S.F. 2278 Section 1. NEW SECTION . 554J.1 Definitions. 1 For purposes of this chapter: 2 1. “Algorithm” means a computational process that uses 3 a set of rules to define a sequence of operation including 4 but not limited to artificial intelligence systems and 5 facial-recognition software. 6 2. “Clear and conspicuous disclosure” means a disclosure 7 in the same medium as, and provided on, at, or near and 8 contemporaneous with every advertisement, display, image, 9 offer, or announcement of a price for which notice is required, 10 using lettering and wording that are easily visible and 11 understandable to the average consumer. 12 3. “Consumer” means a person who is seeking or solicited 13 to purchase, lease, or receive a good or service, not for 14 resale in the ordinary course of the natural person’s trade or 15 business, but for personal, family, or household use. 16 4. “Consumer data” means any data that identifies or could 17 reasonably be linked, directly or indirectly, with a specific 18 natural person or device, excluding location data. 19 5. “Dynamic and surveillance pricing” means pricing that 20 fluctuates dependent on conditions where algorithmic or 21 artificial intelligence models retrain or recalibrate on 22 information in near real-time, excluding promotional pricing 23 offers, loyalty program benefits, or other temporary discounts 24 or changes to pricing related to retention of existing 25 customers. 26 6. “Electronic shelving labels” means electronic and 27 wireless paper displays that present product and pricing 28 information. 29 7. “Food retail establishment” means a retail store that is 30 described by any of the following: 31 a. The retail store is described by all of the following: 32 (1) The retail store is over fifteen thousand square feet 33 in size. 34 (2) The retail store primarily sells household foodstuff 35 -1- LSB 5882XS (3) 91 dg/jh 1/ 9

S.F. 2278 for off-site consumption, including but not limited to fresh 1 produce, meats, poultry, fish, deli products, dairy products, 2 canned foods, dry foods, beverages, baked foods, or prepared 3 foods. 4 (3) Other household supplies or products are considered 5 secondary to the retail store’s primary purpose of food sales. 6 b. The retail store is described by all of the following: 7 (1) The retail store is over eighty-five thousand square 8 feet. 9 (2) At least ten percent of the retail store’s sales 10 floor area is dedicated to the sale of nontaxable merchandise 11 including but not limited to the sale of fresh produce, meats, 12 poultry, fish, deli products, dairy products, canned foods, dry 13 foods, beverages, baked foods, or prepared foods. 14 8. a. “Nondigital presentation of price” means any of the 15 following: 16 (1) A sign which offers the unit price for one or more 17 brands or sizes of a given commodity. 18 (2) A sticker, stamp, sign, label, or tag, affixed to the 19 shelf upon which a commodity is displayed. 20 (3) A sticker, stamp, sign, label, or tag, affixed to a 21 commodity itself. 22 b. If a single sign or tag does not provide the unit 23 price information for more than one brand or size of a given 24 commodity, then all of the following information shall be 25 provided: 26 (1) The identity of the commodity. 27 (2) The brand name. 28 (3) The quantity of the packaged commodity if more than one 29 package size per brand is displayed. 30 (4) The total sale price. 31 (5) The price per appropriate unit. 32 c. Where a sign providing unit price information for one 33 or more sizes or brands of a given commodity is used, the 34 sign shall be located centrally as close as practical to all 35 -2- LSB 5882XS (3) 91 dg/jh 2/ 9

S.F. 2278 items to which the sign refers, and the unit price information 1 displayed on the sign shall be presented in a clear, distinct, 2 and nondeceptive manner. 3 9. “Person” means any human being or individual. 4 10. “Personalized algorithmic pricing” means dynamic pricing 5 and surveillance pricing derived from or set by an algorithm 6 that uses consumer data which may vary among consumers, groups 7 of consumers, or both. 8 11. “Protected class data” means information about an 9 individual person or groups of people that directly, in 10 combination, or by implication identifies a characteristic 11 that is legally protected from discrimination under the 12 laws of this state or under federal law, including but not 13 limited to ethnicity, national origin, age, disability, sex, 14 sexual orientation, gender identity and expression, pregnancy 15 outcomes, and reproductive health care. 16 12. a. “Surveillance pricing” means offering or setting 17 a customized price for a good or service for a specific 18 consumer or group of consumers, based, in whole or in part, on 19 covered information collected through electronic surveillance 20 technology. 21 b. “Surveillance pricing” includes the use of technological 22 methods, systems, or tools, including but not limited to 23 sensors, cameras, device tracking, biometric monitoring, or 24 other forms of observation or data collection, that are capable 25 of gathering covered information about a consumer’s behavior, 26 characteristics, location, or other personal attributes, 27 whether in physical or digital environments. 28 Sec. 2. NEW SECTION . 554J.2 Prohibition against predatory 29 pricing. 30 1. A food retail establishment that knowingly advertises, 31 promotes, labels, or publishes a statement, display, image, 32 offer, or announcement that uses personalized algorithmic 33 pricing using consumer data specific to a particular consumer 34 is required to provide a clear and conspicuous disclosure to 35 -3- LSB 5882XS (3) 91 dg/jh 3/ 9

