CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION

Senate Bill
No. 887

Introduced by Senator Padilla
(Coauthor: Assembly Member Connolly)

January 13, 2026

An act to amend Sections 21080, 21080.69, and 21180 of the Public Resources Code, relating to environmental quality.


LEGISLATIVE COUNSEL'S DIGEST


SB 887, as introduced, Padilla. California Environmental Quality Act: environmental leadership development projects: data centers.
(1) The California Environmental Quality Act (CEQA) requires a lead agency, as defined, to prepare, or cause to be prepared, and certify the completion of, an environmental impact report on a project that it proposes to carry out or approve that may have a significant effect on the environment or to adopt a negative declaration if it finds that the project will not have that effect. CEQA also requires a lead agency to prepare a mitigated negative declaration for a project that may have a significant effect on the environment if revisions in the project would avoid or mitigate that effect and there is no substantial evidence that the project, as revised, would have a significant effect on the environment. CEQA exempts ministerial projects from its requirements. CEQA also exempts from its requirements a project that consists exclusively of a facility for advanced manufacturing, as specified.
This bill would specify that projects proposed to be carried out or approved by a public agency for the development and operation of a data center, as defined, are not ministerial projects exempt from CEQA. Because the bill would require the public agency to comply with CEQA for those data center projects that would otherwise be exempt from CEQA as ministerial projects, the bill would impose a state-mandated local program.
This bill would specify that the CEQA exemption for an advanced manufacturing facility does not apply to a data center, as defined.
(2) The Jobs and Economic Improvement Through Environmental Leadership Act of 2021 authorizes the Governor, until January 1, 2032, to certify environmental leadership development projects that meet specified requirements for certain streamlining benefits related to CEQA. The act, among other things, requires a lead agency to prepare the record of proceedings for an environmental leadership development project concurrent with the administrative process and to provide a specified notice within 10 days of the Governor certifying the project. The act is repealed by its own terms on January 1, 2034.
This bill would extend the application of the act to a data center, as defined, that is certified by the lead agency to meet specified conditions. By increasing the duties of a lead agency, the bill would impose a state-mandated local program.
(3) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

The people of the State of California do enact as follows:


SECTION 1.

 The Legislature finds and declares all of the following:
(a) California drives worldwide technological innovation, and that innovation is an important component of the state’s economy, which is the fifth largest economy in the world.
(b) California supports technological innovation with a world-class university system that provides a highly skilled workforce, and research and development tax incentives and other tools to facilitate the development and expansion of the state’s technology economy.
(c) California is the home of the third largest number of data centers in the country behind Virginia and Texas.
(d) The quickly evolving development of artificial intelligence requires large-format data centers that currently require extremely large loads of electricity and water. While that expanded energy demand can help support the larger electrical grid and ordinary ratepayers, if managed incorrectly, it could pose a serious threat to California’s climate goals and, more importantly, can result in significant cost shifts to ordinary ratepayers and risks of costly stranded assets if projects do not meet projected energy estimates.
(e) Ordinary ratepayers in many states are already experiencing significant rate increases for both energy and water as utilities race to build out the necessary infrastructure and meet the energy and water demands of an exploding number of data centers across the country.
(f) According to recent research, data centers have significantly increased electrical and water demand in California between 2019 and 2023 and that explosive growth is expected to increase through the rest of the decade.
(g) On the current trajectory, demand for electricity and water could rise over 350 percent in just five years between 2023 and 2028, creating significant cost pressures on electricity and access to clean water across the state of California.
(h) As the nation’s technology, innovation, and environmental leader, it is critical that the Legislature develop standards to encourage continued technology development while protecting California residents from shouldering the cost of data center development and ensuring that development does not come at the cost of Californians’ clean air and water.

SEC. 2.

 Section 21080 of the Public Resources Code is amended to read:

