AMENDED IN ASSEMBLY AUGUST 18, 2026

AMENDED IN ASSEMBLY JUNE 3, 2026

AMENDED IN SENATE MARCH 25, 2026

CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION

96

Introduced by Senator Cabaldon

February 20, 2026

An act to amend Sections 529.2 and 904.1 of, and to add Section 425.21 to, the Code of Civil Procedure, relating to civil actions.

Vote: majority   Appropriation: no   Fiscal committee: no   Local program: no

LEGISLATIVE COUNSEL’S DIGEST

Existing law provides that in a civil action brought by a plaintiff to challenge a housing development project that meets or exceeds the requirements for low- or moderate-income housing, a defendant may seek an order requiring the plaintiff to furnish an undertaking as security for costs and damages that may be incurred by the defendant if the bringing of the action would result in preventing or delaying the project, as specified. Existing law limits the liability of the plaintiff who must furnish the undertaking to $500,000. Existing law also permits a defendant in a civil action challenging the approval or permitting of a priority housing development project, as defined, to bring a special motion to strike the pleading. Existing law requires the court to deny the motion to strike if the court determines, based on the pleadings, affidavits, and administrative record if applicable, that the plaintiff has established a probability of prevailing on the claim.

This bill would increase the above-referenced liability limit to $1,000,000. The bill would also generally apply the above provisions to priority care developments, as defined, that provide supportive housing or other housing assistance in connection with behavioral health services and other specified purposes.

The people of the State of California do enact as follows:

SECTION 1.

Section 425.21 is added to the Code of Civil Procedure, to read:

425.21.

(a) The Legislature finds and declares all of the following:

(1) The state faces an availability and affordability housing crisis, largely due to a severe housing shortage. Solving the housing crisis therefore requires a multifaceted, statewide approach that includes encouraging an increase in the overall housing supply, encouraging the development of housing that is affordable to households at all income levels, and removing barriers to housing production.

(2) The limited availability of community-based care facilities to support rehabilitation and recovery contributes to the growing crisis of homelessness and incarceration among those living with a mental health disorder. Research in 2021 indicates that the state has a shortage of over 2,700 subacute and nearly 3,000 community residential beds. This shortage has caused significant increases in emergency department visits for mental health treatment at a very high cost.

(3) The continuum of care for all Californians, especially the most vulnerable, must include immediate access to temporary and permanent supportive housing or other housing assistance provided in connection with behavioral health services, including temporary shelter and permanent housing for people experiencing, or at the risk of experiencing, homelessness.

(4) In response to the state’s housing shortage, and in order to expedite the resolution of actions challenging priority housing developments, the Legislature has enacted laws authorizing a defendant, respondent, or real party in interest to bring a special motion to strike the plaintiff’s pleading in such an action. A similar law for actions challenging priority care development projects will strengthen California’s investment in improving its continuum of care statewide and ameliorate the shortage of such infrastructure.

(b) (1) (A) In all civil actions brought by any petitioner to challenge the approval or permitting of a priority care development project, including actions brought pursuant to Section 21167 of the Public Resources Code, a respondent may bring a special motion to strike the whole or any part of a pleading. The court shall deny the motion to strike if it determines that the petitioner has established that there is a probability that the petitioner will prevail on the claim.

(B) The court shall make its determination on the special motion to strike based on the pleadings, and supporting and opposing affidavits stating the facts upon which the liability or defense is based. Affidavits submitted with the pleadings may include a request for judicial notice of facts and documents relevant to the court’s determination.

(C) (i) If the court is unable to determine whether the petitioner has established a probability that the petitioner will prevail on the claim without reviewing the administrative record in an action in which the administrative record is required, the court shall make its determination on the special motion to strike based on the documents specified in subparagraph (B) and the administrative record, once prepared.

(ii) If the court determines that an administrative record is required for its decision, the moving party may, notwithstanding the 60-day filing requirement pursuant to paragraph (3) and without appealing an order denying a special motion to strike pursuant to paragraph (6), file the special motion to strike within 60 days of the service of the administrative record or, in the court’s discretion, at any later time it deems proper.

(D) If the court determines that the petitioner has established a probability that the petitioner will prevail on the claim, neither that determination nor the fact of that determination shall be admissible in evidence at any later stage of the case, or in any subsequent action, and no burden of proof or degree of proof otherwise applicable shall be affected by that determination in any later stage of the case or in any subsequent proceeding.

