An Inquirer Investigation reads the ballot measure’s broadband language, the Legislative Analyst’s review and a new Legislative Counsel opinion side by side, and finds a dispute that both campaigns say the text settles in their favor.
With a week left before the Nov. 3 election, the fight over Proposition 45 has narrowed to a question the measure never addresses by name: would it speed approval of data centers?
The initiative, backed by the California Chamber of Commerce, builders and utilities, would create a faster, more predictable track through the California Environmental Quality Act for projects it calls “essential.” Supporters say that track is overdue in a state where delays drive up the cost of housing, water and electricity. Opponents, led by environmental and public-health groups and the building trades unions, say it weakens the public’s role in reviewing projects and could open the door to the server farms now spreading across the country.
The word “data center” does not appear in the text of the measure. The argument turns on a single definition, a clause about “ancillary” infrastructure and an instruction to courts on how to read the whole law. The Inquirer read those provisions alongside the Legislative Analyst’s Office analysis, the official ballot arguments, a new opinion from the Legislature’s lawyers, the data-center laws Gov. Gavin Newsom signed last month and state campaign-finance filings.
What Prop. 45 would change
According to the analyst’s office, the measure does three things for eligible projects. It tightens time limits for environmental review, permits and lawsuits. It changes parts of the CEQA review process. And it narrows how courts handle CEQA challenges. Applicants could choose the new procedures or stay with existing ones.
Under the text, a local agency would have to decide whether to certify an environmental impact report within 365 days after an application is deemed complete. Public comment would be capped at 45 days for a draft environmental impact report and 20 days for a negative declaration; current law sets minimums, not maximums, the analyst notes. Written comments outside those windows, other than limited exceptions such as oral testimony at a recorded hearing, “shall be disregarded and excluded from the administrative record,” the measure says.
The analyst lists other changes. Impacts would be judged under the laws and standards in place when an application is submitted. The applicant could develop a single project alternative, where current law requires the agency to weigh several. Tribal consultation would be limited to federally recognized tribes. Lawsuits would have to be filed within 30 days and, under the text, completed within 270 days including appeals. A court that finds a CEQA violation could halt only the affected part of a project while the agency fixes it, rather than the whole project.
The eligible categories are housing, clean energy, water, public health, public safety, broadband Internet access, education facilities and transportation. The drafters wrote several exclusions into the text: Delta conveyance facilities, high-speed rail, electricity from nuclear power, jails and other detention facilities, immigration detention facilities, state prisons, and new oil or natural gas production facilities.
The definition at the center of the dispute
The measure defines an “essential broadband Internet access project” as one “to provide mass-market retail service by wire service, wireless service, or radio to customers in this state that provides the capability to transmit data to, and receive data from, all or substantially all Internet endpoints, including, but not limited to, any capabilities that are incidental to and enable the operation of the communications service, but excluding dial-up Internet access service.”
Two other provisions matter. Every essential project “includes all related and ancillary public, private, and utility infrastructure and public service facilities required by a utility or public agency, or included in an essential project application as part of the ‘whole of the project,'” with examples such as electric, telecommunication, gas and water improvements. And proposed Section 21029 says the chapter “should be interpreted and implemented to afford the fullest possible weight to the interest of, and the approval and realization of, essential projects.”
The case that data centers are excluded
The measure’s official proponent, Kurt Oneto, an election lawyer who has worked on more than 60 ballot measure campaigns, laid out the Yes side’s reading in The National Law Review. “Data centers are not among the projects Prop 45 was drafted to cover,” he wrote. “More importantly, the text of the measure itself makes clear that data centers are not eligible for Prop 45’s streamlined process.”
His argument rests on borrowing. The broadband definition, Oneto wrote, is “borrowed from, and nearly identical to,” the definition of broadband Internet access service in Government Code Section 53167, and California courts give identical language on the same subject the same meaning. “Section 53167 does not reach data centers, so neither can Prop 45. Period.” He argued that the “ancillary” clause must be read with its examples, municipal utilities and public-safety services, and that the interpretation clause “does not expand the scope of what qualifies as an essential project in the first instance.”
