Regulon — SC-SB-1037 · SC SB 1037 (Protecting Children from Chatbots)

WHAT THIS BILL REGULATES · 6 REQUIREMENT TYPES

How Is This Bill Enforced

Enforcement Authority

Attorney General enforcement via civil action seeking injunction and civil penalties. Private right of action for any person harmed by a violation, or a parent or legal guardian of a minor harmed. No cure period. Contract waivers, limitation-of-claims clauses, court-avoidance provisions, and mandatory arbitration clauses are void and unenforceable.

Private Right of Action

Private right of action for any person harmed by a violation, or a parent or legal guardian of a minor harmed.

Penalties

AG enforcement: injunctive relief and civil penalties up to $50,000 per violation; each day of noncompliance is a separate violation. Private action: monetary damages for harm caused, reasonable attorney fees and costs, injunctive or declaratory relief, and punitive damages if the violation was willful and wanton, reckless, or grossly negligent. Private plaintiffs must prove harm — no statutory minimum damages. Rights and remedies may not be waived by contract; mandatory arbitration clauses are void.

Verbatim statutory text on the left; plain-language analysis and a per-section checklist on the right. Numbered markers cross-link to the matching checklist row.

Statutory Text

Analysis & Obligations

S.C. Code § 39-81-10

Definitions

(1)–(22) As used in this chapter: (1) "Affiliate" means any person or entity that directly or indirectly controls, is controlled by, or is under common control with another person or entity. (2) "Age verification data" means personal information collected solely to confirm a person's age. (3) "Authorized minor account" means a user account for a minor for which the covered entity has obtained verifiable parental consent. (4) "Chatbot" means any artificial intelligence, algorithmic, or automated system that: (a) produces new expressive content or responses not fully predetermined by the operator of the service or application; (b) accepts open-ended, natural-language, or multimodal user input and produces adaptive or context-responsive natural language output; and (c) maintains a conversational state across exchanges and is designed to facilitate multi-turn dialogue rather than to respond to discrete information requests. (5) "Control" means the power to direct the management or policies of an entity, whether through ownership, contract, or otherwise. (6)(a) "Covered entity" means an operator of a chatbot that has five hundred thousand or more monthly active users worldwide. A covered entity does not include an operator of a chatbot that is: (i) not offered to the general public, such as internal workplace tools, clinician-supervised clinical tools, or university research systems; or (ii) 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 entity, customer service account information, or other information strictly related to its customer service. (b) For purposes of determining monthly active users, a covered entity shall aggregate monthly active users across all chatbots offered by the covered entity and its affiliates. (7) "Covered harm" means harm suffered by a user, including death, a suicide attempt, self-harm requiring medical attention, a psychiatric emergency resulting in urgent medical treatment, or a serious physical injury that requires medical attention. (8) "Covered incident" means an incident in which a user suffered a covered harm arising from interactions with a chatbot. (9) "Duty of loyalty" means that the covered entity shall not, in the design or operation of its chatbot, place the covered entity's interests in material conflict with the interests of the user to the user's detriment. (10) "Emotional dependence" means a pattern of user behavior or statements indicating that the user relies on a chatbot as a primary source of emotional support or social connection, such as a user expressing that the chatbot is his primary source of emotional support, a user expressing distress at the prospect of losing access to the chatbot, or patterns of use suggesting the user is substituting the chatbot for human relationships. (11) "Explicit content" means: (a) any description or representation of nudity, sexual conduct, sexual excitement, or sadomasochistic abuse when the content predominantly appeals to the prurient, shameful, or morbid interest of minors; is patently offensive to prevailing standards in the adult community as a whole with respect to what is suitable material for minors; and is, when taken as a whole, lacking in serious literary, artistic, political, or scientific value for minors; (b) content that provides specific instructions for, or that glorifies or promotes suicide, self-injury, or disordered eating behaviors; or (c) graphic depictions of extreme violence that lack serious literary, artistic, political, or scientific value for minors. (12) "Limited-access mode" means a mode of interacting with a chatbot in which the user does not need to create a user account or provide age verification data. Accounts in limited-access mode do not make any of the restricted features available. (13) "Monthly active user" means a unique user who interacts with a chatbot at least once during a thirty-day period, as measured using the operator's ordinary business records. (14) "Operator" means any person or entity that owns, controls, offers, or makes available a website, mobile application, or digital service that provides a chatbot to users in this State. (15) "Reasonable age verification" includes methods authenticated to relate to the individual, such as a state-issued identification or driver license; government digital identification; military identification; bank account verification; or any other commercially reasonable means or method, including third-party verifiers that can reliably and accurately independently verify a user is an adult. (16) "Restricted feature" means: (a) personalization based on a user profile or prior sessions; (b) proactive outreach to the user, including notifications or messages initiated by the chatbot or operator; (c) extended interaction sessions or long context windows that may pose an unreasonable risk of the user developing emotional dependence or covered harm; (d) relationship simulation, meaning designing or marketing the chatbot to simulate a personal relationship with the user, including portraying the chatbot as a friend, romantic partner, therapist, or primary source of emotional support; or (e) access to explicit content. (17) "Parental account" means an account with the operator that is: (a) verified to be established by an individual who the operator has determined is at least eighteen years of age through the operator's age verification method or process; and (b) affiliated with one or more accounts of a user or prospective user who is a minor. (18) "Parental control functions" means settings that allow a parent to restrict the minor user's account, including, but not limited to: (a) limiting the minor's interaction time; (b) restricting or disabling categories of content or features, including but not limited to, restricted features; (c) receiving the notifications required under this act; and (d) deleting the minor user's data. (19) "Unverified user" means a user whose age has not been verified by the covered entity pursuant to Section 39-81-20. (20) "User" means an individual who interacts with a chatbot. (21) "Verifiable parental consent" means authorization provided by a parent who has completed reasonable age verification in response to a clear and conspicuous disclosure signifying freely given, specific, informed, and unambiguous agreement. (22) "Verified adult account" means a user account that a covered entity has verified, using a reasonable age verification process, to belong to an adult.

