SB 2567

relating to the deceptive trade practice of failure to disclose
information regarding the use of artificial intelligence system or
algorithmic pricing systems for setting of price.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
Section 1. Section. 17.45., Business & Commerce Code,is
amended by adding Subdivision (18) and (19) to read as follows:
(18)  "Artificial intelligence system" means the use of
machine learning and related technologies that use data to train
statistical models for the purpose of enabling computer systems to
perform tasks normally associated with human intelligence or
perception, such as computer vision, speech or natural language
processing, and content generation.
(19)  "Algorithmic pricing systems" means any
condition in which an artificial intelligence system when deployed
generates recommendations on pricing.
SECTION 2.  Section 17.46(b), Business & Commerce Code, is
(b)  Except as provided in Subsection (d) of this section,
the term "false, misleading, or deceptive acts or practices"
includes, but is not limited to, the following acts:
(1)  passing off goods or services as those of another;
(2)  causing confusion or misunderstanding as to the
source, sponsorship, approval, or certification of goods or
(3)  causing confusion or misunderstanding as to
affiliation, connection, or association with, or certification by,
(4)  using deceptive representations or designations
of geographic origin in connection with goods or services;
(5)  representing that goods or services have
sponsorship, approval, characteristics, ingredients, uses,
benefits, or quantities which they do not have or that a person has
a sponsorship, approval, status, affiliation, or connection which
(6)  representing that goods are original or new if
they are deteriorated, reconditioned, reclaimed, used, or
(7)  representing that goods or services are of a
particular standard, quality, or grade, or that goods are of a
particular style or model, if they are of another;
(8)  disparaging the goods, services, or business of
another by false or misleading representation of facts;
(9)  advertising goods or services with intent not to
(10)  advertising goods or services with intent not to
supply a reasonable expectable public demand, unless the
advertisements disclosed a limitation of quantity;
(11)  making false or misleading statements of fact
concerning the reasons for, existence of, or amount of price
(12)  representing that an agreement confers or
involves rights, remedies, or obligations which it does not have or
involve, or which are prohibited by law;
(13)  knowingly making false or misleading statements
of fact concerning the need for parts, replacement, or repair
(14)  misrepresenting the authority of a salesman,
representative or agent to negotiate the final terms of a consumer
(15)  basing a charge for the repair of any item in
whole or in part on a guaranty or warranty instead of on the value of
the actual repairs made or work to be performed on the item without
stating separately the charges for the work and the charge for the
(16)  disconnecting, turning back, or resetting the
odometer of any motor vehicle so as to reduce the number of miles
indicated on the odometer gauge;
(17)  advertising of any sale by fraudulently
representing that a person is going out of business;
(18)  advertising, selling, or distributing a card
which purports to be a prescription drug identification card issued
under Section 4151.152, Insurance Code, in accordance with rules
adopted by the commissioner of insurance, which offers a discount
on the purchase of health care goods or services from a third party
provider, and which is not evidence of insurance coverage, unless:
(A)  the discount is authorized under an agreement
between the seller of the card and the provider of those goods and
services or the discount or card is offered to members of the
(B)  the seller does not represent that the card
provides insurance coverage of any kind; and
(C)  the discount is not false, misleading, or
(19)  using or employing a chain referral sales plan in
connection with the sale or offer to sell of goods, merchandise, or
anything of value, which uses the sales technique, plan,
arrangement, or agreement in which the buyer or prospective buyer
is offered the opportunity to purchase merchandise or goods and in
connection with the purchase receives the seller's promise or
representation that the buyer shall have the right to receive
compensation or consideration in any form for furnishing to the
seller the names of other prospective buyers if receipt of the
compensation or consideration is contingent upon the occurrence of
an event subsequent to the time the buyer purchases the merchandise
(20)  representing that a guaranty or warranty confers
or involves rights or remedies which it does not have or involve,
provided, however, that nothing in this subchapter shall be
construed to expand the implied warranty of merchantability as
defined in Sections 2.314 through 2.318 and Sections 2A.212 through
2A.216 to involve obligations in excess of those which are
(21)  promoting a pyramid promotional scheme, as
(22)  representing that work or services have been
performed on, or parts replaced in, goods when the work or services
were not performed or the parts replaced;
(23)  filing suit founded upon a written contractual
obligation of and signed by the defendant to pay money arising out
of or based on a consumer transaction for goods, services, loans, or
