This section creates an AI system sandbox program and requires the department to run it, set up vendor applications, provide guidelines, collect quarterly reports, and send a report to the legislature every even-numbered year.
Sec. 2054.706. ARTIFICIAL INTELLIGENCE SYSTEM SANDBOX PROGRAM. (a) In this section: (1) "Eligible entity" means an eligible customer under Section 2054.0525. (2) "Program" means the program established by this section that is designed to allow temporary testing of an artificial intelligence system in a controlled, limited manner without requiring full compliance with otherwise applicable regulations. (3) "Vendor" means a person registered with the department as a contractor to provide commodity items under Section 2157.068. (b) The department shall establish and administer a program to support eligible entities in contracting with vendors to engage in research, development, training, testing, and other pre-deployment activities related to artificial intelligence systems to effectively, efficiently, and securely assist the entity in accomplishing its public purposes. (c) The department shall create an application process for vendors to apply to participate in the program. The application process must include: (1) a detailed description of the artificial intelligence system proposed for participation in the program and the system's intended use; (2) a risk assessment of the system that addresses potential impacts on the public; and (3) a plan for mitigating any adverse consequences discovered during the system's testing phase. (d) A vendor participating in the program shall, with oversight by the department, provide eligible entities with secure access to an artificial intelligence system used in the program. (e) The department shall provide to vendors and eligible entities participating in the program detailed guidelines regarding the exemption from compliance with otherwise applicable regulations provided by the program. (f) The eligible entities and vendors shall submit quarterly reports to the department that include: (1) performance measures for the artificial intelligence system; (2) risk mitigation strategies implemented during system testing; (3) feedback on program effectiveness and efficiency; and (4) any additional information the department requests. (g) Not later than November 30 of each even-numbered year, the department shall produce an annual report and submit the report to the legislature summarizing: (1) the number of eligible entities and vendors participating in the program and the program outcomes; and (2) recommendations for legislative or other action. (h) Notwithstanding Section 2054.383, the department may operate the program as a statewide technology center under Subchapter L. (i) The department shall share information and resources for the program with any other department program established to allow a person, without holding a license or certificate of registration under the laws of this state, to test an artificial intelligence system for a limited time and on a limited basis. Added by Acts 2025, 89th Leg., R.S., Ch. 1148 (S.B. 1964), Sec. 5, eff. September 1, 2025.