Regulon — SC-SB-963 · SC SB 963 (AI Consumer Protection)

WHAT THIS BILL REGULATES · 7 REQUIREMENT TYPES

How Is This Bill Enforced

Enforcement Authority

Attorney General has exclusive enforcement authority. Violations constitute unfair trade practices under Chapter 6 of Title 37. No private right of action. An affirmative defense is available if the developer, deployer, or other person discovers and cures the violation through user feedback, adversarial testing, red teaming, or internal review and is otherwise in compliance with the NIST AI RMF, ISO/IEC 42001, or another substantially equivalent recognized framework or framework designated by the Attorney General.

Private Right of Action

No private right of action. Enforcement is exclusive to the designated authority.

Penalties

Violations are treated as unfair trade practices under S.C. Code Title 37, Chapter 6, which provides remedies available under that chapter. The bill itself does not specify independent monetary penalty amounts, statutory damages, or attorney fee provisions. The bill expressly disclaims any private right of action but preserves all existing rights, claims, remedies, presumptions, and defenses available at law or in equity.

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 § 37-31-10

Definitions

Section 37-31-10. As used in this chapter: (1)(a) "Algorithmic discrimination" means any condition in which the use of an artificial intelligence system results in an unlawful differential treatment or impact that disfavors an individual or group of individuals on the basis of their actual or perceived age, color, disability, ethnicity, genetic information, limited proficiency in the English language, national origin, race, religion, reproductive health, sex, veteran status, or other classification protected under the laws of this State or federal law. (b) "Algorithmic discrimination" does not include: (i) the offer, license, or use of a high-risk artificial intelligence system by a developer or deployer for the sole purpose of: (A) the developer's or deployer's self-testing to identify, mitigate, or prevent discrimination or otherwise ensure compliance with state and federal law; or (B) expanding an applicant, customer, or participant pool to increase diversity or redress historical discrimination; or (ii) an act or omission by or on behalf of a private club or other establishment that is not in fact open to the public, as set forth in Title II of the federal "Civil Rights Act of 1964," 42 U.S.C. Section 2000a. (2) "Artificial intelligence system" means any machine-based system that, for any explicit or implicit objective, infers from the inputs the system receives how to generate outputs, including content, decisions, predictions, or recommendations, that can influence physical or virtual environments. (3) "Consequential decision" means a decision that has a material legal or similarly significant effect on the provision or denial to any consumer of, or the cost or terms of: (a) education enrollment or an education opportunity; (b) employment or an employment opportunity; (c) a financial or lending service; (d) an essential government service; (e) healthcare services; (f) housing; (g) insurance; or (h) a legal service. (4) "Consumer" means an individual who is a South Carolina resident. (5) "Deploy" means to use a high-risk artificial intelligence system. (6) "Deployer" means a person doing business in this State that deploys a high-risk artificial intelligence system. (7) "Developer" means a person doing business in this State that develops or intentionally and substantially modifies an artificial intelligence system. (8) "Healthcare services" has the same meaning as provided in 42 U.S.C. Section 234(d)(2). (9)(a) "High-risk artificial intelligence system" means any artificial intelligence system that, when deployed, makes or is a substantial factor in making, a consequential decision. (b) "High-risk artificial intelligence system" does not include: (i) an artificial intelligence system if the artificial intelligence system is intended to: (A) perform a narrow procedural task; (B) detect decision-making patterns or deviations from prior decision-marking patterns and is not intended to replace or influence a previously completed human assessment without sufficient human review; or (C) the following technologies, unless the technologies, when deployed, make or are a substantial factor in making, a consequential decision: (1) antimalware; (2) antivirus; (3) artificial intelligence-enabled video games; (4) calculators; (5) cybersecurity; (6) databases; (7) data storage; (8) firewall; (9) internet domain registration; (10) internet website loading; (11) networking; (12) spam and robocall filtering; (13) spell-checking; (14) spreadsheets; (15) web caching; (16) web hosting or any similar technology; or (17) technology that communicates with consumers in natural language for the purpose of providing users with information, making referrals or recommendations, and answering questions and is subject to an accepted use policy that prohibits generating content that is discriminatory or harmful. (10)(a) "Intentional and substantial modification" or "intentionally and substantially modifies" means a deliberate change made to an artificial intelligence system that results in any new reasonably foreseeable risk of algorithmic discrimination. (b) "Intentional and substantial modification" or "intentionally and substantially modifies" does not include a change made to a high-risk artificial intelligence system, or the performance of a high-risk artificial intelligence system, if: (i) the high-risk artificial intelligence system continues to learn after the high-risk artificial intelligence system is: (A) offered, sold, leased, licensed, given, or otherwise made available to a deployer; or (B) deployed; (ii) the change is made to the high-risk artificial intelligence system as a result of any learning described in item (10)(b)(i); (iii) the change was predetermined by the deployer, or a third party contracted by the deployer, when the deployer or third party completed an initial impact assessment of such high-risk artificial intelligence system pursuant to Section 37-31-30(C); and (iv) the change is included in technical documentation for the high-risk artificial intelligence system. (11)(a) "Substantial factor" means a factor that: (i) assists in making a consequential decision; (ii) is capable of altering the outcome of a consequential decision; and (iii) is generated by an artificial intelligence system. (b) "Substantial factor" includes any use of an artificial intelligence system to generate any content, decision, prediction, or recommendation concerning a consumer that is used as a basis to make a consequential decision concerning the consumer. (12) "Trade secret" means the whole or any portion or phase of any scientific or technical information, design, process, procedure, formula, improvement, confidential business or financial information, listing of names, addresses, or telephone numbers, or other information relating to any business or profession which is secret and of value. To be a "trade secret" the owner thereof must have taken measures to prevent the secret from becoming available to persons other than those selected by the owner to have access thereto for limited purposes.

