PHP
public function stateSearchAction()
{
$country = $this->getRequest()->getParam('code');
$collection = Mage::getModel('directory/region')->getCollection()
->addFieldToFilter('country_id', $country)->getData();
$this->getResponse()->clearHeaders()->setHeader('Content-type', 'application/json');
$this->getResponse()->setBody(Zend_Json::encode($collection));
}