Texas: Groundbreaking AI Regulation
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APPLIES TO Employers with Employees in TX |
EFFECTIVE January 1, 2026 |
QUESTIONS? Contact HR On-Call |
Quick Look
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Discussion
In a surprising move, Texas has jumped ahead of other states—including California—in passing one of the first comprehensive state laws regulating artificial intelligence. The Texas Responsible Artificial Intelligence Governance Act (TRAIGA) (HB 149), approved by state lawmakers on June 1, now awaits Governor Greg Abbott’s signature. Barring a veto, the law will take effect on January 1, 2026, positioning Texas among a growing group of states, including Colorado and Illinois, that are beginning to shape the legal framework for AI in employment and commercial contexts.
TRAIGA takes a relatively light-touch approach to regulation, balancing emerging concerns about AI misuse with an emphasis on minimizing compliance burdens for businesses. One of TRAIGA’s most important provisions clarifies that it is illegal to intentionally use AI to discriminate against protected classes under Texas law. While this mirrors existing anti-discrimination statutes, the law makes explicit that AI cannot be a tool for purposeful bias. Notably, it also states that disparate impact alone is not enough to establish a violation—aligning with a broader shift in federal regulatory policy under recent executive directives.
The law also bans a handful of high-risk or manipulative AI uses. These include tools designed to incite self-harm or violence, AI systems that conduct “social scoring” based on personal attributes or behavior, and any AI that limits political expression or access to political content.
The law makes important disclosure distinctions between private sector and public agencies. While Texas government entities must notify individuals when interacting with AI, private employers and businesses are not subject to the same transparency mandates.
On biometric data, the law clarifies that public availability of images or audio is not equivalent to consent for AI-based biometric data collection. However, it also includes broad exemptions: AI used solely for training purposes, financial institutions collecting voice data, and tools used for security or legal compliance are largely unaffected.
To support innovation, TRAIGA creates an “AI sandbox” program, allowing businesses to test their AI systems in a monitored environment for up to three years, provided they submit regular reports. The law also establishes a Texas Artificial Intelligence Council, tasked with advising the state on AI governance and innovation policy. Importantly for employers, TRAIGA does not create a private right of action. Only the Texas Attorney General can enforce the law, meaning that individual employees or consumers cannot bring lawsuits based on its provisions.
Action Items
- Evaluate AI Systems for bias risks.
- Monitor additional state and federal developments on AI regulation.
Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2025 ManagEase