BILL NUMBER: S8874
SPONSOR: RHOADS
 
TITLE OF BILL:
An act to amend the general business law, in relation to certain disclo-
sures for use of artificial intelligence
 
PURPOSE:
Relates to the use of artificial intelligence in customer services.
 
SUMMARY OF PROVISIONS:
Section 1. The general business law is amended by adding a new section
399-m1 to read as § 399-m-1. Disclosure in use of artificial intelli-
gence in customer services. 1. For the purpose of this section, the
following terms shall have the following meaning: (a) "Artificial intel-
ligence" or "AI" means systems that are computer programs that can
perform tasks that usually require human intelligence, such as under-
standing natural language, recognizing images, making decisions and
learning from data.
(b) "Point of interaction" means where a customer first encounters arti-
ficial intelligence, including but not limited to, a chat window, chat-
bot, website or email.
2. Any person, firm or partnership association or corporation or agent
or employee thereof shall disclose the use of artificial intelligence to
influence customers support; personalized ad targeting; product eligi-
bility decisions; and AI-driven hiring tools.
3. Such disclosure shall be placed at the point of interaction with the
customer, accompanied by a clear and conspicusus, in not less that
twelve point bold face type, plain-English description of the AI's role,
with instructions on how to access human assistance, if applicable.
§ 2. This act shall take effect on the one hundred twentieth day after
it shall have become law.
 
JUSTIFICATION:
This legislation requires companies operating in New York State to
include a simple, visible disclosure label ("This service uses Al")
anywhere artificial intelligence significantly influences a customer
interaction, including but not limited to: automated customer support,
personalized ad targeting, product eligibility decisions, AI-driven
hiring tools. The disclosure must be placed at the point of interaction
(chat window, website footer, email, etc.), accompanied by a short,
plain-English description of the AI's role, paired with instructions on
how to access human assistance (if applicable).
This policy promotes transparency and customer confidence without
hindering innovation. By treating AI disclosure like a privacy or cookie
notice, companies build brand equity while avoiding backlash from vague
automation. It also levels the playing field as ethical brands get cred-
it for doing things right.
 
LEGISLATIVE HISTORY:
New bill.
 
FISCAL IMPLICATIONS:
None. This act shall take effect on the one hundred twentieth day after
it shall have become law.
 
EFFECTIVE DATE:
This act shall take effect on the one hundred twentieth day after it
shall have become law.