Crpt 119Hrpt681
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Summary
House of Representatives Report 119–681 of the 119th Congress, dated June 3, 2026, submitted by Mr. WILLIAMS of Texas from the Committee on Small Business to accompany H.R. 8881, the SBA Artificial Intelligence Utilization Act of 2026. The committee reports the bill favorably without amendment and states it was ordered reported on May 20, 2026 by a roll call vote of 23 ayes to 0 nos. The report says H.R. 8881 requires the Small Business Administration to submit annual reports to Congress on its use of artificial intelligence and machine learning, including how it maintains human involvement in decisions, and to brief Congress within 30 days of each report. The committee had requested but not received a Congressional Budget Office cost estimate. The report shows changes to the Small Business Act and closes with minority views signed by Ranking Member Nydia M. Velázquez.
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119TH CONGRESS REPORT
" HOUSE OF REPRESENTATIVES !
2d Session 119–681
SBA ARTIFICIAL INTELLIGENCE UTILIZATION
ACT OF 2026
JUNE 3, 2026.—Committed to the Committee of the Whole House on the State of
the Union and ordered to be printed
Mr. WILLIAMS of Texas, from the Committee on Small Business,
submitted the following
R E P O R T
together with
MINORITY VIEWS
[To accompany H.R. 8881]
The Committee on Small Business, to whom was referred the bill
(H.R. 8881) to amend the Small Business Act to require the Admin-
istrator of the Small Business Administration to report on the use
of artificial intelligence and machine learning by the Administra-
tion, and for other purposes, having considered the same, reports
favorably thereon without amendment and recommends that the
bill do pass.
CONTENTS
Page
I. Purpose and Bill Summary ........................................................................ 2
II. Need for Legislation .................................................................................... 2
III. Hearings ....................................................................................................... 2
IV. Committee Consideration ........................................................................... 2
V. Committee Votes ......................................................................................... 2
VI. Section-by-Section of H.R. 8881 ................................................................. 4
VII. Congressional Budget Office Cost Estimate ............................................. 4
VIII. New Budget Authority, Entitlement Authority, and Tax Expenditures 4
IX. Oversight Findings & Recommendations .................................................. 4
X. Performance Goals and Objectives ............................................................ 5
XI. Statement of Duplication of Federal Programs ........................................ 5
XII. Congressional Earmarks, Limited Tax Benefits, and Limited Tariff
Benefits ..................................................................................................... 5
XIII. Federal Mandates Statement ..................................................................... 5
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XIV. Federal Advisory Committee Statement ................................................... 5
XV. Applicability to Legislative Branch ........................................................... 5
69–006
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XVI. Statement of Constitutional Authority ...................................................... 5
XVII. Changes in Existing Law Made by the Bill, as Reported ........................ 5
XVIII. Minority Views ............................................................................................ 9
I. PURPOSE AND BILL SUMMARY
On May 19, 2026, Rep. Brad Finstad (R–MN) and Rep. George
Latimer (D–NY), introduced H.R. 8881, the SBA Artificial Intel-
ligence Utilization Act of 2026. The bill requires the U.S. Small
Business Administration (SBA) to submit an annual report to Con-
gress on its use of artificial intelligence (AI) and machine learning.
II. NEED FOR LEGISLATION
The SBA Artificial Intelligence Utilization Act of 2026 requires
the SBA to report to Congress on the SBA’s use of AI and machine
learning technologies. This bill also requires the SBA to evaluate
how AI can improve agency operations while maintaining appro-
priate human oversight of decision-making.
As AI continues to transform operations across the public and
private sectors, federal agencies are increasingly exploring ways to
leverage AI and machine learning to improve customer service,
fraud detection, and overall program administration.
The Trump Administration has prioritized modernizing govern-
ment technology, reducing regulatory burdens, and accelerating the
adoption of emerging technologies, including AI. Ensuring the SBA
effectively evaluates and deploys AI tools can help the agency bet-
ter serve entrepreneurs, process applications, and improve inter-
actions with small business owners. This legislation would ensure
Congress receives regular information regarding how the SBA is
using AI and machine learning technologies.
