PCL’s Capital Insider – October, 2026

PCL’s Capital Insider for October 2026

All things considered, it was a pretty successful year: 2026 Legislative Wrap

After a disheartening legislative year in 2025, 2026 brought renewed momentum and meaningful progress for PCL’s efforts to restore and advance critical environmental and community protections.

This year has been unlike most, with November’s election shaping the legislative and political landscape. California voters will elect a new governor, legislators, and vote on 14 statewide ballot measures. Prop 45 has been a major concern and a top priority for PCL this year, alongside a coalition of more than 500 California leaders and organizations across labor, environmental, environmental justice, climate, public health, and social justice sectors.

On the legislative side, many of last year’s losses became important fights in 2026. While we did not win every battle, this year brought significant progress and several important victories for water, land use, climate, and CEQA. 

You can view PCL’s full watchlist on our website at pcl.org, but the following are some highlights of PCL’s priorities from the session:  

PCL’s Priority Bills:

SB 954 (Blakespear) SUPPORT: Would fix the SB 131 (2025) advanced manufacturing CEQA exemption: VETOED. SB 954, the SB 131 clean-up bill that fulfills legislative commitments to fix the toxic industrial loophole enacted under SB 131 last year, made it through the Legislature successfully, but was vetoed by Governor Newsom in mid-September. With a change in leadership this coming year, PCL is hopeful that an SB 131 fix will find its way to the Governor’s desk again, as our fight to protect the health of communities and the environment under CEQA continues.  

SB 1087 (Cabaldon) SUPPORT: SB 375 (2008) modernization: SIGNED. SB 375 mandated, for the first time anywhere, that our Regional Transportation Plans, required under the Federal Clean Air Act, must also include a corresponding land use strategy to reduce GHG emissions by bringing jobs, housing, and services closer together. 

For almost two years, PCL and a wide spectrum of stakeholders have been in discussions with the regional planning agencies to negotiate an update to this historic legislation. While earlier iterations of this bill raised many concerns, we believe the final bill is a positive step forward for regional planning. PCL appreciates the time and effort of Senator Cabaldon and all involved in getting this bill to the finish line.

SB 1423 (Stern) PCL SPONSOR: Climate hazard and Sensitive natural/working land spatial database: SIGNED. SB 1423 emerged from several years of discussions about how to equip local and regional planners with the land use policies and tools they need to plan for growth while keeping their communities safe and resilient to climate change impacts. This bill directs the Office of Land Use and Climate Innovation (LCI) to create an online consolidated platform including core datasets covering climate hazards, natural resource sensitivity, and agricultural value. The Governor signed SB 1423 on September 30, and LCI is already developing this tool. 

Important Bills Signed:

SB 716 (Durazo) – Local government: ordinances: penalties for violation: nonresidential structures SUPPORT; SIGNED. In response to the cold-storage warehouse structure fire that broke out in Boyle Heights earlier this year, affecting the health and well-being of thousands of Boyle Heights residents, SB 716 became the vehicle for imposing stronger penalties for health and safety violations. SB 716 allows cities and counties in overburdened communities to impose higher fines for health and safety violations depending on the severity of the violation. 

SB 883 (Umberg) – Hazardous materials: reactive chemicals: methyl methacrylate: facilities SUPPORT; SIGNED. SB 883 is a gut-and-amend bill in response to the GKN aerospace manufacturing plant near-explosion in Garden Grove, Orange County. It creates safeguards for similar chemical plants sited near communities and removes such facilities from the advanced manufacturing exemption under SB 131. 

SB 994 (Cabaldon) – Local agencies: nondisclosure agreements SUPPORT; SIGNED. SB 994 prohibits local officials from entering into nondisclosure agreements related to public business that prevent sharing information with fellow local government officials. This bill helps ensure projects like California Forever do not close the curtain on local government disclosure of public business agreements. The Governor signed SB 994 on August 21st. 

SB1085 (Durazo) – Water supply planning: housing developments SUPPORT; SIGNED. SB 1085 restores the requirement that cities and counties approving large-scale housing projects must identify a water system that would serve the project and complete a water supply assessment, even if the project is exempt from CEQA. 

SB 1250 (Cortese) – State highway system: wildlife connectivity SUPPORT; SIGNED. SB 1250 requires Caltrans, in consultation with the Department of Fish and Wildlife, to create an inventory of connectivity needs on the state highway system where wildlife passage projects could effectively reduce wildlife-vehicle collisions and enhance wildlife connectivity. 

