State agencies would expand AI use and need clear legislative approval to write AI-specific rules

The director would require each state budget unit to look for AI solutions that reduce paperwork and to remove or change AI rules that create unreasonable barriers to innovation. This applies to each budget unit, which the bill's title describes as state agencies. Each unit would also streamline purchasing for AI, set up shared AI governance, and review AI rules for regulatory capture or harm to competition. When using AI, units must focus on lower costs and better service, must not create new requirements that apply only to private-sector AI development, and must use existing staff without creating new administrative bodies.

A budget unit could not adopt a rule that specifically regulates AI systems or computing resources unless all four conditions are met. This applies to state agencies that want to write rules about AI systems or computational resources. Lawmakers must expressly give the agency power to address a specific harm. The rule must be the least restrictive way to meet the law's goal. Its benefit must clearly outweigh its impact on innovation and competition. It must not create a barrier to entering the market or favor an existing firm.

The director would send a yearly report on how state agencies used AI to the Senate president, the House speaker, and the Governor, with a copy to the secretary of state. The report covers AI systems used by budget units during the previous fiscal year. It must list which units used AI and what process or function the AI was applied to. To the extent practicable, it must give measures of time saved, money saved, and better service or quality. It must name any rule, purchasing, or operating barriers that limited the AI system's use. The report is due on or before December 1 each year.