III. HEARINGS
The Committee on Small Business held the following hearings
examining matters related to H.R. 8881:
• On February 5, 2025, the Committee held a hearing titled
‘‘Hope on the Horizon: Prioritizing Small Business Growth in
the 119th Congress.’’
• On June 4, 2025, the Committee held a hearing titled
‘‘Budgeting for Growth: Testimony from SBA Administrator
Kelly Loeffler.’’
IV. COMMITTEE CONSIDERATION
The Committee on Small Business met in open session, with a
quorum being present, on May 20, 2026, and ordered H.R. 8881 to
be reported favorably to the House of Representatives by a roll call
vote of 23 ayes to 0 nos.
V. COMMITTEE VOTES
Clause 3(b) of rule XIII of the Rules of the House of Representa-
tives requires the Committee to list the recorded votes on the mo-
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tion to report legislation and amendments thereto. The Committee
voted to favorably report H.R. 8881 to the House of Representatives
at 4:13 PM.
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VI. SECTION-BY-SECTION OF H.R. 8881
Section 1—Short title
This Act may be cited as the ‘‘SBA Artificial Intelligence Utiliza-
tion Act of 2026.’’
Section 2—Reports regarding artificial intelligence and machine
learning use by the small business administration
This section requires the SBA to submit annual reports to Con-
gress regarding the agency’s use of artificial intelligence and ma-
chine learning technologies.
The reporting requirements include the use of AI, the benefits
and risks associated with AI, as well as the measures the Adminis-
trator may take to identify, evaluate, and manage those benefits
and risks. The SBA is required to report on how the agency main-
tains human involvement in decisions informed by AI or machine
learning; identify tasks appropriate for AI use; determine which
tools are suitable for AI; and evaluate how these tools would meet
the SBA’s needs.
This section would also require the SBA Administrator to provide
a briefing to Congress within 30 days of submitting each report.
VII. CONGRESSIONAL BUDGET OFFICE COST ESTIMATE
Pursuant to 3(c)(3) of rule XIII of the Rules of the House of Rep-
resentatives, the Committee adopts as its own the cost estimate
prepared by the Director of the Congressional Budget Office pursu-
ant to section 402 of the Congressional Budget Act of 1974. At the
time this report was filed, the Committee has requested but not re-
ceived a cost estimate from the Director of the Congressional Budg-
et Office.
VIII. NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND
TAX EXPENDITURES
Pursuant to clause 3(c)(2) of rule XIII of the Rules of the House
of Representatives and section 308(a)(I) of the Congressional Budg-
et Act of 1974, the Committee provides the following opinion and
estimate with respect to new budget authority, entitlement author-
ity, and tax expenditures. While the Committee has not received an
estimate of new budget authority contained in the cost estimate
prepared by the Director of the Congressional Budget Office pursu-
ant to section 402 of the Congressional Budget Act of 1974, the
Committee does not believe that there will be any new or increased
costs attributable to this legislation.
IX. OVERSIGHT FINDINGS & RECOMMENDATIONS
In accordance with clause 3(c)(1) of rule XIII and clause 2(b)(1)
of rule X of the Rules of the House of Representatives, the over-
sight findings and recommendations of the Committee on Small
Business with respect to the subject matter contained in H.R. 8881
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are incorporated into the descriptive portions of this report.
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X. PERFORMANCE GOALS AND OBJECTIVES
With respect to the requirements of clause 3(c)(4) of rule XIII of
the Rules of the House of Representatives, the goal of H.R. 8881
is to improve SBA of AI and machine learning technologies where
it is applicable.
XI. STATEMENT OF DUPLICATION OF FEDERAL PROGRAMS
Pursuant to clause 3(c)(5) of rule XIII of the Rules of the House
of Representatives, no provision of H.R. 8881 is known to be dupli-
cative of another Federal program, including any program that was
included in a report to Congress pursuant to section 21 of Public
Law 111–139 or the most recent Catalog of Federal Domestic As-
sistance.
