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| 1 | + | CALIFORNIA LEGISLATURE 20252026 REGULAR SESSION Assembly Bill No. 1405Introduced by Assembly Member Bauer-Kahan(Coauthor: Senator Wiener)February 21, 2025 An act to add Chapter 5.9.5 (commencing with Section 11549.80) to Part 1 of Division 3 of Title 2 of the Government Code, relating to artificial intelligence. LEGISLATIVE COUNSEL'S DIGESTAB 1405, as introduced, Bauer-Kahan. Artificial intelligence: auditors: enrollment.Existing law establishes the Department of Technology within the Government Operations Agency. Existing law requires the department to conduct, in coordination with other interagency bodies as it deems appropriate, a comprehensive inventory of all high-risk automated decision systems that have been proposed for use, development, or procurement by, or are being used, developed, or procured by, any state agency.Existing law defines automated decision system as a computational process derived from machine learning, statistical modeling, data analytics, or artificial intelligence that issues simplified output, including a score, classification, or recommendation, that is used to assist or replace human discretionary decisionmaking and materially impacts natural persons. Existing law defines artificial intelligence as 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.This bill would require the Government Operations Agency, by January 1, 2027, to establish a mechanism on the agencys internet website allowing AI auditors to enroll with the agency and allowing natural persons to report misconduct by an enrolled AI auditor. The bill would require the agency, commencing January 1, 2027, to publish information provided by an enrolled AI auditor on the agencys internet website and retain specified reports for as long as the auditor remains enrolled, plus 10 years.This bill would, commencing January 1, 2027, require an AI auditor, prior to initially conducting a covered audit, as defined, to enroll with the agency. The bill would require an AI auditor that enrolls with the agency to pay an enrollment fee, to be fixed by the agency by January 1, 2027, and provide specified information. The bill would impose various requirements on an AI auditor that conducts a covered audit, including, among other things, providing the auditee with an audit report after the covered audit.This bill would prohibit the AI auditor from accepting employment with an auditee within 12 months of completing a covered audit of the auditee, disclosing confidential information except under certain circumstances, and preventing an employee from engaging in, or retaliating against an employee who has engaged in, specified whistleblower activity.This bill would create the AI Auditors Enrollment Fund within the State Treasury, to be administered by the agency, and would require that all moneys collected or received by the agency pursuant to the above-described provisions be deposited into the fund to be available, upon appropriation by the Legislature, to administer the above-described provisions.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO Bill TextThe people of the State of California do enact as follows:SECTION 1. Chapter 5.9.5 (commencing with Section 11549.80) is added to Part 1 of Division 3 of Title 2 of the Government Code, to read: CHAPTER 5.9.5. Artificial Intelligence Auditors11549.80. For purposes of this chapter, the following definitions apply:(a) Agency means the Government Operations Agency.(b) Artificial intelligence or AI 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.(c) Artificial intelligence auditor or AI auditor means a person, partnership, or corporation that assesses an AI system or model on behalf of a third party.(d) Covered audit means an audit conducted pursuant to any state statute that requires an audit of an AI system or model by an independent third party auditor.11549.81. The AI Auditors Enrollment Fund is hereby created within the State Treasury. The fund shall be administered by the Government Operations Agency. All moneys collected or received by the agency under this chapter shall be deposited into the AI Auditors Enrollment Fund to be available for expenditure by the agency, upon appropriation by the Legislature, to administer this chapter.11549.82. (a) By January 1, 2027, the agency shall do all of the following:(1) Establish a mechanism on the agencys internet website allowing AI auditors to enroll with the agency pursuant to paragraph (1) of subdivision (a) of Section 11549.83.(2) Fix enrollment fees at an amount not exceeding the reasonable costs of administering this chapter.(3) Establish a mechanism on the agencys internet website allowing natural persons to report misconduct by an enrolled AI auditor.(b) Beginning January 1, 2027, the agency shall do both of the following:(1) Publish any information provided by an enrolled AI auditor pursuant to subdivision (a) of Section 11549.83 in a publicly accessible format on the agencys internet website.(2) Retain any report submitted using the mechanism established pursuant to paragraph (3) of subdivision (a) pertaining to an enrolled AI auditor for as long as the auditor remains enrolled, plus 10 years.11549.83. (a) Beginning January 1, 2027, prior to initially conducting a covered audit, an AI auditor shall do all of the following:(1) Enroll with the agency using the mechanism established pursuant to paragraph (1) of subdivision (a) of Section 11549.82.(2) Pay to the agency the enrollment fee set forth in paragraph (2) of subdivision (a) of Section 11549.82.(3) Provide to the agency all of the following information:(A) The name of the auditor.(B) All of the following contact information:(i) The primary physical address of the auditor, if the auditor has a physical address.(ii) The primary internet website of the auditor, if the auditor has an internet website.(iii) A telephone number enabling a natural person to communicate with the auditor.(iv) An email address enabling a natural person to communicate with the auditor.(C) The types of AI systems or models that the auditor is qualified to audit.(D) Any relevant qualifications, certifications, or accreditations the auditor wishes to provide.(E) A written description of the auditor and the services they provide, not to exceed 200 words in length.(F) A standard operating procedure (SOP) that describes the auditors procedures in sufficient detail to enable a third party to assess whether audits are conducted according to generally accepted industry best practices.(b) In conducting a covered audit, an enrolled AI auditor shall abide by generally accepted industry best practices appropriate to the system or model being audited.11549.84. (a) After conducting a covered audit, an enrolled AI auditor shall provide the auditee with an audit report that contains, but is not limited to, all of the following:(1) The results of the audit.(2) An explanation of any steps the auditee can take to meet generally accepted industry standards appropriate to the system or model being audited.(3) An explanation of any steps the auditee can take to become compliant with state law.(b) An AI auditor shall not knowingly make a material misrepresentation in an audit report prepared pursuant to this subdivision.(c) An enrolled AI auditor shall retain any documentation provided to an auditee pursuant to this chapter for at least 10 years.(d) An enrolled AI auditor shall not conduct a covered audit if it has a financial interest in the auditee other than a financial interest that is necessary for the performance of the audit.(e) Notwithstanding Chapter 1 (commencing with Section 16600) of Part 2 of Division 7 of the Business and Professions Code, an enrolled AI auditor shall not accept employment with an auditee within 12 months of completing a covered audit of the auditee.11549.85. (a) An enrolled AI auditor may disclose confidential information concerning an auditee only if the auditee provides written authorization or if the disclosure is any of the following:(1) Made in compliance with a subpoena or a summons enforceable by order of a court.(2) Reasonably necessary to maintain or defend the auditor in a legal proceeding initiated by the auditee.(3) Made in response to an official inquiry from a federal or state government regulatory agency.(4) Made to another enrolled AI auditor or person in connection with a proposed sale or merger of the auditors professional practice, provided the parties enter into a written nondisclosure agreement with regard to all auditee information shared between the parties.(5) Made to either of the following:(A) Another enrolled AI auditor to the extent necessary for purposes of professional consultation.(B) Organizations that provide professional standards review and ethics or quality control peer review.(6) Specifically permitted by state or federal law.(b) An enrolled AI auditor shall not do either of the following:(1) Prevent an employee from disclosing information to the Attorney General or the Labor Commissioner, or using the mechanism established pursuant to paragraph (3) of subdivision (a) of Section 11549.82, including through terms and conditions of employment or seeking to enforce terms and conditions of employment, if the employee has reasonable cause to believe the information indicates that the auditor is out of compliance with the requirements of this chapter.(2) Retaliate against an employee for disclosing information pursuant to paragraph (1). | |
