On September 29, Governor Newsom signed Assembly Bill 98, a bill establishing warehouse design and build standards for new or expanded “logistics uses”, requiring cities and counties to update their circulation elements to include truck routes, and imposing air pollution study requirements on the South Coast Air Quality Management District. Commencing January 1, 2026, AB 98’s regulations preempt local regulation of warehouses serving logistics uses. Cities and counties cannot approve logistics use developments that do not meet the minimum standards in AB 98.
Logistics Use Facility Development Requirements:
AB 98 regulates new or expanded (by over 20% of existing square footage) logistics uses. A “logistics use” is specifically defined as “a building in which cargo, goods, or products are moved or stored for later distribution to business or retail customers, or both, that does not predominantly serve retail customers for onsite purchases, and heavy-duty trucks are primarily involved in the movement of the cargo, goods, or products.” The statue creates a complicated set of regulations that apply depending on whether or not the logistics use meets certain standards. The purpose of the regulations is to address the effects of emissions from heavy duty trucks serving logistics use warehouses on sensitive uses.
AB 98 applies different development standards to logistics use facilities based on various factors including: (1) whether a facility’s size exceeds 250,000 square feet; (2) whether loading bays (i.e., dock doors) are less than 900 feet from a sensitive receptor (including residences, schools, daycare facilities, parks, nursing homes and hospitals); (3) whether the site’s existing zoning is industrial or non-industrial; (4) whether the site is located in a “warehouse concentration region”; and (5) the entitlement application date for the new or expanded facility.
The standards which apply to warehouse building and site plan design include the following: building design and location, parking, truck loading bays, landscaping buffers, entry gates, and signage. Generally, stricter standards apply to larger logistics uses abutting sensitive receptors in areas zoned for non-industrial uses (“Non-Industrial Areas”). For example, logistics facilities in Non-Industrial Areas must provide a 500-foot setback from the loading bay to the property line of sensitive receptors; whereas, the same facilities in areas zoned for industrial uses (“Industrial Areas”) must provide a 300-foot setback. Less strict standards apply to smaller logistics uses (less than 250,000 square feet) in Industrial Areas, which do not need to meet the 300-foot setback requirement. Similarly, landscaped walls, berms or buffers required to screen adjacent sensitive uses from logistics uses must be 50-feet in Industrial Areas, and 100-feet in Non-Industrial Areas. Additionally, logistics uses requiring demolition of housing units occupied in the last 10 years must replace each such unit with two units of moderate- or low-income housing and provide displaced tenants with payments equal to 12 months’ rent at the current rate.
The stricter “tier” of “21st century warehouse design standards” under AB 98 (“Tier 1”) applies exclusively to larger logistics use facilities (greater than 250,000 square feet), regardless of whether in Industrial or Non-Industrial Areas. The “Base” tier applies to smaller facilities (less than 250,000 square feet) in Non-Industrial Areas, while neither tier applies to smaller facilities in Industrial Areas. Moreover, any logistics use in a Non-Industrial Area in the warehouse concentration region (the Counties of Riverside and San Bernardino and the Cities of Chino, Colton, Fontana, Jurupa Valley, Moreno Valley, Ontario, Perris, Rancho Cucamonga, Redlands, Rialto, Riverside, and San Bernardino) must orient truck bays on the opposite side from sensitive receptors, to the extent feasible; locate truck entry, exit, and internal circulation away from sensitive receptors; provide buffering and screening from light and noise; and have separate entrances for heavy-duty trucks.
Local Agency Land Use Planning Requirements:
AB 98 also requires local governments to update the circulation element components of their General Plans to ensure truck routes avoid residential areas, to the extent feasible. Circulation elements must:
- Establish specific travel routes for truck traffic that can accommodate additional traffic and avoid residential areas and sensitive receptors; and
- Maximize highway use as preferred routes, followed by major thoroughfares and predominately commercially oriented local streets when strictly necessary to reach existing industrial zones.
Logistics uses proposed after January 1, 2028 must be accessible by arterial roads, major thoroughfares, or roads that predominantly serve commercially oriented uses. Truck routes, parking, and idling facility locations must be marked by conspicuous signage, and routes must be made publicly available in geographic information system (GIS) format.
Circulation elements must be updated by January 1, 2028 for cities and counties located outside of the warehouse concentration region. Those in the warehouse concentration region are subject to an accelerated timeline and must update their circulation elements by January 1, 2026. The Attorney General is authorized to penalize noncompliant agencies with a penalty of up to $50,000 every six months until the required updates are made.
South Coast AQMD Requirements:
AB 98 requires South Coast AQMD to submit reports to the legislature in 2028 and 2033 regarding air pollutant concentrations at various distances from logistics use facilities in Riverside and San Bernardino County communities near logistics use developments. These reports are meant to assess the effectiveness of the proscribed setbacks and buffers in AB 98.
South Coast AQMD must also establish a process for receiving community input on assessing and collecting penalties from violators of the Warehouse Indirect Source Rule, and how these penalties should be spent. Community groups must contain representation from areas with high numbers of warehouse facilities.
Takeaway:
AB 98 is the first State legislation to establish regulations to address the impact of logistics uses warehouses on sensitive receptors. The regulatory regime is complicated and will establish minimum standards to replace the patchwork of local regulations throughout the State.
