Texas Joins States Regulating AI Use

Texas is the latest state to enact legislation regulating the use of artificial intelligence. The Texas Republican Governor, Greg Abbott, signed the Texas Responsible AI Governance Act (TRAIGA) on June 22.

Slimmed down regulation: The original version of TRAIGA contained expansive provisions reflecting the regulatory schemes adapted from the EU and Colorado regulations which delineate AI by risk and expose employers and creators to liability. Main provisions include:

• Prohibitions on high-risk activities: These prohibitions include using AI systems to manipulate an individual’s behavior, discriminate unlawfully, or create or distribute child pornography or deepfake content.

  • Government entities are prohibited from using AI to assign social scores that could result in detrimental or disproportionate treatment or infringe on constitutional rights. They are also prohibited from using biometric data for identification without consent.

• Liability, Cure, and Safe Harbors: Violations that are deemed to be curable are subject to fines of $10,000 to $12,000 per violation. Violations deemed uncurable are subject to fines of $80,000 to $200,000 per violation.

  • After receiving notice of violation from the Texas Attorney General (AG), a party has 60 days to cure before the AG can bring an enforcement action.

  • Safe harbors exist for companies that have uncovered their own violations, received external feedback about a violation, or are following state agency guidelines.

• Regulatory sandbox: TRAIGA introduces a regulatory sandbox program that allows testing and development of AI systems under relaxed regulatory constraints.

• Texas Artificial Intelligence Advisory Council: The Council can issue reports and provide training but may not promulgate regulations.

The big picture: While Colorado was the first state to pass broad scope AI regulations, almost every state is trying to pass smaller-scale bills. HRPA’s Employment and Labor Group (ELG) meeting’s panel on the patchwork of state laws identified AI as a major growth area for state legislation.

Why it matters: ELG panelists encouraged employers to analyze their business to determine when to apply the most restrictive state law to all states versus complying with mandates in individual states. 

• For many companies, complying with each state’s law on paid leave has been more economical than applying the most generous benefit across state lines while issues like pay transparency, with a low cost to employers, can be implemented the same way nationwide. 

• Individual state AI requirements are the next issue requiring employers to analyze how to best comply with the state patchwork.

Click here for a recap of all ELG panels.