Closing Days of Legislative Session Produce Strong Results for Business Community

A review of the status of CalChamber Affordability Agenda bills when the Senate and Assembly adjourned on Sept. 1 shows much good news for California businesses and consumers.

Legislators sent two Cost Cutter bills to Gov. Gavin Newsom and only two of the 31 bills identified by CalChamber this year as Cost Drivers. Amendments to the remaining Cost Drivers removed their most onerous provisions.

Stopped on the final day of the legislative session was a Cost Driver proposal that would have exposed businesses to litigation for offering discounts. In addition, several Cost Driver bills first introduced last year failed to advance before the end of the two-year session.

Advocacy efforts by several California Chamber of Commerce coalition partners, including local chambers of commerce, were significant in securing the positive results.

Below is a brief recap of end-of-session legislative activity. The governor has until Sept. 30 to sign or veto legislation.

Cost Cutters

Legislators sent the following Cost Cutters to the governor.

• AB 2124 (Pacheco; D-Downey) Improves How the Legislature Evaluates the Cost of Energy Policy Decisions through Independent Ratepayer Impact Review. Supports more cost-effective policymaking by creating a framework for independent evaluation of proposed legislation that imposes costs on utility customers, helping identify unnecessary or duplicative programs and reducing future rate pressure.

• AB 1693 (Zbur; D-Hollywood) Accelerated Building Plan Approval. Tenant Improvements. Streamlines permitting for tenant improvements at retail locations, while ensuring compliance with all applicable building, health, and safety requirements.

Cost Drivers Stopped

• AB 2564 (Ward; D-San Diego) Litigation Risks for Offering Discounts. Exposes companies who offer discounts to potential liability for offering basic, consumer-friendly discounts if they fail to fit into the bill’s three, limited, allowable forms of discounts. Also infringes on the California Consumer Privacy Act (CCPA) by creating new disclosure obligations that businesses must comply with in order to use personally identifiable information to offer discounts, despite the CCPA already having such standards for rewards programs. Failed to advance before the end of the legislative session. See story.

• AB 1018 (Bauer-Kahan; D-Orinda) Impact Assessments of Automated Decision Systems. Limits use of automated decision systems (ADS), including by small businesses, which will lead to significant liability and increased costs that will ultimately be borne by consumers. It would also hinder many beneficial uses of ADS, including but not limited to: enabling faster approvals and expanded access to credit and enhancing real-time fraud detection. Two-Year Bill Introduced in 2025. Removed from Senate Inactive File 8/21/2026. Failed to advance before the end of the legislative session.

Cost Drivers to Governor

• AB 2575 (Ortega; D-San Leandro) Discourages Artificial Intelligence in Health Care. Requires unworkable disclosure requirements for using AI tools in a health care setting. Places complete liability for harm of patient on health care entities and developers if using AI-enabled tools.

• AB 2646 (Krell; D-Sacramento) Drives Up Agricultural Labor Costs and Threatens California Farm Competitiveness. Threatens the H-2A program, which many agriculture employers rely on to fill labor shortages, by creating a minimum wage of $19.75 for any H-2A worker or worker performing comparable work in that same county. This will drive up agricultural costs at a time when the industry can least afford it.

Amended to Another Subject

• SB 259 (Wahab; D-Hayward), a two-year bill introduced in 2025, originally prohibited businesses from using any input data to create prices or discounts; and forced companies to overhaul their pricing models and strategies at significant cost, to the detriment of both the businesses themselves and their consumers. This threatened not only the profitability of businesses, but also potentially reduced the availability of discounts and personalized deals for consumers. SB 259 was amended to remove its surveillance pricing provisions on Aug. 20, 2026, and now includes language related to vote by mail ballots. Based on these amendments, CalChamber moved to neutral.

Cost Drivers Amended

Amendments in the closing days of the legislative session led to the removal of the Cost Driver tag on the following bills, but CalChamber remained opposed and is asking the governor to veto the bills.

• SB 947 (McNerney; D-Pleasanton) Restricts Use of Automated Decision Systems in Employment. As a Cost Driver, the bill imposed impractical requirements on employers of every size related to automated decision systems, which would have discouraged the use of such tools and subjected employers to costly penalties and onerous new compliance procedures.

As sent to the governor, SB 947 still includes overly broad definitions or undefined standards that would create compliance problems for employers, especially small businesses.

• SB 951 (Reyes; D-San Bernardino) Discourages Innovation Through Broad AI Layoff Mandates. The Cost Driver form of the bill significantly expanded Cal/WARN type requirements to include impacts on hiring or staffing as a result of technology and included problematic enforcement provisions that allowed uninterested third parties to file claims.

As sent to the governor, SB 951 still adds new Cal/WARN notice and reporting mandates onto the existing function, and leaves a core trigger undefined, leaving employers to guess when routine technology use crosses a threshold that carries civil penalty and enforcement exposure.

• In the hectic last week of this year’s legislative session, supporters revived a Cost Driver proposal that had been languishing on the Senate Inactive File since last fall. CalChamber secured amendments to remove the most onerous provisions and the Cost Driver status but remained opposed. AB 1331 (Elhawary; D-Los Angeles) Restricts Workplace Safety and Security Tools. Originally undermined workplace safety in every California workplace by effectively prohibiting the use of surveillance technology in the workplace, including security cameras, cybersecurity systems, and anti-theft devices.

As sent to the governor, AB 1331 still is written so broadly that it sweeps in everyday workplace tools that have nothing to do with surveillance, duplicates existing privacy protections, and imposes compliance burdens that are difficult, and in some cases infeasible for employers to operationalize.

• Amendments led to the removal of the Cost Driver tag on AB 1776 (Aguiar-Curry; D-Winters), which still drastically reshapes California antitrust law. CalChamber remains opposed to the bill. See previous story.