HB 1261

As introduced: - Prohibits artificial intelligence (AI) toys from generating sexual, violent, discriminatory or otherwise inappropriate content. - Prohibits emotional manipulation, encouraging criminal activity, self-harm, substance use, or sexual behavior, or inferring, recording, or categorizing demographic or other personal attributes of the child. - Requires AI toys to include safety features such as parental consent mechanisms, content filters, and a "safe mode". - Restricts a manufacturer's collection and use of a child's data, prohibiting its sale, use for targeted advertising, or use to train unrelated AI models. - Requires manufacturers to conduct regular safety assessments, provide parents with the ability to access and delete their child's data, and notify parents of a data breach within 48 hours. - Requires a clear and conspicuous label stating the product uses AI and identifying data collected and stored. Requires a summary report identifying the age range the toy is intended for, risks, results of testing, and directions for parental control. - Prohibits marketing the toy as an emotional companion, parental substitute, or psychological counselor, using a recording in marketing without parental consent, or using data for targeted advertising. - Establishes the Artificial Intelligence Toy Safety Review Panel within the Office of the Attorney General to monitor compliance and conduct independent audits. - Makes a violation an unfair or deceptive trade practice, subject to a civil penalty of up to $50,000 per violation and a mandatory product recall.