On Oct. 20, the Yes campaign released an opinion from the Office of Legislative Counsel, the Legislature’s nonpartisan lawyers, which concludes: “It is our opinion that…the definition of ‘broadband internet access service’ in section 53167, subdivision (a) does not include a data center.” The opinion, as quoted by the campaign, addresses the existing statute rather than the ballot measure; the campaign says the conclusion carries over because Prop. 45 copies that statute’s definition. The campaign also cites the Data Center Coalition, the industry’s trade group, which it says reviewed the measure 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.”
Other lawyers agree. Rachelle Chong, a former member of the Federal Communications Commission and the California Public Utilities Commission, wrote that the definition describes Internet access bought from a provider, and that “a conventional data center ordinarily performs an entirely different function,” the Los Angeles Times reported. Ryan Thomason and J. Scott Miller, CEQA lawyers at Mitchell Chadwick, wrote that “courts generally interpret identical language in related statutes to have the same meaning.”
“We specifically excluded data centers,” Dan Dunmoyer, president of the California Building Industry Association, told The Times. Jennifer Barrera, president of the Chamber, said in the campaign’s release that opponents “are doing everything they can to distract voters from the merits of Prop 45 and a failing status quo they cannot defend, even if it means misleading Californians about what the measure actually does.”
The case that the door is open
Opponents and several environmental law scholars read the same language differently. Eric Biber, a professor at UC Berkeley School of Law, responded to the Yes side’s arguments in a Sept. 10 post on Legal Planet. The initiative contains no cross-reference to Section 53167, he wrote, so a court would have to choose to rely on textual similarity alone. “It’s possible a court would do that, but it is far from guaranteed.”
Biber’s larger concern is the “ancillary” clause. Data centers are often built alongside Internet exchange and routing equipment, he noted, and a developer could pair the two in one application and argue the data center is part of “the whole of the project.” The interpretation clause could then push a court toward a broad reading. “I’m not going to argue (and I haven’t argued before) that the answer is clear here. It’s uncertain,” he wrote. “I think it’s likely that a court would follow the reasoning above.”
Ethan Elkind, director of the climate program at Berkeley Law, told The Times that data center developers will argue they fit the definition and courts will decide. “Anyone telling you that it’s definitely not going to be data centers, they cannot read the future,” he said.
Opponents also point to what the drafters chose to list. “The drafters of Prop. 45 explicitly excluded a long list of controversial projects,” Richard Frank of the UC Davis School of Law and land-use lawyer Matthew McKerley wrote in a commentary quoted by Ballotpedia). “Data centers are conspicuously absent from this list.”
The Yes campaign rejects that framing. “Prop 45 opponents are lying to voters, plain and simple,” campaign spokesperson Amelia Matier said in a statement quoted by Ballotpedia. “Instead of defending years of costly delays, they’re resorting to scare tactics about projects that aren’t even included in Prop 45.”
What the dispute would mean in practice
Two features of the measure raise the stakes of the disagreement. First, Prop. 45 is an initiative statute that the Legislature could amend only by a two-thirds vote of each house, and only with changes “consistent with, and” that “further the purposes of,” the measure. A reading that courts settle after the election would be hard for lawmakers to revise.
Second, the measure locks in the rules in effect when an application is filed. Biber told The Times that if data centers are covered, a community without a moratorium in place whose zoning allows a data center could not change the rules once an application is filed. Existing bans are not expected to be affected, the paper reported.
The Times described a case in Imperial County, where officials granted a CEQA exemption to a proposed data center of nearly 1 million square feet, then reversed course after residents protested and the city of Imperial and the Sierra Club sued. The county declared a moratorium, which it later rescinded after the developer sued and a court ruled. Attorneys for the No campaign told the paper the developer could claim Prop. 45’s rules apply. Dunmoyer countered that a data center still has to be approved by local officials: “If they decide to do that, this initiative does nothing to expedite that CEQA review,” he told The Times.
For the Bay Area, the question is not abstract. Santa Clara and the rest of Silicon Valley host one of the state’s largest concentrations of data centers.
The new data-center laws
The debate is unfolding weeks after Sacramento wrote its first comprehensive rules for the industry. On Sept. 21, Newsom signed seven data-center bills, including two by Assemblymember Diane Papan, a San Mateo Democrat.
