The State Legislature will soon be wrapping up their month-long business on the State Budget. As of Friday 6/27, Governor Newsom announced he will sign the state budget, however, it is contingent on the State Legislature sending him Budget Trailer Bill AB/SB 131 that seeks to expand CEQA streamlining for housing, clean energy and transportation.

As you know, BizFed has a long-standing position on CEQA reform/modernization for the benefit of housing production, transportation, water infrastructure, broadband, and to promote consistency and efficiency among the state’s ambitious climate goals, and bring in line the 100-plus environmental measures passed since CEQA was enacted in 1970.

Specifically, AB/SB 131 makes a number of targeted refinements to strengthen the operational efficiency of CEQA, including:

• Aligns the standard of review for a lead agency’s determination to adopt a Negative Declaration (ND) or a Mitigated Negative Declaration (MND) to parity with the existing standard of review for Environmental Impact Reports (EIRs).
• Focuses CEQA review on the most germane administrative records by excluding communications of persons tangential or far removed from project decision-making, with specified exemptions.
• Clarifying the existing Class 32 "Infill Development" Categorical Exemption to CEQA by directing the Governor’s Office of Land Use and Climate Innovation (LUCI) to set alternative safe harbor objective standards and clearer geographic standards. These changes will make the existing categorical exemption more usable.
• Exempting re-zonings that are consistent with an already approved housing element from CEQA, recognizing that local jurisdictions must undergo the CEQA process as a part of the housing element adoption process.

AB/SB 131 also includes Round 7 funding of the Homeless Housing, Assistance and Prevention Program funding in the amount of $8 Million. BizFed has had a standing position on this since March 2025.

Click HERE to support CEQA reform now. 

Additionally, the Legislature will be taking up AB/SB 130 that includes a provision that will harm working families by adding major new costs to the construction of housing.

Section 58 (21080.44) of AB/SB 130 relates to Vehicle Miles Traveled (VMT) Mitigation and the creation of a Statewide VMT Mitigation Bank. As currently written, this section has the potential to impose econmically impossible and legally flawed burdens on new housing projects in California.

In the creation of a new "Mitigation Bank," this specific provision would give lead agencies the ability to demand that developers pay to offset any residual VMT Impact.

To be clear, we are asking for our members to reject and remove Section 58 of AB/SB 130 which BizFed has had a standing position of opposing in relation to Vehicle Miles Traveled and the abuse. See BizFed's submitted LETTER HERE.

Click HERE to ask the Legislature to OPPOSE Section 58 of Trailer Bill AB/SB 130 that will harm working families.