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Prepared by Precision Advocacy
As the legislature begins its annual summer recess, the 2026 California Legislative Session has wrapped up its policy committees and moved into the final stretch of the year. In the Senate, 583 bills were introduced this year, with 475 passing the Senate Floor and moving forward. In the Assembly, 1,263 bills were introduced, with 853 passing the Assembly Floor. Together, these numbers reflect a significant volume of legislation still under consideration when lawmakers return to Sacramento in August.
For Orange County, the summer recess provides a useful opportunity to assess which measures remain active, which bills have stalled, and which major policy and budget issues will carry into the final month of session. When lawmakers return, they will face a compressed timeline to move bills through fiscal committees, complete floor votes, and resolve several outstanding negotiations before the end-of-session deadline.
This report highlights several issues with direct or potential implications for Orange County, including unresolved budget trailer bill language, state revenue trends, and emerging artificial intelligence legislation. One item of particular concern is the governor’s proposed sustainable aviation fuel tax credit, which would be taken against diesel fuel tax revenues that currently support state and local transportation programs. While the proposal is intended to encourage lower-carbon aviation fuel, it could reduce funding available for local streets and roads, highway maintenance, freight mobility, transit-related infrastructure, and regional transportation projects.
The report also reviews June revenue data, which shows that state income tax collections came in above May Revision estimates, largely because of stronger-than-expected corporate tax receipts. Although the additional revenue modestly improves the state’s near-term fiscal position, it is unlikely to generate significant flexible funding for county priorities. Most additional gains are expected to be absorbed by Proposition 98 school funding obligations, reserve requirements, and existing budget commitments, leaving continued pressure on health and human services, homelessness, public safety, and county administration funding.
In addition, the report examines artificial intelligence legislation, which has quickly become one of the legislature’s highest-profile policy areas. The active AI bills generally focus less on regulating the technology itself and more on how AI is deployed in government operations, employment settings, public records administration, privacy compliance, workforce planning, and critical infrastructure. Many of these measures could create direct operational, labor, fiscal, or administrative responsibilities for counties and cities, including Orange County.
Several major issues also remain unresolved in the energy, wildfire, and climate space. Decisions related to the Greenhouse Gas Reduction Fund, Proposition 4 climate bond allocations, wildfire liability and utility cost recovery, and the future of the Diablo Canyon Nuclear Power Plant are expected to continue behind the scenes throughout July and return for action in August. These discussions will be especially important for local governments, as final agreements could affect climate resilience funding, energy reliability, utility costs, wildfire prevention, and infrastructure investments.
Sustainable Aviation Fuel Tax Credit Trailer Bill Language
One budget item that has not been fully resolved is the governor’s proposed sustainable aviation fuel (SAF) tax credit, which could have transportation funding implications for Orange County.
The trailer bill language would create a credit against diesel fuel tax liability for producers that produce and sell qualifying alternative jet fuel for use in California. The credit would begin at $1 per gallon for fuel that produces no more than 50% of the carbon-dioxide-equivalent emissions of conventional jet fuel, as determined under the State Air Resources Board’s carbon intensity methodology. The credit would increase by 2 cents per gallon for each additional percentage-point reduction in emissions above the 50% threshold, capped at $2 per gallon. To qualify, the fuel must be produced at a facility that maintains specified high labor standards. The California Air Resources Board (CARB) would certify the credit amount annually, with true ups reflected on the producer’s December return. The credit would apply to qualifying sales occurring before January 1, 2036, while the statute would remain operative until January 1, 2041, for administration, carryover, and repeal purposes.
The primary concern for Orange County and numerous local government stakeholders is not the aviation policy goal itself, but the funding source. The credit would be taken against diesel fuel tax revenues, which support state and local transportation programs. The administration estimates the proposal could reduce diesel excise tax revenues by about $165 million annually in the near term, growing to $300 million annually in later years. Assembly Budget Committee staff estimates the near-term loss would include roughly $49 million annually for local streets and roads, $70 million for Caltrans highway maintenance and rehabilitation, and $46 million for the Trade Corridor Enhancement Program.
Adoption of the proposal would create exposure for local road maintenance, highway rehabilitation, freight mobility, transit-related infrastructure, and regional transportation projects at a time when transportation revenues are already under pressure from fuel efficiency gains and the transition to zero-emission vehicles. A transportation coalition opposing the proposal notes that the state already faces a $215.7 billion 10-year transportation funding shortfall, including a projected $31 billion loss from fuel efficiency and zero-emission vehicle trends, and argues that the SAF credit would further reduce revenues needed for safety, rehabilitation, active transportation, rail, charging infrastructure, and freight projects.
