Nebraska AI Proposal Draws Comparisons to Colorado Law

The committee considered testimony on LB-642, the Artificial Intelligence Consumer Protection Act. Witnesses said the bill is similar to Colorado's AI Act (see 2502030040) and Connecticut’s SB-2 (see 2412200047).

Introduced by Nebraska Sen. Eliot Bostar (D), LB-642 would be enforced by the state attorney general and includes a small-business exemption. It targets discriminatory impacts from high-risk AI systems. Companies would need to comply with impact assessments and reporting requirements on what types of data are collected and used to train AI systems. Consumers would have a right to review, amend and delete certain data. Like Colorado and Connecticut, there’s no private right of action in LB-642.

TechNet, Chamber of Progress and Tech Nebraska spoke in opposition to elements of the legislation. For example, TechNet supports a federal bill to regulate AI systems across state lines, said Ruthie Barko, executive director for the central U.S. Barko said the Nebraska bill takes a more “rational” approach than some of its predecessors, like Colorado, which is currently amending its 2024 law. She credited Bostar for including a right to cure, which allows companies to avoid liability if they correct potential violations 90 days after a notice. It also includes “clearly scoped definitions that are interoperable with some other state laws.”

The bill’s impact assessment requirements could potentially expose companies’ business strategies by forcing them to share information about internal processes, said Hope Ledford, policy analyst at Chamber of Progress. LB-642’s disclosure requirements fail to serve a compelling government interest and aren’t narrowly tailored, she said. The bill’s requirement for regular and repetitive company audits would be a “substantial tax on innovation.” Strengthening existing consumer protection and civil rights law is a better approach than passing an AI law, she added.

One witness spoke in support of the measure. Resident Diane Plock said an AI law is necessary to show how companies are profiting off AI-related consumer data.

Approving data privacy legislation in Nebraska last year was “essential,” but LB-642, which attempts to align with the state's privacy law, includes overly broad definitions of AI that will stifle the local tech sector, said Laurel Oetken, executive director for Tech Nebraska, an organization affiliated with the Nebraska Chamber of Commerce. This bill could run counter to the goal of creating a business-friendly environment in Nebraska, she said, urging the panel to work with Bostar to amend the measure.

Bostar noted at the hearing's start that technical complications with government systems prevented the filing of amendments to the bill. He told the panel that LB-642 borrows language from other states, but ultimately “you won’t find this exact bill anywhere else.” The committee was still deliberating at deadline.