Executive Summary

Although the 2026 legislative session is far from over, the Legislature’s summer recess provides an opportunity to evaluate where key legislation affecting California’s small businesses currently stands. Committee deadlines have now passed, providing a meaningful snapshot of the legislative landscape before lawmakers return to Sacramento later this summer.

Throughout the first half of the session, NFIB has remained actively engaged on behalf of California’s NFIB members, advocating for policies that improve the state’s business climate while opposing measures that increase costs, expand litigation, and impose additional regulatory burdens.

The bills highlighted in this report represent only a sampling of the legislation on which NFIB has taken positions during the 2026 legislative session. Together, they illustrate several of the most significant policy issues affecting California’s small businesses and demonstrate the breadth of NFIB’s advocacy on behalf of its members.

The results are encouraging. Several bills opposed by NFIB are now fundamentally dead, while other priority measures continue to advance. Significant work remains before the Legislature adjourns for the year, but the first half of the session has already produced meaningful victories for California’s NFIB members.

Major Victories

Assembly Bill 2021 (Schiavo)
NFIB Position: OPPOSE
Status: Fundamentally Dead

AB 2021 would have dramatically expanded private enforcement of California’s privacy laws by creating what NFIB characterized as a system of “paid informants,” exposing small businesses to increased litigation over technical compliance issues.

In many respects, AB 2021 represented “PAGA for regulatory violations.” Rather than relying primarily on state regulators to enforce California law, the bill would have encouraged private enforcement actions over alleged regulatory violations, creating new incentives for litigation and increasing legal uncertainty for small businesses.

Why it matters: California’s NFIB members avoided a significant expansion of lawsuit exposure and unnecessary legal costs. By preventing the creation of what amounted to “PAGA for regulatory violations,” NFIB helped preserve a more balanced enforcement framework while protecting small businesses from another costly avenue for private litigation.

Senate Bill 982 (Wiener)
NFIB Position: OPPOSE
Status: Fundamentally Dead

SB 982 was, in many respects, SB 222 2.0. Like its predecessor, the bill sought to dramatically expand climate-related liability by creating new avenues for litigation against businesses, exposing employers to potentially enormous legal uncertainty and costs based on lawful activities occurring over many decades.

NFIB opposed SB 982 because it challenged long-established principles of American jurisprudence, including fairness, predictability, and the expectation that individuals and businesses should be able to rely on the law as it exists when they act.

Expanding retroactive liability on this scale would have undermined those foundational legal principles while encouraging costly and protracted litigation rather than practical environmental solutions.

Why it matters: With SB 982 now fundamentally dead, California’s NFIB members avoided another significant expansion of civil liability and litigation costs. NFIB will continue opposing proposals that erode longstanding legal principles while increasing the cost and uncertainty of doing business in California.

Assembly Bill 1900 (Kalra)
NFIB Position: OPPOSE
Status: Fundamentally Dead

AB 1900 proposed establishing a government-run, single-payer health care system in California. While expanding access to health care is an important objective, NFIB opposed the bill because it would have dramatically expanded the role of state government without adequately addressing the enormous fiscal and administrative challenges such a system would present.

California’s recent experience managing large public programs raises legitimate concerns about the state’s ability to successfully administer a health-care system of this magnitude. From the continuing Unemployment Insurance debt and recurring state budget deficits to the decades-long challenges surrounding high-speed rail, California has struggled to deliver many of its largest and most expensive public initiatives on time and within budget.

A government-run health-care system would likely become one of the largest and most expensive programs in state history. If costs exceeded projections, as they have with other major state initiatives, employers and taxpayers would almost certainly bear the burden through higher taxes and additional mandates. Over time, those costs could further erode California’s economic competitiveness and encourage more employers, jobs, and investment to leave the state.

Why it matters: With AB 1900 now fundamentally dead, California’s NFIB members avoided another proposal with the potential to dramatically increase employer costs and expand state government at a time when California continues to struggle managing many of the major public programs already under its responsibility.

Major Bills Advancing

Senate Bill 690 (Caballero)
NFIB Position: SUPPORT
Status: Advancing

SB 690 was one of the priority bills highlighted by NFIB during last year’s NFIB Day at the Capitol, where Leadership Council members discussed the legislation directly with lawmakers. Since then, the bill has gained significant momentum and become one of the session’s most closely watched privacy measures. During its most recent committee hearing, well over 200 individuals testified in support of the bill, underscoring the broad and growing recognition that California’s privacy laws need greater clarity and fairness for small businesses.

Why it matters: If enacted, SB 690 will provide greater legal certainty while reducing unnecessary litigation, allowing California’s NFIB members to spend more time serving customers and growing their businesses.

