Key point: The California legislature is considering more than 20 AI-related private sector bills.
The California legislature is currently in its summer recess, returning on August 18. Once it returns, it will have approximately five weeks to pass bills prior to closing for the year on September 12.
We are currently tracking 23 private sector AI-related bills and eight privacy-related bills that crossed chambers at the legislature’s deadline. If passed and signed into law, these bills could significantly impact companies doing business in California.
In this two-part series, we provide a brief summary of the bills and their current status. This article focuses on the AI bills, while the next article will focus on the privacy bills. Once the legislature reconvenes, we will provide regular updates on the status of the bills. If you are not already subscribed to this blog, we encourage you to do so to stay up to date.
In this post, we provide an update on the pending private sector AI-related bills under consideration by the California legislature. For ease of analysis, we have grouped these bills together by category.
Algorithmic Discrimination
AB 1018 (Automated Decision Systems)
This is Assemblymember Rebecca Bauer-Kahan’s most recent algorithmic discrimination bill. The bill regulates the development and deployment of automated decision systems (ADS) used to make consequential decisions. The bill requires developers to conduct performance evaluations of covered ADS prior to deployment or being made available to deployers. Beginning in 2030, developers would be required to contract with independent third-party auditors to ensure compliance. Developers also would need to make certain information available to deployers. In turn, prior to and after using a covered ADS to make consequential decisions, deployers would need to make disclosures regarding the covered ADS to the subject of that decision. Deployers also would need to provide individuals with the right to correct any incorrect personal information used to make the consequential decision and the right to appeal the outcome of the consequential decision.
Current Status: On July 15, it was amended and passed the Senate Judiciary Committee by a 11-2 vote. It is now with the Appropriations Committee where it is scheduled for an August 18 hearing.
SB 420 (Automated Decision Systems)
The bill requires developers of high-risk ADS to perform impact assessments prior to making them available for public use and specifies what must be contained in the impact assessments. The bill also requires deployers of high-risk ADS to provide certain information to individuals who are the subject of decisions made by ADS. Developers and deployers would need to implement governance programs.
Current Status: The bill passed the Senate in early June. It was referred to the Assembly Privacy & Consumer Protection and Judiciary Committees but has not been scheduled for a hearing.
Safety
SB 53 (AI Models: Large Developers)
Senator Scott Wiener’s Transparency in Frontier Artificial Intelligence Act is the successor bill to last year’s vetoed SB 1047 (the Safe and Secure Innovation for Frontier AI Models Act). Large developers (as defined in the bill) are required to implement, comply with, and publish a safety and security protocol that covers various items, including the large developers test procedures used to assess catastrophic risks from its foundation models and how the large developer monitors for critical safety incidents. Large developers also must publish on their websites any assessment of catastrophic risk or dangerous capabilities resulting from internal use of its foundation models. Large developers must report any critical safety incident within 15 days of discovery to the attorney general. Starting in 2030, large developers would need to retain independent third-party auditors to provide reports on certain safety and security items.
Current Status: The bill was amended and passed the Assembly Privacy & Consumer Protection Committee on July 16 by a 10-0 vote (5 nonvoting). It is now with the Assembly Appropriations Committee.
Disclosures
SB 11 (Artificial Intelligence Technology)
The bill requires any person or entity that makes any AI technology available to consumers that enables a user to create a digital replica to provide a warning stating: “Unlawful use of this technology to depict another person without prior consent may result in civil or criminal liability for the user.”
Current Status: The bill was amended and passed the Assembly Privacy & Consumer Protection Committee by a 15-0 vote on July 15. The bill was re-referred to the Appropriations Committee.
SB 243 (Companion Chatbots)
Operators of companion chatbots must (1) take reasonable steps to prevent the companion chatbot from providing rewards to a user at unpredictable intervals or after an inconsistent number of actions or from encouraging increased engagement, usage, or response rates; (2) issue a clear and conspicuous notification at the beginning of any companion chatbot interaction, and at least every three hours during ongoing companion chatbot interactions thereafter, to remind a user that the companion chatbot is artificially generated and not human; and (3) prevent the companion chatbot from engaging with users unless the operator has implemented a protocol for addressing suicidal ideation, suicide, or self-harm expressed by a user to the companion chatbot. The bill creates a private right of action.
Current Status: On July 15, the bill passed the Assembly Privacy & Consumer Protection Committee by a 9-1 vote (2 nonvoting). It is now with the Appropriations Committee.
AB 410 (Bots: Disclosure)
The bill amends California’s existing bot disclosure law to require persons that use a bot to autonomously communicate with another to disclose that the bot is not a human, answer truthfully to any subsequent query from a person as to whether the bot is a human, and refrain from attempting to mislead persons that it is not a human.
