California voters weighing Proposition 45 next month are being asked to decide on what backers call a long-overdue fix to the state’s infrastructure permitting process. But critics warn the measure carries a hidden cost: it could gut newly passed state protections meant to keep data centers in check.
The initiative is pitched as a way to speed up environmental reviews for housing, schools, roads and other public works projects under the California Environmental Quality Act. Nowhere does the measure’s text mention data centers by name. Yet a growing chorus of legal scholars and environmental groups argue that its broad wording leaves the door wide open for sprawling computing facilities to slip through the same fast-track process — potentially overriding a wave of local bans and moratoriums that communities across the state have adopted in response to concerns about water use, electricity demand and noise.
At issue is how Prop. 45 defines the categories of projects eligible for streamlined review. The measure covers broadband and telecommunications infrastructure, along with anything considered necessary to support those projects. Legal experts say that language could be read to include the power-hungry server farms that have been multiplying across California as tech companies race to build out artificial intelligence capacity.
Julia Stein, deputy director of UCLA School of Law’s Emmett Institute on Climate Change and the Environment, said the measure functions more like a sledgehammer than a scalpel when it comes to deciding what qualifies for expedited treatment.
“What Prop. 45 does is designate an entire class of projects that would be subject to streamlining, and then it also says that projects ancillary to those projects — so something that you might need to do in the course of the development of the project that’s exempted itself — would fall within that same streamlining bubble,” Stein said.
Because telecommunications projects are explicitly included, Stein said there’s a credible argument that the data centers supporting those networks could be swept in as well.
Notably, the measure spells out certain projects that are excluded from the fast-track process, such as high-speed rail — but data centers appear nowhere on that exclusion list, a detail that several legal experts say is unlikely to be accidental.
“The fact that they excluded some projects but have not expressly excluded data centers, a court would probably actually interpret that not as an unintentional oversight, but rather as intent to include data centers in the initiative,” said Matt McKerley, an attorney with the law firm Shute, Mihaly and Weinberger.
Opponents also point to language in the measure that would allow it to supersede other, more specific state laws — including Senate Bill 887, passed just this year, which tightened the rules around fast-tracking environmental review for data centers. If Prop. 45 takes precedence, critics say, that law’s protections could be rendered meaningless.
The tech industry rejects that reading entirely. The Data Center Coalition, a trade group backing the measure, says its members’ facilities simply don’t qualify for the streamlining Prop. 45 offers, arguing the initiative is aimed squarely at housing and traditional infrastructure like roads and bridges.
“The Data Center Coalition has reviewed Proposition 45 and concluded that data centers are not eligible for Prop. 45’s streamlining, nor are they a covered entity under any part of the measure,” said Khara Boender, the coalition’s director of government affairs for the western U.S.
Supporters have also cited a legal opinion from California’s Office of Legislative Counsel, which advises lawmakers, concluding that Prop. 45’s definitions don’t extend to data centers. Amelia Matier of the Yes on 45 campaign said flatly that “data centers are not included in Prop 45,” accusing opponents of trying to scare voters.
“The defenders of California’s unaffordable status quo are desperate to distract voters with lies because they cannot defend the costly delays and red tape driving up prices for working families,” Matier said.
Still, the money trail has raised eyebrows. Opponents of Prop. 45 — including the California Labor Federation, the Western Center on Law & Poverty, and a coalition of environmental groups — have spent more than $31 million fighting the measure. Meanwhile, the Yes on Prop. 45 campaign has raised more than $40 million, with notable contributions including $3.05 million from utility giant PG&E and $500,000 from Prologis, a major developer of warehouses and data centers. Critics say that financial backing speaks louder than the campaign’s public denials about who stands to benefit.
The fight comes at a particularly sensitive time for California’s booming AI and computing sector. Gov. Gavin Newsom recently signed seven new state laws targeting data centers, requiring operators to disclose their water consumption, cover the costs of grid upgrades needed to support their operations, and submit to environmental review.
Local governments, however, aren’t waiting around to see how those state laws play out. Driven by fears of higher utility bills, strained power grids and dwindling water supplies, at least 26 cities and counties across California — including several in the Inland Empire, where warehouse and data center development has surged in recent years — have passed or proposed moratoriums, outright bans, or strict new limits on data center construction.
Nina Robertson, a deputy managing attorney with Earthjustice’s California office, warns that the vague language in Prop. 45 is almost certain to spark legal fights over who has the final say on local permitting decisions — fights that local governments, not the state, would likely have to pay for.
“And who’s going to bear the cost of that litigation?” Robertson said. “It’s going to be the local governments.”
Original source: CalMatters
