On January 1, 2026, Texas’s newest law addressing the growing issues of data privacy and the use of Artificial Intelligence went into effect. The Texas Responsible Artificial Intelligence Governance Act (TRAIGA) was passed by the 89th Texas Legislature and signed into law by Gov. Greg Abbott in 2025.

The law’s central focus is on restricting and regulating the use of Artificial Intelligence (AI) systems in Texas, which includes adding new prohibitions and requirements on anyone who develops or deploys AI systems in the private sector.

What does TRAIGA prohibit?

Under TRAIGA, private entities are prohibited from developing or deploying AI systems in a manner that:

  • Intentionally aims to incite or encourage a person to commit physical self-harm (including suicide), harm another person, or engage in criminal activity;
  • Serves the sole intent of producing, assisting or aiding in producing or distributing child pornography or certain sexually explicit “deep fake” videos or images;
  • Impairs a person’s individual rights guaranteed under the U.S. Constitution; or
  • Unlawfully discriminates against a protected class in violation of state or federal law.

TRAIGA also prohibits governmental entities from using or deploying AI systems for uniquely identifying a specific individual using biometric data or gathering images or other media without the individual’s consent if such gathering would infringe on the individual’s rights, as well as barring “social scoring” by government entities to evaluate or classify people based on social behavior or personal characteristics, or developing or deploying such systems for the purpose of identifying individuals using biometric data or data from the internet or other public sources without the individual’s consent.

How does TRAIGA prohibit unlawful discrimination?

While TRAIGA’s prohibitions against self-harm and sexual content attract more attention as “high risk” AI systems, the law’s emphasis on unlawful discrimination is of particular concern for many businesses that utilize AI in aspects of their Human Resources, employee evaluation, or recruitment process. Although TRAIGA expressly notes that disparate impact alone is not sufficient to establish a violation, the law otherwise bars any intentional discrimination.

Are any industries treated differently under TRAIGA?

Yes. Although TRAIGA’s requirements generally apply across all industries, the law carves out two unique cases. First, the law’s prohibition on unlawful discrimination does not apply to insurance companies for the purposes of providing insurance services if the company is already subject to statutes regulating unfair discrimination, unfair methods of competition, or unfair or deceptive acts or practices related to the insurance industry.

Additionally, if an AI system is used to provide health care services or treatment, the provider of such service or treatment must provide a clear and conspicuous disclosure to the patient (or patient’s representative) no later than the date the service or treatment is first provided (except in case of emergency).

What are the penalties for violating TRAIGA and who can enforce its prohibitions?

Like other recent efforts by Texas to secure residents’ data privacy and biometric data, TRAIGA does not provide a private cause of action, but tasks the Texas Attorney General with enforcing any violations of TRAIGA following a sixty-day cure period following a notice of violation. Civil penalties under the law can range for $10,000 to $12,000 per violation for any “curable” violation, while penalties for “uncurable” violations can be as high as $80,000 to $200,000 per violation. The law further incentivizes prompt remediation by applying civil penalties for ongoing violations of between $2,000 and $40,000 daily as long as the violation continues.

What can businesses do to comply with TRAIGA?

As AI use is a developing field, TRAIGA also encourages businesses to take proactive steps to adopt compliance measures and self-audit protocols by providing various safe harbors and affirmative defenses for parties who identify potential violations through internal review, adversarial testing, or compliance with recognized risk management frameworks, such as the National Institute of Standards and Technology (NIST) AI Risk Management Framework.

The Texas Attorney General has demonstrated a growing interest in prosecuting technology-related violations in recent years, resulting in several high-profile settlements in the hundreds of millions and billions of dollars. In light of this enforcement priority, Texas businesses should proactively take steps to ensure their actions are compliant with TRAIGA and all other recent data privacy and data security laws in effect, including:

  • Evaluating whether and how they are using any AI system in the workplace, especially with regard to employment decisions
  • Creating AI-specific policies and procedures to ensure any AI use, now or in the future, is regulated and potential violations can be identified and cured promptly
  • Developing procedures for self-auditing and internal review of AI systems prior to full roll-out, and
  • Adopting a recognized AI risk management framework, such as the NIST AI Risk Management Framework

If your organization is one of the many adopting AI use in any aspect of its operations, it is essential that you conduct a prompt review of your usage to ensure your entity is not at risk of non-compliance.

