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[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2231 Introduced in House (IH)]

<DOC>

116th CONGRESS
  1st Session
                                H. R. 2231

 To direct the Federal Trade Commission to require entities that use, 
  store, or share personal information to conduct automated decision 
   system impact assessments and data protection impact assessments.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                             April 10, 2019

    Ms. Clarke of New York introduced the following bill; which was 
            referred to the Committee on Energy and Commerce

_______________________________________________________________________

                                 A BILL

 
 To direct the Federal Trade Commission to require entities that use, 
  store, or share personal information to conduct automated decision 
   system impact assessments and data protection impact assessments.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Algorithmic Accountability Act of 
2019''.

SEC. 2. DEFINITIONS.

    In this Act:
            (1) Automated decision system.--The term ``automated 
        decision system'' means a computational process, including one 
        derived from machine learning, statistics, or other data 
        processing or artificial intelligence techniques, that makes a 
        decision or facilitates human decision making, that impacts 
        consumers.
            (2) Automated decision system impact assessment.--The term 
        ``automated decision system impact assessment'' means a study 
        evaluating an automated decision system and the automated 
        decision system's development process, including the design and 
        training data of the automated decision system, for impacts on 
        accuracy, fairness, bias, discrimination, privacy, and security 
        that includes, at a minimum--
                    (A) a detailed description of the automated 
                decision system, its design, its training, data, and 
                its purpose;
                    (B) an assessment of the relative benefits and 
                costs of the automated decision system in light of its 
                purpose, taking into account relevant factors, 
                including--
                            (i) data minimization practices;
                            (ii) the duration for which personal 
                        information and the results of the automated 
                        decision system are stored;
                            (iii) what information about the automated 
                        decision system is available to consumers;
                            (iv) the extent to which consumers have 
                        access to the results of the automated decision 
                        system and may correct or object to its 
                        results; and
                            (v) the recipients of the results of the 
                        automated decision system;
                    (C) an assessment of the risks posed by the 
                automated decision system to the privacy or security of 
                personal information of consumers and the risks that 
                the automated decision system may result in or 
                contribute to inaccurate, unfair, biased, or 
                discriminatory decisions impacting consumers; and
                    (D) the measures the covered entity will employ to 
                minimize the risks described in subparagraph (C), 
                including technological and physical safeguards.
            (3) Commission.--The term ``Commission'' means the Federal 
        Trade Commission.
            (4) Consumer.--The term ``consumer'' means an individual.
            (5) Covered entity.--The term ``covered entity'' means any 
        person, partnership, or corporation over which the Commission 
        has jurisdiction under section 5(a)(2) of the Federal Trade 
        Commission Act (15 U.S.C. 45(a)(2)) that--
                    (A) had greater than $50,000,000 in average annual 
                gross receipts for the 3-taxable-year period preceding 
                the most recent fiscal year, as determined in 
                accordance with paragraphs (2) and (3) of section 
                448(c) of the Internal Revenue Code of 1986;
                    (B) possesses or controls personal information on 
                more than--
                            (i) 1,000,000 consumers; or
                            (ii) 1,000,000 consumer devices;
                    (C) is substantially owned, operated, or controlled 
                by a person, partnership, or corporation that meets the 
                requirements under subparagraph (A) or (B); or
                    (D) is a data broker or other commercial entity 
