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Bill

HB 5504

State agencies (existing): technology, management, and budget; state digital service office; create. Creates new act.

2025-2026 Regular Session Introduced by Steve Frisbie and 2 co-sponsors

Creates the State Digital Service Office to modernize Michigan’s digital services using agile, open-source, and user-centered practices for five years.

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Bill Summary · HB 5504

Summary of HB 5504 (Michigan, 2025-2026)

Title

State Digital Service Office Act

Purpose and Intent

  • Create a new state-level entity, the State Digital Service Office (SDSO), within the Department of Technology, Management, and Budget (DTMB).
  • Establish the SDSO to promote modern software development practices, improve digital services for Michigan residents, and drive cultural change in the state technology workforce.
  • Operate the SDSO for a five-year period beginning on the act’s effective date.
  • Allow the SDSO to act independently of the DTMB Director while coordinating with key IT governance and procurement entities.

Key Provisions and Changes

Establishment and Structure

  • Creates the State Digital Service Office within DTMB (Sec. 3).
  • The SDSO is led by a Chief Digital Service Officer (CDSO), appointed by the Governor with the advice and consent of the Senate Majority Leader and the Speaker of the House (Sec. 7(1)).
  • CDSO must be a full voting member of the Information Technology Investment Fund governance board (Sec. 7(2)).
  • The SDSO operates independently from the DTMB Director (Sec. 3(2)).

Core Responsibilities

  • Develop strategies and practices to maximize impact on critical IT systems and programs (Sec. 4(1)(a)).
  • Foster cultural change toward modern software development practices and workforce capabilities (Sec. 4(1)(b)).
  • Advise and collaborate with:
    • CIO, Central Procurement Services, Enterprise Portfolio Management Office, and related offices to adopt modern software development practices (Sec. 4(2)).
    • Department procurement offices to study innovative procurement for rapid, high-quality digital services compliant with privacy, security, and accessibility policies (Sec. 4(3)).
    • Governor’s Office, the Director, and state agencies to support adoption of modern strategies (Sec. 4(4)).

Modern Software Development Practices (Section 4(4))

  • Agile development methodologies.
  • Open-source practices for development and deployment.
  • Tools and practices including:
    • Development, security, and operations (DevSecOps).
    • Modular contracting.
    • Active product management.
    • User-centered design.
    • Iterative/incremental development.
    • User research and testing.
    • Unified development infrastructure.
    • Service-oriented architecture.
    • Open-source software.
    • US Digital Service Playbook best practices (13 plays).

Oversight, Review, and Training

  • SDSO reviews IT project proposals with estimated costs of $1,000,000 or more to assess optimal design/development approaches; may review smaller projects (<$1M) if requested or beneficial (Sec. 5(a)).
  • Promotes cost-effective digital services through assessments of user needs (Sec. 5(b)).
  • Coordinates training on effective software project management, including product manager roles (Sec. 5(c)).
  • For IT activities over $500,000, provides oversight, monitoring, and recommendations; sets standards for managing and tracking IT activities (Sec. 5(d)).

Product Management

  • Defines “Product Manager” as a state employee responsible for ensuring a project delivers measurable user value and aligns with strategic objectives via evidence-based decision making and ongoing user engagement (Sec. 2(f)).

Risk and Problem Mitigation

  • The CDSO Chief may block or redirect projects posing significant cost risk or risk to reliable services (Sec. 7(4)).

Reporting and Transparency

  • Annual reports to standard recipients due by February 1:
    • Action status, progress toward adoption of modern practices, recommendations, cost reductions/savings, and any project block/redirect decisions (Sec. 6(1)).
    • A separate annual report on resident-centered outcomes (time saved, error-free applications, user-success rates) for reviewed projects, with public posting (Sec. 6(2)).
  • Additional reporting to the CIO and standard recipients if a project over $500,000 faces budget/schedule risks or disruption, including root causes and remediation recommendations (Sec. 6(3)-(4)).

Organization and Talent

  • CDSO head appointment requires executive approval and Senate/House consent (Sec. 7(1)).
  • CDSO must develop a talent strategy to attract and retain interdisciplinary expertise in technology, strategy, business, and management (Sec. 7(3)).

Duration

  • SDSO exists for five years after the act’s effective date (Sec. 8).

Who/What is Affected

  • State agencies and departments that develop or procure IT and digital services (subject to SDSO oversight and guidance).
  • DTMB, including Central Procurement Services and Enterprise Portfolio Management Office.
  • The Governor’s Office, CIO, and other state leadership involved in IT policy and procurement.
  • Michigan residents, via anticipated improvements in digital services, user experience, and service reliability.

Timeline and Procedural Aspects

  • SDSO established within DTMB, led by CDSO.
  • CDSO appointment subject to gubernatorial appointment with legislative consent.
  • Annual reporting cycle: due by February 1 each year (two reports: adoption progress and resident-centered outcomes).
  • Five-year duration; after expiration, the act would terminate unless renewed or otherwise extended.

Fiscal Considerations

  • The bill notes expected initial costs to establish the SDSO and hire staff; ongoing costs depend on staffing levels and project oversight scope.
  • Some cost-saving potential through procurement efficiencies and improved project delivery, with cited examples from other states and international experience.

This summary captures the bill’s core aims, key provisions, affected parties, and implementation timeline. If you’d like, I can provide a side-by-side comparison with existing Michigan IT governance or with similar state digital service offices.

Compiled from official sources — confirm details with the bill’s official record.

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