S.F. 2278 consumers that reads as follows: 1 THIS PRICE WAS SET BY AN ALGORITHM USING YOUR PERSONAL DATA. 2 2. A food retail establishment shall not use electronic 3 shelving labels or any digital shelf display technology and 4 instead shall use a nondigital presentation of price. This 5 prohibition does not limit any food retail establishment or any 6 business from providing consumers, based on previous purchase 7 history, a discount, promotional price, or loyalty program 8 benefit. 9 3. A food retail establishment shall not use electronic 10 shelving labels or any digital shelf display technology to 11 display personalized algorithmic pricing or surveillance 12 pricing. 13 4. A food retail establishment shall not collect data 14 belonging to minors under seventeen years of age and shall 15 not use such data for targeted advertising or personalized 16 algorithmic pricing. 17 5. A food retail establishment shall not use protected class 18 data in setting a price for, offering, marketing, or selling 19 any good or service if any of the following are true: 20 a. The use of that data has the effect of withholding or 21 denying any of the accommodations, advantages, or privileges 22 afforded to others. 23 b. The price for such good or service is different from the 24 price offered to other individuals or groups based in whole or 25 in part on the use of protected class data. 26 6. This section shall not apply to financial services, 27 including but not limited to financial institutions, financial 28 institution affiliates, broker-dealers, registered investment 29 advisors, and entities that provide consumer credit products 30 such as credit cards, personal loans, and mortgages. 31 7. This section shall not apply to any insurer licensed, 32 regulated, or otherwise authorized to do business in this 33 state, including any persons, agents, or affiliates acting on 34 behalf of such insurer. 35 -4- LSB 5882XS (3) 91 dg/jh 4/ 9

S.F. 2278 Sec. 3. NEW SECTION . 554J.3 Enforcement and penalties. 1 1. The attorney general shall bring an action in a court 2 of competent jurisdiction against a food retail establishment 3 believed to be in violation of this chapter. 4 2. a. The attorney general may seek an injunction against 5 a food retail establishment believed to be in violation of 6 this chapter five calendar days after serving the food retail 7 establishment notice of initiating an action under this 8 chapter. 9 b. A court may issue an injunction to enjoin and restrain a 10 food retail establishment from committing further violations of 11 this chapter without requiring proof that any person has been 12 injured or damaged. 13 3. If a court determines that a food retail establishment 14 has violated this chapter, the court may impose a civil penalty 15 of not more than seven thousand five hundred dollars for each 16 violation. Civil penalties collected under this section shall 17 be deposited into the general fund of the state. 18 4. In addition to any other remedies provided in this 19 chapter, any person aggrieved by a violation of this chapter 20 is entitled to bring an action in a court of competent 21 jurisdiction. 22 5. This section shall not in any way limit rights or 23 remedies which are otherwise available under law to the 24 attorney general or any other person authorized to bring an 25 action under this chapter. 26 Sec. 4. NEW SECTION . 554J.4 Interpretation. 27 This chapter shall be liberally construed to effectuate 28 its purposes. Courts shall interpret the provisions of this 29 chapter in order to preserve the maximum lawful effect of this 30 chapter. 31 EXPLANATION 32 The inclusion of this explanation does not constitute agreement with 33 the explanation’s substance by the members of the general assembly. 34 This bill prohibits personalized algorithmic pricing and 35 -5- LSB 5882XS (3) 91 dg/jh 5/ 9

S.F. 2278 surveillance pricing at certain food retail establishments 1 (establishment). 2 The bill defines “dynamic and surveillance pricing” 3 as pricing that fluctuates dependent on conditions where 4 algorithmic or artificial intelligence models retrain or 5 recalibrate on information in near real-time, excluding 6 promotional pricing offers, loyalty program benefits, or other 7 temporary discounts or changes to pricing related to retention 8 of existing customers. 9 The bill defines “electronic shelving labels” as electronic 10 and wireless paper displays that present product and pricing 11 information. 12 The bill defines “food retail establishment” as a retail 13 store that either is over 15,000 square feet in size, primarily 14 sells household foodstuff for off-site consumption, and the 15 sale of other household supplies or products are considered 16 secondary to the retail store’s primary purpose of food sales; 17 or the retail store is over 85,000 square feet, and at least 10 18 percent of the retail store’s sales floor area is dedicated to 19 the sale of nontaxable merchandise as detailed in the bill. 20 The bill defines “nondigital presentation of price” as a 21 sign which offers the unit price for one or more brands or 22 sizes of a given commodity; a sticker, stamp, sign, label, or 23 tag, affixed to the shelf upon which a commodity is displayed; 24 a sticker, stamp, sign, label, or tag, affixed to a consumer 25 commodity itself. If a single sign or tag does not provide the 26 unit price information for more than one brand or size of a 27 given commodity, then the identity of the commodity, the brand 28 name, the quantity of the packaged commodity if more than one 29 package size per brand is displayed, the total sale price, and 30 the price per appropriate unit shall be provided. Where a 31 sign providing unit price information for one or more sizes or 32 brands of a given commodity is used, the sign shall be located 33 centrally as close as practical to all items to which the sign 34 refers, and the unit price information displayed on the sign 35 -6- LSB 5882XS (3) 91 dg/jh 6/ 9

