State Sen. Catherine Blakespear's bill to tighten environmental review rules for manufacturing facilities near homes and schools passed the California Legislature and now sits on Gov. Gavin Newsom's desk.

Senate Bill 954, which Blakespear (D-Encinitas) authored, narrows a sweeping exemption to the California Environmental Quality Act (CEQA) that lawmakers approved in 2025. The Senate passed the bill 28-10 on Saturday, Aug. 29, after the Assembly approved it on Thursday, Aug. 27, according to KPBS.

The 2025 law, SB 131, exempted advanced manufacturing facilities from environmental review after Newsom threatened to withhold approval of a $300 billion spending plan. More than 30 lawmakers objected to how broad that exemption was, warning it could increase pollution in vulnerable communities. They pledged to narrow it this year.

SB 954 delivers on that pledge.

The bill blocks the CEQA exemption for facilities located near schools, homes and disadvantaged communities. It limits the exemption to "final-tier" manufacturing and excludes facilities that produce components containing harmful chemicals such as PFAS. Data centers and fuel and material extraction industries also lose eligibility.

Supporters pointed to a May 2026 chemical tank incident at the GKN Aerospace facility in Garden Grove, where a tank overheated and forced evacuation orders for 50,000 residents. Under SB 131, that type of facility could bypass environmental review. Under SB 954, it could not.

"The Garden Grove chemical leak was an important reminder of why CEQA and environmental regulations matter," Blakespear said in an Aug. 28 press release from her Senate office.

Blakespear dropped all housing-related provisions after Assemblymember Buffy Wicks, who chairs the Assembly Appropriations Committee, raised concerns.

On the Assembly floor, lawmakers amended the bill to allow exempt facilities in any industrially zoned area and cut the zero-emission backup power requirement from 100% to 50%. The amendments also require environmental review only when pollution exceeds 50% of local air quality standards.

Not everyone supports the measure. Lance Hastings of the California Manufacturers and Technology Association said in a statement that the group had spent months requesting dialogue and that the bill was rushed.

Matt Regan, policy director for the Bay Area Council, said the bill still does not allow commercial sites to be rezoned for manufacturing. Projects must sit on land that was already industrially zoned as of Jan. 1, 2026.

Asha Sharma of the Sierra Club California acknowledged the bill was a compromise. The organization would prefer no CEQA exemptions for heavy industrial projects, Sharma said, but called SB 954 a necessary cleanup of SB 131.

A coalition of environmental and labor groups backs the bill, including California Environmental Voters, the Natural Resources Defense Council and the UAW.

Newsom has until Wednesday, Sept. 30, to sign or veto the bill. CalMatters reported that his office did not respond to questions about whether he supports it. Blakespear said she is confident Newsom will sign.