Current Status: The bill unanimously passed the Senate Judiciary Committee on July 15 and is now with the Appropriations Committee where it is scheduled for an August 18 hearing.
AB 853 (California AI Transparency Act)
Assemblymember Buffy Wicks’ bill amends last year’s California AI Transparency Act (mandates AI detection tool for users of large online AI systems) to add requirements for large online platforms to use a specified label to disclose any machine-readable provenance data detected in content distributed on the large online platform. It also requires capture device manufacturers to provide users with the option to include a latent disclosure in the content captured by the capture device that conveys certain information, including the name of the capture device manufacturer.
Current Status: The bill passed the Senate Judiciary committee on July 15 by an 11-0 vote (2 nonvoting). It is now with the Appropriations Committee where it is scheduled for an August 18 hearing.
Employment
SB 7 (Employment: Automated Decision Systems)
Senator Jerry McNerney’s bill regulates workplace ADS, requiring employers to provide a written notice to workers that an ADS, for the purpose of making employment-related decisions, not including hiring, is in use at the workplace. Employers also must notify job applicants if the employer uses an ADS in hiring decisions. Employers are also prohibited from using an ADS for certain activities such as inferring a protected classification and conducting predictive behavior analysis. The bill further creates obligations and restrictions regarding the use of ADS for employee discipline and termination, including creating a right to appeal.
Current Status: The bill, as amended, passed the Assembly Privacy & Consumer Protection Committee by a 9-4 vote (2 nonvoting) on July 16. It is now with the Appropriations Committee.
SB 238 (Workplace Surveillance Tools)
Senator Lola Smallwood-Cuevas’ bill requires employers to annually notify the Department of Industrial Relations about the use of workplace surveillance tools. The department is required to make the notice publicly available on its website.
Current Status: The bill passed the Assembly Labor & Employment Committee on June 25 by a 5-1 vote (1 nonvoting). It was scheduled for a July 16 hearing in the Privacy & Consumer Protection Committee but the hearing was postponed.
AB 1331 (Workplace Surveillance)
Assemblymember Sade Elhawary’s bill prohibits employers from using workplace surveillance tools to monitor or surveil workers in off-duty areas like bathrooms, locker rooms, changing areas, and break rooms. It also bans mandatory implanted tracking devices and allows workers to disable surveillance tools during off-duty hours. It is enforceable by the labor commissioner or public prosecutors.
Current Status: The bill passed the Senate Judiciary Committee on July 15 by a 9-2 vote (2 nonvoting). It is now with the Appropriations Committee where it is scheduled for an August 18 hearing.
Provenance
AB 412 (Generative AI: Training Data: Copyrighted Materials)
Bauer-Kahan’s bill requires developers of generative AI models to document copyrighted materials used by the developer to train the models. It also requires such developers to provide a mechanism for rights owners to request information about the model’s use of covered information.
Current Status: The bill was scheduled for a July 9 Judiciary Committee hearing but the hearing was canceled at the bill author’s request.
Pricing
SB 259 (Fair Online Pricing Act)
Senator Aisha Wahab’s Fair Online Pricing Act prohibits businesses from generating a price offered to a consumer through the consumer’s online device based on (1) the hardware or hardware state of the online device, (2) the presence or absence of any software on the online device, and (3) the geolocation data of the online device. The bill makes certain exemptions, such as for coupons.
Current Status: The bill passed the Assembly Judiciary Committee on July 15 by an 8-3 vote (1 nonvoting). On July 17, it was read for a second time and ordered to a third reading.
SB 295 (California Preventing Algorithmic Collusion Act of 2025)
Senator Melissa Hurtado’s bill prohibits persons from distributing “a pricing algorithm, or mak[ing] recommendations based on the use of a pricing algorithm, to two or more competitors with the intent or reasonable expectation that the pricing algorithm or the recommendations be used by the competitors to set the price or commercial term of similar products, rental property, or services in the same market if the person knows or should know that the pricing algorithm processes competitor data.” It also prohibits persons from using “the recommendation of a pricing algorithm that processes competitor data to set a price or commercial term of a product, rental property, or service if the person knows or should know that the pricing algorithm uses or incorporates competitor data and that the pricing algorithm or the recommendation of the pricing algorithm was used by a competitor to set or recommend a price or commercial term of a similar product, rental property, or service in the same market.”
Current Status: The bill passed the Assembly Privacy & Consumer Protection Committee on July 16 by a 9-4 vote (2 nonvoting). It is now with the Appropriations Committee.
