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+Assigned to ATT�������������������������������������������������������������������������������������������������������������������� FOR
+COMMITTEE
 
-REFERENCE TITLE: artificial intelligence; state agencies; rules
+ARIZONA STATE SENATE
 
-State of Arizona
-House of Representatives
-Fifty-seventh Legislature
-Second Regular Session
-2026
+Fifty-Seventh
+Legislature, Second Regular Session
 
-HB 2592
+FACT SHEET FOR h.B. 2592
 
-Introduced by
-Representative Wilmeth
+artificial
+intelligence; state agencies; rules
 
-AN ACT
+Purpose
 
-AMENDING TITLE 18, CHAPTER 1, ARTICLE 1, ARIZONA REVISED STATUTES, BY
-ADDING SECTION 18-105; RELATING TO GOVERNMENT INFORMATION TECHNOLOGY.
+Outlines requirements for budget units to identify opportunities for the
+use of artificial intelligence (AI) system solutions and reduce barriers to AI
+system innovation. Requires the Director of the Arizona Department of
+Administration (ADOA) to submit a report on the implementation and
+effectiveness of AI systems by budget units, by December 1 of each year.
 
-(TEXT OF BILL BEGINS ON NEXT PAGE)
+Background
 
-HB 2592
+The federal National Artificial Intelligence Initiative Act of 2020 (Act)
+codified the establishment of a national AI initiative and associated federal
+offices and committees. The Act directed the U.S. Secretary of Commerce, in
+coordination with other federal agencies, including the National Institute of
+Standards and Technology, the U.S. Department of Energy and the U.S. Department
+of Homeland Security, to establish guidelines and best practices for developing
+safe, secure and trustworthy AI systems, with the aim of promoting consensus
+industry standards (15
+U.S.C. �� 9401 et seq).
 
- - 1 -
-Be it enacted by the Legislature of the State of Arizona: 1
-Section 1.  Title 18, chapter 1, article 1, Arizona Revised 2
-Statutes, is amended by adding section 18-105, to read: 3
-18-105.  Regulation of artificial intelligence systems; budget
-4
-units; legislative ratification of rules; 5
-definitions 6
-A.  THE DIRECTOR SHALL REQUIRE EACH BUDGET UNIT TO DO ALL OF THE 7
-FOLLOWING: 8
-1.  IDENTIFY OPPORTUNITIES TO IMPLEMENT ARTIFICIAL INTELLIGENCE 9
-SYSTEM SOLUTIONS THAT REDUCE ADMINISTRATIVE BURDENS. 10
-2.  ELIMINATE REGULATIONS THAT UNNECESSARILY RESTRICT ARTIFICIAL 11
-INTELLIGENCE SYSTEM INNOVATION. 12
-3.  STREAMLINE PROCUREMENT PROCESSES TO ENABLE THE ADOPTION OF 13
-ARTIFICIAL INTELLIGENCE SYSTEMS. 14