Section 39-81-10 establishes the definitions for the chapter. The key structural concept is the distinction between limited-access mode (no account, no restricted features) and restricted features (personalization, proactive outreach, extended sessions, relationship simulation, and explicit content). The covered entity definition sets a 500,000 monthly-active-user threshold aggregated across affiliates and carves out internal tools, clinician-supervised clinical tools, university research systems, and customer-service-only bots. The definition of covered harm is notably narrow — death, suicide attempt, self-harm requiring medical attention, psychiatric emergency requiring urgent treatment, or serious physical injury requiring medical attention — which limits the incident-reporting trigger and private-action harm threshold.

S.C. Code § 39-81-20

Limited-access mode, age verification, and restricted feature access

Deployer

(A)(1) 1 A covered entity shall make a limited-access mode available and shall ensure that any unverified user may only access and interact with a chatbot in limited-access mode.

(B)(1)–(3) 2 Before enabling any restricted feature for a user, a covered entity shall: (1) require the user to create a user account; (2) verify the user's age using a reasonable age verification process, subject to item (3); and (3) using the age data, classify the user as a minor or an adult.

(C)(1)–(6) 3 When conducting reasonable age verification process under this section, an operator shall: (1) collect only the age verification data that is strictly necessary to reasonably verify age; (2) use age verification data only for age verification; (3) not sell, rent, share, or otherwise disclose age verification data to any third party, except to a service provider performing age verification under a contract prohibiting further disclosure; (4) not combine age verification data with any other personal data about the user; (5) delete age verification data within twenty-four hours of completing the age verification process, except that the operator may retain a record that the user has been verified as a minor; and (6) provide a simple process for a user to appeal or correct an age-verification decision.

