State contracts: report: modern foundation models and associated artificial intelligence systems., the official text

An act to add Chapter 6.5 (commencing with Section 12450) to Part 2 of Division 2 of the Public Contract Code, relating to public contracts.

LEGISLATIVE COUNSEL'S DIGEST

Existing law, the Transparency in Frontier Artificial Intelligence Act, among other things related to ensuring the safety of certain artificial intelligence models, requires a large frontier developer to write, implement, and clearly and conspicuously publish on its internet website a frontier AI framework that applies to the large frontier developer’s frontier models and describes how the large frontier developer approaches, among other things, incorporating national standards, international standards, and industry-consensus best practices into its frontier AI framework. Existing law requires the Department of Technology to make recommendations about whether and how to update certain definitions for the purposes of the act, including the definition of “frontier model” so that it applies to foundation models at the frontier of artificial intelligence development.
Existing law requires a contract entered into by any state agency for the procurement or laundering of apparel, garments, or corresponding accessories, or the procurement of equipment, materials, or supplies, other than procurement related to a public works contract, to require that a contractor certify that nothing furnished to the state pursuant to the contract has been laundered or produced by certain types of labor, including sweatshop labor and forced labor, as defined. Existing law requires the Department of Industrial Relations to establish a contractor responsibility program, including a Sweatfree Code of Conduct, to be signed by all bidders on state contracts and subcontracts, as provided.
This bill would require the Department of Industrial Relations, in consultation with the Department of Technology, to convene a Foundation Model Labor and Procurement Working Group consisting of 9 members, as provided, to, among other things, assess labor practices underlying the development of modern foundation models and associated artificial intelligence systems and develop recommendations regarding whether and how the state should incorporate labor standards into procurement decisions for foundation models and associated artificial intelligence systems. The bill would require the working group to compile their findings and recommendations into a report and submit that report to the Legislature on or before December 31, 2027.

The people of the State of California do enact as follows:

SECTION 1.
Chapter 6.5 (commencing with Section 12450) is added to Part 2 of Division 2 of the Public Contract Code, to read:
6.5.
Foundation Model Labor and Procurement Working Group12450.
For purposes of this chapter, the following definitions apply:
(a) “Artificial intelligence” means an engineered or machine-based system that varies in its level of autonomy and that can, for explicit or implicit objectives, infer from the input it receives how to generate outputs that can influence physical or virtual environments.
(b) “Foundation model” means an artificial intelligence model that is all of the following:
(1) Trained on a broad data set.
(2) Designed for generality of output.
(3) Adaptable to a wide range of distinctive tasks.

12452.
(a) The Department of Industrial Relations, in consultation with the Department of Technology, shall convene a Foundation Model Labor and Procurement Working Group consisting of the following nine members:
(1) Two experts in labor standards, including at least one representative from a labor union with relevant experience, as appointed by the Speaker of the Assembly.
(2) One expert in state information technology procurement, as appointed by the Governor.
(3) One expert in state contracting for procurement of ethically sourced goods and services, as appointed by the Governor.
(4) One expert from academia with experience researching artificial intelligence, including foundation model development, training data practices, and model evaluation, as appointed by the Senate Committee on Rules.
(5) One expert in global labor supply chains, as appointed by the Senate Committee on Rules.
(6) One expert from a small private sector entity with experience developing foundation models and associated artificial intelligence systems, as appointed by the Governor.
(7) One expert from a large private sector entity with experience developing foundation models and associated artificial intelligence systems, as appointed by the Senate Committee on Rules.
(8) One expert in occupational health and safety, as appointed by the Governor.
(b) The working group shall do all of the following:
(1) Assess labor practices underlying the development of modern foundation models and associated artificial intelligence systems, including, but not limited to, data annotation, content moderation, reinforcement learning with human feedback, and other forms of data enrichment work, and evaluate the prevalence of those practices across domestic and international supply chains.
(2) Explore the technical and economic viability of alternative labor practices underlying the development of modern foundation models and associated artificial intelligence systems, including those designed to reduce exposure to harmful content or improve worker conditions, including, but not limited to, psychological harm.
(3) Evaluate which foundation models and associated artificial intelligence systems have been procured, licensed, or otherwise deployed by state agencies, and, to the extent feasible, assess the labor practices underlying the development of those models, including the extent to which those practices comply with internationally recognized labor standards and applicable state and federal law.
(4) Assess whether and how other states, the federal government, and foreign jurisdictions have adopted or are considering adopting procurement standards for foundation models and associated artificial intelligence systems, including standards relating to labor conditions, supply chain transparency, and contractor certification requirements.
(5) Assess and review guidelines and best practices developed by domestic and international labor organizations for foundation models and associated artificial intelligence systems, and any barriers to workers seeking out and exercising a right to collectively bargain or join a union.
(6) Analyze the likely impacts of restricting or prohibiting specified labor practices through state procurement standards, including effects on domestic and international labor conditions, model performance, reliability, safety, availability, and cost, as well as potential impacts on competition, innovation, and market concentration.
(7) Identify data gaps, barriers to transparency, and challenges associated with assessing labor practices in global artificial intelligence supply chains, including the role of proprietary information and nondisclosure agreements.
(8) Develop recommendations regarding whether and how the state should incorporate labor standards into procurement decisions for foundation models and associated artificial intelligence systems, including whether state procurement standards should require contractors and subcontractors to certify compliance with minimum labor standards consistent with Section 6108.
(c) On or before December 31, 2027, the working group shall compile the findings made pursuant to subdivision (b), and any related findings or recommendations, into a report and shall submit that report to the Legislature in compliance with Section 9795 of the Government Code.