-4.  ESTABLISH ENTERPRISE ARTIFICIAL INTELLIGENCE SYSTEM GOVERNANCE 15
-TO ENSURE CONSISTENT, EFFICIENT AND APPROPRIATE USE OF ARTIFICIAL 16
-INTELLIGENCE TO BETTER ACHIEVE INTERNAL AND EXTERNAL OBJECTIVES. 17
-5.  REVIEW EXISTING REGULATIONS AFFECTING ARTIFICIAL INTELLIGENCE 18
-SYSTEM DEVELOPMENT TO IDENTIFY INSTANCES OF REGULATORY CAPTURE OR NEGATIVE 19
-IMPACTS ON COMPETITION AND INNOVATION. 20
-6.  MODIFY OR ELIMINATE ANY ARTIFICIAL INTELLIGENCE SYSTEM 21
-REGULATION THAT CREATES UNREASONABLE BARRIERS TO ARTIFICIAL INTELLIGENCE 22
-SYSTEM INNOVATION. 23
-B.  IN IMPLEMENTING AN ARTIFICIAL INTELLIGENCE SYSTEM, EACH BUDGET 24
-UNIT SHALL: 25
-1.  FOCUS ON REDUCING COSTS AND IMPROVING SERVICE DELIVERY. 26
-2.  NOT CREATE NEW REGULATORY REQUIREMENTS THAT ARE SOLELY 27
-APPLICABLE TO PRIVATE SECTOR ARTIFICIAL INTELLIGENCE SYSTEM DEVELOPMENT. 28
-3.  USE EXISTING STAFF AND RESOURCES WITHOUT CREATING NEW 29
-ADMINISTRATIVE BODIES.  30
-C.  A BUDGET UNIT MAY NOT ADOPT RULES SPECIFICALLY REGULATING 31
-ARTIFICIAL INTELLIGENCE SYSTEMS OR COMPUTATIONAL RESOURCES UNLESS ALL OF 32
-THE FOLLOWING APPLY: 33
-1.  THE LEGISLATURE PROVIDES AN EXPRESS STATUTORY DELEGATION TO 34
-ADDRESS A SPECIFIC HARM. 35
-2.  THE RULE IS THE LEAST RESTRICTIVE MEANS AVAILABLE TO ACHIEVE THE 36
-STATUTORY OBJECTIVE. 37
-3.  THE BENEFIT OF THE RULE CLEARLY OUTWEIGH IMPACTS ON INNOVATION 38
-AND COMPETITION. 39
-4.  THE RULE DOES NOT CREATE A BARRIER TO MARKET ENTRY OR AN 40
-ADVANTAGE TO AN INCUMBENT FIRM. 41
-D.  ANY EMERGENCY OR TEMPORARY RULE THAT SPECIFICALLY REGULATES 42
-ARTIFICIAL INTELLIGENCE SYSTEMS OR COMPUTATIONAL RESOURCES MUST BE 43
-APPROVED BY THE LEGISLATURE, SUBJECT TO ALL OF THE FOLLOWING: 44
-HB 2592
+Executive Order 14179 deems that it is the policy of the United States to
+sustain and enhance AI to promote economic competitiveness and national
+security. The Executive Order directed various federal agencies and individuals
+to develop an AI action plan and identify actions taken pursuant to Executive
+Order 14110 that conflict with this policy (Exec.
+Order No. 14179). Executive Order 14365 deems that it is the policy of the
+United States to achieve a minimally burdensome national policy framework for
+AI. The Executive Order directed the establishment of an AI Litigation Task
+Force for the purpose of evaluating and challenging state laws inconsistent
+with this policy and restricted funding to the states under the federal Broadband
+Equity Access and Development Program (Exec.
+Order 14365).
 