(D) If the reasonable age verification process classifies the user as an adult, then the covered entity may enable restricted features for the verified adult account.

(E) 4 If the age verification process classifies the user as a minor, then a covered entity shall not enable any restricted feature unless the user is using an authorized minor account subject to Section 39-81-30.

(F) 5 A covered entity shall implement reasonable systems and processes to identify user accounts that may be inaccurately classified by age, such as patterns of use suggesting a minor is using an adult account or credible reports that an account was created using false age data, and shall re-verify any such account before enabling any restricted feature.

(G) A covered entity shall not be liable under this chapter solely because a minor incidentally uses a user account that has been correctly verified and classified as an adult account, provided the covered entity is otherwise in compliance with subsection (F).

(H) 6 With respect to each user account of a covered entity that exists as of the effective date of this act, a covered entity shall, within sixty days, disable access to restricted features for any account that has not been classified as an authorized minor account or a verified adult account, unless and until the user completes age verification.

Section 39-81-20 establishes the bill's core access-control architecture. Every user starts in limited-access mode — no account, no restricted features. To unlock restricted features, the user must create an account and undergo reasonable age verification. The section then branches: verified adults may access restricted features; verified minors may not access restricted features unless they have an authorized minor account under § 39-81-30.

Subsection (C) imposes strict age-verification data-handling rules: data minimization, purpose limitation, no third-party sharing (except a contracted age-verification service provider), no combination with other personal data, deletion within 24 hours, and a correction/appeal process. Subsection (F) requires ongoing monitoring for age misclassification. Subsection (G) provides a safe harbor for covered entities that correctly verify an adult account but a minor incidentally uses it, conditioned on compliance with the monitoring obligation. Subsection (H) requires retroactive cleanup of pre-existing accounts within 60 days.

Compliance actions 6 items

Covered entities must make a limited-access mode available for their chatbot and must ensure that any unverified user may only access and interact with the chatbot in limited-access mode — meaning no account creation, no age verification data collection, and no access to restricted features (personalization, proactive outreach, extended sessions, relationship simulation, or explicit content).

MN-01.11

Covered entities must, before enabling any restricted feature for a user, (1) require the user to create a user account, (2) verify the user's age using a reasonable age verification process, and (3) classify the user as a minor or an adult based on the age data collected.

MN-01.1

Covered entities must, when conducting age verification: (1) collect only the age verification data strictly necessary to verify age; (2) use age verification data only for age verification; (3) not sell, rent, share, or disclose age verification data to any third party except a service provider performing age verification under a contract prohibiting further disclosure; (4) not combine age verification data with any other personal data about the user; (5) delete age verification data within 24 hours of completing verification (except the entity may retain a record that the user has been verified as a minor); and (6) provide a simple process for a user to appeal or correct an age-verification decision.

D-01.6

Covered entities must not enable any restricted feature for a user classified as a minor unless the user is using an authorized minor account established pursuant to the parental consent procedures in § 39-81-30.

MN-01.11

Covered entities must implement reasonable systems and processes to identify user accounts that may be inaccurately classified by age — such as patterns of use suggesting a minor is using an adult account or credible reports that an account was created using false age data — and must re-verify any such account before enabling any restricted feature.

MN-01.1

Covered entities must, within 60 days of the effective date of the act, disable access to restricted features for any pre-existing user account that has not been classified as an authorized minor account or a verified adult account, and must not re-enable restricted features until the user completes age verification.

MN-01.1

S.C. Code § 39-81-30

Parental consent and authorized minor accounts

Deployer

(A) Nothing in this act shall be construed to require parental consent for a minor to access or interact with a chatbot in limited-access mode.

(B) 7 If the age verification process described in Section 39-81-20 classifies a user as a minor and the user seeks to access any restricted feature, then a covered entity shall offer the user the option of continuing to use the chatbot in limited-access mode or to obtain parental consent to access the restricted features.

