California legislative session to be dominated by AI regulations and state's struggling budget

• California lawmakers are returning for an election-year session focusing on a $68 billion budget deficit and regulations for artificial intelligence.
• The state faces an estimated $68 billion deficit, larger than the operating budgets of many states, making budget decisions a crucial aspect.
• Lawmakers are grappling with the regulation of artificial intelligence, given the prominence of California companies in the AI industry.

California lawmakers return to work on Wednesday for the start of an election-year legislative session dominated by decisions on artificial intelligence and the state's struggling budget.

The budget is a big issue every year in California, which is the nation's most populous state and has an economy larger than that of all but four countries. But this year, lawmakers and Democratic Gov. Gavin Newsom will have to figure out how to cover an estimated $68 billion deficit — a shortfall that is larger than the entire operating budgets of many states.

And with California companies at the forefront of the artificial intelligence boom, a number of state lawmakers are eyeing new rules to govern the use of the technology before it can dominate daily life — much like social media has.

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The California Legislature is scheduled to convene Wednesday afternoon, giving lawmakers a week to settle in before Newsom sends over his first budget plan. Cutting the budget is never easy, but it's especially difficult in an election year when many legislators must then ask voters in November to reelect them.

Plus, lawmakers will be following a pair of new leaders as they navigate their first budget negotiations, an arduous process that happens mostly behind closed doors and requires gaining consensus among the Democrats who control a majority of seats in the Legislature. Assembly Speaker Robert Rivas took over last summer, and incoming Senate President Pro Tempore Mike McGuire is scheduled to take over next month.

They will also guide debates on the use of generative artificial intelligence tools and attempts to rein in the fast-growing industry.

Multiple lawmakers are preparing a host of bills to regulate the use of generative artificial intelligence tools — bills aimed at the potential impacts on privacy, discrimination, job protections and misinformation during an election year.

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Assemblymember Rebecca Bauer-Kahan has said she will introduce a bill to prohibit the use of AI systems that discriminate against people, which would have required companies to evaluate the algorithms they develop and disclose any potential discriminatory risks. She introduced a similar bill last year but couldn’t advance it.

Assemblymember Ash Kalra wants to protect actors and artists by limiting studios’ ability to replicate performers’ work using AI, a sticking point in contract negotiations last year between actors and studios. The bill would allow performers to escape vague language in contracts that allow companies to use AI to create a digital version of themselves.

State Sen. Scott Wiener said he will try to establish a sweeping industry-wide safety framework. The San Francisco Democrat aims to focus on tackling some of the biggest risks in public safety and security, such as AI-generated bioweapons, cyberattacks and misinformation campaigns. The bill, still light in details, will be "among the first attempts at broad regulation of AI," Wiener said.

Beyond the budget and artificial intelligence, lawmakers are also expected to fight over rules governing their own elections.

Republican Assemblymember Vince Fong is running to replace former U.S. House Speaker Kevin McCarthy in Congress. But he's also on the ballot for reelection to his Fresno Assembly seat, creating a legal kerfuffle that has angered Democrats. Fong decided to run for Congress after he had already filed for the Assembly seat.

California Secretary of State Shirley Weber at first refused to put Fong on the ballot for the Congressional seat, citing a state law that does not allow people to appear on the ballot twice. But Fong sued and a state judge ruled in his favor. Weber has said she will appeal the ruling. Assemblymember Wendy Carrillo — who is not running for reelection because she is seeking a seat on the Los Angeles City Council — has vowed to introduce legislation she says "will clear up this mess."

"Under no circumstances should candidates be able to run for two offices at the same time," she said.

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The legislative session runs through the end of August, but lawmakers only have until the end of January to decide which of the bills introduced last year, if any, they will attempt to pass this year.

Among the leftover bills is a proposal by Democratic Senators Catherine Blakespear and Nancy Skinner to require gun owners to carry liability insurance to cover the negligent or accidental use of their firearms. The bill, introduced in 2022, faced fierce opposition from firearms groups last year who said such requirements violate gun owners’ constitutional rights.

Other bills include a proposal to require community colleges and California State University campuses to establish a mental health hotline, a measure to subsidize housing for seniors and adults with disabilities, and a plan to ban homeless encampments within 1,000 feet (305 meters) of a school, park, or library, among others.