- - 2 -
-1.  EACH RULE THAT IS IN EFFECT AT THE BEGINNING OF A LEGISLATIVE 1
-SESSION MUST RECEIVE A RATIFYING VOTE IN ORDER FOR THE RULE TO REMAIN IN 2
-EFFECT AT THE CONCLUSION OF THE LEGISLATIVE SESSION. 3
-2.  THE LEGISLATURE SHALL SCHEDULE A VOTE ON THE FLOOR OF EACH HOUSE 4
-TO RATIFY ALL SUCH RULES WITHIN THE FIRST THIRTY DAYS OF THE LEGISLATIVE 5
-SESSION. 6
-3.  THE LEGISLATURE MAY NOT REQUIRE MORE THAN A SIMPLE MAJORITY VOTE 7
-TO RATIFY A RULE. 8
-E.  FOR THE PURPOSES OF THIS SECTION: 9
-1.  "ARTIFICIAL INTELLIGENCE SYSTEM" MEANS ANY MACHINE 10
-LEARNING-BASED SYSTEM THAT CAN, FOR A GIVEN SET OF OBJECTIVES, GENERATE 11
-OUTPUTS SUCH AS CONTENT, PREDICTIONS, RECOMMENDATIONS OR DECISIONS 12
-INFLUENCING PHYSICAL OR VIRTUAL ENVIRONMENTS. 13
-2.  "COMPUTATIONAL RESOURCE" MEANS ANY TOOL, TECHNOLOGY, SYSTEM OR 14
-INFRASTRUCTURE, WHETHER DIGITAL, ANALOG OR QUANTUM, THAT FACILITATES 15
-COMPUTATION, DATA PROCESSING, STORAGE, TRANSMISSION, MANIPULATION OR USE 16
-OF INFORMATION. 17
-3.  "CONTENT" MEANS ANY DIGITALLY GENERATED, MANIPULATED OR 18
-SYNTHESIZED TEXT, IMAGE, AUDIO RECORDING, VIDEO RECORDING, 19
-THREE-DIMENSIONAL MODEL OR INTERACTIVE ELEMENT, OR ANY COMBINATION OF 20
-THESE, THAT CAN BE PRODUCED AS OUTPUT BY AN ARTIFICIAL INTELLIGENCE 21
-SYSTEM.   22
+There is no
+anticipated fiscal impact to the state General Fund associated with this
+legislation.
+
+Provisions
+
+1.    Requires
+the Director of ADOA (Director) to require each budget unit to:
+
+a)
+identify opportunities to implement AI system solutions that reduce
+administrative burdens;
+
+b)
+eliminate regulations that unnecessarily restrict AI system innovation;
+
+c)
+streamline procurement processes to enable the adoption of AI systems;
+
+d)
+establish enterprise AI system governance to ensure consistent,
+efficient and appropriate use of AI to better achieve internal and external
+objectives;
+
+e)
+review existing regulations affecting AI system development to identify
+instances of regulatory capture or negative impacts on competition and
+innovation; and
+
+f)    modify
+or eliminate any AI system regulation that creates unreasonable barriers to AI
+system innovation.
+
+2.    Requires
+each budget unit, in implementing an AI system, to:
+
+a)
+focus on reducing costs and improving service delivery;
+
+b)
+use existing staff and resources without creating new administrative
+bodies; and
+
+c)    not
+create new regulatory requirements that are solely applicable to private sector
+AI system development.
+
+3.    Prohibits
+a budget unit from adopting rules specifically regulating AI systems or
+computational resources unless the:
+
+a)
+Legislature provides an express statutory delegation to address a
+specific harm;
+
+b)
+rule is the least restrictive means available to achieve the statutory
+objective;
+
+c)
+benefit of the rule clearly outweighs impacts on innovation and
+competition; and
+
+d)    rule
+does not create a barrier to market entry or an advantage to an incumbent firm.
+
+4.
+Requires any emergency or temporary rule that specifically regulates AI
+systems or computational resources to be approved by the Legislature.
+
+5.
+Specifies that each emergency or temporary rule that is in effect at the
+beginning of a legislative session must receive a ratifying vote in order for
+the rule to remain in effect at the conclusion of the legislative session.
+
+6.
+Directs the Legislature to schedule a vote on the floor of each
+legislative chamber to ratify all emergency or temporary rules within the first
+30 days of the legislative session.
+
+7.
+Prohibits the Legislature from requiring more than a simple majority
+vote to ratify an emergency or temporary rule.
+
+8.
+Requires the Director to submit a report regarding the implementation
+and effectiveness of AI systems by budget units during the preceding fiscal
+year to the President of Senate, Speaker of the House of Representatives and
+the Governor, by December 1 of each year.
+
+9.    Requires
+the report to:
+
+a)
+identify each budget unit that implemented an AI system during the
+preceding fiscal year;
+
+b)
+describe the function or administrative process to which the AI system
+was applied;
+
+c)
+include, as practicable, quantitative and qualitative measures of
+government efficiency resulting from the AI system for reductions in processing
+time or backlogs, cost savings or cost avoidance and improvements in service
+delivery or output quality; and
+
+d)    identify
+any regulatory, procurement or operational barriers that were encountered and
+that limited the effective use of the AI system.
+
+10.  Requires
+a copy of the report to be submitted to the Secretary of State.
+
+11.  Defines
+AI system as any machine learning-based system that can, for a given set
+of objectives, generate outputs such as content, predictions, recommendations
+or decisions influencing physical or virtual environments.
+
+12.  Defines
+computational resource as any tool, technology, system or
+infrastructure, whether digital, analog or quantum, that facilitates
+computation, data processing, storage, transmission, manipulation or use of
+information.
+
+13.  Defines
+content as any digitally generated, manipulated or synthesized text,
+image, audio or video recording, three-dimensional model or interactive element
+or any combination thereof that can be produced as output by an AI system.
+
+14.  Becomes
+effective on the general effective date.
+
+House Action
+
+AII����������������� 2/05/26����� DPA��� 4-2-0-1
+
+3rd Read��������� 2/25/26����������������� 31-22-7
+
+Prepared by Senate Research
+
+March 13, 2026
+
+LMM/KS/ci