California Environmental Quality Act: advanced manufacturing facilities: exemption.

Section 21069.5 (defining 'tourism facility' as hotels, resorts, transient lodging, and large event centers) was deleted entirely from the bill.

Subparagraph (C) of Section 21080.085(b)(1), which would have made CEQA applicable to rezonings authorizing new tourism facility uses or increases in floor area, height, density, intensity, or development capacity of existing tourism facilities, was removed. This means such rezonings will now remain exempt from CEQA under the housing element exemption.

The zero-emission backup generation requirement for advanced manufacturing facility projects was relaxed from 100 percent (old subsection (h)) to at least 50 percent (new subsection (g)).

A new criterion was added requiring that an advanced manufacturing project not produce air pollution emissions through construction or operation exceeding 50 percent of the thresholds of significance used by the local air quality management district or regional air pollution control district, covering both criteria air pollutants and toxic air contaminants.

The definition of 'final tier manufacturing' was expanded to add a new exclusion for disposal activities described in subdivision (a) or (b) of Section 40192, and the existing materials production exclusion was clarified to include 'conversion of' and 'other raw materials.'

Assembly Member Ahrens was added to the list of coauthors.

A drafting error in Section 21080.1(b)(4)(D)(ii) was corrected, removing the stray text 'The definition of' before 'For purposes of this subparagraph.'

New amendments to Section 21080.1 establish that when a housing development project would be exempt from CEQA but for a single condition, CEQA review is limited solely to effects caused by that condition. Environmental impact reports for such projects are not required to discuss alternatives or growth-inducing impacts. The provision excludes projects that are not similar in kind to the exemption, are ineligible due to two or more conditions, include a distribution center or oil and gas infrastructure, are located on natural and protected lands (with carve-outs for fire hazard zones and habitat for protected species), or are builder's remedy projects exceeding four acres.

Section 21080.085(b)(1)(B) is restructured to explicitly state that 'natural and protected lands' does not include lands described in subdivision (q) of Section 21067.5 (habitat for protected species) for purposes of the rezoning exception. This means a rezoning that would allow construction within habitat for protected species areas would still qualify for the housing element rezoning exemption from CEQA.

The legislative counsel's digest clarifies that the bill does not repeal the oil and gas infrastructure exception from the rezoning exemption (the Senate version's language suggested it would), and adds explanation of how the single-condition housing provision interacts with the natural and protected lands definition.

The definition of 'advanced manufacturing facility' in Section 21189.101(a) removes placeholder blank items (1), (2), and (3) that previously listed specific product categories, leaving only the requirement that the facility be used exclusively for final tier manufacturing. This broadens eligibility by not restricting to a fixed list of products.

Multiple typo corrections: removed duplicate word 'production' in Section 21189.101(e)(2)(A), removed erroneous word 'financial' from Section 21189.101(e)(1)(B) (now reads 'other functional systems'), and removed extra 'or' in the methane emissions limit in Section 21189.102(d)(5).

The definition of 'advanced manufacturing facility' in Section 21189.101(a) was changed from requiring use for final tier manufacturing of specific listed products (which were left blank with underscores) to simply requiring use exclusively for final tier manufacturing, removing the product-specific limitation.

The exclusions from 'final tier manufacturing' in Section 21189.101(e)(2) were expanded: the old exclusion for 'production of raw materials' was broadened to 'production, recycling, or conservation of materials into fuels, feedstocks, or raw materials,' and a new exclusion was added for 'the production of equipment designed and used primarily for the activities described in subparagraph (A).'

Subdivision (c) of Section 21069.5, which defined 'tourism facility' to include 'an airport,' was removed from the definition.

Section 21189.101(e)(1)(B) was changed from 'Integrates hardware or software, or other financial systems' to 'Integrates hardware or software, or other financial functional systems,' adding the word 'functional.'

Section 21080.085(b)(1)(A) was changed to remove tourism facilities from the list of rezonings that make CEQA applicable, leaving only distribution centers in that paragraph. Tourism facility rezonings remain covered under paragraph (C).

Section 21189.106 was restructured: the previous three-part requirement (environmental mitigation commitments, high road employment standards, and funding) was consolidated into two requirements - (1) demonstrate and certify high road employment standards, and (2) enter into a bona fide community benefits agreement that includes enforceable commitments covering environmental mitigation, high road employment standards, and job access.

A new exception (subparagraph C) to the housing-element rezoning CEQA exemption was added: the exemption no longer applies if a rezoning authorizes a tourism facility use not previously permitted on the site, or increases allowable floor area, height, density, intensity, or development capacity for a tourism facility beyond what was permitted before the rezoning or before January 1, 2027 (whichever is later).

