Highlights
- Senate Bill (SB) 131 includes important California Environmental Quality Act (CEQA) exemptions for qualified advanced manufacturing projects, health centers and rural clinics, childcare centers, food banks, farmworker housing, clean water projects, linear broadband and parks in California.
- Many of the CEQA exemptions established by SB 131 do not apply to projects that would be located on "natural and protected lands."
- It is highly recommended that project applicants with potentially qualifying projects consider whether they can take advantage of these CEQA reforms.
This Holland & Knight alert is part of a series examining major reforms that have been instituted in California in 2025 and their potential impact on various projects in the near future and down the road. For a primer on the important "infill" housing-related California Environmental Quality Act (CEQA) reforms, see Holland & Knight's previous alert, "California Legislature Enacts Major CEQA Reforms for Housing-Rich 'Infill' Projects," July 2, 2025. Additional alerts on other aspects of Assembly Bill (AB) 130 and Senate Bill (SB) 131 will be available on Holland & Knight's West Coast Land Use and Environment blog, Breaking Ground. A two-part webinar series is scheduled for Aug. 20 and Aug. 27, 2025, and will feature analysis of the new laws and a Q&A with Holland & Knight attorneys.
Also in This Series:
In addition to the important "infill" housing-related CEQA reforms explained in the aforementioned Holland & Knight alert, AB 130 and SB 131 contain a variety of CEQA reforms that are unrelated to housing. These new laws were signed by California Gov. Gavin Newsom on June 30, 2025, and went into effect immediately. The purpose of this Holland & Knight alert is to focus on provisions of SB 131 that establish new statutory CEQA exemptions that apply to a variety of qualifying non-housing projects.
SB 131 Exemptions
The statutory CEQA exemptions established by SB 131 are summarized as follows:
Advanced Manufacturing Projects. Pursuant to SB 131, CEQA no longer applies to a project that consists exclusively of "advanced manufacturing" that is proposed to be located on a site that was zoned exclusively for industrial uses but does not also qualify as "natural and protected lands." SB 131 generally defines the term "natural and protected lands" to include the following:
- state and national park lands
- protected marine areas
- national recreation areas
- national monuments
- national wild and scenic rivers
- ecological reserves and wildlife management areas
- hazardous waste sites (absent applicable regulatory clearances)
- regulatory floodways (absent applicable regulatory clearances)
- lands subject to a conservation easement
- wetlands and land within 300 feet of a wetland
- environmentally sensitive areas within the coastal zone
- lands protected as preserve areas or reserve lands pursuant to a habitat conservation plan or natural community conservation plan
- lands within a very high fire hazard zone (absent adopted fire hazard mitigation measures)
- prime farmland and farmland of statewide importance
- land zoned or designated for agricultural preservation or protection by an approved local ballot measure
To define the term "advanced manufacturing," SB 131 refers to a definition of the same term set forth in Public Resources Code Section 26003 that defines "advanced manufacturing" broadly to include, among other things, microelectronics and nanotechnologies, semiconductors, advanced materials, integrated computational materials engineering, additive manufacturing, industrial biotechnology, improvements in manufacturing processes that are often referred to as "smart" or "intelligent" manufacturing systems and which integrate computation predictability and operational efficiency, and sustainable manufacturing systems that are not required to be implemented pursuant to state or federal laws and regulations.
By its terms, however, the current version of Public Code Section 26003 will expire on Jan. 1, 2026, when it will be replaced by a different version that does not define the term "advanced manufacturing." A legislative fix will therefore be necessary to ensure definitional clarity beyond Jan. 1, 2026.
Daycare Centers. SB 131 exempts daycare centers from CEQA review, provided that the daycare center would not be located in a residential area or on a site that qualifies as "natural and protected lands." The term "daycare center" is defined broadly to include licensed childcare centers, child daycare facilities other than a family daycare home, infant centers, preschools, extended daycare facilities and school-age childcare centers.
Health Centers and Rural Health Clinics. SB 131 also provides a CEQA exemption for federally qualified health centers and rural health clinics, provided such facilities do not exceed 50,000 square feet in total space or would be located on "natural and protected lands." In summary, SB 131 defines the term "rural health clinic" to mean a facility that would primarily furnish outpatient health outside of "urban areas," as defined by the U.S. Census Bureau, where there are insufficient numbers of needed healthcare practitioners. This exemption also covers "federally qualified health centers," a term generally defined to mean "rural health clinics" that receive federal grant funding.
Nonprofit Food Banks. SB 131 provides a CEQA exemption for nonprofit food banks and food pantries that solicit, store and "distribute sufficient food to their defined service area," provided the facility would be located on a site that is zoned exclusively for industrial use but does not qualify as "natural and protected lands." However, SB 131 does not define the phrase "distributes sufficient food to their defined service area." Thus, to reduce the likelihood of legal challenge, lead agencies that rely on this CEQA exemption should be careful to include substantial evidence in the administrative record of the anticipated food demand within the food bank's service area and of the food bank's ability to satisfy such demand.
Parks and Nonmotorized Trails. Under SB 131, any activity or approval necessary for or incidental to planning, design, site acquisition, construction, operation or maintenance of public parks or nonmotorized recreational trail facilities are exempt from CEQA, but only if such facilities are funded in whole or in part by bond funds allocated pursuant to the Safe Drinking Water, Wildfire Prevention, Drought Preparedness, and Clean Air Bond Act of 2024, which was approved by California voters in the November 2024 election (Proposition 4).
