Lawmakers shoot down Newsom’s biggest wildfire liability targets

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Hello and welcome back to Capitol Confidential! 

Remember how I wrote last week that nearly every deadline and rule in Sacramento is liable to some kind of workaround? Well, welcome to the official last day of the legislative session – except it’s not really the end. 

That’s because the session was extended to accommodate the very, very last-minute wildfire liability compromise bill. It will be taken up on Tuesday.

Legislators were on the floor well into the evening on Sunday, and very well may have an even later end on Monday as they rush to get through a few hundred remaining bills. 

After weeks of intensive negotiations, Gov. Gavin Newsom’s wildfire liability proposal failed to attract enough legislative backing to move forward. 

It’s an anticlimactic end to a battle that has dominated conversations (and many, many meeting agendas) in Sacramento for the past few weeks. Facing significant opposition from powerful interest groups, vocal wildfire survivors and legislators, Newsom has backed away from the thorniest – and most potentially impactful – provisions of his proposal. 

In the final deal, which went into print early Saturday morning, there is no mention of capping how much utility companies are on the hook for paying when their equipment is found to cause a conflagration. It was the central, guiding tenet of the governor’s effort, as he sought to end his last legislative session with a clearer structure around wildfire liability. 

Newsom has argued that the state needs a more lasting process to help manage the ballooning costs of wildfires in the state, as utilities have drawn from billions in state funds to help pay out damages.

The final deal also does not address Newsom’s desire to end subrogation – the process insurance companies use to sue utilities to recoup the cost of wildfire-related claims – or place limits on how much local governments can claim from utility companies. 

What’s left is a shell of the initial proposal, keeping some of the most palatable provisions that wildfire survivor advocacy groups have applauded, and affecting very little change to wildfire liability in the state. 

The result is SB492, a gut-and-amend coauthored by Sen. Josh Becker, D-Menlo Park, and Assembly Member Cottie Petrie-Norris, D-Irvine. 

The bill would create a new program to fast-track wildfire-related claims from the state’s existing Wildfire Fund, ban the sale of wildfire claims to private equity groups and hedge funds and place new fee caps and limits on attorneys representing survivors against utilities. It also would create new wildfire prevention programs, including a data-sharing platform and mandated wildfire preparedness reports. It would also ban utility company executives from receiving bonuses soon after a utility-sparked fire. 

In a statement on Saturday, Newsom praised the resulting compromise, but suggested the issue is far from resolved. 

“This system needs full structural reform — not a partial one,” Newsom said. “I urge the Legislature to build on this progress next year and finish the work we started to secure the Wildfire Fund’s long-term durability, stabilize electricity rates, and ensure fire victims are never again turned into unsecured creditors in a bankruptcy proceeding.” 

Consumer Watchdog and Every Fire Survivor’s Network, two of the most vocal and organized groups advocating against Newsom’s proposal, cast SB492 as a victory. 

“The California Legislature deserves tremendous credit for standing up for wildfire survivors and consumers in the face of intense political pressure,” said Jamie Court, president of Consumer Watchdog, in a statement. 

The COMPETE Act, AB1776, has made it through the Legislature and is now officially up to the governor. 

The bill would substantially expand the Cartwright Act, a landmark regulation that governs California’s antitrust enforcement, by allowing legal action against single-firm business accused of engaging in anticompetitive practices. Existing law requires there be two businesses engaging in monopolistic behavior to be subject to antitrust enforcement. 

It marks the legislative end of what has been a bruising battle for the bill’s author, Assembly Majority Leader Cecilia Aguiar-Curry, D-Winters. Opposition came not only from the California Chamber of Commerce, which identified the bill earlier this year as its No. 1 kill target, warning it could raise prices for consumers.

But it also hit snags within the majority leader’s own caucus, as lawmakers expressed concern over earlier provisions of the bill that would have allowed individuals to sue corporations under the new parameters. That element was later cut in Appropriations, leaving the bill with fewer teeth than its original version. On Friday, the California Chamber of Commerce turned the knob down on its once-ardent opposition to the bill, saying the new amendments have limited its projected cost impact. 

Despite the changes, Aguiar-Curry has stood by the bill, arguing in previous hearings and in Sunday’s evening floor session that the changes to the bill do not impede its goal of cracking down on monopolistic behavior that she says harms small businesses. 

“I want to thank everybody that’s on this floor that has helped me through this whole policy,” Aguiar-Curry said, remarking on the bill’s rocky journey and multiple amendments. “It’s been tough, but this bill has always been about protecting businesses.” 

A bill from Assembly Member Matt Haney, D-San Francisco, that would place a significant tax on immigration detention center operators in the state, is headed to the governor. 

AB1633, which passed 57-17 in the Assembly on Friday, would impose an annual 25% tax on private detention facility operators in the state and commit the funds to help pay for immigration services. 

The bill originally proposed a 50% tax before it was amended down to 25%. It would go into effect July 1, 2028.

In a press conference earlier this month, Haney called for the bill’s passage outside the Adelanto ICE Processing Center in San Bernardino County, joined by immigrant rights advocates and other supporters. 

“These companies are getting rich while separating families and causing actual harm to our communities,” Haney said. “That has a real cost, and Californians are stuck paying the price. This is not an abstract policy problem, it’s a human crisis.”

The governor has until the end of September to make his decision on AB1633. 

Questions? Thoughts? Interesting tidbits to share? Reach out at [email protected], and follow me on X, @KathrynPlmr.