The Legislative Analyst’s Office (LAO) has also raised broader concerns that the proposal may not be a cost-effective greenhouse gas reduction strategy, could produce lower-than-expected environmental benefits because of fuel “shuffling” or displacement of other low-carbon fuels, and may create fiscal exposure larger than the administration’s estimate if producers or importers structure transactions to maximize credits. The LAO also found that the proposal is inconsistent with the voter-approved framework reserving fuel tax revenues for transportation purposes, because diesel tax revenues paid by road users would be used to subsidize decarbonization in the aviation sector.
June Revenues
Preliminary state tax data shows California’s April-through-June personal and corporate income tax collections exceeded the May Revision estimate by $1.3 billion, including a $1 billion gain in June driven entirely by stronger-than-expected corporate tax receipts. Personal income tax withholding was largely on target in June, with the Legislative Analyst’s Office (LAO) reporting June withholding of $8.9 billion, roughly in line with May Revision projections, while the full fiscal-year withholding total came in about $1.2 billion above the May Revision estimate. The LAO’s withholding tracker also shows the underlying trend holding steady, with trailing 12-month withholding growth remaining at 9% in June and the April-through-June three-month total running about 13% above the same period last year.
For Orange County, the positive revenue news modestly improves the state’s fiscal position, but it does not translate into major new discretionary funding for county priorities. The 2026-27 Budget Act already assumed part of the revenue gain, leaving roughly $900 million as an improvement to the newly enacted budget. However, most additional revenue growth between now and next May is likely to be absorbed by Proposition 98 school and community college funding obligations, required reserve deposits, and paydown of the state’s approximately $3.9 billion Proposition 98 “settle up” obligation for 2025-26.
Stronger June revenues reduce near-term budget risk but do not meaningfully change the pressure on health and human services, homelessness, public safety, and county administration funding. Orange County should continue to assume that additional state revenue gains will first be directed toward schools, reserves, and existing obligations rather than flexible county support. This is especially important as counties continue preparing for increased Medi-Cal, CalFresh, indigent care, and behavioral health impacts tied to federal policy changes and state budget constraints.
Artificial Intelligence Legislation Review
Artificial intelligence (AI) is rapidly emerging as one of the legislature's highest public policy priorities. While most AI bills currently making their way through the legislature don’t directly regulate AI technology itself, collectively they establish the framework through which the legislature is poised to govern AI's impact on state and local government operations, public employees, privacy, employment practices, and critical infrastructure.
Several themes have emerged from our recent comprehensive review of AI related legislation.
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The legislature is increasingly focused on AI governance rather than AI innovation. Policymakers appear less concerned with whether AI should be adopted than with establishing guardrails governing how it’s deployed, particularly where it affects public employees, personal privacy, and governmental decision-making.
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Labor policy has emerged as the primary area of legislative focus and contention. The most significant proposals affecting local governments address how AI may impact employment, implementation of generative AI in represented workplaces, workplace surveillance, AI-related layoffs and workforce reporting, and long-term workforce planning.
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Local governments are increasingly being asked to implement state AI policy. Several bills impose new responsibilities on counties and cities, including expanded privacy compliance obligations, labor notification requirements, public records administration, reporting requirements, and responsibilities associated with the deployment of AI infrastructure.
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Governor Newsom's Executive Orders are influencing legislative priorities. Several measures discussed below closely align with the administration's broader AI initiatives concerning responsible AI deployment, workforce preparedness, transparency, and government modernization.
Overall, the vast majority of the AI bills will have direct operational, labor, fiscal, or administrative implications for Orange County if enacted. AI legislation remains one of the fastest-evolving policy areas before the legislature. The County should anticipate continued legislative activity through the remainder of the 2025-26 legislative session and beyond. Below are a few highlighted bills that have a high likelihood of passage this year.
AB 1883 (Bryan) Workplace surveillance tools
Summary: AB 1883 prohibits public and private employers from using workplace surveillance tools that utilize artificial intelligence to recognize, infer, or predict a worker's emotional state or to collect neural data. The bill applies broadly to governmental employers, including counties, cities, charter cities, special districts, the University of California (UC), California State University, community college districts, and school districts.
The bill authorizes enforcement by the Labor Commissioner, public prosecutors, and affected workers, including civil actions seeking injunctive relief, attorney's fees, costs, punitive damages, and civil penalties. It also preserves limited exceptions for technologies required by federal law or national security contracts.
