WHAT THIS BILL REGULATES · 1 REQUIREMENT TYPE
How Is This Bill Enforced
Verbatim statutory text on the left; plain-language analysis and a per-section checklist on the right. Numbered markers cross-link to the matching checklist row.
As used in this act: "Automated decision systemAutomated decision system"Automated decision system" means a computational process, including one derived from machine learning, statistics, or other data processing or artificial intelligence techniques, that makes a decision or facilitates human decision making.Section 1" means a computational process, including one derived from machine learning, statistics, or other data processing or artificial intelligence techniques, that makes a decision or facilitates human decision making. "Health care providerHealth care provider"Health care provider" means an individual or entity, which, acting within the scope of its licensure or certification, provides health care services, and includes, but is not limited to, a physician, dentist, nurse, or other health care professional whose professional practice is regulated pursuant to Title 45 of the Revised Statutes, and a health care facility licensed pursuant to P.L.1971, c.136 (C.26:2H-1 et seq.).Section 1" means an individual or entity, which, acting within the scope of its licensure or certification, provides health care services, and includes, but is not limited to, a physician, dentist, nurse, or other health care professional whose professional practice is regulated pursuant to Title 45 of the Revised Statutes, and a health care facility licensed pursuant to P.L.1971, c.136 (C.26:2H-1 et seq.). "Member of a protected classMember of a protected class"Member of a protected class" means an individual who has one or more characteristics, including race, creed, color, national origin, nationality, ancestry, age, marital status, civil union status, domestic partnership status, affectional or sexual orientation, genetic information, pregnancy, sex, gender identity or expression, disability or atypical hereditary cellular or blood trait of any individual, or liability for service in the armed forces, for which the individual is provided protections against discriminatory practices pursuant to section 11 of P.L.1945, c.169 (C.10:5-12).Section 1" means an individual who has one or more characteristics, including race, creed, color, national origin, nationality, ancestry, age, marital status, civil union status, domestic partnership status, affectional or sexual orientation, genetic information, pregnancy, sex, gender identity or expression, disability or atypical hereditary cellular or blood trait of any individual, or liability for service in the armed forces, for which the individual is provided protections against discriminatory practices pursuant to section 11 of P.L.1945, c.169 (C.10:5-12).
Section 1 establishes the three defined terms used throughout the bill. Automated decision system is defined broadly to include any computational process — including machine learning, statistics, or AI — that makes or facilitates a decision. Health care provider encompasses licensed individuals and entities providing health care services. Member of a protected class incorporates by reference the full list of characteristics protected under the New Jersey Law Against Discrimination.
(para. 1) 1 A person, bank, banking organization, credit reporting agency, mortgage company, or other financial institution, lender or credit institution involved in the making or purchasing of any loan or extension of credit shall not discriminate through the use of an automated decision systemAutomated decision system"Automated decision system" means a computational process, including one derived from machine learning, statistics, or other data processing or artificial intelligence techniques, that makes a decision or facilitates human decision making.Section 1 against any person or group of persons who is a member of a protected classMember of a protected class"Member of a protected class" means an individual who has one or more characteristics, including race, creed, color, national origin, nationality, ancestry, age, marital status, civil union status, domestic partnership status, affectional or sexual orientation, genetic information, pregnancy, sex, gender identity or expression, disability or atypical hereditary cellular or blood trait of any individual, or liability for service in the armed forces, for which the individual is provided protections against discriminatory practices pursuant to section 11 of P.L.1945, c.169 (C.10:5-12).Section 1.
(para. 2) 1 An automated decision systemAutomated decision system"Automated decision system" means a computational process, including one derived from machine learning, statistics, or other data processing or artificial intelligence techniques, that makes a decision or facilitates human decision making.Section 1 shall be discriminatory pursuant to this section if the system selects individuals who are members of a protected class for participation or eligibility for granting, withholding, extending, modifying, renewing, or purchasing, or in the fixing of the rates, terms, conditions or provisions of any loan, extension of credit or financial assistance, at a rate that is disproportionate to the rate at which the system selects individuals who are not members of the protected class.
Section 2 prohibits financial institutions from using automated decision systems that discriminate against members of a protected class in lending and credit activities. The operative standard is disparate impact: a system is discriminatory if it selects protected-class members at a rate disproportionate to the rate at which it selects non-members for loan or credit participation or eligibility. The prohibition covers the full lifecycle of credit transactions — granting, withholding, extending, modifying, renewing, purchasing, and setting rates, terms, and conditions.
