Regular Session
Government Affairs & Regulatory Compliance Analysis
HB149 fundamentally shifts liability from software vendors to Texas businesses ("Deployers") using AI for hiring, healthcare, finance, and customer service. Effective January 1, 2026, the law mandates strict disclosure protocols, bans non-consensual biometric scraping, and empowers the Attorney General to levy civil penalties of up to $200,000 per violation against companies that fail to maintain specific documentation and oversight.
Rep. Giovanni Capriglione·House Bill·Regular Session
Department of Information Resources (Sandbox Program & AI Council oversight) • Office of the Attorney General (Exclusive authority for Chapter 552) • State Licensing Agencies (e.g., Medical Board, Dept of Licensing and Regulation) for professional sanctions • Texas Artificial Intelligence Council (Advisory & Sandbox consultation)
This legislation has regulatory implications for the following Texas businesses and organizations:
Significant regulatory changes (effective 2025-06-22). Review with your legal and compliance teams to understand implications.
Affected business types:
Affected business types:
highSignificant operational investment may be required.
JD Key Consulting provides government affairs and regulatory strategy services. We help businesses navigate Texas agencies, understand legislative impacts, and advocate for their interests.
JD Key Consulting provides strategic guidance on Texas regulatory compliance and legislative impact for your business.
Key implementation requirements and action items for compliance with this legislation
You must immediately audit and amend Master Services Agreements (MSAs) with software vendors.
To utilize the "Right to Cure" (avoiding penalties), you must be able to produce the following upon AG demand:
JD Key Consulting specializes in Texas regulatory compliance strategy. Work directly with James Dickey—former Chairman of the Republican Party of Texas—to understand this bill's impact on your operations and develop an actionable compliance plan.
Schedule a ConsultationInformation presented is for general knowledge only and is provided without warranty, express or implied. Consult qualified government affairs professionals and legal counsel before making compliance decisions.
This bill's path through the Texas Legislature
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Common questions about HB149
HB149 fundamentally shifts liability from software vendors to Texas businesses ("Deployers") using AI for hiring, healthcare, finance, and customer service. Effective January 1, 2026, the law mandates strict disclosure protocols, bans non-consensual biometric scraping, and empowers the Attorney General to levy civil penalties of up to $200,000 per violation against companies that fail to maintain specific documentation and oversight.
HB149 was authored by Texas Representative Giovanni Capriglione during the Regular Session.
HB149 was signed into law by Governor Greg Abbott on June 22, 2025.
HB149 is enforced by Department of Information Resources (Sandbox Program & AI Council oversight), Office of the Attorney General (Exclusive authority for Chapter 552), State Licensing Agencies (e.g., Medical Board, Dept of Licensing and Regulation) for professional sanctions and Texas Artificial Intelligence Council (Advisory & Sandbox consultation).
The regulatory priority for HB149 is rated as "critical". Businesses and organizations should review the legislation to understand potential impacts.
The cost impact of HB149 is estimated as "high". This may vary based on industry and implementation requirements.
HB149 addresses topics including artificial intelligence, business & commerce, business & commerce--trade practices, consumer protection and electronic information systems.
Key dates for HB149: Effective date is 2025-06-22. Rulemaking: Prescribe application forms and rules for the Artificial Intelligence Regulatory Sandbox Program. (No specific date set (Program establishment required)); Post the online consumer complaint mechanism and required information on the AG website. (2026-09-01). Consult with legal counsel regarding applicability.
HB149 establishes the following penalties: civil penalty of $10,000 - $12,000 per violation for Violation deemed 'curable' by the court or breach of a cure statement submitted to the AG.; civil penalty of $80,000 - $200,000 per violation for Violation deemed 'uncurable' by the court.; civil penalty of $2,000 - $40,000 per day for Continued violation after notice.. Consult with legal counsel for specific applicability to your situation.
HB149 primarily affects Texas businesses and commercial enterprises, healthcare providers and medical facilities. These businesses should review the legislation with their legal and compliance teams to understand potential impacts.
JD Key Consulting is an Austin, Texas-based government affairs firm led by James Dickey, former Chairman of the Republican Party of Texas. We specialize in Texas regulatory compliance and legislative strategy for data centers, energy, banking, and manufacturing.