Section 37-31-10 establishes twelve definitions that govern the entire chapter. The core conceptual architecture hinges on five terms: artificial intelligence system (broad machine-based inference definition), high-risk artificial intelligence system (an AI system that makes or is a substantial factor in making a consequential decision), consequential decision (covering education, employment, financial services, government services, healthcare, housing, insurance, and legal services), developer, and deployer.

The high-risk definition includes a lengthy list of carved-out technologies (antimalware, video games, spell-checking, etc.) and — notably — excludes natural-language chatbots that are subject to an acceptable use policy prohibiting discriminatory or harmful content. The definition of algorithmic discrimination is tied to existing protected-class frameworks under state and federal law and carves out self-testing and diversity-expansion uses.

S.C. Code § 37-31-20

Developer obligations

Developer

(A) 1 A developer of a high-risk artificial intelligence system shall use reasonable care to protect consumers from any known or reasonably foreseeable risks of algorithmic discrimination arising from the intended and contracted uses of the high-risk artificial intelligence system. In any enforcement action brought by the Attorney General pursuant to Section 37-31-60, there is a rebuttable presumption that a developer used reasonable care as required under this section if the developer complied with this section and any additional requirements or obligations as set forth in rules adopted by the Attorney General pursuant to Section 37-31-70.

(B) 2 Except as provided in subsection (F), a developer of a high-risk artificial intelligence system shall make available to the deployer or other developer of the high-risk artificial intelligence system: (1) a general statement describing the reasonably foreseeable uses and known harmful or inappropriate uses of the high-risk artificial intelligence system; (2) documentation disclosing: (a) high-level summaries of the type of data used to train the high-risk artificial intelligence system; (b) known or reasonably foreseeable limitations of the high-risk artificial intelligence system, including known or reasonably foreseeable risks of algorithmic discrimination arising from the intended uses of the high-risk artificial intelligence system; (c) the purpose of the high-risk artificial intelligence system; (d) the intended benefits and uses of the high-risk artificial intelligence system; and (e) all other information necessary to allow the deployer to comply with the requirements of Section 37-31-30; (3) documentation describing: (a) how the high-risk artificial intelligence system was evaluated for performance and mitigation of algorithmic discrimination before the high-risk artificial intelligence system was offered, sold, leased, licensed, given, or otherwise made available to the deployer; (b) the data governance measures used to cover the training datasets and the measures used to examine the suitability of data sources, possible biases, and appropriate mitigation; (c) the intended outputs of the high-risk artificial intelligence system; (d) the measures the developer has taken to mitigate known or reasonably foreseeable risks of algorithmic discrimination that may arise from the reasonably foreseeable deployment of the high-risk artificial intelligence system; and (e) how the high-risk artificial intelligence system should be used, not be used, and be monitored by an individual when the high-risk artificial intelligence system is used to make, or is a substantial factor in making, a consequential decision; and (4) any additional documentation that is reasonably necessary to assist the deployer in understanding the outputs and monitor the performance of the high-risk artificial intelligence system for risks of algorithmic discrimination.

(C) 3 Except as provided in subsection (F), a developer that offers, sells, leases, licenses, gives, or otherwise makes available to a deployer or other developer a high-risk artificial intelligence system shall make available to the deployer or other developer, to the extent feasible, the documentation and information, through artifacts such as model cards, dataset cards, or other impact assessments, necessary for a deployer, or for a third party contracted by a deployer, to complete an impact assessment pursuant to Section 37-31-30(C). (2) A developer that also serves as a deployer for a high-risk artificial intelligence system is not required to generate the documentation required by this section unless the high-risk artificial intelligence system is provided to an unaffiliated entity acting as a deployer.

(D) 4 A developer shall make available, in a manner that is clear and readily available on the developer's website or in a public-use case inventory, a statement summarizing: (a) the types of high-risk artificial intelligence systems that the developer has developed or intentionally and substantially modified and currently makes available to a deployer or other developer; and (b) how the developer manages known or reasonably foreseeable risks of algorithmic discrimination that may arise from the development or intentional and substantial modification of the types of high-risk artificial intelligence systems described in accordance with item (1)(a). (2) A developer shall update the statement described in item (1): (a) as necessary to ensure that the statement remains accurate; and (b) no later than ninety days after the developer intentionally and substantially modifies any high-risk artificial intelligence system described in item (1)(a).

