,,ii #aafth ,,congress #b;d ,session ,s4 #ejeb ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,december #ag1 #bjbj,mr4 ,coons introduced the following bill2 which was read twice and referred to the ,committee on ,commerce1 ,science1 and ,transportation ,a ,,bill ,to increase fairness and transparency in algorithmic eligibility determinations4 #a4 ,short title2 table of contents 7a7 ,short title ,this ,act may be cited as the ,algorithmic ,fairness ,act of #bjbj4 7b7 ,table of contents ,the table of contents of this ,act is as follows3 ,sec4 #a4 ,short title2 table of contents4,sec4 #b4 ,definitions4,sec4 #c4 ,,ftc study and report on ways companies are developing and implementing algorithmic eligibility determinations4,sec4 #d4 ,substantive fairness4,sec4 #e4 ,procedural fairness4,sec4 #f4 ,enforcement4,sec4 #g4 ,research grants for the study of fair and transparent data analytics4,sec4 #h4 ,leadership program4,sec4 #i4 ,avoiding duplication4 #b4 ,definitions ,in this ,act3 7#a7 ,algorithmic eligibility determination ,the term algorithmic eligibility determination means a determination based in whole or in significant part on an algorithmic process that utilizes methods of machine learning1 advanced statistical techniques1 artificial intelligence1 or similar techniques to determine the eligibility for1 the denial of access to1 the receipt of information about1 the cost of acquiring1 the opportunity to access1 or the revocation of important opportunities including1 but not limited to1 education1 employment1 credit1 health care insurance1 and housing4 7#b7 ,commission ,the term ,commission means the ,federal ,trade ,commission4 7#c7 ,covered entity ,the term covered entity means an entity that-- 7,a7 makes an algorithmic eligibility determination2 and 7,b7 is-- 7i7 a person over which the ,commission has authority pursuant to section #e7;a77#b7 of the ,federal ,trade ,commission ,act 7#ae ,u4,s4,c4 #de7;a77#b771 but including banks1 savings and loan institutions1 and ,federal credit unions that are otherwise excluded under such section2 7ii7 a common carrier subject to the ,communications ,act of #aicd 7#dg ,u4,s4,c4 #aea et seq471 notwithstanding the definition of the term ,acts to regulate commerce in section #d of the ,federal ,trade ,commission ,act 7#ae ,u4,s4,c4 #dd7 and the exception provided by section #e7;a77#b7 of the ,federal ,trade ,commission ,act 7#ae ,u4,s4,c4 #de7;a77#b77 for such carriers2 or 7iii7 a nonprofit organization1 including any organization described in section #eja7;c7 of the ,internal ,revenue ,code of #aihf that is exempt from taxation under section #eja7;a7 of such ,code1 notwithstanding the definition of the term ,acts to regulate commerce in section #d of the ,federal ,trade ,commission ,act 7#ae ,u4,s4,c4 #dd7 and the exception provided by section #e7;a77#b7 of the ,federal ,trade ,commission ,act 7#ae ,u4,s4,c4 #de7;a77#b77 for such organizations4 7#d7 ,online advertisement ,the term online advertisement means an algorithmic eligibility determination that determines whether an individual receives promotional information from a covered entity through the use of paid internet or paid digital communication4 7#e7 ,search result ,the term search result means an algorithmic eligibility determination that determines the information an individual is presented after querying an internet search engine4 #c4 ,,ftc study and report on ways companies are developing and implementing algorithmic eligibility determinations 7a7 ,study ,the ,commission shall conduct a study on the ways covered entities are developing and implementing algorithmic eligibility determinations4 ,such study shall include an analysis of-- 7#a7 the industries that most commonly utilize algorithmic eligibility determinations2 7#b7 the types of algorithmic eligibility determinations that covered entities make2 7#c7 the data1 data sources1 pre-processing strategies and other practices1 data collection technologies1 and methodologies that covered entities use to make such determinations2 7#d7 the transparency of algorithmic eligibility determinations1 including the types of explanations that covered entities disclose to-- 7,a7 individuals or entities that are the subject of an algorithmic eligibility determination2 7,b7 regulators2 and 7,c7 the general public2 7#e7 whether and how human decision makers are involved in rendering algorithmic eligibility determinations2 7#f7 whether covered entities have a mechanism to receive complaints about algorithmic eligibility determinations1 and the number and nature of such complaints received from individuals regarding such determinations2 7#g7 whether covered entities have accountability procedures in place should an algorithmic eligibility determination be questioned or challenged1 a description of such accountability procedures1 and what remedial steps covered entities have taken1 if any2 7#h7 what information a covered entity could reasonably be required to disclose such that an individual could understand1 question1 or challenge an algorithmic eligibility determination2 7#i7 whether covered entities perform algorithmic audits to understand whether algorithmic eligibility determinations are fair1 how covered entities define fairness for this purpose1 and whether any such