21080.
 (a) Except as otherwise provided in this division, this division shall apply to discretionary projects proposed to be carried out or approved by public agencies, including, but not limited to, the enactment and amendment of zoning ordinances, the issuance of zoning variances, the issuance of conditional use permits, and the approval of tentative subdivision maps unless the project is exempt from this division.
(b) This division does not apply to any of the following activities:
(1) (A) Ministerial projects proposed to be carried out or approved by public agencies.
(B) Subparagraph(A) does not apply to a project proposed to be carried out or approved by a public agency for the development and operation of a data center. For purposes of this paragraph, “data center” means a large-scale energy consumer that requires uninterruptible electricity to serve a facility housing servers and related data center equipment and software for the processing, storage, and distribution of data.
(2) Emergency repairs to public service facilities necessary to maintain service.
(3) Projects undertaken, carried out, or approved by a public agency to maintain, repair, restore, demolish, or replace property or facilities damaged or destroyed as a result of a disaster in a disaster-stricken area in which a state of emergency has been proclaimed by the Governor pursuant to Chapter 7 (commencing with Section 8550) of Division 1 of Title 2 of the Government Code.
(4) Specific actions necessary to prevent or mitigate an emergency.
(5) Projects that a public agency rejects or disapproves.
(6) Actions undertaken by a public agency relating to any thermal powerplant site or facility, including the expenditure, obligation, or encumbrance of funds by a public agency for planning, engineering, or design purposes, or for the conditional sale or purchase of equipment, fuel, water (except groundwater), steam, or power for a thermal powerplant, if the powerplant site and related facility will be the subject of an environmental impact report, negative declaration, or other document, prepared pursuant to a regulatory program certified pursuant to Section 21080.5, which will be prepared by the State Energy Resources Conservation and Development Commission, by the Public Utilities Commission, or by the city or county in which the powerplant and related facility would be located if the environmental impact report, negative declaration, or document includes the environmental impact, if any, of the action described in this paragraph.
(7) (A) Activities or approvals for the bidding, hosting or staging of, and funding of, an Olympic Games and a Paralympic Games under the authority of the International Olympic Committee or the International Paralympic Committee, except for the construction of facilities necessary for the Olympic Games or Paralympic Games.
(B) Notwithstanding subparagraph (A), the division does not apply to the construction of temporary facilities for the 2028 Olympic Games and Paralympic Games. For purposes of this subparagraph, “temporary facility” means a facility that will be completely removed and the area restored to a clean and safe condition within six months after the end of the 2028 Olympic Games and Paralympic Games.
(C) Any confirmed changes to the locations of the competition venues of the 2028 Olympic Games and Paralympic Games venue plan, pursuant to the host city contract and games agreement with the City of Los Angeles, shall be noticed publicly on the organizing committee’s official internet website and shall be noticed in a newspaper or other medium of general circulation in the local jurisdiction notifying the public of the change in location of the venue.
(D) This paragraph does not limit any other applicable statute or regulation governing impacts from temporary facilities to, among others, sensitive wildlife habitats, including, but not limited to, riparian lands, wetlands, bays, estuaries, marshes, and habitats for endangered, rare, and threatened species.
(8) The establishment, modification, structuring, restructuring, or approval of rates, tolls, fares, or other charges by public agencies that the public agency finds are for the purpose of: (A) meeting operating expenses, including employee wage rates and fringe benefits; (B) purchasing or leasing supplies, equipment, or materials; (C) meeting financial reserve needs and requirements; (D) obtaining funds for capital projects necessary to maintain service within existing service areas; or (E) obtaining funds necessary to maintain those intracity transfers as are authorized by city charter. The public agency shall incorporate written findings in the record of any proceeding in which an exemption under this paragraph is claimed setting forth with specificity the basis for the claim of exemption.
(9) All classes of projects designated pursuant to Section 21084.
(10) A project for the institution or increase of passenger or commuter services on rail or highway rights-of-way already in use, including modernization of existing stations and parking facilities. For purposes of this paragraph, “highway” has the same meaning as defined in Section 360 of the Vehicle Code.
(11) A project for the institution or increase of passenger or commuter service on high-occupancy vehicle lanes already in use, including the modernization of existing stations and parking facilities.
(12) Facility extensions not to exceed four miles in length that are required for the transfer of passengers from or to exclusive public mass transit guideway or busway public transit services.
(13) A project for the development of a regional transportation improvement program, the state transportation improvement program, or a congestion management program prepared pursuant to Section 65089 of the Government Code.
(14) A project or portion of a project located in another state that will be subject to environmental impact review pursuant to the National Environmental Policy Act of 1969 (42 U.S.C. Sec. 4321 et seq.) or similar state laws of that state. Any emissions or discharges that would have a significant effect on the environment in this state are subject to this division.
(15) Projects undertaken by a local agency to implement a rule or regulation imposed by a state agency, board, or commission under a certified regulatory program pursuant to Section 21080.5. Any site-specific effect of the project that was not analyzed as a significant effect on the environment in the plan or other written documentation required by Section 21080.5 is subject to this division.
(16) Approval by the Department of Pesticide Regulation of a pesticide emergency exemption pursuant to Section 136p of Title 7 of the United States Code.
(c) If a lead agency determines that a proposed project, not otherwise exempt from this division, would not have a significant effect on the environment, the lead agency shall adopt a negative declaration to that effect. The negative declaration shall be prepared for the proposed project in either of the following circumstances:
(1) There is no substantial evidence, in light of the whole record before the lead agency, that the project may have a significant effect on the environment.
(2) An initial study identifies potentially significant effects on the environment, but: (A) revisions in the project plans or proposals made by, or agreed to by, the applicant before the proposed negative declaration and initial study are released for public review would avoid the effects or mitigate the effects to a point where clearly no significant effect on the environment would occur; and (B) there is no substantial evidence, in light of the whole record before the lead agency, that the project, as revised, may have a significant effect on the environment.
(d) If there is substantial evidence, in light of the whole record before the lead agency, that the project may have a significant effect on the environment, an environmental impact report shall be prepared.
(e) (1) For purposes of this section and this division, substantial evidence includes fact, a reasonable assumption predicated upon fact, or expert opinion supported by fact.
(2) Substantial evidence is not argument, speculation, unsubstantiated opinion or narrative, evidence that is clearly inaccurate or erroneous, or evidence of social or economic impacts that do not contribute to, or are not caused by, physical impacts on the environment.
(f) As a result of the public review process for a mitigated negative declaration, including administrative decisions and public hearings, the lead agency may conclude that certain mitigation measures identified pursuant to paragraph (2) of subdivision (c) are infeasible or otherwise undesirable. In those circumstances, the lead agency, before approving the project, may delete those mitigation measures and substitute for them other mitigation measures that the lead agency finds, after holding a public hearing on the matter, are equivalent or more effective in mitigating significant effects on the environment to a less than significant level and that do not cause any potentially significant effect on the environment. If those new mitigation measures are made conditions of project approval or are otherwise made part of the project approval, the deletion of the former measures and the substitution of the new mitigation measures shall not constitute an action or circumstance requiring recirculation of the mitigated negative declaration.
(g) This section does not preclude a project applicant or any other person fro