Requirements for covered entity impact assessment

(a) Requirements for impact assessment In performing any impact assessment required under section 3(b)(1) for an automated decision system or augmented critical decision process, a covered entity shall do the following, to the extent possible, as applicable to such covered entity as determined by the Commission: (1) In the case of a new augmented critical decision process, evaluate any previously existing critical decision-making process used for the same critical decision prior to the deployment of the new augmented critical decision process, along with any related documentation or information, such as— (A) a description of the baseline process being enhanced or replaced by the augmented critical decision process; (B) any known harm, shortcoming, failure case, or material negative impact on consumers of the previously existing process used to make the critical decision; (C) the intended benefits of and need for the augmented critical decision process; and (D) the intended purpose of the automated decision system or augmented critical decision process. (2) Identify and describe any consultation with relevant stakeholders as required by section 3(b)(1)(G), including by documenting— (A) the points of contact for the stakeholders who were consulted; (B) the date of any such consultation; and (C) information about the terms and process of the consultation, such as— (i) the existence and nature of any legal or financial agreement between the stakeholders and the covered entity; (ii) any data, system, design, scenario, or other document or material the stakeholder interacted with; and (iii) any recommendations made by the stakeholders that were used to modify the development or deployment of the automated decision system or augmented critical decision process, as well as any recommendations not used and the rationale for such nonuse. (3) In accordance with any relevant National Institute of Standards and Technology or other Federal Government best practices and standards, perform ongoing testing and evaluation of the privacy risks and privacy-enhancing measures of the automated decision system or augmented critical decision process, such as— (A) assessing and documenting the data minimization practices of such system or process and the duration for which the relevant identifying information and any resulting critical decision is stored; (B) assessing the information security measures in place with respect to such system or process, including any use of privacy-enhancing technology such as federated learning, differential privacy, secure multi-party computation, de-identification, or secure data enclaves based on the level of risk; and (C) assessing and documenting the current and potential future or downstream positive and negative impacts of such system or process on the privacy, safety, or security of consumers and their identifying information. (4) Perform ongoing testing and evaluation of the current and historical performance of the automated decision system or augmented critical decision process using measures such as benchmarking datasets, representative examples from the covered entity’s historical data, and other standards, including by documenting— (A) a description of what is deemed successful performance and the methods and technical and business metrics used by the covered entity to assess performance; (B) a review of the performance of such system or process under test conditions or an explanation of why such performance testing was not conducted; (C) a review of the performance of such system or process under deployed conditions or an explanation of why performance was not reviewed under deployed conditions; (D) a comparison of the performance of such system or process under deployed conditions to test conditions or an explanation of why such a comparison was not possible; (E) an evaluation of any differential performance associated with consumers' race, color, sex, gender, age, disability, religion, family status, socioeconomic status, or veteran status, and any other characteristics the Commission deems appropriate (including any combination of such characteristics) for which the covered entity has information, including a description of the methodology for such evaluation and information about and documentation of the methods used to identify such characteristics in the data (such as through the use of proxy data, including ZIP Codes); and (F) if any subpopulations were used for testing and evaluation, a description of which subpopulations were used and how and why such subpopulations were determined to be of relevance for the testing and evaluation. (5) Support and perform ongoing training and education for all relevant employees, contractors, or other agents regarding any documented material negative impacts on consumers from similar automated decision systems or augmented critical decision processes and any improved methods of developing or performing an impact assessment for such system or process based on industry best practices and relevant proposals and publications from experts, such as advocates, journalists, and academics. (6) Assess the need for and possible development of any guard rail for or limitation on certain uses or applications of the automated decision system or augmented critical decision process, including whether such uses or applications ought to be prohibited or otherwise limited through any terms of use, licensing agreement, or other legal agreement between entities. (7) Maintain and keep updated documentation of any data or other input information used to develop, test, maintain, or update the automated decision system or augmented critical decision process, including— (A) how and when such data or other input information was sourced and, if applicable, licensed, including information such as— (i) metadata and information about the structure and type of data or other input information, such as the file type, the date of the file creation or modification, and a description of data fields; (ii) an explanation of the methodology by which the covered entity collected, inferred, or obtained the data or other input information and, if applicable, labeled, categorized, sorted, or clustered such data or other input information, including whether such data