Status: Awaiting hearing in the Senate Appropriations Committee
Support: AB 1883 is co-sponsored by the California Federation of Labor Unions and Teamsters California, with support from a broad labor coalition. Supporters argue that emotion-recognition and related technologies raise privacy, civil rights, and workplace concerns because opaque algorithms may inaccurately infer emotions or mental states, embed bias into employment decisions, discourage organizing, and intensify worker monitoring.
Opposition: The bill is opposed by local government organizations, including CSAC, UCC, RCRC, Cal Cities, the California Special Districts Association (CSDA), and the County Health Executives Association of California (CHEAC), as well as a broad coalition of business and employer groups, including the California Chamber of Commerce, CMTA, TechNet, retailers, hospitals, restaurants, and trade associations. Opponents argue that even the narrowed bill could restrict legitimate workplace safety, security, logistics, theft prevention, customer-service, and quality-assurance tools. They also object to the private right of action and the bill’s application to independent contractors.
Local governments are particularly concerned that the definition of “workplace surveillance tool” remains broad enough to create uncertainty for routine public-sector operations, including security cameras, badge access systems, collaboration platforms, fraud investigations, facility security, and employee safety practices.
Policy Implications for Orange County: AB 1883 could require Orange County to review existing AI-enabled workplace monitoring and security tools, update procurement and employment policies, provide departmental guidance and training, and assess collective bargaining implications related to employee privacy and workplace monitoring.
AB 2469 (Papan) Data Centers: Water Use Disclosures
Summary: AB 2469 would establish new statewide requirements governing the local approval of new or expanded data centers that increase peak water demand. Before approving either discretionary or ministerial permits, the bill requires cities and counties to obtain specified water-related analyses and disclosures from project applicants. Among other things, the bill would require applicants to provide:
- Water Supply Assessments where applicable.
- Water Use Assessments upon request of the local agency.
- Projected water demand and water efficiency measures.
- Beginning January 1, 2028, a Water Scarcity Plan.Workforce-related disclosures associated with construction and operation.
- Funding for the full cost of any necessary water conveyance, treatment, storage, or distribution infrastructure required to serve the project.
The bill would also direct the Department of Water Resources (DWR) and State Water Resources Control Board (SWCRB) to develop standardized methodologies for defining and estimating water consumption by large consumptive water users, including data centers.
Status: Awaiting hearing in the Senate Appropriations Committee
Support: Environmental organizations, including Sierra Club California, California Environmental Voters, California Coastkeeper Alliance, Clean Water Action, Center for Biological Diversity, and Planning and Conservation League, support the bill. Supporters argue that expanding AI infrastructure could place new demands on limited water supplies and that local governments need better information before approving data centers.
Opposition: Opposition includes CSAC, RCRC, Cal Cities, the California Chamber of Commerce, CMTA, the Data Center Coalition, Silicon Valley Leadership Group, and the Bay Area Council. Opponents argue the bill would create unnecessary permitting burdens, reduce local land use authority, increase development costs, and duplicate existing water planning requirements.
Policy Implications for Orange County: AB 2469 is unlikely to directly affect County labor negotiations, but it could increase future staffing needs for permitting, environmental review, water resource analysis, and infrastructure planning if significant data center development occurs in Orange County. The bill could also lengthen entitlement timelines, increase developer costs, and reflects growing state oversight of AI-related infrastructure.
AB 2545 (Schiavo) Report: labor force impact: artificial intelligence
Summary: AB 2545 establishes the California Artificial Intelligence Worker Impact Data Assessment Project within EDD and creates a 14-member advisory panel composed of representatives from labor, employers, academia, nonprofit organizations, AI developers, and local government. The advisory panel is tasked with evaluating how artificial intelligence is affecting California's workforce and identifying gaps in existing workforce data collection systems. By January 1, 2028, the panel must submit a report to the Legislature containing policy recommendations addressing AI-related workforce disruption, worker retraining, workforce development, and strategies to maintain workforce pipelines in occupations requiring human expertise. The advisory panel sunsets on January 1, 2029.
Status: Awaiting hearing in the Senate Appropriations Committee
Support: AB 2545 is supported by a broad coalition of labor organizations, educational institutions, and public-sector organizations, including the California Federation of Labor Unions (AFL-CIO), SEIU California, California Teachers Association, CSAC, UCC, Cal Cities, Association of California School Administrators, AFSCME, and TechEquity Action. Supporters argue California lacks reliable data regarding AI's workforce impacts and that sound public policy should be informed by comprehensive research rather than anecdotal evidence.
