Overview

• Gov. Gavin Newsom signed Assembly Bill 130 and Senate Bill 131 into law on July 1 as part of the $321 billion 2025–2026 budget, marking the most extensive overhaul of the California Environmental Quality Act since 1970.
• The legislation exempts most urban housing, transit, water, broadband and advanced manufacturing projects from CEQA environmental impact reviews when they comply with local planning rules.
• Supporters including California YIMBY, the Bay Area Council and Sen. Scott Wiener contend the reforms are essential to unlocking new homebuilding and addressing soaring construction costs.
• Environmental and community advocates such as San Francisco Baykeeper and Defenders of Wildlife say the rollbacks undermine habitat safeguards and public input and have pledged legal challenges.
• Critics including Sen. Sasha Renée Pérez and labor unions argue tying CEQA reform to the budget deadline stifled debate and constrained legislative oversight.