United States - North Carolina - AI Policy Office (S747)

Overview

North Carolina Senate Bill 747, introduced in the 2025 legislative session, represents a significant proactive step by the state to engage with the rapidly evolving landscape of artificial intelligence (AI) technologies. Titled 'AN ACT ESTABLISHING THE OFFICE OF ARTIFICIAL INTELLIGENCE POLICY AND CREATING THE AI LEARNING LABORATORY PROGRAM,' the bill acknowledges the profound impact AI is having on global economies, societies, and industries. It posits that a thoughtful and evidence-based approach to AI governance is essential for North Carolina to harness the benefits of these technologies while simultaneously protecting its citizens. The core of this legislation is the establishment of a dedicated Office of Artificial Intelligence Policy within the Department of Commerce, tasked with a broad mandate to navigate the complexities of AI development and deployment within the state. This Office is envisioned as a central coordinating body that will not only identify regulatory hurdles but also foster an environment conducive to responsible innovation.

The legislative intent behind S747 is rooted in the recognition that traditional regulatory frameworks may not be adequately equipped to address the unique challenges and opportunities presented by AI. Therefore, the bill advocates for an 'inclusive and iterative learning model' that prioritizes both technological advancement and the safeguarding of consumer interests and civil rights. This model is designed to be adaptive, allowing the state to continuously learn from practical experience and stakeholder input. By creating an AI Learning Laboratory Program, North Carolina aims to provide a controlled environment for technology developers to test and refine AI applications under expert guidance, ensuring that new technologies are assessed for their societal impact before widespread adoption. This forward-thinking approach positions North Carolina as a leader in developing adaptive governance strategies for emerging technologies, emphasizing collaboration between government, industry, academia, and civil society to build a robust and responsive regulatory ecosystem.

Definitions

Senate Bill 747 establishes several key definitions essential for understanding its scope and implementation. An 'Applicant' is defined as any person or entity that formally applies for participation in the regulatory Learning Laboratory, indicating the gateway for engagement with the program. The 'Learning Agenda' is a critical concept, referring to the specific areas of artificial intelligence applications, associated risks, and pertinent policy considerations that the newly established Office of Artificial Intelligence Policy will select for focused attention and research within the Learning Laboratory. This definition ensures that the program's efforts are strategically directed towards high-priority areas identified by the state.

The 'Learning Laboratory' itself is explicitly defined as the artificial intelligence analysis and research program created by this act, signifying its role as the operational core for practical AI exploration and testing. The 'Office' refers specifically to the Office of Artificial Intelligence Policy, the central governmental entity tasked with overseeing and implementing the provisions of the bill. A 'Participant' is distinguished from an 'Applicant' as a person or entity that has been formally accepted to participate in the Learning Laboratory, implying a successful application and entry into the program. Furthermore, 'Regulatory mitigation' is broadly defined to encompass various forms of redress, including restitution, refunds, credits, monetary or nonmonetary relief, or the voiding or modification of transactions, highlighting the bill's focus on consumer protection and equitable outcomes in the context of AI use. Lastly, 'State agency or agency' is defined to include any State agency, department, or institution within the executive or legislative branches of government or a political subdivision of the State, clarifying the governmental entities to which certain provisions of the bill may apply. These definitions collectively provide a clear framework for the bill's objectives and the roles of various stakeholders.

Governance and Institutional Framework

The institutional backbone of North Carolina's AI strategy, as outlined in S747, is the newly established Office of Artificial Intelligence Policy, situated within the Department of Commerce. This strategic placement underscores the state's intent to integrate AI policy with economic development and innovation initiatives. The Secretary of Commerce is mandated to appoint a Director to lead this Office, ensuring dedicated leadership for its management and operations. A primary function of the Office is to adopt rules necessary for carrying out its purposes, which include identifying and recommending solutions for regulatory barriers and gaps that might impede AI development or fail to address potential harms within North Carolina. This involves a comprehensive inventory of existing state regulations related to AI technology, aiming for a coherent and adaptive regulatory environment.

A critical component of the governance framework is the creation and administration of the Artificial Intelligence Learning Laboratory program by the Office. This program is designed to be a collaborative space where AI technologies can be explored and tested. To ensure a broad and informed perspective, the Office is also tasked with establishing and convening a multidisciplinary AI Learning Advisory Panel. This panel will draw expertise from academic institutions, industry leaders, legal scholars, and civil society organizations, providing diverse input into the learning agenda and ongoing evaluations of the Learning Laboratory. This consultative approach is intended to foster a balanced perspective, considering both the innovative potential and the ethical and societal implications of AI. Furthermore, the Office is required to consult with businesses, other stakeholders within the state, and similar learning laboratories or bodies in other states, promoting knowledge sharing and alignment with broader best practices in AI governance.

