On September 29, 2024, California Governor Gavin Newsom signed California Assembly Bill 98 (AB 98) into law. AB 98 was created to add to California’s attempts to reduce emissions by providing new requirements for warehouse construction and trucking activities associated with warehouses. The new requirements become effective on January 1, 2026, and construction industry practitioners should take note of the volume and complexity of these new regulations. This article only touches on portions of AB 98 pertaining to construction and development.
Types of Facilities Affected
AB 98 applies to the development of most logistics use and warehouse facilities, but excludes those that predominantly serve retail customers for onsite purchases and those that are primarily served by rail. AB 98 applies to development of new facilities as well as expansions by more than 20% of the prior square footage, excluding office space.
The New Requirements Focus on Energy Efficiency and Reduced Emissions
Starting January 1, 2026, any new or expanded facility must meet requirements that are tiered based on the square footage of the facility, the proximity to a “sensitive receptor,” and the current zoning status of the land. Sensitive receptor is defined as a residence, a school, a daycare facility, a nursing home, a hospital, or publicly owned parks, playgrounds, or other recreational areas used by children. Depending on these variables and the location of the facility, there are certain standards that must be met.
These standards may include:
- Conformity with Part 6 of Title 24 of California Code of Regulations and Part 11 of Title 24 (the Green Building Standards), including:
- Photovoltaic system installation and associated battery storage;
- Medium- and heavy-duty vehicle charging readiness; and
- Light-duty electric vehicle charging stations
- Skylights in at least one percent of roof area, or equivalent LED efficient lighting
- Conduits and electrical hookups at all loading bays serving cold storage to reduce truck idling
- High-efficiency heating, ventilation, and air-conditioning
- Eventual transition to zero emission forklifts and other equipment used on site
- Microgrid-ready switchgear system capable of supporting renewable energy sources
- Advanced smart metering readiness
- Minimum levels of electric vehicle charging stations and conduit for additional future stations
Because there is a complex tier system and numerous exceptions and potential ambiguities throughout the Bill, you may want to review AB 98 with legal counsel regarding any upcoming design or construction of warehouse facilities in California.