audit techniques and outcomes of audits are available to individuals or groups challenging an algorithmic eligibility determination2 7#aj7 the extent to which1 if any1 algorithmic eligibility determinations consider factors such as geographic information1 income1 ethnicity1 race1 religion1 national origin1 age1 sex1 sexual orientation1 disability information1 pregnancy1 marital status1 physical or mental health status1 criminal history status1 or proxies for such factors2 7#aa7 the extent to which algorithmic eligibility determinations could result in negative or differential treatment of individuals based on the factors described in paragraph 7#aj72 and 7#ab7 the best way to address intellectual property concerns of covered entities1 like trade secret protections1 that may arise if the ,federal ,government requires companies to share information related to their algorithmic eligibility determination processes4 7b7 ,reports 7#a7 ,initial report ,not later than #a year after the date of the enactment of this ,act1 and once every #c years thereafter 7until a total of #d reports have been submitted71 the ,commission shall submit to ,congress a report on the study conducted under subsection 7a71 together with recommendations for such additional legislation and administrative action as the ,commission determines appropriate4 7#b7 ,special rule ,in the final report submitted in accordance with paragraph 7#a71 the ,commission shall include a recommendation as to whether to continue conducting the study under subsection 7a7 7and submitting corresponding reports under this subsection74 7c7 ,consultation ,in conducting the study under subsection 7a7 and preparing the reports under subsection 7b71 the ,commission shall consult with-- 7#a7 the ,national ,institute of ,standards and ,technology2 7#b7 the ,department of ,homeland ,security2 7#c7 the ,consumer ,financial ,protection ,bureau2 7#d7 the ,department of ,housing and ,urban ,development2 7#e7 the ,department of ,health and ,human ,services2 7#f7 the ,department of ,veterans ,affairs2 7#g7 the ,department of ,education2 7#h7 the ,federal ,communications ,commission2 7#i7 the ,equal ,employment ,opportunity ,commission2 and 7#aj7 the ,civil ,rights ,division of the ,department of ,justice4 #d4 ,substantive fairness 7a7 ,in general ,a covered entity shall not act on an unfair algorithmic eligibility determination in or affecting commerce4 7b7 ,considerations ,in determining whether a particular algorithmic eligibility determination is unfair1 the ,commission-- 7#a7 shall consider the factors specified in section #e7n7 of the ,federal ,trade ,commission ,act 7#ae ,u4,s4,c4 #de7n772 and 7#b7 may consider-- 7,a7 established public policies2 7,b7 emotional distress1 bias on the basis of protected class status1 and other noneconomic injuries1 and may conclude that these injuries contribute to substantial injury to consumers for the purposes of section #e7n7 of the ,federal ,trade ,commission ,act 7#ae ,u4,s4,c4 #de7n772 and 7,c7 any code of conduct developed by industry sectors1 civil rights groups1 consumer protection groups1 or academics1 as long as the ,commission has first published such code of conduct in the ,federal ,register and provided for a period of public comment in accordance with section #eec of title #e1 ,united ,states ,code4 #e4 ,procedural fairness 7a7 ,in general ,beginning #a year after the date of the enactment of this ,act1 each covered entity shall1 for each algorithmic eligibility determination-- 7#a7 retain for at least #e years an audit trail that records-- 7,a7 the data used by the algorithm1 as it existed at the time the algorithm was deployed and rendered the algorithmic eligibility determination2 7,b7 the source of pre-processing techniques1 or any other technique used to produce any such data described in subparagraph 7,a72 7,c7 the methodology used by the entity to develop the algorithm2 7,d7 the version of the design of the algorithm utilized to make the determination2 7,e7 any data or sets of data used to train the algorithm2 7,f7 any testing for model performance for discriminatory effects across different subgroups and the results of such testing2 7,g7 the methodology used to render the determination2 and 7,h7 the ultimate determination rendered2 7#b7 notify the individual that they have been the subject of an algorithmic eligibility determination2 and 7#c7 upon request1 provide the individual with the opportunity to-- 7,a7 access the data pertaining to that individual that the covered entity employed to make the determination1 in a human-readable format that a reasonable individual can understand2 7,b7 submit corrections to the data pertaining to that individual that the covered entity used in the algorithmic eligibility determination2 and 7,c7 request that the covered entity conduct a reevaluation of the relevant algorithmic eligibility determination based on the corrected data4 7b7 ,review ,upon the request of the ,commission1 a covered entity shall make available to the ,commission the full audit trail described in subsection 7a77#a74 ,the ,commission shall establish a secure and confidential process for reviewing the materials created and retained under such subsection4 7c7 ,request to the ,commission ,an individual who has