AB 98 Could Dramatically Limit The Siting Of Logistics Facilities Statewide
(UPDATED ON OCTOBER 1, 2024)
On August 28, 2024, just three days before the deadline for the legislature to pass bills, Assemblymembers Juan Carrillo (39th Assembly District) and Eloise Reyes (50th Assembly District) introduced a “gut and amend” version of AB 98. As amended, AB 98 seeks to address environmental justice issues associated with the rapid expansion of warehouse uses in the state and would impose significant requirements on both the businesses that build warehouses and the local governments that approve them. Governor Newsom signed AB 98 on September 29th, and the new law takes effect on January 1, 2025.
Unlike the requirements of some failed predecessor bills, most of AB 98’s restrictions on warehouse uses apply statewide. AB 98 prohibits local agencies from approving new or expanded “logistics uses” that do not comply with comprehensive, statewide standards, including siting criteria and design standards. Additional standards apply within a designated “warehouse concentration region” in the Inland Empire. Further, AB 98 requires local agencies to update the circulation elements of their general plans to establish specific travel routes for the transport of goods and materials, avoiding sensitive land uses. Collectively, these requirements could dramatically limit the availability of sites for new or expanded logistics uses.
With no time to amend the bill before final votes in both houses, the legislature’s last-minute adoption of AB 98 limited stakeholder participation and has led to much confusion about how to interpret some of the provisions of the bill.
Key Definitions
AB 98 contains several definitions that establish the framework for its proposed regulations.
Most importantly, AB 98 defines “logistics use” as “a building in which cargo, goods, or products are moved or stored for later distribution to business or retail customers, or both, that does not predominantly serve retail customers for onsite purchases, and heavy-duty trucks are primarily involved in the movement of the cargo, goods, or products.” A “logistics use” does not include the following:
- A facility where food or household goods are sold directly to consumers and accessible by the public.
- A building primarily served by rail to move cargo goods or products.
- “Strategic Intermodal Facility,” meaning a facility that satisfies all of the following: (1) a logistics facility served by rail, (2) intermodal freight transport services, and (3) all facility structures and related rail operations are located within a single site footprint.
An “expansion” of a logistics use means an expansion of 20 percent or more of the existing square footage, excluding office space.
AB 98 defines a “sensitive receptor” as a residence, school, daycare facility, public recreation facility primarily used by children, nursing home or similar facility, and hospital.
The “warehouse concentration region” (“WCR”) includes the counties of Riverside and San Bernardino and the cities of Chino, Colton, Fontana, Jurupa Valley, Moreno Valley, Ontario, Perris, Rancho Cucamonga, Redlands, Rialto, Riverside, and San Bernardino.
Key Requirements for Logistics Uses
1. Truck Routing Plan
Prior to the issuance of a certificate of occupancy for a logistics use, AB 98 would require the facility operator to prepare and submit for city or county approval a truck routing plan to and from the state highway system based on the latest truck route map of the city or county. The truck routing plan would describe the operational characteristics of the facility, avoid passing sensitive receptors to the maximum extent possible, and include measures to prevent truck queuing or stopping on public streets. A revised truck routing plan would be required for every new tenant.
2. Housing Replacement and Displacement Assistance
AB 98 would impose additional requirements for logistics uses that require the demolition of existing housing. First, if a logistics project requires the demolition of housing units that were occupied within the last 10 years, AB 98 would require the city or county to condition approval of the project on the replacement of each demolished unit with two deed-restricted low- or moderate-income units within the jurisdiction. Second, the developer would have to provide any displaced tenant with 12 months’ rent.
3. Siting Criteria and Design Standards
AB 98 would mandate siting criteria and design standards for new or expanded logistics uses. These requirements are prescriptive and, collectively, could severely limit the locations capable of supporting viable logistics uses.
Siting Criteria
AB 98 would require any new logistics use to be sited on a roadway classified as an arterial, collector, major thoroughfare, or local road that predominantly serves commercial uses (i.e., more than 50 percent of the properties fronting the road within 1000 feet are zoned for commercial or industrial use). A city or county could grant a waiver for logistics facilities in industrial zones where siting on such roadways is impractical due to unique geographic, economic, or infrastructure-related reasons, as demonstrated by evidence provided by the applicant.
Design Standards
Commencing January 1, 2026, AB 98 would require new or expanded logistics uses to meet specified design standards based on the size of the logistics use (greater or less than 250,000 square feet), the geographic location of the site (whether or not loading bays are within 900 feet of a sensitive receptor (“SR”) and whether or not within the WCR), and the zoning of the site (industrial or non-industrial). Industrial zoning would includes site where an industrial rezoning application was submitted by September 30, 2024, and ultimately approved. AB 98 prohibits local agencies from approving logistics use developments that do not meet these standards.
As summarized below (and in the linked PDF here for ease of reference), AB 98 would establish:
- 21stCentury Warehouse (Base) Standards, applicable (in whole or in part) to logistics uses less than 250,000 square feet that are subject to AB 98, set forth in Table 1: 21st Century Warehouse (Base) Standards.
- Tier 1 21stCentury Warehouse Standards, applicable to warehouses 250,000 square feet or more that are subject to AB 98, set forth in Table 2: Tier 1 21st Century Warehouse Standards.
- Additional Standards applicable to warehouses that are subject to AB 98 based on size, location, and zoning, set forth in Table 3: Standards by Size, Location, and Zoning.
