Action by the Senate Appropriations Committee last Friday showed that legislators heeded business concerns about costs in some cases, but continued to move other proposals that will increase costs for small businesses and consumers.
The legislation held by Senate Appropriations on May 23 included the following bills opposed by the California Chamber of Commerce:
SB 285 (Becker; D-Menlo Park), which would have restricted carbon dioxide removal innovation, discouraged private-sector climate action, and increased regulatory compliance costs imposed on business, leading to a corresponding increase in costs for California consumers.
SB 318 (Becker; D-Menlo Park), which would have imposed extensive new mandates and permitting requirements that introduced significant regulatory uncertainty, mandated costly technology upgrades on stationary sources, and increased the cost of operating in California for critical sectors such as energy, food production, and manufacturing. Such costs would have undermined the state’s competitiveness and further strained affordability for residents. SB 318 also significantly increased the state’s costs of air quality regulation.
SB 659 (Reyes; D-San Bernardino), a massive liability increase for online transactions involving minors. The bill would have multiplied existing penalties for online sales of various products, including spray paint, between five times and 70 times, when the transactions involved a minor.
SB 755 (Blakespear; D-Encinitas), which would have imposed significant, costly new mandates on businesses that contract with the state and risked reducing participation in state contracting at a time when public procurement should be more efficient, not more burdensome.
Cost Cutters
Two bills identified as improving California’s affordability moved to the Senate Floor.
One would authorize the California Independent System Operator (CAISO) and California utilities to integrate into a broader regional energy market governed by an independent regional organization. The bill, SB 540 (Becker; D-Menlo Park), passed with committee amendments modifying the bill’s off-ramp provisions by creating a committee that would be required to make certain specified findings.
A second Cost Cutter, SB 630 (Allen; D-Santa Monica), which originally sought to more than double the state’s film tax credit, was amended to return the credit to the current annual authorization amount of $330 million.
Also moving out of Senate Appropriations with amendments was CalChamber-supported SB 263 (Gonzalez; D-Long Beach). The urgency bill authorizes funding for a study to help determine the impact tariffs have had and will have on the state’s seaports, cargo airports, and land ports of entry. The study is to be completed by January 1, 2026.
Cost Drivers Moving to Senate Floor
SB 7 (McNerney; D-Pleasanton) imposes impractical requirements on employers of every size related to automated decision systems, which will discourage the use of such tools and subject employers to costly litigation and onerous new compliance procedures, thereby driving up costs and ultimately impacting consumer prices.
SB 295 (Hurtado; D-Bakersfield) prohibits a person from using or distributing pricing algorithms that use, incorporate, or were trained on “nonpublic competitor data.” Exposes businesses to significant uncertainty and aggressive liability and creates a chilling effect on the use of this technology by imposing significant cost on all businesses using technological tools.
SB 310 (Wiener; D-San Francisco) creates a new private right of action for wage and hour penalties that will be manipulated by trial attorneys, undermining the 2024 Private Attorneys General Act (PAGA) reform, which sought to reduce avenues for litigation abuse and overall costs on employers. See Fix PAGA Coalition reaction.
SB 384 (Wahab; D-Hayward) effectively bans the use of technology to help set prices or help manage supply levels, making it harder for businesses to offer discounts and competitive pricing to their customers.
SB 601 (Allen; D-Santa Monica) creates duplicative permitting obligations and dramatic legal liability requirements for businesses, agriculture, and water and wastewater utilities by granting regional water boards broad authority to impose permitting requirements without considering economic impacts or the critical need for housing and recycled water projects.
SB 632 (Arreguín; D-Berkeley) significantly increases workers’ compensation costs for public and private hospitals by presuming certain diseases and injuries are caused by the workplace, establishing a troubling precedent for expanding presumptions into the private sector. Nine prior attempts to impose similar standards have ended in failure.
SB 682 (Allen; D-Santa Monica) creates a de facto ban on the use of perfluoroalkyl and polyfluoroalkyl substances (PFAS) in all commercial and consumer products, unless the state Department of Toxic Substances Control (DTSC) is petitioned and makes an affirmative determination that the PFAS in a particular product is an unavoidable use. Because of the breadth and scope of PFAS use, including in aerospace, lithium-ion batteries, medical devices, automotive and semiconductors, to name a few, the regulatory program established is unworkable and ultimately will lead to a ban on critically important products or otherwise make certain products less safe, ultimately raising prices for consumers. Senate Appropriations amendments refined certain product categories.
Other CalChamber-Opposed Bills Moving
SB 24 (McNerney; D-Pleasanton), a flawed proposal that duplicates existing prohibitions with far broader reach, creates extensive new administrative costs, and intrudes on corporate speech and operations in a manner that will likely have unintended consequences for California’s energy reliability and cost of doing business. The bill’s regulatory overreach ultimately could increase costs for consumers.
SB 254 (Becker; D-Menlo Park) is framed as a “ratepayer relief and wildfire-safety” omnibus bill, but in practice overlays California’s already-complex energy framework with new state authorities, bond-financing schemes, and open-ended reimbursement funds that shift, rather than reduce, costs while introducing additional compliance burdens and inviting continued expansion of legislative spending mandates. CalChamber is concerned that the mechanisms SB 254 uses will unintentionally erode the financial footing required to keep the grid reliable, resilient, and attractive for clean-energy investment.
SB 41 (Wiener; D-San Francisco) limits the use of preferred pharmacy networks and financial incentives which will lead to increased drug costs for patients and employers.
SB 747 (Wiener; D-San Francisco) requires a single organization to report confidential compensation information to the state Department of Industrial Relations and potentially disrupt labor contract negotiations.
