Will Google make a deal with California news agencies to fund journalism?

California news publishers and major technology companies appear to be slowly moving toward a compromise on a controversial bill that would require Google and major social media platforms to pay news organizations for the articles they publish.

After a deadlock last year, House Bill 886 cleared a critical hurdle Tuesday when it passed the Senate Judiciary Committee. Several lawmakers called the bill a work in progress that aims to solve a critical problem: The news business is shrinking as technology changes the way people consume information.

“I am convinced that the market is the best mechanism for regulating the industry,” said the senator. Tom Umberg (D-Orange), the committee chairman, said during a hearing on the bill.

However, he said, the decline of journalism is damaging democracy: “We therefore have an obligation to find a way to support sensible and credible journalism.”

Read more: Column: California’s news industry needs help. Is government the answer?

The bill, known as the California Journalism Preservation Act, would require digital platforms to pay news outlets a fee when they sell advertising alongside news content. It would set up a fund into which the tech companies would pay, with the money distributed to news outlets based on the number of journalists they employ. Publishers would have to use 70% of the money they receive to pay journalists in California.

Umberg noted that the bill does not set an amount for the fund. He said it would be “a very elegant solution” if the parties involved agreed on an amount.

Senator Henry Stern (D-Calabasas) said the talks were “getting closer and closer to the point where we could actually come to an agreement.”

In Canada, Google pays $74 million annually into a fund for the news industry under a law similar to that proposed in California.

Jaffer Zaidi, Google’s vice president of global news partnerships, testified against the California proposal during a hearing where news executives from across the state came together to express their support for the bill while tech industry lobbyists lined up to oppose it. The bill is supported by the California News Publishers Assn., of which the Los Angeles Times is a member.

“The bill would … break the basic and fundamental principles of the open internet and force platforms to pay publishers to send them valuable free traffic,” Zaidi said.

“The entire burden of support is being placed on one or two companies, while many other major platforms that also link to news from California publishers are being shielded.”

He said Google had put forward a proposal for a different way of supporting journalism “through targeted programs” funded by more companies than just the very largest platforms. The current version of the bill would apply only to Google and Meta, the parent company of Instagram and Facebook.

“We hope that this can serve as a basis for a viable common way forward,” Zaidi said. “We remain committed to being here and working constructively towards an outcome.”

Read more: Why Google’s lobbying in California skyrocketed this year

The bill’s author, Rep. Buffy Wicks (D-Oakland), said she is “aggressively trying to engage” with the companies opposing the bill in the hope that the disputing sides can reach an agreement that allows the news industry to thrive.

“Ultimately, I want the best solution to the problem,” Wicks said.

At the end of the hearing, she spoke about the role of journalism in exposing issues that lawmakers will ultimately have to address at the Capitol, such as drafting new legislation to extend the statute of limitations on sexual abuse lawsuits after the Times investigation revealed a pattern of allegations against former USC gynecologist George Tyndall.

The bill will now go to the Senate Budget Committee. If it passes both houses of the legislature by August 31, it will be sent to Governor Gavin Newsom.

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This story originally appeared in the Los Angeles Times.