(2) In any action subject to paragraph (1), a prevailing respondent on a special motion to strike shall be entitled to recover that respondent’s attorney’s fees and costs. If the court finds that a special motion to strike is frivolous or is solely intended to cause unnecessary delay, the court shall award costs and reasonable attorney’s fees to a petitioner prevailing on the motion, pursuant to Section 128.5.

(3) The special motion may be filed within 60 days of the service of the petition or, in the court’s discretion, at any later time upon terms it deems proper.

(4) All discovery proceedings in the action shall be stayed upon the filing of a notice of motion made pursuant to this section. The stay of discovery shall remain in effect until notice of entry of the order ruling on the motion. The court, on noticed motion and for good cause shown, may order that specified discovery be conducted notwithstanding this subdivision.

(5) For purposes of this section, “petition” includes “cross-petition,” “complaint,” and “cross-complaint,” “petitioner” includes “plaintiff” and “cross-complainant,” and “respondent” includes “cross-respondent,” “defendant,” “cross-defendant,” and “real party in interest.”

(6) An order granting or denying a special motion to strike is appealable under Section 904.1.

(c) (1) “Priority care development” means any projects funded, in whole or in part, pursuant to Sections 5892 or 5965.04, or subdivision (c) of Section 18999.97, of the Welfare and Institutions Code.

(2) “Priority care development” does not include a “detention facility” as defined in subdivision (a) of Section 9500 of the Penal Code.

SEC. 2.

Section 529.2 of the Code of Civil Procedure is amended to read:

529.2.

(a) This section applies to all civil actions, including, but not limited to, actions brought pursuant to Section 21167 of the Public Resources Code, brought by any plaintiff to challenge a housing project that is either of the following:

(1) A development project, as defined by Section 65928 of the Government Code, and which meets or exceeds the requirements for low- or moderate-income housing as set forth in Section 65915 of the Government Code.

(2) A priority care development as defined by Section 425.21.

(b) For actions described in subdivision (a), a defendant may, if the bringing of the action or the seeking by the plaintiff of particular relief including, but not limited to, injunctions, has the effect of preventing or delaying the project from being carried out, apply to the court by noticed motion for an order requiring the plaintiff to furnish an undertaking as security for costs and any damages or economic hardships that may be incurred by the defendant by the conclusion of the action or proceeding as the result of a delay in carrying out the development project. The motion shall be made on the grounds that the action is without merit and that the action was brought in bad faith, vexatiously, for the purpose of delay, or to thwart the low- or moderate-income nature of the housing development project or the suitability of the priority care development to serve the intended population.

(c) (1) In responding to a motion for undertaking, the plaintiff may seek to limit the amount of the undertaking by presenting admissible evidence that filing an undertaking will cause it, and in cases where the plaintiff is an unincorporated association, its members, to suffer undue economic hardship. If the court, after hearing, determines that the grounds for the motion have been established, the court shall order that the plaintiff file the undertaking in an amount specified in the court’s order, taking into consideration any admitted evidence of plaintiff’s economic hardship and avoiding causing the plaintiff to suffer undue economic hardship, as security for costs and damages or economic hardships of the defendant. The liability of the plaintiff pursuant to this section for the costs and damages of the defendant shall not exceed one million dollars ($1,000,000). If the court concludes, based on all of the admissible evidence presented, that a bond in any amount would cause the plaintiff undue economic hardship, the court is authorized in its discretion to decline to impose a bond.

(2) The amount specified in this subdivision shall adjust annually for inflation, beginning on January 1, 2028, based on the change in the annual California Consumer Price Index for All Urban Consumers, published by the Department of Industrial Relations, for the most recent one-year period ending on December 31 preceding each adjustment, with each adjusted amount rounded to the nearest twenty-five dollars ($25).

(d) If at any time after the plaintiff has filed an undertaking the development plan is changed by the developer in bad faith so that it fails to meet or exceed the requirements for low- or moderate-income housing as set forth in Section 65915 of the Government Code, or it fails to meet the definition of a priority care development set forth in Section 425.21, the developer shall be liable to the plaintiff for the cost of obtaining the undertaking.

(e) For purposes of this section, “plaintiff” includes “petitioner,” “cross-petitioner,” and “cross-plaintiff,” and “defendant” includes “respondent,” “cross-respondent,” “cross-defendant,” and “real party in interest.”

SEC. 2.5.

Section 529.2 of the Code of Civil Procedure is amended to read:

529.2.

