S0963 would create a new chapter in Title 37 of the South Carolina Code called the “Consumer Protections in Interactions with Artificial Intelligence Systems Act.” The bill is aimed at high-risk artificial intelligence systems—systems that are a substantial factor in consequential decisions affecting education, employment, lending, government services, healthcare, housing, insurance, or legal services. It defines algorithmic discrimination and prohibits developers and deployers from using AI in ways that unlawfully disadvantage people based on protected characteristics such as race, sex, disability, age, religion, national origin, veteran status, and others.
The bill imposes a set of compliance duties on both AI developers and deployers. Developers must use reasonable care to prevent foreseeable discriminatory harms, provide documentation about training data, limitations, intended uses, and mitigation measures, and disclose known or reasonably foreseeable discrimination risks to deployers and the Attorney General. Deployers must maintain risk management policies, conduct impact assessments, review systems at least annually, notify consumers when AI is used in consequential decisions, provide explanations for adverse decisions, allow corrections and appeals, and post public-facing summaries of their AI use and risk management practices. The Attorney General is given exclusive enforcement authority, may issue rules, and violations are treated as unfair trade practices, but the bill does not create a private right of action.
The bill would also require consumer-facing disclosure when a person is interacting with an AI system, unless that is already obvious. It includes exemptions for certain low-risk tools and technologies, small deployers meeting specified conditions, federally approved or federally regulated systems, some research and testing activities, certain government contracts, and some HIPAA-covered healthcare recommendation systems. It also preserves trade secret protections, evidentiary privileges, and constitutional speech and press rights.
Overall, the bill appears to reflect a strong consumer-protection and anti-discrimination approach to AI governance. Because there are no recorded committee transcripts or votes in the provided material, there is no documented legislative debate or formal vote history to indicate support or opposition. Based on the text alone, the bill’s structure suggests an intent to balance innovation with oversight by relying on risk management, documentation, transparency, and Attorney General enforcement rather than private litigation.
The bill would add a new regulatory framework to Title 37 governing artificial intelligence systems used in consumer-facing and consequential decision-making contexts. It would create affirmative duties for AI developers and deployers, authorize the Attorney General to promulgate implementing rules, and classify violations as unfair trade practices under Chapter 6. It would also establish recordkeeping, disclosure, impact-assessment, and consumer-notice requirements, while carving out exemptions for certain federally regulated systems, small deployers, and other limited categories. The practical effect would be to expand state consumer-protection law into AI governance and impose compliance obligations on businesses doing business in South Carolina that develop or use high-risk AI systems.
No committee transcripts or votes were provided, so there is no recorded discussion-based sentiment to summarize. From the bill text itself, the measure appears to be framed as a consumer-protection and civil-rights safeguard, with a clear emphasis on preventing discriminatory outcomes and increasing transparency. The overall tone is regulatory rather than permissive, but it also includes multiple exemptions and safe harbors that suggest an effort to make the bill workable for businesses and federally regulated sectors.
The main points of potential contention are likely to be the scope of the definition of “high-risk artificial intelligence system,” the breadth of the documentation and impact-assessment requirements, and the compliance burden on developers and deployers. Businesses may object to the Attorney General’s broad rulemaking and enforcement authority, the annual review and disclosure obligations, and the requirement to explain adverse decisions and allow appeals with human review when feasible. On the other hand, consumer advocates would likely support the bill’s anti-discrimination protections, notice requirements, and transparency measures. The exemptions for small deployers, trade secrets, federally approved systems, and certain healthcare and government uses appear designed to address some of those concerns.