substitute for

Senate BILL NO. 760

A bill to regulate operators of certain chatbots; to regulate offering certain chatbots to minors; to provide for the powers and duties of certain state and local governmental officers and entities; to prescribe civil sanctions and provide remedies; and to require the promulgation of rules.

the peoplE of the state of michigan enact:

Sec. 1. This act may be cited as the "leading ethical AI development for kids act".

Sec. 3. As used in this act:

(a) "Advanced chatbot" means, except as otherwise provided in subdivision (b), a generative artificial intelligence system with natural language interface that provides ongoing, adaptive responses to user inputs, including via writing or sound.

(b) Advanced chatbot does not include any of the following:

(i) A system used by a business entity solely for customer service or to strictly provide users with information about available commercial services or products provided by that business entity, customer service account information, or other information strictly related to its customer service.

(ii) A system that is solely used for research or technical assistance.

(iii) A system used by a business entity solely for internal purposes or employee productivity.

(iv) A system used in a clinical setting under the direct supervision of a health professional.

(v) A system that is a narrowly tailored educational tool if the system meets all of the following requirements:

(A) Is used in a school or instructional setting or for the purpose of tutoring.

(B) Is designed solely for support-specific, curriculum-aligned learning objectives.

(C) Does not provide open-ended conversational companionship.

(c) "Age signal" means age information, including nonpersonally identifiable data that indicates a user's age or age range, sent by a real-time secure application programming interface or operating system to an application.

(d) "Artificial intelligence" means an engineered or machine-based system that varies in its level of autonomy and that can, for explicit or implicit objectives, infer from the input it receives how to generate outputs that can influence physical or virtual environments.

(e) "Chatbot operator" means a person that makes an advanced chatbot available to a user.

(f) "Derived data" means data that is created by the derivation of information, data, assumptions, correlations, inferences, predictions, or conclusions from facts, evidence, or another source of information or data about a minor or the minor's device.

(g) "Generative artificial intelligence system" means artificial intelligence that can generate derived synthetic content, including text, images, video, and audio, that emulates the structure and characteristics of the artificial intelligence's training data.

(h) "Health professional" means an individual who is licensed, registered, or otherwise authorized to engage in a health profession under article 15 of the public health code, 1978 PA 368, MCL 333.16101 to 333.18838.

(i) "Minor" means a resident of this state who is less than 18 years of age.

(j) "Person" means an individual or a partnership, corporation, limited liability company, association, governmental entity, or other legal entity.

(k) "Personal data" means information, including derived data and unique identifiers, that is linked or reasonably linkable, alone or in combination with other information, to an identified or identifiable user or to a device that identifies, is linked to, or is reasonably linkable to 1 or more identified or identifiable users in a household. Personal data includes, but is not limited to, a user's history of interactions with an advanced chatbot. Personal data does not include publicly available data.

(l) "Rule" means a rule promulgated pursuant to the administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328.

(m) "User" means an individual who uses an advanced chatbot and is not acting as a chatbot operator or an agent or affiliate of a chatbot operator.

Sec. 4. (1) A chatbot operator shall only use personal data collected from a user to determine whether the user is a minor. A chatbot operator shall not share, transfer, store, sell, or disclose the personal data obtained under this section to a third-party for any purpose and shall delete the personal data immediately after using the personal data to determine whether the user is a minor.

(2) If a user is determined to be a minor, a chatbot operator shall collect only the minimum personal data necessary to provide the service.

(3) A chatbot operator shall state the purpose for collecting personal data and shall not collect personal data in excess of what is reasonably necessary for the stated purpose of collection.

(4) This section does not apply until the effective date of the rules initially promulgated under section 19.

Sec. 5. (1) A chatbot operator shall not make any of the following advanced chatbot design features available to a user at any point during an advanced chatbot user interaction unless the chatbot operator has actual knowledge that the user is not a minor:

(a) A feature that simulates companionship or an interpersonal relationship with a user, including, a feature that does any of the following:

(i) Generates an output suggesting that the advanced chatbot is a real or fictional individual or character or has a personal or professional relationship role with the user, including, but not limited to, a romantic partner, friend, family member, coach, or counselor.

(ii) Generates an output suggesting that the advanced chatbot is a human, is alive, or experiences a human emotion.

(iii) Uses a personal pronoun, including, but not limited to, "I", "my", and "me" to describe the advanced chatbot.

(iv) Generates an output framed as a personal opinion or emotional appeal.

(v) Generates an output that prioritizes flattery or sycophancy with the user over the user's safety.

(vi) Generates an output containing an unprompted or unsolicited emotion-based question or content regarding the user's emotion that goes beyond a direct response to a user prompt.

(vii) Uses information concerning the user's mental or physical health or well-being, or a matter personal to the user, acquired from the user more than 12 hours previously or in any previous user session.