(a) In This section applies to all civil actions, including, but not limited to, actions brought pursuant to Section 21167 of the Public Resources Code, brought by any plaintiff to challenge a housing project that is a any of the following:

(1) A development project, as defined by Section 65928 of the Government Code, and which meets or exceeds the requirements for low- or moderate-income housing as set forth in Section 65915 of the Government Code, a Code.

(b) For actions described in subdivision (a), a defendant may, if the bringing of the action or the seeking by the plaintiff of particular relief including, but not limited to, injunctions, has the effect of preventing or delaying the project from being carried out, apply to the court by noticed motion for an order requiring the plaintiff to furnish an undertaking as security for costs and any damages or economic hardships that may be incurred by the defendant by the conclusion of the action or proceeding as the result of a delay in carrying out the development project. The motion shall be made on the grounds that the action is without merit and that the action was brought in bad faith, vexatiously, for the purpose of delay, or to thwart the student housing or low- or moderate-income nature of the housing development project. project, or the suitability of the priority care development to serve the intended population.

(c) (1) In responding to a motion for undertaking, the plaintiff may seek to limit the amount of the undertaking by presenting admissible evidence that filing an undertaking will cause it, and in cases where the plaintiff is an unincorporated association, its members, to suffer undue economic hardship. If the court, after hearing, determines that the grounds for the motion have been established, the court shall order that the plaintiff file the undertaking in an amount specified in the court’s order, taking into consideration any admitted evidence of plaintiff’s economic hardship and avoiding causing the plaintiff to suffer undue economic hardship, as security for costs and damages or economic hardships of the defendant. The liability of the plaintiff pursuant to this section for the costs and damages of the defendant shall not exceed five hundred thousand dollars ($500,000). one million dollars ($1,000,000). If the court concludes, based on all of the admissible evidence presented, that a bond in any amount would cause the plaintiff undue economic hardship, the court is authorized in its discretion to decline to impose a bond.

(d) If at any time after the plaintiff has filed an undertaking the housing development plan is changed by the developer in bad faith so that it fails to meet or exceed the requirements for low- or moderate-income housing as set forth in Section 65915 of the Government Code, or it fails to meet the definition of a priority care development set forth in Section 425.21, or it fails to meet the definition of student housing project in subdivision (f), the developer shall be liable to the plaintiff for the cost of obtaining the undertaking.

SEC. 3.SEC. 3.

Section 904.1 of the Code of Civil Procedure is amended to read:

904.1.

(a) An appeal, other than in a limited civil case, is to the court of appeal. An appeal, other than in a limited civil case, may be taken from any of the following:

(1) From a judgment, except an interlocutory judgment, other than as provided in paragraphs (8), (9), and (11), or a judgment of contempt that is made final and conclusive by Section 1222.

(2) From an order made after a judgment made appealable by paragraph (1).

(3) From an order granting a motion to quash service of summons or granting a motion to stay the action on the ground of inconvenient forum, or from a written order of dismissal under Section 581d following an order granting a motion to dismiss the action on the ground of inconvenient forum.

(4) From an order granting a new trial or denying a motion for judgment notwithstanding the verdict.

(5) From an order discharging or refusing to discharge an attachment or granting a right to attach order.

(6) From an order granting or dissolving an injunction, or refusing to grant or dissolve an injunction.

(7) From an order appointing a receiver.

(8) From an interlocutory judgment, order, or decree, made or entered in an action to redeem real or personal property from a mortgage thereof, or a lien thereon, determining the right to redeem and directing an accounting.

(9) From an interlocutory judgment in an action for partition determining the rights and interests of the respective parties and directing partition to be made.

(10) From an order made appealable by the Probate Code or the Family Code.

(11) From an interlocutory judgment directing payment of monetary sanctions by a party or an attorney for a party if the amount exceeds five thousand dollars ($5,000).

(12) From an order directing payment of monetary sanctions by a party or an attorney for a party if the amount exceeds five thousand dollars ($5,000).

(13) From an order granting or denying a special motion to strike under Sections 425.16, 425.19, and 425.21.

(14) From a final order or judgment in a bifurcated proceeding regarding child custody or visitation rights.

(b) Sanction orders or judgments of five thousand dollars ($5,000) or less against a party or an attorney for a party may be reviewed on an appeal by that party after entry of final judgment in the main action, or, at the discretion of the court of appeal, may be reviewed upon petition for an extraordinary writ.

SEC. 4.