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[Updated: Tue., July 1, 2025, 10:15 a.m.]
That means allocating more than $322 billion for everything from education to health care to housing. But it also meant passing two bills that will change how municipalities, including the city and county of Santa Barbara, evaluate housing projects under the California Environmental Quality Act, or CEQA, a 1970 state law requiring state and local agencies to disclose, evaluate, and mitigate proposed projects’ significant environmental impacts. Here’s a breakdown of what will change.
Senate Bill 131
- If SB 131 had not been signed into law, the entire budget would have been inoperative, or repealed, as per Governor Gavin Newsom’s demand.
- Local governments evaluate whether housing projects are CEQA exempt or not as part of the planning process. SB 131 will allow projects that are determined not to be CEQA-exempt due to a single factor to complete only an initial study or impact report examining the factor that makes it non-exempt.
- SB 131 will require the state to map areas for urban infill — underutilized land within existing urban areas where new developments could be built — in all of California by July 2027. Local municipalities (like the city and the county) can comment or request corrections on the proposed map. This change relates to Assmbly Bill 130, the legislation that would actually expand which housing projects are CEQA-exempt, based on their proximity to or existence on urban infill sites.
SB 131, adapted from legislation originally introduced by Senator Scott Wiener in February, also creates a long list of CEQA exemptions — everything from farmworker housing and food banks to, controversially, advanced manufacturing sites.
Environmental groups across the state voiced opposition to this legislation on Friday, calling it “the worst anti-environmental bill in California this century.”
“Making funding of critical state resources — like affordable housing funding — dependent on gutting CEQA is an unconscionable tradeoff and false dichotomy,” said a letter to state legislators signed by more than 100 environmentalists and representatives for environmental justice organizations, including Los Padres ForestWatch.
The governor supports the bill as a means to build more housing, according to reporting from the Sacramento Bee. More generally, advocates of CEQA reform say the CEQA process can be used to block affordable housing projects.
Assembly Bill 130
- AB 130 will expand existing exemptions for housing on infill sites. That will include sites up to 20 acres (or for builder’s remedy sites, up to five acres) in urban areas. The sites would also need to have been previously developed with an “urban use,” or surrounded by developed, urban sites. The project has to be consistent with the general plan and local and coastal zoning rules, where applicable. It can’t be on any sensitive habitat, involve the demolition of any structure on a historic register, and can’t be used as transient lodging — like a hotel.
- Projects that gain these CEQA exemptions will still have to follow specific guidelines for working with California’s Tribes, and will still have to assess sites for environmental hazards.
The bill will also require the California Coastal Commission to adhere to a shorter timeline for CEQA projects, like local municipalities, and establish specific rules for construction worker wages.
Proponents of the bill, like YIMBY (Yes in My Back Yard), a pro-housing group, say it will help the environment by avoiding urban sprawl. But the bill saw significant pushback last week from construction unions, which said it took wages from workers. Some of that language, surrounding wages, was amended on June 24 and 26.
Last year in Montecito, the Rosewood Hotel’s worker housing project made use of an existing infill exemption. Santa Barbara County states that without the exemption, the project would have been delayed and may have been held up by a CEQA lawsuit.
The proposed eight-story development near the Santa Barbara Mission is just under five acres, the maximum lot size for a builder’s remedy project to qualify for the infill exemption. The structure on the site are part of Santa Barbara’s historic resource inventory, which the city said is equivalent to its local historic register, meaning it may not qualify for an exemption.
Santa Barbara’s Lawmakers React
Santa Barbara’s state legislators, Senator Monique Limón and Assemblymember Gregg Hart, both responded to the Independent with comments on the budget vote and the CEQA trailer bills.
Assemblymember Hart was one of three assembly members who voted against Senate Bill 131, the trailer bill that would allow certain projects, from food banks to advanced manufacturing facilities, CEQA exemptions. The bill garnered significant pushback from environmentalists.
“I did not support AB 130 and SB 131 that proposed sweeping changes to California’s bedrock environmental laws yesterday in the State Assembly,” Hart wrote in a statement to the Independent. “While I understand the need for CEQA reform, in relation to our state housing crisis, these bills go too far and [they] did not have adequate public scrutiny and the compromise necessary to gain my support.”
Hart said he heard concerns from environmental groups and his constituents on the bill’s impact, and that he believed it is important to have environmental review and careful planning of development projects. Further, he said that the trailer bills, which are attached to the budget, circumvent part of the normal legislative process and that AB 131 and its implications would have been examined more closely by lawmakers if it was examined as a regular bill.
Hart did not vote on AB130, the trailer bill expanding CEQA exemptions for infill projects.
In a written statement, Senator Limón said that she had concerns about provisions in SB 131, but that passing the state budget is essential to fund higher education, housing programs, healthcare services, childcare providers, and firefighting forces. She voted for the bill, as well as SB 130 (the Senate version of AB 130).
“Over the last week, I have conveyed our community’s concerns about this bill (AB/SB 131). I remain committed to working with my colleagues to promote housing policies that address our concerns of wildfire risk, evacuation routes and first responder access, traffic and circulation infrastructure, and the ways this policy interacts with CEQA exemptions that exist in state law today,” she said.
Editor’s Note: This story was updated to note that Legislators approved the two bills on Monday; to clarify the second bill passed was Assembly Bill 130, not Senate Bill 130 as originally reported; and to add comments from State Senator Monique Limón and Assemblymember Gregg Hart.
