On June 30, 2025, Governor Newsom signed Assembly Bill 130 and Senate Bill 131 into law, creating significant new opportunities in housing and other development sectors, primarily by reducing the burdens imposed by the California Environmental Quality Act (CEQA) and other land use laws. As budget trailer bills, these new provisions took effect immediately.
A significant component of AB 130 was the creation of a new CEQA statutory exemption for residential and mixed-use infill projects on sites of no more than 20 acres. The details of that statutory exemption are included in a separate client alert here.
Though the new infill exemption received significant attention, AB 130 and SB 131 also include other changes to streamline eligible developments in California. Notable new provisions to streamline housing include:
- Streamlining CEQA review for projects that would otherwise fit within an exemption category but for a single condition (AB 131).
- Imposing a 30-day deadline for an agency to approve or disapprove a project that qualifies for the new infill exemption (AB 130).
- Removing prior Housing Accountability Act, Permit Streamlining Act, and Housing Crisis Act sunsetting dates (AB 130).
- Exempting rezones that implement the Housing Element from CEQA review (AB 131).
SB 131 also streamlines projects, including non-housing projects, by:
- Creating new CEQA exemptions.
- Expanding existing CEQA exemptions.
- Directing the Office of Land Use and Climate Innovation ("LUCI") to uniformly define and identify "eligible urban fill sites" on a statewide basis to facilitate development in suitable locations.
- Limiting the scope of administrative records prepared by public agencies, which no longer require the inclusion of certain internal staff communications.
These revisions are discussed in detail below. (AB 130 also included a new fee-based option to mitigate "vehicle miles traveled" impacts under CEQA, which is explained here.
Housing Provisions
Streamlined CEQA Review for "Near Miss" Exemptions
The new "near miss" rule established under SB 131 applies to a proposed "housing development project" that is precluded from using a CEQA exemption by failure to satisfy a "single condition." A "condition" is defined as "a physical or regulatory feature of the project or its setting or an effect upon the environment caused by the project."
If a project qualifies under the new "near miss" rule, an Initial Study or Environmental Impact Report (EIR) can be prepared to examine only the potential environmental effects caused solely by the single condition. An EIR prepared under the "near miss" rule is not required to include a discussion of alternatives or growth-inducing impacts.
If a project would qualify for an exemption but for one condition, the "near miss" rule provides a unique opportunity to significantly streamline and limit the required CEQA review. For example, a project that meets each of the Class 32 infill exemption criteria but for a specific impact (e.g., an air quality impact) previously would have been precluded from using the Class 32 exemption, resulting in the need for more in-depth CEQA analysis, such as a Mitigated Negative Declaration (MND) or EIR. The "near miss" rule changes that result, allowing the project to satisfy CEQA by using Class 32 and processing an MND or EIR that analyzes only air quality impacts and prescribes measures to mitigate those impacts.
The following types of housing development projects are excluded from using the "near miss" rule:
- A project that is not "similar in kind" to projects listed in the exemption relied upon by the project.
- A project that is ineligible for the exemption due to at least two conditions.
- A project that includes a distribution center or oil and gas infrastructure.
- A project located on "natural and protected lands,"
which is defined to include the following:
- Lands in a state park system, wilderness area, marine protected area, national park system, national recreation area, national monument, national wild and scenic rivers system.
- Lands including "[a]ny ecological reserve or wildlife management area" managed by the Department of Fish and Wildlife.
- A hazardous waste site listed on the Cortese list unless certain requirements are met.
- Lands within a regulatory floodway.
- Lands under a conservation easement.
- Lands on or within a 300' radius of a wetland as defined by USFW.
- Lands within an environmentally sensitive area within the coastal zone.
- Lands protected as preserve areas or reserve lands.
Simplifying the Permit Streamlining Act's "Deemed Approved" Provisions
Previously, the Permit Streamlining Act (PSA) stated that an agency's failure to approve or disapprove a project within a specific period following an agency's determination pursuant to CEQA would be deemed an approval only if a public notice required by law had occurred. If the agency failed to provide the required notice, the applicant could instead provide the required notice, but that process was uncertain and cumbersome, and thus rarely used.
AB 130 removes the requirement that an applicant provide notice. Instead, an agency's failure to approve or disapprove a project within the required time limits will lead to an automatic deemed approval of the project.