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| 3 | + | CALIFORNIA LEGISLATURE 20252026 REGULAR SESSION Assembly Bill No. 1405Introduced by Assembly Member Bauer-Kahan(Coauthor: Senator Wiener)February 21, 2025 An act to add Chapter 5.9.5 (commencing with Section 11549.80) to Part 1 of Division 3 of Title 2 of the Government Code, relating to artificial intelligence. LEGISLATIVE COUNSEL'S DIGESTAB 1405, as introduced, Bauer-Kahan. Artificial intelligence: auditors: enrollment.Existing law establishes the Department of Technology within the Government Operations Agency. Existing law requires the department to conduct, in coordination with other interagency bodies as it deems appropriate, a comprehensive inventory of all high-risk automated decision systems that have been proposed for use, development, or procurement by, or are being used, developed, or procured by, any state agency.Existing law defines automated decision system as a computational process derived from machine learning, statistical modeling, data analytics, or artificial intelligence that issues simplified output, including a score, classification, or recommendation, that is used to assist or replace human discretionary decisionmaking and materially impacts natural persons. Existing law defines artificial intelligence as 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.This bill would require the Government Operations Agency, by January 1, 2027, to establish a mechanism on the agencys internet website allowing AI auditors to enroll with the agency and allowing natural persons to report misconduct by an enrolled AI auditor. The bill would require the agency, commencing January 1, 2027, to publish information provided by an enrolled AI auditor on the agencys internet website and retain specified reports for as long as the auditor remains enrolled, plus 10 years.This bill would, commencing January 1, 2027, require an AI auditor, prior to initially conducting a covered audit, as defined, to enroll with the agency. The bill would require an AI auditor that enrolls with the agency to pay an enrollment fee, to be fixed by the agency by January 1, 2027, and provide specified information. The bill would impose various requirements on an AI auditor that conducts a covered audit, including, among other things, providing the auditee with an audit report after the covered audit.This bill would prohibit the AI auditor from accepting employment with an auditee within 12 months of completing a covered audit of the auditee, disclosing confidential information except under certain circumstances, and preventing an employee from engaging in, or retaliating against an employee who has engaged in, specified whistleblower activity.This bill would create the AI Auditors Enrollment Fund within the State Treasury, to be administered by the agency, and would require that all moneys collected or received by the agency pursuant to the above-described provisions be deposited into the fund to be available, upon appropriation by the Legislature, to administer the above-described provisions.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO | |
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| 5 | - | Amended IN Assembly April 03, 2025 | |
| 6 | 5 | ||
| 7 | - | Amended IN Assembly April 03, 2025 | |
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| 7 | + | ||
| 8 | 8 | ||
| 9 | 9 | CALIFORNIA LEGISLATURE 20252026 REGULAR SESSION | |
| 10 | 10 | ||
| 11 | 11 | Assembly Bill | |
| 12 | 12 | ||
| 13 | 13 | No. 1405 | |
| 14 | 14 | ||
| 15 | 15 | Introduced by Assembly Member Bauer-Kahan(Coauthor: Senator Wiener)February 21, 2025 | |
| 16 | 16 | ||
| 17 | 17 | Introduced by Assembly Member Bauer-Kahan(Coauthor: Senator Wiener) | |
| 18 | 18 | February 21, 2025 | |
| 19 | 19 | ||
| 20 | 20 | An act to add Chapter 5.9.5 (commencing with Section 11549.80) to Part 1 of Division 3 of Title 2 of the Government Code, relating to artificial intelligence. | |
| 21 | 21 | ||
| 22 | 22 | LEGISLATIVE COUNSEL'S DIGEST | |
| 23 | 23 | ||
| 24 | 24 | ## LEGISLATIVE COUNSEL'S DIGEST | |
| 25 | 25 | ||
| 26 | - | AB 1405, as | |
| 26 | + | AB 1405, as introduced, Bauer-Kahan. Artificial intelligence: auditors: enrollment. | |
| 27 | 27 | ||
| 28 | - | Existing law establishes the Department of Technology within the Government Operations Agency. Existing law requires the department to conduct, in coordination with other interagency bodies as it deems appropriate, a comprehensive inventory of all high-risk automated decision systems that have been proposed for use, development, or procurement by, or are being used, developed, or procured by, any state agency.Existing law defines automated decision system as a computational process derived from machine learning, statistical modeling, data analytics, or artificial intelligence that issues simplified output, including a score, classification, or recommendation, that is used to assist or replace human discretionary decisionmaking and materially impacts natural persons. Existing law defines artificial intelligence as 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.This bill would require the Government Operations Agency, by January 1, 2027, to establish a mechanism on the agencys internet website allowing AI auditors to enroll with the agency and allowing natural persons to report misconduct by an enrolled AI auditor. The bill would require the agency, commencing January 1, 2027, to publish information provided by an enrolled AI auditor on the agencys internet website and | |
| 28 | + | Existing law establishes the Department of Technology within the Government Operations Agency. Existing law requires the department to conduct, in coordination with other interagency bodies as it deems appropriate, a comprehensive inventory of all high-risk automated decision systems that have been proposed for use, development, or procurement by, or are being used, developed, or procured by, any state agency.Existing law defines automated decision system as a computational process derived from machine learning, statistical modeling, data analytics, or artificial intelligence that issues simplified output, including a score, classification, or recommendation, that is used to assist or replace human discretionary decisionmaking and materially impacts natural persons. Existing law defines artificial intelligence as 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.This bill would require the Government Operations Agency, by January 1, 2027, to establish a mechanism on the agencys internet website allowing AI auditors to enroll with the agency and allowing natural persons to report misconduct by an enrolled AI auditor. The bill would require the agency, commencing January 1, 2027, to publish information provided by an enrolled AI auditor on the agencys internet website and retain specified reports for as long as the auditor remains enrolled, plus 10 years.This bill would, commencing January 1, 2027, require an AI auditor, prior to initially conducting a covered audit, as defined, to enroll with the agency. The bill would require an AI auditor that enrolls with the agency to pay an enrollment fee, to be fixed by the agency by January 1, 2027, and provide specified information. The bill would impose various requirements on an AI auditor that conducts a covered audit, including, among other things, providing the auditee with an audit report after the covered audit.This bill would prohibit the AI auditor from accepting employment with an auditee within 12 months of completing a covered audit of the auditee, disclosing confidential information except under certain circumstances, and preventing an employee from engaging in, or retaliating against an employee who has engaged in, specified whistleblower activity.This bill would create the AI Auditors Enrollment Fund within the State Treasury, to be administered by the agency, and would require that all moneys collected or received by the agency pursuant to the above-described provisions be deposited into the fund to be available, upon appropriation by the Legislature, to administer the above-described provisions. | |
| 29 | 29 | ||
| 30 | 30 | Existing law establishes the Department of Technology within the Government Operations Agency. Existing law requires the department to conduct, in coordination with other interagency bodies as it deems appropriate, a comprehensive inventory of all high-risk automated decision systems that have been proposed for use, development, or procurement by, or are being used, developed, or procured by, any state agency. | |
