2026 Cost Drivers
As part of CalChamber’s Affordabilty Agenda, each year a list of Cost Driver bills is released to identify legislation that will decimate California’s economic and job growth, and increase costs for small businesses and consumers.
CalChamber tracks these bills throughout the legislative session and works to educate legislators about the serious consequences these bills will have on the state.
Air Quality
AB 1777 (Garcia; D-Rancho Cucamonga) Grants California Air Resources Board (CARB) Sweeping New Authority to Regulate Indirect Sources Statewide. Authorizes broad, undefined statewide regulation of facilities that attract mobile sources of emissions, driving new compliance costs across key sectors and increasing prices for goods and services.
Climate Change
SB 982 (Wiener; D-San Francisco) Drives Up the Cost of Energy Through a Punitive Strict Liability Framework for Climate Damages. Requires a targeted group of energy companies to absorb substantial costs for climate-related damage regardless of fault, enforced through actions brought by the Attorney General, costs that will be reflected in higher prices for energy and everyday goods.
Energy
SB 875 (Wiener; D-San Francisco) Removes Key Legal and Regulatory Safeguards that Protect Ratepayers in Utility Takeover Decisions. Weakens established safeguards in utility takeover decisions by limiting judicial and regulatory review, exposing ratepayers to higher costs and increased system risk.
Health Care
AB 1900 (Kalra; D-San Jose) Government-Run Health Care. Forces all Californians into a new untested state government health plan, with no ability to opt out while eliminating Medicare for California seniors and increasing taxes at least $250 billion a year on workers, income, jobs, goods and services.
Labor and Employment
AB 1234 (Ortega; D-San Leandro) Creates New Penalty and Revises Wage Claim Procedures. Imposes up to a 30% penalty on all orders issued by the Labor Commissioner, which penalizes employers that exercise their due process rights, and also makes other burdensome changes to the existing claims process. Two-Year Bill Introduced in 2025. On Senate Inactive File since 9/3/2025.
AB 1331 (Elhawary; D-Los Angeles) Restricts Workplace Safety and Security Tools. Undermines 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. Two-Year Bill Introduced in 2025. On Senate Inactive File since 9/13/2025.
AB 1898 (Schultz; D-Glendale) Onerous Notice Requirement. Requires public and private employers of all sizes to issue a voluminous number of notices regarding even the most routine technologies and for those notices to include confidential and proprietary information. The bill also effectively gives all employees and independent contractors veto power over the employer deploying new technology.
SB 947 (McNerney; D-Pleasanton) Restricts use of Automated Decision Systems in Employment. 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 penalties and onerous new compliance procedures.
Legal Reform and Protection
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.
Privacy and Cybersecurity
SB 259 (Wahab; D-Hayward) Online Pricing. Prohibits businesses from using any input data to create prices or discounts. Forces companies to overhaul their pricing models and strategies at significant cost, to the detriment of both the businesses themselves and their consumers. This threatens not only the profitability of businesses, but also potentially reduces the availability of discounts and personalized deals for consumers. Two-Year Bill Introduced in 2025. On Assembly Inactive File since 9/12/2025.
SB 295 (Hurtado; D-Bakersfield) Pricing Algorithms. 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. Two-Year Bill Introduced in 2025. Failed passage in Assembly, 9/13/2025, 13-24. Reconsideration granted.
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. On Senate Inactive File since 9/13/2025.
Regulatory Reform
SB 1123 (Wiener; D-San Francisco) Remove Detailed Economic Analysis from California Regulations. Effectively ends the existing obligation for agencies to perform thorough economic analysis of any regulation that has over $50 million in economic effects by allowing agencies to skip the analysis if they assert that the long-term economic or health impacts outweigh the economic costs.
Taxation
AB 1790 (Connolly; D-San Rafael) Significant Tax Increase for International Businesses. Forces all taxpayers to file on a worldwide combined reporting basis. Requires businesses to report revenues from international affiliates and subject their tax liability to income generated in foreign countries.
Workers’ Compensation
SB 632 (Arreguín; D-Berkeley) Expands Costly Presumption of Injury. Significantly increases workers’ compensation costs for public and private hospitals by presuming certain diseases and injuries are caused by the workplace and establishes an extremely concerning precedent for expanding presumptions into the private sector. Has been tried nine times before and failed every time. Two-Year Bill Introduced in 2025. Referred to Assembly Insurance Committee 6/16/2025.
