July 28, 2026
City Council
DATE: July 28, 2026
TO: Mayor Martinez and Members of the City Council
FROM:
Councilmember Cesar Zepeda
Subject:
Resolution in support of SB 954 Tightening California
Environmental Quality Act Exemptions (CEQA)
FINANCIAL IMPACT: Adoption of the proposed resolution has no direct fiscal impact on the City's budget. If enacted, SB 954 could
affect the processing of certain development projects
subject to the California Environmental Quality Act
(CEQA); however, any fiscal or operational impacts to the City cannot be quantified at this time.
PREVIOUS COUNCIL
ACTION:
None
STATEMENT OF THE
ISSUE:
SB 954 makes targeted changes to last year’s California Environmental Quality Act (CEQA) reforms enacted in SB
131. In particular, the bill would narrow overly broad
definitions of advanced manufacturing, add environmental guardrails to protect communities, and clarify language so the original intent of SB 131 is followed without harming the environment, labor or tribal resources.
SB 131’s CEQA exemption for advanced manufacturing
relies on an expansive definition originally developed for a tax credit program that covers almost all manufacturing.
This means that even manufacturing that is damaging to
the environment, such as strip mining and lithium
extraction, gets a CEQA exemption, without other historic considerations or protections required. This runs counter to the spirit of CEQA.
AGENDA
REPORT
July 28, 2026
Additionally, SB 131 permitted childcare facilities in
industrial zones – but not in residential areas – to qualify for CEQA exemptions and allowed projects on habitat for protected species to move forward without environmental review.
RECOMMENDED ACTION:
ADOPT a resolution to support SB 954 to tighten California Environmental Quality Act (CEQA) exemptions that
strengthens protections for habitat of protected species, extends exemptions for residential daycare facilities, and adds clear environmental guardrails to the CEQA
exemption for advanced manufacturing to protect East
Bay and California residents from toxic contaminants and other industrial pollution - Councilmember Cesar Zepeda (510-620-6593).
DISCUSSION:
SB 954 makes targeted changes to last year’s California Environmental Quality Act (CEQA) reforms enacted in SB 131. In particular, the bill would narrow overly broad definitions of advanced manufacturing, add environmental guardrails to protect communities, and clarify language so the original intent of SB 131 is followed without harming the environment, labor or tribal resources.
SB 131’s CEQA exemption for advanced manufacturing relies on an expansive definition originally developed for a tax credit program that covers almost all manufacturing. This means that even manufacturing that is damaging to the environment, such as strip mining and lithium extraction, gets a CEQA exemption, without other historic considerations or protections required. This runs counter to the spirit of CEQA.
SB 131 created numerous changes to CEQA, adding a dozen new exemptions, including for housing, high speed rail facilities, and most significantly, “advanced manufacturing.” Additionally, SB 131 permitted childcare facilities in industrial zones – but not in residential areas – to qualify for CEQA exemptions and allowed projects on habitat for protected species to move forward without environmental review.
July 28, 2026
At the time of SB 131’s passage, several legislators raised insufficient concerns about protections for sensitive species and tribal resources, and an overly broad definition for advanced manufacturing, while at the same time supporting the main thrust of the bill. A dozen Senators and 20 Assemblymembers signed a letter urging prompt legislation to fix these outstanding issues, but no action has been taken yet.
Adopting a resolution that supports SB 954 supports the strengthening of protected species’ habitat, extension of CEQA exemptions for residential daycare facilities, and addition of clear environmental guardrails to the CEQA exemption for advanced manufacturing. Specifically, this bill requires projects to: 1) have zero emission backup generation; 2) be sited in heavy industrial zones with setbacks of 1,600 feet from sensitive receptors and 1,000-foot setbacks from disadvantaged communities; 3) not harm tribal resources; and 4) include a community benefits agreement and high roads labor standards.
The bill also requires the governor to certify these projects as ‘advanced manufacturing’ leaders, that are not only more efficient, but also more environmentally sound than current industry standards. This bill also specifies the intent of the Legislature to further narrow the definition of advanced manufacturing to appropriate sectors, allowing room for stakeholders and the Legislature to continue discussions on the definition of advanced manufacturing and CEQA exemption.
Adopting a resolution to support SB 954 fulfills commitments made to address SB 131’s outstanding issues and ensures that CEQA reforms are implemented thoughtfully, balancing streamlining with environmental protections to support a clean and abundant future for all Californians.
DOCUMENTS ATTACHED:
Attachment 1 – Resolution
Attachment 2 – SB 954 Factsheet