                that, as a substantial part of its business, collects, 
                assembles, or maintains personal information concerning 
                an individual who is not a customer or an employee of 
                that entity in order to sell or trade the information 
                or provide third-party access to the information.
            (6) Data protection impact assessment.--The term ``data 
        protection impact assessment'' means a study evaluating the 
        extent to which an information system protects the privacy and 
        security of personal information the system processes.
            (7) High-risk automated decision system.--The term ``high-
        risk automated decision system'' means an automated decision 
        system that--
                    (A) taking into account the novelty of the 
                technology used and the nature, scope, context, and 
                purpose of the automated decision system, poses a 
                significant risk--
                            (i) to the privacy or security of personal 
                        information of consumers; or
                            (ii) of resulting in or contributing to 
                        inaccurate, unfair, biased, or discriminatory 
                        decisions impacting consumers;
                    (B) makes decisions, or facilitates human decision 
                making, based on systematic and extensive evaluations 
                of consumers, including attempts to analyze or predict 
                sensitive aspects of their lives, such as their work 
                performance, economic situation, health, personal 
                preferences, interests, behavior, location, or 
                movements, that--
                            (i) alter legal rights of consumers; or
                            (ii) otherwise significantly impact 
                        consumers;
                    (C) involves the personal information of a 
                significant number of consumers regarding race, color, 
                national origin, political opinions, religion, trade 
                union membership, genetic data, biometric data, health, 
                gender, gender identity, sexuality, sexual orientation, 
                criminal convictions, or arrests;
                    (D) systematically monitors a large, publicly 
                accessible physical place; or
                    (E) meets any other criteria established by the 
                Commission in regulations issued under section 3(b)(1).
            (8) High-risk information system.--The term ``high-risk 
        information system'' means an information system that--
                    (A) taking into account the novelty of the 
                technology used and the nature, scope, context, and 
                purpose of the information system, poses a significant 
                risk to the privacy or security of personal information 
                of consumers;
                    (B) involves the personal information of a 
                significant number of consumers regarding race, color, 
                national origin, political opinions, religion, trade 
                union membership, genetic data, biometric data, health, 
                gender, gender identity, sexuality, sexual orientation, 
                criminal convictions, or arrests;
                    (C) systematically monitors a large, publicly 
                accessible physical place; or
                    (D) meets any other criteria established by the 
                Commission in regulations issued under section 3(b)(1).
            (9) Information system.--The term ``information system''--
                    (A) means a process, automated or not, that 
                involves personal information, such as the collection, 
                recording, organization, structuring, storage, 
                alteration, retrieval, consultation, use, sharing, 
                disclosure, dissemination, combination, restriction, 
                erasure, or destruction of personal information; and
                    (B) does not include automated decision systems.
            (10) Personal information.--The term ``personal 
        information'' means any information, regardless of how the 
        information is collected, inferred, or obtained that is 
        reasonably linkable to a specific consumer or consumer device.
            (11) Store.--The term ``store''--
                    (A) means the actions of a person, partnership, or 
                corporation to retain information; and
                    (B) includes actions to store, collect, assemble, 
                possess, control, or maintain information.
            (12) Use.--The term ``use'' means the actions of a person, 
        partnership, or corporation in using information, including 
        actions to use, process, or access information.