SB 384 (Preventing Algorithmic Price Fixing Act)
Wahab’s bill makes it unlawful for a person to sell, license, provide, or use a price-setting algorithm with the intent or reasonable expectation that it be used by two or more competitors in the same market if the person knows or should know that the algorithm processes nonpublic input data to set either the price or supply level of a good or service or rent or occupancy level of rental property.
Current Status: The bill passed the Assembly Privacy & Consumer Protection Committee on July 16 by a 9-4 vote (2 nonvoting). The bill was referred to the Appropriations Committee.
AB 325 (Cartwright Act: Violations)
Assemblymember Cecilia Aguiar-Curry’s bill prohibits a person from using or distributing a common pricing algorithm as part of a contract, combination in the form of a trust, or conspiracy to restrain trade or commerce. It also makes it unlawful for a person to use or distribute a common pricing algorithm if the person coerces another person to set or adopt a recommended price or commercial term for the same or similar products or services.
Current Status: The bill was placed on the Appropriations suspense file on July 14.
AB 446 (Surveillance Pricing)
Assemblymember Chris Ward’s bill bans the use of surveillance pricing subject to certain exemptions.
Current Status: The bill passed the Senate Judiciary Committee on July 15 by a 10-2 vote (1 nonvoting). It was referred to the Appropriations Committee where it is scheduled for an August 18 hearing.
Health
SB 503 (Health Care Services: AI)
The bill requires developers and deployers to make reasonable efforts to identify AI systems used to support clinical decisions or health care resource allocation that are known or have a reasonably foreseeable risk of biased impacts in the system’s outputs resulting from the use of the system in health programs or activities. They also must take reasonable steps to mitigate the risk of biased impacts.
Current Status: The bill passed the Assembly Privacy & Consumer Protection Committee on July 16 by a 13-0 vote (2 nonvoting). It is now with the Appropriations Committee.
AB 489 (Health Care Professions: Deceptive Terms or Letters: AI)
Assemblymember Mia Bonta’s bill amends state law to prohibit AI systems from using terms implying licensed health care professional status without proper licensure.
Current Status: The bill unanimously passed the Senate Judiciary Committee on July 15 and was referred to the Appropriations Committee where it is scheduled for an August 18 hearing.
AB 682 (Health Care Coverage Reporting)
The bill amends California’s Health, Safety, & Insurance Codes to require health insurers to report monthly data on claim denials, including those processed, adjudicated, or reviewed with AI or other predictive algorithms.
Current Status: The bill was amended and passed the Senate Health Committee on July 16 by a 9-0 vote (2 nonvoting). It was referred to the Appropriations Committee where it is scheduled for an August 18 hearing.
Real Estate
SB 52 (Housing Rental Terms: Algorithmic Devices)
Among other things, the bill makes it unlawful “for any person to sell, license, or otherwise provide to two or more persons a rental pricing algorithm with the intent or reasonable expectation that it be used by two or more persons in the same market to set or recommend rental terms for residential premises.”
Current Status: The bill was amended and passed the Assembly Privacy & Consumer Protection Committee on July 16 by a 10-4 vote (1 nonvoting). It is now with the Appropriations Committee.
AB 723 (Real Estate: Digitally Altered Images: Disclosures)
The bill mandates that real estate brokers or salespeople disclose digitally altered images in property sale advertisements and include the original unaltered images alongside the modified ones. Violations are considered criminal, but no reimbursement is required.
Current Status: The bill passed the Senate Judiciary Committee by a 11-2 vote on July 15 and was referred to the Appropriations Committee. It is scheduled for an August 18 hearing.
Children
AB 1064 (Leading Ethical AI Development for Kids Act)
Bauer-Kahan’s bill prohibits a developer from designing, coding, substantially modifying, or otherwise producing a covered product that is intended to be used by or on a child (under 18) in California. “Covered product” is defined as an AI system that is a companion chatbot that can foreseeably take certain actions with respect to a child or an AI system that is used to, among other things, collect or process a child’s biometric information for any purpose other than confirming a child’s identity, with the consent of the child’s parent or guardian, in order to grant access to a service, unlock a device, or provide physical access to an educational institution.
Current Status: The bill passed the Senate Judiciary Committee on July 15 by an 11-1 vote (1 nonvoting). It is now with the Appropriations Committee where it is scheduled for an August 18 hearing.
Civil Liability
AB 316 (AI: Defenses)
The bill prohibits defendants who developed, modified, or used AI from claiming as a defense that the AI autonomously caused harm to the plaintiff in a legal action.
Current Status: On July 7, the bill was placed on the Senate Appropriations Committee suspense file.
