State and Local Public Sector Innovation Act

This bill, titled the State and Local Public Sector Innovation Act, directs the Assistant Secretary of Commerce for Communications and Information to establish a grant program within one year of enactment. The program's core purpose is to modernize the technology utilized by State and local governments , aiming to improve the security and efficacy of public services across the nation. Grant funds will be distributed annually to States, with half allocated based on population and the other half based on each State's assessed technology modernization needs, determined through a required survey. These funds are provided to State technology departments, which must then direct at least 70 percent of the grant amount directly to political subdivisions within their State to ensure local impact. Eligible uses for the grants include purchasing and updating technology, including for artificial intelligence, establishing or upgrading cybersecurity systems, and transitioning to post-quantum cryptography. Funds can also support staffing, training, and updating permitting processes, alongside compliance with specific "covered mandates" related to data management and cybersecurity frameworks. The Assistant Secretary can require States to set aside up to 15 percent of grant funds for compliance with these mandates. The bill also mandates technical assistance for government entities on data security, privacy, and cyber threat monitoring, and provides guidance on fund usage, technical standards, and AI system transparency. The program is authorized to receive $500,000,000 annually for fiscal years 2027 through 2030.