Bill Summary – FastDemocracy

Enrolled Copy                                                                                 S.B. 149
                       ARTIFICIAL INTELLIGENCE AMENDMENTS
                                            2024 GENERAL SESSION
                                                   STATE OF UTAH
                                         Chief Sponsor: Kirk A. Cullimore House Sponsor: Jefferson Moss
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  LONG TITLE
  General Description:
      This bill creates the Artificial Intelligence Policy Act.
  Highlighted Provisions:
      This bill:
      ▸ defines terms;
      ▸ establishes liability for use of artificial intelligence (AI) that violates consumer
  protection laws if not properly disclosed;
      ▸ creates the Office of Artificial Intelligence Policy (office) and a regulatory AI analysis
  program;
      ▸ enables temporary mitigation of regulatory impacts during AI pilot testing;
      ▸ establishes the Artificial Intelligence Learning Laboratory Program to assess
  technologies, risks, and policy;
      ▸ requires disclosure when an individual interacts with AI in a regulated occupation; and
      ▸ grants the office rulemaking authority over AI programs and regulatory exemptions.
  Money Appropriated in this Bill:
      None
  Other Special Clauses:
      None
  Utah Code Sections Affected:
  AMENDS:
      13-11-4, as last amended by Laws of Utah 2021, Chapters 138, 154
      13-61-101, as last amended by Laws of Utah 2023, Chapter 327
      63I-2-213, as last amended by Laws of Utah 2023, Chapter 33
  ENACTS:
     S.B. 149                                                                                   Enrolled Copy
       13-2-12, as Utah Code Annotated 1953
       13-70-101, as Utah Code Annotated 1953
       13-70-201, as Utah Code Annotated 1953
       13-70-301, as Utah Code Annotated 1953
       13-70-302, as Utah Code Annotated 1953
       13-70-303, as Utah Code Annotated 1953
       13-70-304, as Utah Code Annotated 1953
       13-70-305, as Utah Code Annotated 1953
       76-2-107, as Utah Code Annotated 1953
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   Be it enacted by the Legislature of the state of Utah:
            Section 1. Section 13-2-12 is enacted to read:
            13-2-12 . Generative artificial intelligence -- Impact on liability for violation of
   consumer protection law.
   (1) As used in this section:
       (a) "Generative artificial intelligence" means an artificial system that:
              (i) is trained on data;
              (ii) interacts with a person using text, audio, or visual communication; and
              (iii) generates non-scripted outputs similar to outputs created by a human, with
                  limited or no human oversight.
       (b) "License" means a state-granted authorization for a person to engage in a specified
              occupation:
              (i) based on the person meeting personal qualifications established under state law;
                  and
              (ii) where state law requires the authorization before the person may lawfully engage
                  in the occupation for compensation.
       (c) "Regulated occupation" means an occupation regulated by the Department of
              Commerce that requires a person to obtain a license or state certification to practice
              the occupation.
       (d) "State certification" means a state-granted authorization given to a person to use the
              term "state certified" as part of a designated title related to engaging in a specified
              occupation:
              (i) based on the person meeting personal qualifications established under state law;
                  and
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     Enrolled Copy                                                                                   S.B. 149
          (ii) where state law prohibits a noncertified person from using the term "state
               certified" as part of a designated title but does not otherwise prohibit a
               noncertified person from engaging in the occupation for compensation.
  (2) It is not a defense to the violation of any statute administered and enforced by the
      division, as described in Section 13-2-1, that generative artificial intelligence:
      (a) made the violative statement;
      (b) undertook the violative act; or
      (c) was used in furtherance of the violation.
  (3) A person who uses, prompts, or otherwise causes generative artificial intelligence to
      interact with a person in connection with any act administered and enforced by the
      division, as described in Section 13-2-1, shall clearly and conspicuously disclose to the
      person with whom the generative artificial intelligence interacts, if asked or prompted by
      the person, that the person is interacting with generative artificial intelligence and not a
      human.
  (4) (a) A person who provides the services of a regulated occupation shall prominently
      disclose when a person is interacting with a generative artificial intelligence in the
      provision of regulated services.
      (b) Nothing in this section permits a person to provide the services of a regulated
          occupation through generative artificial intelligence without meeting the
          requirements of the regulated occupation.
  (5) A disclosure described Subsection (4)(a) shall be provided:
      (a) verbally at the start of an oral exchange or conversation; and
      (b) through electronic messaging before a written exchange.