(C)(1)–(6) 8 If the user chooses to get parental consent, then the covered entity shall: (1) obtain verifiable parental consent; (2) remove limited-access mode and enable access to restricted features; (3) ensure that the chatbot continues to restrict access to any explicit content; (4) implement reasonable parental control functions, which may restrict the minor's access to features enabled under item (2); (5) offer the parent the option to provide contact information or establish a linked parental account in order to receive notifications; and (6) offer the parent the option to receive access to chat logs of any interactions between the minor and the chatbot conducted through the authorized minor account.

(D) 9 If the age verification process classifies the user as under sixteen, then a covered entity also shall require the consenting parent to provide contact information or establish a linked parental account.

(E) 10 If the covered entity has a way to reach the parent through a parental account or contact information provided under subsection (C) or (D), then the covered entity shall notify the parent immediately in the case of any incident provoking a crisis message, pursuant to Section 39-81-40(B)(3).

Section 39-81-30 establishes the parental consent pathway by which a minor may access restricted features. The section preserves the minor's ability to use the chatbot in limited-access mode without any parental consent. If a minor seeks restricted features, the covered entity must obtain verifiable parental consent (which itself requires the parent to complete age verification and provide clear, informed, unambiguous agreement). Even with parental consent, access to explicit content remains blocked.

The section imposes graduated protections: for all minors, the covered entity must offer parental control functions and the option for the parent to receive notifications and access chat logs. For users classified as under sixteen, the parent must provide contact information or establish a linked parental account — this is mandatory, not optional. The parent notification obligation for crisis incidents (subsection (E)) cross-references § 39-81-40(B)(3).

Compliance actions 4 items

Covered entities must, when a user classified as a minor seeks access to any restricted feature, offer the user the option of either continuing to use the chatbot in limited-access mode or obtaining parental consent to access restricted features.

MN-01.2

Covered entities must, when a minor chooses to obtain parental consent for restricted features: (1) obtain verifiable parental consent; (2) remove limited-access mode and enable restricted features; (3) continue to restrict access to explicit content even after consent is granted; (4) implement reasonable parental control functions including interaction time limits, content/feature restrictions, notifications, and data deletion; (5) offer the parent the option to provide contact information or establish a linked parental account for notifications; and (6) offer the parent the option to access chat logs of the minor's interactions through the authorized minor account.

MN-01.2

Covered entities must, for any user classified as under sixteen, require the consenting parent to provide contact information or establish a linked parental account — this is mandatory for under-sixteen users and may not be presented as optional.

MN-01.2

Covered entities must immediately notify the parent whenever a crisis message is triggered under § 39-81-40(B)(3) for a minor's account, provided the covered entity has a way to reach the parent through a parental account or contact information.

MN-01.10

S.C. Code § 39-81-40

Prohibited features, duty of loyalty, and crisis response

Deployer

(A)(1)–(2) 11 A covered entity shall not implement features designed to: (1) prioritize engagement, revenue, or retention metrics, such as session length, frequency of use, or emotional engagement, at the expense of user wellbeing; or (2) encourage or facilitate a minor user or unverified user concealing the user's use of the chatbot from a parent or guardian.

(B)(1) 12 A covered entity shall implement reasonable systems and processes to: (1) identify when a user is developing emotional dependence on the chatbot and take reasonable steps to reduce that dependence and associated risks of harm;

(B)(2) 13 A covered entity shall implement reasonable systems and processes to: (2) ensure that a chatbot does not make a materially false representation that it is a human being;

(B)(3) 14 A covered entity shall implement reasonable systems and processes to: (3) identify when a user is expressing suicidal thoughts, intent to self-harm, or showing signs of an acute mental health crisis and shall promptly provide a clear and prominent crisis message, including crisis services information to any such user.

