California lawmakers are returning to work this week for the start of an election-year legislative session that will be dominated by decisions on artificial intelligence (AI) and the state's struggling budget. With California being the most populous state in the nation and having an economy larger than that of all but four countries, the budget is a significant issue every year. However, this year, lawmakers and Democratic Governor Gavin Newsom will have to address an estimated $68 billion deficit, which is larger than the entire operating budgets of many states.

In addition to the budget crisis, California companies are at the forefront of the AI boom, prompting lawmakers to consider new regulations to govern the use of the technology. They aim to prevent AI from dominating daily life, similar to the impact that social media has had. The California Legislature is set to convene this week, allowing lawmakers a week to settle in before Governor Newsom presents his first budget plan.

Cutting the budget is always a challenge, but it becomes even more difficult in an election year when legislators must ask voters to reelect them in November. Moreover, lawmakers will be navigating their first budget negotiations under the guidance of new leaders. Assembly Speaker Robert Rivas, who assumed his position last summer, and incoming Senate President Pro Tempore Mike McGuire, who is scheduled to take over next month, will be responsible for guiding debates on the use of generative AI tools and attempts to regulate the fast-growing industry.

Several lawmakers are preparing bills to regulate the use of generative AI tools, focusing on potential impacts on privacy, discrimination, job protections, and misinformation during an election year. Assemblymember Rebecca Bauer-Kahan plans to introduce a bill that prohibits the use of AI systems that discriminate against people, requiring companies to evaluate their algorithms and disclose any potential discriminatory risks. Assemblymember Ash Kalra aims to protect actors and artists by limiting studios' ability to replicate performers' work using AI, addressing a contentious issue in last year's contract negotiations. State Senator Scott Wiener plans to establish a sweeping industry-wide safety framework, focusing on addressing risks such as AI-generated bioweapons, cyberattacks, and misinformation campaigns.

Apart from the budget and AI, lawmakers are also expected to clash 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 is also on the ballot for reelection to his Fresno Assembly seat. This has sparked a legal dispute, with California Secretary of State Shirley Weber initially refusing to put Fong on the Congressional ballot due to a state law that prohibits candidates from appearing on the ballot twice. However, Fong sued, and a state judge ruled in his favor. Secretary Weber has stated that she will appeal the ruling, while Assemblymember Wendy Carrillo, who is not seeking reelection and is running for a seat on the Los Angeles City Council, plans to introduce legislation to address this issue.

The legislative session will run through the end of August, but lawmakers have until the end of January to decide which bills introduced last year they will attempt to pass this year. Among the bills carried over from last year 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 firearms. This proposal faced strong opposition from firearms groups last year, who argued that it violated gun owners' constitutional rights. Other bills on the agenda include establishing a mental health hotline for community colleges and California State University campuses, subsidizing housing for seniors and adults with disabilities, and banning homeless encampments within 1,000 feet of schools, parks, or libraries.