ARTIFICIAL INTELLIGENCE TRANSPARENCY ACT

HB0028

HOUSE BILL 28

57th legislature - STATE OF NEW MEXICO - second session, 2026

INTRODUCED BY

Christine Chandler

AN ACT

RELATING TO CONSUMER PROTECTION; ENACTING THE ARTIFICIAL
INTELLIGENCE TRANSPARENCY ACT; REQUIRING NOTICE OF USE AND AN
OPPORTUNITY TO APPEAL IN MATTERS CONCERNING CONSEQUENTIAL
DECISIONS; REQUIRING NOTICE DURING USE OF COMPANION PRODUCTS;
PROVIDING FOR ENFORCEMENT AND CIVIL ACTIONS FOR INJUNCTIVE OR
DECLARATORY RELIEF.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

SECTION 1.
[
NEW MATERIAL
] SHORT TITLE.--This act may be
cited as the "Artificial Intelligence Transparency Act".

SECTION 2.
[
NEW MATERIAL
] DEFINITIONS.--As used in the
Artificial Intelligence Transparency Act:

A. "artificial intelligence" means an engineered or
machine-based system that varies in its level of autonomy and
that can, for explicit and implicit objectives, infer from the
input it receives how to generate outputs that can influence
physical or virtual environments;

B. "companion product" means a software application
that uses generative artificial intelligence and through the
software application's design and function is capable of
generating adaptive, personalized and emotionally resonant
responses to sustain a coherent, long-term, one-on-one
conversational relationship with a user;

C. "consequential decision" means a decision that
has a material legal or similarly significant effect on the
provision or denial to a consumer of or the cost or terms of:

(1) education enrollment;

(2) employment or an employment opportunity;

(3) a financial or lending service;

(4) housing;

(5) health care service;

(6) insurance; or

(7) legal service;

D. "consumer" means a person who is a user or
recipient of goods or services in New Mexico and for whom
consequential decisions are made;

E. "department" means the state department of
justice;

F. "deploy" means to put into effect, host or
otherwise commercialize an artificial intelligence system or a
companion product;

G. "deployer" includes a person doing business in
New Mexico, the state or a political subdivision of the state
that deploys or uses an artificial intelligence system to make
a consequential decision affecting a consumer;

H. "developer" means a person doing business in New
Mexico that:

(1) makes an artificial intelligence system
publicly available for use in New Mexico; or

(2) intentionally and substantially modifies
an artificial intelligence system that is used in New Mexico;

I. "generative artificial intelligence" means an
artificial intelligence system that learns the patterns and
structure of the artificial intelligence system's input
training data and then generates new data that have similar
characteristics;

J. "interactive session" means a dialogue between a
human user and a companion product;

K. "machine learning" means the development and
incorporation of algorithms to build data-derived statistical
models that are capable of drawing inferences from previously
unseen data without explicit human instruction; and

L. "substantial factor" means a decision, score,
label, prediction or recommendation generated by an artificial
intelligence system that is a basis or partial basis to make a
consequential decision.

SECTION 3.
[
NEW MATERIAL
] USE OF ARTIFICIAL INTELLIGENCE
SYSTEMS WHEN MAKING CONSEQUENTIAL DECISIONS--NOTICE--ADVERSE
CONSEQUENTIAL DECISIONS--OPPORTUNITY FOR APPEAL.--

A. Before an artificial intelligence system is used
to generate a substantial factor or make a consequential
decision concerning a consumer, a deployer shall provide notice
directly to the consumer that the system will be used to make
or generate a substantial factor to be used in making the
decision. The notice shall include the name of the developer,
trade name, version number or other information that distinctly
identifies the artificial intelligence system and the
deployer's contact information.

B. When an artificial intelligence system has been
used to generate a substantial factor or make a consequential
decision concerning a consumer that is adverse to the consumer,
the deployer shall provide directly to the consumer:

(1) a statement explaining:

(a) the principal reasons for the
consequential decision and the specific facts or data about the
consumer or the consumer's application that most influenced the
consequential decision;

(b) the degree and manner in which the
system contributed to and the level of human oversight used in
making the consequential decision; and

(c) the source and type of data that was
processed by the system to generate a substantial factor;

(2) an opportunity to correct any incorrect
personal data that was used to generate a substantial factor;
and

(3) an opportunity to appeal the adverse
consequential decision.

C. An appeal of an adverse consequential decision
by a consumer shall be reviewed by a human being.

D. All information, notices and statements to a
consumer shall be provided:

(1) in plain language and in all languages in
which the deployer in the ordinary course of business provides
contracts, disclaimers, sale announcements and other
information to users of its products or services; and

(2) in a format that is accessible to
consumers with disabilities.

SECTION 4.
[
NEW MATERIAL
] USE OF COMPANION PRODUCTS--USER
NOTICE.--

A. At the beginning of each interactive session in
which a person uses a companion product, the companion product
shall provide directly to the person a notice that the
companion product is an artificial intelligence system. The
notice shall be provided in a manner distinct from the format
that the product uses for the interactive session and shall be:

(1) presented in plain language and in all
languages in which the deployer of the companion product in the
ordinary course of business provides contracts, disclaimers,
sale announcements and other information to users of its
products or services;

(2) presented conspicuously, legibly and
persistently in the user interface for text-based interactive
sessions;

(3) presented a minimum of once every thirty
minutes for a duration of no less than thirty seconds for
interactive sessions that are not text-based; and

(4) in a format that is accessible to persons
with disabilities.

B. A companion product shall not represent itself
as a human being or make material misrepresentations about the
companion product's identity, capabilities, professional
certifications or training data.

SECTION 5.
[
NEW MATERIAL
] ENFORCEMENT--DEPARTMENT--OPPORTUNITY TO CURE--CIVIL ACTIONS.--

A. The department shall have authority to enforce
the provisions of the Artificial Intelligence Transparency Act.
A consumer affected by the use of an artificial intelligence
system or deployment of a companion product in New Mexico may
bring a civil action in district court against a developer or
deployer for declaratory or injunctive relief and attorney fees
for a violation of that act.

B. Nothing in the Artificial Intelligence
Transparency Act preempts or otherwise affects any right,
claim, remedy, presumption or defense available in law or
equity.

C. A violation of the Artificial Intelligence
Transparency Act is an unfair or deceptive trade practice and
may be enforced in the manner provided in the Unfair Practices
Act.

SECTION 6.
EFFECTIVE DATE.--The effective date of the
provisions of this act is July 1, 2026.

- 7 -