XII. CONGRESSIONAL EARMARKS, LIMITED TAX BENEFITS, AND
LIMITED TARIFF BENEFITS
With respect to clause 9 of rule XXI of the Rules of the House
of Representatives, the Committee finds that the bill does not con-
tain any congressional earmarks, limited tax benefits, or limited
tariff benefits as defined in clause 9(e), 9(f), or 9(g) of rule XXI of
the Rules of the House of Representatives.
XIII. FEDERAL MANDATES STATEMENT
The Committee will adopt as its own the estimate of the Federal
mandates prepared by the Director of the Congressional Budget Of-
fice pursuant to section 423 of the Unfunded Mandates Reform Act.
XIV. FEDERAL ADVISORY COMMITTEE STATEMENT
No advisory committees within the meaning of section 5(b) of the
Federal Advisory Committee Act were created by this legislation.
XV. APPLICABILITY TO LEGISLATIVE BRANCH
The Committee finds that the legislation does not relate to the
terms and conditions of employment or access to public services or
accommodations within the meaning of section 102(b)(3) of the Con-
gressional Accountability Act.
XVI. STATEMENT OF CONSTITUTIONAL AUTHORITY
Pursuant to clause 7 of rule XII of the Rules of the House, the
Committee finds that the authority for this legislation in Art. I, § 8,
cl.1 of the Constitution of the United States.
XVII. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
In compliance with clause 3(e) of rule XIII of the Rules of the
House of Representatives, changes in existing law made by the bill,
as reported, are shown as follows (existing law proposed to be omit-
ted is enclosed in black brackets, new matter is printed in italics,
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and existing law in which no change is proposed is shown in
roman):
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CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
In compliance with clause 3(e) of rule XIII of the Rules of the
House of Representatives, changes in existing law made by the bill,
as reported, are shown as follows (existing law proposed to be omit-
ted is enclosed in black brackets, new matter is printed in italics,
and existing law in which no change is proposed is shown in
roman):
SMALL BUSINESS ACT
* * * * * * *
SEC. 10. (a) The Administration shall, as soon as practicable each
fiscal year make a comprehensive annual report to the President,
the President of the Senate, the Senate Select Committee on Small
Business, and the Speaker of the House of Representatives. Such
report shall include a description of the state of small business in
the Nation and the several States, and a description of the oper-
ations of the Administration under this chapter, including, but not
limited to, the general lending, disaster relief, Government regula-
tion relief, procurement and property disposal, research and devel-
opment, technical assistance, dissemination of data and informa-
tion, and other functions under the jurisdiction of the Administra-
tion during the previous fiscal year. Such report shall contain rec-
ommendations for strengthening or improving such programs, or,
when necessary or desirable to implement more effectively congres-
sional policies and proposals, for establishing new or alternative
programs. In addition, such report shall include the names of the
business concerns to whom contracts are let and for whom financ-
ing is arranged by the Administration, together with the amounts
involved. With respect to minority small business concerns, the re-
port shall include the proportion of loans and other assistance
under this Act provided to such concerns, the goals of the Adminis-
tration for the next fiscal year with respect to such concerns, and
recommendations for improving assistance to minority small busi-
ness concerns under this Act.
(b) CYBERSECURITY REPORTS.—
(1) ANNUAL REPORT.—Not later than 180 days after the date
of enactment of this subsection, and every year thereafter, the
Administrator shall submit a report to the appropriate congres-
sional committees that includes—
(A) a strategy to increase the cybersecurity of informa-
tion technology infrastructure of the Administration;
(B) a supply chain risk management strategy and an im-
plementation plan to address the risks of foreign manufac-
tured information technology equipment utilized by the
Administration, including specific risk mitigation activities
for components originating from entities with principal
places of business located in the People’s Republic of
China; and
(C) an account of—
(i) any incident that occurred at the Administration
during the 2-year period preceding the date on which
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the first report is submitted, and, for subsequent re-
ports, the 1-year period preceding the date of submis-
sion; and
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(ii) any action taken by the Administrator to re-
spond to or remediate any such incident.
(2) FISMA REPORTS.—Each report required under paragraph
(1) may be submitted as part of the report required under sec-
tion 3554 of title 44, United States Code.
