2026 Regulatory and Legislative Outlook
By Larry Camp, Legislative Committee Co-Chair
Regulatory Update
The major focus of the Board of Forestry will be development and approval of Zone Zero (the area within 0 to five feet of the exterior walls of dwellings within State Responsibility Areas, largely wildlands and the areas within the wildland urban interface) regulations. It is likely to be mid-to-late summer before final regulations are approved. The public can monitor the issue via the Board of Forestry website at https://bof.fire.ca.gov/business.
Currently, the Board has two vacancies, a public member and an industry member. We will update the status of these positions as appointments are made.
Legislative Update
In the first week of January, the State Legislature began the second year of the 2025-26 session. Legislators initially began addressing several two-year bills that were required to pass their house of origin by the end of January, while also developing bill packages to meet the February 20 deadline for new bills. Guestimates are that another 2,000 bills will be introduced by the February deadline, which will kick off a four-month sprint to move the bills out of their house of origin by early June.
Affordability issues will continue to take center stage as legislators seek to ensure programs such as cap-and-invest and efforts to reduce wildfire threats through transmission upgrades do not disproportionately impact low-income and disadvantaged communities. This will include revisiting the wildfire liability issue where Governor Newsom and the Legislature will decide which policy reforms to pursue based on recommendations from a required study under SB 254 (2025).
A Cal Chamber of Commerce-backed ballot initiative known as the “Building an Affordable California Act” could affect legislative policy making with the goal of expediting the permit process for so-called “essential projects.” While the measure would impose new procedures and strict review timelines on public agencies, it would also explicitly preserve their existing discretion, and it would not compel approval of a project, nor exempt essential projects from California Environmental Quality Act (CEQA) review or other environmental requirements.
Policymaking will also be impacted by the June and November elections and term limits. Currently, there are at least twenty open seats in the Legislature, with additional open seats possible. The Governor’s race is the most uncertain since there are currently at least 11 viable candidates seeking to replace Governor Newsom. But there is no clear front runner right now and most polls indicate that 40% of voters are undecided on who should be the top two candidates in the June Primary and the November General Election. Senator Monique Limon, (Santa Barbara area) is the new Senate Leader. In addition, several new committee chairs have been appointed: Appropriations (Senator Sabrina Cervantes), Budget (Senator John Laird), Energy (Senator Ben Allen), and Natural Resources (Senator Josh Becker).
Governor Newsom delivered his final State of the State address before the Legislature. He also released his proposed 2026-27 budget (see links below). Attached is the Assembly’s budget but listed below are specific climate change, energy, and water highlights.
The Governor proposed a $349 billion spending plan ($248 billion GF) that would seek to close a $3 billion deficit, which is a much rosier scenario than the Legislative Analyst Office (LAO) projected in their December analysis that opined a potential $18 billion budget deficit for 2026-27 due to a potential AI bubble and impact of federal tariffs.
It should be noted the Governor’s $42 billion revenue increase projection is based over a three-year budget period. The LAO will conduct its review of the Governor’s proposed 2026-27 budget, and it’s expected to paint a less rosy picture. The deficit is expected to reach $22 billion next year, with shortfalls in the two subsequent years in the LAO review. The Legislature will review and discuss the proposed budget during the next five months and then revisit it again when the Governor issues his May Revised Budget. A link to the Governor’s budget is here https://ebudget.ca.gov/FullBudgetSummary.pdf Details of the budget are at the following link https://ebudget.ca.gov/budget/p/2026-27/BudgetDetail.
Within the budget, the Governor proposed to continue the 2025 Budget Act agreement to shift the following amounts from General Fund to the Greenhouse Gas Reduction Fund (GGRF) (money raised from Carbon Credit auctions) for baseline Cal FIRE operations: $1.25 billion in 2026-27, $500 million in 2027-28, $500 million in 2028-29. This includes $750 million from the Tier 2 Legislature Discretionary pot and $500 million in 2027-28 and 2028-29.
The draft budget proposes to spend $2.1 billion across all investment categories from the Climate Bond/ Proposition 4. Approximately $314 million was proposed for the Wildfire and Forest Resilience category.
Some of the two-year bills that must be immediately acted include:
AB 763 (Ward-D) was recently amended and would require a regional water board that has adopted general waste discharge requirements for timber harvesting to approve, deny or otherwise act on a request for coverage for timber harvesting operations that are performed consistent with an approved timber harvesting plan subject to those general waste discharge requirements. It was heard in the Assembly Environmental Toxics Committee in January.
AB 513 (Gonzalez-R) would require the California Air Resources Board (CARB) to include greenhouse gas emissions from wildland and forest fires in the state scoping plan to ensure that California is considering all major sources of emissions when developing solutions to address the state’s climate change challenges. No hearing set.
AB 442 (Hadwick-R) would exempt from CEQA prescribed fire, thinning or fuel reduction projects undertaken within a community with a single ingress and egress evacuation route. Moved to the Senate. FLC should support.
AB 706 (Aguiar-Curry-D) would establish a funding mechanism to support bioenergy procurement by establishing the Forest Organic Residue Energy and Safety Transformation and Wildfire Prevention Fund (FOREST). The funding would be used to fund the beneficial use of wood waste that is generated through critical fuel reduction, forest health and post-fire recovery projects. While this bill would be helpful, its budget constraints will likely make it problematic.
AB 1421 (Wilson-D) While not directly related to forestry this bill authorizes a study of alternative to the current gas tax, which electric vehicles don’t pay. The bill includes possibly a mileage charge that would apply to all vehicles. FLC will continue to monitor the status of the bill.
New Bills
SB 899 (Grove-R) The bill requires the Wildfire and Forest Resiliency Taskforce to assess health costs and impacts of high-severity wildfire smoke using existing smoke and health data and develop a model of the benefits of achieving the goals in the Taskforce action plan. FLC will support.
SB 922 (Laird-D) The bill permits local agencies to implement a charge or fee for maintenance or repair of street, roads or highways associated with a use of those streets, roads, or highways. FLC will continue to monitor the status of this bill.
Track Bills by visiting http://leginfo.legislature.ca.gov and use the Quick Bill Search function.
Current Year
Legislative Archives
Appellate Decision on WFMP Case
Good News -- Exemptions and NTMPs
CAL FIRE has reversed its policy change regarding the acceptance of exemptions for NTMPs. Please refer to the link below to view the letter from the California Department of Forestry and Fire Protection (Ken Pimlott) to the California Board of Forestry and Fire Protection (Keith Gilless).
Should you have any questions, please send an email to the FLC Legislative Committee at legchair@forestlandowners.org.
Letter and Supporting Content from CAL FIRE to Board of Forestry
Legislative Committee Assignments
Public Policy Institute of California
The Public Policy Institute of California (PPIC) issued a report in mid-September on the status of forest health in the Headwaters Forests. On September 20, there was a panel debriefing on the report. Click on the links below to download the documents.
If you are interested in wathcing the panel debrief, the video is posted on the PPIC's website: