S1840

An Act concerning responsible artificial intelligence deployment and supplementing Title 34 of the Revised Statutes and P.L.1945, c.169 (C.10:5-1 et seq.).

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. This act shall be known and may be cited as the “New Jersey Responsible AI Advancement and Workforce Protection Act.”

2. The Legislature finds and declares:

a. Artificial intelligence (AI) is transforming the economy, the workforce, and people’s daily lives. However, innovation without accountability risks leaving residents, workers, communities, and the environment behind. With appropriate policies, New Jersey can lead AI innovation with responsibility, equity, and foresight.

b. As AI reshapes the economy, the development of a comprehensive legislative framework can ensure that workers are not casualties of technological progress. Investing in retraining and re-employment pathways for those displaced by AI, developing union-led apprenticeships, and enhancing community college programs will prepare residents of the State for the jobs of tomorrow: jobs that are resilient, dignified, and future-proof. AI businesses and developers will share in this framework by contributing to a training fund to enable these retraining and development programs, and employers deploying AI systems that result in layoffs will be held accountable through mandatory disclosures and additional contributions to this training fund.

c. AI computing facilities consume enormous amounts of energy and water, placing additional burdens on existing infrastructure and the taxpayers whose dollars fund that infrastructure. Environmental impact assessments for large-scale AI infrastructure projects help enable development that is sustainable and community-informed. Creating consistent community review processes and developing incentives for clean energy solutions like battery storage, geothermal, and nuclear to power AI help drive sustainability. With these policies, New Jersey can be a model for how states balance technological growth with environmental stewardship and infrastructure resilience.

d. AI should serve the public good and not undermine civil rights or privacy. In that regard, high-risk AI systems used in housing, employment, healthcare, and policing will be subject to algorithmic impact assessments before deployment and intrusive surveillance and automated workplace management policies will be subject to further public review and strict limitations.

e. Public trust begins with public oversight. Providing the Attorney General with the authority to investigate AI-driven discrimination and enforce penalties for civil rights violations will ensure proper oversight in this developing area.

f. Local communities should have a voice in decision-making, with community benefit agreements ensuring that AI uplifts neighborhoods rather than exploiting them.

g. AI implementations and their corporate sponsors must disclose their environmental and economic footprint to allow municipalities to negotiate fair terms. Those municipalities should be empowered to shape how AI impacts the community's future, rather than passively accepting corporate development. To assist in this empowerment, funds should be invested directly in community resilience supporting infrastructure, education, and local workforce development.

h. Innovation must uplift, not replace the people who built the economy.

i. It is therefore an appropriate public purpose to establish an integrated AI strategy for New Jersey that includes incentives for innovation tied to community involvement, responsible funding, worker protections, and sustainable infrastructure usage.

3. As used in this act:

"AI infrastructure entity" means any company operating large-scale AI computing facilities within this State.

"Artificial intelligence" or “AI” means the development of software and hardware and the end-use application of technologies that are able to perform tasks normally requiring human intelligence, including, but not limited to, visual perception, speech recognition, decision-making, translation between languages, and generative artificial intelligence, which generates new content in response to user inputs of data.

"Community benefit agreement" means a comprehensive agreement developed in cooperation between an AI infrastructure entity and an impacted municipality or other political subdivision of the State which provides an environmental and economic impact statement regarding the resources used in the AI implementation and an analysis of the resulting employment and secondary community benefits associated with the AI implementation.

"Department" means the Department of Labor and Workforce Development.

"Gross revenue from AI operations" means sales revenue derived from the sale of AI services sourced from AI computing facilities in the State.

"High-risk AI system" means any AI system used in employment, housing, healthcare, education, criminal justice, or public services.

4. a. There is established in the Department of Labor and Workforce Development and administered by the New Jersey Economic Development Authority a dedicated, nonlapsing, revolving to be known as the AI Horizon Fund, to be managed and invested by the State Treasurer to:

(1) support workforce retraining and apprenticeship programs;

(2) invest in clean energy upgrades for AI infrastructure; and

(3) fund community resilience initiatives in areas impacted by AI-related development.

b. The fund shall be credited with:

(1) contributions from AI infrastructure entities operating in New Jersey, based on a five percent assessment of gross revenue from AI operations;

(2) penalties and fees collected by the department pursuant to section 8 of this act;

(3) moneys as are appropriated by the Legislature; and

(4) any return on investment of moneys deposited in the fund.