Papan’s AB 2469 bars a city or county from approving a permit to build or expand a data center unless the applicant provides a water supply assessment, projected water use and efficiency measures, workforce disclosures and, beginning in 2028, a drought “water scarcity plan,” and pays the full cost of any water infrastructure needed to serve it, according to a summary by the law firm Cox, Castle & Nicholson. Her AB 2619 requires operators to give their water supplier an estimate of expected use before licensing and to report actual use at each renewal. The new laws take effect Jan. 1.
A third law, SB 887 by Sen. Steve Padilla, bars data centers from using CEQA’s categorical exemptions while making those that meet strict energy, water, community-benefit and labor conditions eligible for an existing expedited track for “environmental leadership” projects. The governor’s office said the laws give communities “more information about energy, water, workforce, and land use for proposed data centers so they can better weigh the economic costs and benefits of such projects.”
How those laws would interact with Prop. 45 has not been tested. The water rules are permit conditions rather than CEQA procedures, and the measure says projects must still comply with existing law. But Prop. 45 also freezes the standards that apply to a project at the date its application is filed, so timing could matter for any application submitted before the new rules take effect. Neither campaign has addressed that interaction in its public materials.
The broader argument
Data centers are only one front. In the official voter guide, supporters, including the California Children’s Hospital Association and the California Water Association, argue that “endless delays, red tape, and frivolous lawsuits” raise the cost of housing, electricity and water, and that permitting delays add more than $75,000 to the cost of a new home. The measure “does not exempt a single project from environmental review,” they write, and cities and counties “retain full authority to approve or deny projects.”
Opponents, including the Coalition for Clean Air, Clean Water Action and California Environmental Voters, counter that the measure “limits both the environmental review of major new development projects and the public’s right to be heard,” and that it “doesn’t include any requirement to lower your housing costs or your utility bills.” Chris Hannan, president of the State Building and Construction Trades Council, has said that “undermining the public’s ability to meaningfully participate in project approvals would move our state backward,” according to Ballotpedia.
The analyst does not take sides. It projects initial costs to state and local governments and courts “likely in the high tens of millions of dollars annually, potentially exceeding $100 million annually,” partly covered by fees. Over the longer term, it says, effects are uncertain and could cut either way: faster public projects and new tax revenue on one hand, costs from projects with environmental harms that would not otherwise have been approved on the other.
The Legislature has already moved in this direction. In June 2025, Newsom signed AB 130 and SB 131, which exempted most urban infill housing from CEQA.
Who is paying
Through filings with the Secretary of State last updated Oct. 23, committees supporting Prop. 45 had raised about $41.5 million and opponents about $31.3 million, according to CalMatters’ campaign-finance tracker. Neither side reported independent expenditures.
The largest support contributions listed include $10 million from the committee Building A Better California, $4.2 million from the California Building Industry Association, $3.9 million from the CA Business PAC, $2.4 million from PG&E, $2 million each from Edison International and the Chamber, $1.5 million from the California Association of Realtors and $1 million from Sempra Energy. A committee sponsored by Prologis, the logistics real estate company, gave $500,000.
On the opposing side, the largest listed contributor is Wendy Schmidt, the philanthropist, at $10 million, followed by about $7.1 million from a committee sponsored by environmental organizations and about $2.2 million from the State Building and Construction Trades Council, with millions more from laborers’, ironworkers’ and operating engineers’ unions.
The endorsement lists cross party lines in unusual ways. The Republican Party of California, Assemblymember Buffy Wicks of Oakland and former U.S. Energy Secretary Jennifer Granholm support the measure, according to Ballotpedia. The California Democratic Party, State Treasurer Fiona Ma, Rep. Jared Huffman of San Rafael and Sierra Club California oppose it.
What’s next
The only independent public poll, the Public Policy Institute of California’s September survey, found 49 percent of likely voters in favor, 46 percent opposed and 5 percent undecided.
If voters approve the measure, it would take effect after the election results are certified and would apply to pending as well as future projects. Oneto has written that he will defend the campaign’s reading of the broadband definition “after Election Day.” Biber, for his part, has written that whether data centers are covered is uncertain. On that point, at least, the measure’s defenders and its critics agree that a court may have the final word.
Graham Ostrowski covers the governor, the Legislature, state agencies and the state budget for the Sacramento Report. More from Graham Ostrowski