(E) 5 A developer of a high-risk artificial intelligence system shall disclose to the Attorney General, in a form and manner prescribed by the Attorney General, and to all known deployers or other developers of the high-risk artificial intelligence system, any known or reasonably foreseeable risks of algorithmic discrimination arising from the intended uses of the high-risk artificial intelligence system without unreasonable delay but no later than ninety days after the date on which: (1) the developer discovers through the developer's ongoing testing and analysis that the developer's high-risk artificial intelligence system has been deployed and has caused or is reasonably likely to have caused algorithmic discrimination; or (2) the developer receives from a deployer a credible report that the high-risk artificial intelligence system has been deployed and has caused algorithmic discrimination.

(F)–(G) 6 Nothing in subsections (B) through (E) requires a developer to disclose a trade secret, information protected from disclosure by state or federal law, or information that would create a security risk to the developer. (G) The Attorney General may require that a developer disclose to the Attorney General, no later than ninety days after the request and in a form and manner prescribed by the Attorney General, the statement or documentation described in subsection (B). The Attorney General may evaluate such statement or documentation to ensure compliance with this chapter, and the statement or documentation is not subject to disclosure under the South Carolina Freedom of Information Act. In a disclosure made pursuant to this subsection, a developer may designate the statement or documentation as including proprietary information or a trade secret. To the extent that any information contained in the statement or documentation includes information subject to attorney-client privilege or work-product protection, the disclosure does not constitute a waiver of the privilege or protection.

Section 37-31-20 imposes five categories of obligations on developers of high-risk AI systems: (A) a general reasonable-care duty to protect consumers from algorithmic discrimination, with a rebuttable presumption of compliance if the developer meets the section's specific requirements; (B) a duty to provide deployers with detailed documentation covering intended uses, training data, limitations, discrimination risks, data governance, and monitoring guidance; (C) a duty to provide deployers with documentation sufficient to complete impact assessments; (D) a public transparency requirement to post and update a summary of high-risk AI systems and discrimination-risk management on the developer's website; and (E) a duty to disclose discovered algorithmic discrimination to the Attorney General and all known deployers within 90 days.

Subsection (F) carves out trade secrets and information protected by law, and subsection (G) gives the Attorney General authority to demand production of documentation within 90 days, with confidentiality and privilege protections.

Compliance actions 6 items

Developers of high-risk AI systems must use reasonable care to protect consumers from any known or reasonably foreseeable risks of algorithmic discrimination arising from the intended and contracted uses of the system. A rebuttable presumption of reasonable care applies if the developer complies with all requirements of Section 37-31-20 and any rules adopted by the Attorney General.

H-02.3

Developers must make available to deployers and other developers documentation covering: (1) a general statement of reasonably foreseeable uses and known harmful or inappropriate uses; (2) high-level summaries of training data types, known limitations and discrimination risks, system purpose, intended benefits and uses, and all information necessary for the deployer to comply with Section 37-31-30; (3) descriptions of pre-deployment performance evaluation and discrimination mitigation, data governance measures including data source suitability and bias examination, intended outputs, discrimination mitigation measures, and how the system should be used, not used, and monitored during consequential decision-making; and (4) any additional documentation reasonably necessary for the deployer to understand outputs and monitor performance for algorithmic discrimination risks. Trade secrets and legally protected information may be withheld.

G-02.1

Developers must make available to deployers and other developers, to the extent feasible, the documentation and information — through artifacts such as model cards, dataset cards, or other impact assessments — necessary for a deployer or its contracted third party to complete an impact assessment under Section 37-31-30(C). A developer that also serves as the deployer is exempt from this documentation requirement unless the system is provided to an unaffiliated entity acting as a deployer.

G-02.1

Developers must publish and maintain on their website or in a public-use case inventory a clear statement summarizing (1) the types of high-risk AI systems the developer has developed or intentionally and substantially modified and currently makes available to deployers or other developers, and (2) how the developer manages known or reasonably foreseeable risks of algorithmic discrimination arising from those systems. The statement must be updated as necessary to remain accurate and no later than 90 days after any intentional and substantial modification.

G-02.4

Developers must disclose to the Attorney General and to all known deployers or other developers any known or reasonably foreseeable risks of algorithmic discrimination arising from the intended uses of their high-risk AI system, without unreasonable delay but no later than 90 days after (1) the developer discovers through ongoing testing and analysis that the system has been deployed and has caused or is reasonably likely to have caused algorithmic discrimination, or (2) the developer receives from a deployer a credible report that the system has been deployed and has caused algorithmic discrimination.

R-01.1

Developers must, upon request by the Attorney General, disclose the documentation described in subsection (B) within 90 days, in a form and manner prescribed by the Attorney General. Developers may designate materials as proprietary or trade secret. Attorney-client privilege and work-product protection are preserved; disclosure to the AG does not constitute waiver. Documents produced are not subject to disclosure under the South Carolina Freedom of Information Act.

