California scraps SB 492, Newsom calls special session

California lawmakers ended the 2026 session without passing Senate Bill 492, a late wildfire-liability compromise that had been negotiated by Governor Gavin Newsom, legislative leaders and utility interests. The Assembly did not bring the bill up for a vote on September 1, killing it for the regular session, according to CalMatters. (calmatters.org) Newsom responded by saying the state should come back to address what he called the underlying structural problem in California’s wildfire system. Separately, lawmakers passed a pair of bills that would make California the first state to set standards for when smoke-damaged homes are safe to reoccupy after a wildfire. ### Why did SB 492 collapse at the end of session? (nbcnews.com) The Assembly declined to take up SB 492 on Tuesday, effectively ending the bill on the Legislature’s final day. CalMatters reported the measure emerged from nearly a month of closed-door talks and was designed as a compromise after Newsom and utilities had pushed for broader limits on liability when investor-owned utilities cause catastrophic wildfires. Robert Rivas, the Assembly speaker, said the proposal still fell short. “The proposal before us does not yet deliver the relief, accountability or meaningful reform that Californians deserve,” Rivas said in a statement reported by CalMatters. (calmatters.org) ### What was Newsom trying to preserve in the bill? Newsom said on August 29 that the compromise would block private-equity investment in wildfire claims, bar utility executives from taking bonuses when their company ignites a fire, and speed payments to survivors. His office also said the measure would establish a Statewide Community Wildfire Strategy. (calmatters.org) Gavin Newsom also said that compromise was incomplete. In the same statement, he said California still needed “full structural reform” to secure the wildfire fund’s long-term durability, stabilize electricity rates and prevent fire victims from again becoming unsecured creditors in a bankruptcy. (calmatters.org) After the bill died, CalMatters reported Newsom said the state needed to “return to fix the entire problem, not part of it.” ### What role did utilities play in the fight? Pacific Gas & Electric and Southern California Edison warned legislative leaders that utility companies had lost $20 billion in market value since the compromise was announced, CalMatters reported. (gov.ca.gov) The same report said utility stocks had fallen as investors concluded the bill did not provide the protections utilities wanted. Fox 40 reported the deal unraveled after last-minute pressure from California’s largest utility companies. CalMatters likewise reported that Newsom and the utilities had sought a broader reduction in utility liability than the final compromise provided. (gov.ca.gov) ### What about the criticism over PG&E influence and past fires? Consumer Watchdog, a California advocacy group, said in an August 6 report that California’s three largest for-profit utilities had spent more than $366 million on lobbying, campaign contributions, charitable giving and related political activity since Newsom took office. That report framed the late-session plan as a utility-backed bailout; those claims came from the group, not from state investigators or a court finding. (calmatters.org) The broader political backdrop is California’s history of deadly utility-linked fires. CalMatters said Newsom’s push was shaped by concern about another utility bankruptcy after catastrophic wildfires, while public criticism around the bill invoked disasters including the 2018 Camp Fire in Paradise and the 2025 Eaton Fire in Altadena. (fox40.com) NBC News reported the Eaton Fire killed 19 people and burned about 9,400 homes and structures. ### What did lawmakers pass instead on post-fire home safety? California lawmakers passed AB 1642 and its companion, AB 1795, to create statewide standards for testing and remediating wildfire smoke contamination in homes. NBC News reported the bills would make California the first U.S. state to set rules for contaminants such as lead and asbestos that can remain in houses that survive a fire. (consumerwatchdog.org) AB 1642 would require the Department of Toxic Substances Control, in consultation with other agencies, to adopt regulations on lead and asbestos testing, remediation and restoration by December 31, 2028, according to Digital Democracy’s bill summary. It also directs the State Air Resources Board to publish guidance on indoor air contaminants from residential smoke damage by the same date, with additional contaminant guidance due by December 31, 2029. (calmatters.org) ### What happens next? Newsom said this week California should come back and “fix the entire problem,” and multiple reports said he was weighing or calling for a special session focused on wildfire liability and utility policy. The separate contamination bills now go to his desk, with AB 1642 written to become operative only if AB 1795 is also enacted and takes effect on or before January 1, 2027. (nbcnews.com) (calmatters.org) (calmatters.digitaldemocracy.org)