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Since Governor Newsom signed Senate Bill 131 (SB 131) and Assembly Bill 130 (AB 130) into law on June 30, 2025, California's legislature has continued to push additional California Environmental Quality Act (CEQA) reforms designed to streamline environmental review for projects tied to housing and climate resilience. Beveridge & Diamond's July 3, 2025 article, "California Passes Major CEQA Reforms: Key Takeaways for the Regulated Community," provided an early analysis of the key impacts of SB 131 and AB 130. This article examines two additional CEQA reforms passed later in 2025 – as well as two proposals on tap for 2026 – that developers and other interested parties should be aware of.
Senate Bill 71 (SB 71), signed by Governor Newsom on October 13, 2025, broadens the scope of transit projects eligible for CEQA exemptions and extends several sunset dates applicable to existing exemptions. Additionally, Senate Bill 79 (SB 79), signed into law on October 10, 2025, focuses on expanding housing development near transit stops and carries indirect implications for CEQA implementation.
Outside of the legislature, the California Chamber of Commerce has introduced the Building an Affordable California Act (BACA), a proposed statewide ballot initiative that would streamline environmental review under CEQA and further restrict litigation challenges to projects deemed "essential" to the public interest.
In contrast, Assembly Bill 1083 (AB 1083), pending in the legislature, would narrow CEQA exemptions, introduce additional administrative record requirements, and expand protections for environmentally sensitive lands.
This article summarizes these measures, which present opportunities and risks for housing, infrastructure and transit developers, municipalities, and agencies.
1. Senate Bill 71: "California Environmental Quality Act: exemptions: transit projects"
SB 71 newly exempts from CEQA review "transit comprehensive operational analysis," defined as "a plan that redesigns or modifies... a public transit service network."
The exemption includes transit route adjustments and service modifications, such as projects that introduce or expand microtransit, paratransit, shuttle, and ferry services.
SB 71 also expands exemptions to include "transit prioritization projects," such as transit stop access and safety improvements (including bus shelters and lighting), sign changes, installation of wayside technologies, and conversion of unrestricted public roadways to dedicated public transit lanes. The law also exempts a defined set of transportation projects, including pedestrian- and bicycle-safety improvements, public-transit-prioritization measures, parking-reduction planning decisions, and utility work associated with exempt projects.
For projects used exclusively by zero-emissions vehicles, rail or cable cars, or vessels, SB 71 extends the CEQA exemption through January 1, 2040. These exempted projects also include charging and refueling infrastructure, maintenance infrastructure, stations, and other operational facilities. For projects primarily used by near-zero-emission, low NOx, compressed natural gas, or hybrid vehicles, the exemption extends through January 1, 2032.
2. Senate Bill 79: "The Abundant and Affordable Homes Near Transit Act"
Overview of SB 79
SB 79 addresses California's housing shortage, particularly in areas served by robust public transit infrastructure. The law applies statewide and becomes effective on July 1, 2026.
The statute's purpose is to facilitate multi-family housing development on sites zoned for residential, mixed-use, or commercial uses located within one quarter to one half mile of qualifying transit stops. SB 79 establishes tiered minimum standards for height, density, and residential floor area ratio that vary based on a project's proximity to transit stops and the frequency and type of transit service provided.
Under this framework, qualifying housing developments located near eligible transit stops are deemed an allowed use if they satisfy minimum statutory criteria. Those baseline requirements include a minimum of five dwelling units, a minimum density of 30 dwelling units per acre (or higher depending on locally applicable standards), and an average unit size cap of 1,750 net habitable square feet.
SB 79's CEQA Implications
Although SB 79 does not amend CEQA or create a new CEQA exemption, it has practical implications for how and when CEQA review applies. In effect, SB 79 focuses CEQA review on early planning decisions, such as zoning around public transportation, rather than on individual housing projects.
First, SB 79 provides that when a transit agency adopts zoning standards for land surrounding its public transit stations, that action is subject to CEQA review with the transit agency serving as the lead agency. Subsequent rezonings or individual housing projects developed on agency-owned land may rely on that earlier CEQA document. A new Environmental Impact Report or Mitigated Negative Declaration is required only if a later action would result in a significant environmental impact that was not adequately addressed in the prior environmental review document.
