Why a Texas Bill Might Be the Most Surprising Piece of AI Governance in the World
By Courtney King | June 26, 2025
When you think of forward-looking AI regulation, Texas probably does not top the list. Yet a new law out of the Lone Star State—HB149, formally known as the Texas Responsible Artificial Intelligence Governance Act—may be one of the most practical and enforceable pieces of AI legislation in the world. And yes, we are just as surprised as you might be.
At Stillwater Insights, we monitor how jurisdictions around the world are grappling with the rapid rise of artificial intelligence. Most efforts fall into one of two categories: overly cautious frameworks that lack teeth, or sweeping proposals that are too rigid to implement. Texas has done something different. HB149 manages to protect civil liberties, outline concrete obligations, and create space for innovation, all within a single bill.
Here’s why it matters.
What the Texas AI Law Actually Does
HB149 applies to any entity developing, deploying, or distributing AI systems in Texas or targeting Texas residents. It creates enforceable requirements for transparency, ethical use, and consumer protections. Some of the most notable provisions include:
Clear disclosure when government agencies use AI systems to interact with consumers
Prohibitions on harmful or rights-infringing uses of AI, including inciting self-harm, deploying deceptive trade practices, and using biometric surveillance without consent
A strict ban on government-run social scoring systems, similar to what has been used in China
Restrictions on political viewpoint discrimination through AI-powered content moderation or filtering
Civil penalties ranging from $10,000 to $200,000, with per-day fines for continued violations
A 60-day cure period for developers and deployers to fix issues before enforcement actions
A safe harbor for companies following the NIST AI Risk Management Framework, ISO/IEC 42001, or similar standards
The law also introduces a state-managed AI regulatory sandbox and creates a formal AI Council to provide policy guidance, evaluate government AI use, and recommend improvements to existing law.
More Than a Framework
This is not just a broad-strokes policy framework. HB149 contains specific, enforceable provisions backed by the Attorney General’s office. It establishes real investigatory authority, a public complaint mechanism, and a roadmap for ongoing compliance.
At the same time, the law avoids being overly punitive. It allows room for remediation, recognizes industry standards, and includes exceptions for pre-deployment research and testing. This balance between accountability and flexibility is rare in tech policy and marks a notable shift in how state governments might approach AI governance.
What Makes It Distinctly Texan
Parts of this bill clearly reflect Texas’ political culture. The emphasis on political neutrality, free speech protections, and centralized state authority over local regulations are hallmarks of Texas policymaking. For example:
The law prohibits AI-based censorship or de-platforming based on political viewpoints
It includes a preemption clause that blocks cities and counties from creating their own AI rules
The Attorney General, not a new regulatory agency, has primary enforcement power
These features make the bill more ideologically distinct than similar laws emerging in other states. While some of the free speech provisions may raise constitutional questions down the line, they reflect a growing push for state-level tech governance, particularly in red and purple states.
A Sandbox That Works
Texas didn’t just regulate AI, it also created space for safe experimentation. The bill introduces a regulatory sandbox that allows developers to test AI systems in a limited environment for up to 36 months. Participants are required to submit detailed plans and report regularly, but they are temporarily exempt from full compliance requirements during the test period.
This is a smart move. It encourages smaller companies and startups to innovate responsibly without the immediate burden of regulatory overhead. At the same time, oversight from the Department of Information Resources and the AI Council helps ensure that public safety and privacy are not sacrificed.
How It Stacks Up Globally
Texas’ law compares favorably to other emerging AI governance models around the world:
The EU AI Act is far more prescriptive, using a risk-tiered approach and imposing detailed obligations on high-risk systems. However, its complexity and compliance burden may prove overwhelming for small and mid-sized companies.
Canada’s Artificial Intelligence and Data Act (AIDA) takes a lighter-touch approach for now, focusing on impact assessments and high-risk systems. But enforcement mechanisms are still vague, and the scope remains limited.
In contrast, HB149 is leaner, more practical, and more enforceable. It does not attempt to cover every use case but sets meaningful boundaries around civil rights, consumer protections, and responsible deployment.
Rather than trying to predict every future risk, the Texas approach focuses on clear lines: what must be disclosed, what cannot be done, and how oversight will be handled. It is both principled and implementable.
What Comes Next
With HB149 officially signed into law and set to take effect on January 1, 2026, Texas now joins the shortlist of jurisdictions with serious AI governance infrastructure in place. The law does not just encourage compliance—it offers a way to prove it. Developers who follow the NIST framework, document their decision-making, and cure issues when flagged will have strong defenses against enforcement.
For companies building or deploying AI systems, this is a wake-up call. A patchwork of state regulations is emerging, and Texas is no longer just a low-regulation frontier. It is positioning itself as a leader in pragmatic AI oversight.
If your organization is building in or serving Texas, the time to act is now.
At Stillwater Insights, we help companies navigate AI governance through readiness assessments, policy development, and strategic compliance advisory. Whether you are deploying your first AI tool or managing a mature AI portfolio, we can help you align with regulatory expectations while staying focused on innovation.
Get in touch to learn how we can support your AI governance journey.