R-02.2

S.C. Code § 37-31-30

Deployer obligations

Deployer

(A) 7 A deployer of a high-risk artificial intelligence system shall use reasonable care to protect consumers from any known or reasonably foreseeable risks of algorithmic discrimination. In any enforcement action brought by the Attorney General pursuant to Section 37-31-70, there is a rebuttable presumption that a deployer of a high-risk artificial intelligence system used reasonable care as required under this section if the deployer complied with this section and any additional requirements or obligations as set forth in rules adopted by the Attorney General pursuant to Section 37-31-70.

(B) 8 Except as provided in subsection (F), a deployer of a high-risk artificial intelligence system shall implement a risk management policy and program to govern the deployer's deployment of the high-risk artificial intelligence system. The risk management policy and program must specify and incorporate the principles, processes, and personnel that the deployer uses to identify, document, and mitigate known or reasonably foreseeable risks of algorithmic discrimination. The risk management policy and program must be an iterative process planned, implemented, and regularly and systematically reviewed and updated over the life cycle of a high-risk artificial intelligence system, requiring regular, systematic review and updates. A risk management policy and program implemented and maintained pursuant to this subsection must be reasonable considering: (a)(i) The guidance and standards set forth in the latest version of the "Artificial Intelligence Risk Management Framework" published by the National Institute of Standards and Technology in the United States Department of Commerce, standard ISO/IEC 42001 of the International Organization for Standardization, or another nationally or internationally recognized risk management framework for artificial intelligence systems, if the standards are substantially equivalent to or more stringent than the requirements of this chapter; or (ii) any risk management framework for artificial intelligence systems that the Attorney General, in his discretion, may designate; (b) the size and complexity of the deployer; (c) the nature and scope of the high-risk artificial intelligence systems deployed by the deployer, including the intended uses of the high-risk artificial intelligence systems; and (d) the sensitivity and volume of data processed in connection with the high-risk artificial intelligence systems deployed by the deployer. (2) A risk management policy and program implemented pursuant to item (1) may cover multiple high-risk artificial intelligence systems deployed by the deployer.

(C)(1)–(5) 9 Except as provided in items (4), (5), and subsection (F) of this section: (a) a deployer, or a third party contracted by the deployer, that deploys a high-risk artificial intelligence system shall complete an impact assessment for the high-risk artificial intelligence system; and (b) a deployer, or a third party contracted by the deployer, shall complete an impact assessment for a deployed high-risk artificial intelligence system at least annually and within ninety days after any intentional and substantial modification to the high-risk artificial intelligence system is made available. (2) An impact assessment completed pursuant to this subsection must include, at a minimum, and to the extent reasonably known by or available to the deployer: (a) a statement by the deployer disclosing the purpose, intended-use cases, and deployment context of, and benefits afforded by, the high-risk artificial intelligence system; (b) an analysis of whether the deployment of the high-risk artificial intelligence system poses any known or reasonably foreseeable risks of algorithmic discrimination and, if so, the nature of the algorithmic discrimination and the steps that have been taken to mitigate the risks; (c) a description of the categories of data the high-risk artificial intelligence system processes as inputs and the outputs the high-risk artificial intelligence system produces; (d) if the deployer used data to customize the high-risk artificial intelligence system, an overview of the categories of data the deployer used to customize the high-risk artificial intelligence system; (e) any metrics used to evaluate the performance and known limitations of the high-risk artificial intelligence system; (f) a description of any transparency measures taken concerning the high-risk artificial intelligence system, including any measures taken to disclose to a consumer that the high-risk artificial intelligence system is in use when the high-risk artificial intelligence system is in use; and (g) a description of the postdeployment monitoring and user safeguards provided concerning the high-risk artificial intelligence system, including the oversight, use, and learning process established by the deployer to address issues arising from the deployment of the high-risk artificial intelligence system. (3) In addition to the information required under item (2), an impact assessment completed pursuant to this item following an intentional and substantial modification to a high-risk artificial intelligence system must include a statement disclosing the extent to which the high-risk artificial intelligence system was used in a manner that was consistent with, or varied from, the developer's intended uses of the high-risk artificial intelligence system. (4) A single impact assessment may address a comparable set of high-risk artificial intelligence systems deployed by a deployer. (5) If a deployer, or a third party contracted by the deployer, completes an impact assessment for the purpose of complying with another applicable law or regulation, the impact assessment satisfies the requirements established in this subsection if the impact assessment is reasonably similar in scope and effect to the impact assessment that would otherwise be completed pursuant to this subsection.

(C)(6) 10 A deployer shall maintain the most recently completed impact assessment for a high-risk artificial intelligence system as required under this subsection, all records concerning each impact assessment, and all prior impact assessments, if any, for at least three years following the final deployment of the high-risk artificial intelligence system.

(C)(7) 11 At least annually, a deployer, or a third party contracted by the deployer, must review the deployment of each high-risk artificial intelligence system deployed by the deployer to ensure that the high-risk artificial intelligence system is not causing algorithmic discrimination.

