Utah Approves AI Policy Act — What You Need to Know

Utah's state legislature recently approved Senate Bill 149, the AI Policy Act, and became one of the first U.S. states to address private-sector AI deployments beyond public-sector requirements.

The bill, expected to be enacted by March 21, focuses primarily on holding businesses accountable if their use of generative AI goes against consumers, rather than regulating the technology itself.

The legislation adopts a relatively “light-touch” approach, aiming to expand existing consumer protection, health care, and financial services laws to encompass AI usage.

State Senator Kirk Cullimore emphasized the state's commitment to encouraging innovation without hindering progress through excessive regulation.

"We believe government should have a light touch, and we want to encourage innovation in Utah," Cullimore added.

Transparency requirements and penalties

The bill introduces transparency obligations for AI deployments, requiring certain licensed professionals, such as mental health providers, to disclose interactions with AI technology or materials generated by generative AI.

The bill also imposes fines and penalties for violations, with administrative fines reaching up to US$ 2,500 and civil penalties up to US$5,000. Additionally, criminal charges could be pursued for individuals using generative AI models for criminal activities like creating fraudulent telephone solicitations.

Office of AI Policy

The legislation establishes the Office of AI Policy within Utah's consumer protection division, tasked with overseeing the AI Learning Lab Program. This lab will study the risks and benefits of current AI technology, make recommendations to lawmakers, and invite stakeholders to provide input on new technology applications across various industries.

The AI Learning Lab also serves as a safe harbor for developers, allowing them to apply for regulatory mitigation agreements to test AI products without fear of regulatory repercussions. The lab's purpose aligns with previous initiatives, such as Utah's fintech sandbox established in 2019.

While Utah joins other states like Colorado and California in addressing AI usage, legal experts suggest that Utah's simpler approach, focusing on existing laws applying to generative AI, may influence other states' regulatory efforts. They draw parallels to Washington's 2019 privacy bill, which served as a template for subsequent state-level privacy laws.