Opposition: None registered.
Potential Policy Implications for Orange County: AB 2545 would not impose immediate workforce, procurement, or reporting mandates on Orange County. Instead, the bill creates a state-level data and policy process that could shape future legislation on artificial intelligence, workforce displacement, retraining, and public-sector labor practices. For the County, the most relevant provision is the inclusion of a local government representative on the advisory panel, which provides an opportunity for city, county, special district, or local education agency perspectives to be incorporated into the state’s assessment of AI-related workforce impacts.
AB 2656 (Petrie-Norris) Public employees: notice: artificial intelligence performing service within scope of work
Summary: AB 2656 requires specified state and local public agencies to provide a recognized employee organization with at least 45 days' written notice before taking action to develop, purchase, implement, utilize, or require the use of generative artificial intelligence (GenAI) to perform work within the scope of duties represented by that employee organization.
Unlike other AI employment bills, AB 2656 does not regulate the technology itself or prohibit agencies from adopting AI tools. Instead, it establishes a procedural notice requirement intended to provide employee organizations advance awareness of AI deployments that could affect represented classifications.
Status: Awaiting hearing in the Senate Appropriations Committee
Support: AB 2656 is sponsored by the Peace Officers Research Association of California (PORAC) and supported by SEIU California and other organized labor organizations. Supporters argue that employee organizations should receive meaningful advance notice before generative AI is introduced into represented workplaces, particularly where the technology may alter job duties, workloads, or workforce needs.
Opposition: The measure is opposed primarily by organizations representing state and local public employers, including CSAC, RCRC, UCC, Cal Cities, CSDA, PRISM, Association of California School Administrators, and numerous local agencies. Opponents generally argue that existing collective bargaining statutes already govern employer obligations when workplace changes affect represented employees and that AB 2656 would impose duplicative procedural requirements while creating uncertainty regarding when AI is performing work within the scope of a bargaining-unit classification.
Policy Implications for Orange County: For Orange County, AB 2656 directly affects how the County may implement generative AI technologies in the workplace. If enacted, departments considering AI tools for administrative, operational, customer-service, or other governmental functions would likely need to coordinate procurement and implementation decisions to determine whether the statutory notice requirement has been triggered. Although the bill does not require collective bargaining over every AI implementation, it establishes a uniform statewide notice requirement that operates independently of existing management decisions regarding technology procurement and deployment.
SB 951 (Reyes) Employment: technological displacement: notice
Summary: SB 951 seeks to increase transparency regarding the workforce impacts of artificial intelligence and automation by expanding California's existing Cal/WARN Act reporting requirements.
Under the bill, employers conducting a mass layoff, relocation, or termination that is caused in whole or in substantial part by artificial intelligence or other automated technology would be required to identify in their existing Cal/WARN notice:
- The number and classification of workers whose positions are being automated;
- The job functions being replaced;
- The category of AI or automated technology responsible for the displacement; and
- The developer, vendor, or lessor of that technology.
In addition, employers, including state and local governmental entities, would be required to notify the Employment Development Department (EDD) whenever they permanently cease hiring for a particular occupation because AI or automation has eliminated the need to fill those positions. The EDD would be required to publicly summarize these notices, prepare quarterly statewide reports regarding AI-related workforce displacement, and submit those reports to the Legislature. Employers that fail to provide the required hiring disruption notice would be subject to civil penalties of up to $500 per day.
Status: Awaiting hearing in the Assembly Appropriations Committee
Support: Sponsored by the California Federation of Labor Unions, AFL-CIO, SB 951 is supported by a broad coalition of labor organizations, employee associations, legal advocacy organizations, and technology accountability groups, including AFSCME California, SEIU California, the California Teachers Association, California Nurses Association, California School Employees Association, the Electronic Frontier Foundation, TechEquity Collaborative, and numerous regional labor councils.
Supporters argue that workers and policymakers deserve greater transparency regarding the extent to which artificial intelligence contributes to layoffs, hiring freezes, and workforce restructuring, particularly as AI adoption accelerates across California's economy.
Opposition: The bill is opposed by a broad coalition representing California's business community, including the California Chamber of Commerce, California Manufacturers & Technology Association (CMTA), California Retailers Association, California Hospital Association, California Restaurant Association, TechNet, Silicon Valley Leadership Group, and numerous employer organizations.
Public-sector organizations, including CSAC, RCRC, UCC, CSDA, PRISM, and the University of California, currently maintain an oppose unless amended position, and continue to express concern regarding expanded reporting obligations, potential conflicts with existing labor agreements, the inclusion of independent contractors within the definition of "worker," and the administrative burden associated with determining when AI or automation has caused a technological cessation in hiring.