(D)(1) 12 No later than the time that a deployer deploys a high-risk artificial intelligence system to make, or be a substantial factor in making, a consequential decision concerning a consumer, the deployer shall: (a) notify the consumer that the deployer has deployed a high-risk artificial intelligence system to make, or be a substantial factor in making, a consequential decision before the decision is made; (b) provide to the consumer a statement disclosing the purpose of the high-risk artificial intelligence system and the nature of the consequential decision; the contact information for the deployer; a description, in plain language, of the high-risk artificial intelligence system; and instructions on how to access the statement required by this item; and (c) provide to the consumer information, if applicable, regarding the consumer's right to opt out of the processing of personal data concerning the consumer for purposes of profiling in furtherance of decisions that produce legal or similarly significant effects concerning the consumer pursuant to Section 30-31-60(A)(1)(a)(iii).

(D)(2) 13 A deployer that has deployed a high-risk artificial intelligence system to make, or be a substantial factor in making, a consequential decision concerning a consumer shall, if the consequential decision is adverse to the consumer, provide to the consumer: (a) a statement disclosing the principal reason or reasons for the consequential decision, including: (i) the degree to which, and manner in which, the high-risk artificial intelligence system contributed to the consequential decision; (ii) the type of data that was processed by the high-risk artificial intelligence system in making the consequential decision; and (iii) the source or sources of the data described in item (2)(a)(ii); (b) an opportunity to correct any incorrect personal data that the high-risk artificial intelligence system processed in making, or as a substantial factor in making, the consequential decision; and (c) an opportunity to appeal an adverse consequential decision concerning the consumer arising from the deployment of a high-risk artificial intelligence system, which appeal must, if technically feasible, allow for human review unless providing the opportunity for appeal is not in the best interest of the consumer, including in instances in which any delay might pose a risk to the life or safety of such consumer.

(D)(3) 12 Except as provided in subitem (b), a deployer shall provide the notice, statement, contact information, and description required by items (1) and (2): (i) directly to the consumer; (ii) in plain language; (iii) in all languages in which the deployer, in the ordinary course of the deployer's business, provides contracts, disclaimers, sale announcements, and other information to consumers; and (iv) in a format that is accessible to consumers with disabilities. (b) If the deployer is unable to provide the notice, statement, contact information, and description required by items (1) and (2) directly to the consumer, the deployer shall make the notice, statement, contact information, and description available in a manner that is reasonably calculated to ensure that the consumer receives the notice, statement, contact information, and description.

(E) 14 Except as provided in subsection (F), a deployer shall make available, in a manner that is clear and readily available on the deployer's website, a statement summarizing: (a) the types of high-risk artificial intelligence systems that are currently deployed by the deployer; (b) how the deployer manages known or reasonably foreseeable risks of algorithmic discrimination that may arise from the deployment of each high-risk artificial intelligence system described pursuant to subitem (a); and (c) in detail, the nature, source, and extent of the information collected and used by the deployer. (2) A deployer shall periodically update the statement described in item (1) of this section.

(F) Subsections (B), (C), and (E) do not apply to a deployer if, at the time the deployer deploys a high-risk artificial intelligence system and at all times while the high-risk artificial intelligence system is deployed: (1) the deployer: (a) employs fewer than fifty full-time equivalent employees; and (b) does not use the deployer's own data to train the high-risk artificial intelligence system; (2) the high-risk artificial intelligence system: (a) is used for the intended uses that are disclosed to the deployer as required by Section 37-31-20(B)(1); (b) continues learning based on data derived from sources other than the deployer's own data; and (3) the deployer makes available to consumers any impact assessment that: (a) the developer of the high-risk artificial intelligence system has completed and provided to the deployer; and (b) includes information that is substantially similar to the information in the impact assessment required under subsection (C)(2).

(G) 15 If a deployer deploys a high-risk artificial intelligence system and subsequently discovers that the high-risk artificial intelligence system has caused algorithmic discrimination, the deployer, without unreasonable delay, but no later than ninety days after the date of the discovery, shall send to the Attorney General, in a form and manner prescribed by him, a notice disclosing the discovery.

(H) Nothing in subsections (B) through (E) and (G) requires a deployer to disclose a trade secret or information protected from disclosure by state or federal law. To the extent that a deployer withholds information pursuant to this subsection (H) or Section 37-31-50(E), the deployer shall notify the consumer and provide a basis for the withholding.

(I) 16 The Attorney General may require that a deployer, or a third party contracted by the deployer, disclose to him, no later than ninety days after the request and in a form and manner prescribed by him, the risk management policy implemented pursuant to subsection (B), the impact assessment completed pursuant to subsection (C), or the records maintained pursuant to subsection (C)(6). The Attorney General may evaluate the risk management policy, impact assessment, or records to ensure compliance with this chapter, and the risk management policy, impact assessment, and records are not subject to disclosure under the South Carolina Freedom of Information Act. In a disclosure made pursuant to this subsection, a deployer may designate the statement or documentation as including proprietary information or a trade secret. To the extent that any information contained in the risk management policy, impact assessment, or records includes information subject to attorney-client privilege or work-product protection, the disclosure does not constitute a waiver of the privilege or protection.

