicle stalls installed with EV charging stations.
k. Provide conduit and electrical hookups at all loading bays serving cold storage. Idling or auxiliary truck power to run climate control equipment is prohibited if the truck is capable of utilizing a loading bay electrical hookup.
l. High-efficiency HVAC systems.
m. All classes of on-site forklifts shall be zero-emission by January 1, 2028, where operationally feasible, commercially off-the-shelf available, and adequate power is provided on site. Cost is not considered in determining feasibility. Where not feasible, the cleanest technology commercially available shall be used.
n. Developer shall ensure that all on-site equipment utilizing small off-road engines shall be zero-emissions, where operationally and commercially feasible. Otherwise, the cleanest technology that is commercially and operationally feasible shall be used. If such equipment is contracted out, the developer shall preferentially contract for services utilizing zero-emission equipment.
17. Govt. Code § 65098.1(a).
18. Govt. Code § 65098(a) defines "Base Standards" as:
a. Meet or exceed all Title 24 California Green Building Standards.
b. Photovoltaic system installation and associated battery storage.
c. Cool roof.
d. Medium and heavy-duty vehicle charging readiness.
e. Light-duty electric vehicle charging readiness and installed charging stations.
f. Skylights covering at least 1% of the roof area, or the equivalent LED lighting.
g. Provide conduit and electrical hookups at all loading bays serving cold storage.
h. Idling or auxiliary truck power to run climate control equipment is prohibited if the truck can utilize a loading bay electrical hookup.
i. High-efficiency HVAC systems.
j. All classes of on-site forklifts shall be zero-emission by January 1, 2030, where operationally feasible, commercially off-the-shelf available, and adequate power is provided on site. Cost is not considered in determining feasibility. Where not feasible, the cleanest technology commercially available shall be used.
k. Developer shall ensure that all on-site equipment utilizing small off-road engines shall be zero-emission, where operationally and commercially feasible. Otherwise, the cleanest technology that is commercially and operationally feasible shall be used. If such equipment is contracted out, the developer shall preferentially contract for services utilizing zero-emission equipment.
19. Govt. Code §65098.1(b).
20. Projects that fall in this category include: any proposed new or expanded logistics use development that is on land that is not zoned industrial, whether developed or undeveloped, or land that needs to be rezoned, where the loading bay is within 900 feet of a sensitive receptor.
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