AI Frontier Institute

Relating to regulation of the use of artificial intelligence systems in this state; providing civil penalties.

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H.B. No. 149, the Texas Responsible Artificial Intelligence Governance Act (Section 1), establishes a comprehensive framework for regulating artificial intelligence (AI) systems in Texas, effective January 1, 2026 (Section 10). The bill adds a new Subtitle D to Title 11, Business & Commerce Code, comprising Chapters 551–554. Chapter 551 (Section 4) defines key terms, including 'artificial intelligence system' as any machine-based system that infers from inputs how to generate outputs such as content, decisions, or recommendations. The subtitle applies to any person who promotes or conducts business in Texas, produces products used by Texas residents, or develops or deploys an AI system in the state (Sec. 551.002). Chapter 552 establishes core duties and prohibitions: governmental agencies that make AI systems available to consumers must disclose the interaction before or at the time it occurs (Sec. 552.051); no person may deploy an AI system intended to incite self-harm, harm to others, or criminal activity (Sec. 552.052); governmental entities may not use AI for social scoring that causes detrimental treatment or rights violations (Sec. 552.053); governmental entities may not use AI to uniquely identify individuals via biometric data without consent in ways that infringe legal rights (Sec. 552.054); no person may deploy AI with the sole intent to infringe constitutionally guaranteed rights (Sec. 552.055); no person may develop or deploy AI with intent to unlawfully discriminate against a protected class, though disparate impact alone is insufficient to show intent (Sec. 552.056); and AI systems must not be designed to produce child sexual abuse material or deepfakes in violation of Penal Code Sections 43.26 and 21.165 (Sec. 552.057). Local governments are preempted from adopting separate AI regulations (Sec. 552.003). Enforcement is vested exclusively in the attorney general, with no private right of action (Sec. 552.101). Violators receive a 60-day notice-and-cure period before the attorney general may bring suit (Sec. 552.104). Civil penalties range from $10,000–$12,000 per curable violation, $80,000–$200,000 per uncurable violation, and $2,000–$40,000 per day for continued violations (Sec. 552.105). State licensing agencies may impose additional sanctions, including license revocation and up to $100,000 in monetary penalties, upon attorney general recommendation (Sec. 552.106). Chapter 553 creates a regulatory sandbox program administered by the Texas Department of Information Resources, allowing persons to test AI systems for up to 36 months without standard licensing requirements, subject to quarterly reporting and ongoing oversight (Secs. 553.051–553.103). Chapter 554 establishes the seven-member Texas Artificial Intelligence Council, administratively attached to the Department of Information Resources, to advise the legislature, conduct studies, provide training to state agencies, and oversee the sandbox program, but without binding rulemaking authority (Secs. 554.001–554.103). The bill also amends Section 503.001, Business & Commerce Code (Section 2) to tighten biometric identifier consent rules, clarifying that publicly available images do not constitute consent unless posted by the individual, and to exempt AI training use of biometric data unless used to uniquely identify individuals; amends Section 541.104(a) (Section 3) to require data processors to assist controllers with AI-related data security; amends Section 325.011, Government Code (Section 5) to add AI use as a criterion in sunset reviews of state agencies; and amends Sections 2054.068(b) and 2054.0965(b), Government Code (Sections 6–7) to require state agencies to report and inventory their AI system use to the Department of Information Resources.

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