Policy Implications for Orange County: Although SB 951 primarily expands workforce reporting requirements rather than regulating AI use itself, it could have several implications for Orange County as a public employer:
- Orange County would become subject to new reporting requirements if AI or automation contributes to a qualifying workforce reduction or permanent decision not to refill positions.
- County departments adopting AI tools to improve efficiency could face additional administrative responsibilities to determine whether automation substantially contributed to layoffs or hiring decisions and to prepare required notices to the Employment Development Department (EDD).
- Human Resources, County Counsel, and departmental leadership may need to develop internal policies documenting AI-related workforce decisions to ensure compliance and reduce potential liability.
- Failure to submit required technology hiring disruption notices could expose the County to civil penalties of up to $500 per day.
SB 1159 (Cabaldon) Artificial intelligence: transparency and governance
Summary: SB 1159 clarifies that, for purposes of California's principal transparency and open government laws, including the Administrative Procedure Act, California Public Records Act (CPRA), Legislative Open Records Act, Bagley-Keene Open Meeting Act, Ralph M. Brown Act, California Environmental Quality Act (CEQA), and the California Coastal Act, references to a "person," "member of the public," "participant," or similar terms do not include artificial intelligence systems, autonomous agents, robots, or other nonhuman entities.
The bill authorizes state and local agencies to utilize AI disclosure verification tools to determine whether AI-generated content is present, prohibits knowingly using AI to falsely represent that a natural person engaged with a governmental agency, and expressly preserves the ability of individuals to use AI, including assistive technologies, to support their own participation in governmental processes, provided that participation remains reasonably consistent with ordinary human engagement.
Status: Awaiting a full vote of the Assembly
Support: SB 1159 appears to be the only of two AI bills that are actively supported by local government organizations, including the California State Association of Counties (CSAC), League of California Cities (Cal Cities), Urban Counties of California (UCC), Rural County Representatives of California (RCRC), California Special Districts Association (CSDA), as well as the California Municipal Clerks Association, numerous counties, cities, councils of governments, and local elected officials. Additional support comes from technology policy organizations, environmental organizations, public employee organizations, and the Chamber of Progress.
Opposition: Opposition is limited to the First Amendment Coalition and Oakland Privacy, which argue existing law already provides governmental agencies with discretion to evaluate public comments without redefining who may participate in governmental processes. They further contend the bill could create uncertainty regarding anonymous participation under the Brown Act and California Public Records Act by allowing agencies to question whether a submission originated from AI. Privacy advocates also express concern that agencies could improperly reject legitimate records requests or public comments without clear standards governing AI verification.
Policy Implications for Orange County: SB 1159 would likely have a modest but practical operational impact on Orange County by giving the County clearer authority to distinguish between genuine public participation and automated AI-generated engagement. The bill could be particularly relevant for high-volume processes such as Public Records Act requests, public comments at Board of Supervisors meetings, CEQA proceedings, land use hearings, coastal-related proceedings, and other administrative or permitting processes where mass AI-generated submissions could consume staff time or distort the public record.
For Orange County, the bill may support greater administrative efficiency by allowing agencies to use AI disclosure verification tools when reviewing public comments, records requests, or other submissions. However, implementation would require careful coordination among County Counsel, clerks, IT, department staff, and public-facing offices to ensure that legitimate public participation is not discouraged or improperly rejected. The County may also need internal protocols for when AI verification tools are used, how results are documented, and how staff distinguish between impermissible autonomous AI activity and permissible use of AI by residents, advocates, or individuals using assistive technologies.
Upcoming Hearings
- Agendas are typically posted on the committee websites in the Assembly and Senate a few days prior to the hearings.
- To watch live: Assembly/Senate
- To view hearings after they take place, you may access them in the Assembly or Senate media archives where they are generally available within a few hours of committee adjournment.
Tuesday, August 04 2026, 1:30 p.m.
Assembly Joint Hearing Assembly Environmental Safety and Toxic Materials and Senate Environmental Quality
State Capitol, Room 447
Oversight Hearing: Department of Toxic Substances Control Reform: Update Evaluation of the Board Of Environmental Safety
Wednesday, August 05 2026, 9:00 a.m.
Assembly Budget Subcommittee No. 7 on Accountability and Oversight
State Capitol, Room 126
Part 1: Indigent Health
Part 2: State Leadership Accountability Act And Audit Reporting Trailer Bill
Wednesday, August 05 2026, 1:30 p.m.