Significant Policy Initiatives

Senate Bill 885 (Strickland)
NFIB Position: SUPPORT
Status: Fundamentally Dead

SB 885 would have restored greater legislative oversight of California’s regulatory process by requiring legislative confirmation of only those major regulations with an estimated economic impact of $50 million or more. Rather than allowing the state’s most costly regulations to take effect solely through the administrative rulemaking process, the bill would have ensured that elected lawmakers voted on the most economically significant regulatory proposals before they became law.

California’s regulatory Leviathan has increasingly taken on a life of its own, with agencies exercising broad rulemaking authority that can have enormous economic consequences for employers, consumers, and taxpayers. SB 885 recognized that regulations carrying extraordinary statewide costs deserve greater oversight from elected officials who are directly accountable to the people they represent.

Why it matters: Although the bill is fundamentally dead this session, SB 885 advanced an important conversation about restoring accountability to California’s regulatory process. NFIB will continue advocating for reforms that ensure the state’s most costly regulations receive direct legislative review before taking effect.

Senate Joint Resolution 15 (Jones)
NFIB Position: SUPPORT
Status: Fundamentally Dead

SJR 15 urged Congress to ensure that California employers are not subjected to additional federal unemployment tax increases while the state works to resolve its Unemployment Insurance debt. NFIB testified in support of the resolution because California’s employers have already absorbed years of escalating federal unemployment taxes resulting from the state’s insolvent UI Trust Fund.

California is now the only state in the Union that has not repaid its federal Unemployment Insurance loan. In fact, the state now owes more than it originally borrowed during the pandemic because of accumulated interest and continuing obligations. California’s NFIB members continue to shoulder the cost of servicing this debt while receiving no additional unemployment insurance benefits whatsoever.

The resolution simply asked the federal government to “do no harm” while California develops a responsible, long-term solution to restore the solvency of its unemployment insurance system.

Why it matters: California’s NFIB members should not continue paying higher federal unemployment taxes to service a debt from which they derive no additional benefit. NFIB will continue advocating for a responsible solution that restores the solvency of California’s UI Trust Fund while protecting employers from additional tax burdens.

Significant Bills Still in Play

Assembly Bill 2646 (Krell)
NFIB Position: OPPOSE
Status: Still in Play

AB 2646 would further increase labor costs for California’s agricultural employers by raising the minimum wage for agricultural workers. The proposal comes at a time when California farmers already face some of the nation’s highest labor, energy, water, insurance, and regulatory costs while competing in a global marketplace.

California agriculture operates on nature’s schedule, not the Legislature’s. Crops must be planted, cultivated, and harvested within narrow seasonal windows, leaving growers with little flexibility to absorb rapidly increasing labor costs. Unlike many businesses, farmers cannot simply delay production or pass those costs on to consumers because they compete in national and global commodity markets where prices are largely determined by supply and demand.

California agriculture does not compete only with growers in neighboring states. It competes with producers around the world. Each additional cost imposed by state government makes it more difficult for California growers to remain competitive, preserve jobs, and continue investing in their operations.

Why it matters: California’s farmers feed the nation and compete in a global economy. Public policy should recognize the unique seasonal and economic realities of agriculture and preserve California’s ability to remain one of the world’s premier agricultural producers.

Other Legislative Highlights

Senate Bill 981 (Niello)
NFIB Position: SUPPORT
Status: Fundamentally Dead

Would have strengthened transparency by requiring a more comprehensive assessment of the affordability impacts of major regulations before they were adopted.

Senate Bill 84 (Niello)
NFIB Position: SUPPORT
Status: Fundamentally Dead

Would have provided businesses with a reasonable opportunity to cure certain accessibility violations before litigation proceeded, encouraging compliance while discouraging abusive lawsuits.

Assembly Bill 1745 (Gonzalez)
NFIB Position: SUPPORT
Status: Fundamentally Dead

Would have provided temporary relief from California’s high fuel taxes, helping reduce operating costs for California’s NFIB members and consumers.

Assembly Bill 2336 (Macedo)
NFIB Position: SUPPORT
Status: Fundamentally Dead

Would have allowed employees to retain more of their overtime earnings while helping employers recruit and retain workers in California’s challenging labor market.

Looking Ahead

The Legislature will return from summer recess with many of the year’s most consequential votes still ahead. NFIB will continue working with legislators from both parties to advance policies that strengthen California’s business climate while opposing legislation that increases costs, expands litigation, and imposes unnecessary regulatory burdens.

While the session is not yet over, the first half of 2026 demonstrates that sustained advocacy matters. Whether defeating harmful proposals, advancing meaningful reforms, or elevating important policy discussions, NFIB remains committed to ensuring that the voice of California’s NFIB members is heard in the halls of the State Capitol.