California Assembly Kills Newsom's Wildfire Liability Deal
California Assembly Kills Newsom's Wildfire Liability Deal
The News
California Democrats killed Gov. Gavin Newsom's wildfire liability deal Tuesday, September 1, on the final day of the legislative session — after the bill had already been stripped of its most contentious provisions.
Assembly Speaker Robert Rivas, D-Hollister, announced the Assembly would not take up Senate Bill 492 less than three hours after the session convened, the San Francisco Chronicle reported. The decision surprised several lawmakers in the Senate.
Rivas said the bill, the product of weeks of negotiations between the governor's office, lawmakers and stakeholders, amounted to "half-measures."
What The Deal Would Have Done
Newsom's original proposal was aimed at shielding utility companies from soaring costs when their electrical equipment starts a wildfire, per the Chronicle.
It would have barred insurance companies from suing utilities to recoup the cost of claims — a process known as subrogation — limited noneconomic damages for some wildfire survivors, and limited local governments' ability to recover the full replacement cost of damaged infrastructure.
Those provisions drew heavy opposition, including from wildfire survivor groups who called the plan a bailout for utilities. By the time the final version was published over the weekend, they were gone: no cap on what utilities owe when their equipment is found to have started a fire, no end to subrogation, no limits on local government claims.
What was left, according to the Chronicle, was a program to fast-track wildfire claims from the state's existing Wildfire Fund; a ban on selling wildfire claims to private equity groups and hedge funds; new fee caps and limits on attorneys representing survivors against utilities; new prevention programs including a data-sharing platform and mandated wildfire preparedness reports; and a ban on utility executives collecting bonuses soon after a utility-sparked fire.
The Center Square reported the bill aimed to help victims who lost their homes, and that the Assembly simply did not take it up at the last minute on the Legislature's final day.
Timeline
Weeks of negotiations between Newsom's office, lawmakers and stakeholders produce a compromise after survivor groups and Democratic legislators push back on the original plan.
the final, pared-down deal is published. Newsom praises the compromise in a Saturday statement while calling the issue far from resolved.
the session was originally scheduled to end. Lawmakers extend it by a day to pass SB 492. Speaking to reporters at the Capitol that night, Newsom says wildfire liability still needs a legislative fix.
Rivas announces the Assembly will not take up the bill. It dies.
Reactions
"Unfortunately in such an expedited timeframe, it's very difficult to land something as challenging as this. This is something with real structural problems, this issue," Rivas told reporters at the Capitol.
Newsom, in a statement after the bill failed: "The reforms in this bill, while important, did not address the underlying structural problems driving this crisis, as the initial market reaction this week demonstrates. Simply put, this measure did not meet the gravity of this moment. The only solution is to return to fix the entire problem, not part of it."
The night before, Newsom had blamed special interests for the scaled-back bill. "This thing is not going to get better on its own. It gets better through leadership and taking responsibility and going up against all the special interests," he said. "And it's hard. I have a sell-by date, I get it, so I'm not going to be here to solve all this, but it needs to be solved."
Assembly Member Diane Papan, D-San Mateo, on when the issue returns: "We will see, it's to be determined. At this moment, we decided, 'Let's do this in a comprehensive way, rather than this smaller, incremental advancement.'"
The killing is being read two opposite ways. The New York Post framed it as Democrats giving an "11th hour reprieve" to utility companies responsible for deadly wildfires, killing a bill to hold them accountable. The left-leaning American Prospect argued the opposite — that SB 492 preserved survivors' legal rights and that its collapse averted the harms of what it called Newsom's utility bailout. A New York Post opinion piece took a similar line, calling the bailout dead and the people of California the winners.
What's Next
Rivas and other Assembly lawmakers pledged to keep working on wildfire liability legislation "in the near future," the Chronicle reported, but offered no timeline.
Newsom's office did not immediately respond to the Chronicle's questions about whether a special session is on the table.
The state's existing Wildfire Fund remains the mechanism utilities draw from — billions in state money already used to pay out damages, per the Chronicle — and nothing passed Tuesday changes that.
What We Cannot Tell You Yet
None of the reporting on this bill's collapse puts a number on what it means for homeowners' insurance premiums or for the availability of wildfire coverage. Newsom referred to an "initial market reaction this week" without specifying it, and no source quantifies the effect. We are not going to estimate it.
What is established: the structural question Newsom said the state must answer — who pays when a utility's equipment burns down a neighborhood — is unanswered, and the Legislature has gone home.
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