Section 37-31-30 imposes the bill's most extensive set of compliance obligations on deployers of high-risk AI systems. The section contains nine subsections covering: (A) a general reasonable-care duty mirroring the developer obligation with an analogous rebuttable presumption; (B) a mandatory risk management policy and program aligned with NIST AI RMF, ISO/IEC 42001, or an AG-designated framework; (C) impact assessments with detailed minimum contents, annual refresh, 3-year retention, and annual anti-discrimination review; (D) consumer-facing pre-decision notice, adverse-decision explanation, data correction rights, and appeal with human review; (E) public website disclosure of deployed high-risk AI systems and discrimination-risk management; (F) a small-deployer exemption; (G) mandatory 90-day AG notification upon discovering algorithmic discrimination; (H) a trade secret carve-out with consumer notification; and (I) AG authority to demand documentation with confidentiality protections.

Compliance actions 10 items

Deployers of high-risk AI systems must use reasonable care to protect consumers from any known or reasonably foreseeable risks of algorithmic discrimination. A rebuttable presumption of reasonable care applies if the deployer complies with all requirements of Section 37-31-30 and any rules adopted by the Attorney General.

H-02.3

Deployers must implement a risk management policy and program governing deployment of each high-risk AI system. The program must specify and incorporate the principles, processes, and personnel used to identify, document, and mitigate known or reasonably foreseeable risks of algorithmic discrimination. The program must be iterative, regularly and systematically reviewed, and updated over the life cycle of the system. Reasonableness is assessed by reference to the NIST AI RMF, ISO/IEC 42001, or another nationally or internationally recognized or AG-designated risk management framework, the deployer's size and complexity, the nature and scope of deployed systems, and the sensitivity and volume of data processed. A single program may cover multiple high-risk AI systems. Small deployers with fewer than 50 employees that do not train the system on their own data are exempt if other conditions in subsection (F) are met.

G-01.1

Deployers, or third parties contracted by deployers, must complete an impact assessment for each deployed high-risk AI system before or at deployment, and at least annually thereafter and within 90 days after any intentional and substantial modification. The impact assessment must include, at minimum: (1) a statement of the system's purpose, intended uses, deployment context, and benefits; (2) an analysis of known or reasonably foreseeable algorithmic discrimination risks and mitigation steps; (3) a description of data inputs and outputs; (4) an overview of data used to customize the system, if applicable; (5) performance metrics and known limitations; (6) transparency measures including consumer disclosure; and (7) post-deployment monitoring and user safeguards. Post-modification assessments must also disclose whether the system was used consistently with or varied from the developer's intended uses. A single impact assessment may cover comparable systems. An impact assessment completed for another applicable law or regulation satisfies this requirement if reasonably similar in scope and effect. Small deployers with fewer than 50 employees are exempt if other conditions in subsection (F) are met.

H-02.3

Deployers must retain the most recently completed impact assessment, all records concerning each impact assessment, and all prior impact assessments for at least three years following the final deployment of the high-risk AI system.

H-02.10

At least annually, deployers or third parties contracted by deployers must review the deployment of each high-risk AI system to ensure the system is not causing algorithmic discrimination.

H-02.8

Deployers must, before a high-risk AI system makes or is a substantial factor in making a consequential decision concerning a consumer: (1) notify the consumer that a high-risk AI system will be used; (2) provide a statement disclosing the system's purpose, the nature of the consequential decision, the deployer's contact information, a plain-language description of the system, and instructions on how to access the statement; and (3) inform the consumer of any applicable right to opt out of automated profiling for decisions producing legal or similarly significant effects. All notices must be provided directly to the consumer, in plain language, in all languages used in the deployer's ordinary course of business, and in a format accessible to consumers with disabilities. If direct notice is not feasible, the deployer must make the information available in a manner reasonably calculated to reach the consumer.

H-01.3

Deployers must, when a high-risk AI system has made or been a substantial factor in making an adverse consequential decision concerning a consumer, provide the consumer with: (1) a statement disclosing the principal reasons for the decision, including the degree to which and manner in which the AI system contributed, the type of data processed, and the source(s) of that data; (2) an opportunity to correct any incorrect personal data that the AI system processed in making the decision; and (3) an opportunity to appeal the adverse decision, which appeal must, if technically feasible, allow for human review — unless providing the appeal opportunity is not in the consumer's best interest (e.g., where delay might pose a risk to the consumer's life or safety).

H-01.1

Deployers must publish and periodically update on their website a clear statement summarizing: (1) the types of high-risk AI systems currently deployed; (2) how the deployer manages known or reasonably foreseeable risks of algorithmic discrimination from each deployed system; and (3) in detail, the nature, source, and extent of information collected and used by the deployer. Small deployers with fewer than 50 employees are exempt if other conditions in subsection (F) are met.

G-02.4

Deployers must, without unreasonable delay but no later than 90 days after discovery, notify the Attorney General in a prescribed form and manner upon discovering that a deployed high-risk AI system has caused algorithmic discrimination.

R-01.3

Deployers must, upon request by the Attorney General, disclose within 90 days the risk management policy, impact assessment, or records maintained under Section 37-31-30, in a form and manner prescribed by the Attorney General. Deployers may designate materials as proprietary or trade secret. Attorney-client privilege and work-product protection are preserved; disclosure does not constitute waiver. Documents produced are not subject to disclosure under the South Carolina Freedom of Information Act.

