S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   3930
 
                        2025-2026 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             January 30, 2025
                                ___________
 
 Introduced  by  M.  of  A.  ROSENTHAL  --  read once and referred to the
   Committee on Housing
 
 AN ACT to amend the real property law, the general business law and  the
   banking  law, in relation to regulating the use of artificial intelli-
   gence in aiding decisions on rental housing and loans;  and  providing
   for the repeal of certain provisions upon expiration thereof
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. The real property law is amended by adding  a  new  section
 227-g to read as follows:
   §  227-G. USE OF AUTOMATED DECISION TOOLS. 1. FOR THE PURPOSES OF THIS
 SECTION, THE FOLLOWING TERMS SHALL HAVE THE FOLLOWING MEANINGS:
   (A) "AUTOMATED DECISION TOOL" MEANS ANY COMPUTATIONAL PROCESS, DERIVED
 FROM MACHINE LEARNING, STATISTICAL MODELING, DATA ANALYTICS, OR  ARTIFI-
 CIAL  INTELLIGENCE,  THAT  ISSUES  SIMPLIFIED OUTPUT, INCLUDING A SCORE,
 CLASSIFICATION, OR RECOMMENDATION, THAT IS USED TO SUBSTANTIALLY  ASSIST
 OR  REPLACE  DISCRETIONARY  DECISION MAKING FOR MAKING HOUSING DECISIONS
 THAT IMPACT NATURAL PERSONS. "AUTOMATED DECISION TOOL" DOES NOT  INCLUDE
 A TOOL THAT DOES NOT AUTOMATE, SUPPORT, SUBSTANTIALLY ASSIST, OR REPLACE
 DISCRETIONARY  DECISION-MAKING  PROCESSES  AND  THAT DOES NOT MATERIALLY
 IMPACT NATURAL PERSONS, INCLUDING, BUT NOT  LIMITED  TO,  A  JUNK  EMAIL
 FILTER, FIREWALL, ANTIVIRUS SOFTWARE, CALCULATOR, SPREADSHEET, DATABASE,
 DATA SET, OR OTHER COMPILATION OF DATA.
   (B)   "DISPARATE   IMPACT  ANALYSIS"  MEANS  AN  IMPARTIAL  EVALUATION
 CONDUCTED BY AN INDEPENDENT  AUDITOR.  SUCH  DISPARATE  IMPACT  ANALYSIS
 SHALL INCLUDE, BUT NOT BE LIMITED TO, TESTING OF THE EXTENT TO WHICH USE
 OF  AN  AUTOMATED DECISION TOOL IS LIKELY TO RESULT IN AN ADVERSE IMPACT
 TO THE DETRIMENT OF ANY GROUP ON THE BASIS OF SEX, RACE,  ETHNICITY,  OR
 OTHER  PROTECTED  CLASS UNDER THIS ARTICLE.  A DISPARATE IMPACT ANALYSIS
 SHALL DIFFERENTIATE BETWEEN APPLICANTS WHO WERE SELECTED AND  APPLICANTS
 WHO WERE NOT SELECTED BY THE TOOL.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD02498-01-5
              

 A. 3930                             2
 
   (C) "HOUSING DECISION" MEANS TO SCREEN APPLICANTS FOR HOUSING.
   2.  IT  SHALL  BE UNLAWFUL FOR A LANDLORD TO IMPLEMENT OR USE AN AUTO-
 MATED DECISION TOOL THAT FAILS TO COMPLY WITH THE FOLLOWING PROVISIONS:
   (A) NO LESS THAN  ANNUALLY,  A  DISPARATE  IMPACT  ANALYSIS  SHALL  BE
 CONDUCTED  TO  ASSESS  THE  ACTUAL IMPACT OF ANY AUTOMATED DECISION TOOL
 USED BY ANY LANDLORD TO SELECT APPLICANTS FOR HOUSING WITHIN THE  STATE.
 SUCH DISPARATE IMPACT ANALYSIS SHALL BE PROVIDED TO THE LANDLORD.