Second, SB 79 makes qualifying transit-oriented housing projects eligible for streamlined, ministerial approval under Government Code Section 65913.4. Because ministerial approvals are generally exempt from CEQA, projects that qualify for this pathway may proceed without project-level environmental review.
Third, SB 79 provides that local ordinances adopted solely to bring zoning codes into compliance with the statute are not considered "projects" under CEQA. As a result, jurisdictions may implement SB 79 criteria through conforming zoning ordinances without triggering CEQA review.
3. Building an Affordable California Act (BACA)
BACA is a proposed statewide ballot initiative that seeks to restructure CEQA review for certain categories of development. The California Chamber of Commerce filed the initiative with the California Attorney General in October 2025. The public comment period closed in November 2025, and the initiative is currently under review by the Attorney General.
BACA proposes creating a new environmental review and permitting framework for projects designated as "essential," such as housing, water systems, and clean energy infrastructure. Developers opting to follow this new framework would still have to comply with specified labor standards and other eligibility criteria, but the authority of courts in CEQA proceedings to delay or halt such "essential" projects would be further restricted.
The initiative would also impose deadlines for specified agency actions. The practical benefits of such deadlines may be undercut for two reasons. First, BACA would allow deadlines to be extended upon the project applicant's request, and some applicants may choose to request an extension out of concern that insisting on timely action might lead the agency to deny the application. Second, judicial relief – to enforce deadlines – can be slow.
In addition, BACA would expedite the agency review process by truncating public comment periods and requiring agencies to evaluate environmental impacts based on the project's compliance with existing laws and established "thresholds of significance" (i.e., thresholds that have been adopted or used by the agency in the past).
Finally, the proposal introduces a new initial screening process for tribal consultation, including early coordination between the lead agency and affected tribes to identify potential impacts, develop mitigation measures to avoid or reduce those impacts, and incorporate enforceable conditions into project approvals.
4. Assembly Bill 1083
By contrast with BACA, AB 1083 proposes several changes to the procedural operation of CEQA that would strengthen environmental protections and administrative requirements rather than facilitating new development.
Narrowing CEQA Exemptions for Industrial Uses
Under existing law, facilities for "advanced manufacturing" may qualify for a CEQA exemption if located on land zoned exclusively for industrial use, provided the site is not located on "natural or protected lands" as currently defined under Public Resources Code § 21067.5. AB 1083 would narrow this exemption in two ways.
First, the bill would limit the exemption to semiconductor manufacturing facilities located on sites zoned for heavy industrial use before August 1, 2025. To qualify for the exemption, the facility would also have to meet specific requirements for the storage, use, and discharge of hazardous chemicals, as well as employment and labor standards.
Second, AB 1083 would expand the statutory definition of "natural and protected lands" under CEQA. The expanded definition would include lands designated for conservation in adopted natural community conservation plans, habitat conservation plans, or other natural resource protection plans, as well as habitat for species protected under the Endangered Species Act and various state laws. This expansion of the exception to the exemption would narrow the exemption.
Housing-Related Exemptions and Tourism Uses
AB 1083 would also modify CEQA exemptions applicable to housing-related rezonings. While rezonings that implement actions in an approved housing element are exempt from CEQA review under current law, AB 1083 would exclude "tourism facilities" from that exemption.
Administrative Record and Litigation Changes
In addition, AB 1083 would expand the scope of materials that must be included in the administrative record in CEQA litigation. Agencies would be required to include a broader range of internal communications, such as emails and internal notes, unless those materials are protected by legal privilege. This would expand the range of materials project opponents could use to attack project approvals in CEQA litigation.
This proposal should be read in light of SB 131, which narrowed the scope of internal agency communications that must be included in the administrative record by excluding internal agency emails and communications among non-supervisory personnel that were not presented to the final decision-making body. In effect, AB 1083 seeks to largely reverse those changes.
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