The House of Representatives is stepping up efforts to make the Small Business Administration more transparent about its artificial intelligence efforts, passing a bill on Tuesday that would require the agency to submit annual reports to Congress on its use of emerging technologies.
The SBA Artificial Intelligence Utilization Act (HR 8881) was introduced by the House Small Business Committee last month following the release of a Government Accountability Office report that highlighted the SBA’s longstanding noncompliance with federal AI use case reporting requirements. The agency released its first-ever list of AI use cases in March, two months after the Office of Management and Budget deadline.
The bill from Reps. Brad Finstad, R-Minn., and George Latimer, R-N.Y., would require the SBA administrator to submit annual reports to the House and Senate Small Business Committees documenting the use of AI and machine learning, but would also detail the risks and benefits of the case, the need for human involvement, and whether the AI tools “adequately meet the administration’s needs,” according to the bill text.
Finstad said on the House floor Tuesday that the bill would ensure Congress has adequate oversight of how effectively and responsibly the SBA uses AI.
“AI can be a useful tool for the SBA to process information and facilitate its implementation, but it also raises questions about transparency, oversight, and risk,” Finstad said. “This does not mandate the use of AI or ban innovation at the Small Business Administration, but instead ensures common sense Congressional oversight of how these tools are used.”
House Small Business Committee Chairman Roger Williams (R-Texas) said the bill’s provisions would tie in with government-wide efforts to prevent fraud in federal programs, allowing government agencies to better identify suspicious activity and flag improper payments.
“By providing regular information to the SBA, [and its] “Given the use of artificial intelligence, this legislation will promote a more efficient and responsible government while ensuring innovation is combined with appropriate oversight and human judgment,” Williams said.
The Small Business Cybersecurity Assistance and Evaluation Act (HR 8880), by California Democratic Rep. Latifa Simon and Pennsylvania Republican Rep. Rob Bresnahan, also passed the House on Tuesday. The bill directs GAO’s Inspector General to conduct an investigation into federal cyber assistance to small businesses.
GAO’s audit will assess current federal cyber initiatives and programs available to small businesses, including examining risks, threats, vulnerabilities, preparedness, and ways to protect against fraud and scams.
Williams cited data showing that while more than half of small businesses report having no cybersecurity measures in place, small businesses are 210% more likely to experience a cyber incident than large businesses. Rep. Johnny Olszewski (D-Md.) said these gaps create “obvious weaknesses in Main Street America’s cyber posture, weaknesses that cybercriminals like to exploit to steal funds, confidential information, and other critical assets.”
Simon said the bill would ensure that Congress receives the “best available data” to help protect small businesses from cyberattacks.
“Many small business owners don’t have a dedicated cybersecurity staff or the resources to protect themselves,” the California Democrat said. “A single cybersecurity attack can mean the difference between survival and failure for a family-run business on the high street.”
The House also debated the Small Business Technology Act (HR 915) from Rep. Mark Alford (R-Missouri) and Rep. Susie Lee (D-Nevada), but Rep. Williams held off on a vote due to lack of a quorum. The bill would authorize the SBA to provide Section 7(a) loans to small businesses to purchase the latest business software, cloud computing services, AI tools, and other technology to support their operations.
Alford said small businesses cannot compete effectively in today’s economy without modern technology such as cloud-based accounting systems, inventory management software and new AI tools.
“Under the SBA’s 7(a) lending program, there has been unnecessary uncertainty about whether these investments qualify as qualified business expenses. That confusion has delayed access to capital and made it really difficult for entrepreneurs to operate and modernize. This bill resolves that uncertainty,” he said.