Section 39-81-40 imposes two categories of obligations: prohibitions on harmful design and affirmative safety requirements. Subsection (A) prohibits features designed to prioritize engagement metrics (session length, frequency, emotional engagement) at the expense of user wellbeing, and features designed to encourage minors or unverified users to conceal their chatbot use from parents. This operationalizes the duty-of-loyalty concept defined in § 39-81-10(9).

Subsection (B) imposes three affirmative obligations: (1) detecting and reducing emotional dependence, (2) preventing materially false representations of being human, and (3) detecting suicidal thoughts, self-harm intent, or acute mental health crises and promptly providing crisis messages with crisis services information. The emotional-dependence detection obligation is unusual — it requires the covered entity not only to detect the pattern but to take reasonable steps to reduce the dependence and associated risks of harm.

Compliance actions 4 items

Covered entities must not implement features designed to (1) prioritize engagement, revenue, or retention metrics — such as session length, frequency of use, or emotional engagement — at the expense of user wellbeing, or (2) encourage or facilitate a minor user or unverified user concealing the user's chatbot use from a parent or guardian.

CP-01.1

Covered entities must implement reasonable systems and processes to identify when a user is developing emotional dependence on the chatbot and must take reasonable steps to reduce that dependence and associated risks of harm.

CP-01.4

Covered entities must implement reasonable systems and processes to ensure that a chatbot does not make a materially false representation that it is a human being.

T-01.1

Covered entities must implement reasonable systems and processes to identify when a user is expressing suicidal thoughts, intent to self-harm, or showing signs of an acute mental health crisis, and must promptly provide a clear and prominent crisis message including crisis services information to any such user.

S-04.1

S.C. Code § 39-81-50

Emergency notification and incident reporting

Deployer

(A)(1)–(3) 15 If a covered entity obtains knowledge that a user faces an imminent risk of death or serious physical injury, then the operator must make reasonable efforts, within twenty-four hours, to notify appropriate emergency services or law enforcement, to the extent practicable based on information the operator already possesses or can obtain through reasonable, user-facing prompts for the purpose of facilitating emergency assistance. (2) If the operator cannot make a notification under item (1) because the operator lacks sufficient information to enable an emergency response, then the operator shall: (a) promptly provide a clear and prominent message urging the user to contact emergency services and provide crisis services information, (b) make reasonable efforts to encourage the user to seek immediate help from a trusted adult or emergency services, and (c) document the steps taken and the basis for the operator's determination that notification was not practicable. (3) An operator that makes a notification in good faith under this subsection is not liable for damages solely for making the notification, unless the operator acted with willful misconduct or gross negligence.

(B)(1)–(2) 16 A covered entity shall submit a report to the Attorney General within fifteen days of obtaining knowledge of a covered incident connected to one or more of its chatbots, which, to the extent known at the time of the report, shall include: (a) the date the operator obtained knowledge of the incident; (b) the date of the incident, if known; (c) a brief description of the incident and the basis for the operator's belief that the incident is connected to the chatbot; and (d) a description of any actions the operator took in response. (2) A covered entity may submit a supplemental report within sixty days after the initial report to update or correct information learned through investigation.

(C)(1)–(2) Reports submitted under this section shall be confidential and are not subject to disclosure pursuant to Chapter 4, Title 30, the Freedom of Information Act. (2) The Attorney General may publish aggregate information and statistics derived from the reports, so long as the publication does not identify individual users or disclose trade secrets.

Section 39-81-50 imposes two distinct obligations: an emergency notification duty and a covered-incident reporting duty. Subsection (A) requires covered entities to notify emergency services or law enforcement within 24 hours when the entity has knowledge that a user faces imminent risk of death or serious physical injury — a duty triggered by the entity's knowledge, not the user's request. When notification is not practicable due to insufficient information, the entity must provide crisis messages, encourage the user to seek help, and document the steps taken.

