California Proposition 45 Sparks Debate Over Potential Data Center Development Impact

A UC Davis environmental law expert, Richard Frank, along with land use attorney Matthew McKerley, has issued a warning that California's Proposition 45, a November ballot measure, could significantly accelerate data center development across the state. They argue that the initiative's language regarding broadband internet access projects and "related and ancillary" infrastructure is broad enough to encompass some data centers, potentially allowing them to benefit from streamlined environmental review processes under the California Environmental Quality Act (CEQA) and face more limited court challenges. This interpretation is contested by Proposition 45 supporters, who maintain that the measure's definition of broadband infrastructure applies to consumer-facing retail internet services, not conventional data centers.

This debate is part of a broader discussion on California's environmental and water policies. Separately, Governor Gavin Newsom recently vetoed Senate Bill 954, which aimed to narrow CEQA exemptions for advanced manufacturing facilities, a move that had faced pushback from business and industry groups concerned about its potential to open up environmentally sensitive areas to industrial development without adequate review.

The digest also highlights several other significant water-related developments in California, including the Sites Project Authority's announcement that the Sites Reservoir, a $6 billion project 70 miles northwest of Sacramento, has cleared a major regulatory hurdle regarding water draw conditions from the Sacramento River. This comes as federal forecasters predict unusually wet winter prospects for California due to a strengthening El Niño, raising concerns about reservoir capacity in some areas. Furthermore, a new law (AB 1572) passed in 2023 will prohibit using potable water for irrigating nonfunctional turf on government properties by 2027, with commercial and HOA properties following in subsequent years, aiming to significantly cut urban water use.