Ah yes, the fox guarding the chicken-coop; the auditors are to verify that the fox is indeed guarding the chicken-coop per the standards the fox has set. No mention of disappearing chickens anywhere in the standards.
> (a) A large frontier developer that violates this Act shall be subject to a civil penalty in an amount dependent upon the severity of the violation that does not exceed $1,000,000 per violation.
> (b) A large chatbot provider that violates this Act shall be subject to a civil penalty in an amount dependent upon the severity of the violation that does not exceed $50,000 per violation.
> (c) A civil penalty described in this Section shall be recovered in a civil action brought by the Attorney General.
This is the "penalties" section of the bill (available at https://www.ilga.gov/documents/legislation/104/SB/PDF/10400S...). I'm not sure what counts as a violation, but if it's simply the act of releasing the model, this isn't going to have much impact at $1,000,000 maximum.
As to the bigger question of how can Illinois regulate a company that isn't based in Illinois: the general principal is that states can regulate a company's conduct within or targeted at the state. In the U.S., there are constitutional limits to this kind of regulation (https://texaslawreview.org/state-regulation-of-online-behavi...). It's a fuzzy line, though, and if this were a big enough headache for the frontier labs to comply with they would probably litigate it.
If enough states by population follow, it becomes the standard. California, New York, etc.
(have contributed to policy at the state level in Illinois, but not on this topic)