Gov. Gavin Newsom has signed into law a bill that is seen as slowing construction of warehouses in California and setting up a new layer of approval for truck routing.
Newsom signed AB98 over the weekend – it was in a news release about numerous bills he signed – but did not explain his reasons. A spokesman for Newsom told FreightWaves in an email that his signature “speaks for itself.”
At the core of the legislation are three key regulations. First, there will be a new set of rules limiting the siting of warehouses. Second, city and county governments will be mandated to put together what the law calls a “truck routing plan” for the vehicles servicing the warehouse. The routes will be enforced by the warehouse owner. Third, there is a significantly expanded role for the state government in decisions that had until now been in the hands of local officials.
Existing warehouses are not impacted as long as they stay their current size. Expansions, however, would trigger regulations and see certain grandfather clauses disappear.
The growth in a state role into areas that had been the responsibility of local governments is why the League of California Cities is one of the leading opponents of AB98.
“We are disappointed that the Governor still signed this flawed legislation after hearing the concerns of more than 700 city officials, business leaders, and environmental justice groups,” Carolyn Coleman, League of California Cities executive director and CEO, said in a prepared statement. “It was jammed through the Legislature at the 11th hour after weeks of closed-door negotiations that shut out local governments and other stakeholders from the policymaking process. Cities deserved a voice in this process. Cal Cities will be advocating for a more transparent and inclusive process next session that addresses our concerns.”
Quick changes may be targeted
The reference to the “next session” echoes commentary in California that the law is seen as having enough problems that a “cleanup” next year might be necessary.
That possibility of later amendments was raised by Sarah Wiltfong, the chief public policy and advocacy officer for the newly formed Supply Chain Council.
“Because the legislative compromise that created the new law occurred in the final days of session, there was no ability to amend the legislation,” Wiltfong said in an email to FreightWaves. “We have identified several issues regarding the new law that were not considered or that require clarification.”
Specifically, Wiltfong said they include “ensuring that obsolete industrial buildings near sensitive receptors can be redeveloped, addressing the unique needs of cross-dock buildings sited near sensitive receptors, and clarifying the definition of buffer areas.”
Attorneys from the law firm of Allen Matkin noted in a blog post that AB98 does have some loopholes on projects that were already submitted or are at certain stages in the process.
One of those doors will close on Tuesday, the attorneys said: “[D]evelopers who are contemplating the development of warehouse facilities should attempt to ‘commence a local entitlement process’ before September 30 in order to be exempt from AB 98,” they wrote on the JD Supra site, quoting wording from the law.
The attorneys also said warehouse projects that receive an OK from their respective local governments before Jan. 1 will be exempt from the law.
But they added, “These two exemptions of AB98 are not perpetual. If no development activity occurs within five years of approval of all entitlements, these exemptions expire.”
According to the Allen Matkins blog post, provisions of the law that will go into effect at the start of January include those that directly impact trucking: the truck routing plan requirement and signage that lays out those routes. There also are restrictions on idling.
A year after that, in January 2026, other rules that go into effect include requirements for a 900-foot buffer to what the state calls a “sensitive receptor,” defined as “a person in the population who is particularly susceptible to health effects due to exposure to an air contaminant.”
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