SB1964 – Public-Sector AI Governance and Hospital Notice

TXLawState

Date Passed

6/20/2025

Effective Date

9/1/2025

Summary

Establishes public-sector AI ethics, risk-management and disclosure requirements. State agencies and vendors using heightened-scrutiny systems must assess risk and make assessments available to DIR on request. Public hospitals and specified academic medical centers may satisfy standardized notice duties through a general AI statement in patient consent forms.

Healthcare Implications

Covered public healthcare entities and their vendors must map AI use to the applicable public-sector duties. The express hospital notice option supplies a healthcare nexus. The Act is separate from HB149; its hospital option does not remove other disclosure duties under separate laws.

Operational Implications

  • State agencies using public-facing AI must disclose interaction under the DIR code of ethics unless a reasonable person would know the interaction is with AI (2054.707).
  • Academic medical centers, state-owned hospitals, public hospitals and hospital districts may satisfy 2054.711 notice by a generalized AI-use statement in patient consent forms; the option is limited to this section.
  • State agencies or their vendors deploying heightened-scrutiny AI must assess unlawful-harm risks, limitations and information governance; mandatory DIR standards address risk management and employee training (2054.703, .708).
  • Agencies or vendors must supply the heightened-scrutiny impact assessment to DIR on request; it remains confidential rather than publicly disclosable (2054.708).
  • DIR minimum standards must require assessment and documentation before deploying heightened-scrutiny systems and upon material changes to the system, data or intended use; agencies and local governments must adopt the standards (2054.703).
  • DIR must adopt the AI ethics code, heightened-scrutiny standards and implementing rules aligned with NIST AI RMF; state agencies and local governments must adopt the required code and standards (2054.702–.703, .713).
  • A public-sector AI advisory board assists agencies and advises DIR on ethics and heightened-scrutiny standards under Government Code 2054.705; this is advisory, not clinical treatment authority.

Impact Level

High

Keywords

Transparency & Governance; Safety & Risk; Privacy & Data

Stakeholders

Providers & Health Systems; Developers & Vendors; Patients & Public; Regulators & Government