or other input information was labeled, categorized, sorted, or clustered prior to being collected, inferred, or obtained by the covered entity; and (iii) whether and how consumers provided informed consent for the inclusion and further use of data or other input information about themselves and any limitations stipulated on such inclusion or further use; (B) why such data or other input information was used and what alternatives were explored; and (C) other information about the data or other input information, such as— (i) the representativeness of the dataset and how this factor was measured, including any assumption about the distribution of the population on which the augmented critical decision process is deployed; and (ii) the quality of the data, how the quality was evaluated, and any measure taken to normalize, correct, or clean the data. (8) Evaluate the rights of consumers, such as— (A) by assessing the extent to which the covered entity provides consumers with— (i) clear notice that such system or process will be used; and (ii) a mechanism for opting out of such use; (B) by assessing the transparency and explainability of such system or process and the degree to which a consumer may contest, correct, or appeal a decision or opt out of such system or process, including— (i) the information available to consumers or representatives or agents of consumers about the system or process, such as any relevant factors that contribute to a particular decision, including an explanation of which contributing factors, if changed, would cause the system or process to reach a different decision, and how such consumer, representative, or agent can access such information; (ii) documentation of any complaint, dispute, correction, appeal, or opt-out request submitted to the covered entity by a consumer with respect to such system or process; and (iii) the process and outcome of any remediation measure taken by the covered entity to address the concerns of or harms to consumers; and (C) by describing the extent to which any third-party decision recipient receives a copy of or has access to the results of such system or process and the category of such third-party decision recipient, as defined by the Commission in section 3(b)(1)(I)(iii). (9) Identify any likely material negative impact of the automated decision system or augmented critical decision process on consumers and assess any applicable mitigation strategy, such as by— (A) identifying and measuring any likely material negative impact of the system or process on consumers, including documentation of the steps taken to identify and measure such impact; (B) documenting any steps taken to eliminate or reasonably mitigate any likely material negative impact identified, including steps such as removing the system or process from the market or terminating its development; (C) with respect to the likely material negative impacts identified, documenting which such impacts were left unmitigated and the rationale for the inaction, including details about the justifying non-discriminatory, compelling interest and why such interest cannot be satisfied by other means (such as where there is an equal, zero-sum trade-off between impacts on 2 or more consumers or where the required mitigating action would violate civil rights or other laws); and (D) documenting standard protocols or practices used to identify, measure, mitigate, or eliminate any likely material negative impact on consumers and how relevant teams or staff are informed of and trained about such protocols or practices. (10) Describe any ongoing documentation of the development and deployment process with respect to the automated decision system or augmented critical decision process, including information such as— (A) the date of any testing, deployment, licensure, or other significant milestones; and (B) points of contact for any team, business unit, or similar internal stakeholder that was involved. (11) Identify any capabilities, tools, standards, datasets, security protocols, improvements to stakeholder engagement, or other resources that may be necessary or beneficial to improving the automated decision system, augmented critical decision process, or the impact assessment of such system or process, in areas such as— (A) performance, including accuracy, robustness, and reliability; (B) fairness, including bias and nondiscrimination; (C) transparency, explainability, contestability, and opportunity for recourse; (D) privacy and security; (E) personal and public safety; (F) efficiency and timeliness; (G) cost; or (H) any other area determined appropriate by the Commission. (12) Document any of the impact assessment requirements described in paragraphs (1) through (11) that were attempted but were not possible to comply with because they were infeasible, as well as the corresponding rationale for not being able to comply with such requirements, which may include— (A) the absence of certain information about an automated decision system developed by other persons, partnerships, and corporations; (B) the absence of certain information about how clients, customers, licensees, partners, and other persons, partnerships, or corporations are deploying an automated decision system in their augmented critical decision processes; (C) a lack of demographic or other data required to assess differential performance because such data is too sensitive to collect, infer, or store; or (D) a lack of certain capabilities, including technological innovations, that would be necessary to conduct such requirements. (13) Perform and document any other ongoing study or evaluation determined appropriate by the Commission. (b) Rule of construction Nothing in this Act should be construed to limit any covered entity from adding other criteria, procedures, or technologies to improve the performance of an impact assessment of their automated decision system or augmented critical decision process. (c) Nondisclosure of impact assessment Nothing in this Act should be construed to require a covered entity to share with or otherwise disclose to the Commission or the public any information contained in an impact assessment performed in accordance with this Act, except for any information contained in the summary report required under subparagraph (D) or (E) of section 3(b)(1).