S.F. 2278 shall be presented in a clear, distinct, and nondeceptive 1 manner. 2 The bill defines “personalized algorithmic pricing” as 3 dynamic pricing and surveillance pricing derived from or set 4 by an algorithm that uses consumer data which may vary among 5 consumers, groups of consumers, or both. 6 The bill defines “protected class data” as information about 7 an individual person or groups of people that directly, in 8 combination, or by implication identifies a characteristic 9 that is legally protected from discrimination under the 10 laws of this state or under federal law, including but not 11 limited to ethnicity, national origin, age, disability, sex, 12 sexual orientation, gender identity and expression, pregnancy 13 outcomes, and reproductive health care. 14 The bill defines “surveillance pricing” as offering or 15 setting a customized price for a good or service for a specific 16 consumer or group of consumers, based, in whole or in part, on 17 covered information collected through electronic surveillance 18 technology. The bill details methods, systems, and tools 19 included within the meaning of “surveillance pricing”. 20 The bill also defines “algorithm”, “clear and conspicuous 21 disclosure”, “consumer”, “consumer data”, and “person”. 22 The bill requires an establishment that knowingly 23 advertises, promotes, labels, or publishes a statement, 24 display, image, offer, or announcement that uses personalized 25 algorithmic pricing using consumer data specific to a 26 particular consumer to provide a clear and conspicuous 27 disclosure that reads: THIS PRICE WAS SET BY AN ALGORITHM 28 USING YOUR PERSONAL DATA. 29 The bill prohibits an establishment from using electronic 30 shelving labels (ESL) or any digital shelf display technology 31 and instead shall use a nondigital presentation of price. This 32 prohibition does not limit any establishment or any business 33 from providing consumers, based on previous purchase history, a 34 discount, promotional price, or loyalty program benefit. 35 -7- LSB 5882XS (3) 91 dg/jh 7/ 9

S.F. 2278 The bill prohibits an establishment from using ESLs or 1 any digital shelf display technology to display personalized 2 algorithmic pricing or surveillance pricing. 3 The bill prohibits an establishment from collecting data 4 belonging to minors under 17 years of age and from using such 5 data for targeted advertising or personalized algorithmic 6 pricing. 7 The bill prohibits an establishment from using protected 8 class data in setting a price for, offering, marketing, or 9 selling any good or service if the use of that data has the 10 effect of withholding or denying any of the accommodations, 11 advantages, or privileges afforded to others; or the price for 12 such good or service is different from the price offered to 13 other individuals or groups based in whole or in part on the 14 use of protected class data. 15 The bill does not apply to financial services, including but 16 not limited to financial institutions, financial institution 17 affiliates, broker-dealers, registered investment advisors, and 18 entities that provide consumer credit products such as credit 19 cards, personal loans, and mortgages. 20 The bill does not apply to any insurer licensed, regulated, 21 or otherwise authorized to do business in this state, including 22 any persons, agents, or affiliates acting on behalf of such 23 insurer. 24 The bill requires the attorney general to bring an action 25 in a court of competent jurisdiction against an establishment 26 believed to be in violation of the bill. 27 The bill allows the attorney general to seek an injunction 28 against an establishment believed to be in violation of the 29 bill five calendar days after serving the establishment notice 30 of initiating an action under the bill. A court may issue 31 an injunction to enjoin and restrain an establishment from 32 committing further violations of the provisions of the bill 33 without requiring proof that any person has been injured or 34 damaged. 35 -8- LSB 5882XS (3) 91 dg/jh 8/ 9

S.F. 2278 The bill allows a court that determines that an 1 establishment has violated the bill to impose a civil penalty 2 of not more than $7,500 for each violation. Civil penalties 3 collected under the bill shall be deposited into the general 4 fund of the state. In addition to any other remedies, any 5 person aggrieved by a violation of the bill is entitled to 6 bring an action in a court of competent jurisdiction. 7 The bill shall not in any way limit rights or remedies which 8 are otherwise available under law to the attorney general or 9 any other person authorized to bring an action under the bill. 10 The bill shall be liberally construed to effectuate its 11 purposes. Courts shall interpret the bill’s provisions in 12 order to preserve the bill’s maximum lawful effect. 13 -9- LSB 5882XS (3) 91 dg/jh 9/ 9