[Senate Report 118-89]
[From the U.S. Government Publishing Office]


                                                  Calendar No. 192

118th Congress}                                           { Report
                                 SENATE
 1st Session  }                                           { 118-89

======================================================================                
 
                    TRANSPARENT AUTOMATED GOVERNANCE 
                                   ACT

                               __________

                              R E P O R T

                                 OF THE

                   COMMITTEE ON HOMELAND SECURITY AND

                          GOVERNMENTAL AFFAIRS

                          UNITED STATES SENATE

                              TO ACCOMPANY

                                S. 1865

            TO DIRECT AGENCIES TO BE TRANSPARENT WHEN USING
            AUTOMATED AND AUGMENTED SYSTEMS TO INTERACT WITH
     THE PUBLIC OR MAKE CRITICAL DECISIONS, AND FOR OTHER PURPOSES

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


                August 22, 2023.--Ordered to be printed
   Filed, under authority of the order of the Senate of July 27, 2023
   
                                
                    U.S. GOVERNMENT PUBLISHING OFFICE                    
                           WASHINGTON : 2023                   
          
-----------------------------------------------------------------------------------     
   

        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                   GARY C. PETERS, Michigan, Chairman
THOMAS R. CARPER, Delaware           RAND PAUL, Kentucky
MAGGIE HASSAN, New Hampshire         RON JOHNSON, Wisconsin
KYRSTEN SINEMA, Arizona              JAMES LANKFORD, Oklahoma
JACKY ROSEN, Nevada                  MITT ROMNEY, Utah
ALEX PADILLA, California             RICK SCOTT, Florida
JON OSSOFF, Georgia                  JOSH HAWLEY, Missouri
RICHARD BLUMENTHAL, Connecticut      ROGER MARSHALL, Kansas

                   David M. Weinberg, Staff Director
            Lena C. Chang, Director of Governmental Affairs
                  Michelle M. Benecke, Senior Counsel
                        Evan E. Freeman, Counsel
           William E. Henderson III, Minority Staff Director
              Christina N. Salazar, Minority Chief Counsel
          Kendal B. Tigner, Minority Professional Staff Member
                     Laura W. Kilbride, Chief Clerk
                     
                     
                                                  Calendar No. 192

118th Congress}                                           { Report
                                 SENATE
 1st Session  }                                           { 118-89

======================================================================
 
           
                    TRANSPARENT AUTOMATED GOVERNANCE 
                                   ACT                    
                     
                                 _______
                                

                August 22, 2023.--Ordered to be printed

   Filed, under authority of the order of the Senate of July 27, 2023

                                _______
                                

 Mr. Peters, from the Committee on Homeland Security and Governmental 
                    Affairs, submitted the following

                              R E P O R T

                         [To accompany S. 1865]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Homeland Security and Governmental 
Affairs, to which was referred the bill (S. 1865) to direct 
agencies to be transparent when using automated and augmented 
systems to interact with the public or make critical decisions, 
and for other purposes, having considered the same, reports 
favorably thereon with an amendment, in the nature of a 
substitute, and recommends that the bill, as amended, do pass.

                                CONTENTS

                                                                   Page
  I. Purpose and Summary..............................................1
 II. Background and Need for the Legislation..........................2
III. Legislative History..............................................3
 IV. Section-by-Section Analysis of the Bill, as Reported.............3
  V. Evaluation of Regulatory Impact..................................5
 VI. Congressional Budget Office Cost Estimate........................5
VII. Changes in Existing Law Made by the Bill, as Reported............6

                         I. PURPOSE AND SUMMARY

    S. 1865, the Transparent Automated Governance Act, requires 
the Director of the Office of Management and Budget (OMB) to 
issue guidance to agencies requiring them to notify individuals 
when they are interacting with, or subject to critical 
decisions made using, certain artificial intelligence (AI) or 
other automated systems. OMB's guidance would also direct 
agencies to institute an appeal process for individuals who 
believe an adverse critical decision impacting them was made in 
error using such a system. These processes would involve 
alternative human review of the decision.

