The California Assembly declined to vote Tuesday on legislation intended to help wildfire victims, opting at the last minute to delay action on a bill that some Democrats, including Gov. Gavin Newsom, said would not adequately address the financial fallout from catastrophic fires.

Lawmakers introduced the legislation over the weekend after rejecting a broader proposal from Newsom that would have limited electric companies’ financial liability for fires sparked by their equipment.

After the Assembly decided not to vote Tuesday, Speaker Robert Rivas said lawmakers would return to the issue this fall.

“The proposal before us does not yet deliver the relief, accountability or meaningful reform that Californians deserve,” the Democrat said in a statement. “So, we are going back to work — and we will not stop until we have done everything in our power to deliver real results.”

Newsom’s plan would have reduced the amount utilities had to pay some victims and barred insurance companies from suing electrical companies to recover damages paid to homeowners.

The governor said the late compromise he reached with lawmakers would have offered some benefits to wildfire victims, including faster payments, but would not have delivered the sweeping reforms needed to resolve the question of who should bear the cost of fires ignited by utility equipment.

Newsom said the bill still represented progress on a contentious, high-stakes issue.

“I could have easily walked away from it,” he told reporters Monday. “And that would have been a disservice to you and the people of this state.”

Monique Limón, the state Senate president pro tempore, said she was disappointed the deal was not passed Tuesday.

“Thousands of survivors made their voices clear — they needed reform to ensure the next wildfire does not continue to cause the mental and financial stress that recent disasters have placed on Californians,” the Democrat said in a statement.

Newsom’s failure to win passage of his full plan by the end of the session marked a rare setback for the governor, who has often found support for his policy priorities in the Democratic-led Legislature. The disappointment comes as he completes his final session before leaving office in January.

Fire victims strongly criticized the proposal and protested outside the governor’s mansion in Sacramento last week. They argued that Newsom’s plan would have favored utilities over victims, while insurance companies said shifting more of the costs onto them would have forced them to raise rates for policyholders.

Joy Chen, executive director of Every Fire Survivor’s Network, a group representing victims of the 2025 Los Angeles-area fires, said the decision was a victory for survivors.

“Survivors from across California came to Sacramento and asked our elected representatives to stand with the people whose homes, communities and lives have been devastated,” she said in a statement. “They listened.”

Newsom said his proposal was designed in part to stabilize California’s notoriously high electricity rates by shielding utilities from the full financial consequences of wildfires. Utilities have increased rates to pay for wildfire prevention and recovery as climate change has made fires more intense and more frequent. Under California law, utilities must pay damages for fires started by their equipment, even if a judge does not find them negligent.

The question of who should pay for utility-sparked fires has remained a central issue throughout Newsom’s tenure, which began after the most destructive wildfire in state history. In 2019, his first year in office, he signed a law creating a $21 billion fund, paid for by utility shareholders and ratepayers, to help utilities cover wildfire damages if they meet certain safety requirements. Last year, he and lawmakers agreed to add another $18 billion fund.

Newsom unveiled his latest proposal as Southern California Edison faced claims stemming from the state’s second-most destructive blaze, a 2025 fire that killed 19 people outside Los Angeles.

The bill lawmakers were prepared to vote on would have created a program to ensure wildfire victims are paid more quickly, banned hedge funds from profiting from wildfire claims, and prohibited utility executives from receiving bonuses if their company’s equipment sparked a blaze that damaged or destroyed more than 500 buildings.

It also would have required the California Catastrophe Response Council, which oversees the wildfire fund, to appoint an administrator to create a faster process for resolving victim claims.

Pacific Gas & Electric, which filed for bankruptcy in 2019 after facing claims from a devastating Northern California blaze started by its equipment, and Edison International, Southern California Edison’s parent company, said they were disappointed with the deal. In a letter to lawmakers, they said the bill would not stabilize rates for Californians and would not provide “durable, long-term solutions” for compensating victims, sustaining the state’s wildfire fund, or managing utilities’ financial risk.

Assemblymember Rick Zbur, a Democrat, said it was a “disaster” that lawmakers could not agree on broader reforms.

“We’re nibbling around the edges, and we’re not dealing with the structural issues,” he said at a hearing on the bill.

Katelyn Roedner Sutter of the Environmental Defense Fund was also unimpressed, saying the proposal did not go far enough to reduce fire risk or stabilize electricity and insurance rates.

“The best I can say about this bill is it’s fine,” she said after the hearing.

Lawmakers also passed a bill Monday that would create the nation’s first standards for testing and cleaning up lead, asbestos and other toxic contaminants inside homes after a wildfire.

Assemblymember John Harabedian, a Democrat who authored the bill, said it was prompted by the deadly 2025 Eaton Fire that swept through Altadena, which he represents. He said lawmakers need to “figure out very quickly how to protect wildfire survivors and rebuild communities,” and said the bill is one way to do that.

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Associated Press reporter Dorany Pineda in Los Angeles contributed to this report.

This story was originally featured on Fortune.com