California policy activity in March 2026 was defined by the ongoing debate over the state’s proposed wealth tax, continued implementation of major climate disclosure laws, escalating federal–state conflict over energy and environmental authority, and an executive order on the AI safeguards.
Tax
Wealth Tax Debate Intensifies
The debate over California’s proposed wealth tax intensified, with the UC Berkeley-POLITICO poll showing early support for the tax. Key commentaries on the issue include:
“Why California’s plan to tax billionaires is misguided,” Financial Times, March 8, 2026.
Jared Walczak, “Would California’s Wealth Tax Be Temporary?,” Tax Foundation, March 19, 2026.
Niko Gallogly, “California’s Billionaire Tax Battle,” New York Times, March 14, 2026.
Harold Meyerson, Google Man Peddles Snake Oil, The American Prospect, March 10, 2026.
Aaron With, “Why unions love the ‘Billionaire Tax’,” The Hill, March 12, 2026.
Dan Walters, “Billionaires bolt from blue states amid tax fears, mirroring rebellion in ‘Atlas Shrugged’ novel,” Cal Matters, March 17, 2026.
Shawn Regan, “California’s Billionaire Tax Proposal Is Already Doing Damage,” City Journal, March 24, 2026.
San Diego Puts Empty Home Tax on Ballot
The San Diego City Council agreed to place an empty home tax measure on the June ballot. The measure would impose a tax on thousands of homes that are vacant for at least six months of the year. The measure is intended to discourage owners from leaving homes vacant.
Labor Unions Look to Increases Taxes on California Corporations
Major labor unions launched a campaign called UnRig California, which aims to increase taxes on large corporations. The coalition supports a permanent wealth tax and various corporate tax proposals. This includes AB 1790, which would terminate California’s water’s-edge election for taxable years beginning on or after January 1, 2028.
Trade
California Attorney General Rob Bonta and Governor Gavin Newsom announced that the state filed a motion to block implementation of President Trump’s latest efforts to impose tariffs on U.S. imports.
Energy and Climate
CARB Approves Regulations Implementing California’s Emissions Reporting Laws
The California Air Resources Board (CARB) voted on February 26, 2026 to approve regulations implementing California’s landmark corporate climate disclosure laws, establishing compliance timelines and administrative rules for companies subject to the requirements. The regulations confirm that companies must submit their first emissions disclosures by August 10, 2026. Read more at the California Energy Journal.
Companies doing business in California should now be actively building emissions inventories, internal controls, and third-party assurance processes. The compliance timeline is short relative to the scope of required data collection.
California, Washington, Quebec Publish Draft Agreement on Carbon Markets
California and Washington state released a draft agreement outlining how their carbon emissions trading programs could be linked. This step would expand the existing California–Québec cap-and-trade market and potentially create a larger West Coast carbon market. Read more at the California Energy Journal.
Trump Administration Sues California over Electric Vehicle Mandate
The Trump administration is suing the California Air Resources Board (CARB) to block enforcement of the state’s vehicle emissions rules. The U.S. Department of Justice (DOJ) argues that the state’s fleetwide CO2 emissions regulation and zero-emission vehicle (ZEV) sales mandate conflict with federal law governing fuel economy standards. Read more at the California Energy Journal.
Sable Offshore Restarts Pipeline Upon Trump Administration Order
The Trump administration directed Sable Offshore Corp. on March 13, 2026 to restart the oil pipeline system serving the Santa Ynez Unit offshore oil field, citing national security concerns and the need to strengthen domestic energy supply on the West Coast. Read more at the California Energy Journal.
In response, California launched a legal effort to stop Sable Offshore Corp.’s restart of the Las Flores Pipeline System serving the offshore Santa Ynez Unit. Read more at the California Energy Journal.
Artificial Intelligence (AI) Regulation
Governor Gavin Newsom signed Executive Order N-5-26, directing state agencies to develop a plan for new state contracting processes and best practices for artificial intelligence (AI). The practices include vetting companies based in part on how they attest and explain their policies and safeguards to protect the public from exploitation or distribution of illegal content; models that display bias or lack technology to prevent such bias; and violations of civil rights and free speech.