Assembly Utilities and Energy
1021 O Street, Room 1100
Oversight Hearing: Savings You Don't See: California's Energy Efficiency Programs
Grant Opportunities
Below is a list of the latest grant opportunities released by the state. All opportunities for local jurisdictions may be found here.
Application Deadline: 9/25/26 23:59
Title: Community Resilience Centers Round 2 IMPLEMENTATION Grant (FY 26-27)
State Agency / Department: Strategic Growth Council
Match Funding? No
Estimated Total Funding: $52,000,000
Funding Method: Advances & Reimbursement(s)
Application Deadline: 9/4/26 23:59
Title: Community Resilience Centers Round 2 PLANNING Grant (FY 26-27)
State Agency / Department: Strategic Growth Council
Match Funding? No
Estimated Total Funding: $3,000,000
Funding Method: Advances & Reimbursement(s)
Application Deadline: 10/30/26 23:59
Title: 2026-27 Digital Divide Grant Program Round 4
State Agency / Department: Public Utilities Commission
Match Funding? No
Estimated Total Funding: $200,000
Funding Method: Reimbursement(s)
Application Deadline: 6/30/30 23:59
Title: Proposition 4 – Water Recycling
State Agency / Department: State Water Resources Control Board
Match Funding? 50%
Estimated Total Funding: $150,000,000
Funding Method: Reimbursement(s)
Expected Award Announcement: Late 2026/early 2027
Title: 2026 Cooperative Endangered Species Conservation Fund: HCP Land Acquisition (Nontraditional Section 6)
State Agency / Department: Department of Fish and Wildlife
Match Funding? 25%
Estimated Total Funding: $26,000,000
Funding Method: Reimbursement(s)
Expected Award Announcement: Late 2026/early 2027
Title: 2026 Cooperative Endangered Species Conservation Fund: Conservation Planning Assistance (Nontraditional Section 6)
State Agency / Department: Department of Fish and Wildlife
Match Funding? 25%
Estimated Total Funding: $8,740,000
Funding Method: Reimbursement(s)
Governor’s Press Releases
Below is a list of the governor’s press releases beginning July 1.
July 7: California continues illegal cannabis crackdown, seizing more than 63,000 pounds of illegal cannabis in three months
July 7: Governor Newsom announces appointments 7.7.2026
- Jaci Thomson, of Roseville, has been appointed Deputy Director of the Interagency Support Division at the California Department of General Services
- Devon Keeler, of Carmichael, has been appointed as Deputy Secretary for Communications and External Affairs at the California Department of Food and Agriculture
- Darrell Roberts, of Chula Vista, has been appointed to the State Board of Fire Services
- John Preckwinkle III, of Palm Springs, has been appointed to the Native American Heritage Commission
July 6: California’s wildfire defense blasts off: Governor Newsom launches “FireSat” wildfire-detection satellites to spot blazes from space
July 6: Lights, camera, action! First year of California’s expanded Film & TV Tax Credit projected to bring $6.6 billion in economic impact
July 6: Governor Newsom signs legislation 7.6.26
July 6: Governor Newsom announces $12.5 million in community emergency preparedness to help Californians get “Ready” for the next disaster
July 4: Governor Newsom announces deployment of California firefighters and equipment to Colorado, as sister state battles wildfires
July 4: Governor Gavin Newsom marks Fourth of July with a call for a renewed fight to defend democracy
July 2: California reaches major milestone in modernizing behavioral healthcare: Proposition 1 goes into effect statewide
July 2: California State Parks pass programs reach major milestones during last week to download the free Historian Passport
July 1: Hey, NIMBY Huntington Beach…you tired of losing yet?
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Prepared by Townsend Public Affairs
LEGISLATIVE BRANCH ACTIVITY
July Recess Leaves Congress Short on Time for the Remainder of the Year
Ahead of the August and October month-long recesses, Congress faces an increasingly crowded agenda of must-pass legislation before the fiscal year ends on September 30 and the 119th Congress concludes on January 3, 2027. With only 18 full legislative days remaining before the midterm elections, the risk of key provisions expiring or requiring short-term extensions continues to grow.
Before the end of the fiscal year, Congress must pass the 12 appropriations bills funding the federal government or risk another government shutdown, a surface transportation reauthorization act providing a supplemental for the Highway Trust Fund, and a Farm Bill reauthorizing agricultural subsidies and food assistance programs.
