TX SB1964

Defines "artificial intelligence system" and creates a new category called "heightened scrutiny artificial intelligence systems" for AI that autonomously makes or is a controlling factor in consequential decisions affecting access to government services

Requires the Texas Department of Information Resources to establish an AI code of ethics and minimum risk management standards aligned with the NIST AI Risk Management Framework, which state agencies and local governments must adopt

Mandates state agencies maintain inventories of all AI systems, conduct impact assessments for heightened scrutiny AI systems documenting risks of unlawful harm, and provide public disclosure when deploying public-facing AI systems

Creates an 8-member Public Sector AI Advisory Board appointed by the governor to assist agencies with AI deployment, and establishes an AI sandbox program for testing systems before full regulatory compliance

Establishes enforcement mechanisms including a complaint web page through the attorney general's office, a 30-day cure period for vendor violations, contract voiding authority, and potential debarment for repeat violators; takes effect September 1, 2025