AZ HB 2592: artificial intelligence; state agencies; rules

In one paragraph

Vetoed. Arizona's HB 2592 (2026) would have added A.R.S. § 18-105, requiring the Department of Administration director to have each state budget unit identify AI uses that reduce administrative burdens, eliminate regulations that unnecessarily restrict AI innovation, streamline AI procurement and set up enterprise AI governance. Agencies could not have adopted rules specifically regulating AI systems or computational resources without an express legislative delegation to address a specific harm and a least-restrictive-means showing. The director would have reported yearly by December 1. Vetoed June 19, 2026.

Plain-English summary, written with AI assistance. The official text controls.

What it means for business

None: the bill was vetoed and never became law. It would have limited Arizona agencies' ability to adopt rules specifically regulating AI and directed them to streamline AI procurement.

Key provisions

1. 1Would have added A.R.S. § 18-105: the director (of the Arizona Department of Administration) must require each budget unit to identify AI system solutions that reduce administrative burdens, eliminate regulations that unnecessarily restrict AI system innovation, streamline procurement to enable AI adoption and establish enterprise AI system governance
2. 2Budget units would also review existing regulations affecting AI system development for regulatory capture or negative impacts on competition and innovation, and modify or eliminate AI system regulations that create unreasonable barriers to innovation
3. 3In implementing AI, budget units would have had to focus on reducing costs and improving service delivery, not create new regulatory requirements applicable solely to private-sector AI development, and use existing staff and resources without creating new administrative bodies
4. 4No budget-unit rule specifically regulating AI systems or computational resources unless the Legislature expressly delegates authority to address a specific harm, the rule is the least restrictive means, its benefit clearly outweighs impacts on innovation and competition, and it creates no barrier to market entry or advantage to an incumbent firm
5. 5Annual report by December 1 to the Senate President, House Speaker and Governor (copy to the Secretary of State) identifying budget units that implemented AI, the functions it was applied to, efficiency measures (processing time, cost savings, service quality) and barriers encountered
6. 6AI system: 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
7. 7Final passage in the House June 9, 2026 (32-23); vetoed June 19, 2026, with a veto message saying it was redundant of actions the state is already taking and would create barriers to the efficient and responsible adoption of AI

Latest legislative action

Jun 19, 2026. Vetoed by Governor

Sponsors

Roll call votes