The National Defense Authorization Act (NDAA), and the Water Resources Development Act (WRDA), setting Army Corps of Engineers priorities for the next two years must be passed before the end of the calendar year. Congress has the option to push back the deadlines by passing clean extensions on a bipartisan basis, but has struggled to do so over the last year and the political incentives for compromise agreements are few ahead of the midterm elections in November. In 2024, negotiations on FY25 appropriations and a number of related bills were pushed into the new Congress, it is possible that happens this time as well.
Additionally, the White House and congressional Republicans remain divided over whether to pursue a second budget reconciliation package to advance additional policy priorities. The White House previously transmitted an $87.6 billion request to Congress to pay for the conflict in Iran, but the President has argued for a substantially larger package totaling roughly $350 billion. He has also advocated for follow-on version of HR 1 that would include the SAVE America Act, his signature voter identification proposal. At the same time, congressional Republicans are seeking to advance several other priorities, including reforms to veterans' benefits programs, a regulatory framework for cryptocurrencies and artificial intelligence, and permitting reform legislation designed to streamline project approvals and reduce federal environmental review requirements.
Senate Appropriations Chairwoman Expresses Concern Regarding OMB Proposed Rule on Federal Grantmaking
On July 6, Senate Appropriations Committee Chairwoman Susan Collins sent a letter to White House Office of Management and Budget (OMB) Director Russ Vought asking OMB to withdraw parts of a Proposed Rule that would give the Administration near total control over the federal grantmaking process. In addition, the Chairwoman asked OMB to extend the public comment period.
The Senator’s primary argument was against the provision allowing the Executive Branch to terminate any award if it determines, at its own discretion, “that a termination is in the interest of the Federal agency…, including if a Federal award does not effectuate program goals, Federal agency priorities, or the national interest.” She argues that without the ability to appeal, as guaranteed in cases of financial mismanagement, many organizations could be disincentivized from accepting federal funding. Additionally, the letter addressed the increased drawdown request justifications and pre-issuance reviews by political appointees. The Senator asked questions regarding whether or not the political appointees and the regulation would supersede Congressional intent.
OMB has received 93,000 comments on the Proposed Rule, comments are due by July 13 and can be posted on regulations.gov.
EXECUTIVE BRANCH ACTIVITY
DOJ and DHS Issue Interim Final Rule on Local Counter-Drone Measures
On July 6, the Department of Justice (DOJ) and Department of Homeland Security (DHS) posted an Interim Final Rule in the Federal Register titled, “Counter-UAS Authority for State, Local, Tribal, and Territorial Law Enforcement and Correctional Agencies” implementing Sec. 8601 of S 1071, the National Defense Authorization Act for Fiscal Year 2026 (FY26 NDAA), the Safer Skies Act.
The Safer Skies Act, alongside Representative Lous Correa’s DRONE Act, allows State, Local, Tribal, and Territorial Law Enforcement (SLTT) to purchase and operate commercial drones for public safety purposes and provides limited authority for drone mitigation measures.
The Interim Final Rule breaks SLTT authorities over commercial drones into two categories. Detection, identification, monitoring, tracking, and warning commercial drone pilots, including through confiscation of their equipment is permitted, but the drone’s flight cannot be mitigated. The second part of the rule defines the circumstances under which SLTT law enforcement can disrupt, disable, interfere, seize control over, or disable, damage, or destroy a drone, deploying cUAS equipment. SLTT officers must first be certified by a national schoolhouse to use the equipment, which has faced a bottleneck since opening, and will only have access to technology approved by the Secretaries of Defense, Homeland Security, and Transportation along with the Federal Communications Commission (FCC) and National Telecommunications and Information Administration (NTIA), since current cUAS equipment can significantly damage cellular networks and interrupt radio and broadband access.
The Interim Final Rule is open for comments through September 4, but went into effect July 1.
EPA Proposes to Limit Federal New Source Review Requirements, Defaulting California Projects to CARB Standard
On July 7, the Environmental Protection Agency (EPA) issued a Proposed Rule titled, “Minor New Source Review Program Air Permitting Public Participation Requirements for State Implementation Plans.” The Proposed Rule would limit federal requirements for public participation in New Source Reviews (NSR), leaving decisions about public participation requirements for State and local minor NSR programs turned over to the California Air Resources Board (CARB) and local air quality districts meeting other requirements under the Clean Air Act (CAA).
