Late on the last night of session, the Legislature passed a controversial bill seeking to establish construction standards (and restrictions on locations) for “logistics use projects.”  Assembly Bill 98 (Carrillo and Reyes) was unveiled just days before the end of the legislative session after months of closed-door negotiations with a small group of stakeholders.

AB 98 is a compromise measure between the California Chamber of Commerce and environmental groups after several previous attempts to regulate the construction and siting of warehouses failed in the Legislature.  AB 98 was strongly opposed by a large coalition of business groups, manufacturers, environmental justice organizations, and local governments.

As drafted, AB 98 covers a sweeping array of “logistics use projects” located within 900’ of a house, park, hospital, school, daycare, etc.  “Logistics use projects” include any “building in which cargo, goods, or products are moved or stored for later distribution to business or retail customers” and where “heavy-duty trucks are primarily involved in the movement of the cargo, goods, or products.”  It does not apply to facilities that “predominantly serve retail customers for onsite purchases.” 

While AB 98 was drafted to address expansive warehouse developments in Southern California, its sweep and construction will have far reaching consequences on rural areas. 

Of particular concern, the bill’s a one-size-fits-all approach applies to manufacturing and agricultural processing facilities that may include smaller storage buildings that are far different in size, scope, and impact than their urban counterparts.  Under AB 98, these buildings can only be located on arterial roads, collector roads, major thoroughfares, or “local roads that predominantly serve commercial uses.”  These types of roads may not be available where ag-related facilities need to be located in rural areas, and so could have fatal consequences for attempts to build any new storage or manufacturing facilities in rural areas. 

AB 98 also requires all local governments to update their circulation elements to identify and establish travel routes for the transportation of goods, materials, or freight for storage, transfer, or redistribution.  Failure to update the circulation element by January 1, 2028, exposes jurisdictions to penalties of up to $50,000 for each six-month period. 

RCRC strongly opposed the measure and pushed hard for amendments to:

  • Exempt buildings and facilities in which agricultural commodities are processed, moved, or stored, including any facilities supporting those uses.
  • Limit application of the bill to counties with a population of 600,000 or more.
  • Remove the grossly excessive penalties a local government’s failure to timely update its circulation element.

Since AB 98 was introduced too late in the session to fix any of the practical and technical issues that became immediately apparent, the bill’s authors committed to clean-up legislation in 2025.  As part of that process, RCRC will seek to remedy the issues raised above and exempt smaller jurisdictions from the circulation element update requirement.

RCRC’s letter in opposition can be found here and its request for Governor Newsom to veto the measure can be found here.

Please contact RCRC Senior Policy Advocate, John Kennedy, for more information or with any questions