Newsom, lawmakers at odds over key pieces of wildfire deal

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Hello and welcome back to Capitol Confidential! 

As a teenager, parents and teachers seemed to constantly drone on about the importance of time management to me – a serial procrastinator. “Don’t put off until tomorrow what you can do today,” as one proverb frequently recited to me goes. But as this week’s legislative marathon goes to show, old habits are tough to crack, as we face yet another scramble in the Legislature’s final few days. 

We’re halfway into the week and still waiting on dozens of the session’s most closely watched bills to head to final floor votes. Some of this is expected – procedure must be followed for amended bills. But some of it is end-of-session political horsetrading, as negotiations and last-minute conversations kick the can down the road for many of the session’s most controversial bills.   

As if the hundreds of bills moving through the Legislature weren’t enough, new legislation is also coming down to the wire. That includes two governor-backed elections bills introduced last month, and a highly contentious wildfire liability deal that lawmakers are frantically negotiating behind closed doors. 

The clock is ticking on Gov. Gavin Newsom’s attempt to broker a deal that would limit how much utility companies would pay in future wildfires. 

It’s a fix the governor and his supporters say is needed, as the state’s $21 billion Wildfire Fund, which was created to help utilities pay claims if they’re found to have caused a wildfire, is dwindling. The soaring costs of wildfires has also further exacerbated California's insurance crisis, in which many homeowners in wildfire-prone areas are uninsured or underinsured, further increasing the financial tolls of catastrophic fires in the state.

Critics have derided Newsom’s proposal as a bailout for utility companies. Many lawmakers are struggling to find a way forward with the proposal that is a political livewire, especially for those representing areas of the state devastated by utility-caused conflagrations. 

Weeks-long negotiations now enter into their final crunch time. Lawmakers have until late Friday to introduce any new legislation that would tackle the governor’s requests in order for the language to meet the constitutional rule that bills be in print for at least 72 hours before it’s voted on. 

Late last week, Assembly working groups submitted their counterproposal to the governor, followed on Tuesday by the Senate’s own response. 

According to a copy of the Assembly’s counterproposal obtained by the Chronicle, Assembly lawmakers rejected several key provisions. Two people directly involved in negotiations said Monday it was the most recent copy of the proposal they'd reviewed.

Many of them are central tenets of the proposal. Chief among them is a cap on the amount of non-economic damages that can be claimed. This can include emotional trauma and distress, claims around pain and suffering and the loss of items that are of high sentimental value. 

The counterproposal also rejects a provision to limit claims by public entities, such as municipalities, and rejects the proposal on subrogation – a process in which insurance companies sue utilities to recoup the cost of claims.

As the Chronicle reported over the weekend, limiting insurers’ ability to subrogate against utilities, and capping what damages survivors can claim, would reduce the amount of money the Wildfire Fund could be on the hook for in future fires. Less strain would lessen the likelihood of a utility going bankrupt and increase investors’ confidence — giving utilities better access to money to maintain or underground their power lines and prevent future fires. 

It’s this last element, perhaps one of the more complex and wonky provisions, that has led to a back-and-forth between lawmakers and the governor’s office in recent days. 

Assembly Member Cottie Petrie-Norris, D-Irvine, is a member of the Assembly’s working group that has been hammering out the response to Newsom’s proposal. 

“On everything, as we have said, our position is subject to change as we get more information and as we have these negotiations with the governor’s office,” she said. “I will say they have come back to us with kind of an alternative approach on subrogation in particular, and they’re also really working to make their case.”

This approach, Petrie-Norris said, would make the change to the subrogation process over the course of several years, rather than an abrupt halt. 

“That’s the case they’re making to members, and we’re taking a really close look,” she said. 

While the Senate is taking a similar stance to the Assembly’s on subrogation, according to Politico’s analysis of the upper chamber’s counterproposal, it diverts on the other two central sticking points. The Senate’s response made no mention of a cap on non-economic damages and limiting how much municipalities and local governments can claim after a devastating fire. 

The Senate’s response also proposes incorporating pieces of existing wildfire legislation, including two from Sen. Sasha Renée Pérez, D-Pasadena, who has been an outspoken voice against a deal that would limit utility liability. The senator’s district was ravaged by last year’s deadly Eaton Fire. 

But in the meantime, there still is no official plan in print, despite weeks of negotiations and years of conversation over the larger issue of wildfire liability. 

That lack of a clear proposal has frustrated not only some lawmakers, but also many advocates and wildfire survivor groups, who have panned the negotiations as opaque and unnecessarily last-minute. 

In a press conference on the Capitol lawn Tuesday morning, a group of more than two dozen wildfire survivors impacted by the Eaton Fire rallied against the governor’s proposal. Pérez and Assembly Member Isaac Bryan, D-Los Angeles, also spoke at the rally. 

Survivors’ and advocates say that the deal process has been secretive and rushed, amping up anxieties that lawmakers might push through an agreement that they feel they have had little time to review. 

As they stepped up the podium to condemn the proposal and share emotional testimonies of surviving the fire, survivors appeared to aim their pleas not just at the governor, but at the dozens of lawmakers who hold the cards. 

Eaton Fire survivor Anthony McFarland, a pastor, ended his speech with a prayer directly for the state’s legislators, asking them to “take a stand” with fire survivors. 

The U.S. Supreme Court on Monday allowed part of President Donald Trump’s executive order designed to sharply curtail mail voting to go into effect. Another ruling effectively blocking much of its practical implementation remains in place.  

Within a few hours of the decision, Democrats in the Assembly and Senate advanced two pieces of legislation touted as direct responses to the administration. 

The two bills, AB282 by Assembly Member Gail Pellerin, D-Santa Cruz, and SB259 by Sen. Aisha Wahab, D-Hayward, were introduced via a gut-and-amend last week. The governor called for both measures in a video posted to social media in early July, in which he said they were aimed at “anyone considering helping President Trump interfere with our election.”

AB282 would ban officials from seizing or ordering the seizure of ballots, election records and voting machines before an election is certified. SB259 would ban officials from interfering with a ballot’s delivery to a voter or local election official.

“You will be prosecuted,” Newsom said in last month’s video statement on the bill package. “We will be the wall he cannot get past.”

Lawmakers moved to consider the measures in committee on Monday shortly before the Supreme Court announced the decision. With both bills needing committee hearings and floor votes, it’s likely they will be among the crush of final votes. 

AB1775, by Assembly Member Chris Ward, D-San Diego, is now headed to the governor’s desk after clearing both houses. 

The bill would fast-track the ability for transgender troops forced out of the military by Trump’s 2025 executive order to receive certain veteran benefits and assistance programs. 

The bill would fund housing support services for affected veterans and other services aimed at helping troops transition back to civilian life, including legal help to upgrade their military discharge status to qualify for more assistance. 

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