Charting the Future of AI Regulation
Virginia is on the brink of becoming the second state in the U.S. to enact comprehensive legislation governing the use of high-risk artificial intelligence (AI) systems, following in the footsteps of Colorado. This legislation is a crucial step towards addressing the growing concerns surrounding algorithmic discrimination.
Legislative Overview
On February 12, 2025, the Virginia state senate passed the High-Risk Artificial Intelligence Developer and Deployer Act (H.B. 2094), which aims to regulate AI applications across various sectors, particularly those impacting employment decisions. If signed into law by Governor Glenn Youngkin, this act will take effect on July 1, 2026, and introduce new compliance requirements for businesses utilizing high-risk AI systems.
Key Provisions of H.B. 2094
The act defines high-risk AI systems as those that either autonomously make or significantly influence consequential decisions, such as those relating to employment, lending, housing, and education. One of the key distinctions in Virginia’s approach is the requirement that AI must be the principal basis for a decision to trigger anti-discrimination measures.
Consumer Protection Goals
A primary objective of this legislation is to protect consumers from algorithmic discrimination. The act defines a consumer as a natural person residing in Virginia who acts in an individual or household context. Notably, the definition excludes individuals acting in a commercial or employment capacity, raising questions about how job applicants are categorized under the law.
Obligations for Developers and Deployers
Both developers and deployers of high-risk AI systems are mandated to exercise a reasonable duty of care to mitigate potential discriminatory harms. Developers must disclose critical information about the AI systems they create, including intended uses, known limitations, and measures taken to address algorithmic bias.
Deployers, on the other hand, are required to establish a risk management policy tailored to the specific high-risk AI systems they implement. They must also conduct an impact assessment prior to deploying such systems, considering factors like the system’s purpose and potential discriminatory risks.
Exemptions and Safe Harbors
While H.B. 2094 has broad applicability, it provides exemptions for certain entities that are already subject to more stringent regulations, such as federal agencies and regulated financial institutions. Additionally, there are provisions that protect businesses from disclosing trade secrets and provide a safe harbor for those who comply with the specified operating standards.
Enforcement Mechanisms
The enforcement of this legislation falls solely under the jurisdiction of the attorney general, who can impose civil penalties for violations. Non-willful violations may incur fines of up to $1,000, while willful violations can result in fines reaching $10,000 per instance.
Future Implications
As the law is anticipated to take effect in 2026, organizations developing or deploying high-risk AI systems are encouraged to begin preparing for compliance now. Aligning with established frameworks like the NIST AI Risk Management Framework can help mitigate legal risks and enhance transparency.
Conclusion
Virginia’s High-Risk Artificial Intelligence Developer and Deployer Act marks a significant advancement in AI governance at the state level, emphasizing the need for responsible AI practices. By implementing clear documentation and consumer disclosures, the legislation aims to foster trust and safeguard against algorithmic discrimination.