| 31 | 31 | ||
| 32 | 32 | Existing law defines automated decision system as a computational process derived from machine learning, statistical modeling, data analytics, or artificial intelligence that issues simplified output, including a score, classification, or recommendation, that is used to assist or replace human discretionary decisionmaking and materially impacts natural persons. Existing law defines artificial intelligence as 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. | |
| 33 | 33 | ||
| 34 | - | This bill would require the Government Operations Agency, by January 1, 2027, to establish a mechanism on the agencys internet website allowing AI auditors to enroll with the agency and allowing natural persons to report misconduct by an enrolled AI auditor. The bill would require the agency, commencing January 1, 2027, to publish information provided by an enrolled AI auditor on the agencys internet website and | |
| 34 | + | This bill would require the Government Operations Agency, by January 1, 2027, to establish a mechanism on the agencys internet website allowing AI auditors to enroll with the agency and allowing natural persons to report misconduct by an enrolled AI auditor. The bill would require the agency, commencing January 1, 2027, to publish information provided by an enrolled AI auditor on the agencys internet website and retain specified reports for as long as the auditor remains enrolled, plus 10 years. | |
| 35 | 35 | ||
| 36 | 36 | This bill would, commencing January 1, 2027, require an AI auditor, prior to initially conducting a covered audit, as defined, to enroll with the agency. The bill would require an AI auditor that enrolls with the agency to pay an enrollment fee, to be fixed by the agency by January 1, 2027, and provide specified information. The bill would impose various requirements on an AI auditor that conducts a covered audit, including, among other things, providing the auditee with an audit report after the covered audit. | |
| 37 | 37 | ||
| 38 | - | This bill would prohibit the AI auditor from accepting employment with an auditee within 12 months of completing a covered audit of the auditee | |
| 38 | + | This bill would prohibit the AI auditor from accepting employment with an auditee within 12 months of completing a covered audit of the auditee, disclosing confidential information except under certain circumstances, and preventing an employee from engaging in, or retaliating against an employee who has engaged in, specified whistleblower activity. | |
| 39 | 39 | ||
| 40 | 40 | This bill would create the AI Auditors Enrollment Fund within the State Treasury, to be administered by the agency, and would require that all moneys collected or received by the agency pursuant to the above-described provisions be deposited into the fund to be available, upon appropriation by the Legislature, to administer the above-described provisions. | |
| 41 | 41 | ||
| 42 | 42 | ## Digest Key | |
| 43 | 43 | ||
| 44 | 44 | ## Bill Text | |
| 45 | 45 | ||
| 46 | - | The people of the State of California do enact as follows:SECTION 1. Chapter 5.9.5 (commencing with Section 11549.80) is added to Part 1 of Division 3 of Title 2 of the Government Code, to read: CHAPTER 5.9.5. Artificial Intelligence Auditors11549.80. For purposes of this chapter, the following definitions apply:(a) Agency means the Government Operations Agency.(b) Artificial intelligence or AI 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.(c) Artificial intelligence auditor or AI auditor means a person, partnership, or corporation that assesses an AI system or model on behalf of a third party.(d) Covered audit means an audit conducted pursuant to any state statute that requires an audit of an AI system or model by an independent third party auditor.11549.81. The AI Auditors Enrollment Fund is hereby created within the State Treasury. The fund shall be administered by the Government Operations Agency. All moneys collected or received by the agency under this chapter shall be deposited into the AI Auditors Enrollment Fund to be available for expenditure by the agency, upon appropriation by the Legislature, to administer this chapter.11549.82. (a) By January 1, 2027, the agency shall do all of the following:(1) Establish a mechanism on the agencys internet website allowing AI auditors to enroll with the agency pursuant to paragraph (1) of subdivision (a) of Section 11549.83.(2) Fix enrollment fees at an amount not exceeding the reasonable costs of administering this chapter.(3) Establish a mechanism on the agencys internet website allowing natural persons to report misconduct by an enrolled AI auditor.(b) Beginning January 1, 2027, the agency shall do both | |
| 46 | + | The people of the State of California do enact as follows:SECTION 1. Chapter 5.9.5 (commencing with Section 11549.80) is added to Part 1 of Division 3 of Title 2 of the Government Code, to read: CHAPTER 5.9.5. Artificial Intelligence Auditors11549.80. For purposes of this chapter, the following definitions apply:(a) Agency means the Government Operations Agency.(b) Artificial intelligence or AI 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.(c) Artificial intelligence auditor or AI auditor means a person, partnership, or corporation that assesses an AI system or model on behalf of a third party.(d) Covered audit means an audit conducted pursuant to any state statute that requires an audit of an AI system or model by an independent third party auditor.11549.81. The AI Auditors Enrollment Fund is hereby created within the State Treasury. The fund shall be administered by the Government Operations Agency. All moneys collected or received by the agency under this chapter shall be deposited into the AI Auditors Enrollment Fund to be available for expenditure by the agency, upon appropriation by the Legislature, to administer this chapter.11549.82. (a) By January 1, 2027, the agency shall do all of the following:(1) Establish a mechanism on the agencys internet website allowing AI auditors to enroll with the agency pursuant to paragraph (1) of subdivision (a) of Section 11549.83.(2) Fix enrollment fees at an amount not exceeding the reasonable costs of administering this chapter.(3) Establish a mechanism on the agencys internet website allowing natural persons to report misconduct by an enrolled AI auditor.(b) Beginning January 1, 2027, the agency shall do both of the following:(1) Publish any information provided by an enrolled AI auditor pursuant to subdivision (a) of Section 11549.83 in a publicly accessible format on the agencys internet website.(2) Retain any report submitted using the mechanism established pursuant to paragraph (3) of subdivision (a) pertaining to an enrolled AI auditor for as long as the auditor remains enrolled, plus 10 years.11549.83. (a) Beginning January 1, 2027, prior to initially conducting a covered audit, an AI auditor shall do all of the following:(1) Enroll with the agency using the mechanism established pursuant to paragraph (1) of subdivision (a) of Section 11549.82.(2) Pay to the agency the enrollment fee set forth in paragraph (2) of subdivision (a) of Section 11549.82.(3) Provide to the agency all of the following information:(A) The name of the auditor.(B) All of the following contact information:(i) The primary physical address of the auditor, if the auditor has a physical address.(ii) The primary internet website of the auditor, if the auditor has an internet website.(iii) A telephone number enabling a natural person to communicate with the auditor.(iv) An email address enabling a natural person to communicate with the auditor.(C) The types of AI systems or models that the auditor is qualified to audit.(D) Any relevant qualifications, certifications, or accreditations the auditor wishes to provide.(E) A written description of the auditor and the services they provide, not to exceed 200 words in length.(F) A standard operating procedure (SOP) that describes the auditors procedures in sufficient detail to enable a third party to assess whether audits are conducted according to generally accepted industry best practices.(b) In conducting a covered audit, an enrolled AI auditor shall abide by generally accepted industry best practices appropriate to the system or model being audited.11549.84. (a) After conducting a covered audit, an enrolled AI auditor shall provide the auditee with an audit report that contains, but is not limited to, all of the following:(1) The results of the audit.(2) An explanation of any steps the auditee can take to meet generally accepted industry standards appropriate to the system or model being audited.(3) An explanation of any steps the auditee can take to become compliant with state law.(b) An AI auditor shall not knowingly make a material misrepresentation in an audit report prepared pursuant to this subdivision.