S.B. No. 1964 establishes comprehensive regulations for the use of artificial intelligence (AI) systems by governmental entities in Texas. The bill defines essential terms such as "artificial intelligence system," "consequential decision," and "heightened scrutiny artificial intelligence system," which pertains to AI systems that make significant decisions affecting individuals' access to government services. It mandates state agencies to collect and report information on their AI systems, particularly those under heightened scrutiny, and requires local governments to review their deployment. The legislation also introduces an AI system code of ethics and minimum standards for heightened scrutiny systems, ensuring compliance with state and federal laws.

Additionally, the bill creates a Public Sector Artificial Intelligence Systems Advisory Board to assist in the development and deployment of AI systems and outlines an educational outreach program for responsible AI use. It establishes an AI Sandbox Program for temporary testing of AI systems without full regulatory compliance, emphasizing accountability, transparency, and risk management. The Department of Information Resources is tasked with supporting eligible entities in contracting with vendors for AI systems, requiring detailed descriptions, risk assessments, and quarterly performance reports from vendors. The bill also mandates disclosure requirements for public-facing AI systems, impact assessments for heightened scrutiny systems, and the establishment of a web page for reporting complaints, with the act set to take effect on September 1, 2025.

Statutes affected:
Introduced: Government Code 2054.003, Government Code 2054.068, Government Code 2054.0965, Government Code 2054.137 (Government Code 2054)
Senate Committee Report: Government Code 2054.003, Government Code 2054.068, Government Code 2054.0965, Government Code 2054.137 (Government Code 2054)
Engrossed: Government Code 2054.003, Government Code 2054.068, Government Code 2054.0965, Government Code 2054.137 (Government Code 2054)
House Committee Report: Government Code 2054.003, Government Code 2054.068, Government Code 2054.0965, Government Code 2054.137 (Government Code 2054)
Enrolled: Government Code 2054.003, Government Code 2054.068, Government Code 2054.0965, Government Code 2054.137 (Government Code 2054)