Key Focus Areas

Senate Bill 747 delineates several key focus areas that guide the operations of the Office of Artificial Intelligence Policy and the AI Learning Laboratory Program. A paramount focus is the identification and mitigation of regulatory barriers to AI development, deployment, and use within North Carolina. The Office is specifically tasked with recommending regulatory proposals designed to either remove existing impediments or proactively avoid future ones, thereby fostering an environment conducive to AI innovation. Concurrently, the bill emphasizes the importance of identifying regulatory gaps where current laws may be insufficient to prevent or redress 'substantial, non-speculative, concrete, and redressable harm' arising from AI technologies. This dual approach ensures that the regulatory landscape is both enabling for innovation and protective against potential risks.

Another significant focus area is the comprehensive inventory of existing state regulations that pertain to AI technology. This systematic review is crucial for understanding the current legal framework and identifying areas that require modification or new legislation. The establishment and administration of the Artificial Intelligence Learning Laboratory program itself constitute a major focus, serving as a practical mechanism for exploring AI applications, risks, and policy considerations through a 'Learning Agenda.' This hands-on, iterative approach allows the state to gain practical insights into AI's real-world implications. Moreover, the bill places importance on stakeholder engagement, requiring the Office to consult with businesses, other relevant entities within the state, and even similar initiatives in other states to ensure that North Carolina's AI policy is well-informed, collaborative, and aligned with broader technological and regulatory trends.

Implementation Framework

The implementation framework for North Carolina S747 centers on the operationalization of the Office of Artificial Intelligence Policy and the Artificial Intelligence Learning Laboratory program. The Office, under the direction of an appointed Director, is empowered to adopt comprehensive rules to govern its functions. These rules are critical for establishing the practical procedures and requirements for participation in the Learning Laboratory program. This includes defining the application process, setting criteria for acceptance into the program, and outlining the ongoing oversight mechanisms that will ensure responsible conduct by participants. The bill mandates that these rules must address crucial aspects such as data handling protocols, robust risk management plans, and detailed reporting requirements for all activities undertaken within the Learning Laboratory.

A core element of the implementation is the structured engagement with technology developers through the Learning Laboratory. Participants accepted into the program are expected to demonstrate not only technical expertise but also financial stability and a commitment to robust risk management. The requirement for detailed reporting on their AI technologies and activities ensures transparency and accountability within the experimental environment. Furthermore, the establishment of the multidisciplinary AI Learning Advisory Panel is integral to the implementation, as it provides expert guidance and input into the 'Learning Agenda' and the ongoing evaluation of the program's effectiveness. This panel's diverse composition, including academic, industry, legal, and civil society experts, ensures a holistic assessment of AI's impacts and potential policy responses. The Office's mandate to submit annual reports to the General Assembly closes the feedback loop, ensuring that legislative bodies are continuously informed of findings, participation levels, and recommended legislative actions, allowing for an adaptive and responsive governance model.

Monitoring and Evaluation

The North Carolina S747 bill incorporates robust mechanisms for monitoring and evaluation to ensure the effectiveness and accountability of the Office of Artificial Intelligence Policy and the AI Learning Laboratory Program. A cornerstone of this oversight is the requirement for the Office to submit annual reports to the General Assembly. These reports are crucial for providing transparency and accountability, detailing the findings derived from the Learning Laboratory program, outlining the level and nature of participation, and presenting recommended legislative actions. This continuous reporting mechanism ensures that the legislative body remains informed about the evolving landscape of AI and the state's efforts to govern it, allowing for timely adjustments to policy and regulation.

Further enhancing monitoring and evaluation is the role of the multidisciplinary AI Learning Advisory Panel. This panel, composed of experts from diverse fields such as academia, industry, law, and civil society, is specifically tasked with providing input into the 'Learning Agenda' and contributing to the 'ongoing evaluations' of the Learning Laboratory. Their collective expertise offers a critical lens through which to assess the program's progress, identify emerging risks, and evaluate the efficacy of proposed regulatory mitigations. The rules adopted by the Office are also expected to concern oversight of participants, implying a continuous monitoring of their activities within the Learning Laboratory to ensure compliance with established criteria, including adherence to risk management plans and proper data handling. This multi-layered approach to monitoring and evaluation is designed to ensure that North Carolina's AI policy remains dynamic, responsive, and grounded in evidence-based insights.