  (6) The division shall administer and enforce the provisions of this section in accordance
      with Chapter 2, Division of Consumer Protection.
  (7) In addition to the division's enforcement powers described by Chapter 2, Division of
      Consumer Protection:
      (a) the division director may impose an administrative fine for up to $2,500 for each
          violation of this section; and
      (b) the division may bring an action in court to enforce a provision of this section.
  (8) In a court action by the division to enforce a provision of this section, the court may:
      (a) declare that an act or practice violates a provision of this section;
      (b) issue an injunction for a violation of this section;
      (c) order disgorgement of any money received in violation of this section;
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      S.B. 149                                                                                   Enrolled Copy
       (d) order payment of disgorged money to a person injured by a violation of this section;
       (e) impose a fine of up to $2,500 for each violation of this section; or
       (f) award any other relief that the court deems reasonable and necessary.
   (9) If a court of competent jurisdiction grants judgment or injunctive relief to the division,
       the court shall award the division:
       (a) reasonable attorney fees;
       (b) court costs; and
       (c) investigative fees.
   (10) (a) A person who violates an administrative or court order issued for a violation of
       this chapter is subject to a civil penalty of no more than $5,000 for each violation.
       (b) A civil penalty authorized under this section may be imposed in any civil action
              brought by the attorney general on behalf of the division.
            Section 2. Section 13-11-4 is amended to read:
            13-11-4 . Deceptive act or practice by supplier.
   (1) A deceptive act or practice by a supplier in connection with a consumer transaction
       violates this chapter whether it occurs before, during, or after the transaction.
   (2) Without limiting the scope of Subsection (1), a supplier commits a deceptive act or
       practice if the supplier knowingly or intentionally:
       (a) indicates that the subject of a consumer transaction has sponsorship, approval,
              performance characteristics, accessories, uses, or benefits, if it has not;
       (b) indicates that the subject of a consumer transaction is of a particular standard,
              quality, grade, style, or model, if it is not;
       (c) indicates that the subject of a consumer transaction is new, or unused, if it is not, or
              has been used to an extent that is materially different from the fact;
       (d) indicates that the subject of a consumer transaction is available to the consumer for a
              reason that does not exist, including any of the following reasons falsely used in an
              advertisement:
              (i) "going out of business";
              (ii) "bankruptcy sale";
              (iii) "lost our lease";
              (iv) "building coming down";
              (v) "forced out of business";
              (vi) "final days";
              (vii) "liquidation sale";
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          (viii) "fire sale";
          (ix) "quitting business"; or
          (x) an expression similar to any of the expressions in Subsections (2)(d)(i) through
              (ix);
      (e) indicates that the subject of a consumer transaction has been supplied in accordance
          with a previous representation, if it has not;
      (f) indicates that the subject of a consumer transaction will be supplied in greater
          quantity than the supplier intends;
      (g) indicates that replacement or repair is needed, if it is not;
      (h) indicates that a specific price advantage exists, if it does not;
      (i) indicates that the supplier has a sponsorship, approval, license, certification, or
          affiliation the supplier does not have;
      (j) (i) indicates that a consumer transaction involves or does not involve a warranty, a
          disclaimer of warranties, particular warranty terms, or other rights, remedies, or
          obligations, if the representation is false; or
          (ii) fails to honor a warranty or a particular warranty term;
      (k) indicates that the consumer will receive a rebate, discount, or other benefit as an
          inducement for entering into a consumer transaction in return for giving the supplier
          the names of prospective consumers or otherwise helping the supplier to enter into
          other consumer transactions, if receipt of the benefit is contingent on an event
          occurring after the consumer enters into the transaction;
      (l) after receipt of payment for goods or services, fails to ship the goods or furnish the
          services within the time advertised or otherwise represented or, if no specific time is
          advertised or represented, fails to ship the goods or furnish the services within 30
          days, unless within the applicable time period the supplier provides the buyer with
          the option to:
          (i) cancel the sales agreement and receive a refund of all previous payments to the
              supplier if the refund is mailed or delivered to the buyer within 10 business days
              after the day on which the seller receives written notification from the buyer of the
              buyer's intent to cancel the sales agreement and receive the refund; or
          (ii) extend the shipping date to a specific date proposed by the supplier;
      (m) except as provided in Subsection (3)(b), fails to furnish a notice meeting the
          requirements of Subsection (3)(a) of the purchaser's right to cancel a direct
