Governor Newsom Nixes Digital Financial Assets Licensing Bill
Last week, Governor Gavin Newsom vetoed AB 2269 (Grayson) which would have created a "Digital Financial Assets Law" to be administered by the Department of Financial Protection & Innovation. The Governor in his veto message asserted that it would be "premature to lock a licensing structure in statute". He also claimed that establishing a "new regulatory program is a costly undertaking, and this bill would require a loan from the general fund in the tens of millions of dollars for the first several years".
AB 2269 could still become law in two ways. First, the California Constitution specifies that the Governor may veto a bill "by returning it with any objections to the house of origin". Cal. Const. Art. IV, § 10(a). A bill that is (i) passed before September 1 (AB 2069 was enrolled on August 26, 2022) before the second calendar year of the legislative biennium (this is the second year of the current 2021-2022 biennium); (ii) in the possession of the Governor on or after September 1 (AB 2069 was presented to the Governor on August 31, 2022); and (iii) not returned on or before September 30, of that year becomes a statute. Cal. Const. Art. IV, § 10(b)(1). This actually occurred under the administration of Governor Pete Wilson when nine bills became law because they had been left on a copy machine in the Governor’s office by staff and not returned to their house of origin. See Wilson Vetoes Arrive Too Late to Kill Laws. Second, the legislature could also overturn Governor Newsom's veto by a two-thirds vote of each house. Cal. Const. Art. IV, § 10(a).