(c) An enrolled AI auditor shall retain any documentation provided to an auditee pursuant to this chapter for at least 10 years.(d) An enrolled AI auditor shall not conduct a covered audit if it has a financial interest in the auditee other than a financial interest that is necessary for the performance of the audit.(e) Notwithstanding Chapter 1 (commencing with Section 16600) of Part 2 of Division 7 of the Business and Professions Code, an enrolled AI auditor shall not accept employment with an auditee within 12 months of completing a covered audit of the auditee.11549.85. (a) An enrolled AI auditor may disclose confidential information concerning an auditee only if the auditee provides written authorization or if the disclosure is any of the following:(1) Made in compliance with a subpoena or a summons enforceable by order of a court.(2) Reasonably necessary to maintain or defend the auditor in a legal proceeding initiated by the auditee.(3) Made in response to an official inquiry from a federal or state government regulatory agency.(4) Made to another enrolled AI auditor or person in connection with a proposed sale or merger of the auditors professional practice, provided the parties enter into a written nondisclosure agreement with regard to all auditee information shared between the parties.(5) Made to either of the following:(A) Another enrolled AI auditor to the extent necessary for purposes of professional consultation.(B) Organizations that provide professional standards review and ethics or quality control peer review.(6) Specifically permitted by state or federal law.(b) An enrolled AI auditor shall not do either of the following:(1) Prevent an employee from disclosing information to the Attorney General or the Labor Commissioner, or using the mechanism established pursuant to paragraph (3) of subdivision (a) of Section 11549.82, including through terms and conditions of employment or seeking to enforce terms and conditions of employment, if the employee has reasonable cause to believe the information indicates that the auditor is out of compliance with the requirements of this chapter.(2) Retaliate against an employee for disclosing information pursuant to paragraph (1). | |
| 47 | 47 | ||
| 48 | 48 | The people of the State of California do enact as follows: | |
| 49 | 49 | ||
| 50 | 50 | ## The people of the State of California do enact as follows: | |
| 51 | 51 | ||
| 52 | - | SECTION 1. Chapter 5.9.5 (commencing with Section 11549.80) is added to Part 1 of Division 3 of Title 2 of the Government Code, to read: CHAPTER 5.9.5. Artificial Intelligence Auditors11549.80. For purposes of this chapter, the following definitions apply:(a) Agency means the Government Operations Agency.(b) Artificial intelligence or AI 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.(c) Artificial intelligence auditor or AI auditor means a person, partnership, or corporation that assesses an AI system or model on behalf of a third party.(d) Covered audit means an audit conducted pursuant to any state statute that requires an audit of an AI system or model by an independent third party auditor.11549.81. The AI Auditors Enrollment Fund is hereby created within the State Treasury. The fund shall be administered by the Government Operations Agency. All moneys collected or received by the agency under this chapter shall be deposited into the AI Auditors Enrollment Fund to be available for expenditure by the agency, upon appropriation by the Legislature, to administer this chapter.11549.82. (a) By January 1, 2027, the agency shall do all of the following:(1) Establish a mechanism on the agencys internet website allowing AI auditors to enroll with the agency pursuant to paragraph (1) of subdivision (a) of Section 11549.83.(2) Fix enrollment fees at an amount not exceeding the reasonable costs of administering this chapter.(3) Establish a mechanism on the agencys internet website allowing natural persons to report misconduct by an enrolled AI auditor.(b) Beginning January 1, 2027, the agency shall do both | |
| 52 | + | SECTION 1. Chapter 5.9.5 (commencing with Section 11549.80) is added to Part 1 of Division 3 of Title 2 of the Government Code, to read: CHAPTER 5.9.5. Artificial Intelligence Auditors11549.80. For purposes of this chapter, the following definitions apply:(a) Agency means the Government Operations Agency.(b) Artificial intelligence or AI 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.(c) Artificial intelligence auditor or AI auditor means a person, partnership, or corporation that assesses an AI system or model on behalf of a third party.(d) Covered audit means an audit conducted pursuant to any state statute that requires an audit of an AI system or model by an independent third party auditor.11549.81. The AI Auditors Enrollment Fund is hereby created within the State Treasury. The fund shall be administered by the Government Operations Agency. All moneys collected or received by the agency under this chapter shall be deposited into the AI Auditors Enrollment Fund to be available for expenditure by the agency, upon appropriation by the Legislature, to administer this chapter.11549.82. (a) By January 1, 2027, the agency shall do all of the following:(1) Establish a mechanism on the agencys internet website allowing AI auditors to enroll with the agency pursuant to paragraph (1) of subdivision (a) of Section 11549.83.(2) Fix enrollment fees at an amount not exceeding the reasonable costs of administering this chapter.(3) Establish a mechanism on the agencys internet website allowing natural persons to report misconduct by an enrolled AI auditor.(b) Beginning January 1, 2027, the agency shall do both of the following:(1) Publish any information provided by an enrolled AI auditor pursuant to subdivision (a) of Section 11549.83 in a publicly accessible format on the agencys internet website.(2) Retain any report submitted using the mechanism established pursuant to paragraph (3) of subdivision (a) pertaining to an enrolled AI auditor for as long as the auditor remains enrolled, plus 10 years.11549.83. (a) Beginning January 1, 2027, prior to initially conducting a covered audit, an AI auditor shall do all of the following:(1) Enroll with the agency using the mechanism established pursuant to paragraph (1) of subdivision (a) of Section 11549.82.(2) Pay to the agency the enrollment fee set forth in paragraph (2) of subdivision (a) of Section 11549.82.(3) Provide to the agency all of the following information:(A) The name of the auditor.(B) All of the following contact information:(i) The primary physical address of the auditor, if the auditor has a physical address.(ii) The primary internet website of the auditor, if the auditor has an internet website.(iii) A telephone number enabling a natural person to communicate with the auditor.(iv) An email address enabling a natural person to communicate with the auditor.(C) The types of AI systems or models that the auditor is qualified to audit.(D) Any relevant qualifications, certifications, or accreditations the auditor wishes to provide.(E) A written description of the auditor and the services they provide, not to exceed 200 words in length.(F) A standard operating procedure (SOP) that describes the auditors procedures in sufficient detail to enable a third party to assess whether audits are conducted according to generally accepted industry best practices.(b) In conducting a covered audit, an enrolled AI auditor shall abide by generally accepted industry best practices appropriate to the system or model being audited.11549.84. (a) After conducting a covered audit, an enrolled AI auditor shall provide the auditee with an audit report that contains, but is not limited to, all of the following:(1) The results of the audit.(2) An explanation of any steps the auditee can take to meet generally accepted industry standards appropriate to the system or model being audited.(3) An explanation of any steps the auditee can take to become compliant with state law.(b) An AI auditor shall not knowingly make a material misrepresentation in an audit report prepared pursuant to this subdivision.(c) An enrolled AI auditor shall retain any documentation provided to an auditee pursuant to this chapter for at least 10 years.(d) An enrolled AI auditor shall not conduct a covered audit if it has a financial interest in the auditee other than a financial interest that is necessary for the performance of the audit.(e) Notwithstanding Chapter 1 (commencing with Section 16600) of Part 2 of Division 7 of the Business and Professions Code, an enrolled AI auditor shall not accept employment with an auditee within 12 months of completing a covered audit of the auditee.11549.85. (a) An enrolled AI auditor may disclose confidential information concerning an auditee only if the auditee provides written authorization or if the disclosure is any of the following:(1) Made in compliance with a subpoena or a summons enforceable by order of a court.