SB 1370 (Stern) – Covered wildfire mitigation projects: consolidated and expedited review NEUTRAL; SIGNED. SB 1370 stemmed from the Governor’s Executive Order signed amid the Los Angeles fires in January 2025. This bill establishes an expedited review process for certain covered wildfire mitigation projects that require approval from CNRA or CalEPA. The environmental community voiced many concerns with the initial proposal, but in the end the most concerning issues were addressed, and PCL remained neutral. 

AB 40 (Bonta) – CEQA: EIRs: coal handling, storage, and export SUPPORT; SIGNED. AB 40 requires a full environmental review under CEQA before any local agency can approve the handling, storage, or export of high volumes of coal (≥5 million short tons/year). This bill was a gut-and-amend in response to the proposed West Oakland coal project by the Trump administration, set to begin operation in 2028 despite any proper environmental review.

AB 1448 (Hart) – Coastal resources: California Coastal Sanctuary: tidelands and submerged lands: oil and gas development SUPPORT; SIGNED. In response to the Trump administration’s plans to expand offshore drilling into federal waters off the coast of California, AB 1448 prohibits the use of existing oil and gas infrastructure on California’s coast from new offshore leases.   

AB 2469/AB2619 (Papan) – Data centers: water use disclosures; Water resources: data centers SUPPORT; SIGNED AB 2469 prohibits the approval of a data center within a city and/or county if it results in an increase in the maximum peak water use, unless the applicant provides a water scarcity plan and water supply assessment. 

AB 2619 requires the owner or operator of a data center to provide its water supplier an estimate of the expected water use, anticipated source of water, and project water use volume prior to applying for an initial business license or permits. 

Important Bills That Did Not Pass the Legislature:

AB 2560 (Schultz) – Climate Action Plan for Transportation Infrastructure: goals SUPPORT. AB 2560 would have codified existing goals under the State’s Climate Action Plan for Transportation Infrastructure (CAPTI) that steer discretionary transportation dollars toward infrastructure improvements that combat and adapt to climate change. This bill died in Senate Appropriations. 

AB 2569 (Hart) – PCL SPONSOR CEQA: natural hazards and adverse environmental conditions SUPPORT. As climate disasters become more frequent, AB 2569 would have required lead agencies to analyze the effects of hazards or adverse environmental conditions of a project site during the environmental review process, such as high wildfire and flood risks. Unfortunately, AB 2569 died in Assembly Appropriations. 

AB 2170 (Boerner) – CEQA: overburdened communities: notices and hearings: translations SUPPORT. AB 2170 would have required CEQA notices of public hearing or informational meetings to be translated to the jurisdictions’ threshold languages. Despite strong support from social and environmental justice communities, the bill died in Assembly Appropriations.  

AB 2026 (Aguiar-Curry) – Water diversion: groundwater recharge: permit OPPOSE UNLESS AMENDED. AB 2026 presented many provisions aimed at expanding surface water diversions for flood management and groundwater recharge. These are important goals, but PCL and many others were deeply concerned with the broadness of the proposal. We and our partners worked diligently to negotiate a more measured approach with the sponsors when the bill was held in Senate Appropriations. There was progress being made in those discussions, and PCL is committed to continuing those discussions to identify sustainable policy solutions to these issues. 

AB 2676 (Lackey) – Housing Crisis Act of 2019 OPPOSE. AB 2676 would have amended the Housing Crisis Act of 2019 to greatly restrict public initiative powers to set urban limit boundaries or otherwise limit new growth areas within cities and counties. This bill died in the Senate. 

AB 66 (Tangipa) – CEQA: exemption: egress route projects: fire safety OPPOSE. This two-year bill would have created a CEQA exemption for egress routes in subdivisions. PCL worked with several stakeholders to develop alternative strategies to streamline egress route projects responsibly, but the bill ultimately stalled in the Senate Natural Resources and Water Committee in 2025 and did not move again this year.

SB 601 (Allen) – Water: waste discharge SUPPORT. In response to the federal attacks on the Clean Water Act by the US Supreme Court’s Sackett vs US EPA decision in 2023, SB 601 worked to ensure that “nexus waters” remained protected as they were under the waters of the United States (WOTUS) designation. Unfortunately, SB 601 died in Assembly Appropriations, but the bill’s sponsors and PCL remain committed to resolving this issue.

