AI Regulatory Reform Act.

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
H 2
HOUSE BILL 934
Committee Substitute Favorable 5/6/25

Short Title: AI Regulatory Reform Act. (Public)
Sponsors:
Referred to:
April 14, 2025
*H934-v-2*
A BILL TO BE ENTITLED 1
AN ACT AMENDING THE CRIMINAL LAWS TO CRE ATE THE OFFENSE OF 2
UNLAWFUL DISTRIBUTIO N OF A DEEPFAKE AND AMENDING THE CIVIL 3
PROCEDURE LAWS TO GR ANT IMMUNITY FROM CI VIL LIABILITY TO 4
DEVELOPERS OF ARTIFI CIAL INTELLIGENCE PR ODUCTS USED BY LEARNED 5
PROFESSIONALS. 6
The General Assembly of North Carolina enacts: 7
SECTION 1.(a) Article 60 of Chapter 14 of the General Statutes is amended by 8
adding a new section to read: 9
"§ 14-459. Unlawful distribution of a deepfake. 10
(a) Definitions. – For purposes of this section, the following definitions apply: 11
(1) Deepfake. – An image, audio recording, or video recording that is created with 12
the intent to deceiv e and i s digitally altered or generated to inauthentically 13
depict a natural person speaking or acting in a manner that the person did not 14
actually speak or act , in such a manner that a reasonable person would not 15
know that the depiction is false. A work of artistic or newsworthy value, 16
including commentary, criticism, satire, or parody, is not a deepfake. 17
(2) Interactive computer service. – Any information service, system, or access 18
software provider that provides or enables computer access by multiple users 19
to a computer server, including specifically a serv ice or system that provides 20
access to the internet and such systems operated or services offered by 21
libraries or educational institutions. 22
(b) Offense. – It is unlawful for a person, without the affirmative consent of the depicted 23
individual, to knowingly do any of the following for the purpose of (i) harassing, extorting, 24
threatening, or causing physical, emotional, reputational, or economic harm to an individual 25
falsely depicted or (ii) injuring a candidate for elected office or influencing an election: 26
(1) Create a deepfake with an intent to distribute the deepfake. 27
(2) Distribute a deepfake. 28
(3) Solicit the creation of a deepfake with an intent to distribute the deepfake. 29
(c) Punishment. – A violation of this section is punishable as a Class 1 misdemeanor. 30
(d) Civil Action. – In addition to any other remedies at law or in equity, including an 31
order by the court to destroy any deepfake disclosed in violation of this section, any person 32
aggrieved by a violation of subsection (b) of this section has a civil cause of action against any 33
person who creates or distributes the deepfake in violation of subsection (b) of this section and 34
is entitled to recover from the other person any of the following: 35
General Assembly Of North Carolina Session 2025
Page 2 House Bill 934-Second Edition
(1) Actual damages, but not less than liquidated damages, to be computed at the 1
rate of one thousand dollars ($1,000) for each time the deepfake is 2
redistributed or in the amount of ten thousand dollars ($10,000), whichever is 3
higher. 4
(2) Punitive damages. 5
(3) A reasonable attorneys' fee and other litigation costs reasonably incurred. 6
(e) Exceptions. – The following entities shall not be liable for the actions of a person that 7
uses that entity's service or technology in the commission of an offense under subsection (b) of 8
this section: 9
(1) An interactive computer service. 10
(2) A provider or developer of any technology used in the creation of a deepfake. 11
(f) Other Sanctions or Remedies Not Precluded. – A violation of this section is an offense 12
additional to other civil and criminal provisions and is not intended to repeal or preclude any 13
other sanctions or remedies." 14
SECTION 1.(b) This section becomes effective December 1, 2025, and applies to 15
offenses committed on or after that date. 16
SECTION 2.(a) Chapter 1 of the General Statutes is amended by adding a new 17
Article to read: 18
"Article 43G. 19
"Actions Pertaining to Artificial Intelligence. 20
"§ 1-539.30. Definitions. 21
The following definitions apply in this Article: 22
(1) Artificial intelligence product or AI product. – Any algorithm, product, 23
software, or system that: 24
a. Performs tasks that would typically require human intelligence, such 25
as reasoning, language processing, or decision making; 26
b. Is designed to operate with some degree of autonomy; 27
c. Uses techniques that ena ble the system to improve its performance 28
over time or through exposure to data; and 29
d. Is marketed, distributed, licensed, or otherwise made available for use, 30
whether as a stand -alone product or as a component integrated into 31
other products or services. 32
(2) Client. – Any person who engages the services of a learned professional and 33
who relies upon the learned professional 's expertise, judgment, and advice 34
where the professional relationship with the learned professional is governed 35
by professional standards, codes of conduct, or regulations. 36
(3) Developer. – Any person that meets any of the following: 37
a. Creates, designs, programs, trains, modifies, or substantially 38
contributes to the creation or modification of an AI product. 39
b. Exercises control over the AI product 's design specifications, 40
functionality, capabilities, limitations, or intended uses. 41
c. Tests, validates, documents, or certifies an AI product prior to its 42
release or deployment. 43
d. Markets, distributes, licenses, or makes available an AI product under 44
their own name, brand, or trademark, regardless of whether they 45
created the original underlying technology. 46
e. Either creates an original AI product or is a secondary developer who 47
substantially modifies, retrains, or adapts an existing AI product for a 48
new use or market. 49
(4) Error. – Any output, action, recommendation, or omission by an AI product 50
that produces objectively incorrect information . The term includes when an 51
General Assembly Of North Carolina Session 2025
House Bill 934-Second Edition Page 3
AI product fails to perform a function or task that it expressly or implicitly 1
represents itself as capable of performing. 2
(5) Interactive computer service. – Any information service, system, or access 3
software provider that provides or enables computer access by multiple users 4
to a computer server, including specifically a service or system that provides 5
access to the internet and such systems operated or services offered by 6
libraries or educational institutions. 7
(6) Learned professional. – Any individual who meets all of the following: 8
a. Possesses specialized education, training, knowledge, or skill in a 9
recognized profession. 10
b. Is licensed, certified, or otherwise authorized by an occupational 11
licensing board to practice in their field in this State. 12
c. Is bound by professional standards, ethical obligations, and a duty of 13
care to clients. 14
d. Exercises independent professional judgment when utilizing tools, 15
including AI products, in the course of rendering professional services. 16
e. Is expected to possess sufficient knowledge to evaluate the 17
appropriateness, limitations, and risks of tools employed in their 18
professional practice, including artificial intelligence products, as they 19
pertain to a specific client matter. 20
"§ 1-539.31. Immunity from civil liability for artificial intelligence developers. 21
When a learned professional uses an artificial intelligence program or product in the course 22
of providing professional services to a client, the learned professional is solely responsible for 23
any damage to the client resulting from errors generated by the artificial inte lligence product. 24
The following entities shall not be liable for the actions of the learned professional in use of the 25
artificial intelligence product: 26
(1) The developer of the artificial intelligence product. 27
(2) An interactive computer service. 28
"§ 1-539.32. Other privileges and immunities. 29
This Article does not affect any other immunities from civil liability established by the 30
General Statutes or available at common law." 31
SECTION 2.(b) This section becomes effective December 1, 2025, and applies to 32
acts or omissions occurring on or after that date. 33
SECTION 3. Except as otherwise provided, this act is effective when it becomes 34
law. 35