(2) Reasonably necessary to maintain or defend the auditor in a legal proceeding initiated by the auditee.(3) Made in response to an official inquiry from a federal or state government regulatory agency.(4) Made to another enrolled AI auditor or person in connection with a proposed sale or merger of the auditors professional practice, provided the parties enter into a written nondisclosure agreement with regard to all auditee information shared between the parties.(5) Made to either of the following:(A) Another enrolled AI auditor to the extent necessary for purposes of professional consultation.(B) Organizations that provide professional standards review and ethics or quality control peer review.(6) Specifically permitted by state or federal law.(b) An enrolled AI auditor shall not do either of the following:(1) Prevent an employee from disclosing information to the Attorney General or the Labor Commissioner, or using the mechanism established pursuant to paragraph (3) of subdivision (a) of Section 11549.82, including through terms and conditions of employment or seeking to enforce terms and conditions of employment, if the employee has reasonable cause to believe the information indicates that the auditor is out of compliance with the requirements of this chapter.(2) Retaliate against an employee for disclosing information pursuant to paragraph (1). | |
| 53 | 53 | ||
| 54 | 54 | SECTION 1. Chapter 5.9.5 (commencing with Section 11549.80) is added to Part 1 of Division 3 of Title 2 of the Government Code, to read: | |
| 55 | 55 | ||
| 56 | 56 | ### SECTION 1. | |
| 57 | 57 | ||
| 58 | - | CHAPTER 5.9.5. Artificial Intelligence Auditors11549.80. For purposes of this chapter, the following definitions apply:(a) Agency means the Government Operations Agency.(b) Artificial intelligence or AI 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.(c) Artificial intelligence auditor or AI auditor means a person, partnership, or corporation that assesses an AI system or model on behalf of a third party.(d) Covered audit means an audit conducted pursuant to any state statute that requires an audit of an AI system or model by an independent third party auditor.11549.81. The AI Auditors Enrollment Fund is hereby created within the State Treasury. The fund shall be administered by the Government Operations Agency. All moneys collected or received by the agency under this chapter shall be deposited into the AI Auditors Enrollment Fund to be available for expenditure by the agency, upon appropriation by the Legislature, to administer this chapter.11549.82. (a) By January 1, 2027, the agency shall do all of the following:(1) Establish a mechanism on the agencys internet website allowing AI auditors to enroll with the agency pursuant to paragraph (1) of subdivision (a) of Section 11549.83.(2) Fix enrollment fees at an amount not exceeding the reasonable costs of administering this chapter.(3) Establish a mechanism on the agencys internet website allowing natural persons to report misconduct by an enrolled AI auditor.(b) Beginning January 1, 2027, the agency shall do both | |
| 58 | + | CHAPTER 5.9.5. Artificial Intelligence Auditors11549.80. For purposes of this chapter, the following definitions apply:(a) Agency means the Government Operations Agency.(b) Artificial intelligence or AI 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.(c) Artificial intelligence auditor or AI auditor means a person, partnership, or corporation that assesses an AI system or model on behalf of a third party.(d) Covered audit means an audit conducted pursuant to any state statute that requires an audit of an AI system or model by an independent third party auditor.11549.81. The AI Auditors Enrollment Fund is hereby created within the State Treasury. The fund shall be administered by the Government Operations Agency. All moneys collected or received by the agency under this chapter shall be deposited into the AI Auditors Enrollment Fund to be available for expenditure by the agency, upon appropriation by the Legislature, to administer this chapter.11549.82. (a) By January 1, 2027, the agency shall do all of the following:(1) Establish a mechanism on the agencys internet website allowing AI auditors to enroll with the agency pursuant to paragraph (1) of subdivision (a) of Section 11549.83.(2) Fix enrollment fees at an amount not exceeding the reasonable costs of administering this chapter.(3) Establish a mechanism on the agencys internet website allowing natural persons to report misconduct by an enrolled AI auditor.(b) Beginning January 1, 2027, the agency shall do both of the following:(1) Publish any information provided by an enrolled AI auditor pursuant to subdivision (a) of Section 11549.83 in a publicly accessible format on the agencys internet website.(2) Retain any report submitted using the mechanism established pursuant to paragraph (3) of subdivision (a) pertaining to an enrolled AI auditor for as long as the auditor remains enrolled, plus 10 years.11549.83. (a) Beginning January 1, 2027, prior to initially conducting a covered audit, an AI auditor shall do all of the following:(1) Enroll with the agency using the mechanism established pursuant to paragraph (1) of subdivision (a) of Section 11549.82.(2) Pay to the agency the enrollment fee set forth in paragraph (2) of subdivision (a) of Section 11549.82.(3) Provide to the agency all of the following information:(A) The name of the auditor.(B) All of the following contact information:(i) The primary physical address of the auditor, if the auditor has a physical address.(ii) The primary internet website of the auditor, if the auditor has an internet website.(iii) A telephone number enabling a natural person to communicate with the auditor.(iv) An email address enabling a natural person to communicate with the auditor.(C) The types of AI systems or models that the auditor is qualified to audit.(D) Any relevant qualifications, certifications, or accreditations the auditor wishes to provide.(E) A written description of the auditor and the services they provide, not to exceed 200 words in length.(F) A standard operating procedure (SOP) that describes the auditors procedures in sufficient detail to enable a third party to assess whether audits are conducted according to generally accepted industry best practices.(b) In conducting a covered audit, an enrolled AI auditor shall abide by generally accepted industry best practices appropriate to the system or model being audited.11549.84. (a) After conducting a covered audit, an enrolled AI auditor shall provide the auditee with an audit report that contains, but is not limited to, all of the following:(1) The results of the audit.(2) An explanation of any steps the auditee can take to meet generally accepted industry standards appropriate to the system or model being audited.(3) An explanation of any steps the auditee can take to become compliant with state law.(b) An AI auditor shall not knowingly make a material misrepresentation in an audit report prepared pursuant to this subdivision.(c) An enrolled AI auditor shall retain any documentation provided to an auditee pursuant to this chapter for at least 10 years.(d) An enrolled AI auditor shall not conduct a covered audit if it has a financial interest in the auditee other than a financial interest that is necessary for the performance of the audit.(e) Notwithstanding Chapter 1 (commencing with Section 16600) of Part 2 of Division 7 of the Business and Professions Code, an enrolled AI auditor shall not accept employment with an auditee within 12 months of completing a covered audit of the auditee.11549.85. (a) An enrolled AI auditor may disclose confidential information concerning an auditee only if the auditee provides written authorization or if the disclosure is any of the following:(1) Made in compliance with a subpoena or a summons enforceable by order of a court.(2) Reasonably necessary to maintain or defend the auditor in a legal proceeding initiated by the auditee.(3) Made in response to an official inquiry from a federal or state government regulatory agency.(4) Made to another enrolled AI auditor or person in connection with a proposed sale or merger of the auditors professional practice, provided the parties enter into a written nondisclosure agreement with regard to all auditee information shared between the parties.(5) Made to either of the following:(A) Another enrolled AI auditor to the extent necessary for purposes of professional consultation.(B) Organizations that provide professional standards review and ethics or quality control peer review.(6) Specifically permitted by state or federal law.(b) An enrolled AI auditor shall not do either of the following:(1) Prevent an employee from disclosing information to the Attorney General or the Labor Commissioner, or using the mechanism established pursuant to paragraph (3) of subdivision (a) of Section 11549.82, including through terms and conditions of employment or seeking to enforce terms and conditions of employment, if the employee has reasonable cause to believe the information indicates that the auditor is out of compliance with the requirements of this chapter.(2) Retaliate against an employee for disclosing information pursuant to paragraph (1). | |