R-02.2

S.C. Code § 37-31-40

AI identity disclosure

DeployerDeveloper

(A)–(B) 17 Except as provided in subsection (B), a deployer or other developer that deploys, offers, sells, leases, licenses, gives, or otherwise makes available an artificial intelligence system that is intended to interact with consumers shall ensure the disclosure to each consumer who interacts with the artificial intelligence system that the consumer is interacting with an artificial intelligence system. (B) Disclosure is not required under subsection (A) under circumstances in which it would be obvious to a reasonable person that the person is interacting with an artificial intelligence system.

Section 37-31-40 imposes a disclosure obligation on deployers or other developers that make available an AI system intended to interact with consumers — not limited to high-risk AI systems. Subsection (A) requires disclosure to each consumer that they are interacting with an AI system. Subsection (B) carves out situations where it would be obvious to a reasonable person that they are interacting with AI.

Compliance actions 1 item

Deployers or other developers that make available an AI system intended to interact with consumers must disclose to each consumer that the consumer is interacting with an artificial intelligence system. Disclosure is not required where it would be obvious to a reasonable person that they are interacting with AI.

T-01.1

S.C. Code § 37-31-50

Exemptions and limitations

(A)–(F) Nothing in this chapter restricts a developer's, a deployer's, or other person's ability to: (1) comply with federal, state, or municipal laws, ordinances, or regulations; (2) comply with a civil, criminal, or regulatory inquiry, investigation, subpoena, or summons by a federal, a state, a municipal, or other governmental authority; (3) cooperate with a law enforcement agency concerning conduct or activity that the developer, deployer, or other person reasonably and in good faith believes may violate federal, state, or municipal laws, ordinances, or regulations; (4) investigate, establish, exercise, prepare for, or defend legal claims; (5) take immediate steps to protect an interest that is essential for the life or physical safety of a consumer or another individual; (6) by any means other than the use of facial recognition technology, prevent, detect, protect against, or respond to security incidents, identity theft, fraud, harassment, malicious or deceptive activities, or illegal activity; investigate, report, or prosecute the persons responsible for any such action; or preserve the integrity or security of systems; (7) engage in public or peer-reviewed scientific or statistical research in the public interest that adheres to all other applicable ethics and privacy laws and is conducted in accordance with 45 C.F.R. 46, as amended, or relevant requirements established by the federal Food and Drug Administration; (8) conduct research, testing, and development activities regarding an artificial intelligence system or model, other than testing conducted under real-world conditions, before the artificial intelligence system or model is placed on the market, deployed, or put into service, as applicable; or (9) assist another developer, deployer, or other person with any of the obligations imposed under this chapter. (B) The obligations imposed on developers, deployers, or other persons under this chapter do not restrict a developer's, a deployer's, or other person's ability to: (1) effectuate a product recall; or (2) identify and repair technical errors that impair existing or intended functionality. (C) The obligations imposed on developers, deployers, or other persons under this chapter do not apply where compliance with this chapter by the developer, deployer, or other person would violate an evidentiary privilege under the laws of this State. (D) Nothing in this chapter imposes any obligation on a developer, a deployer, or other person that adversely affects the rights or freedoms of a person, including the rights of a person to freedom of speech or freedom of the press that are guaranteed in: (1) The First Amendment to the United States Constitution; or (2) Section 2, Article I of the S.C. Constitution. (E) Nothing in this chapter applies to a developer, a deployer, or other person: (1) insofar as the developer, deployer, or other person develops, deploys, puts into service, or intentionally and substantially modifies, as applicable, a high-risk artificial intelligence system: (a) that has been approved, authorized, certified, cleared, developed, or granted by a federal agency, such as the federal Food and Drug Administration or the Federal Aviation Administration, acting within the scope of the federal agency's authority, or by a regulated entity subject to the supervision and regulation of the Federal Housing Finance Agency; or (b) in compliance with standards established by a federal agency, including standards established by the federal Office of the National Coordinator for Health Information Technology, or by a regulated entity subject to the supervision and regulation of the federal Housing Finance Agency, if the standards are substantially equivalent or more stringent than the requirements of this chapter; (2) conducting research to support an application for approval or certification from a federal agency, including the Federal Aviation Administration, the Federal Communications Commission, or the federal Food and Drug Administration or research to support an application otherwise subject to review by the federal agency; (3) performing work under, or in connection with, a contract with the United States Department of Commerce, the United States Department of Defense, or the National Aeronautics and Space Administration, unless the developer, deployer, or other person is performing the work on a high-risk artificial intelligence system that is used to make, or is a substantial factor in making, a decision concerning employment or housing; or (4) that is a covered entity within the meaning of the federal Health Insurance Portability and Accountability Act of 1996, 42 U.S.C. Sections 1320d to 1320d-9, and the regulations promulgated under the federal act, as both may be amended from time to time, and is providing healthcare recommendations that: (a) are generated by an artificial intelligence system; (b) require a healthcare provider to take action to implement the recommendations; and (c) are not considered to be high risk. (F) Nothing in this chapter applies to any artificial intelligence system that is acquired by or for the federal government or any federal agency or department, including the United States Department of Commerce, the United States Department of Defense, or the National Aeronautics and Space Administration, unless the artificial intelligence system is a high-risk artificial intelligence system that is used to make, or is a substantial factor in making, a decision concerning employment or housing.

