HF 2469 (LSB 5718YH (4) 91)

HOUSE FILE 2469

BY  McBURNEY

A BILL FOR

An Act prohibiting the use of an automated decision-making system to alter the price of a product or service for a specific individual based on surveillance data, and providing civil penalties.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  NEW SECTION.  554J.1  Definitions.
   For purposes of this chapter:
   1.  “Automated decision-making system” means a system that uses artificial intelligence or algorithms to make decisions or predictions with little or no human intervention.
   2.  “Surveillance data” means data obtained through observation, inference, or surveillance of an individual that is related to the characteristics, behaviors, salaries, or biometrics of the individual or a group to which the individual belongs.
    Sec. 2.  NEW SECTION.  554J.2  Automated decision-making systems —— prohibited acts.
   1.  A person shall not use an automated decision-making system to alter the price of a product or service for a specific individual based on surveillance data.
   2.  A person that violates this section commits an unfair practice under section 714.16 and under chapter 714H.
    Sec. 3.  NEW SECTION.  554J.3  Limitations.
   This chapter does not apply to the use of an automated decision-making system to alter the price of a product or service for a specific individual for any of the following reasons:
   1.  Due to the difference in costs to provide a product or service to a specific individual.
   2.  Due to a bona fide discount that is widely available to members of the public, including but not limited to membership discounts, military and student discounts, senior discounts, and discounts due to a special event.
   3.  When the person using an automated decision-making system is an insurer using the automated decision-making system to determine the amount a consumer must pay for an insurance policy or contract.
   4.  When the person using an automated decision-making system is using the automated decision-making system to determine whether to extend a line of credit to, or refuse to enter into a transaction with, an individual based on data provided in a consumer report covered by the federal Fair Credit Reporting Act, 15 U.S.C. §1681 et seq.
    Sec. 4.  NEW SECTION.  554J.4  Attorney general rulemaking authority.
   The attorney general shall adopt rules pursuant to chapter 17A to implement and enforce this chapter.
    Sec. 5.  Section 714.16, subsection 2, Code 2026, is amended by adding the following new paragraph:
   NEW PARAGRAPH.  t.  It is an unlawful practice for a person to violate section 554J.2.
    Sec. 6.  Section 714H.3, subsection 2, Code 2026, is amended by adding the following new paragraph:
   NEW PARAGRAPH.  0f.  Section 554J.2.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill prohibits the use of an automated decision-making system to alter the price of a product or service for a specific individual based on surveillance data. A person who violates the bill’s provisions commits an unlawful practice and shall be subject to civil action according to Code section 714.16 (consumer fraud) and Code chapter 714H (consumer fraud —— private action), which can result in remedies including but not limited to an injunction, restoration of a person’s money or property, disgorgement of moneys or property, a civil penalty of up to $40,000 per violation, and liability pursuant to a private cause of action.
   The bill lists several instances when a person may use an automated decision-making system to alter the price of a product or service for a specific individual.
   The bill defines “automated decision-making system” as a system that uses artificial intelligence or algorithms to make decisions or predictions with little or no human intervention.
   The bill defines “surveillance data” as data obtained through observation, inference, or surveillance of an individual that is related to the characteristics, behaviors, salaries, or biometrics of the individual or a group to which the individual belongs.