H.340 is a proposed bill in Vermont aimed at regulating the use of automated decision systems to prevent algorithmic discrimination against consumers. It introduces a new Chapter 118 to Title 9 of the Vermont Statutes, defining key terms such as "algorithmic discrimination" and "automated decision system." The bill outlines the responsibilities of developers and deployers, including the obligation to inform consumers about the use of these systems, provide clear explanations for decisions made, and conduct independent audits to ensure compliance and prevent discrimination. Additionally, it establishes whistleblower protections for employees who report potential violations, ensuring they are not retaliated against for disclosing such information.

The bill also mandates a comprehensive framework for auditing and reporting on automated decision systems, requiring independent audits before deployment, six months after, and at least every 18 months thereafter. These audits must evaluate algorithmic discrimination and compliance with relevant laws, with results submitted to the Attorney General. Furthermore, developers and deployers are required to implement a risk management policy to identify and mitigate risks associated with algorithmic discrimination. Violations of the bill's provisions are classified as unfair and deceptive acts under the Vermont Consumer Protection Act, allowing affected consumers to seek remedies. The act is scheduled to take effect on July 1, 2025.