Illinois has first-in-nation law on AI safety; Iowa, Nebraska have new protections for chatbot users

In a year marked by a flurry of activity by state legislatures on artificial intelligence, Illinois has adopted a first-in-the-nation requirement for the developers of advanced AI systems: undergo annual, independent third-party audits that evaluate the safety of your frontier AI models. The Artificial Intelligence Safety Measures Act (SB 315) takes effect in January.

Under this new Illinois law, developers must publicly disclose safety practices, report significant safety incidents, and maintain robust compliance processes. Their safety frameworks must include how to “manage, assess and mitigate catastrophic risks,” defined in Illinois statute as the risk of a frontier AI model contributing to an incident that causes the death or serious injury of more than 50 people or more than $1 billion in property damage.

“Crucially, companies must subject those frameworks to independent audits to confirm compliance with their own standards,” the New York University Stern Center for Business and Human Rights notes in its analysis of SB 315. Illinois lawmakers also established whistleblower protections for employees who raise AI safety concerns.

According to the nonprofit Transparency Coalition, during the first six months of 2026, legislatures in 27 U.S. states had passed 84 AI-related laws. Examples from the Midwest include:

• Restrictions on the use of AI by health insurers — Under Iowa’s HF 2635, AI-based reviews of prior-authorization requests cannot be the sole basis for denying coverage of specific treatments, surgeries or medications. Illinois’ SB 3114 requires human reviews of a health claim prior to it being “downcoded” to a lower level of reimbursement.
• AI chatbot safeguards — In Nebraska, under LB 525, young users of conversational AI chatbots must be made aware that they are interacting with an AI system (not a human). They also must be shielded from sexually explicit content and other potentially harmful interactions. Additionally, when a user (of any age) indicates self-harm or suicidal ideation in a prompt, chatbot protocols should be to respond with referrals to crisis services. Many of these same provisions also are part of a new Iowa law (SF 2417).
• Consumer and worker protections — New laws in Illinois prevent bots from purchasing an excess number of tickets to live events (SB 318) and prohibit AI-driven rental pricing in the housing market (SB 343). In Nebraska, it is now illegal for ride-sharing services to use dynamic pricing in the aftermath of a governor-declared state of emergency (LB 771).