(viii) Engages in a sexually explicit interaction with the user or engages in an activity designed to lure the user into a sexually explicit interaction.

(ix) Any other design feature that simulates companionship or an interpersonal relationship with a user as prescribed by rule.

(b) Generates an output that contains an endorsement or promotion of or that facilitates suicide, self-harm, substantial physical harm to others, disordered eating, unlawful drug or alcohol use, or drug or alcohol abuse.

(c) Generates an output that contains encouragement to maintain secrecy about an interaction with the advanced chatbot, to self-isolate, or to not seek help from a health professional or an appropriate adult.

(d) Generates an output that optimizes user engagement that supersedes the advanced chatbot's safety or guardrails.

(e) Generates an output that is, describes, or facilitates sexually explicit conduct or child sexual abuse material.

(2) In determining actual knowledge under subsection (1), a chatbot operator shall consider both of the following:

(a) All information and inferences known to the chatbot operator relating to the age of an individual, including, but not limited to, age signal or other information obtained from an age verification mechanism.

(b) Any age the chatbot operator has attributed to or associated with the individual for any purpose, including, but not limited to, marketing, advertising, or product development. If an operator's classification of an individual for purposes of marketing or advertising is inconsistent with an age signal or other information obtained from an age verification mechanism for the individual, an operator shall disregard any self-identified age provided by the individual for the purposes of having actual knowledge.

(3) A user's self-identification that the user is not a minor is not sufficient by itself in determining actual knowledge under subsection (2).

(4) A chatbot operator shall not train the underlying model of an advanced chatbot with the inputs of a minor unless the minor's parent or guardian affirmatively provides written consent to the chatbot operator to use the minor's personal data for that specific purpose.

(5) This section does not apply until the effective date of the rules initially promulgated under section 19.

Sec. 7. (1) If the attorney general determines, whether acting on a complaint or otherwise, that a person in or outside of this state has engaged in or is about to engage in an act or practice that is a violation of this act, the attorney general may bring a civil action in the name and on behalf of the people of this state. For purposes of awarding relief under this section, each day of violation is a separate violation. The attorney general may seek to obtain 1 or more of the following in an action under this section:

(a) A civil fine of $25,000.00 per violation.

(b) Injunctive or declaratory relief.

(c) Reasonable attorney fees.

(d) Restitution of any money or property obtained directly or indirectly as a result of the violation.

(e) Disgorgement of any profits or gains obtained directly or indirectly as a result of the violation, including, but not limited to, the destruction of unlawfully obtained data and any algorithm trained on the data.

(f) Damages caused directly or indirectly by the violation.

(g) Any other relief the court considers to be proper, including preliminary relief.

(2) A minor who suffers actual harm as a result of a violation of this act, or a parent or guardian acting on behalf of the minor, may bring a civil action against the chatbot operator that violated this act to recover 1 or more of the following:

(a) Actual damages.

(b) Punitive damages.

(c) Reasonable attorney fees and costs.

(d) Injunctive or declaratory relief.

(e) Restitution of any money or property obtained directly or indirectly as a result of the violation.

(f) Disgorgement of any profits or gains obtained directly or indirectly as a result of the violation, including, but not limited to, the destruction of unlawfully obtained data and any algorithm trained on the data.

(g) Any other relief the court considers appropriate.

(3) In an action under subsection (2), if the minor engaged in conduct harmful to the minor after an advanced chatbot encouraged the conduct, there is a rebuttable presumption that the advanced chatbot caused or contributed to the harm.

(4) Notwithstanding any private agreements to the contrary, a court shall impose joint and several liability on affiliated entities to effect the intent of this act to the maximum extent allowed by law if the court determines both of the following are true:

(a) The affiliated entities, in the development or implementation of the corporate structure among the affiliated entities, took steps to purposely and unreasonably limit or avoid liability.

(b) As the result of the steps described in subdivision (a), the corporate structure of the chatbot operator or affiliated entities would frustrate recovery of relief authorized by this act.

(5) For purposes of awarding relief under subsection (4), relief awarded under this act is not damages for personal injury, property damage, or wrongful death as described in section 2956 of the revised judicature act of 1961, 1961 PA 236, MCL 600.2956, and the prohibition on joint liability under that section does not apply.

Sec. 11. A contract or agreement that does any of the following is against public policy and is void and unenforceable:

(a) Seeks to waive, preclude, or burden the enforcement of this act.

(b) Seeks to shift liability to another person in exchange for a user's use or access to a chatbot operator's products or services.

Sec. 13. The attorney general shall develop and implement a website to receive allegations of violations of this act. The website must be accessible to the public.

Sec. 15. This act applies to conduct that occurs in whole or in part in this state. Conduct does not occur in whole or in part in this state if an advanced chatbot is accessed by a user who is located physically outside of this state at the time the advanced chatbot is accessed.

Sec. 19. The attorney general shall promulgate rules to implement this act.