10/04/2026

Under the Dome

Its a great time to pursue ASC tours with state elected officials!

CALIFORNIA

October 2026

Governor Newsom has completed action on the final bills of the 2025–2026 legislative session, his last before his term ends in January 2027. Over two terms, he acted on 7,803 bills, signing 6,752 (86.5%) and vetoing 1,051 (13.5%). His veto rate is nearly identical to Governor Brown's (13.7%) and about half of Governor Schwarzenegger's (26.5%).

With the session over, attention turns to the November 3 election. Voters will choose Governor Newsom's successor: Democrat Xavier Becerra, former U.S. Secretary of Health and Human Services and former California Attorney General, or Republican Steve Hilton, a former Fox News commentator. All 80 Assembly seats and half of the Senate are also on the ballot, along with 14 statewide propositions. That's an unusually long list, covering taxes, housing, health care, and elections. A brief summary of each proposition is included below.

CASA is using the rest of the year to host ASC tours with state elected officials. We are also preparing for the 2027–2028 legislative session, which will bring a new Governor and new members to the Capitol.

Legislative Update

For ASCs, the session closed with strong outcomes on CASA's priority issues:

AB 225 (Bonta) – Facility Fees: The bill would have prohibited facility fees for certain outpatient services, including preventive and telehealth services, and barred health plans from reimbursing them. CASA and the California Hospital Association prevented it from advancing, protecting facility reimbursement for procedures such as screening colonoscopies. CASA actively opposed this bill alongside other provider groups to prevent the bill from advancing.
SB 29 (Laird) – Decedent's Pain-and-Suffering Damages: The bill would have extended the authorization for a decedent's estate to recover damages for pain, suffering, or disfigurement, expanding medical-liability exposure. It died on the Assembly inactive file, preserving the stability of the 2022 MICRA agreement. CASA actively opposed this bill alongside other provider groups to prevent the bill from advancing.
AB 1979 (Bonta) – AI in Health Care: Signed into law. The law requires facilities using clinical decision-support tools to ensure licensed professionals retain independent judgment, bars AI from performing licensed clinical functions, and brings health chatbots under medical-privacy law. Amendments softened its original prohibitions. CASA did not actively position on the bill.
AB 2575 (Ortega) – AI Transparency and Worker Protections: Vetoed by Governor. The bill would have required facilities to inventory and disclose details of their clinical decision-support systems and protected workers who override AI outputs. The veto spares ASCs new technology-inventory, disclosure, and liability obligations.
Cal/OSHA Surgical Plume Regulation: The standard would require plume-evacuation systems, exposure-control plans, training, and recordkeeping for procedures that generate surgical smoke. CASA remains engaged as Cal/OSHA prepares its proposed standard for the Standards Board by December 1, 2026.

Regulatory Update: Cal/OSHA Surgical Plume Regulation

Cal/OSHA is developing regulations to implement AB 1007, the 2023 law requiring protections against occupational exposure to surgical smoke or plume. The proposed standard would establish requirements for plume-evacuation systems, written exposure-control plans, employee training, equipment maintenance, and recordkeeping for procedures that generate surgical plume.

CASA has actively engaged with Cal/OSHA throughout the regulatory process. In a May 29 comment letter, CASA expressed support for reasonable, evidence-based protections while identifying provisions that could impose significant and unnecessary burdens on ASCs. CASA specifically urged the Department to remove or revise the proposed Certified Industrial Hygienist requirement, eliminate the 25-foot outdoor-exhaust mandate, establish procedure-appropriate filtration standards, use the AORN Guideline for Surgical Smoke Safety as the primary technical benchmark, and provide facilities at least 12 months to implement the final regulation. CASA emphasized that many ASCs already use plume-evacuation systems and support appropriate exposure-control plans, staff training, source capture, annual review, and recordkeeping.

In a September 16 comment letter responding to the August 17 revised discussion draft, CASA acknowledged the Division's improvements - including expanded examples of qualified personnel and clarified exhaust pathways - while continuing to press for revisions needed to make the regulation workable for existing ASCs. CASA urged the Division to limit new air exchange rate requirements to new construction only, confirm that indoor ULPA filtration with gas-phase adsorption fully satisfies exhaust standards without an outdoor distance mandate, adopt a proportionality standard allowing procedure-appropriate plume controls, clarify that plume reduction testing conformity is the manufacturer's burden rather than the facility's, give meaningful weight to AORN guidance alongside the ISO and CSA benchmarks the statute directs, and provide a minimum 12-month implementation period. CASA reiterated that its members support the core objective of protecting healthcare workers from surgical plume and are already acting on that commitment.

