California Delays Ambitious AI Transparency Bill for Third Consecutive Year

The California legislature postpones Assembly Bill 1018, a comprehensive AI transparency measure, for the third consecutive year. The bill, which would require businesses and government agencies to disclose when AI systems make significant decisions about individuals, faces another delay as lawmakers seek more time for consultations and negotiations.

Key Provisions of AB 1018

Assemblymember Rebecca Bauer-Kahan, the bill's sponsor, announced that AB 1018 has been designated a two-year bill, allowing it to return in the next legislative session. The bill aims to provide Californians with the right to know when AI is making consequential decisions about their lives, such as apartment leases, school admissions, and workplace decisions like hiring, firing, promotions, and disciplinary actions. It also covers decisions in education, healthcare, criminal justice, government benefits, financial services, and insurance.

Under AB 1018, if an automated system makes an error, individuals would have the right to have that mistake rectified within 30 days. The bill reiterates that algorithms must provide “full and equal” accommodations to everyone and cannot discriminate based on characteristics like age, race, gender, disability, or immigration status. Developers would be required to conduct impact assessments to test for bias in their systems. Failure to do so could result in fines of up to $25,000 per violation or legal action by the attorney general, public prosecutors, or the Civil Rights Department.

Amendments and Exemptions

Recent amendments to the bill exempt generative AI models from its coverage, potentially preventing it from impacting major AI companies or ongoing generative AI pilot projects carried out by state agencies. The bill was also amended to delay a developer auditing requirement until 2030 and to clarify that the bill intends to address evaluating a person and making predictions or recommendations about them.

Industry Opposition and Legislative Fight

The bill faced intense opposition from industry groups, big tech companies, the state’s largest healthcare provider, venture capital firms, and the Judicial Council of California. Samantha Gordon, chief program officer at TechEquity, a sponsor of the bill, noted that more lobbyists attempted to kill AB 1018 this week in the California Senate than for any other AI bill. She believes the bill had a pathway to passage but was paused to work with Governor Gavin Newsom, who ends his second and final term next year.

“There’s a fundamental disagreement about whether or not these tools should face basic scrutiny of testing and informing the public that they’re being used,” Gordon said. She added that it’s possible tech companies will use their “unlimited amount of money” to fight the bill next year. However, she emphasized that polls show Americans want strong laws on AI and that voluntary protections are insufficient.

Context and Implications

California has passed more AI regulation than any other state but has yet to adopt a law like AB 1018. The bill aligns with the principles enshrined in the Biden administration’s AI Bill of Rights. Meanwhile, politicians in Washington D.C. continue to oppose AI regulation, arguing it could stand in the way of progress. President Donald Trump released an “AI Action Plan” calling for deregulation of the technology at the federal and state level. Earlier this year, Congress tried and failed to pass a moratorium on AI regulation by state governments.

As the bill is delayed, the focus shifts to the next legislative session, where stakeholders hope to reach a consensus and address the concerns raised by opponents. The future of AI transparency in California remains uncertain, but the push for regulation continues to gain momentum.

References

1. Why California backed off again from ambitious AI regulation