HOUSE BILL REPORT
SHB 1833
As Passed House:
March 5, 2025
Title: An act relating to creating an artificial intelligence grant program to promote the economic development of innovative uses of artificial intelligence.
Brief Description: Creating an artificial intelligence grant program.
Sponsors: House Committee on Appropriations (originally sponsored by Representatives Keaton, Barnard, Penner, Eslick and Salahuddin).
Brief History:
Committee Activity:
Appropriations: 2/25/25, 2/27/25 [DPS].
Floor Activity:
Passed House: 3/5/25, 92-5.
Brief Summary of Substitute Bill
  • Creates the Spark Act Grant Program to provide grants to promote the economic development of innovative uses of artificial intelligence, which is administered by the Department of Commerce.
  • Creates the Spark Act Grant Program Account.
HOUSE COMMITTEE ON APPROPRIATIONS
Majority Report: The substitute bill be substituted therefor and the substitute bill do pass.Signed by 29 members:Representatives Ormsby, Chair; Gregerson, Vice Chair; Macri, Vice Chair; Couture, Ranking Minority Member; Connors, Assistant Ranking Minority Member; Penner, Assistant Ranking Minority Member; Schmick, Assistant Ranking Minority Member; Berg, Bergquist, Burnett, Caldier, Corry, Cortes, Doglio, Dye, Fitzgibbon, Keaton, Leavitt, Lekanoff, Manjarrez, Marshall, Peterson, Pollet, Rude, Springer, Stonier, Street, Thai and Tharinger.
Minority Report: Without recommendation.Signed by 1 member:Representative Ryu.
Staff: Jessica Van Horne (786-7288).
Background:

Artificial Intelligence.

Artificial intelligence (AI) is defined and understood in different ways.  The National Artificial Intelligence Initiative Act of 2020 (Act) defines AI as a machine-based system that can, for a given set of human-defined objectives, make predictions, recommendations, or decisions influencing real or virtual environments.  The Act further describes AI systems and systems using machine- and human-based inputs to:  (1) perceive real and virtual environments; (2) abstract such perceptions into models through analysis in an automated manner; and (3) use model inference to formulate options for information or action.

 

During the 2024 session, the Legislature created a task force on AI issues staffed by the Office of the Attorney General (ATG).  The task force must assess current uses and trends of AI, and make recommendations to the Legislature regarding guidelines and potential legislation for use of AI systems.  The task force must submit reports to the Legislature by December 31, 2024, December 1, 2025, and July 1, 2026.  The task force expires June 30, 2027.

 

Department of Commerce—Economic Development Activities.

The Department of Commerce (Commerce) conducts multiple economic development activities through the Office of Economic Development and Competitiveness.  These activities include, but are not limited to, programs providing grants and technical assistance to small businesses, and programs supporting local governments and other entities in applying for federal funding.
Summary of Substitute Bill:

Subject to the availability of amounts appropriated, the Spark Act Grant Program (Program) is created to be administered by Commerce to promote the economic development of innovative uses of AI.  Grants must be awarded on at least an annual basis.  The AI task force staffed by the ATG must assist Commerce in identifying state priorities to form the basis of the grants no less than once per year through 2027.  

 

In order to be eligible for a grant under the Program, an applicant's proposal must include technology that will be shared with the state and provide a state benefit.  When Commerce evaluates applications for grants, it must prioritize:  (1) applicants who have committed to ethical uses of AI; (2) applicants that have analyzed the risks associated with its product; (3) small businesses; and (4) projects with a statewide impact.

 

The nonappropriated Spark Act Grant Program Account (Account) is created.  Revenues to the Account consist of appropriations by the Legislature, public and private donations, federal funding, and all other sources deposited into the Account.  Expenditures from the Account may only be used for the Program, including administrative expenses.  Commerce is directed to pursue all available opportunities for federal funding and solicit private donations for the Account.

 

Beginning October 31, 2027, Commerce must provide a report to the Governor and the Legislature on the Program every two years.  The report must include the priorities identified for the reporting period, the number of grant applications received, the number and amount of grants awarded, the types of projects supported by the grants, and the revenue sources for the grants.

 

For the purposes of the Program, "artificial intelligence" is defined as "the use of machine learning and related technologies that use data to train statistical models for the purpose of enabling computer systems to perform tasks normally associated with human intelligence or perception, such as computer vision, speech or natural language processing, and content generation."

 

The bill may be known and cited as the Spark Act.
Appropriation: None.
Fiscal Note: Requested on February 18, 2025.
Effective Date: The bill takes effect 90 days after adjournment of the session in which the bill is passed.  However, the bill is null and void unless funded in the budget.
Staff Summary of Public Testimony:

(In support) The AI sector is about to undergo significant economic growth.  Companies working in the AI sector want to invest in the United States.  Washington is well-positioned to take advantage of these investments due to the many tech companies that are based in the state, as well as access to cheap and reliable power.  This bill will help ensure that AI companies invest significantly in Washington compared to other states.  The bill will create a grant program to encourage public-private partnerships and invest in technologies that can help the state in areas such as wildfire management, emergency response, and cybersecurity.  It will prioritize investing in small businesses, leverage the work of the state's AI task force, and align with industry needs for sectors like retail.  This bill will provide significant economic and public benefits and will help the state maximize investments.

 

(Opposed) None.
Persons Testifying:

Representative Michael Keaton, prime sponsor; Crystal Leatherman; and Morgan Irwin, AWB.
Persons Signed In To Testify But Not Testifying: None.