Lawmakers Review Sweeping AI Bill

State lawmakers held a Feb. 26 public hearing on sweeping legislation designed to regulate the use of artificial intelligence.

SB 2 evolved from a 2024 bill that drew broad concern from the business community and stalled in the state House after passing the Senate on 24-12 vote.

Championed by General Law Committee co-chair Sen. James Maroney (D-Milford), this year’s bill incorporates several consensus recommendations from the AI Working Group.

Established in 2023, the working group was charged with developing guidelines for ethical and equitable AI use in state government operations and private sector regulation, drawing from the White House’s Blueprint for an AI Bill of Rights and other relevant frameworks. 

CBIA commends the committee for acknowledging both the need for ethical AI practices and the economic growth potential that artificial intelligence offers Connecticut.

AI Benefits

AI has already demonstrated significant benefits across industries by boosting efficiency, enhancing productivity, and driving expansion throughout various economic sectors. 

Areas of support: 

• Section 11 of the bill creates a regulatory sandbox for AI innovation  

• Section 12 solidifies the Connecticut AI Academy  

• Section 15 that creates the Connecticut Technology Advisory Board 

• Section 17 creates a Connecticut confidential computing cluster 

• Section 19 strengthens the Tecnology Talent and Innovation Fund in DECD to expand tech talent in the state 

• Section 22 requires state agencies to evaluate how generative AI can be used to strengthen state services  

• Section 24 that creates a working group to study and make recommendations on AI adoption across private and public sectors 

• Section 27 that prohibits the dissemination of synthetic intimate images  

Concerns

While supporting many provisions of the bill, CBIA is concerned that certain regulatory requirements could create undue burdens for small businesses and potentially stifle innovation. 

CBIA’s Chris Davis told committee members that, “We do, however, have concerns about the regulatory burdens imposed by sections 1 through 10 of this bill, particularly on small businesses, and the chilling effect that broad, comprehensive state-specific regulations on the use of AI by businesses could have on innovation, entrepreneurship, and investment in Connecticut-based employers.” 

Key concerns include: 

• Requires businesses to conduct impact assessments, maintain risk management programs, and document AI decision-making processes on an annual basis, regardless of the nature of the change made to the systems themselves. This requires small businesses to continuously adhere to compliance specifications, creating significant cost burdens that many employers cannot afford 

• Beyond the compliance costs for small businesses, there are several practical difficulties if the bill passes as written including mandatory human reviews of adverse decisions that businesses cannot appeal, unclear definitions of “integrator” roles within the AI ecosystem, and insufficient guaranteed funding to help small businesses meet compliance requirements. These obstacles create significant operational challenges for businesses attempting to navigate the new regulatory framework while maintaining competitiveness. 

• Under the proposed legislation, a small employer’s standard hiring process could trigger multiple mandatory impact assessments at virtually every stage.

• Small employers using social media or job boards for position advertising would need impact assessments for each platform’s algorithms.

• Salary determination tools used to establish compensation ranges would trigger assessment requirements.

• Applicant screening software requires separate impact assessments for candidate evaluation algorithms.

• Application filtering systems showing only qualified candidates require additional documentation. 

• Resume parsing tools or writing sample analysis would each demand their own impact assessments.

• Automated interview scheduling or application status notification systems trigger yet more assessment requirements.

Regulatory Framework

Connecticut’s economy is deeply interconnected with neighboring states and global markets, making a patchwork of state-by-state AI regulations problematic.

Department of Economic and Community Development Commissioner Daniel O’Keefe told the committee, “Federal standards would be ideal, but absent that, a regional approach ensuring common rules would create a more predictable environment for businesses.”

As AI stands poised to revolutionize Connecticut’s key industries and boost productivity, Connecticut must carefully balance enabling innovation while preparing the workforce to capitalize on these transformative opportunities. 

---

For more information, contact CBIA’s Chris Davis (860.244.1931).