Texas Governor Greg Abbott has signed one of the nation’s most comprehensive state laws aimed at governing artificial intelligence. Signed into law as H.B. 149, the Texas Responsible Artificial Intelligence Governance Act will take effect January 1, 2026, establishing new protections for consumers, setting boundaries on government and commercial use of AI, and introducing civil penalties for violations.
Passed overwhelmingly in both chambers, the law is a broad framework regulating the development, deployment, and use of AI systems within the state. It applies to any entity doing business in Texas, developing AI systems used by Texans, or deploying those systems within state borders.
At its core, the law mandates clear disclosures when consumers interact with AI, especially in health care contexts, and prohibits the use of AI to intentionally incite harm or criminal activity. The law also bars government agencies from using AI systems for social scoring or identifying individuals through biometric data without consent—protections aimed at curbing surveillance overreach.
“Texans deserve to know when they’re dealing with a machine and to have their rights respected regardless of the technology involved,” lawmakers wrote in the bill’s statement of intent.
In a nod to privacy advocates, the law tightens rules around biometric data, clarifying that companies cannot collect or use such identifiers for AI training without informed consent—even if the images are publicly available online. Exceptions are provided for systems used to prevent fraud, protect cybersecurity, or assist in law enforcement investigations.
The legislation gives exclusive enforcement authority to the Texas Attorney General, who may investigate complaints, issue civil investigative demands, and bring actions with fines ranging from \$10,000 to \$200,000 per violation. Companies found in violation have 60 days to fix the problem before legal action is initiated. If they do not, they may face additional daily penalties for ongoing noncompliance.
Importantly, the law also establishes a Regulatory Sandbox Program to encourage innovation. This program allows developers to test AI systems under reduced regulatory burdens for up to 36 months, provided they meet transparency and safety standards. State agencies and the Attorney General are barred from penalizing participants for otherwise waivable offenses during the test period—though sandbox participants must still comply with the law’s core protections around consumer interaction and biometric data.
To support ongoing oversight, H.B. 149 creates the Texas Artificial Intelligence Council, a seven-member body appointed by the governor, lieutenant governor, and speaker of the House. The council will issue reports, advise on ethical uses of AI, and evaluate government use of the technology.
“This bill seeks to strike a balance between fostering innovation and protecting fundamental rights,” lawmakers wrote.
Texas joins a growing list of states drafting AI governance frameworks in the absence of comprehensive federal regulation. But H.B. 149 stands out for its breadth—spanning consumer disclosures, anti-discrimination provisions, data governance, and government transparency—while creating a central council to monitor the evolving landscape.
With enforcement set to begin in 2026, state agencies have just over a year to prepare for compliance. The law’s true test will come as AI systems continue to advance—and the state works to ensure they do so responsibly.
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