DIR LAR Shows Shift From Cybersecurity Expansion to AI

The Texas Department of Information Resources’ (DIR) fiscal year 2028-29 Legislative Appropriations Request (LAR) reflects a reshaped role for the state technology agency, with new AI duties, continued shared-services funding and no exceptional-item request after cybersecurity functions began moving to Texas Cyber Command.

The agency is requesting about $7.1 million for AI and about $18.5 million in technology-related capital items in its LAR. The request also shows no funding in fiscal years 2028 or 2029 for two prior cybersecurity strategies: security policy and awareness and security services.

The change follows the 89th Legislature’s creation of Texas Cyber Command as the state’s dedicated cybersecurity agency. DIR’s administrator’s statement says House Bill 150 established the command and transferred DIR’s cybersecurity functions to it by Dec. 31, 2026. DIR says it transferred 46 cybersecurity full-time equivalent positions to Texas Cyber Command on March 1 and continues working with the command on the transition.

The absence of exceptional items is also a change from DIR’s previous request. Its 2026-27 LAR included $64.5 million in exceptional items, including funding for new full-time equivalent positions, Regional Security Operations Center expansion, cybersecurity services expansion, eProcurement enhancements and IT service management tools.

In the prior request, DIR sought $24.5 million for Regional Security Operations Center expansion and $24.1 million for cybersecurity services expansion. The new LAR does not include comparable cybersecurity exceptional items, with those functions now moving to Texas Cyber Command.

The filing comes after statewide budget instructions required agencies to reduce base appropriation request levels by 3 percent as the starting point for budget deliberations.

DIR’s new AI strategy includes about $3.6 million in each fiscal year, for a biennial total of about $7.1 million. DIR says legislation passed during the 89th Legislature gave it responsibilities around public-sector AI governance and training, helping agencies implement AI tools, administering AI sandbox programs and providing staff support to appointed AI advisory bodies.

The LAR also includes a proposed rider that would appropriate unexpended and unobligated AI funds from fiscal year 2028 to DIR for the same purposes in fiscal year 2029.

DIR’s largest requested funding areas remain shared and statewide services. The agency requests about $1.5 billion for Shared Technology Services, about $233 million for Communications Technology Services and about $113 million for texas.gov across the biennium.

Shared Technology Services includes services such as the Texas Private Cloud, Public Cloud Manager, Mainframe Services, Managed Security Services, Application Services, Technology Solution Services, Print, Mail and Digitization, texas.gov and the Open Data Portal. Communications Technology Services provides a secure statewide network for data, voice, video and Internet service used by state agencies, educational institutions and local governments.

DIR’s capital budget request totals about $28.3 million for the biennium, though that figure includes a non-IT facilities renovation project. Excluding that facilities project, technology-related capital items total about $18.5 million.

The largest technology capital item is about $15.7 million for data center consolidation, with about $7.7 million requested in fiscal year 2028 and about $8 million in fiscal year 2029. DIR says the program supports uninterrupted customer access to data while securing information entrusted to customer agencies. The agency also cites its statutory responsibility to manage statewide data center consolidation and identify agencies for participation.

DIR also requests about $2.2 million for an eProcurement solution, with about $1.1 million requested in each fiscal year. The agency says it has historically relied on legacy applications to procure and contract for products and services used by government customers. According to the LAR, the existing procurement system was not developed for modern contracting needs and does not have the scalability needed to support customer demand.

The eProcurement item has also changed position in DIR’s budget request. In the 2026-27 LAR, DIR requested eProcurement enhancements as an exceptional item. In the 2028-29 LAR, eProcurement appears as a capital budget item.

Other technology capital items include about $354,000 for daily operations and about $246,000 for personal computer purchases. The daily operations item supports DIR’s technical environment, including hardware, software maintenance and tools. The computer purchase item supports the agency’s equipment refresh cycle for laptops, desktops and printers.