September 23, 2025
The State Legislature convened last week to conclude the 2025 session as bills went through late amendments.
In a push led by Governor Newsom, the Legislature approved AB 1207, extending California’s Cap-and-Trade program, now “Cap-and-Invest”, through 2045. The bill provides regulatory certainty and adds affordability measures such as offset limits, price ceiling adjustments, and a Climate Mitigation Fund. Companion bill SB 840 directs future revenues to clean transportation, housing, air quality, wildfire resilience, and energy innovation, while strengthening oversight of offsets. Together, the bills set California’s long-term climate investment framework, though the business community has raised concerns about transparency, compliance costs, and the potential impact on competitiveness.
SB 415 (Reyes) has passed and is moving to the Governor’s desk. SB 415 is a clean-up to last year’s AB 98 (Carillo) that clarifies requirements for logistics developments, including truck routing, warehouse design standards, and local planning updates. The Chamber joined a coalition led by our partners at California Business Property Association (CBPA) to secure 16 critical fixes from the coalition’s proposed redline, all included in the final bill. While these amendments improve implementation and compliance, the statute remains highly prescriptive and poses litigation risks, underscoring the challenges of last-minute gut-and-amend tactics and the importance of early coalition engagement.
SB 80(Caballero) emerged from the final week of session as a major win for California’s innovation economy and for San Diego’s fusion leadership. In partnership with the Governor’s office, the bill was revised to establish a dedicated fusion initiative under the California Energy Commission, replacing the original “hubs” concept with a stronger, statewide strategy. The initiative sets clear priorities: advancing fusion R&D, expanding critical testing facilities, accelerating commercialization, and positioning California to deliver a pilot fusion energy project by the 2040s. While the bill evolved from its original form, the final product provides a strong foundation for California’s leadership in fusion, building on the work of regional innovators like General Atomics, and represents an exciting outcome for the year.
AB 1331 (Elhawary) was ordered to the inactive file at the request of its author, meaning it did not advance before adjournment of the 2025 session. The proposal, which sought to restrict certain forms of workplace surveillance and impose new compliance requirements on employers, may be reintroduced in the 2026 session. The same goes for AB 446 (Ward), which was placed on the inactive file by Senator McNerny, halting its progress for the remainder of the 2025 session. Assemblymember Ward noted that amendments adopted in the Senate Appropriations Committee significantly weakened the bill, and he has decided not to advance it in its current form, but indicated he intends to revisit the proposal in January, making AB 446 a likely topic in the 2026 session.
Governor Newsom now has thirty days to sign or veto bills passed by the legislature to finalize the 2025 legislative session for the state of California. Unless otherwise prescribed, most bills will take effect on January 1, 2026. The Chamber team will continue to monitor bill movement over the next few weeks and is getting started with planning for the 2026 delegation to Sacramento.