California voters decide if data centers get a fast track

California voters face a decision on November 3 that could reshape how the state builds its infrastructure. Proposition 45, a ballot measure designed to accelerate environmental reviews for housing and clean energy, is drawing scrutiny over a potential loophole for data center developers. If passed, the measure would allow certain projects to bypass parts of the California Environmental Quality Act, known as CEQA, which currently mandates extensive public input and agency oversight before construction begins.

The core of the proposal is a strict timeline. Under Prop 45, state agencies would have 365 days to complete an environmental impact report for eligible projects. Any legal challenges to those projects would need to be resolved within 270 days. Public comment periods would shrink to just 45 days. Currently, CEQA sets minimum, not maximum, timeframes for these steps. The new rule also changes the role of regulators. Instead of agencies developing mitigation strategies, developers would be required to submit a single alternative project plan. Regulators would no longer be able to repeatedly request additional information from developers; all required data must be provided at the start of the application process.

Environmental advocates warn that the definition of eligible projects is broad enough to include data centers. The measure lists nine types of essential projects, including housing, clean energy, and broadband Internet access. Fernando Gaytan, a senior attorney at Earthjustice, argues that data center developers will find a way to fit their projects into the broadband category to access the fast track. He notes that this would remove local communities from the conversation. The definition of broadband includes services that transmit data to substantially all internet endpoints. UC Davis School of Law professor emeritus Richard Frank and attorney Matthew McKerley wrote in the Daily Journal that proposed data centers with broadband transmission infrastructure could likely qualify under this language. They noted that companies currently building data centers have spent hundreds of thousands of dollars to support the measure.

The proposition also limits the power of the courts. Under the new rules, judges would not be able to halt a project entirely if they find an agency failed to comply with CEQA. A judge could only pause specific parts of a project that are problematic. Gaytan described this change as the most egregious aspect of the proposal, stating that it is difficult to undo harms once construction has begun. The measure also restricts tribal consultation to federally recognized Native American tribes, whereas current law requires agencies to consult with tribes that may be impacted, regardless of federal status.

Proponents argue that the measure is necessary to address the state's housing shortage and rising electricity demand. They contend that data centers are not included in the essential project list. Kurt Oneto, an attorney and lobbyist, wrote in The National Law Review that a data center's role in supporting the internet does not automatically make it an essential broadband project. The Yes on Prop 45 campaign did not immediately respond to a request for comment. The measure has gained support from the California and Hawaii chapter of the NAACP. Rick Callender, president of that chapter, said in a September 9 press release that the measure creates a smarter process that protects civil rights and environmental safeguards while building projects sooner.

The NAACP has been active in opposing data center developments elsewhere. The organization filed a lawsuit against xAI over air pollution from gas turbines at the Colossus 2 data center. The Texas chapter of the NAACP has called for a statewide moratorium on new data centers. For Gaytan, the vote is about public participation and democracy. He said it is about neighbors being able to demand transparency from developers about what is happening behind a project's wall. The ballot measure will be decided by voters on November 3.

The measure excludes specific project types from the streamlined process, such as nuclear energy and dial-up internet access service. However, it does not explicitly bar data centers. The debate centers on whether the existing language for broadband access is broad enough to capture large-scale data facilities that include transmission infrastructure. Legal experts on both sides agree that the interpretation of this clause will be the focus of any post-election litigation.