On June 22, 2025, Texas took a significant step in AI regulation with the signing of the Texas Responsible Artificial Intelligence Governance Act (TRAIGA). Set to take effect on January 1, 2026, this law marks a new chapter in how AI is governed in the Lone Star State. But what does it really mean for employers, and how does it differ from the original, more sweeping proposal?
The Evolution of TRAIGA: From Ambition to Focus
TRAIGA began as one of the most ambitious AI bills in the country, aiming to set a gold standard for comprehensive regulation. However, after months of debate and revision, the final version is more focused, scaling back many of the original requirements for private businesses. Instead, it zeroes in on government agencies and a handful of high-risk AI uses.
Who Does TRAIGA Affect?
TRAIGA applies to anyone who develops or deploys AI systems in Texas, offers products or services to Texas residents, or conducts business in the state. The law defines an "artificial intelligence system" broadly, covering any machine-based system that uses input data to generate outputs—like content, decisions, or recommendations—that can influence people or environments.
What’s Changed for Private Employers?
1. No More Broad Disclosure Requirements
Private employers are no longer required to disclose their use of AI to job applicants or employees. Disclosure is now mainly required for state agencies (when interacting with consumers) and healthcare providers (when using AI in patient care).
2. Focus on Intentional Discrimination
TRAIGA prohibits only the intentional use of AI to unlawfully discriminate against protected classes. This means that unintentional bias or disparate impact is not enough to trigger a violation. Employers are also no longer required to conduct impact assessments for algorithmic bias.
3. Targeting Harmful AI Uses
The law specifically bans the development or deployment of AI systems intended to:
- Incite or encourage self-harm or criminal activity
- Produce child sexual abuse imagery or deep fake pornography, or simulate sexual content while impersonating a child
- Enable government entities to use "social scoring" systems that could infringe on individual rights
4. No Mandatory Risk Management Policies
Unlike the original bill, TRAIGA does not require employers to implement formal AI risk management policies. However, following best practices—like those outlined by the National Institute of Standards and Technology (NIST)—can help employers defend against potential violations.
5. Regulatory Sandbox for Innovation
TRAIGA preserves the "regulatory sandbox" program, allowing companies to test AI systems in a controlled environment with certain regulatory requirements waived. This encourages innovation while maintaining oversight.
6. Enforcement and Penalties
The Texas Attorney General has exclusive authority to enforce TRAIGA. There is no private right of action, but consumers can file complaints online. Penalties for violations range from $10,000 to $12,000 for curable issues, up to $200,000 for uncurable violations, and daily fines for ongoing non-compliance.
Actionable Tips for Employers
Even though TRAIGA’s requirements for private employers are limited, it’s wise to:
- Develop internal AI policies and training to ensure responsible use and oversight
- Audit AI systems to confirm they do not intentionally discriminate
- Request assurances from AI vendors that their tools are compliant
- Document AI decision-making processes to support your practices if challenged
Key Takeaways
- TRAIGA narrows its focus to government agencies and specific harmful uses of AI
- Private employers face fewer obligations but should still prepare for compliance
- Intentional discrimination via AI is prohibited; unintentional bias is not covered
- No mandatory risk management policy, but best practices are recommended
- Enforcement is handled by the Texas Attorney General, with significant penalties for violations
As AI continues to evolve, so too will the laws that govern its use. Staying informed and proactive is the best way for Texas employers to navigate this new regulatory landscape.