SB 2966

relating to establishing a framework to govern the use of
artificial intelligence systems in critical decision-making by
private companies and ensure consumer protections; authorizing a
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1.  Subtitle C, Title 11, Business & Commerce Code,
is amended by adding Chapter 551 to read as follows:
CHAPTER 551.  ALGORITHMIC ARTIFICIAL INTELLIGENCE SYSTEMS
Sec. 551.001.  DEFINITIONS.  In this chapter:
(1)  "Artificial intelligence system" means any
machine learning-based system that, for any explicit or implicit
objective, infers from the inputs such system receives how to
generate outputs, including content, decisions, predictions, and
recommendations, that can influence physical or virtual
(2)  "Consequential decision" means any decision that
has a material, legal, or similarly significant effect on a
Sec. 551.002.  ARTIFICIAL INTELLIGENCE FRAMEWORK.  A private
company that uses an artificial intelligence system to make a
consequential decision shall establish a framework to govern the
use of the system to ensure protection of consumers.
Sec. 551.003.  CIVIL PENALTY.  A private company that
violates this section is liable for a civil penalty not to exceed
SECTION 2.  This Act takes effect September 1, 2025.