been the subject of an algorithmic eligibility determination may request that the ,commission conduct a review 7and the ,commission may conduct such a review7 of-- 7#a7 the algorithmic eligibility determination to determine if it was unfair 7determined pursuant to section 7#d772 and 7#b7 a covered entity's reevaluation of an algorithmic eligibility determination where an individual has submitted corrected data4 7d7 ,rule of construction ,nothing in this section shall be construed to require a covered entity to provide an individual with the algorithm or model used to make the eligibility determination1 or otherwise divulge legally protected trade secrets4 7e7 ,scope ,notwithstanding any of the preceding provisions of this section1 subsection 7a77#b7 shall not apply to-- 7#a7 online advertisements2 7#b7 search results2 or 7#c7 any other use case for which the ,commission determines1 by rulemaking in accordance with section #eec of title #e1 ,united ,states ,code1 that the requirements of subsection 7a77#b7 would impose an undue burden on or prove to be infeasible for that general class of use case4 #f4 ,enforcement 7a7 ,enforcement by the ,federal ,trade ,commission 7#a7 ,unfair act or practice ,any covered entity that violates section #d or section #e shall be deemed to have committed an unfair act or practice under section #e7;a77#a7 of the ,federal ,trade ,commission ,act 7#ae ,u4,s4,c4 #de7;a77#a774 7#b7 ,powers of the ,commission 7,a7 ,in general ,the ,commission shall enforce sections #d and #e in the same manner1 by the same means1 and with the same jurisdiction1 powers1 and duties as though all applicable terms and provisions of the ,federal ,trade ,commission ,act 7#ae ,u4,s4,c4 #da et seq47 were incorporated into and made a part of this section4 7,b7 ,civil penalty authority ,when enforcing section #d or #e1 the ,commission may1 depending on the nature and severity of the violation1 include an assessment of a civil penalty in the cease and desist order provided for under section #e7;b7 of the ,federal ,trade ,commission ,act 7#ae ,u4,s4,c4 #de74 7,c7 ,privileges and immunities ,any covered entity that violates section #d or #e shall be subject to the penalties and entitled to the privileges and immunities provided in the ,federal ,trade ,commission ,act 7#ae ,u4,s4,c4 #da et seq474 7,d7 ,authority preserved ,nothing in this subsection shall be construed to limit the authority of the ,commission under any other provision of law4 7b7 ,regulations 7#a7 ,in general ,the ,commission may promulgate1 in accordance with section #eec of title #e1 ,united ,states ,code1 regulations to-- 7,a7 carry out section #d1 including by describing which algorithmic eligibility determinations are unfair for the purposes of section #e of the ,federal ,trade ,commission ,act 7#ae ,u4,s4,c4 #de72 and 7,b7 carry out section #e4 7#b7 ,no requirement for regulations ,nothing in this ,act shall require the ,commission to promulgate regulations before enforcing violations of section #d or #e4 7c7 ,referral regarding a potential violation of a ,federal anti-,discrimination law ,if the ,commission finds that an algorithmic eligibility determination may be in violation of a ,federal anti-discrimination law1 the ,commission shall refer the matter to the appropriate ,federal or ,state agency with authority to initiate proceedings relating to such violation4 #g4 ,research grants for the study of fair and transparent data analytics 7a7 ,grant authority ,the ,director of the ,national ,institute of ,standards and ,technology may award grants for research into fair1 accountable1 and transparent data analytics and machine learning1 particularly with respect to algorithmic eligibility determinations4 7b7 ,funding ,there are authorized to be appropriated #aj1jjj1jjj for each of fiscal years #bjba through #bjbf1 to carry out this section4 ,amounts appropriated under the preceding sentence shall remain available until expended4 #h4 ,leadership program 7a7 ,in general ,by not later than #a year after the date of the enactment of this ,act1 the ,commission shall establish a leadership program under which the ,commission recognizes covered entities that display excellence in fair1 accountable1 and transparent data science or machine learning1 particularly with respect to algorithmic eligibility determinations4 7b7 ,process ,such leadership program shall include a process for-- 7#a7 covered entities to apply to the ,commission for such recognition2 7#b7 the ,commission1 in consultation with the ,national ,institute of ,standards and ,technology1 to evaluate the merits of applications in accordance with standards that the ,commission shall promulgate as a rule under section #eec of title #e1 ,united ,states ,code2 and 7#c7 recognizing covered entities that the ,commission determines have achieved excellence in fair1 accountable1 and transparent data science or machine learning1 particularly with respect to algorithmic eligibility determinations4 #i4 ,avoiding duplication ,in implementing the provisions of this ,act1 the ,commission shall work with other ,federal agencies to avoid the burden on a covered entity from having to comply with requirements under this ,act that may be duplicative of requirements under other provisions of ,federal law4