   (B)  A  SUMMARY  OF  THE MOST RECENT DISPARATE IMPACT ANALYSIS OF SUCH
 TOOL AS WELL AS THE DISTRIBUTION DATE OF THE TOOL TO WHICH THE  ANALYSIS
 APPLIES  SHALL BE MADE PUBLICLY AVAILABLE ON THE WEBSITE OF THE LANDLORD
 PRIOR TO THE IMPLEMENTATION OR USE OF SUCH TOOL.    SUCH  SUMMARY  SHALL
 ALSO  BE  MADE  ACCESSIBLE  THROUGH ANY LISTING FOR HOUSING ON A DIGITAL
 PLATFORM FOR WHICH THE LANDLORD INTENDS TO  USE  AN  AUTOMATED  DECISION
 TOOL TO SCREEN APPLICANTS FOR HOUSING.
   3.  (A)  ANY  LANDLORD  THAT USES AN AUTOMATED DECISION TOOL TO SCREEN
 APPLICANTS FOR HOUSING SHALL NOTIFY EACH SUCH APPLICANT OF  THE  FOLLOW-
 ING:
   (I)  THAT  AN  AUTOMATED DECISION TOOL WILL BE USED IN CONNECTION WITH
 THE ASSESSMENT OR EVALUATION OF SUCH APPLICANT;
   (II) THE CHARACTERISTICS THAT SUCH AUTOMATED DECISION TOOL WILL USE IN
 THE ASSESSMENT OF SUCH APPLICANT;
   (III) INFORMATION ABOUT THE TYPE OF DATA COLLECTED FOR SUCH  AUTOMATED
 DECISION  TOOL,  THE  SOURCE  OF  SUCH  DATA,  AND  THE  LANDLORD'S DATA
 RETENTION POLICY; AND
   (IV) IF AN APPLICATION FOR HOUSING IS DENIED THROUGH USE OF THE  AUTO-
 MATED DECISION TOOL, THE REASON FOR SUCH DENIAL.
   (B)  THE NOTICE REQUIRED BY PARAGRAPH (A) OF THIS SUBDIVISION SHALL BE
 MADE NO LESS THAN TWENTY-FOUR HOURS BEFORE THE  USE  OF  SUCH  AUTOMATED
 DECISION  TOOL  AND SHALL ALLOW SUCH APPLICANT TO REQUEST AN ALTERNATIVE
 SELECTION PROCESS OR ACCOMMODATION.
   4. THE ATTORNEY GENERAL MAY INITIATE AN INVESTIGATION IF A  PREPONDER-
 ANCE OF THE EVIDENCE, INCLUDING THE SUMMARY OF THE MOST RECENT DISPARATE
 IMPACT  ANALYSIS  ESTABLISHES  A  SUSPICION OF A VIOLATION. THE ATTORNEY
 GENERAL MAY ALSO INITIATE IN ANY COURT  OF  COMPETENT  JURISDICTION  ANY
 ACTION OR PROCEEDING THAT MAY BE APPROPRIATE OR NECESSARY FOR CORRECTION
 OF  ANY  VIOLATION  ISSUED PURSUANT TO THIS SECTION, INCLUDING MANDATING
 COMPLIANCE WITH THE PROVISIONS OF THIS SECTION OR SUCH OTHER  RELIEF  AS
 MAY BE APPROPRIATE.
   §  2.  The general business law is amended by adding a new section 344
 to read as follows:
   § 344. USE OF PRICING ALGORITHMIC IN SETTING RENT  AMOUNT  PROHIBITED.
 1.  FOR THE PURPOSES OF THIS SECTION, THE FOLLOWING TERMS SHALL HAVE THE
 FOLLOWING MEANINGS:
   (A)  "PRICING ALGORITHM" SHALL MEAN ANY COMPUTATIONAL PROCESS, INCLUD-
 ING A COMPUTATIONAL PROCESS DERIVED FROM MACHINE LEARNING OR OTHER ARTI-
 FICIAL INTELLIGENCE TECHNIQUES, THAT PROCESSES DATA TO RECOMMEND OR  SET
 A PRICE OR COMMERCIAL TERM THAT IS IN OR AFFECTING INTERSTATE OR FOREIGN
 COMMERCE.
   (B)  "COORDINATOR"  SHALL  MEAN  ANY  OPERATOR  OF  A SOFTWARE OR DATA
 ANALYTICS SERVICE THAT PERFORMS A COORDINATING FUNCTION  FOR  ANY  LAND-
 LORD,  INCLUDING  A LANDLORD PERFORMING A COORDINATING FUNCTION FOR SUCH
 LANDLORD'S OWN BENEFIT.