              II. BACKGROUND AND NEED FOR THE LEGISLATION

    Agencies across the federal government are already using AI 
and other automated systems to interact with and make--or 
assist in making--critical decisions about members of the 
public, and deployment of these systems is expected to continue 
to grow.\1\
---------------------------------------------------------------------------
    \1\David Freeman Engstrom et al., Government by Algorithm: 
Artificial Intelligence in Federal Administrative Agencies, 
Administrative Conference of the United States (Feb. 19, 2020).
---------------------------------------------------------------------------
    AI systems can allow government agencies to provide more 
efficient services, automating routine tasks and drawing new 
insights from existing data sets. The federal government is 
already using AI, and the opportunities for new efficiencies 
will increase as AI capabilities continue to improve. For 
example, the Social Security Administration is developing AI 
tools with the goal of improving the accuracy and efficiency of 
formal adjudications, and agencies like the Federal 
Communications Commission and the Consumer Financial Protection 
Bureau are increasingly using AI and machine learning tools to 
streamline their processing and analysis of public comments.\2\
---------------------------------------------------------------------------
    \2\Id.
---------------------------------------------------------------------------
    While AI use is widespread and continues to grow, there is 
no comprehensive information on the use cases and contexts in 
which government agencies use these technologies.\3\ These 
systems are not monitored or evaluated in any comprehensive or 
standardized way, and most agencies do not have dedicated 
governance structures to oversee policies in this space.\4\ As 
a result, governments are leaving the door open to risks posed 
by AI technologies that do not work as intended, such as lack 
of accuracy, bias in decision-making, and breaches of 
privacy.\5\ These systems also pose deep accountability 
challenges if bias or privacy violations are detected. This is 
because, as these systems become more complex, it is not always 
possible to accurately describe how an algorithm reached a 
particular output.\6\ When the stakes are high, these 
problematic outputs can cause significant, and sometimes life-
threatening, harms, as discussed below.
---------------------------------------------------------------------------
    \3\Id.
    \4\National AI Advisory Committee (NAIAC), Year 1 Report (May 2023) 
(www.ai.gov/wp-
content/uploads/2023/05/NAIAC-Report-Year1.pdf).
    \5\Id.; National Institute of Standards and Technology, Artificial 
Intelligence Risk Management Framework (AI RMF 1.0) (Jan. 2023) 
(nvlpubs.nist.gov/nistpubs/ai/NIST.AI.100-1.pdf).
    \6\Id.
---------------------------------------------------------------------------
    These harms are not hypothetical; they are already 
occurring both at the federal level and in states across the 
country. For example, CBP began to require the use of a facial 
recognition technology in order for migrants to apply for 
asylum at the U.S.-Mexico border. However, the app failed to 
register many people with darker skin tones, effectively 
barring them from their right to request entry into the United 
States.\7\ In another example, algorithms deployed across at 
least a dozen states to decide who is eligible for Medicaid 
benefits erroneously stripped critical assistance from 
thousands of Americans who relied on disability benefits.\8\ In 
at least one state, when the applicants tried to understand how 
their benefits were determined, they were told the formula 
could not be disclosed because it was a ``trade secret.''\9\
---------------------------------------------------------------------------
    \7\Facial recognition bias frustrates Black asylum applicants to 
US, advocates say, The Guardian (Feb. 8, 2023).
    \8\What happens when an algorithm cuts your healthcare, The Verge 
(Mar. 21, 2018); What happened when a `wildly irrational' algorithm 
made crucial healthcare decisions, The Guardian (July 2, 2021).
    \9\What happens when an algorithm cuts your healthcare, The Verge 
(Mar. 21, 2018).
---------------------------------------------------------------------------
    As the above examples show, transparency and the 
opportunity for members of the public to seek help correcting 
harms are critical steps to ensuring that agencies are using AI 
and other automated systems with purpose, forethought, and 
care, and that individuals are not left at the whim of 
erroneous decision-making assisted by these systems. The 
Transparent Automated Governance Act would increase 
transparency regarding the federal government's use of 
artificial intelligence and other automated systems when these 
systems interact with or make critical decisions about members 
of the public through required notice and opportunity for 
redress.

                        III. LEGISLATIVE HISTORY

    Senator Gary Peters (D-MI) introduced S. 1865, the 
Transparent Automated Governance Act, on June 7, 2023, with 
original cosponsors Senator Mike Braun (R-IN) and Senator James 
Lankford (R-OK). The bill was referred to the Committee on 
Homeland Security and Governmental Affairs.
    The Committee considered S. 1865 at a business meeting on 
June 14, 2023. At the business meeting, Senator Peters offered 
a substitute amendment to the bill, as well as a modification 
to that amendment. The Peters amendment, as modified, added a 
definition for artificial intelligence. It also changed an OMB 
consultation with other agencies from a required consultation 
to a suggested consultation and removed specific mentions of 
the National Institute for Standards and Technology, the Office 
of Science and Technology Policy, and academia from the 
consultation list. The provision now recommends OMB consult 
with the Government Accountability Office (GAO), the Government 
Services Administration (GSA), other agencies with relevant 
expertise, the private sector, and the nonprofit sector. The 
Committee adopted the modification to the Peters substitute 
amendment and the Peters substitute amendment, as modified, by 
unanimous consent, with Senators Peters, Hassan, Sinema, Rosen, 
Padilla, Ossoff, Blumenthal, Paul, Lankford, Romney, Scott, and 
Hawley present.
    The bill, as amended by the Peters substitute amendment as 
modified, was ordered reported favorably by roll call vote of 
10 yeas to 1 nay, with Senators Peters, Hassan, Sinema, Rosen, 
Padilla, Ossoff, Lankford, Romney, Scott, and Hawley voting in 
the affirmative, and Senator Paul voting in the negative. 
Senators Carper, Blumenthal, Johnson, and Marshall voted yea by 
proxy, for the record only.

