2026 Cost Drivers

Legislation that increases costs  for businesses and consumers

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.

AB 1776 (Aguiar-Curry; D-Winters) Massive Expansion of Antitrust Law. Would create the largest expansion of antitrust law in world history. Would leave every business of every size in California vulnerable to massive legal liability.

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.

AB 2569 (Hart; D-Santa Barbara) CEQA Expansion. Significantly expands California Environmental Quality Act (CEQA) environmental impact report requirements, which will increase litigation exposure and costs for a permitting process that already causes some of the longest and most costly project delays in the country.

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.

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.

SB 1011 (McNerney; D-Pleasanton) Limits Use of Technology by Utilities. Places significant burdens on utilities’ use of automated decision systems, which would impact systems already in widespread use to manage distribution systems as well as critical systems used to provide rapid emergency responses

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.

AB 1979 (Bonta; D-Alameda) Bans Artificial Intelligence in Health Care. Prohibits the use of AI-enabled tools in a health care setting for activity involving professional judgement — essentially impacting every health care interaction.

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.

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.

SB 951 (Reyes; D-San Bernardino) Discourages Innovation Through Broad AI Layoff Mandates. Significantly expands Cal/WARN type requirements to include impacts on hiring or staffing as a result of technology and includes problematic enforcement provisions that allow uninterested, third parties to file claims.

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.

AB 2027 (Ward; D-San Diego) Creates Barriers to Technology Investment and Job Growth. Its sweeping provisions effectively prohibit creating or improving technology used in the workplace, impacting everything from simple scheduling tools to life-saving technology developments in health care.

AB 2095 (Lee; D-San Jose) Expands Fair Chance Liability and Restricts Employer Hiring Discretion. Creates problematic changes to the Fair Chance Act, including a presumption that an applicant may not be denied a position if they have completed a sentence or possess a certificate or license for the position, regardless of the facts or circumstances of any prior convictions.

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.

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.

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.

AB 2021 (Schiavo; D-Chatsworth) CCPA Whistleblower Incentives. Creates a financial incentive for individuals to bring forward claims of violations under the California Consumer Privacy Act (CCPA), effectively deputizing employees and consumers as private attorneys enforcing the CCPA. This Private Attorneys General Act (PAGA)-like litigation diverts agency resources and circumvents the deliberate enforcement structure created in the CCPA.

 

AB 2034 (Addis; D-Morro Bay) New Costly Regulatory Structure. Establishes extensive, state-specific regulatory structure regarding food additives that will significantly impact supply chains and increase food costs.

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.

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.

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.