S.F. 2106 Section 1. NEW SECTION . 562C.1 Short title. 1 This chapter shall be known and may be cited as the “Iowa 2 Residential Rent Fairness and Anticollusion Act” . 3 Sec. 2. NEW SECTION . 562C.2 Definitions. 4 As used in this chapter, unless the context otherwise 5 requires: 6 1. “Algorithmic rent-setting system” means software, machine 7 learning, artificial intelligence, or any other automated tool 8 used by a landlord to set, recommend, or adjust rent levels 9 or occupancy levels for residential rental property, based 10 in whole or in part on nonpublic competitor data, without 11 independent individualized human review or decision making. 12 2. “Landlord” means any person that owns, leases, 13 subleases, or otherwise controls five or more residential 14 rental properties in the state, or that manages or operates 15 residential rental properties on behalf of the person. 16 3. “Nonpublic competitor data” means data regarding rent 17 levels, lease terms, occupancy rates, or other proprietary 18 information of other landlords or rental properties that is not 19 publicly disclosed or available. 20 4. “Price fixing” means any agreement, arrangement, or 21 understanding among two or more landlords or agents of the 22 landlords that does any of the following: 23 a. Fixes, stabilizes, raises, or maintains the level of rent 24 charged for residential rental property. 25 b. Limits or restricts competition by controlling rent 26 setting or terms of tenancy. 27 c. Uses shared nonpublic competitor data, algorithmic tools, 28 or software to coordinate rent levels or occupancy terms across 29 multiple landlords. 30 5. “Provider of an algorithmic rent-setting system” means 31 a person who designs, develops, markets, sells, licenses, or 32 operates an algorithmic rent-setting system. 33 6. “Rent” means all payments or charges, however designated, 34 that a landlord demands or receives from a tenant in return for 35 -1- LSB 5238XS (4) 91 lh/jh 1/ 6

S.F. 2106 occupancy of a residential rental property, including any fees, 1 parking, utilities, or other services tied to the tenancy. 2 7. “Residential rental property” means a parcel of land or a 3 building or portion thereof occupied or intended for occupancy 4 as a home, mobile home, residence, or sleeping place by a 5 person, and offered or used for rent in the state. 6 8. “Tenant” means the same as defined in section 562A.6 or 7 562B.7. 8 Sec. 3. NEW SECTION . 562C.3 Price fixing —— prohibited 9 acts. 10 1. Any landlord, or any person acting on behalf of a 11 landlord, shall not enter into or engage in any price fixing 12 with another landlord regarding rent for residential rental 13 property. 14 2. A landlord shall not use an algorithmic rent-setting 15 system that relies on nonpublic competitor data or coordinates 16 pricing with other landlords to set or adjust rent or occupancy 17 levels for residential rental property. 18 3. A provider of an algorithmic rent-setting system shall 19 not do any of the following: 20 a. Provide an algorithmic rent-setting system that uses or 21 incorporates nonpublic competitor data in a manner that fixes, 22 stabilizes, raises, or maintains the level of rent or occupancy 23 for residential property. 24 b. Provide an algorithmic rent-setting system that the 25 provider of an algorithmic rent-setting system knew or 26 reasonably should have known would be used for price fixing. 27 c. Enter into any agreement with two or more landlords 28 to limit or restrain competition in setting rent or terms of 29 tenancy using the algorithmic rent-setting system. 30 Sec. 4. NEW SECTION . 562C.4 Enforcement. 31 1. The attorney general, or any county attorney or city 32 attorney in this state may bring a civil action for a violation 33 of this chapter. Upon finding that a landlord or a provider 34 of an algorithmic rent-setting system violated this chapter, a 35 -2- LSB 5238XS (4) 91 lh/jh 2/ 6

S.F. 2106 court may order any of the following: 1 a. Civil penalties of up to five thousand dollars per rental 2 unit per month for each month a violation continues, or such 3 higher amount as determined by rulemaking, to be deposited into 4 the general fund of the state. 5 b. Injunctive relief as necessary to enforce compliance with 6 this chapter. 7 c. Restitution to aggrieved tenants who paid rent in excess 8 of what would have been charged in a competitive market absent 9 the violation. 10 d. Reasonable attorney fees and costs to the attorney 11 general, county attorney, or city attorney, as applicable. 12 2. A tenant harmed by a violation of this chapter may bring 13 a civil action, and upon finding that a landlord or a provider 14 of an algorithmic rent-setting system violated this chapter, a 15 court may order the following: 16 a. Injunctive relief as necessary to enforce compliance with 17 this chapter. 18 b. Damages. 19 c. Reasonable attorney fees. 20 3. An action brought under this section may be commenced 21 within two years of a violation, and not afterward. 22 Sec. 5. NEW SECTION . 56C.5 Affirmative defenses. 23 1. It is an affirmative defense to any claim or action 24 alleging that a landlord or a provider of an algorithmic 25 rent-setting system violated this chapter, if all of the 26 following apply: 27 a. The landlord or provider of an algorithmic rent-setting 28 system set the rent independently and without knowledge of any 29 agreement, coordination, or shared nonpublic competitor data 30 with other landlords. 31 b. The landlord or provider of an algorithmic rent-setting 32 system did not rely on an algorithmic rent-setting system that 33 uses nonpublic competitor data to coordinate pricing. 34 c. The landlord or provider of an algorithmic rent-setting 35 -3- LSB 5238XS (4) 91 lh/jh 3/ 6

