Proposition 45 Draws Fire Amid Fears of Data Center Environmental Exemptions

By David M. Greenwald

August 25, 2026

A debate over whether Proposition 45 could ease environmental review for data centers is emerging as a major fault line in the campaign over the California ballot measure, as opponents seek to connect proposed changes to the California Environmental Quality Act with growing public resistance to the massive facilities.

Proposition 45 would establish new timelines and legal standards for environmental review of certain housing, infrastructure, energy, transportation and digital access projects. Supporters argue the measure would reduce delays and costs associated with CEQA, while opponents contend it would weaken environmental protections and limit the ability of communities to challenge development.

The dispute has increasingly focused on whether data centers — large facilities that house computer servers and support cloud computing and artificial intelligence infrastructure — could qualify for the measure’s streamlined environmental review provisions.

According to reporting by Andrew Graham of The Sacramento Bee, opponents of Proposition 45 are making the data center issue a central part of a broader campaign against the measure, while supporters insist the proposition does not apply to data centers.

“It is a way for data center giants, oil, gas and utility corporations to build what they want where they want,” Mabel Tsang, political director of the California Environmental Justice Alliance, said during a rally at the state Capitol, according to The Sacramento Bee.

Opposition to Proposition 45 includes environmental organizations, labor unions and the California Democratic Party. Opponents have characterized the initiative as an effort by corporate and development interests to weaken environmental review under the banner of addressing California’s affordability problems.

The campaign supporting Proposition 45 is backed by construction and affordable housing organizations, the California Chamber of Commerce, utility companies and a political action committee largely funded by wealthy technology executives, according to The Sacramento Bee.

Supporters reject the argument that the measure would benefit data centers.

“Proposition 45 unequivocally does not include data centers,” Amelia Matier, a spokesperson for the campaign, told The Sacramento Bee. “The opponents know that people are really unhappy with the status quo and the facts are just not on their side, so they’re pushing these fearmongering lies.”

The political significance of the dispute is underscored by polling from the Public Policy Institute of California showing substantial support both for changes to environmental review and for restrictions on data centers.

Seventy-three percent of likely voters surveyed by PPIC said they would support a proposal modifying environmental reviews for housing, transportation, health, water and clean energy projects, according to The Sacramento Bee. The poll was conducted before the final ballot label and title for Proposition 45 were published.

Opponents contend the poll’s description of the proposal was too broad and argue that support falls when voters receive additional information about the measure.

At the same time, 77% of likely voters surveyed by PPIC said they would oppose construction of a data center in their area, highlighting the potential political consequences if voters conclude Proposition 45 would facilitate such development.

Data centers have become increasingly controversial because of their substantial electricity and water demands, particularly as the growth of artificial intelligence increases demand for computing infrastructure.

The political backlash has spread beyond California. New York, Pennsylvania and Texas have taken actions aimed at restricting or scrutinizing data center development, while governors in New York and Texas have imposed temporary moratoriums or other restrictions related to new facilities.

At the center of the Proposition 45 debate are changes to how CEQA reviews would be conducted and challenged.

The measure would give government agencies 365 business days to approve or reject a project’s environmental impact report. Courts would have 270 days to resolve legal challenges brought against qualifying projects.

Proposition 45 would also change the evidence judges could consider when reviewing government approval of projects.

Courts would determine whether an agency’s decision was supported by substantial evidence but would not be permitted to consider competing environmental studies prepared by project opponents when conducting that review.

Community organizations and development opponents sometimes commission independent studies when they contend that the environmental analysis used by a government agency is flawed.

Supporters of Proposition 45 argue CEQA litigation has been used by opponents of development to delay projects for years, increasing costs and contributing to California’s housing and infrastructure problems.

Opponents argue the proposed changes would shift the balance too far toward developers by restricting the evidence available to courts and accelerating litigation.

The measure would not override local restrictions. Cities and counties could continue banning or imposing restrictions on particular forms of development, including infrastructure projects otherwise covered by Proposition 45.

The proposition identifies eight broad categories of projects eligible for its revised CEQA procedures: housing, public health facilities, clean energy, water infrastructure, schools and higher education facilities, public safety projects, transportation, and broadband and digital access.

It is the final category that has fueled the dispute over data centers.

The Yes campaign describes eligible projects as including “fiber-optic and wireless broadband projects connecting underserved and rural communities,” according to The Sacramento Bee.

The language of Proposition 45 itself defines eligible projects more broadly as projects “to provide mass­ market retail service by wire service, wireless service, or radio to customers in this state.”

Opponents contend that definition could give data center developers an opening to argue that their facilities are part of the infrastructure necessary to provide broadband or digital services.

“Those facts point to coverage under the measure, or at the very least, allow a pathway for a developer to argue that they fulfill the terms laid out by this definition,” Gabriel Tolson, a spokesperson for the No campaign, told The Sacramento Bee.

Opponents also argue that Proposition 45’s authors could have explicitly excluded data centers if they intended to prevent the facilities from receiving expedited review.

The measure contains explicit exclusions for some controversial projects. The Delta conveyance project is excluded from the proposition’s water infrastructure provisions, while high-speed rail projects are excluded from the transportation category.

Supporters maintain that such an exclusion was unnecessary because data centers do not fall within the measure’s definition of broadband infrastructure.

Attorney Rachelle Chong, a former member of both the California Public Utilities Commission and Federal Communications Commission, has argued that state and federal regulatory history does not support classifying a data center as a broadband internet project.

Proponents also contend it would have been impractical to list every type of project that does not qualify for Proposition 45.

The disagreement could ultimately become a question for the courts if Proposition 45 passes and a data center developer attempts to use its provisions.

The Yes campaign says on its website that “data centers are not eligible for streamlining under Prop 45,” while opponents continue to argue that the initiative’s language leaves an opening for them.

Neither campaign mentions data centers in its official ballot statement, according to The Sacramento Bee.

The No campaign argues that statements made by Proposition 45 supporters outside the initiative itself cannot eliminate what opponents describe as a loophole.

The Yes campaign’s “public statements, and their fear that the public will find out about this loophole that they’ve allowed to be included in this measure, does not close the loophole,” Tolson told The Sacramento Bee.

If litigation does arise, courts could examine both the statutory language and evidence concerning what voters understood themselves to be approving.

UC Davis law professor Chris Elmendorf told The Sacramento Bee that California courts examining a voter-approved measure would “look at the intent of the voters, and they look at the language in the ballot pamphlet to try to infer what a reasonable voter thought they were voting on.”

“If the ballot language is silent then the court is just going to fall back on its best interpretation of what the ballot measure means,” Elmendorf said.

Judges can also consider campaign statements in some circumstances, Elmendorf said, although that is less common.

The dispute leaves California voters confronting two issues that polling suggests produce sharply different reactions: broad dissatisfaction with the costs and delays associated with building housing and infrastructure, and substantial opposition to the rapid expansion of data centers.

Whether Proposition 45 actually encompasses those facilities could remain unresolved unless the measure passes and a developer attempts to invoke its protections, potentially leaving California courts to determine where broadband infrastructure ends and data center development begins.