Penalties, Liability, and Appeals

While North Carolina S747 primarily focuses on establishing a framework for AI policy and a learning laboratory, it implicitly addresses aspects of liability and potential penalties through its emphasis on 'regulatory mitigation' and the requirement for robust risk management plans. The bill's definition of 'regulatory mitigation' explicitly includes provisions for restitution, refunds, credits, other monetary or nonmonetary relief, or the voiding or modification of transactions when users may be entitled to such remedies. This suggests an underlying expectation that if harms occur as a result of AI technologies explored or developed within the Learning Laboratory, mechanisms for redress will be in place, even if specific penalty amounts or liability assignments are not detailed in this foundational bill.

The requirement for participants in the AI Learning Laboratory to demonstrate 'robust risk management plans' is a proactive measure to minimize the likelihood of adverse outcomes and, by extension, potential liability. Although the bill does not explicitly outline a system of fines, sanctions, or appeal processes for non-compliance or harm, the Office of Artificial Intelligence Policy is empowered to adopt rules concerning the procedures, requirements, and oversight of participants. It is anticipated that these rules, once developed, would detail the consequences for breaches of program requirements or failures in risk management, and potentially establish processes for appealing decisions related to participation or findings of the Learning Laboratory. The annual reports to the General Assembly, which include recommended legislative actions, also provide a pathway for the development of more specific provisions regarding penalties, liability, and appeals as the state's understanding of AI governance matures.

Relationship to Other Instruments

North Carolina S747 is designed to integrate with and build upon existing legal and policy frameworks within the state, rather than operating in isolation. By establishing the Office of Artificial Intelligence Policy within the Department of Commerce and proposing amendments to Chapter 114 of the General Statutes, the bill signals an intent to embed AI governance directly into the state's established legal code. This approach ensures that the new AI policy framework is not a standalone initiative but becomes an integral part of North Carolina's broader regulatory and economic development strategies. The Office's mandate to conduct an 'inventory of existing State regulation of AI technology' further highlights this integrative approach, as it aims to understand how current laws already touch upon AI and where new provisions are needed to complement or clarify existing statutes.

The bill's emphasis on identifying regulatory barriers and gaps implies a continuous interaction with other state laws and regulations that might inadvertently hinder AI innovation or fail to address emerging AI-specific issues. The recommendations for regulatory proposals, whether to remove barriers or fill gaps, would necessarily involve modifications or additions to existing legislative instruments. Furthermore, the requirement for the Office to consult with businesses and other stakeholders suggests an awareness of how AI policy will intersect with various sector-specific regulations and industry standards. This consultative process is crucial for ensuring that the AI framework is harmonized with, and does not unduly conflict with, other instruments governing different aspects of the state's economy and society, thereby promoting a cohesive and effective regulatory environment for AI.

International Alignment

While North Carolina S747 is a state-level initiative, its provisions subtly acknowledge the broader global context of AI development and governance, hinting at an awareness of international alignment. The bill explicitly mandates that the Office of Artificial Intelligence Policy shall 'Consult with Learning Laboratories or similar bodies in other states'. This directive indicates a strategic intent to learn from, and potentially align with, best practices and emerging regulatory models being developed elsewhere, including potentially international frameworks. By engaging with other jurisdictions, North Carolina can ensure its AI policies are informed by a wider range of experiences and avoid creating isolated or contradictory regulations that could hinder cross-border innovation or collaboration.

The overarching goal of promoting innovation while protecting consumer interests and civil rights, as stated in the bill, also resonates with principles found in various international AI policy discussions and frameworks. Many global initiatives, such as those from the OECD, UNESCO, and the European Union, emphasize human-centric AI, transparency, fairness, and accountability. Although the bill does not directly reference specific international treaties or regulations, its foundational principles for responsible AI development align with a growing global consensus on ethical AI. By fostering a learning-oriented approach and encouraging consultation beyond state borders, North Carolina positions itself to adapt its AI governance strategies in a manner that can remain relevant and compatible with evolving international norms and standards, thereby facilitating future collaborations and ensuring its businesses can compete effectively in a globalized AI landscape.

Implementation Timeline

Compliance Checklist

Sources and References