| 59 | 59 | ||
| 60 | - | CHAPTER 5.9.5. Artificial Intelligence Auditors11549.80. For purposes of this chapter, the following definitions apply:(a) Agency means the Government Operations Agency.(b) Artificial intelligence or AI 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.(c) Artificial intelligence auditor or AI auditor means a person, partnership, or corporation that assesses an AI system or model on behalf of a third party.(d) Covered audit means an audit conducted pursuant to any state statute that requires an audit of an AI system or model by an independent third party auditor.11549.81. The AI Auditors Enrollment Fund is hereby created within the State Treasury. The fund shall be administered by the Government Operations Agency. All moneys collected or received by the agency under this chapter shall be deposited into the AI Auditors Enrollment Fund to be available for expenditure by the agency, upon appropriation by the Legislature, to administer this chapter.11549.82. (a) By January 1, 2027, the agency shall do all of the following:(1) Establish a mechanism on the agencys internet website allowing AI auditors to enroll with the agency pursuant to paragraph (1) of subdivision (a) of Section 11549.83.(2) Fix enrollment fees at an amount not exceeding the reasonable costs of administering this chapter.(3) Establish a mechanism on the agencys internet website allowing natural persons to report misconduct by an enrolled AI auditor.(b) Beginning January 1, 2027, the agency shall do both | |
| 60 | + | CHAPTER 5.9.5. Artificial Intelligence Auditors11549.80. For purposes of this chapter, the following definitions apply:(a) Agency means the Government Operations Agency.(b) Artificial intelligence or AI 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.(c) Artificial intelligence auditor or AI auditor means a person, partnership, or corporation that assesses an AI system or model on behalf of a third party.(d) Covered audit means an audit conducted pursuant to any state statute that requires an audit of an AI system or model by an independent third party auditor.11549.81. The AI Auditors Enrollment Fund is hereby created within the State Treasury. The fund shall be administered by the Government Operations Agency. All moneys collected or received by the agency under this chapter shall be deposited into the AI Auditors Enrollment Fund to be available for expenditure by the agency, upon appropriation by the Legislature, to administer this chapter.11549.82. (a) By January 1, 2027, the agency shall do all of the following:(1) Establish a mechanism on the agencys internet website allowing AI auditors to enroll with the agency pursuant to paragraph (1) of subdivision (a) of Section 11549.83.(2) Fix enrollment fees at an amount not exceeding the reasonable costs of administering this chapter.(3) Establish a mechanism on the agencys internet website allowing natural persons to report misconduct by an enrolled AI auditor.(b) Beginning January 1, 2027, the agency shall do both of the following:(1) Publish any information provided by an enrolled AI auditor pursuant to subdivision (a) of Section 11549.83 in a publicly accessible format on the agencys internet website.(2) Retain any report submitted using the mechanism established pursuant to paragraph (3) of subdivision (a) pertaining to an enrolled AI auditor for as long as the auditor remains enrolled, plus 10 years.11549.83. (a) Beginning January 1, 2027, prior to initially conducting a covered audit, an AI auditor shall do all of the following:(1) Enroll with the agency using the mechanism established pursuant to paragraph (1) of subdivision (a) of Section 11549.82.(2) Pay to the agency the enrollment fee set forth in paragraph (2) of subdivision (a) of Section 11549.82.(3) Provide to the agency all of the following information:(A) The name of the auditor.(B) All of the following contact information:(i) The primary physical address of the auditor, if the auditor has a physical address.(ii) The primary internet website of the auditor, if the auditor has an internet website.(iii) A telephone number enabling a natural person to communicate with the auditor.(iv) An email address enabling a natural person to communicate with the auditor.(C) The types of AI systems or models that the auditor is qualified to audit.(D) Any relevant qualifications, certifications, or accreditations the auditor wishes to provide.(E) A written description of the auditor and the services they provide, not to exceed 200 words in length.(F) A standard operating procedure (SOP) that describes the auditors procedures in sufficient detail to enable a third party to assess whether audits are conducted according to generally accepted industry best practices.(b) In conducting a covered audit, an enrolled AI auditor shall abide by generally accepted industry best practices appropriate to the system or model being audited.11549.84. (a) After conducting a covered audit, an enrolled AI auditor shall provide the auditee with an audit report that contains, but is not limited to, all of the following:(1) The results of the audit.(2) An explanation of any steps the auditee can take to meet generally accepted industry standards appropriate to the system or model being audited.(3) An explanation of any steps the auditee can take to become compliant with state law.(b) An AI auditor shall not knowingly make a material misrepresentation in an audit report prepared pursuant to this subdivision.(c) An enrolled AI auditor shall retain any documentation provided to an auditee pursuant to this chapter for at least 10 years.(d) An enrolled AI auditor shall not conduct a covered audit if it has a financial interest in the auditee other than a financial interest that is necessary for the performance of the audit.(e) Notwithstanding Chapter 1 (commencing with Section 16600) of Part 2 of Division 7 of the Business and Professions Code, an enrolled AI auditor shall not accept employment with an auditee within 12 months of completing a covered audit of the auditee.11549.85. (a) An enrolled AI auditor may disclose confidential information concerning an auditee only if the auditee provides written authorization or if the disclosure is any of the following:(1) Made in compliance with a subpoena or a summons enforceable by order of a court.(2) Reasonably necessary to maintain or defend the auditor in a legal proceeding initiated by the auditee.(3) Made in response to an official inquiry from a federal or state government regulatory agency.(4) Made to another enrolled AI auditor or person in connection with a proposed sale or merger of the auditors professional practice, provided the parties enter into a written nondisclosure agreement with regard to all auditee information shared between the parties.(5) Made to either of the following:(A) Another enrolled AI auditor to the extent necessary for purposes of professional consultation.(B) Organizations that provide professional standards review and ethics or quality control peer review.(6) Specifically permitted by state or federal law.(b) An enrolled AI auditor shall not do either of the following:(1) Prevent an employee from disclosing information to the Attorney General or the Labor Commissioner, or using the mechanism established pursuant to paragraph (3) of subdivision (a) of Section 11549.82, including through terms and conditions of employment or seeking to enforce terms and conditions of employment, if the employee has reasonable cause to believe the information indicates that the auditor is out of compliance with the requirements of this chapter.(2) Retaliate against an employee for disclosing information pursuant to paragraph (1). | |
| 61 | 61 | ||
| 62 | 62 | CHAPTER 5.9.5. Artificial Intelligence Auditors | |
| 63 | 63 | ||
| 64 | 64 | CHAPTER 5.9.5. Artificial Intelligence Auditors | |
| 65 | 65 | ||
| 66 | 66 | 11549.80. For purposes of this chapter, the following definitions apply:(a) Agency means the Government Operations Agency.(b) Artificial intelligence or AI 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.(c) Artificial intelligence auditor or AI auditor means a person, partnership, or corporation that assesses an AI system or model on behalf of a third party.(d) Covered audit means an audit conducted pursuant to any state statute that requires an audit of an AI system or model by an independent third party auditor. | |
| 67 | 67 | ||
| 68 | 68 | ||
| 69 | 69 | ||
| 70 | 70 | 11549.80. For purposes of this chapter, the following definitions apply: | |
| 71 | 71 | ||
| 72 | 72 | (a) Agency means the Government Operations Agency. | |