SEC. 3. DATA PROTECTION AUTHORITY.

    (a) Acts Prohibited.--It is unlawful for any covered entity to--
            (1) violate a regulation promulgated under subsection (b); 
        or
            (2) knowingly provide substantial assistance to any person, 
        partnership, or corporation whose actions violate subsection 
        (b).
    (b) Regulations.--
            (1) In general.--Not later than 2 years after the date of 
        enactment of this section, the Commission shall promulgate 
        regulations, in accordance with section 553 of title 5, United 
        States Code, that--
                    (A) require each covered entity to conduct 
                automated decision system impact assessments of--
                            (i) existing high-risk automated decision 
                        systems, as frequently as the Commission 
                        determines is necessary; and
                            (ii) new high-risk automated decision 
                        systems, prior to implementation;
                provided that a covered entity may evaluate similar 
                high-risk automated decision systems that present 
                similar risks in a single assessment;
                    (B) require each covered entity to conduct data 
                protection impact assessments of--
                            (i) existing high-risk information systems, 
                        as frequently as the Commission determines is 
                        necessary; and
                            (ii) new high-risk information systems, 
                        prior to implementation;
                provided that a covered entity may evaluate similar 
                high-risk information systems that present similar 
                risks in a single assessment;
                    (C) require each covered entity to conduct the 
                impact assessments under subparagraphs (A) and (B), if 
                reasonably possible, in consultation with external 
                third parties, including independent auditors and 
                independent technology experts; and
                    (D) require each covered entity to reasonably 
                address in a timely manner the results of the impact 
                assessments under subparagraphs (A) and (B).
            (2) Optional publication of impact assessments.--The impact 
        assessments under subparagraphs (A) and (B) may be made public 
        by the covered entity at its sole discretion.
    (c) Preemption of Private Contracts.--It shall be unlawful for any 
covered entity to commit the acts prohibited in subsection (a), 
regardless of specific agreements between entities or consumers.
    (d) Enforcement by the Commission.--
            (1) Unfair or deceptive acts or practices.--A violation of 
        subsection (a) shall be treated as a violation of a rule 
        defining an unfair or deceptive act or practice under section 
        18(a)(1)(B) of the Federal Trade Commission Act (15 U.S.C. 
        57a(a)(1)(B)).
            (2) Powers of the commission.--
                    (A) In general.--The Commission shall enforce this 
                section in the same manner, by the same means, and with 
                the same jurisdiction, powers, and duties as though all 
                applicable terms and provisions of the Federal Trade 
                Commission Act (15 U.S.C. 41 et seq.) were incorporated 
                into and made a part of this section.
                    (B) Privileges and immunities.--Any person who 
                violates subsection (a) shall be subject to the 
                penalties and entitled to the privileges and immunities 
                provided in the Federal Trade Commission Act (15 U.S.C. 
                41 et seq.).
                    (C) Authority preserved.--Nothing in this section 
                shall be construed to limit the authority of the 
                Commission under any other provision of law.
    (e) Enforcement by States.--
            (1) In general.--If the attorney general of a State has 
        reason to believe that an interest of the residents of the 
        State has been or is being threatened or adversely affected by 
        a practice that violates subsection (a), the attorney general 
        of the State may, as parens patriae, bring a civil action on 
        behalf of the residents of the State in an appropriate district 
        court of the United States to obtain appropriate relief.
            (2) Rights of commission.--
                    (A) Notice to commission.--
                            (i) In general.--Except as provided in 
                        clause (iii), the attorney general of a State, 
                        before initiating a civil action under 
                        paragraph (1), shall provide written 
                        notification to the Commission that the 
                        attorney general intends to bring such civil 
                        action.
                            (ii) Contents.--The notification required 
                        under clause (i) shall include a copy of the 
                        complaint to be filed to initiate the civil 
                        action.
                            (iii) Exception.--If it is not feasible for 
                        the attorney general of a State to provide the 
                        notification required under clause (i) before 
                        initiating a civil action under paragraph (1), 
                        the attorney general shall notify the 
                        Commission immediately upon instituting the 
                        civil action.
                    (B) Intervention by commission.--The Commission 
                may--
                            (i) intervene in any civil action brought 
                        by the attorney general of a State under 
                        paragraph (1); and
                            (ii) upon intervening--
                                    (I) be heard on all matters arising 
                                in the civil action; and
                                    (II) file petitions for appeal of a 
                                decision in the civil action.
            (3) Investigatory powers.--Nothing in this subsection may 
        be construed to prevent the attorney general of a State from 
        exercising the powers conferred on the attorney general by the 
        laws of the State to conduct investigations, to administer 
        oaths or affirmations, or to compel the attendance of witnesses 
        or the production of documentary or other evidence.
            (4) Venue; service of process.--
                    (A) Venue.--Any action brought under paragraph (1) 
                may be brought in--
                            (i) the district court of the United States 
                        that meets applicable requirements relating to 
                        venue under section 1391 of title 28, United 
                        States Code; or
                            (ii) another court of competent 
                        jurisdiction.
                    (B) Service of process.--In an action brought under 
                paragraph (1), process may be served in any district in 
                which--
                            (i) the defendant is an inhabitant, may be 
                        found, or transacts business; or
                            (ii) venue is proper under section 1391 of 
                        title 28, United States Code.
            (5) Actions by other state officials.--
                    (A) In general.--In addition to a civil action 
                brought by an attorney general under paragraph (1), any 
                other officer of a State who is authorized by the State 
                to do so may bring a civil action under paragraph (1), 
                subject to the same requirements and limitations that 
                apply under this subsection to civil actions brought by 
                attorneys general.
                    (B) Savings provision.--Nothing in this subsection 
                may be construed to prohibit an authorized official of 
                a State from initiating or continuing any proceeding in 
                a court of the State for a violation of any civil or 
                criminal law of the State.

SEC. 4. NO PREEMPTION.

    Nothing in this Act may be construed to preempt any State law.
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