California's Prop 45 could open a loophole letting data centers skirt environmental review

California voters are weighing a ballot measure pitched as a fast track for essential infrastructure, but environmental advocates warn it could hand data center developers a way around the state's environmental review process, according to The Verge.

Proposition 45 would compress timelines for state-mandated environmental assessments on eligible projects and make it harder for residents to challenge those projects in court. Backers frame it as a response to California's housing shortage and to rising electricity demand that new renewable energy projects could meet. Opponents, including the environmental law nonprofit Earthjustice, argue the measure's wording could sweep data centers into the fast lane.

What the measure would change

Prop 45 targets projects covered by the California Environmental Quality Act (CEQA), the law requiring state agencies to review environmental impacts, work with developers on mitigation, and gather community input before granting approvals. As The Verge lays out, the measure would:

• Set a 365-day deadline for agencies to complete a project's environmental impact report
• Require legal challenges to be resolved within 270 days
• Cap public comment at 45 days, where CEQA currently sets a minimum rather than a maximum review period
• Limit tribal consultation to federally recognized tribes, dropping the current requirement to consult tribes affected by a project even without federal recognition
• Shift responsibility for drafting mitigation alternatives from agencies to developers, with developers proposing a single alternative instead
• Bar agencies from repeatedly requesting more information, forcing regulators to specify everything a company must provide up front
• Prevent courts from halting a project entirely even when an agency is found to have failed to comply with CEQA, leaving judges able to pause only specific problematic parts

That last provision is what Earthjustice senior attorney Fernando Gaytan finds most troubling, telling The Verge that harm is difficult to undo once construction has begun. His broader concern is that communities get shut out of the conversation.

Where data centers could fit

Prop 45 lists nine categories of eligible "essential" projects, including housing, clean energy and broadband internet access. The broadband category is where critics see the loophole. The measure's language covers projects offering mass-market retail data transmission to and from substantially all internet endpoints, including capabilities that are incidental to and enable the operation of the communications service.

UC Davis School of Law professor emeritus Richard Frank and attorney Matthew McKerley, writing in the Daily Journal, contend that proposed data centers including any broadband transmission infrastructure might squeeze into that definition. They also note that companies currently developing data centers have poured hundreds of thousands of dollars into the campaign supporting Prop 45. While the measure excludes certain project types, such as nuclear energy and dial-up internet service, it never explicitly bars data centers.

Proponents dispute that reading. Attorney and lobbyist Kurt Oneto argues in The National Law Review that data centers' supporting role in delivering internet service does not make them essential broadband access projects under the measure. The Verge reports that the Yes on Prop 45 campaign did not respond to a request for comment.

An unexpected backer

The measure has drawn support from the California and Hawaii chapter of the NAACP, an organization that has been among the most vocal civil rights groups opposing data center development nationally. The NAACP has sued xAI over air pollution from gas turbines at its Colossus 2 data center, and its Texas chapter has called for a statewide data center moratorium. Rick Callender, president of the NAACP's California/Hawaii conference, said in a September 9 press release that the measure is about accountability rather than shortcuts, and that working families and communities of color pay the price when housing, clean energy and other essential projects take years longer and cost millions more than they should.

Data centers have become a flashpoint in midterm races across the US, The Verge notes, and Prop 45 is no exception.

Why it matters

If Prop 45 passes and its broadband clause is read broadly, data center and cloud infrastructure projects in California could proceed with shorter reviews, less community input and sharply limited legal recourse, potentially accelerating the state's compute buildout at the cost of public oversight. Even if data centers never qualify, the measure would remake how CEQA operates for every covered project, shifting power from regulators and residents toward developers. For cloud and AI companies weighing expansion in California, the vote signals how far states may go to speed up infrastructure approval, and how contested that speed has become.