5. a. The Department of Labor and Workforce Development shall:

(1) establish an AI Worker Protection and Economic Adjustment section on its website. That section shall include a list of sectors at risk for AI-driven displacement. The list shall be updated at least quarterly;

(2) engage with registered unions to expand training programs specific to job roles within those organizations;

(3) engage with community colleges to develop curricula around AI certification;

(4) based on the list of at-risk sectors referenced in paragraph (1) of this subsection, provide enhanced unemployment benefits of 13 additional weeks for workers displaced by AI;

(5) based on the list of at-risk sectors referenced in paragraph (1) of this subsection, develop specific job placement programs for workers displaced by AI;

(6) develop an AI Impact Disclosure that employers deploying AI systems that results in layoffs shall file with the department. This disclosure shall contain, at a minimum, the date on which the AI tool that resulted in layoffs was deployed, the date of layoffs, and the number of workers displaced by the AI tool deployment; and

(7) develop a supplemental contribution schedule to the AI Horizon Fund based on the number of layoffs attributable to AI and develop a mechanism for assessment and payment of these assessments.

b. The disclosure statements and supplemental contributions specified in paragraphs (6) and (7) of subsection a. of this section shall only be applicable to firms which have 100 or more employees.

6. Each AI infrastructure entity shall, at the time of initial deployment and annually thereafter, in a manner determined by the department:

a. Conduct an environmental impact assessment and provide an additional environmental impact assessment with any capacity expansion, and file the assessment with the department;

b. Submit annual reports to the department detailing energy consumption, water usage, and carbon emissions; and

c. Enter into community benefit agreements with affected municipalities, and file the agreement with the department.

7. High-risk AI systems implemented in New Jersey shall:

a. Undergo algorithmic impact assessments prior to deployment. The Office of Information Technology in, but not of, the Department of the Treasury, shall perform the impact assessments, in a manner to be determined by the Office of Information Technology.

b. Be subject to ethical use and transparency requirements pursuant to P.L.2023, c.266 (C.56:8-166.4 et seq.).

8. Any person violating any of the provisions of sections 6 or 7 of this act shall be liable to a penalty of not less than $1,000 for a first violation and not more than $2,000 for a second or subsequent violation, to be collected in a civil action by a summary proceeding brought by the department or the Attorney General under the "Penalty Enforcement Law of 1999," P.L.1999, c.274 (C.2A:58-10 et seq.).

9. a. The Office of the Attorney General shall investigate complaints related to AI-driven discrimination, unreasonable AI workplace surveillance, and claims of violations of civil rights protections related to AI. The Attorney General shall enforce penalties pursuant to the "Law Against Discrimination," P.L.1945, c.169 (C.10:5-1 et seq.), and the "New Jersey Civil Rights Act," P.L.2004, c.143 (C.10:6-1 et seq.) for violations of this section.

b. As used in this section:

"AI-driven discrimination" means output resulting from AI systems that exhibit biases against individuals based on age, race, religion, or other protected classes.

"AI workplace surveillance" means the use of AI to monitor and analyze employee behavior and performance through the use of technology tools that track employee activities including computer usage and physical movements.

10. This act shall take effect 180 days after enactment, except that the Commissioner of Labor and Workforce Development and the Attorney General may take any anticipatory administrative action in advance as shall be necessary for the implementation of this act.

STATEMENT

This bill creates the “New Jersey Responsible AI Advancement and Workforce Protection Act.” The bill establishes worker protections, environmental responsibility, privacy protection, responsible investment, and workforce development within the AI industry.

AI is reshaping the economy, and the bill establishes a legislative framework to ensure that workers are not casualties of technological progress. Investing in retraining and re-employment pathways for those displaced by AI, developing apprenticeships, and enhancing community college programs will prepare residents of the State for the jobs of tomorrow: jobs that are resilient, dignified, and future-proof. AI businesses and developers will contribute to a training fund to enable retraining and development programs, and employers deploying AI systems that result in layoffs will be held accountable through mandatory disclosures and additional contributions to the training fund.

The bill establishes the AI Horizon Fund, sourced by an assessment on AI revenues and supplemented by annual appropriations, which will be used to fund the various programs outlined in the bill. In addition, the Department of Labor and Workforce Development will establish an additional schedule of supplemental assessments that will be levied on employers who lay off workers because the employers can replace the workers’ capabilities with AI.

The bill requires environmental and resource usage disclosures at the time of initial deployment and additional annual reporting on these factors. In addition, municipalities will work with AI providers at the time of initial deployment to ensure community-based involvement in AI developments.

High-risk AI systems implemented in New Jersey are required to develop impact assessments and comply with ethical use and transparency requirements. The bill defines high-risk AI systems as AI systems used in employment, housing, healthcare, education, criminal justice, or public services. The bill enables the Department of Labor and Workforce Development or the Attorney General to enforce civil penalties against employers who violate those provisions.

In addition, the bill requires the Office of the Attorney General to investigate complaints related to AI-driven discrimination and unreasonable AI workplace surveillance and pursue penalties for violations of civil rights protections.