Newsom signs nation-leading bills on social media, AI

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Hello and welcome back to Capitol Confidential! 

Signing season is officially in motion. Gov. Gavin Newsom signed over a dozen bills on Wednesday and Thursday related to kids’ safety online, many concerning AI technologies.

It’s the first sign-a-palooza so far, but don’t expect it to be the last. The governor has less than three weeks to get through more than 1,000 bills still waiting for his final weigh-in. 

Backdropped by the Golden Gate Bridge in Sausalito Thursday morning, Newsom signed a package of bills to create sweeping regulations aimed at protecting kids online, including measures that will ban social media platforms from letting children under 16 access addictive feeds and establishing a safety framework for children using AI chatbots.

AB1709, by Assembly Member Josh Lowenthal, D-Long Beach, bars social media companies like Meta and TikTok from letting children under 16 use versions of their websites with “addictive” elements, including autoplay and other features designed to keep a user on the platform or encourage compulsive use. An earlier version of the bill would have forbid social media websites from allowing children under 16 from using their platforms altogether.

SB1119, called Adam’s Law, by Sen. Steve Padilla, D-Chula Vista, imposes several new requirements for chatbot operators aimed at limiting potentially harmful content for children. It will require chatbots operators to regularly verify users’ ages, include crisis support resources to minors who express suicidal ideation or self-harm and promptly notify parents connected to their childrens’ accounts. 

It also directs AI companies to perform risk assessments of any new or updated chatbot design and evaluate its level of safety for minors, describe potential harms it could pose to children and submit independent safety audits to the attorney general. 

The two bills are among a dozen AI and internet safety legislation for children Newsom signed Thursday. The package includes a law, also from Padilla, that places a four-year ban on the sale and manufacturing of children’s toys that include a companion chatbot, SB867. Padilla has said the short-term ban is needed to allow lawmakers and safety advocates more time to study their impacts and “modernize frameworks” that regulate them. 

Other bills tackle child safety online, including SB1276 from Sen. Susan Rubio, D-Baldwin Park, which criminalizes the viewing of AI-generated child sexual abuse material; and AB2017 by Assembly Member Josh Hoover, R-Folsom, to expand instruction in schools to teach kids how to safely navigate technology like AI.

Also signed in the Thursday package: 

On Wednesday, Newsom signed two bills that add third-party oversight of AI companies and their software development: SB813 by Sen. Jerry McNerney, D-Pleasanton, and AB1405 by Bauer-Kahan.

Building off a question from a reporter about other AI safety bills not included in Thursday’s signing package, the governor suggested there may be more to come. 

“This is the beginning of the process, we’re looking at I think 1200 bills that were sent, and we’re working through all those,” Newsom said. “There are dozens more in this space that I’ll continue to work through, so don’t read between the lines, that because it wasn’t included in this batch that it isn't being considered. Quite the contrary.”

Dozens of bills were sent to the governor’s desk that deal entirely or partly with AI – whether that be new regulations and safety precautions or a handful of bills seeking to place stricter oversight on data center construction and their energy and water usage. 

The state’s two largest investor-owned utility companies are placing renewed pressure on Newsom to convene a special legislative session to tackle wildfire liability reform, after the issue collapsed in last-minute negotiations last week. 

Caroline Choi, an executive vice president for Edison International and its subsidiary Southern California Edison, told the Orange County Register the company is “pushing” for a special session to re-up the issue before the next legislative session begins in December. 

When asked about his position on calling the Legislature back to deal with the reform at a news conference Thursday, Newsom hedged, echoing non-committal comments he’s made over the past week.

But he was clear about the risks customers face without action, including higher utility bills.

"This is serious. I mean, this is not going away," he said. "You are one fire away, or a serious fire, this thing collapses on itself."

When pressed on whether he thinks the issue is critical enough to bring lawmakers back to Sacramento and renegotiate a new deal, Newsom only said, "I'm here until I'm not. I've been consistent with legislative leaders that I'm not going on a break as it relates to this issue."

Newsom said he has been holding "consistent meetings with a lot of different groups, organizations, players in this space."

"I hear the special … that's like a four-letter word for these guys," Newsom said, pointing to the small group of lawmakers who had joined him for an AI bill-signing ceremony in Sausalito on Thursday. "It's a real issue. It's one that I hope we can tackle together and, if not, it will I assure you be one of the first agenda items in the new administration. There's just no escaping it. It only gets harder, every hour of every day we wait."

Some lawmakers have expressed hesitancy over a special session over the past week as well, questioning if it would just recreate a rushed timeline to reach a deal – one of the top complaints that hounded the initial deal proposed in the last few weeks of session. 

“It is not something that I am a big fan of and I don't believe in convening special sessions for the purpose of doing one,” Padilla told the Chronicle last week, 

“I think there needs to be a sober convening, a table of all interested parties to work hard, outside of a pressure cooker, outside of politics and political gamesmanship, but a serious conversation about solving some of these very complex issues in the long term,” he added.

While the most politically dramatic insurance-related legislation efforts died with Newsom’s wildfire liability reform push, the Legislature still passed several bills that could significantly change the state’s insurance industry. 

As the Chronicle’s Megan Fan Munce reported, the slate of legislation touches on everything from increasing fines when insurers break the law to giving policyholders more notice before they lose coverage. Many of the bills were helmed by Southern California legislators who represent communities that have burned in wildfires.

They include SB876 by Padilla, seeking to combat underinsurance of homes – an issue highlighted in recent devastating wildfires. The bill would require all insurance companies to provide policyholders with an estimate of what it would take to replace their home, and require that insurers offer at least 50% extended replacement cost coverage for both a home’s structure and a type of coverage known as additional living expenses.

SB878 by state Sen. Sasha Perez, D-Alhambra, would apply interest penalties to insurance companies when they delay paying out claims. Another of Perez’s bills, SB877, aims to increase transparency on how insurance companies decide what to pay in claims by requiring they provide policyholders with documents used to determine whether damage is covered.

An investigation by the Chronicle documented how some insurance companies and insurance claims handlers, known as adjusters, avoid giving homeowners the exact estimates used to determine how much their claim is worth.

SB1301, by state Sen. Ben Allen, D-Santa Monica, would extend the required notice period for insurance companies to tell policyholders they’re being non-renewed, from at least 75 days to to 90 days before their policy expires.

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