State Climate Adaptation Strategy Updates. Existing law requires the California Natural Resources Agency to update every three years the state's climate adaptation strategy to identify the state's vulnerability to climate change and priority actions needed to reduce climate-related risk and achieve climate resilience. SB 131 completely exempts future climate adaptation strategy updates from CEQA review.
Housing Element Rezonings. Existing law requires cities and counties every eight years to approve Housing Elements that are capable of accommodating their respective share of the Regional Housing Needs Allocation (RHNA),then rezone land within their jurisdictions as necessary to accommodate RHNA units. Housing Element rezoning pursuant to Government Code Section 65583(c) is now exempt from CEQA, provided the rezoning would not permit construction of a distribution center or oil and gas infrastructure or would otherwise permit development within "natural and protected lands." When combined with AB 130's new infill housing CEQA exemption, it is possible that some infill housing projects would entirely avoid CEQA review at both the long-term planning and project levels.
Agricultural Employee Housing. Though SB 131 predominately addresses non-housing projects, this CEQA exemption builds off another CEQA exemption for agricultural employee housing found in Public Resources Code Section 21159.22 but adds further restrictions mandating that in order to use the SB 131 agricultural employee housing CEQA exemption, an agricultural employee housing project must be any of the following:
- funded by the Joe Serna Jr. Farmworker Housing Grant Program
- funded by the Office of Migrant Services within the Department of Housing and Community Development
- funded by a local government, or
- owned or operated and funded by a public or nonprofit entity, or that receives state, federal or local public funding
Please note that this exemption does not apply to a project consisting exclusively of the repair or maintenance of an existing farmworker housing project.
Certain Water and Sewer Infrastructure Projects. SB 131 exempts from CEQA review various water and sewer projects that primarily benefit a small, disadvantaged community water system or a state small water system by improving water quality, water supply or water supply reliability, as well as encourages water conservation and provides drinking water service to existing residences within a disadvantaged community. There are various qualifying criteria, such as not 1) affecting wetlands or an environmentally sensitive habitat area within the coastal zone, 2) not having unusual circumstances that would cause a significant effect on the environment, 3) not having a substantial adverse change in the significance of a historic resource and 4) ensuring that construction impacts are fully mitigated. This exemption imposes a skilled workforce requirement or prevailing wages depending on various factors. SB 131 extended expiration of this CEQA exemption to Jan. 1, 2032.
Community Water Systems. A project that consists of a community water system funded by the Safe Drinking Water, Wildfire Prevention, Drought Preparedness, and Clean Air Bond Act of 2024 or the State Water Resources Control Board's Safe and Affordable Funding for Equity and Resilience program that does not otherwise include any construction activities is now exempt from CEQA until Jan. 1, 2030, if the project results in long-term net benefits to climate resiliency, biodiversity, and sensitive species recovery or includes procedures, as well as ongoing management for the protection of the environment. This exemption imposes a skilled workforce requirement or prevailing wages depending on various factors.
Wildfire Risk Reduction Projects. Given the prominence of wildfire risk in California, especially in light of the 2025 Palisades and Eaton fires, the legislature stepped in with a new CEQA exemption for wildfire risk reduction measures. As long as a wildfire risk reduction project is in compliance with all other applicable laws, ordinance and zoning requirements, all of the following wildfire risk reduction projects are now exempt from CEQA:
- projects consisting of a prescribed fire or fuel reduction to reduce wildfire risk by reestablishing the fire return interval appropriate to the ecosystem for biodiversity or other benefits (but entirely excluding projects located on coastal sage scrub habitat or any other sensitive habitat), provided the project 1) does not exceed 50 contiguous acres, 2) is located within a half-mile of a subdivision of 30 or more dwelling units, 3) is subject to consultation with the California Department of Fish and Wildlife, 4) avoids impacts to riparian areas and water quality, and 5) provides for the identification and protection of potentially impacted tribal cultural resources
- projects consisting of "defensible space" fire clearance of up to 100 feet (as measured from the center line of the roadway) for a public roadway identified as an egress and evacuation route for a subdivision or community of 30 or more dwelling units to remove flammable vegetation or trees of less than 12 inches in diameter as measured at chest height
- projects consisting of the establishment or enhancement of residential home hardening or the establishment of wildfire defensible space within 200 feet of a legal structure located in a high or very high wildfire hazard zone
- projects consisting of the establishment of a fuel break extending up to 200 feet from structures, including the clearance of flammable vegetation and trees less than 12 inches in diameter as measured at chest height
Linear Broadband Projects. SB 131 amends Public Resources Code Section 21080.51 to clarify the CEQA exemption for above-ground or subsurface linear broadband projects within, or within 30 feet of, a right-of-way, including but limited to a local street or road right of way. To qualify for this updated exemption, above-ground projects must install improvements aerially along an existing utility pole right of way, and subsurface projects must restore the surface to preexisting conditions. Moreover, qualifying broadband projects must 1) include monitors during construction activities to avoid or address impacts to cultural and biological resources, 2) comply with mitigation requirements lawfully imposed through the local agency permit process and 3) comply with applicable laws related to wetlands preservation, endangered species, and other applicable state and federal laws.
Conclusion
Newly enacted SB 131 decrees several statutory exemptions from CEQA that will facilitate the development of a variety of socially and environmentally beneficial projects that have often been stymied in the past by CEQA lawsuits. This Holland & Knight alert, however, summarizes only the new exemptions, and the application of each is highly dependent on the specific facts associated with each individual development project.
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.