The oil and gas infrastructure exception to the housing-element rezoning CEQA exemption was removed from Section 21080.085(b)(1)(A), replaced by the tourism facility language.

The standalone advanced manufacturing exemption in Section 21080.69(a)(4) (which exempted projects consisting exclusively of an advanced manufacturing facility on a site zoned exclusively for industrial uses) was deleted. Advanced manufacturing projects are now only exempt through the more restrictive Chapter 8 certification process.

Two new emissions limits were added to the advanced manufacturing exemption criteria in Section 21189.102(d): (4) no more than 54 pounds per day or 10 tons per year of PM2.5, and (5) no more than 10 pounds per day of methane.

Section 21189.106 was restructured: the community benefits agreement requirement now requires both (a) enforceable commitments for local environmental mitigation and high-road employment standards with certification to the lead agency, and (b) a 'bona fide' community benefits agreement containing specific terms including funding for community improvements. The term 'bona fide' was added, implying the agreement must be genuine and in good faith rather than merely formal.

Section 21189.105(b) was changed from requiring the lead agency to ensure the applicant 'has entered into a community benefits agreement pursuant to Section 21189.106' to ensuring the applicant 'complies with Section 21189.106,' broadening the lead agency's enforcement duty to cover all requirements of that section, not just the agreement itself.

The fiscal notes changed from 'Fiscal committee: no' and 'State-mandated local program: no' (with strikethroughs showing prior changes) to confirmed 'Fiscal committee: yes' and 'State-mandated local program: yes,' indicating the bill now triggers state reimbursement obligations for local agencies.

Added a detailed definition of 'natural and protected lands' (Section 21067.5) covering state parks, wilderness areas, marine protected areas, national parks, recreation areas, monuments, wild and scenic rivers, ecological reserves, hazardous waste sites, floodways, conservation easements, wetlands, coastal sensitive areas, natural community conservation plans, very high fire hazard severity zones, prime farmland, and habitats for protected species (candidate, sensitive, special status, fully protected, or federally/state-endangered).

Added a new definition of 'tourism facility' (Section 21069.5) covering hotels, resorts, transient lodging (excluding residential hotels and post-occupancy short-term rentals), event centers of at least 100,000 square feet or 10,000 seats, and airports.

The housing element rezoning exemption (Section 21080.085) now excludes tourism facilities from the exemption instead of oil and gas infrastructure. It also adds a provision that the exemption does not apply to rezonings within natural and protected lands boundaries, but allows the exemption if those lands are carved out as separate projects.

The childcare project exemption (Section 21080.69) was expanded to include family daycare homes in addition to day care centers. The location restriction changed from 'not in a residential area' to 'not in an area zoned for industrial use or within 3,200 feet of a facility that actively extracts or refines oil or natural gas.'

The advanced manufacturing exemption was restructured. Previously it applied to any advanced manufacturing facility on industrially zoned land. Now it requires Governor certification under a new Chapter 8, with criteria including: site zoned exclusively for heavy industrial uses as of January 1, 2026; not within 1,600 feet of a sensitive receptor; not within 1,000 feet of a disadvantaged community; specific emissions caps (54 lbs/day ROG, 54 lbs/day NOx, 80 lbs/day PM10, 137 lbs/day SOx, 548 lbs/day CO); cancer risk no more than 10 in one million; tribal cultural resource protection; not on natural and protected lands; and zero-emission backup generation.

Added a new Chapter 8 (Sections 21189.100-21189.107) establishing an 'Environmental Leadership Program for Advanced Manufacturing.' Requires LEED Gold or better certification, demonstrated improvements over industry baselines for energy, water, and air quality, a community benefits agreement with enforceable environmental mitigation commitments, high road employment standards, and funding for community improvements. Also requires prevailing wages, skilled and trained workforce, and a labor peace agreement if state financial interest exceeds $2.5 million.

Added enforcement mechanisms including: lead agency must hold at least one public hearing before determining exemption; monthly compliance reports on skilled workforce requirements with $10,000 per month penalty for non-compliance; $200 per day per worker penalty for failing to use skilled and trained workforce; Labor Commissioner enforcement authority within 18 months of project completion; and Joint Legislative Budget Committee review of Governor certifications (30-day window, deemed certified if no action).

The bill's fiscal committee designation changed from 'no' to 'yes' and state-mandated local program changed from 'no' to 'yes,' reflecting the new duties imposed on lead agencies. A provision was added stating no reimbursement is required under Article XIII B because local agencies can levy sufficient fees.