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AB 131

Provides an exemption from property taxation for accessory dwelling units rented or leased to certain tenants. (BDR 32-694)

2025 Regular Session Introduced by Jovan Jackson

Authorizes $500M for HHAP Round 7 to fund homelessness housing; expands CEQA exemptions to speed housing, water, wildfire resilience, broadband, parks, clinics, and more.

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Bill Summary · AB 131

AB 131 — Public Resources (Committee on Budget) — Summary

Main purpose

AB 131 (as amended) is a Budget-related bill that (1) establishes Round 7 of California’s Homeless Housing, Assistance, and Prevention (HHAP) program and appropriates funds for it, and (2) makes a wide set of targeted changes and temporary expansions to exemptions under the California Environmental Quality Act (CEQA) for specified project types to accelerate delivery of housing, infrastructure, climate resilience, public health and community facilities.

Key provisions

HHAP — Round 7 funding and administration

  • Authorizes the Department of Finance (DOF) to augment Item 2240-001-0001 (Budget Act of 2025) by $8,000,000 (General Fund) to prepare administration for HHAP Round 7.
  • Requires DOF to notify the Joint Legislative Budget Committee within 10 days of any such augmentation.
  • Effective July 1, 2026, appropriates $500,000,000 for HHAP Round 7 (subject to specified disbursement requirements).
  • Conditions for disbursement to a city, county, federally recognized tribe, or continuum of care (CoC): the department must declare (in consultation with DOF) that it has substantially completed initial disbursement of Round 6 funds to that jurisdiction and that the jurisdiction has obligated at least 50% of its total Round 6 award.
  • States legislative intent to enact future legislation that will specify Round 7 program parameters.

CEQA exemptions and limits

  • Exempts from CEQA (with some exceptions) rezoning actions that implement the schedule of actions in an approved housing element.
  • Requires the lead agency to determine applicability of these exemptions (creates a state-mandated local program).
  • For projects that would otherwise qualify for a statutory or categorical exemption but fail due to a single disqualifying condition, limits CEQA review to environmental effects caused solely by that single condition; initial studies/EIRs must focus on effects the lead agency determines (based on substantial evidence) are solely caused by the single condition.
  • Lists project categories newly exempted (or expanded exemptions), often with temporal limits:
    • Specified new agricultural employee (farmworker) housing and repair/maintenance of existing farmworker housing.
    • Extension and expansion of an existing small/state disadvantaged community water-system CEQA exemption through Jan 1, 2032; adds sewer service projects to disadvantaged communities with inadequate sewage treatment.
    • Temporary exemption (through Jan 1, 2030) for certain community water system projects funded from specified sources that yield long-term climate resiliency, biodiversity and species recovery benefits (non-construction activities only).
    • Wildfire risk reduction projects (e.g., prescribed fire, defensible space, fuel breaks).
    • Expansion of linear broadband deployment ROW exemption to include rights-of-way on local streets/roads.
    • Exemptions for updates to the state climate adaptation strategy.
    • Exemptions for planning/design/site acquisition/construction/operation/maintenance of public parks or nonmotorized trails funded by a specified source.
    • Exemptions (except on natural/protected lands) for projects that consist exclusively of day care centers; federally qualified health centers or rural health clinics; nonprofit food banks/pantries; certain advanced manufacturing facilities.
    • Exemptions for heavy maintenance facilities and related work for electrically powered high-speed rail and for passenger rail station development/modification (subject to conditions).
  • CEQA exemptions do not apply to projects that include distribution centers, oil & gas infrastructure, or projects located on specified natural and protected lands.

Who is affected

  • Local governments (cities, counties), federally recognized tribes, and CoCs receiving HHAP funds.
  • Department of Housing and Community Development and state budget/finance entities administering HHAP.
  • Local “lead agencies” responsible for CEQA determinations (with added duties and potential state-mandated program requirements).
  • Water systems serving disadvantaged communities, farmworker housing operators, wildfire and fuels management programs, broadband deployers, transit/high‑speed rail projects, public park/trail projects, day care centers, community health clinics, nonprofit food banks, advanced manufacturing projects, and related private and nonprofit developers.

Fiscal and procedural notes

  • Appropriation: $500,000,000 (effective July 1, 2026) for HHAP Round 7; $8,000,000 GF augmentation for DOF budgeting/preparation.
  • Legislative status (selected): Passed Assembly (3/20/2025; Ayes 53, Noes 17); transmitted to Senate; amended in Senate committee; re-referred to Senate Committee on Budget and Fiscal Review (re-referred 7/2/2025). Committee approved (6/30/25) with amendments and recommended do pass (Ayes 13, Noes 2).
  • The bill declares legislative intent that further legislation will set Round 7 program details.

Potential impacts and considerations

  • Accelerates delivery of certain housing, water, wildfire resilience, broadband, public health, and community facility projects by narrowing or exempting CEQA review for specifically identified project types.
  • Places additional responsibilities on local lead agencies to assess exemption applicability—this creates a state-mandated local program and may require local administrative resources.
  • Provides substantial targeted HHAP funding contingent on Round 6 disbursement and obligation milestones, signaling continuity of homelessness funding while tying new funds to prior-round performance.

Compiled from official sources — confirm details with the bill’s official record.

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