extensions of credit intended primarily for personal, family,
household, or agricultural use in any county other than in the
county in which the defendant resides at the time of the
commencement of the action or in the county in which the defendant
in fact signed the contract; provided, however, that a violation of
this subsection shall not occur where it is shown by the person
filing such suit that the person neither knew or had reason to know
that the county in which such suit was filed was neither the county
in which the defendant resides at the commencement of the suit nor
the county in which the defendant in fact signed the contract;
(24)  failing to disclose information concerning goods
or services which was known at the time of the transaction if such
failure to disclose such information was intended to induce the
consumer into a transaction into which the consumer would not have
entered had the information been disclosed;
(25)  using the term "corporation," "incorporated," or
an abbreviation of either of those terms in the name of a business
entity that is not incorporated under the laws of this state or
(26)  selling, offering to sell, or illegally promoting
an annuity contract under Chapter 22, Acts of the 57th Legislature,
3rd Called Session, 1962 (Article 6228a-5, Vernon's Texas Civil
Statutes), with the intent that the annuity contract will be the
subject of a salary reduction agreement, as defined by that Act, if
the annuity contract is not an eligible qualified investment under
(27)  subject to Section 17.4625, taking advantage of a
disaster declared by the governor under Chapter 418, Government
Code, or by the president of the United States by:
(A)  selling or leasing fuel, food, medicine,
lodging, building materials, construction tools, or another
necessity at an exorbitant or excessive price; or
(B)  demanding an exorbitant or excessive price in
connection with the sale or lease of fuel, food, medicine, lodging,
building materials, construction tools, or another necessity;
(28)  using the translation into a foreign language of
a title or other word, including "attorney," "immigration
consultant," "immigration expert," "lawyer," "licensed," "notary,"
and "notary public," in any written or electronic material,
including an advertisement, a business card, a letterhead,
stationery, a website, or an online video, in reference to a person
who is not an attorney in order to imply that the person is
authorized to practice law in the United States;
(29)  delivering or distributing a solicitation in
connection with a good or service that:
(A)  represents that the solicitation is sent on
behalf of a governmental entity when it is not; or
(B)  resembles a governmental notice or form that
represents or implies that a criminal penalty may be imposed if the
recipient does not remit payment for the good or service;
(30)  delivering or distributing a solicitation in
connection with a good or service that resembles a check or other
negotiable instrument or invoice, unless the portion of the
solicitation that resembles a check or other negotiable instrument
or invoice includes the following notice, clearly and conspicuously
printed in at least 18-point type:
(31)  in the production, sale, distribution, or
promotion of a synthetic substance that produces and is intended to
produce an effect when consumed or ingested similar to, or in excess
of, the effect of a controlled substance or controlled substance
analogue, as those terms are defined by Section 481.002, Health and
(A)  making a deceptive representation or
designation about the synthetic substance; or
(B)  causing confusion or misunderstanding as to
the effects the synthetic substance causes when consumed or
(32)  a licensed public insurance adjuster directly or
indirectly soliciting employment, as defined by Section 38.01,
Penal Code, for an attorney, or a licensed public insurance
adjuster entering into a contract with an insured for the primary
purpose of referring the insured to an attorney without the intent
to actually perform the services customarily provided by a licensed
public insurance adjuster, provided that this subdivision may not
be construed to prohibit a licensed public insurance adjuster from
recommending a particular attorney to an insured;
(33)  owning, operating, maintaining, or advertising a
massage establishment, as defined by Section 455.001, Occupations
(A)  is not appropriately licensed under Chapter
455, Occupations Code, or is not in compliance with the applicable
licensing and other requirements of that chapter; or
(B)  is not in compliance with an applicable local
ordinance relating to the licensing or regulation of massage
(34)  a warrantor of a vehicle protection product
warranty using, in connection with the product, a name that
includes "casualty," "surety," "insurance," "mutual," or any other
word descriptive of an insurance business, including property or
casualty insurance, or a surety business; or
(35)  failure to disclose information regarding use of
artificial intelligence system, or algorithmic pricing systems for
SECTION 3.  The change in law made by this Act applies only
to an act or practice that occurs on or after the effective date of
this Act.  An act or practice that occurs before the effective date
of this Act is governed by the law in effect on the date the act or
practice occurred, and the former law is continued in effect for
SECTION 4.  This Act takes effect September 1, 2025.