        IV. SECTION-BY-SECTION ANALYSIS OF THE BILL, AS REPORTED

Section 1. Short title

    This section establishes the short title of the bill as the 
``Transparent Automated Governance Act'' or the ``TAG Act.''

Section 2. Definitions

    This section defines the terms ``agency,'' ``artificial 
intelligence,'' ``augmented critical decision process,'' 
``automated system,'' ``critical decision,'' ``Director,'' 
``plain language,'' and ``transparent automated governance 
guidance'' for the purposes of this Act.

Section 3. Transparent automated governance guidance

    Subsection (a) directs the Director of OMB to issue 
guidance to agencies to require them to disclose when they use 
certain automated systems to interact with or to help make a 
critical decision about a member of the public within 270 days.
    Subsection (b) requires that the guidance include: the 
identification of additional agency actions that qualify as 
critical decisions, if appropriate; a list of automated systems 
that may be used in augmented critical decision processes that 
are not subject to the Act's requirements; how agencies must 
provide plain language notice at the time and place of an 
individual's interaction with certain automated systems; the 
proper contents of the plain language description of the 
automated system; examples of the plain language description 
for the automated system; how agencies must provide plain 
language notice to individuals when they receive a critical 
decision made using an automated system; the proper contents of 
the plain language description of the critical decision; 
examples of the plain language description for the critical 
decision; how an agency must provide an appeals process when an 
individual receives an adverse critical decision made using an 
automated system; how agencies shall provide for alternative 
review of adverse critical decisions made using an automated 
system, including by an individual; and the guidance must 
include criteria for agency information collection regarding 
issues that arise during the use of these systems.
    Subsection (c) requires OMB to provide 180 days for public 
comment on a preliminary version of the guidance from 
subsection (a) as described in subsection (b).
    Subsection (d) requires OMB to consider consulting with 
GSA, GAO, the private sector, and the nonprofit sector, 
including experts in privacy, civil rights, and civil 
liberties, when developing this guidance.
    Subsection (e) allows for the guidance required by section 
104 of the AI in Government Act of 2020 (40 U.S.C. 11301 note) 
to satisfy the requirements of the Act if it meets all the 
requirements of subsection (b).
    Subsection (f) requires OMB to update this guidance every 
two years.

Section 4. Agency implementation

    Subsection (a) requires agencies to implement the guidance 
provided by OMB in section 3 within 270 days.
    Subsection (b) requires the Comptroller General to review 
agency compliance with the Act and submit a report to the 
Senate Homeland Security and Governmental Affairs Committee and 
the House Oversight and Accountability Committee within 2 years 
and then biannually thereafter.

Section 5. Sunset

    The Act sunsets 10 years after enactment.

                   V. EVALUATION OF REGULATORY IMPACT

    Pursuant to the requirements of paragraph 11(b) of rule 
XXVI of the Standing Rules of the Senate, the Committee has 
considered the regulatory impact of this bill and determined 
that the bill will have no regulatory impact within the meaning 
of the rules. The Committee agrees with the Congressional 
Budget Office's statement that the bill contains no 
intergovernmental or private-sector mandates as defined in the 
Unfunded Mandates Reform Act (UMRA) and would impose no costs 
on state, local, or tribal governments.

             VI. CONGRESSIONAL BUDGET OFFICE COST ESTIMATE
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    S. 1865 would require the Office of Management and Budget 
(OMB) to provide guidance to federal agencies on how to adopt 
secure artificial intelligence (AI) programs. The guidance 
would inform agencies how to notify the public that they are 
interacting with a federal system that uses artificial 
intelligence to make decisions regarding benefits or 
eligibility for federal programs. It also would instruct 
agencies how to provide a process for members of the public to 
appeal those AI-generated decisions. The bill would require the 
Government Accountability Office (GAO) to report to the 
Congress on the effectiveness of these efforts.
    The Administration already has issued some orders and 
memorandums concerning the creation of federal AI programs that 
CBO expects will satisfy most of the requirements of the bill. 
Thus, the costs of implementing S. 1865 would stem mainly from 
the need for OMB provide any additional guidance that might be 
necessary and for GAO to publish the required report.
    CBO estimates those costs would be less than $500,000; any 
spending would be subject to the availability of appropriated 
funds.
    The CBO staff contact for this estimate is Aldo Prosperi. 
The estimate was reviewed by Christina Hawley Anthony, Deputy 
Director of Budget Analysis.

                                         Phillip L. Swagel,
                             Director, Congressional Budget Office.

       VII. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

    This legislation would make no change in existing law, 
within the meaning of clauses (a) and (b) of subparagraph 12 of 
rule XXVI of the Standing Rules of the Senate, because this 
legislation would not repeal or amend any provision of current 
law.

                                  [all]