Cal/OSHA must submit its proposed regulation to the Occupational Safety and Health Standards Board by December 1, 2026, and the Board must consider it for adoption by June 1, 2027. CASA will continue working directly with the Department to ensure the final standard protects health care workers while remaining technologically feasible, operationally practical, and financially sustainable for ASCs.

November 3 Ballot Propositions

Californians will decide 14 statewide propositions on November 3. Props 40, 44, and 45 carry the most direct health care implications; where competing tax measures conflict (Prop 40 versus Props 41 and 42), the measure with more votes generally prevails.

Prop 1 – Veterans and Affordable Housing Bond (Legislative): Authorizes $11.25 billion in general obligation bonds. $10 billion would fund affordable rental housing, homeownership, and farmworker housing programs, and $1.25 billion would fund the CalVet home loan program for veterans.
Prop 2 – Rainy Day Fund (Legislative, ACA 20): Raises the cap on the state's Budget Stabilization Account from 10% to 20% of General Fund tax revenue and extends required extra debt payments through 2039–40. It also excludes certain reserve deposits from the state spending limit, giving the state more room to save in strong revenue years.
Prop 3 – Extends High-Income Tax (Initiative): Makes permanent the higher income tax rates on high earners first approved in 2012, which are set to expire in 2031. The LAO estimates it maintains $5 billion to $15 billion in annual revenue, directed largely to K–14 education.
Prop 4 – Public Campaign Financing (Legislative, SB 42): Repeals the statewide ban on public financing of election campaigns, allowing state and local governments to create programs subject to spending limits and eligibility rules. It also increases penalties for illegal foreign contributions.
Prop 5 – Recall Elections (Legislative, SCA 1): Removes the replacement-candidate question from recall ballots. If a Governor is recalled, the Lieutenant Governor would take office, with a special election required if the recall occurs early in the term.
Prop 37 – Middle-Income Homebuyer Loans (Initiative): Authorizes up to $25 billion in revenue bonds for second-mortgage loans covering up to 17% of the price of a qualified new home. Buyers must earn under 200% of area median income and put at least 3% down; bonds are repaid by borrowers, not the state.
Prop 38 – Immunology Research Bonds (Initiative): Authorizes $8.4 billion in bonds for immunology and immunotherapy research, split between a UC-affiliated research institute and a competitive grant program, with half directed to cancer, heart disease, and Alzheimer's research. The LAO estimates repayment costs of about $500 million a year for 25 years.
Prop 39 – Voter ID (Initiative): Requires voters to show government-issued ID at the polls or provide the last four digits of an ID number when voting by mail. It also requires free state voter ID cards on request and annual county reporting on citizenship verification.
Prop 40 – One-Time Billionaire Tax (Initiative): Imposes a one-time tax of up to 5% on the net worth of residents and trusts with more than $1 billion in covered assets. 90% of revenue would go to health care and 10% to food assistance or education; the LAO estimates tens of billions of dollars over several years.
Prop 41 – Special Tax Audits and Spending Limit (Initiative): Requires State Auditor reviews of programs funded by proposed and enacted special taxes. It also bars new state taxes whose revenues are excluded from the state spending limit, including taxes on the same ballot.
Prop 42 – Ban on Personal Property and Retroactive Taxes (Initiative): Prohibits new state taxes on the ownership of personal property, such as financial assets, retirement accounts, and business interests, as well as certain retroactive taxes. It applies to taxes taking effect on or after January 1, 2026, including measures on the same ballot.
Prop 43 – Local Tax Vote Threshold (Legislative, ACA 22): Requires two-thirds voter approval for local special taxes, including those placed on the ballot by citizen initiative, beginning January 1, 2027. Today, courts allow citizen-initiated local special taxes to pass by simple majority.
Prop 44 – Community Clinic Spending Requirement (Initiative): Requires nonprofit Federally Qualified Health Centers to spend at least 90% of revenue on program services rather than administration and overhead. The Attorney General would define qualifying expenses, with penalties for noncompliance and waivers in exceptional cases.
Prop 45 – CEQA Streamlining (Initiative): Expedites environmental review for designated project types, including housing, transportation, water, clean energy, and medical facilities. It sets deadlines for agency review and litigation and narrows what courts may consider in legal challenges.

Looking Ahead

With the session concluded, CASA is focused on two priorities for the remainder of the year.

ASC tours with state elected officials. CASA is actively scheduling site visits so legislators can see firsthand how ASCs deliver high-quality, lower-cost surgical care in their communities.
Preparing for the 2027–2028 legislative session. A new Governor and new members will shape the next session. CASA expects renewed activity on AI in health care (including a likely AB 2575 reintroduction), facility fees, medical liability, and Medi-Cal financing as the MCO tax awaits federal approval, and will position ASCs early on each.

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