Automated decision systems.

Assembly Member Bauer-Kahan's comprehensive artificial intelligence legislation establishes new requirements for automated decision systems (ADS) that affect critical aspects of Californians' lives, from employment and housing to healthcare and financial services.

The bill requires developers of covered ADS to conduct regular performance evaluations assessing accuracy, reliability, and potential disparate impacts. Starting in 2030, these evaluations must be verified by independent third-party auditors. Developers must provide deployers with detailed documentation about system capabilities, limitations, and proper usage.

Organizations deploying these systems must notify individuals when ADS will be used for consequential decisions and provide specific information about how the system operates, what personal data it considers, and how outputs are used. After decisions are made, deployers must allow individuals to correct inaccurate information and appeal outcomes within 30 business days. The legislation mandates that deployers maintain records of system usage, disclosures, and appeals for 10 years.

Enforcement authority rests with the Attorney General, district attorneys, the Civil Rights Department, and the Labor Commissioner for employment matters. Violations can result in injunctive relief and civil penalties up to $25,000 per incident. The bill exempts systems used solely for cybersecurity or aircraft operation, and creates special provisions for financial services companies regulated under federal law. Medical emergencies are exempt from certain disclosure requirements.

The legislation integrates ADS oversight into California's existing civil rights framework by amending the Unruh Civil Rights Act and related statutes. While compliance with the new ADS requirements will be considered in civil rights cases, it is not conclusive in determining violations. Records of performance evaluations provided to regulators are exempt from public disclosure to protect trade secrets.