In California, the changes are not likely to impact requirements for New Source Review (NSR) since generally California maintains higher standards than the CAA, though CARB could opt to adopt a lower standard for public engagement in the future if the rule becomes final. The Proposed Rule would only apply to the construction of new minor stationary sources and modifications of existing stationary sources are regulated through the CAA minor NSR programs. New stationary sources are considered “minor” if they do not have the potential to emit air pollutants in amounts equal to or exceeding the “major source” statutory thresholds within parts C and D of CAA title I.
Orange County Delegation Press Releases
- Adam Schiff – July 1, 2026: NEWS: Schiff, Padilla Demand Answers on Elimination of Yosemite Reservation System
- Adam Schiff – July 1, 2026: PHOTOS: Sen. Schiff Tours Fullerton Fire Station, Highlights $250,000 in Federal Funds Secured
- Adam Schiff – July 1, 2026: WATCH: Sen. Schiff Unveils New Actions to Hold Big Oil Companies Accountable for Price Gouging of Californians Ahead of July 4th Holiday
- Alex Padilla – July 1, 2026: Padilla, Schiff Demand Answers on Elimination of Yosemite Reservation System
- Alex Padilla – July 1, 2026: Padilla, Durbin, Klobuchar, Whitehouse Lead Colleagues in Urging DOJ to Reject Payouts for January 6 Rioters
- Alex Padilla – July 1, 2026: Padilla, Durbin, Congressional Democrats Sound the Alarm on Trump Administration Concerning Green Card Application Changes
- Alex Padilla – July 1, 2026: Padilla Statement on Supreme Court Further Dismantling Limits on Campaign Spending
- Lou Correa – July 1, 2026: Correa, Colleagues Move to Enshrine Psychedelic Therapy Executive Order in Law, Protect Veterans' Access
- Dave Min – July 1, 2026: Reps. Dave Min and Johnny Olszewski Lead SEEC Roundtable on Building Resilient, Affordable Housing
- Dave Min – July 1, 2026: Representative Dave Min Pushes Bipartisan Fostering TRUST Act to Strengthen Veteran Care
- Derek Tran – July 1, 2026: Representatives Tran, Luna Lead Bipartisan Effort Against Amendment Shielding Rideshare Companies from Liability
- Linda Sánchez – July 1, 2026: Sánchez: USMCA review needs to deliver for American workers, strengthen our economy
- Adam Schiff – July 2, 2026: NEWS: Schiff, Padilla Announce $107 Million to Modernize California Airports
- Adam Schiff – July 2, 2026: NEWS: Schiff, Padilla Join Peters, Schumer, Murray, Merkley & Senate Democrats in Demanding OMB Rescind Rule Giving President Sweeping Power to Politicize Federal Grants
- Alex Padilla – July 2, 2026: Padilla, Senate Democrats Demand OMB Rescind Rule Granting Trump Sweeping Power to Politicize Federal Grants
- Alex Padilla – July 2, 2026: Padilla, Schiff Announce $107 Million to Modernize California Airports
- Young Kim – July 2, 2026: Rep. Young Kim Introduces Healthy Mothers, Healthy Babies Act to Strengthen U.S. Leadership, Support American Jobs, and Help Families Globally
- Derek Tran – July 2, 2026: Representative Derek Tran Urges President to Sign the 21st Century ROAD to Housing Act
- Linda Sánchez – July 4, 2026: Sánchez: Celebrates 250th Independence Day, calls for renewed commitment to America's ideals
- Adam Schiff – July 6, 2026: PHOTOS: Sen. Schiff Tours San Diego Affordable Housing Complex, Urges Trump to Sign Landmark Legislation to Increase Housing Supply Across the Country, Lower Costs for Families
- Adam Schiff – July 6, 2026: NEWS: Sen. Schiff Pushes to End Québec Restrictions on California Wine, Restore American Imports
- Derek Tran – July 6, 2026: ICYMI: Semafor Exclusive: Representatives Tran, Luna Want Rideshare Liability Shield Dropped
- Adam Schiff – July 7, 2026: NEWS: Sens. Schiff, Padilla Announce Over $53 Million to Repair Highways, Roads Across California
- Derek Tran – July 7, 2026: Representative Derek Tran Delivers $250,000 for Safer Streets in Fullerton
Legislation Introduced by the Orange County Delegation
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Bill Number
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Bill Title
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Introduction Date
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Sponsor
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Bill Description
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Latest Major Action
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H.R. 9583
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Healthy Mothers, Healthy Babies Act of 2026
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07/02/26
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Rep. Young Kim (R-CA-40)
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To provide support for scaling up global access to multiple micronutrient supplements and other cost effective maternal and child interventions, and for other purposes.
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Referred to the House Committee on Foreign Affairs 07/02/2026
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