(3) RULE OF CONSTRUCTION.—Nothing in this subsection
shall be construed to affect the reporting requirements of the
Administrator under chapter 35 of title 44, United States Code,
in particular the requirement to notify the Federal information
security incident center under section 3554(b)(7)(C)(ii) of such
title, any guidance issued by the Office of Management and
Budget, or any other provision of law or Federal policy.
(4) DEFINITIONS.—In this subsection:
(A) APPROPRIATE CONGRESSIONAL COMMITTEES.—The
term ‘‘appropriate congressional committees’’ means—
(i) the Committee on Small Business and Entrepre-
neurship of the Senate;
(ii) the Committee on Homeland Security and Gov-
ernmental Affairs of the Senate;
(iii) the Committee on Small Business of the House
of Representatives; and
(iv) the Committee on Oversight and Reform of the
House of Representatives.
(B) INCIDENT.—The term ‘‘incident’’ has the meaning
given the term in section 3552 of title 44, United States
Code.
(C) INFORMATION TECHNOLOGY.—The term ‘‘information
technology’’ has the meaning given the term in section
3502 of title 44, United States Code.
(d) For the purpose of aiding in carrying out the national policy
to insure that a fair proportion of the total purchases and contracts
for property and services for the Government be placed with small
business enterprises, and to maintain and strengthen the overall
economy of the Nation, the Department of Defense shall make an
annual report to the Committees on Small Business of the Senate
and the House of Representatives, showing the amount of funds ap-
propriated to the Department of Defense which have been ex-
pended, obligated, or contracted to be spent with small business
concerns and the amount of such funds expended, obligated, or con-
tracted to be spent with firms other than small business in the
same fields of operation; and such reports shall show separately
the funds expended, obligated, or contracted to be spent for basic
and applied scientific research and development.
(e) The Administration and the Inspector General of the Admin-
istration shall retain all correspondence, records of inquiries,
memoranda, reports, books, and records, including memoranda as
to all investigations conducted by or for the Administration, for a
period of at least one year from the date of each thereof, and shall
at all times keep the same available for inspection and examination
by the Senate Select Committee on Small Business and the Com-
mittee on Small Business of the House of Representatives or their
duly authorized representatives.
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(2) The Committee on Small Business of either the Senate or the
House of Representatives may request that the Office of the Inspec-
tor General of the Administration conduct an investigation of any
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8
program or activity conducted under the authority of section 7(j) or
8(a). Not later than thirty days after the receipt of such a request,
the Inspector General shall inform the committee, in writing, of the
disposition of the request by such office.
(f) To the extent deemed necessary by the Administrator to pro-
tect and preserve small-business interests, the Administration shall
consult and cooperate with other departments and agencies of the
Federal Government in the formulation by the Administration of
policies affecting small-business concerns. When requested by the
Administrator, each department and agency of the Federal Govern-
ment shall consult and cooperate with the Administration in the
formulation by such department or agency of policies affecting
small-business concerns, in order to insure that small-business in-
terests will be recognized, protected, and preserved. This sub-
section shall not require any department or agency to consult or co-
operate with the Administration in any case where the head of
such department or agency determines that such consultation or
cooperation would unduly delay action which must be taken by
such department or agency to protect the national interest in an
emergency.
(g) The Administration shall transmit, not later than December
31 of each year, to the Senate Select Committee on Small Business
and Committee on Small Business of the House of Representatives
a sealed report with respect to—
(1) complaints alleging illegal conduct by employees of the
Administration which were received or acted upon by the Ad-
ministration during the preceding fiscal year; and
(2) investigations undertaken by the Administration, includ-
ing external and internal audits and security and investigation
reports.
