(1) A governmental entity may not:
(a) convey a material benefit upon an individual for using a state digital identity instead of a physical identity;
(b) withhold services or benefits from an individual if the individual uses a physical identity or is otherwise unable to use a state digital identity; or
(c) require a holder to surrender the holder's secure electronic device in the course of a presentation.
(2)
(a) A governmental entity that, on or after May 6, 2026, implements a new system that accepts a digital identity shall, within three months after the day on which the department issues the first state-endorsed digital identity, accept a state-endorsed digital identity.
(b) A governmental entity is not required to accept a state-endorsed digital identity within the time frame described in Subsection (2)(a) if the governmental entity:
(i)
(A) demonstrates to the satisfaction of the department that accepting a state-endorsed digital identity at that time is not technically feasible; and
(B) provides a plan for accepting a state-endorsed digital identity as soon as feasible; or
(ii) is required by law to only accept a specific form of state digital identity.