| 73 | 73 | ||
| 74 | 74 | (b) Artificial intelligence or AI 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. | |
| 75 | 75 | ||
| 76 | 76 | (c) Artificial intelligence auditor or AI auditor means a person, partnership, or corporation that assesses an AI system or model on behalf of a third party. | |
| 77 | 77 | ||
| 78 | 78 | (d) Covered audit means an audit conducted pursuant to any state statute that requires an audit of an AI system or model by an independent third party auditor. | |
| 79 | 79 | ||
| 80 | 80 | 11549.81. The AI Auditors Enrollment Fund is hereby created within the State Treasury. The fund shall be administered by the Government Operations Agency. All moneys collected or received by the agency under this chapter shall be deposited into the AI Auditors Enrollment Fund to be available for expenditure by the agency, upon appropriation by the Legislature, to administer this chapter. | |
| 81 | 81 | ||
| 82 | 82 | ||
| 83 | 83 | ||
| 84 | 84 | 11549.81. The AI Auditors Enrollment Fund is hereby created within the State Treasury. The fund shall be administered by the Government Operations Agency. All moneys collected or received by the agency under this chapter shall be deposited into the AI Auditors Enrollment Fund to be available for expenditure by the agency, upon appropriation by the Legislature, to administer this chapter. | |
| 85 | 85 | ||
| 86 | - | 11549.82. (a) By January 1, 2027, the agency shall do all of the following:(1) Establish a mechanism on the agencys internet website allowing AI auditors to enroll with the agency pursuant to paragraph (1) of subdivision (a) of Section 11549.83.(2) Fix enrollment fees at an amount not exceeding the reasonable costs of administering this chapter.(3) Establish a mechanism on the agencys internet website allowing natural persons to report misconduct by an enrolled AI auditor.(b) Beginning January 1, 2027, the agency shall do both | |
| 86 | + | 11549.82. (a) By January 1, 2027, the agency shall do all of the following:(1) Establish a mechanism on the agencys internet website allowing AI auditors to enroll with the agency pursuant to paragraph (1) of subdivision (a) of Section 11549.83.(2) Fix enrollment fees at an amount not exceeding the reasonable costs of administering this chapter.(3) Establish a mechanism on the agencys internet website allowing natural persons to report misconduct by an enrolled AI auditor.(b) Beginning January 1, 2027, the agency shall do both of the following:(1) Publish any information provided by an enrolled AI auditor pursuant to subdivision (a) of Section 11549.83 in a publicly accessible format on the agencys internet website.(2) Retain any report submitted using the mechanism established pursuant to paragraph (3) of subdivision (a) pertaining to an enrolled AI auditor for as long as the auditor remains enrolled, plus 10 years. | |
| 87 | 87 | ||
| 88 | 88 | ||
| 89 | 89 | ||
| 90 | 90 | 11549.82. (a) By January 1, 2027, the agency shall do all of the following: | |
| 91 | 91 | ||
| 92 | 92 | (1) Establish a mechanism on the agencys internet website allowing AI auditors to enroll with the agency pursuant to paragraph (1) of subdivision (a) of Section 11549.83. | |
| 93 | 93 | ||
| 94 | 94 | (2) Fix enrollment fees at an amount not exceeding the reasonable costs of administering this chapter. | |
| 95 | 95 | ||
| 96 | 96 | (3) Establish a mechanism on the agencys internet website allowing natural persons to report misconduct by an enrolled AI auditor. | |
| 97 | 97 | ||
| 98 | - | (b) Beginning January 1, 2027, the agency shall do both | |
| 98 | + | (b) Beginning January 1, 2027, the agency shall do both of the following: | |
| 99 | 99 | ||
| 100 | 100 | (1) Publish any information provided by an enrolled AI auditor pursuant to subdivision (a) of Section 11549.83 in a publicly accessible format on the agencys internet website. | |
| 101 | 101 | ||
| 102 | - | (2) Retain any report submitted using the mechanism established pursuant to paragraph (3) of subdivision (a) pertaining to an enrolled AI auditor for as long as the | |
| 102 | + | (2) Retain any report submitted using the mechanism established pursuant to paragraph (3) of subdivision (a) pertaining to an enrolled AI auditor for as long as the auditor remains enrolled, plus 10 years. | |
| 103 | 103 | ||
| 104 | - | (3) Share reports submitted using the mechanism established pursuant to paragraph (3) of subdivision (a) with other state agencies as necessary for enforcement purposes. | |
| 105 | - | ||
| 106 | - | 11549.83. (a) Beginning January 1, 2027, prior to initially conducting a covered audit, an AI auditor shall do all of the following:(1) Enroll with the agency using the mechanism established pursuant to paragraph (1) of subdivision (a) of Section 11549.82.(2) Pay to the agency the enrollment fee set forth in paragraph (2) of subdivision (a) of Section 11549.82.(3) Provide to the agency all of the following information:(A) The name of the auditor.(B) All of the following contact information:(i) The primary physical address of the auditor, if the auditor has a physical address.(ii) The primary internet website of the auditor, if the auditor has an internet website.(iii) A telephone number enabling a natural person to communicate with the auditor.(iv) An email address enabling a natural person to communicate with the auditor.(C) The types of AI systems or models that the auditor is qualified enrolling to audit.(D) Any relevant qualifications, certifications, certifications or accreditations the auditor wishes to provide. and the identities of the certifying or accrediting entities.(E) A written description of the auditor and the services they provide, not to exceed 200 words in length.(F) A standard operating procedure (SOP) that describes the auditors procedures in sufficient detail to enable a third party to assess whether audits are conducted according to generally accepted industry best practices.(b) In conducting a covered audit, an enrolled AI auditor shall abide by generally accepted industry best practices appropriate to the system or model being audited. | |
| 104 | + | 11549.83. (a) Beginning January 1, 2027, prior to initially conducting a covered audit, an AI auditor shall do all of the following:(1) Enroll with the agency using the mechanism established pursuant to paragraph (1) of subdivision (a) of Section 11549.82.(2) Pay to the agency the enrollment fee set forth in paragraph (2) of subdivision (a) of Section 11549.82.(3) Provide to the agency all of the following information:(A) The name of the auditor.(B) All of the following contact information:(i) The primary physical address of the auditor, if the auditor has a physical address.(ii) The primary internet website of the auditor, if the auditor has an internet website.(iii) A telephone number enabling a natural person to communicate with the auditor.(iv) An email address enabling a natural person to communicate with the auditor.(C) The types of AI systems or models that the auditor is qualified to audit.(D) Any relevant qualifications, certifications, or accreditations the auditor wishes to provide.(E) A written description of the auditor and the services they provide, not to exceed 200 words in length.(F) A standard operating procedure (SOP) that describes the auditors procedures in sufficient detail to enable a third party to assess whether audits are conducted according to generally accepted industry best practices.(b) In conducting a covered audit, an enrolled AI auditor shall abide by generally accepted industry best practices appropriate to the system or model being audited. | |
| 107 | 105 | ||
| 108 | 106 | ||
| 109 | 107 | ||
| 110 | 108 | 11549.83. (a) Beginning January 1, 2027, prior to initially conducting a covered audit, an AI auditor shall do all of the following: | |
| 111 | 109 | ||
| 112 | 110 | (1) Enroll with the agency using the mechanism established pursuant to paragraph (1) of subdivision (a) of Section 11549.82. | |
| 113 | 111 | ||
| 114 | 112 | (2) Pay to the agency the enrollment fee set forth in paragraph (2) of subdivision (a) of Section 11549.82. | |
| 115 | 113 | ||
| 116 | 114 | (3) Provide to the agency all of the following information: | |
| 117 | 115 | ||
| 118 | 116 | (A) The name of the auditor. | |
| 119 | 117 | ||
| 120 | 118 | (B) All of the following contact information: | |
| 121 | 119 | ||
| 122 | 120 | (i) The primary physical address of the auditor, if the auditor has a physical address. | |
| 123 | 121 | ||
| 124 | 122 | (ii) The primary internet website of the auditor, if the auditor has an internet website. | |
| 125 | 123 | ||
| 126 | 124 | (iii) A telephone number enabling a natural person to communicate with the auditor. | |
| 127 | 125 | ||
| 128 | 126 | (iv) An email address enabling a natural person to communicate with the auditor. | |
| 129 | 127 | ||
| 130 | - | (C) The types of AI systems or models that the auditor is qualified | |
