State and Local Public Sector Innovation Act

This Act may be cited as the “State and Local Public Sector Innovation Act”.

(a) Establishment.— Not later than 1 year after the date of the enactment of this Act, the Assistant Secretary shall establish a grant program to modernize the technology utilized by State and local governments in order to improve the security and efficacy of public services.

(b) Grant authority.— Each fiscal year, the Assistant Secretary shall distribute among the States the total amount made available for grants under the Program with respect to such fiscal year in the following manner:

(1) 50 percent of such total amount shall be distributed in a manner that provides to each State the portion of such 50 percent amount that bears the same ratio to such 50 percent amount as the ratio that—

(A) the population of such State; bears to

(B) the total population of all States.

(2) 50 percent of such total amount shall be distributed among the States according to the needs of each State with respect to modernizing the technology of government entities in such State, as determined by the Assistant Secretary in accordance with subsection (e)(1).

(c) Recipients of grant funds.— Each grant made to a State under the Program shall be provided to the State technology department of such State for use in accordance with subsection (d).

(d) Grant uses.—

(1) In general.— A State technology department that receives grant funds under the Program may use such grant funds to assist any government entity of such State, or any government entity of a political subdivision of such State, to modernize the technology utilized by such government entity in order to improve the security and efficacy of public services, including through any of the following actions:

(A) Purchasing or updating technology and related infrastructure, including technology and infrastructure related to artificial intelligence.

(B) Conducting testing to determine needs with respect to technology modernization.

(C) Updating permitting processes as necessary to facilitate technology modernization.

(D) Establishing or upgrading cybersecurity systems and processes.

(E) Hiring and maintaining staff as necessary to support technology modernization.

(F) Training staff as necessary to support technology modernization.

(G) Transitioning technology to meet standards with respect to post-quantum cryptography.

(H) Complying with the covered mandates.

(2) Local focus.— The Assistant Secretary shall require, as a condition of a grant under the Program, that at least 70 percent of the amount provided for a State under such grant be provided directly to political subdivisions of such State for use in accordance with paragraph (1).

(3) Set aside for covered mandates.— If the Assistant Secretary determines pursuant to subsection (e)(2) that a State is not complying with the covered mandates, the Assistant Secretary may require, as a condition of a grant under the Program, that such State set aside up to 15 percent of the amount provided under such grant for actions necessary to comply with the covered mandates.

(e) Survey.—

(1) Need determinations.— To determine the relative needs of States for purposes of subsection (b)(2), the Assistant Secretary shall complete, not later than 1 year after the date of the enactment of this Act, a survey to collect from the State technology department of each State information with respect to—

(A) the technology utilized and data stored by government entities in such State;

(B) the modernization readiness, interoperability, and regulatory compliance, with respect to technology, of government entities in such State; and

(C) any technology modernization planning of such State.

(2) Covered mandates determination.— For purposes of subsection (d)(3), the Assistant Secretary shall collect from each State, though the survey completed under paragraph (1) of this subsection, information necessary to determine whether such State is complying with the covered mandates.

(f) Technical assistance.— The Assistant Secretary shall make available to government entities assisted with grant funds under the Program technical assistance, including technical assistance with respect to—

(1) data security best practices;

(2) privacy best practices;

(3) cyber threat monitoring and awareness; and

(4) compliance with the covered mandates, including related best practices and timelines.

(g) Guidance.— The Assistant Secretary shall publish guidance with respect to the Program, including guidance—

(1) on the use of grant funds made available under the Program;

(2) for utilizing consensus-based technical standards in carrying out the Program; and

(3) to ensure that any artificial intelligence system of a government entity assisted with grant funds made available under the Program, if used for an interaction with a member of the public, includes a notification that artificial intelligence is being used.

(h) Consultation.— In carrying out the Program, the Assistant Secretary shall consult with representatives of the following:

(1) Academia.

(2) Scientific societies.

(3) Industry.

(4) Civil society organizations.

(5) State and local government information technology experts.

(6) Other stakeholder groups the Assistant Secretary determines appropriate.

(i) Briefing.— Not later than 4 years after the date of the enactment of this Act, the Assistant Secretary shall provide to the appropriate congressional committees a briefing on the Program, which shall include—

(1) data on the impact of the Program on State and local government technology;

(2) a description of any obstacles encountered in implementing the Program and how such obstacles were addressed;

(3) recommendations on any additional resources necessary to support the Program; and

(4) an analysis of whether the Program should be authorized for additional fiscal years.

(j) Authorization of appropriations.— There is authorized to be appropriated to carry out the Program $500,000,000 for each of fiscal years 2027 through 2030.

(k) Definitions.— In this section:

(1) Appropriate congressional committees.— The term appropriate congressional committees means—

(A) in the House of Representatives—

(i) the Committee on Energy and Commerce; and

(ii) the Committee on Science, Space, and Technology; and

(B) in the Senate, the Committee on Commerce, Science, and Transportation.

(2) Artificial intelligence.— The term artificial intelligence has the meaning given such term in section 5002 of the National Artificial Intelligence Initiative Act of 2020 (15 U.S.C. 9401).

(3) Assistant Secretary.— The term Assistant Secretary means the Assistant Secretary of Commerce for Communications and Information.

(4) Covered mandates.— The term covered mandates means, with respect to a State, that such State, as determined by the Assistant Secretary—

(A) has a Chief Data Officer or an individual serving in a substantially similar position;

(B) has, and is implementing, a data privacy, inventory and classification system;

(C) has, and is implementing, data life-cycle policies; and

(D) is complying with the most recent cybersecurity and risk management frameworks of the National Institute of Standards and Technology of the Department of Commerce.

(5) Post-quantum cryptography.— The term post-quantum cryptography means cryptographic algorithms and methods that are assessed not to be specifically vulnerable to attack by a quantum, or classical, computer.

(6) Program.— The term Program means the grant program established under subsection (a).

(7) State.— The term State means each of the several States, the District of Columbia, each territory or possession of the United States, and each federally recognized Indian Tribe.

(8) State technology department.— The term State technology department means the department or agency of a State that the Governor or chief executive of such State designates, for purposes of the Program, as the primary department or agency of such State with respect to technology provision and services.