H.340 is a proposed bill in Vermont that seeks to regulate the use of automated decision systems to prevent algorithmic discrimination against consumers in significant decisions. It introduces a new Chapter 118 to Title 9 of the Vermont Statutes, defining key terms related to algorithmic discrimination and outlining the responsibilities of developers and deployers of these systems. The bill establishes that algorithmic discrimination occurs when automated decision systems result in differential treatment based on protected characteristics. It requires deployers to inform consumers about the use of such systems, including providing clear notices and explanations regarding the decision-making process and the data utilized.

The bill mandates that developers ensure their automated decision systems undergo independent audits to confirm they do not produce algorithmic discrimination before deployment and at regular intervals thereafter. It includes provisions for whistleblower protections, allowing employees to report violations without fear of retaliation. Additionally, the bill requires developers and deployers 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, enabling harmed consumers to seek remedies. The act is scheduled to take effect on July 1, 2025.