SB 715/SB 815 (Allen) – Planning and zoning: very high fire hazard areas SUPPORT. PCL initially sponsored SB 715 and SB 815, originally complementary fire planning bills aimed at incorporating fire risk analysis into the RHNA and General Plan processes. There was strong support for these bills, but we were never able to negotiate a workable compromise with the opposition. SB 715 made it through the Senate but was gutted and amended into an election bill in the Assembly. SB 815 died in Senate Appropriations. 

SB 1075 (Reyes) – Air resources: toxic air contaminants: criteria air pollutants: community emissions reduction programs: local community emissions reduction plans SUPPORT. SB 1075 would have updated the Community Air Protection Program under AB 617 to strengthen enforcement and implementation of air emissions reduction strategies in disadvantaged communities across the state. It also would have made disadvantaged unincorporated communities eligible for grants and technical assistance. Unfortunately, the bill died in Assembly Appropriations. 

SB 1097 (Weiner) – CEQA: electrical distribution: exemptions OPPOSE. SB 1097 went through several iterations before landing on a CEQA exemption for electrical transmission infrastructure. One of the key issues PCL had with the bill was the replacement of the fair argument standard for the preparation of an EIR with a “substantial evidence” test that lacked the in-depth review needed to determine significant impacts on the environment, particularly on sensitive sites like wilderness areas, national parks, monuments, or recreation areas. PCL, alongside a strong coalition of environmental justice and environmental organizations, fought hard against SB 1097, and the bill died in Senate Appropriations.      

Important Bills Vetoed: 

AB 2218 (Kalra) – Water policy: California Native American tribes SUPPORT; VETOED. AB 2218 would have created a statewide policy to address water-related inequities endured by California’s Indigenous people through financial assistance, protection of tribal water uses, consultation on water projects, plans and policies, and incorporation of Indigenous knowledge when developing strategies to restore and protect ecosystems. While understanding the intent of the bill, the Governor was concerned that the process laid out under AB 2218 would slow down water policy implementation. 

SB 872 (McNerney) – Delta Levees and Canal Subsidence Fund SUPPORT; VETOED. SB 872 would have established the Delta Levees and Canal Subsidence Fund to support aging Delta Levee improvements and subsidence repair along the state’s conveyance infrastructure. Noting that this year’s budget already allocated monies for subsidence mitigation and levee and flood protection improvements, the Governor vetoed SB 872.  

AB 2494 (Rogers) – State forests: forest management SUPPORT; VETOED. AB 2494 would have redefined “management” for California’s Demonstration State Forest system to further prioritize biodiversity, climate resilience, restoration, research, recreation, and tribal co-management of the demonstration forests, and veer away from extractive logging priorities that were originally established in 1947. The Governor’s veto message stated that the bill lacked flexibility to combat climate impacts by significantly narrowing the definition of forest management. 

SB 1125 (Menjivar) – Water Rate Assistance Program SUPPORT; VETOED. SB 1125 would have required the State Water Resources Control Board to establish a Water Rate Assistance Program to support low-income residential ratepayers with their water bills. The Governor encouraged revisiting SB 1125 intent next year as part of the annual budget process to ensure the program has an ongoing funding source. 

Last-minute Budget Deals:

It is no surprise that the end of session brought a flood of consequential trailer bill proposals. Three important ones went PCL’s way:

California Forever: Failed: Efforts continue to build a city of 400 thousand people, a manufacturing hub, and a shipyard on important wetlands and agricultural land in Solano County despite local opposition. And there was yet another effort for a last-minute budget bill that would expedite these projects without environmental review or any public input process in the final days of the session–in the end, Solano County voted to not support the proposal, and amid mounting opposition from the environmental community, the bill never came to fruition.

Coastal Act Exemption: Failed: A last-minute proposal was also circulated that would exempt the Santa Monica coastal zone from the Coastal Act. Again, amid extreme opposition to this terrible precedent, the proposal never gained traction. 

The Greenhouse Gas Reduction Fund Fix: (Partial) Success: Earlier this year, the California Air Resources Board updated the Cap-and-Trade program rules to provide a significant number of emission allowances to the petroleum industry and other heavy-emitting sectors without having to pay into the cap. These credits would reduce GGRF revenue to about $2 billion, roughly half the amount raised in recent years, leaving little to no funding for “Tier 3” programs (Affordable Housing Sustainable Communities, Transit and Intercity Rail Capital Program, Community Air Protection Program, Low Carbon Transit Operations Program, Wildfire and Forest Resilience, and Safe and Affordable Drinking Water Program).  After tremendous pressure from advocates across the state, the legislature passed a budget deal that substantially, if not fully, augments funding for these programs.

All things considered, it was a pretty successful year.