   (C) "NONPUBLIC COMPETITOR DATA":
   (I) SHALL MEAN NONPUBLIC  DATA  THAT  IS  DERIVED  FROM  OR  OTHERWISE
 PROVIDED BY ANOTHER PERSON THAT COMPETES IN THE SAME MARKET AS A PERSON,
 OR A RELATED MARKET; AND
 A. 3930                             3
 
   (II)  DOES NOT INCLUDE INFORMATION DISTRIBUTED, REPORTED, OR OTHERWISE
 COMMUNICATED IN A WAY THAT DOES NOT REVEAL ANY UNDERLYING  DATA  FROM  A
 COMPETITOR,  SUCH  AS NARRATIVE INDUSTRY REPORTS, NEWS REPORTS, BUSINESS
 COMMENTARIES, OR GENERALIZED INDUSTRY SURVEY RESULTS.
   (D)  "NONPUBLIC DATA" SHALL MEAN INFORMATION THAT IS NOT WIDELY AVAIL-
 ABLE OR EASILY ACCESSIBLE TO THE  PUBLIC,  INCLUDING  INFORMATION  ABOUT
 ACTUAL  RENT  PRICES,  OCCUPANCY  RATES,  LEASE START AND END DATES, AND
 SIMILAR DATA, REGARDLESS OF WHETHER  SUCH  DATA  IS  ATTRIBUTABLE  TO  A
 SPECIFIC COMPETITOR OR ANONYMIZED.
   2. (A) IN SETTING THE AMOUNT OF RENT TO BE CHARGED TO A TENANT FOR THE
 OCCUPANCY OF A RESIDENTIAL PREMISES, INCLUDING DETERMINING ANY CHANGE IN
 THE AMOUNT OF RENT TO BE CHARGED FOR THE RENEWED OCCUPANCY OF A RESIDEN-
 TIAL  PREMISES, A LANDLORD SHALL NOT EMPLOY, USE, OR RELY UPON, OR CAUSE
 ANOTHER PERSON TO EMPLOY, USE, OR RELY UPON, AN ALGORITHMIC PRICING THAT
 USES, INCORPORATES, OR WAS TRAINED WITH NONPUBLIC COMPETITOR DATA.
   (B) A COORDINATOR SHALL NOT FACILITATE AN AGREEMENT AMONG LANDLORDS TO
 NOT COMPETE REGARDING THE RENTING OF RESIDENTIAL PREMISES.
   3. (A) A LANDLORD SHALL NOT SHARE A TENANT'S PERSONAL  DATA  WITH  ANY
 THIRD PARTY WITHOUT SUCH TENANT'S WRITTEN CONSENT.
   (B) A LANDLORD SHALL DISCLOSE TO EACH TENANT:
   (I)  THE  CATEGORIES OF PERSONAL DATA PROCESSED BY THE LANDLORD AND BY
 ANY PROCESSOR WHO PROCESSES PERSONAL DATA ON BEHALF OF SUCH LANDLORD;
   (II) THE SOURCES FROM WHICH PERSONAL DATA IS COLLECTED;
   (III) THE PURPOSES FOR PROCESSING PERSONAL DATA;
   (IV) THE LANDLORD'S RETENTION PERIOD FOR  EACH  CATEGORY  OF  PERSONAL
 DATA  THAT  SUCH  LANDLORD PROCESSES OR WHICH IS PROCESSED ON SUCH LAND-
 LORD'S BEHALF, OR IF THAT IS NOT POSSIBLE, THE CRITERIA USED  TO  DETER-
 MINE SUCH RETENTION PERIOD; AND
   (V)  THE  IDENTITY OF EACH THIRD PARTY TO WHOM THE LANDLORD DISCLOSED,
 SHARED, TRANSFERRED, OR SOLD PERSONAL  DATA,  AND  FOR  EACH  IDENTIFIED
 THIRD PARTY:
   (A)  THE  CATEGORIES  OF PERSONAL DATA BEING SHARED, DISCLOSED, TRANS-
 FERRED, OR SOLD TO THE THIRD PARTY;
   (B) THE PURPOSES FOR WHICH PERSONAL DATA IS BEING  SHARED,  DISCLOSED,
 TRANSFERRED, OR SOLD TO THE THIRD PARTY;
   (C)  THE  THIRD PARTY'S RETENTION PERIOD FOR EACH CATEGORY OF PERSONAL
 DATA PROCESSED BY SUCH THIRD PARTY OR PROCESSED ON  SUCH  THIRD  PARTY'S
 BEHALF,  OR IF THAT IS NOT POSSIBLE, THE CRITERIA USED TO DETERMINE SUCH
 RETENTION PERIOD; AND
   (D) WHETHER THE THIRD PARTY USES THE PERSONAL DATA FOR TARGETED ADVER-
 TISING.
