House File 2469 - Introduced HOUSE FILE 2469 BY McBURNEY A BILL FOR An Act prohibiting the use of an automated decision-making 1 system to alter the price of a product or service for 2 a specific individual based on surveillance data, and 3 providing civil penalties. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 5718YH (4) 91 dg/jh

H.F. 2469 Section 1. NEW SECTION . 554J.1 Definitions. 1 For purposes of this chapter: 2 1. “Automated decision-making system” means a system that 3 uses artificial intelligence or algorithms to make decisions or 4 predictions with little or no human intervention. 5 2. “Surveillance data” means data obtained through 6 observation, inference, or surveillance of an individual that 7 is related to the characteristics, behaviors, salaries, or 8 biometrics of the individual or a group to which the individual 9 belongs. 10 Sec. 2. NEW SECTION . 554J.2 Automated decision-making 11 systems —— prohibited acts. 12 1. A person shall not use an automated decision-making 13 system to alter the price of a product or service for a 14 specific individual based on surveillance data. 15 2. A person that violates this section commits an unfair 16 practice under section 714.16 and under chapter 714H. 17 Sec. 3. NEW SECTION . 554J.3 Limitations. 18 This chapter does not apply to the use of an automated 19 decision-making system to alter the price of a product or 20 service for a specific individual for any of the following 21 reasons: 22 1. Due to the difference in costs to provide a product or 23 service to a specific individual. 24 2. Due to a bona fide discount that is widely available to 25 members of the public, including but not limited to membership 26 discounts, military and student discounts, senior discounts, 27 and discounts due to a special event. 28 3. When the person using an automated decision-making 29 system is an insurer using the automated decision-making system 30 to determine the amount a consumer must pay for an insurance 31 policy or contract. 32 4. When the person using an automated decision-making 33 system is using the automated decision-making system to 34 determine whether to extend a line of credit to, or refuse to 35 -1- LSB 5718YH (4) 91 dg/jh 1/ 3

H.F. 2469 enter into a transaction with, an individual based on data 1 provided in a consumer report covered by the federal Fair 2 Credit Reporting Act, 15 U.S.C. §1681 et seq. 3 Sec. 4. NEW SECTION . 554J.4 Attorney general rulemaking 4 authority. 5 The attorney general shall adopt rules pursuant to chapter 6 17A to implement and enforce this chapter. 7 Sec. 5. Section 714.16, subsection 2, Code 2026, is amended 8 by adding the following new paragraph: 9 NEW PARAGRAPH . t. It is an unlawful practice for a person 10 to violate section 554J.2. 11 Sec. 6. Section 714H.3, subsection 2, Code 2026, is amended 12 by adding the following new paragraph: 13 NEW PARAGRAPH . 0f. Section 554J.2. 14 EXPLANATION 15 The inclusion of this explanation does not constitute agreement with 16 the explanation’s substance by the members of the general assembly. 17 This bill prohibits the use of an automated decision-making 18 system to alter the price of a product or service for a 19 specific individual based on surveillance data. A person who 20 violates the bill’s provisions commits an unlawful practice 21 and shall be subject to civil action according to Code section 22 714.16 (consumer fraud) and Code chapter 714H (consumer fraud 23 —— private action), which can result in remedies including 24 but not limited to an injunction, restoration of a person’s 25 money or property, disgorgement of moneys or property, a civil 26 penalty of up to $40,000 per violation, and liability pursuant 27 to a private cause of action. 28 The bill lists several instances when a person may use 29 an automated decision-making system to alter the price of a 30 product or service for a specific individual. 31 The bill defines “automated decision-making system” as a 32 system that uses artificial intelligence or algorithms to make 33 decisions or predictions with little or no human intervention. 34 The bill defines “surveillance data” as data obtained 35 -2- LSB 5718YH (4) 91 dg/jh 2/ 3

H.F. 2469 through observation, inference, or surveillance of an 1 individual that is related to the characteristics, behaviors, 2 salaries, or biometrics of the individual or a group to which 3 the individual belongs. 4 -3- LSB 5718YH (4) 91 dg/jh 3/ 3