A Complete Guide to the TAG Act in 2025: Understanding Automated Governance

Updated February 25th, 2025

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What is the Transparent Automated Governance (TAG) Act? #

The Transparent Automated Governance (TAG) Act requires federal agencies to disclose when automated systems influence decisions that affect individuals’ rights or access to services. It mandates transparency in the use of AI and automation in critical decision-making, ensuring that the public is informed and has access to an appeals process.
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TAG Act Highlights: #


  • Mandatory Disclosure: Agencies must publicly share when AI and automated systems affect decisions impacting people’s rights or services.
  • Right to Appeal: A structured process will allow individuals to challenge or seek reviews of AI-driven decisions.
  • Focus Areas: The Act covers critical sectors such as healthcare, housing, employment, education, transportation, and financial services.

This article delves into the key provisions of the TAG Act and its implications for how federal agencies deploy AI in decision-making.

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Table of Contents #

  1. What is the Transparent Automated Governance (TAG) Act?
  2. Understanding the Transparent Automated Governance (TAG) Act
  3. Why is TAG being introduced?
  4. What are the guidelines outlined by the Transparent Automated Governance (TAG) Act?
  5. How is TAG different from other AI-centric legislations?
  6. Bottom line
  7. FAQs on the TAG Act
  8. Transparent Automated Governance (TAG) Act: Related reads

Understanding the Transparent Automated Governance (TAG) Act #

The Transparent Automated Governance (TAG) Act is a mandate 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.” Its aim is to create transparency and accountability in the deployment of artificial intelligence (AI) and related technologies in federal decision-making.

The act applies to automated systems affecting critical decisions, such as those related to employment, education and training, financial services, healthcare, housing, transportation, and essential utilities.

The TAG act requires the Director of Office of Management and Budget (OMB) to issue guidance to agencies on implementing transparency practices when it comes to using AI and other automated systems.

This guidance will include requirements for public disclosures, assessments, and the process of appealing decisions influenced by AI, helping agencies standardize compliance across different federal bodies.

The TAG act also requires the Government Accountability Office (GAO) to report to the Congress on the effectiveness of these efforts, ensuring continued oversight and potential improvements to the framework.

Who is behind the TAG act? #


The Transparent Automated Governance (TAG) Act was introduced by Senator Gary Peters, with support from Senators Mike Braun and James Lankford. The bill, backed by the Senate Homeland Security and Governmental Affairs Committee, underscores a shared commitment to responsible AI governance in federal decision-making.

“This bipartisan bill will ensure taxpayers know when they are interacting with certain federal AI systems and establishes a process for people to get answers about why these systems are making certain decisions.” - Senator Gary Peters

The bipartisan support reflects a growing consensus on the need for transparency and accountability in federal AI systems, highlighting the importance of public trust and ethical governance.

When will the TAG act come into effect? #


The TAG Act was introduced to the Senate on June 7, 2023 and placed on the Senate Legislative Calendar under General Orders on August 22, 2023.

If enacted, the TAG Act would require the Director of the Office of Management and Budget (OMB) to issue guidance within 270 days, and agencies would need to implement this guidance within nine months following its release. This phased approach aims to ensure adequate preparation and compliance by all federal agencies involved.

Why is TAG being introduced? #

“Artificial intelligence is already transforming how federal agencies are serving the public, but the government must be more transparent with the public about when and how they are using these emerging technologies.” - Senator Gary Peters

The TAG Act addresses rising concerns about the use of automated systems in decisions with far-reaching consequences for public services, such as healthcare, financial assistance, and public welfare programs.

As automated decision-making systems become more integrated into public services, the risk of unintentional discrimination or bias increases, potentially impacting individuals’ rights and opportunities.

The TAG Act is designed to protect civil liberties and privacy, build public trust, and ensure that AI-enhanced decision-making aligns with ethical standards.

What are the guidelines outlined by the Transparent Automated Governance (TAG) Act? #

The TAG Act is designed to ensure ethical, transparent, and accountable use of AI in decision-making by federal agencies. Here’s a breakdown of its key provisions:

Objectives of the TAG Act #


The TAG Act aims to:

  • Protect Individual Rights: Ensure AI systems are used responsibly, respecting citizens’ rights.
  • Promote Transparency: Make the use of AI in government decisions clear and understandable.
  • Foster Public Trust: Build confidence in government AI systems by ensuring they are fair and ethical.
  • Establish Accountability: Set clear standards for how AI-driven decisions are made and held accountable.

Automated Systems Disclosure #


Federal agencies are required to:

  • List Automated Systems: Publicly disclose all automated systems used in critical decision-making processes.
  • Provide Detailed Information: For each system, agencies must share:
    • Its purpose
    • The data sources it uses
    • The potential impacts it may have on decision-making

Plain Language Explanations #


Agencies must:

  • Explain AI Decisions Clearly: Provide simple, straightforward explanations of how and why AI systems are used in decisions.
  • Ensure Understanding: Make sure individuals can easily understand the factors influencing AI-driven decisions.

Appeals and Review Process #


The TAG Act requires that agencies:

  • Offer Appeal Options: Provide a process for individuals to challenge or request a review of decisions influenced by automated systems.

Ensure Recourse: Give affected individuals a clear path to contest decisions that impact their rights or access to services.

How is TAG different from other AI-centric legislations? #

The TAG Act is distinct in that it specifically targets the use of AI and automated decision-making in federal agencies, as opposed to private sector businesses or general-purpose AI laws.

The Act’s focus is on transparency, accountability, and public notification in the federal context, especially when decisions impact citizens’ rights and access to essential services.

The Act also includes requirements for contractors working with federal agencies to develop automated systems. These contractors must ensure that their systems comply with the TAG Act’s requirements for public disclosure, plain language notices, and an accessible appeals process for individuals affected by AI-driven decisions.

Bottom line #

The TAG Act represents a significant step towards transparency and accountability in AI-powered governance at the federal level.

By mandating public disclosure, clear explanations, and avenues for individuals to appeal decisions, the TAG Act aims to build public trust in government systems and promote responsible AI use within federal agencies.

FAQs on the TAG Act #

1. What is the Transparent Automated Governance (TAG) Act and how does it impact federal agencies? #


The TAG Act mandates transparency for federal agencies when using automated systems in decision-making processes that affect citizens’ rights or access to services. It requires agencies to publicly disclose the use of AI systems and provide clear explanations of how they impact decisions.

2. How will the TAG Act ensure transparency in AI-driven decisions? #


Under the TAG Act, federal agencies must publicly list automated systems, explain their purpose and data sources, and provide clear, easy-to-understand explanations of how these systems influence decisions. This ensures that citizens are informed about AI’s role in public decision-making.

3. Can individuals challenge AI-driven decisions under the TAG Act? #


Yes, the TAG Act requires federal agencies to establish an appeals process for individuals to challenge or request a review of decisions influenced by automated systems, ensuring that citizens have a clear recourse when AI impacts their rights or access to services.

4. When will the TAG Act come into effect and how will agencies comply? #


The TAG Act is expected to come into effect after guidance is issued by the Office of Management and Budget (OMB) within 270 days of enactment. Federal agencies will then have nine months to implement these guidelines, ensuring full compliance with the transparency and accountability standards set by the Act.

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