| 128 | + | (C) The types of AI systems or models that the auditor is qualified to audit. | |
| 131 | 129 | ||
| 132 | - | (D) Any relevant qualifications, certifications, | |
| 130 | + | (D) Any relevant qualifications, certifications, or accreditations the auditor wishes to provide. | |
| 133 | 131 | ||
| 134 | 132 | (E) A written description of the auditor and the services they provide, not to exceed 200 words in length. | |
| 135 | 133 | ||
| 136 | 134 | (F) A standard operating procedure (SOP) that describes the auditors procedures in sufficient detail to enable a third party to assess whether audits are conducted according to generally accepted industry best practices. | |
| 137 | 135 | ||
| 138 | 136 | (b) In conducting a covered audit, an enrolled AI auditor shall abide by generally accepted industry best practices appropriate to the system or model being audited. | |
| 139 | 137 | ||
| 140 | - | 11549.84. (a) After conducting a covered audit, an enrolled AI auditor shall provide the auditee with an audit report that contains, but is not limited to, all of the following:(1) The | |
| 138 | + | 11549.84. (a) After conducting a covered audit, an enrolled AI auditor shall provide the auditee with an audit report that contains, but is not limited to, all of the following:(1) The results of the audit.(2) An explanation of any steps the auditee can take to meet generally accepted industry standards appropriate to the system or model being audited.(3) An explanation of any steps the auditee can take to become compliant with state law.(b) An AI auditor shall not knowingly make a material misrepresentation in an audit report prepared pursuant to this subdivision.(c) An enrolled AI auditor shall retain any documentation provided to an auditee pursuant to this chapter for at least 10 years.(d) An enrolled AI auditor shall not conduct a covered audit if it has a financial interest in the auditee other than a financial interest that is necessary for the performance of the audit.(e) Notwithstanding Chapter 1 (commencing with Section 16600) of Part 2 of Division 7 of the Business and Professions Code, an enrolled AI auditor shall not accept employment with an auditee within 12 months of completing a covered audit of the auditee. | |
| 141 | 139 | ||
| 142 | 140 | ||
| 143 | 141 | ||
| 144 | 142 | 11549.84. (a) After conducting a covered audit, an enrolled AI auditor shall provide the auditee with an audit report that contains, but is not limited to, all of the following: | |
| 145 | 143 | ||
| 146 | - | (1) The | |
| 144 | + | (1) The results of the audit. | |
| 147 | 145 | ||
| 148 | - | ( | |
| 146 | + | (2) An explanation of any steps the auditee can take to meet generally accepted industry standards appropriate to the system or model being audited. | |
| 149 | 147 | ||
| 150 | - | ||
| 151 | - | ||
| 152 | - | (2) The results of the audit. audit and any documentation necessary to demonstrate the basis of those results. | |
| 153 | - | ||
| 154 | - | (2) | |
| 155 | - | ||
| 156 | - | ||
| 157 | - | ||
| 158 | - | (3) An explanation of any steps the auditee can take to meet generally accepted industry standards appropriate to the system or model being audited. | |
| 159 | - | ||
| 160 | - | (3) | |
| 161 | - | ||
| 162 | - | ||
| 163 | - | ||
| 164 | - | (4) An explanation of any steps the auditee can take to become compliant with state law. | |
| 165 | - | ||
| 166 | - | (5) A statement that is signed and dated by each auditor that certifies that the covered audit was completed. | |
| 148 | + | (3) An explanation of any steps the auditee can take to become compliant with state law. | |
| 167 | 149 | ||
| 168 | 150 | (b) An AI auditor shall not knowingly make a material misrepresentation in an audit report prepared pursuant to this subdivision. | |
| 169 | 151 | ||
| 170 | - | (c) An enrolled AI auditor shall retain any documentation | |
| 152 | + | (c) An enrolled AI auditor shall retain any documentation provided to an auditee pursuant to this chapter for at least 10 years. | |
| 171 | 153 | ||
| 172 | - | (d) An enrolled AI auditor shall not conduct a covered audit if it has a financial interest in the auditee other than a financial interest that is necessary for the performance of the audit. | |
| 154 | + | (d) An enrolled AI auditor shall not conduct a covered audit if it has a financial interest in the auditee other than a financial interest that is necessary for the performance of the audit. | |
| 173 | 155 | ||
| 174 | - | (e) (1) Notwithstanding Chapter 1 (commencing with Section 16600) of Part 2 of Division 7 of the Business and Professions Code, an enrolled AI auditor shall not accept employment with an auditee within 12 months of completing a covered audit of the auditee. | |
| 175 | - | ||
| 176 | - | (2) An enrolled AI auditor shall not conduct a covered audit if the auditee had employed the auditor during the 12-month period preceding the audit. | |
| 156 | + | (e) Notwithstanding Chapter 1 (commencing with Section 16600) of Part 2 of Division 7 of the Business and Professions Code, an enrolled AI auditor shall not accept employment with an auditee within 12 months of completing a covered audit of the auditee. | |
| 177 | 157 | ||
| 178 | 158 | 11549.85. (a) An enrolled AI auditor may disclose confidential information concerning an auditee only if the auditee provides written authorization or if the disclosure is any of the following:(1) Made in compliance with a subpoena or a summons enforceable by order of a court.(2) Reasonably necessary to maintain or defend the auditor in a legal proceeding initiated by the auditee.(3) Made in response to an official inquiry from a federal or state government regulatory agency.(4) Made to another enrolled AI auditor or person in connection with a proposed sale or merger of the auditors professional practice, provided the parties enter into a written nondisclosure agreement with regard to all auditee information shared between the parties.(5) Made to either of the following:(A) Another enrolled AI auditor to the extent necessary for purposes of professional consultation.(B) Organizations that provide professional standards review and ethics or quality control peer review.(6) Specifically permitted by state or federal law.(b) An enrolled AI auditor shall not do either of the following:(1) Prevent an employee from disclosing information to the Attorney General or the Labor Commissioner, or using the mechanism established pursuant to paragraph (3) of subdivision (a) of Section 11549.82, including through terms and conditions of employment or seeking to enforce terms and conditions of employment, if the employee has reasonable cause to believe the information indicates that the auditor is out of compliance with the requirements of this chapter.(2) Retaliate against an employee for disclosing information pursuant to paragraph (1). | |
| 179 | 159 | ||
| 180 | 160 | ||
| 181 | 161 | ||
| 182 | 162 | 11549.85. (a) An enrolled AI auditor may disclose confidential information concerning an auditee only if the auditee provides written authorization or if the disclosure is any of the following: | |
| 183 | 163 | ||
| 184 | 164 | (1) Made in compliance with a subpoena or a summons enforceable by order of a court. | |
| 185 | 165 | ||
| 186 | 166 | (2) Reasonably necessary to maintain or defend the auditor in a legal proceeding initiated by the auditee. | |
| 187 | 167 | ||
| 188 | 168 | (3) Made in response to an official inquiry from a federal or state government regulatory agency. | |
| 189 | 169 | ||
| 190 | 170 | (4) Made to another enrolled AI auditor or person in connection with a proposed sale or merger of the auditors professional practice, provided the parties enter into a written nondisclosure agreement with regard to all auditee information shared between the parties. | |
| 191 | 171 | ||
| 192 | 172 | (5) Made to either of the following: | |
| 193 | 173 | ||
| 194 | 174 | (A) Another enrolled AI auditor to the extent necessary for purposes of professional consultation. | |
| 195 | 175 | ||
| 196 | 176 | (B) Organizations that provide professional standards review and ethics or quality control peer review. | |
| 197 | 177 | ||
| 198 | 178 | (6) Specifically permitted by state or federal law. | |
| 199 | 179 | ||
| 200 | 180 | (b) An enrolled AI auditor shall not do either of the following: | |
| 201 | 181 | ||
| 202 | 182 | (1) Prevent an employee from disclosing information to the Attorney General or the Labor Commissioner, or using the mechanism established pursuant to paragraph (3) of subdivision (a) of Section 11549.82, including through terms and conditions of employment or seeking to enforce terms and conditions of employment, if the employee has reasonable cause to believe the information indicates that the auditor is out of compliance with the requirements of this chapter. | |
| 203 | 183 | ||
| 204 | 184 | (2) Retaliate against an employee for disclosing information pursuant to paragraph (1). |