Bill H.340 aims to regulate automated decision systems in Vermont to prevent algorithmic discrimination against consumers. It introduces Chapter 118 to Title 9 of the Vermont Statutes, defining key terms such as "algorithmic discrimination" and "automated decision system." The bill mandates that developers and deployers of these systems inform consumers about their use, provide clear explanations of decision-making processes, and conduct independent audits to assess for bias. Additionally, it establishes whistleblower protections for employees reporting violations related to these systems, enhancing consumer protection and accountability.

The legislation requires independent audits to be conducted before deployment, six months after, and at least every 18 months thereafter, focusing on algorithmic discrimination and compliance with laws. Developers and deployers are jointly responsible for these audits and must submit findings to the Attorney General, who will maintain a public database of reports. The bill also mandates a risk management policy to address foreseeable risks associated with algorithmic discrimination and classifies violations as unfair and deceptive acts under the Vermont Consumer Protection Act, allowing harmed consumers to seek remedies. The act is set to take effect on July 1, 2025.