S.F. 2106 system conducted due diligence to ensure that any algorithmic 1 rent-setting system used was not designed or intended to 2 facilitate coordination among landlords. 3 2. The burden of proof for the affirmative defense lies with 4 the landlord or the provider of an algorithmic rent-setting 5 system. 6 Sec. 6. NEW SECTION . 562C.6 Landlords —— algorithmic 7 rent-setting system providers —— recordkeeping. 8 A landlord or a provider of an algorithmic rent-setting 9 system shall retain for five years records concerning the use 10 of rent-setting algorithms, data sources, decisions, and human 11 oversight of algorithmic rent-setting systems. 12 Sec. 7. NEW SECTION . 562C.7 Rules. 13 The attorney general may adopt rules pursuant to chapter 14 17A to administer this chapter, including standards for 15 algorithmic rent-setting systems, recordkeeping requirements, 16 affirmative defense compliance practices, and the form and 17 content of notices to tenants when rent adjustments are based 18 on an algorithmic rent-setting system, that include a summary 19 statement of the landlord’s use of such system and the tenant’s 20 rights under this chapter. 21 EXPLANATION 22 The inclusion of this explanation does not constitute agreement with 23 the explanation’s substance by the members of the general assembly. 24 This bill relates to residential rental properties price 25 fixing. 26 The bill defines a “landlord” as any person that owns, 27 leases, subleases, or otherwise controls five or more 28 residential rental properties in the state, or any that 29 manages or operates residential rental properties on behalf of 30 the person. “Algorithmic rent-setting system” (algorithmic 31 system) is defined as software, machine learning, artificial 32 intelligence, or other automated tool used by a landlord to 33 set, recommend, or adjust rent levels or occupancy levels for 34 residential rental properties, based in whole or in part on 35 -4- LSB 5238XS (4) 91 lh/jh 4/ 6

S.F. 2106 nonpublic competitor data without independent individualized 1 human review or decision making. 2 The bill prohibits any landlord, or any person acting 3 on behalf of a landlord, from entering into or engaging in 4 any price fixing with another landlord regarding rent for 5 residential rental property. The bill also prohibits a 6 landlord from using an algorithmic system that relies on 7 nonpublic competitor data or coordinates with other landlords 8 to set or adjust rent or occupancy levels for residential 9 rental property. A provider of an algorithmic system is 10 prohibited from providing an algorithmic system that uses or 11 incorporates nonpublic competitor data in a manner that fixes, 12 stabilizes, raises, or maintains the level of rent or occupancy 13 for residential property; providing an algorithmic system that 14 the provider of the algorithmic system knew or reasonably 15 should have known would be used for price fixing; and entering 16 into any agreement with two or more landlords to limit or 17 restrain competition in setting rent or terms of tenancy using 18 the algorithmic system. 19 The bill provides that the attorney general, or a county 20 attorney or city attorney may bring a civil action for a 21 violation of the bill. Upon finding that a landlord or a 22 provider of an algorithmic system violated the bill, a court 23 may order civil penalties, to be deposited into the general 24 fund of the state, of up to $5,000 per rental unit per month 25 for each month a violation continues, or a higher amount as 26 determined by rulemaking, injunctive relief, restitution, and 27 reasonable attorney fees and costs. 28 The bill provides that a tenant harmed by a violation of the 29 bill may bring a civil action. Upon finding that a landlord or 30 a provider of an algorithmic system violated the bill, a court 31 may order injunctive relief, damages, and reasonable attorney 32 fees. 33 An action brought under the bill must be commenced within two 34 years of the violation, and not afterward. 35 -5- LSB 5238XS (4) 91 lh/jh 5/ 6

S.F. 2106 The bill provides an affirmative defense to any claim or 1 action alleging that a landlord or a provider of an algorithmic 2 system violated the bill, if the landlord or a provider of an 3 algorithmic system: (1) set the rent independently and without 4 knowledge of any agreement, coordination, or shared nonpublic 5 competitor data with other landlords; (2) did not rely on an 6 algorithmic system that uses nonpublic competitor data to 7 coordinate pricing; and (3) conducted due diligence to ensure 8 that any algorithmic system used was not designed or intended 9 to facilitate coordination among landlords. The burden of 10 proof for the affirmative defense lies with the landlord or the 11 provider of an algorithmic system. 12 The bill requires a landlord or a provider of an algorithmic 13 system to retain for five years records concerning the use of 14 rent-setting algorithms, data sources, decisions, and human 15 oversight of algorithmic rent-setting systems. 16 The attorney general may adopt rules to administer the bill. 17 -6- LSB 5238XS (4) 91 lh/jh 6/ 6