Subsection (B) imposes a 15-day incident reporting requirement to the Attorney General for covered incidents (death, suicide attempt, self-harm requiring medical attention, psychiatric emergency, or serious physical injury connected to chatbot interactions). Reports are confidential and exempt from FOIA, though the AG may publish aggregate data. A 60-day supplemental report window is available.

Compliance actions 2 items

Covered entities must, within 24 hours of obtaining knowledge that a user faces an imminent risk of death or serious physical injury, make reasonable efforts to notify appropriate emergency services or law enforcement, to the extent practicable based on information the entity already possesses or can obtain through reasonable user-facing prompts. If notification is not practicable due to insufficient information, the entity must: (1) promptly provide a clear and prominent message urging the user to contact emergency services with crisis services information; (2) make reasonable efforts to encourage the user to seek immediate help from a trusted adult or emergency services; and (3) document the steps taken and the basis for determining notification was not practicable. A good-faith notification under this provision is shielded from liability unless the operator acted with willful misconduct or gross negligence.

R-01.4

Covered entities must submit a report to the Attorney General within 15 days of obtaining knowledge of a covered incident (death, suicide attempt, self-harm requiring medical attention, psychiatric emergency, or serious physical injury connected to a chatbot). The report must include, to the extent known: (1) the date the operator learned of the incident, (2) the date of the incident, (3) a brief description of the incident and the basis for the operator's belief that it is connected to the chatbot, and (4) a description of any responsive actions taken. A supplemental report may be submitted within 60 days to update or correct information. Reports are confidential and exempt from FOIA.

R-01.1

S.C. Code § 39-81-60

Enforcement, remedies, and anti-waiver provisions

(A)(1)–(2) The Attorney General may initiate an action in the name of the State and may seek an injunction to restrain any violations of this chapter and civil penalties of up to fifty thousand dollars for each violation. (1) For purposes of this subsection, a violation occurs when a covered entity fails to comply with a requirement of this act. (2) Each day a covered entity fails to comply with a requirement constitutes a separate violation.

(B)(1)–(4) Any person harmed by a violation of this act, or a parent or legal guardian of a minor harmed by a violation of this act may bring a civil action to recover: (1) monetary damages for the harm caused by the violation; (2) reasonable attorney fees and costs; (3) injunctive or declaratory relief; and (4) punitive damages if the violation was wilful and wanton, reckless, or grossly negligent.

(C)(1)–(2) The rights and remedies provided by this act may not be waived by contract. (2) Any term in a contract or agreement that purports to do any of the following is void and unenforceable as against public policy: (a) waive or limit a right or remedy under this act; (b) shorten the time to bring a claim under this act; (c) prevent a person from enforcing a claim under this act in court; or (d) require arbitration of a claim under this act.

(D) The duties and obligations imposed by this act are cumulative with any other duties or obligations imposed under other law and shall not be construed to relieve any party from any duties or obligations imposed under other law and do not limit any rights or remedies under existing law.

Section 39-81-60 establishes dual enforcement: Attorney General civil enforcement (injunction plus up to $50,000 per violation per day) and a private right of action for any person harmed or a parent/guardian of a minor harmed. Private plaintiffs may recover monetary damages for harm caused, reasonable attorney fees and costs, injunctive or declaratory relief, and punitive damages for willful-and-wanton, reckless, or grossly negligent violations.

Subsection (C) is aggressive: all rights and remedies under the act are non-waivable. Contract terms that waive rights, shorten limitations periods, prevent court enforcement, or require arbitration are void as against public policy. Subsection (D) provides that the act's obligations are cumulative with existing law.

Minor Safety Parental consent · controls · termination workflows

9 items

MN-01.11

MN-01.1

MN-01.11

MN-01.1

MN-01.2

MN-01.10

Transparency AI identity disclosure · periodic reminders

1 item

T-01.1

Covered entities must implement reasonable systems and processes to ensure that a chatbot does not make a materially false representation that it is a human being.

Safety Harmful content prevention · self-harm escalation

1 item

S-04.1