The timelines for an agency to act on a project under the PSA generally run from an agency's approval of a CEQA document, limiting the use of the PSA to speed the permitting process. For example, an agency must approve or disapprove a project within 90 days after its certification of an EIR for a housing development project. However, agencies generally have discretion over the CEQA process, and in most cases the agency certifies the EIR at the same time it approves or disapproves the project. That leaves the "deemed approved" remedy somewhat elusive, unless other provisions of state law are used to force an agency's CEQA action (such as the Housing Accountability Act's provisions regarding CEQA exemptions).
Importantly, AB 130 makes the deemed approved remedy readily available for projects (i) using the new infill exemption in AB 130 (see our prior Client Alert), or (ii) subject to ministerial review by the agency. As to the new AB 130 infill exemption, the local government must approve or disapprove the project within 30 days after the conclusion of the tribal consultation process required by that exemption. If the project is subject to ministerial review, the agency must approve or disapprove the project within 60 days after the date of receipt of a complete application (except for AB 2011 projects, which have separate approval deadlines depending on the size of the project). As a result of AB 130's elimination of the cumbersome public notice process, the PSA now requires a swift approval for a project using the new AB 130 statutory exemption or a project subject to ministerial approval and provides a "deemed approved" remedy if the agency fails to act with in these time periods.
Removing Expiration Dates for the Housing Accountability Act, Permit Streamlining Act, and Housing Crisis Act
AB 130 extends indefinitely (i) certain provisions of the Housing Accountability Act and Permit Streamlining Act and (ii) the entirety of the Housing Crisis Act. Extended provisions include the "five hearing rule," the "freezing" of regulations in effect when a preliminary application is submitted, and streamlining time limits applicable to certain applications. Previously, these provisions would have "sunset" on either January 1, 2030 or 2034, as previously specified by their own terms.
Exemption for Rezones Implementing the Housing Element
SB 131 exempts from CEQA any rezonings that implement provisions of an approved housing element. However, the new exemption cannot be used for a rezone that will allow for (i) construction of a distribution center or oil and gas infrastructure or (ii) construction to occur within the boundaries of any "natural and protected lands."
Non-Housing Provisions
New CEQA Exemptions
SB 131 exempts the following projects from CEQA, provided they are not located on "natural and protected lands" and subject to certain criteria.
- Day care centers.
- Rural Health Clinics.
- Nonprofit foodbanks or food pantries.
- Advanced manufacturing facilities, as defined on Public Resources Code section 26003 .
- Maintenance facilities for electrically powered high-speed rail.
- Passenger rail stations serving electronically powered high-speed rail.
New CEQA exemptions are also available for the following categories. Like the categories listed above, these exemptions are subject to specific conditions.
- Community Water System Exemption.
- Wildfire Risk Reduction Exemption.
- Climate Adaptation Strategy Exemption.
- Public Parks and Nonmotorized Recreational Trail Facilities Exemption.
Statewide Map of Eligible Urban Infill Sites
To facilitate development across the State, SB 131 requires LUCI to map the "eligible urban infill sites" within every urbanized area or urban cluster in California on or before July 1, 2027. The legislation also tasks LUCI with developing a uniform definition and metric for statewide identification of "eligible urban infill sites" that is both consistent with local general plan land use designations and supportive of compact development that achieves environmental sustainability goals.
Notably, the statute does not specify the significance of LUCI's eligible urban infill site designation. The designation does not appear to affect or determine whether a project site is eligible for any CEQA exemptions or other streamlining provisions related to infill development.
Trimming the Administrative Record
CEQA requires that an action initiated to review or set aside project approvals by a public agency to follow specified processes, including that the petitioner must file a request that the respondent public agency prepare a record of proceedings relating to the challenged project. The record of proceedings is required to include specified items and materials. Prior to SB 131, the list of specified items included all internal agency communications, including staff notes and memoranda related to the project or to compliance with CEQA.
SB 131 refines these procedural requirements for CEQA lawsuits. Effective immediately, a respondent public agency may exclude from its administrative record of proceedings any electronic internal agency communications, including emails, that were not presented to the final decision-making body on the project, other than those communications and documents consulted, or reviewed by the lead agency executive, a local agency executive, or other administrative official responsible for reviewing the project in a supervisory role.
This seemingly minor provision should significantly reduce the cost and time required to resolve a CEQA challenge in the trial courts. The assembly of the record, and in particular the cumbersome process of determining which documents to include, has become a major burden.
This evidentiary exclusion does not apply to any project review or approval of a distribution center or oil and gas infrastructure project.
Conclusion
The Governor's trailer bills mark a major shift in policy that will provide opportunities for new housing and other development throughout the State. If you would like to know more about this legislation or how it may affect you, please contact any of our experienced land use attorneys.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