(para. 1) 2 An insurance company licensed, registered, or otherwise authorized to do business under the laws of this State shall not discriminate through the use of an automated decision systemAutomated decision system"Automated decision system" means a computational process, including one derived from machine learning, statistics, or other data processing or artificial intelligence techniques, that makes a decision or facilitates human decision making.Section 1 against any person or group of persons who is a member of a protected classMember of a protected class"Member of a protected class" means an individual who has one or more characteristics, including race, creed, color, national origin, nationality, ancestry, age, marital status, civil union status, domestic partnership status, affectional or sexual orientation, genetic information, pregnancy, sex, gender identity or expression, disability or atypical hereditary cellular or blood trait of any individual, or liability for service in the armed forces, for which the individual is provided protections against discriminatory practices pursuant to section 11 of P.L.1945, c.169 (C.10:5-12).Section 1.
(para. 2) 2 An automated decision systemAutomated decision system"Automated decision system" means a computational process, including one derived from machine learning, statistics, or other data processing or artificial intelligence techniques, that makes a decision or facilitates human decision making.Section 1 shall be discriminatory pursuant to this section if the system selects individuals who are members of a protected class for participation or eligibility for insurance or continuance of insurance, limiting the amount, extent, or kind of insurance coverage, or charging a different rate for the same insurance coverage, at a rate that is disproportionate to the rate at which the system selects individuals who are not members of the protected class.
Section 3 extends the same disparate-impact prohibition to insurance companies. Licensed, registered, or authorized insurers may not use automated decision systems that discriminate against protected-class members in insurance coverage decisions — including refusal to insure, continuation of coverage, scope or amount of coverage, and rate-setting. The disproportionate-selection-rate standard mirrors Section 2.
(para. 1) 3 A health care providerHealth care provider"Health care provider" means an individual or entity, which, acting within the scope of its licensure or certification, provides health care services, and includes, but is not limited to, a physician, dentist, nurse, or other health care professional whose professional practice is regulated pursuant to Title 45 of the Revised Statutes, and a health care facility licensed pursuant to P.L.1971, c.136 (C.26:2H-1 et seq.).Section 1 shall not discriminate through the use of an automated decision systemAutomated decision system"Automated decision system" means a computational process, including one derived from machine learning, statistics, or other data processing or artificial intelligence techniques, that makes a decision or facilitates human decision making.Section 1 against any person or group of persons who is a member of a protected classMember of a protected class"Member of a protected class" means an individual who has one or more characteristics, including race, creed, color, national origin, nationality, ancestry, age, marital status, civil union status, domestic partnership status, affectional or sexual orientation, genetic information, pregnancy, sex, gender identity or expression, disability or atypical hereditary cellular or blood trait of any individual, or liability for service in the armed forces, for which the individual is provided protections against discriminatory practices pursuant to section 11 of P.L.1945, c.169 (C.10:5-12).Section 1.
(para. 2) 3 An automated decision systemAutomated decision system"Automated decision system" means a computational process, including one derived from machine learning, statistics, or other data processing or artificial intelligence techniques, that makes a decision or facilitates human decision making.Section 1 shall be discriminatory pursuant to this section if the system selects individuals who are members of a protected class for participation or eligibility for health care services at a rate that is disproportionate to the rate at which the system selects individuals who are not members of the protected class.
Section 4 applies the same disparate-impact prohibition to healthcare providers. A health care provider — broadly defined in Section 1 to include licensed individuals and facilities — may not use automated decision systems that select protected-class members for healthcare service participation or eligibility at a disproportionate rate. The standard is identical to Sections 2 and 3.
A violation of this act shall be unlawful discrimination and a violation of section 11 of P.L.1945, c.169 (C.10:5-12).
Section 5 is the enforcement hook: a violation of any provision of this act constitutes unlawful discrimination under N.J.S.A. 10:5-12, the operative section of the New Jersey Law Against Discrimination. This incorporation makes the full range of LAD remedies and enforcement mechanisms — including Division on Civil Rights complaints, private civil actions, compensatory and punitive damages, and attorney's fees — available for violations of the bill's automated-decision-system prohibitions.
This act shall take effect on the first day of the third month next following enactment.
Section 6 provides that the act takes effect on the first day of the third month following enactment. Because the bill was not enacted, no effective date was triggered.