          solicitation sale within three business days of the time of purchase if:
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      S.B. 149                                                                                Enrolled Copy
            (i) the sale is made other than at the supplier's established place of business pursuant
                to the supplier's personal contact, whether through mail, electronic mail, facsimile
                transmission, telephone, or any other form of direct solicitation; and
            (ii) the sale price exceeds $25;
       (n) promotes, offers, or grants participation in a pyramid scheme as defined under Title
            76, Chapter 6a, Pyramid Scheme Act;
       (o) represents that the funds or property conveyed in response to a charitable solicitation
            will be donated or used for a particular purpose or will be donated to or used by a
            particular organization, if the representation is false;
       (p) if a consumer indicates the consumer's intention of making a claim for a motor
            vehicle repair against the consumer's motor vehicle insurance policy:
            (i) commences the repair without first giving the consumer oral and written notice of:
                (A) the total estimated cost of the repair; and
                (B) the total dollar amount the consumer is responsible to pay for the repair,
                    which dollar amount may not exceed the applicable deductible or other copay
                    arrangement in the consumer's insurance policy; or
            (ii) requests or collects from a consumer an amount that exceeds the dollar amount a
                consumer was initially told the consumer was responsible to pay as an insurance
                deductible or other copay arrangement for a motor vehicle repair under Subsection
                (2)(p)(i), even if that amount is less than the full amount the motor vehicle
                insurance policy requires the insured to pay as a deductible or other copay
                arrangement, unless:
                (A) the consumer's insurance company denies that coverage exists for the repair,
                    in which case, the full amount of the repair may be charged and collected from
                    the consumer; or
                (B) the consumer misstates, before the repair is commenced, the amount of money
                    the insurance policy requires the consumer to pay as a deductible or other
                    copay arrangement, in which case, the supplier may charge and collect from
                    the consumer an amount that does not exceed the amount the insurance policy
                    requires the consumer to pay as a deductible or other copay arrangement;
       (q) includes in any contract, receipt, or other written documentation of a consumer
            transaction, or any addendum to any contract, receipt, or other written documentation
            of a consumer transaction, any confession of judgment or any waiver of any of the
            rights to which a consumer is entitled under this chapter;
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      Enrolled Copy                                                                                   S.B. 149
      (r) charges a consumer for a consumer transaction or a portion of a consumer transaction
          that has not previously been agreed to by the consumer;
      (s) solicits or enters into a consumer transaction with a person who lacks the mental
          ability to comprehend the nature and consequences of:
          (i) the consumer transaction; or
          (ii) the person's ability to benefit from the consumer transaction;
      (t) solicits for the sale of a product or service by providing a consumer with an
          unsolicited check or negotiable instrument the presentment or negotiation of which
          obligates the consumer to purchase a product or service, unless the supplier is:
          (i) a depository institution under Section 7-1-103;
          (ii) an affiliate of a depository institution; or
          (iii) an entity regulated under Title 7, Financial Institutions Act;
      (u) sends an unsolicited mailing to a person that appears to be a billing, statement, or
          request for payment for a product or service the person has not ordered or used, or
          that implies that the mailing requests payment for an ongoing product or service the
          person has not received or requested;
      (v) issues a gift certificate, instrument, or other record in exchange for payment to
          provide the bearer, upon presentation, goods or services in a specified amount
          without printing in a readable manner on the gift certificate, instrument, packaging,
          or record any expiration date or information concerning a fee to be charged and
          deducted from the balance of the gift certificate, instrument, or other record;
      (w) misrepresents the geographical origin or location of the supplier's business;
      (x) fails to comply with the restrictions of Section 15-10-201 on automatic renewal
          provisions;
      (y) violates Section 13-59-201; or
      (z) fails to comply with the restrictions of Subsection 13-54-202(2).
  (3) (a) The notice required by Subsection (2)(m) shall:
          (i) be a conspicuous statement written in dark bold with at least 12-point type on the
              first page of the purchase documentation; and
          (ii) read as follows: "YOU, THE BUYER, MAY CANCEL THIS CONTRACT AT
              ANY TIME PRIOR TO MIDNIGHT OF THE THIRD BUSINESS DAY (or time
              period reflecting the supplier's cancellation policy but not less than three business
              days) AFTER THE DATE OF THE TRANSACTION OR RECEIPT O