Section 37-31-50 establishes a comprehensive set of exemptions and limitations, including carve-outs for compliance with other laws, law enforcement cooperation, legal claims, emergency safety, security incidents (excluding facial recognition), public research, pre-market R&D, product recalls, technical repairs, evidentiary privilege, First Amendment protections, federally approved or regulated AI systems, federal contract work (except for employment and housing decisions), and HIPAA-covered entities providing AI-generated healthcare recommendations that require provider action and are not considered high-risk. These provisions do not create new obligations and are savings clauses.

S.C. Code § 37-31-60

Enforcement

(1)–(6) Notwithstanding Section 37-31-30, the Attorney General has exclusive authority to enforce this chapter. (2) Except as provided in item (3), a violation of the requirements established in this chapter constitutes an unfair trade practice pursuant to the provisions of Chapter 6 of this title. (3) In any action commenced by the Attorney General to enforce this chapter, it is an affirmative defense that the developer, deployer, or other person: (a) discovers and cures a violation of this chapter as a result of: (i) feedback that the developer, deployer, or other person encourages deployers or users to provide to the developer, deployer, or other person; (ii) adversarial testing or red teaming, as those terms are defined or used by the National Institute of Standards and Technology; or (iii) an internal review process; and (b) is otherwise in compliance with: (i) the latest version of the "Artificial Intelligence Risk Management Framework" published by the National Institute of Standards and Technology in the United States Department of Commerce and standard ISO/IEC 42001 of the International Organization for Standardization; (ii) another nationally or internationally recognized risk management framework for artificial intelligence systems, if the standards are substantially equivalent to or more stringent than the requirements of this chapter; or (iii) any risk management framework for artificial intelligence systems that the Attorney General, in his discretion, may designate and, if designated, shall publicly disseminate. (4) A developer, a deployer, or other person bears the burden of demonstrating to the Attorney General that the requirements established in item (3) have been satisfied. (5) Nothing in this chapter, including the enforcement authority granted to the Attorney General under this section, preempts or otherwise affects any right, claim, remedy, presumption, or defense available at law or in equity. A rebuttable presumption or affirmative defense established under this chapter applies only to an enforcement action brought by the Attorney General pursuant to this section and does not apply to any right, claim, remedy, presumption, or defense available at law or in equity. (6) This chapter does not provide the basis for, and is not subject to, a private right of action for violations of this chapter or any other law.

Section 37-31-60 establishes the exclusive enforcement framework. The Attorney General has sole enforcement authority; there is no private right of action. Violations constitute unfair trade practices under Chapter 6 of Title 37. An affirmative defense is available when a developer, deployer, or other person discovers and cures a violation through user feedback, adversarial testing/red teaming, or internal review, and is otherwise in compliance with the NIST AI RMF, ISO/IEC 42001, another substantially equivalent recognized framework, or an AG-designated framework. The burden of demonstrating the affirmative defense falls on the party asserting it. The bill expressly preserves all existing rights, claims, remedies, and defenses at law or in equity, but the rebuttable presumption and affirmative defense apply only to AG enforcement actions.

S.C. Code § 37-31-70

Attorney General rulemaking authority

Section 37-31-70. The Attorney General may promulgate rules as necessary for the purpose of implementing and enforcing this chapter, including: (1) the documentation and requirements for developers pursuant to Section 37-31-20(B); (2) the contents of and requirements for the notices and disclosures required by Sections 37-31-20(E) and (G); 37-31-30(D), (E), (F), and (H); and 37-31-40; (3) the content and requirements of the risk management policy and program required by Section 37-31-30(B); (4) the content and requirements of the impact assessments required by Section 37-31-30(C); (5) the requirements for the rebuttable presumptions set forth in Sections 37-31-20 and 37-31-30; and (6) the requirements for the affirmative defense set forth in Section 37-31-60(C), including the process by which the Attorney General will recognize any other nationally or internationally recognized risk management framework for artificial intelligence systems.

Section 37-31-70 grants the Attorney General authority to promulgate rules for implementing and enforcing the chapter, covering developer documentation requirements, notice and disclosure requirements, risk management program content, impact assessment content, rebuttable presumption requirements, and affirmative defense requirements including the process for recognizing additional risk management frameworks. This section creates no independent compliance obligation for developers or deployers — it is an authorization provision for the regulatory authority.

Transparency AI identity disclosure · periodic reminders

1 item

T-01.1

Human Oversight Decision review · appeal pathways

7 items

H-02.3

H-02.10

H-02.8

At least annually, deployers or third parties contracted by deployers must review the deployment of each high-risk AI system to ensure the system is not causing algorithmic discrimination.

H-01.3