On September 28, 2024, California Governor Gavin Newsom vetoed California Assembly Bill 3129 (“AB 3129”), which targeted certain private equity (“PE”) and hedge fund investments in the health care industry. The California Legislature passed AB 3129 in August 2024. Its purpose is to increase regulatory scrutiny of certain investments involving health care facilities, providers or provider groups in California by requiring notice to be given to California’s attorney general (“AG”), and the AG’s approval, for certain transactions with PE entities.
In his veto message, Governor Newsom explained the rationale behind the veto was that California’s Office of Health Care Affordability already had sufficient oversight to examine whether health care transactions the agency routinely reviews might negatively affect market competition and/or affordability. AB 3129’s last chance of survival this year would be for the California Legislature to override the Governor’s veto, but such a result is unlikely. Though bill author Assemblymember Jim Wood is not seeking re-election, it is still uncertain whether a similar measure will be introduced in the future.
Visit our Private Equity landing page for further developments on AB 3129 and other issues impacting PE stakeholders.
If you have any questions or would like additional information, please contact:
- Erin Drummy at 317-977-1414 or edrummy@hallrender.com;
- Rubin Pusha III at (773) 550-6859 or rpusha@hallrender.com;
- Colleen Powers at (317) 977-1471 or cpowers@hallrender.com;
- Abigail Kaericher at (202) 742-9674 or akaericher@hallrender.com; or
- Your primary Hall Render contact.
Special thanks to Antoine Neumann, Summer Associate, for his assistance in preparing this alert.
Hall Render blog posts and articles are intended for informational purposes only. For ethical reasons, Hall Render attorneys cannot—outside of an attorney-client relationship—answer specific questions that would be legal advice.
