The proposed "Artificial Intelligence Transparency Act" aims to enhance consumer protection by establishing clear guidelines for the use of artificial intelligence (AI) systems in making consequential decisions that affect consumers. The bill mandates that before deploying an AI system for such decisions, consumers must be notified about its use, including details about the developer and the system itself. If an adverse decision is made based on AI input, consumers are entitled to an explanation, the opportunity to correct any incorrect data, and the right to appeal the decision, which must be reviewed by a human. Additionally, the bill requires that notices be accessible and provided in plain language, ensuring that all consumers, including those with disabilities, can understand the information.

Furthermore, the act stipulates that companion products utilizing generative AI must inform users at the start of each interaction that they are engaging with an AI system, and they must not misrepresent themselves as human. The enforcement of these provisions will be overseen by the state department of justice, allowing consumers to pursue civil actions against developers or deployers for violations. The act is set to take effect on July 1, 2026, and violations will be classified as unfair or deceptive trade practices, subject to enforcement under existing laws.