Utah Passes Artificial Intelligence Legislation

By Tony Caldwell and Lindsay Johnson 

Utah is among the first in the nation to pass legislation aimed at regulating the burgeoning field of artificial intelligence (AI). The bill (SB0149), known as the Artificial Intelligence Policy Act, was signed by Governor Cox on March 13, 2024, and is set to take effect on May 1, 2024. The new legislation is made part of Utah consumer protection laws and introduces certain disclosure obligations for entities and professionals using AI systems. It also establishes the Office of Artificial Intelligence Policy (Office) and Artificial Intelligence Learning Laboratory Program (Program), which is tasked with analyzing and researching AI technologies to inform the state regulatory framework.

Such disclosure obligations fall into two categories with respect to the use of generative AI. The first category is a responsive disclosure obligation that applies to any act administered and enforced by the Utah Division of Consumer Protection (e.g., telemarketing, charitable solicitations, and other acts covered by U.C.A 13-2-1). It requires that a person who “uses, prompts, or otherwise causes generative AI to interact with a person” to clearly and conspicuously disclose that the person is interacting with generative AI if asked or prompted by the person.

The second category applies to any person who provides services of a “regulated occupation” (a newly defined term), defined as occupations regulated by the Utah Department of Commerce that require such person to obtain a license or state certification to practice the occupation (e.g., accountants, architects, therapists, and healthcare professionals, just to name a few). Those who provide services falling into this category must proactively disclose when they are interacting with generative AI or looking at material created by generative AI, in the provision of such services verbally at the start of an oral exchange or conversation, or through electronic messaging before a written exchange.

Failure to comply with these requirements could result in administrative fines of up to $2,500 and a civil penalty of up to $5,000 per violation.

To encourage innovation and development in the AI space, the Program provides a safe harbor for participants in the learning laboratory who can receive “regulatory mitigation” to test their AI applications under the Program’s supervision. Companies and participants seeking regulatory mitigation must demonstrate technical expertise, financial resources, and consumer benefits outweighing risks from mitigated regulation enforcement. The Office will establish rules governing application procedures, participant selection criteria, disclosure requirements and reporting mandates, which are forthcoming.

Snell & Wilmer will continue to monitor this developing area of law.