1 AB 98 would establish the following exceptions to this distance requirement if a new sensitive receptor is constructed, established, or permitted after the effective date of AB 98:
- A logistics use development in existence as of September 30, 2024, a proposed expansion of a logistics use development in the local entitlement process by September 30, 2024, or a proposed logistics use development in the local entitlement process by September 30, 2024.
- A new a new logistics use requiring a rezoning if the entitlements process for the logistics use started before any sensitive receptor started its own entitlement process, unless the proposed sensitive receptor was an allowable use according to local zoning regulations.
- A new or expanded logistics use if it was not already subject to the setback requirements prior to the new sensitive receptor being proposed or established.
These protections would exist from the time of application through the completion of the entitlements process and through the development period. If no development occurs within five years of entitlement approvals, the protections would be waived.
Other Requirements
For all new or expanded logistics uses, AB 98 would require the entry gates to the loading truck court to be positioned to allow a minimum of 50 feet of available stacking depth inside the property line. The stacking depth would increase by 70 feet for every 20 loading bays beyond 50 loading bays, to the extent feasible.
AB 98 would require anti-idling signs indicating a three-minute heavy-duty truck engine idling restriction to be posted at logistics use developments along entrances to the site and at the truck loading bays.
Exemptions from Requirements for Logistics Uses
AB 98 would exempt the following logistics use projects from these requirements:
- Logistics use projects that were subject to a commenced local entitlement process prior to September 30, 2024. This protection would exist from the time of application through the completion of the entitlements process and through the development period. If no development occurs within five years of entitlement approvals, the protection would be waived.
- Logistics projects that received approval prior to the effective date of AB 98. The term “approval” means the “decision by a public agency which commits the agency to a definite course of action in regard to a project intended to be carried out.” This protection would exist from the time of application through the completion of the entitlements process and through the development period. If no development occurs within five years of entitlement approvals, the protection would be waived.
- Logistics use projects that are mixed-use developments that may create sensitive receptors on the sites of the new logistics use developments, but with no sensitive receptors within 900 feet of the loading bays.
Requirements for Agencies
Circulation Element Updates
AB 98 would require cities and counties to update the circulation elements of their general plans to (1) “[i]dentify and establish specific travel routes for the transport of goods, materials, or freight for storage, transfer, or redistribution to safely accommodate additional truck traffic and avoid residential areas and sensitive receptors” and (2) “[m]aximize the use of interstate or state divided highways as preferred routes for truck routes … and maximize the use of arterial roads, major thoroughfares, and predominantly commercially oriented local streets when state highways or interstate highways are not utilized.” Cities and counties within the WCR would be required to update their circulation elements by January 1, 2026, while cities and counties outside of the WCR would be required to do so by January 1, 2028.
On or after January 1, 2028, “all proposed development of a logistics use development” would have to be accessible via arterial roads, major thoroughfares, or roads that predominantly serve commercially oriented uses.
SCAQMD Air Quality Reporting
Subject to an appropriation, AB 98 would impose various monitoring and reporting requirements on the South Coast Air Quality Management District (SCAQMD). SCAQMD would be required to deploy mobile air monitoring systems within Riverside and San Bernardino counties between January 1, 2026, and January 1, 2032, to collect air pollution measurements in communities near operational logistics use developments. SCAQMD would use the data to model and analyze the impact of air pollution on sensitive receptors from logistics use development and report its findings to the legislature on or before January 1, 2033 (with an interim report on or before January 1, 2028).
AB 98 Background
Critics of AB 98 have bemoaned the less-than-transparent adoption process. While appearing to some to have dropped as a last minute “gut and amend” bill, AB 98 in fact has considerable administrative and legislative history over the last few years.
- As early as 2005, the California Air Resources Board (“CARB”), in its Air Quality Land Use Handbook: A Community Health Perspective, issued guidance recommending siting warehouses at least 1,000 feet from sensitive receptors.
- In 2022, Assemblymember Reyes introduced AB 2840, which would have required jurisdictions in Riverside and San Bernardino counties to impose 1000-foot setbacks between logistics centers larger than 100,000 square feet and residences, schools, and other sensitive receptors.
- Also in 2022, the California Attorney General issued Warehouse Projects: Best Practices and Mitigation Measures to Comply with the California Environmental Quality Act. The guidance recommended warehouse siting and design considerations (including CARB’s 1000- separation distance), as well as recommended analysis best practices and mitigations measures for air quality and greenhouse gas emissions, noise, traffic, and other impacts from warehouses.
- Earlier this session, Assemblymember Reyes’ AB 1000, which would have softened the 1000-foot setback provisions of AB 2840 to allow 500-foot setbacks if certain protective measures were taken. Assemblymember Reyes subsequently elected to participate in a warehouse working group established by Assembly Speaker Robert Rivas earlier this year.
Also earlier this session, Assemblymember Ramos sponsored AB 1748, which would have required a 300-foot setback requirement for warehouses larger than 400,000 square feet in Riverside and San Bernardino counties.
Despite support of AB 98 by labor and building contractor groups, stakeholders ranging from municipalities, business interests, and environmental groups have mounted their own last-minute efforts to encourage Governor Newsom to veto the AB 98. It remains to be seen whether these efforts will sway the Governor over the coming weeks.
We will be monitoring AB 98 for action by the Governor. If you have any questions about the bill, please reach out to an author of this alert or a member of Cox Castle’s Land Use & Natural Resources Team.