(h) The Administration shall transmit, not later than March 31
of each year, to the Committees on Small Business of the Senate
and House of Representatives a report on the secondary market op-
erations during the preceding calendar year. This report shall in-
clude, but not be limited to, (1) the number and the total dollar
amount of loans sold into the secondary market and the distribu-
tion of such loans by size of loan, size of lender, geographic location
of lender, interest rate, maturity, lender servicing fees, whether the
rate is fixed or variable, and premium paid; (2) the number and
dollar amount of loans resold in the secondary market with a dis-
tribution by size of loan, interest rate, and premiums; (3) the num-
ber and total dollar amount of pools formed; (4) the number and
total dollar amount of loans in each pool; (5) the dollar amount, in-
terest rate, and terms on each loan in each pool and whether the
rate is fixed or variable; (6) the number, face value, interest rate,
and terms of the trust certificates issued for each pool; (7) to the
maximum extent possible, the use by the lender of the proceeds of
sales of loans in the secondary market for additional lending to
small business concerns; and (8) an analysis of the information re-
ported in (1) through (7) to assess small businesses’ access to cap-
ital at reasonable rates and terms as a result of secondary market
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operations.
* * * * * * *
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XVIII. MINORITY VIEWS
Artificial intelligence (AI) is technology that enables computers
and machines to perform sophisticated tasks that model human
reasoning and decision making, and it has the potential to revolu-
tionize every aspect of our lives. Policy stakeholders have expressed
interest in promoting government AI adoption to improve efficiency
and enhance public services, with an eye to generative AI (GenAI)
tools such as OpenAI’s ChatGPT and Anthropic’s Claude.
However, like with consumer and business AI use, government
AI use poses significant risks. First, as a result of the data and
content used in AI training and fine-tuning, tools could make bi-
ased and discriminatory decisions, or steal intellectual property
and content from unknowing creators. Second, errors in AI outputs
could mislead entrepreneurs and direct them to break laws and
regulations. Third, AI-generated deepfakes could be used for
disinformation, fraud, and scams. Fourth, cybersecurity
vulnerabilities and other safety issues in AI tools could render
them open to adversarial attacks. Lastly, additional risks could
emerge as AI evolves and gains added capabilities.
The operational, reputational, and legal harm caused by flaws in
AI tools imprudently deployed by government agencies, like the
U.S. Small Business Administration (SBA), can be steep, hurting
the small businesses they serve. For instance, under Eric Adams’s
mayoralty, the City of New York deployed the first-of-its-kind
MyCity chatbot, meant to answer questions about operating small
businesses, City small business services, and regulatory compli-
ance.1 But a subsequent press expose determined the chatbot was
consistently encouraging users to break laws and regulations, and
the current Mayor closed it as part of a broader cost-cutting effort,
calling it ‘‘unusable.’’ 2
1 Transcript: Mayor Adams Releases First-of-Its-Kind Plan for Responsible Artificial Intel-
ligence Use in NYC Government, CITY OF N.Y. (Oct. 16, 2023), https://www.nyc.gov/office-of-the-
mayor/news/782-23/transcript-mayor-adams-releases-first-of-its-kind-plan-responsible-artificial-
intelligence-use; Ethan Stark-Miller, Mayor Adams Rolls Out AI Action Plan, ‘Chatbot’ to Assist
Small Business Owners, AMNY (Oct. 16, 2023), https://www.amny.com/politics/mayor-adams-
rolls-out-ai-action-plan-chatbot-to-assist-small-business-owners.
2 Colin Lecher & Katie Honan, Mamdani Targets ‘Unusable’ AI Chatbot for Termination, THE
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CITY (Jan. 30, 2026), https://www.thecity.nyc/2026/01/30/mamdani-unusable-ai-chatbot-budget.
(9)
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Shortly after the MyCity chatbot’s launch, I led the now-Vice
Ranking Member and 6 other Committee Democrats in writing the
White House Office of Management and Budget (OMB) and U.S.
Department of Commerce requesting they incorporate various com-
monsense considerations in their upcoming guidance on federal
agencies’ AI use.3
NYDIA M. VELÁZQUEZ,
Ranking Member.
Æ
3 Letter from 8 Members of Congress to Shalanda Young, Dir., White House Off. of Mgmt. &
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Budget, & Gina Raimondo, Sec’y, U.S. Dep’t of Com. (Dec. 13, 2023), https://democrats-
smallbusiness.house.gov/uploadedfiles/231213_sbc_ds_sb_ai_chatbot_letter_closed.pdf.
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