Photo of Joseph J. Lazzarotti Joseph J. Lazzarotti

Joseph J. Lazzarotti is a principal in the Berkeley Heights, New Jersey, office of Jackson Lewis P.C. He founded and currently co-leads the firm’s Privacy, Data and Cybersecurity practice group, edits the firm’s Privacy Blog, and is a Certified Information Privacy Professional (CIPP)…

Joseph J. Lazzarotti is a principal in the Berkeley Heights, New Jersey, office of Jackson Lewis P.C. He founded and currently co-leads the firm’s Privacy, Data and Cybersecurity practice group, edits the firm’s Privacy Blog, and is a Certified Information Privacy Professional (CIPP) with the International Association of Privacy Professionals. Trained as an employee benefits lawyer, focused on compliance, Joe also is a member of the firm’s Employee Benefits practice group.

In short, his practice focuses on the matrix of laws governing the privacy, security, and management of data, as well as the impact and regulation of social media. He also counsels companies on compliance, fiduciary, taxation, and administrative matters with respect to employee benefit plans.

Privacy and cybersecurity experience – Joe counsels multinational, national and regional companies in all industries on the broad array of laws, regulations, best practices, and preventive safeguards. The following are examples of areas of focus in his practice:

  • Advising health care providers, business associates, and group health plan sponsors concerning HIPAA/HITECH compliance, including risk assessments, policies and procedures, incident response plan development, vendor assessment and management programs, and training.
  • Coached hundreds of companies through the investigation, remediation, notification, and overall response to data breaches of all kinds – PHI, PII, payment card, etc.
  • Helping organizations address questions about the application, implementation, and overall compliance with European Union’s General Data Protection Regulation (GDPR) and, in particular, its implications in the U.S., together with preparing for the California Consumer Privacy Act.
  • Working with organizations to develop and implement video, audio, and data-driven monitoring and surveillance programs. For instance, in the transportation and related industries, Joe has worked with numerous clients on fleet management programs involving the use of telematics, dash-cams, event data recorders (EDR), and related technologies. He also has advised many clients in the use of biometrics including with regard to consent, data security, and retention issues under BIPA and other laws.
  • Assisting clients with growing state data security mandates to safeguard personal information, including steering clients through detailed risk assessments and converting those assessments into practical “best practice” risk management solutions, including written information security programs (WISPs). Related work includes compliance advice concerning FTC Act, Regulation S-P, GLBA, and New York Reg. 500.
  • Advising clients about best practices for electronic communications, including in social media, as well as when communicating under a “bring your own device” (BYOD) or “company owned personally enabled device” (COPE) environment.
  • Conducting various levels of privacy and data security training for executives and employees
  • Supports organizations through mergers, acquisitions, and reorganizations with regard to the handling of employee and customer data, and the safeguarding of that data during the transaction.
  • Representing organizations in matters involving inquiries into privacy and data security compliance before federal and state agencies including the HHS Office of Civil Rights, Federal Trade Commission, and various state Attorneys General.

Benefits counseling experience – Joe’s work in the benefits counseling area covers many areas of employee benefits law. Below are some examples of that work:

  • As part of the Firm’s Health Care Reform Team, he advises employers and plan sponsors regarding the establishment, administration and operation of fully insured and self-funded health and welfare plans to comply with ERISA, IRC, ACA/PPACA, HIPAA, COBRA, ADA, GINA, and other related laws.
  • Guiding clients through the selection of plan service providers, along with negotiating service agreements with vendors to address plan compliance and operations, while leveraging data security experience to ensure plan data is safeguarded.
  • Counsels plan sponsors on day-to-day compliance and administrative issues affecting plans.
  • Assists in the design and drafting of benefit plan documents, including severance and fringe benefit plans.
  • Advises plan sponsors concerning employee benefit plan operation, administration and correcting errors in operation.

Joe speaks and writes regularly on current employee benefits and data privacy and cybersecurity topics and his work has been published in leading business and legal journals and media outlets, such as The Washington Post, Inside Counsel, Bloomberg, The National Law Journal, Financial Times, Business Insurance, HR Magazine and NPR, as well as the ABA Journal, The American Lawyer, Law360, Bender’s Labor and Employment Bulletin, the Australian Privacy Law Bulletin and the Privacy, and Data Security Law Journal.

Joe served as a judicial law clerk for the Honorable Laura Denvir Stith on the Missouri Court of Appeals.

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