   4. IN ADDITION TO ANY ACTION BROUGHT BY  THE  ATTORNEY  GENERAL  UNDER
 THIS  ARTICLE, A TENANT INJURED BY A VIOLATION OF THIS SECTION MAY BRING
 AN ACTION TO RECOVER DAMAGES. A COURT MAY ALSO AWARD ATTORNEYS' FEES  TO
 A PREVAILING PLAINTIFF TENANT.
   §  3. The banking law is amended by adding a new section 103-a to read
 as follows:
   § 103-A. USE OF AUTOMATED DECISION TOOLS TO MAKE LENDING DECISIONS. 1.
 FOR THE PURPOSES OF THIS SECTION, THE FOLLOWING  TERMS  SHALL  HAVE  THE
 FOLLOWING MEANINGS:
   (A) "AUTOMATED DECISION TOOL" MEANS ANY COMPUTATIONAL PROCESS, DERIVED
 FROM  MACHINE LEARNING, STATISTICAL MODELING, DATA ANALYTICS, OR ARTIFI-
 CIAL INTELLIGENCE, THAT ISSUES SIMPLIFIED  OUTPUT,  INCLUDING  A  SCORE,
 CLASSIFICATION,  OR RECOMMENDATION, THAT IS USED TO SUBSTANTIALLY ASSIST
 OR REPLACE DISCRETIONARY DECISION MAKING FOR  MAKING  LENDING  DECISIONS
 THAT  IMPACT NATURAL PERSONS. "AUTOMATED DECISION TOOL" DOES NOT INCLUDE
 A. 3930                             4
 
 A TOOL THAT DOES NOT AUTOMATE, SUPPORT, SUBSTANTIALLY ASSIST, OR REPLACE
 DISCRETIONARY DECISION-MAKING PROCESSES AND  THAT  DOES  NOT  MATERIALLY
 IMPACT  NATURAL  PERSONS,  INCLUDING,  BUT  NOT LIMITED TO, A JUNK EMAIL
 FILTER, FIREWALL, ANTIVIRUS SOFTWARE, CALCULATOR, SPREADSHEET, DATABASE,
 DATA SET, OR OTHER COMPILATION OF DATA.
   (B)   "DISPARATE   IMPACT  ANALYSIS"  MEANS  AN  IMPARTIAL  EVALUATION
 CONDUCTED BY AN INDEPENDENT  AUDITOR.  SUCH  DISPARATE  IMPACT  ANALYSIS
 SHALL INCLUDE, BUT NOT BE LIMITED TO, TESTING OF THE EXTENT TO WHICH USE
 OF  AN  AUTOMATED DECISION TOOL IS LIKELY TO RESULT IN AN ADVERSE IMPACT
 TO THE DETRIMENT OF ANY GROUP ON THE BASIS OF SEX, RACE,  ETHNICITY,  OR
 OTHER  PROTECTED  CLASS  UNDER THIS ARTICLE. A DISPARATE IMPACT ANALYSIS
 SHALL DIFFERENTIATE BETWEEN APPLICANTS WHO WERE APPROVED AND  APPLICANTS
 WHO WERE NOT APPROVED BY THE TOOL.
   (C) "LENDING DECISION" MEANS TO SCREEN APPLICANTS FOR A LOAN.
   2. NO LESS THAN ANNUALLY, EACH BANK THAT USES AUTOMATED DECISION TOOLS
 TO MAKE LENDING DECISIONS SHALL:
   (A) CONDUCT A DISPARATE IMPACT ANALYSIS TO ASSESS THE ACTUAL IMPACT OF
 ANY  AUTOMATED  DECISION TOOL USED BY ANY BANK TO MAKE LENDING DECISIONS
 WITHIN THE STATE; AND
   (B) SUBMIT A SUMMARY OF THE MOST RECENT DISPARATE IMPACT  ANALYSIS  OF
 SUCH  TOOL  AS  WELL  AS  THE DISTRIBUTION DATE OF THE TOOL TO WHICH THE
 ANALYSIS APPLIES TO THE ATTORNEY GENERAL'S OFFICE.
