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The California Assembly on Tuesday rejected a last-minute and controversial bill that would have brought changes to how the state responds to utility-caused wildfires, after criticism of the deal by Gov. Gavin Newsom and several legislators.
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It was a surprising end to furious weeks of negotiations that were driven by Newsom and involved some of the biggest interest groups in the state.
“At the end of the day, we had a proposal that we could have voted on today that was essentially some half measures,” Assembly Speaker Robert Rivas, D-Hollister, told reporters. “And I think Californians expect a lot more than half measures when it comes to addressing, again, the structural nature (of the issue) that we are dealing with. And so our commitment is to build on the foundation of work that we have created over the past month.”
Senate Bill 492 would have created a program to try and more quickly pay victims who fail claims for damages after a wildfire, put requirements on attorneys seeking to represent them, and deny short-term bonuses for utility CEOs for a year if the company started a blaze that killed at least one person.
It also aimed to prevent attorneys or companies from selling the rights to recover a wildfire claim to private equity groups. And it would have required state officials to come up with a wildfire preparedness strategy every five years.
But the measure was largely criticized for what it did not include: An effort to restrict the ability of insurance companies to recoup money from utilities who spark wildfires.
Newsom had pushed to bar that practice, or phase it out, saying it would help ensure that wildfire survivors were compensated sooner after a fire, but he was met with strong opposition from insurance company executives and resistance from many legislators.
The process can be particularly lucrative to insurers. Pacific Gas and Electric Co. paid $11 billion in claims to insurance companies from wildfires in 2017 and 2018, including the Camp Fire that decimated most of Paradise, while it was in the midst of a bankruptcy case.
“We negotiated in good faith. A lot of the outside groups didn’t,” Newsom said during a news conference Monday at the Capitol. “That’s why they’re as powerful as they are. That’s why big insurance is big insurance.”
Signs of frustration with the deal were evident Monday when assemblymembers held a hearing on the measure. Some called the results of the lengthy negotiations a “disaster” and something that didn’t “meet the mark.”
Assemblymember Cottie Petrie-Norris, D-Irvine, one of the lead negotiations of the measure acknowledged Tuesday that the bill had issues.
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“If we even just look at the scope of the proposal before us, we heard from a lot of groups about the fast pay process that there were some gaps and some issues that we want to resolve before we actually implement this for wildfire survivors,” she told reporters. “I think it should come as no surprise to anybody that sometimes when policies get written at 6 a.m. perhaps we can do better.”
Lawmakers also faced pressure from news that PG&E and Southern California Edison, major utilities in the state, had seen large stock market drops in recent days.
The legislative year was supposed to end Monday, but lawmakers were back in the Capitol because the bill was amended so late in the legislative process. A measure needs to be in print for 72 hours before it can be voted on. The bill didn’t appear online until just before 7:30 a.m. Saturday morning.
The measure needed support from two-thirds of both the Assembly and Senate to go beyond Monday’s deadline.
“For our house, the votes and the members were there,” Senate President pro Tem Monique Limón, D-Santa Barbara told reporters.
Like Limón, state Sen. Josh Becker, D-Menlo Park, who authored the measure, said he was disappointed by the Assembly’s decision.
“This bill was a balanced and meaningful first step with the understanding that we would continue working on the larger structural issues next year,” he said in a statement.
It’s possible that legislators could be asked to return earlier. Newsom completes his second term as governor in January. He could call the Legislature back for a special session before his time in the role ends.
The Governor’s Office declined to answer an emailed question about the possibility of a special session. Newsom left the state Tuesday morning for a trip to the South.
“Simply put, this measure did not meet the gravity of this moment,” he said in a statement. “The only solution is to return to fix the entire problem, not part of it.”
Read more California Assembly rejects vote on wildfire bill. Legislature adjourns for year
This story was originally published September 1, 2026 at 12:33 PM.