AI Transparency Rules for Federal Agencies

Summary#

The TAG Act would create a new federal law; it does not amend an existing Act. It would direct the Office of Management and Budget (OMB) to issue guidance on federal agencies’ use of AI in important decisions and public services. Its stated goal is greater transparency when agencies use automated or augmented systems.

  • OMB would have to issue a directive requiring agencies to publish inventories of covered decisions, AI use, and related contractors and vendors. The inventories would be due within 180 days of enactment.
  • OMB guidance would have to cover notices, appeals, human review, public input, performance measures, and chatbot use. Agencies would have to implement the guidance within 180 days after it is issued.
  • Agencies would have to bar contractors from using contract data for ads or individual profiles, and bar linking data from third-party AI interactions with a person’s commercial or personal account.
  • Agencies could not require the public to create an account with a private company as a condition of dealing with an agency, using a federal service, or receiving federal benefits. People could request a transcript or recording of an AI interaction; agencies would have to provide it within three business days after verifying identity and allow an immediate download or email at the end of the interaction.
  • The Comptroller General would review compliance every two years. The Act would expire 10 years after OMB issues the guidance.

The bill has been introduced in the Senate and referred to committee; it is not law.

What it means for you#

  • People affected by federal decisions: For covered decisions that use AI, OMB guidance would have to require agencies to give notice and establish a way for people to appeal adverse decisions and obtain timely recourse. The guidance must also address a chance for review by a human independent of the AI process, and a chance to request information about the process and data used.
  • People using federal services: Guidance would have to require agencies to identify AI interactions promptly, provide a way to escalate issues to a human, and explain how personal information will be used. If you request a transcript or recording, the agency must verify your identity and provide it within three business days.
  • Federal agencies and their contractors: Agencies would have to publish metrics and information about covered systems, and seek public input on systems that interact with the public. Contractors could not use contract data for advertising or to create or update individual profiles beyond performing the contract.
  • State and local agencies, private businesses, and the public generally: The bill does not directly impose duties on state or local agencies or regulate private AI use generally. It also does not ban federal agencies from using AI.

Money#

No publicly available information on the bill’s cost.

  • Agencies and OMB would have to produce guidance, inventories, notices, metrics, and appeal processes; the bill provides no cost estimate or specific funding.
  • The bill would require procurement guidance and contract terms, but does not estimate any effect on contract costs.
  • The Comptroller General would have to conduct recurring compliance reviews; no cost estimate is provided.

What is unclear#

  • “Augmented critical decision process” is used throughout but is not defined in the bill.
  • OMB must issue a directive within 90 days, but the bill does not set a deadline for final guidance. The timing of many agency duties therefore depends on when that guidance is issued.
  • The bill leaves OMB to identify some covered decisions and define what counts as other services or opportunities with a significant effect on a person’s life.
  • The bill does not specify how agencies should resolve conflicts between public reporting and protecting sensitive information, or how much detail must appear in inventories and metrics.
  • The bill does not specify how agencies should handle situations where its required notice about personal information and a third-party AI service’s data handling may not align.

Case for#

  • The bill appears intended to make it easier for people to know when AI is involved in federal decisions and to seek review when a decision harms them.
  • Requiring human review, appeal routes, and information about decision processes could give people more ways to identify and challenge errors.
  • Public inventories, performance measures, and feedback could help agencies and the public spot problems, including differences in performance across languages.
  • Limits on account requirements and commercial use or linking of interaction data could reduce the risk that access to federal services depends on private accounts or that federal interactions feed commercial profiles.

Case against#

  • The bill leaves key terms and many operating details to OMB guidance. Until that guidance is issued, agencies and the public may not know exactly which systems and decisions are covered.
  • The required inventories, testing, metrics, appeals, transcripts, and reviews could take staff time and money, but the bill provides no cost estimate or specific funding.
  • Publishing system details and providing transcripts could raise privacy or security concerns; the bill requires safeguards but leaves many details to later guidance.
  • The Act would expire 10 years after the guidance is issued, so the protections would not continue indefinitely unless later law changes that.