   3. (A) ANY BANK THAT USES AN AUTOMATED DECISION TOOL TO SCREEN  APPLI-
 CANTS FOR A LOAN SHALL NOTIFY EACH SUCH APPLICANT OF THE FOLLOWING:
   (I)  THAT  AN  AUTOMATED DECISION TOOL WILL BE USED IN CONNECTION WITH
 THE ASSESSMENT OR EVALUATION OF SUCH APPLICANT;
   (II) THE CHARACTERISTICS THAT SUCH AUTOMATED DECISION TOOL WILL USE IN
 THE ASSESSMENT OF SUCH APPLICANT;
   (III) INFORMATION ABOUT THE TYPE OF DATA COLLECTED FOR SUCH  AUTOMATED
 DECISION  TOOL,  THE  SOURCE OF SUCH DATA, AND THE BANK'S DATA RETENTION
 POLICY; AND
   (IV) IF AN APPLICATION FOR A LOAN IS DENIED THROUGH USE OF  THE  AUTO-
 MATED DECISION TOOL, THE REASON FOR SUCH DENIAL.
   (B)  THE NOTICE REQUIRED BY PARAGRAPH (A) OF THIS SUBDIVISION SHALL BE
 MADE NO LESS THAN TWENTY-FOUR HOURS BEFORE THE  USE  OF  SUCH  AUTOMATED
 DECISION TOOL AND SHALL ALLOW SUCH APPLICANT TO OPT OUT OF OR CONSENT TO
 SUCH  USE  AND/OR  RETENTION OF SUCH APPLICANT'S PERSONAL INFORMATION BY
 THE BANK.
   (C) IF AN APPLICATION FOR A LOAN IS DENIED BASED ON PERSONAL  INFORMA-
 TION  THAT  IS  INCORRECT,  THE  APPLICANT,  UPON  RECEIPT OF THE NOTICE
 REQUIRED BY SUBPARAGRAPH (IV) OF  PARAGRAPH  (A)  OF  THIS  SUBDIVISION,
 SHALL  HAVE  THIRTY  DAYS  TO  CORRECT  SUCH INFORMATION AND APPEAL SUCH
 DENIAL.
   4. THE ATTORNEY GENERAL MAY INITIATE AN INVESTIGATION IF A  PREPONDER-
 ANCE OF THE EVIDENCE, INCLUDING THE SUMMARY OF THE MOST RECENT DISPARATE
 IMPACT ANALYSIS REQUIRED PURSUANT TO PARAGRAPH (B) OF SUBDIVISION TWO OF
 THIS  SECTION,  ESTABLISHES  A  SUSPICION  OF  A VIOLATION. THE ATTORNEY
 GENERAL MAY ALSO INITIATE IN ANY COURT  OF  COMPETENT  JURISDICTION  ANY
 ACTION OR PROCEEDING THAT MAY BE APPROPRIATE OR NECESSARY FOR CORRECTION
 OF  ANY  VIOLATION  ISSUED PURSUANT TO THIS SECTION, INCLUDING MANDATING
 COMPLIANCE WITH THE PROVISIONS OF THIS SECTION OR SUCH OTHER  RELIEF  AS
 MAY BE APPROPRIATE.
   §  4. 1. The division of housing and community renewal, in conjunction
 with the department of financial services  and  the  division  of  human
 rights  shall  conduct  a study on the impact of artificial intelligence
 and machine learning on housing discrimination and how  such  artificial
 A. 3930                             5
 
 intelligence  and  machine  learning  may  further redlining. Such study
 shall be completed within one year of the effective date of this act.
   2. The division of housing and community renewal shall submit a report
 to  the governor and the legislature on its findings and recommendations
 for legislative action no later than ninety days after the completion of
 the study.
   § 5. This act shall take effect immediately; provided,  however,  that
 the  provisions  of  section four of this act shall expire and be deemed
 repealed after transmission of the report of the findings and  recommen-
 dations of the study to the governor and the legislature, as provided in
 subdivision  2 of section four of this act.  Provided, further, that the
 commissioner of the division of  housing  and  community  renewal  shall
 notify the legislative bill drafting commission upon the transmission of
 the report of the findings and recommendations of the study, as provided
 in  subdivision 2 of section four of this act, in order that the commis-
 sion may maintain an accurate and timely  effective  data  base  of  the
 official  text  of  the  laws of the state of New York in furtherance of
 effectuating the provisions of section 44 of  the  legislative  law  and
 section 70-b of the public officers law.