California’s 2026 legislative agenda is prioritizing data center siting reforms, grid reliability mandates, and clean energy integration standards.

The California Legislature concluded its 2026 session in Sacramento on August 31. Meaningful progress was made by treating buildings as integral components of the energy system, encompassing data centers, distributed energy resources (DERs), climate literacy initiatives, and more. The session also prompted important questions regarding the processes for maintaining the state’s long-standing leadership in high-performance public buildings. Below is an overview of key legislation tracked by the U.S. Green Building Council (USGBC) during the 2026 season.

**Data Center Reporting**

California ranks third nationally for data centers, hosting 277 facilities as of early 2026. These facilities account for approximately 1,000 MW of existing data-center peak demand and operate at roughly 85–90% of their annual maximum demand across operating hours. Assemblymember Rebecca Bauer-Kahan’s AB 1577 successfully passed the legislature, marking a significant win focused on reporting requirements for these large-scale facilities, particularly power usage effectiveness and on-site fuel consumption. If enacted, the bill would enhance transparency and accountability in data center operations, provide the California Energy Commission and local agencies with detailed operational data to guide energy and land-use planning, and incentivize more water- and energy-efficient design and operation.

**Aggregated DERs**

California’s localized electricity distribution networks face compounding strain from triple-digit summer heat waves and accelerating wildfire seasons. To address this, the legislature passed Senator Josh Becker’s SB 913. If enacted, the bill would establish a compensation rate for instances when a grid operator exports energy from a ratepayer during peak demand periods characterized by higher electricity costs, such as drawing from a home battery. By aggregating these local devices into virtual power plants, grid operators can dispatch localized power back to the grid or reduce regional demand during extreme weather events and peak evening hours.

**Climate Literacy**

Following Colorado and Maine, the California legislature passed Senator Becker’s SB 1048, which would establish a voluntary State Seal of Climate Literacy. This seal would recognize high school graduates who master climate science concepts and complete hands-on community projects. The proposed voluntary statewide distinction on high school diplomas and transcripts would strengthen California’s education and workforce pipeline, better preparing students for college, careers, and civic leadership in a rapidly changing world.

**Embodied Carbon**

USGBC joined USGBC California and the Sierra Club in a Natural Resources Defense Council-led coalition opposing AB 1704, which ultimately failed in the Senate Appropriations Committee. The bill would have undermined and delayed a nation-leading California climate goal to reduce building material emissions by 40% by 2035. Specifically, it would have required the California Air Resources Board (CARB) to determine whether lower-carbon building materials achieved cost parity with conventional materials within a two-year evaluation period. If parity was not met, CARB would have been mandated to suspend or delay implementing greenhouse gas reduction rules for building materials for five to ten years. USGBC echoed the coalition’s concerns, noting that emerging supply chains require time to scale and that a potential decade-long freeze on climate regulations could severely undermine investor confidence. Ultimately, legislators acknowledged the bill stemmed from legitimate concerns regarding housing affordability but sought to advance a deregulatory loophole.

**Shifting Equivalency Standards**

The session saw a legislative setback with the failure of SB 1398, which would have created an alternative adoption pathway for a single green certification program. An existing California statute codifies a policy requiring state buildings to be designed, constructed, and operated using approved green building rating systems. Current law lists LEED as an approved system and outlines a process for the California Department of Government Services to add additional certification programs, including an equivalence determination step to ensure alignment with state goals. This review process has been in place for over a decade. SB 1398, however, would have provided a fast-track legislative approval for one specific program, asking lawmakers to deem it outcome-equivalent to existing standards without supporting evidence. USGBC maintains that if an existing regulatory process requires modification, it should be formally amended rather than circumvented, ensuring fairness and transparency for all certification programs.

**Looking Ahead**

Over 8,000 LEED-certified buildings currently stand in California, encompassing more than 1.4 billion gross square feet. Additionally, over 27,000 California-based professionals hold LEED credentials, while USGBC member organizations in the state span professional firms, real estate providers, state and local governments, contractors, and individual buildings. USGBC looks forward to California’s next steps with a newly inaugurated governor in January 2027. We remain committed to advancing our work alongside partner organizations and members, continuing to lead advocacy across a broader portfolio of state energy, resilience, and building-policy legislation.

To engage with policies like these during California’s upcoming legislative cycle and support USGBC’s advocacy for a better built environment, consider signing up for the USGBC Advocacy Working Group.

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