Newsom signs AI ad disclosure bill, teases more AI action

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Hello and welcome back to Capitol Confidential! 

Happy Friday. We’re only two weeks away from October, which means if you’re serious about your Halloween movie lineup, this weekend is a great time to dive in. Personally, my list always starts with either “The Rocky Horror Picture Show” or “Young Frankenstein” – I do camp, not gore. 

Here’s what’s on our radar today.

Gov. Gavin Newsom on Wednesday signed another AI bill, adding to a growing list of legislation regulating the technology to earn his approval. 

Newsom signed SB1050 by Sen. Angelique Ashby, D-Sacramento, which requires companies to disclose when they use AI-generated performers or actors in advertisements. 

The bill was sponsored by SAG-AFTRA, Hollywood’s largest labor union representing artists, performers and broadcasters. Newsom signed the bill at its headquarters in Los Angeles.

It’s just the latest AI regulation bill to nab Newsom’s signature, amid a political groundswell in support of stricter oversight of the rapidly evolving technology.

While the issue has been among the most urgent policy areas for state legislators over the past few years, national conversations about AI have reached a near-fever pitch over the last few weeks. 

In July, rogue OpenAI agents hacked open-source AI company Hugging Face. Earlier this month, a former Anthropic and OpenAI researcher’s social media post went extremely viral for his warning that artificial intelligence could kill off humanity. On the heels of those warnings, OpenAI disclosed six new instances of “unexpected or concerning model behavior we’ve observed in the last six months.” And Congress continues to rally support around legislative proposals tackling AI regulation and safety – although they’ve packed up and gone home early. 

In the middle of this AI fervor, Newsom told Politico on Thursday that he plans to take further action on AI safety before leaving office, raising the possibility of calling a special session, declaring an executive action or ordering state agencies take action under their existing authorities.

The governor last week signed a dozen AI and internet safety bills designed to better protect children and teens using the technology, while many more bills remain on his desk. They include:

California’s High-Speed Rail Authority paid nearly $600,000 to consultants for travel expenses with no documented business purpose, in violation of state rules or contract terms, according to a state watchdog report released Tuesday.

As the Chronicle’s Aidin Vaziri, Rachel Swan reported, one consultant repeatedly billed premium Uber rides to gyms around Sacramento and later billed rides to and from a restaurant, bar and nightclub. The report also found consultants billed rides to an escape room, a tiki bar, a sushi restaurant in Denver, restaurants in Folsom and a cigar lounge in Washington, D.C.

“These trips clearly appear to be for personal enjoyment rather than for the benefit of the State,” the Office of the Inspector General said.

One legal consultant made more than 30 trips between Denver and Sacramento in about a year. The authority paid $40,800 in travel expenses and another $86,500 in travel time under the terms of the contract.

The watchdog agency also found the authority routinely paid for upgraded transportation. None were by rail.

But the watchdog also found problems beyond individual rides and flights, including thousands in expenses that seemed to violate the authority’s own requirements on international and out-of-state travel. Across the four contracts, the inspector general identified $81,000 in expenses that appeared to violate state travel rules and another $543,400 that violated contract terms.

The report has sparked outrage, especially among the state’s Republicans, who have long accused the rail project of being a financial scourge. 

Assembly Minority Leader Alexandra Maceo, R-Tulare, said the rail project has “a culture of waste” that has become a burden for taxpayers.

“With his remaining time in office, Gov. (Gavin) Newsom should make taxpayers whole and claw back every dollar,” Maceo said in a statement.

The report is the latest blow to the project, which has fumbled for years with ballooning costs, high-profile leadership turnover and delays that have pushed the project back decades.

In response to the report, the authority said it will tighten its travel rules and seek reimbursement for expenses that should not have been paid. 

The inspector general plans to review the agency’s progress after March 2027. 

A union for hundreds of thousands of educators in California accused the state of depriving public schools of billions of dollars in the last two years, in violation of state constitutional requirements.

In the lawsuit filed Tuesday in Sacramento County Superior Court, the California Teachers Association said California “deliberately underfunded the schools” by $1.9 billion in 2024-25 and by $3.9 billion in 2025-26. 

As the Chronicle’s Bob Egelko reported, the union said in the lawsuit the state repaid the 2024-25 deficit but has not made a commitment to pay back the 2025-26 deficit. That amounts to $638 for every public school student in California. 

Nearly 1,000 school employees were laid off in the last year, said the union, whose 310,000 members include teachers, counselors, librarians and other employees.

“We are demanding a return of the funds that have been withheld so that our students and communities can be saved from yet another year of devastating educator layoffs and unnecessary cuts,” CTA President David Goldberg said in a statement. 

Goldberg also urged California voters to pass Proposition 3, a November ballot measure that would permanently extend a state tax increase on high incomes that was approved by the voters in 2012 and 2016 and is scheduled to expire in 2031. The revenue reaches nearly $15 billion a year, and goes directly to public schools and community colleges.

In response to the lawsuit, H.D. Palmer, spokesperson for Newsom’s Department of Finance, said the governor and Legislature “fully met their commitment to schools this year by funding the amount that was temporarily held back last year under the same process — and we’re confident that will be the same case next year.”

Newsom this week also signed SB1392 by Sen. Dave Cortese, D-San Jose, exempting some classic and collectible cars made between 1976 and 1985 from the state’s mandatory smog tests. Cars must be insured as collector vehicles or driven less than 1,000 miles per year to qualify, and be in compliance with exhaust emissions standards for its class and year and pass fuel cap and fuel leak inspections.

It’s nicknamed Jay Leno’s Law after the former late-night host and avid car collector. Newsom signed the bill with Leno in attendance at his famed garage in Burbank. 

“California can protect clean air while also recognizing the historic and cultural value of collector vehicles,” Cortese said in a statement. “SB1392 establishes a carefully limited exemption for cars that are preserved, driven sparingly, and maintained as part of California’s automotive heritage.”

The exemption drew criticism from the Sierra Club. 

Jakob Evans, policy strategist with the environmental conservation organization, said in a statement it “gives a handout to the ultra wealthy at the expense of California’s air protections” and will lead to an “inevitable increase in air pollution.”

Questions? Thoughts? Interesting tidbits to share? Reach out at [email protected], and follow me on X, @KathrynPlmr.