Legal Compliance

Understanding TRAIGA: How the Texas Responsible AI Governance Act Affects Businesses

•By Maria Jose Castro L•8 min
By Maria Jose Castro L
8 min
TRAIGA
AI Governance
Texas AI Law
AI Compliance
Business Law
Regulatory Compliance

TL;DR

Texas's Responsible AI Governance Act (TRAIGA) takes effect January 1, 2026 and imposes obligations on developers, deployers and government agencies to prevent harmful or discriminatory AI practices. This article summarizes the Act's scope, prohibited behaviors, enforcement mechanisms, safe harbors and the implications for businesses in Texas and beyond.

Understanding TRAIGA: How the Texas Responsible AI Governance Act Affects Businesses

On June 22 2025, Texas Governor Greg Abbott signed the Texas Responsible Artificial Intelligence Governance Act (TRAIGA) into law, making Texas one of the first states to enact comprehensive AI legislation. The law becomes effective January 1 2026, giving businesses roughly six months to prepare. TRAIGA aims to protect consumers from harmful AI applications while fostering innovation through a regulatory sandbox. Understanding its requirements is essential for any company developing or using AI systems in Texas.

Who Is Covered?

TRAIGA applies broadly to "developers" and "deployers" conducting business in Texas or offering products or services to Texas residents. A developer creates AI systems that are sold, leased or otherwise provided in Texas, while a deployer places an AI system into service. The Act's definition of "artificial intelligence system" is technology‑neutral, encompassing any machine‑based system that infers from inputs to generate outputs that can influence physical or virtual environments. This includes generative AI, recommendation engines and biometric technologies.

Prohibited Practices

TRAIGA prohibits AI systems intentionally designed for harmful purposes. The law forbids AI development or deployment aimed at inciting self‑harm, harming others, or facilitating criminal activity.

It also bars AI developed with the intent to infringe constitutional rights or unlawfully discriminate against protected classes, as well as AI designed to produce or distribute explicit content involving minors. Unlike impact‑based regulations, TRAIGA adopts an intent‑based liability standard: regulators must prove that the developer or deployer acted with harmful intent. This affords businesses clearer compliance guidelines but necessitates meticulous documentation to demonstrate legitimate uses.

Obligations for Government Agencies

Government entities using AI must comply with additional requirements. The Wiley analysis notes that agencies must provide clear, conspicuous notice when interacting with consumers through an AI system.

TRAIGA prohibits government use of AI for "social scoring" or biometric identification of individuals without consent. Social scoring refers to evaluating individuals based on behavior or characteristics to assign scores that could result in unjustified or disproportionate treatment. Government entities are also prohibited from using AI to uniquely identify individuals via biometric data collected from public sources.

Enforcement and Safe Harbors

The Texas Attorney General holds exclusive enforcement authority. Consumers cannot sue under TRAIGA; instead, they may file complaints through an online portal. If the Attorney General suspects a violation, they must provide notice and allow a 60‑day cure period before pursuing civil penalties.

Penalties cannot be imposed on undeployed AI systems or on developers if a deployer misuses the technology. The law also includes safe‑harbor provisions: companies that follow the NIST AI Risk Management Framework, comply with state agency guidelines or discover violations through internal testing or red‑team exercises may avoid liability. This encourages businesses to adopt recognized standards and proactive governance practices.

Regulatory Sandbox and AI Council

TRAIGA establishes the Texas Artificial Intelligence Council, a seven‑member body tasked with promoting ethical AI development and recommending reforms. The Council will collaborate with the Texas Department of Information Resources to create a regulatory sandbox program, allowing approved participants to test AI innovations for up to 36 months without obtaining standard licenses.

Participants must still comply with core prohibitions but benefit from flexibility and limited liability. Furthermore, the sandbox requires participants to submit quarterly performance reports and to describe benefits, risks and mitigation strategies for their AI systems.

Healthcare and Biometric Privacy Provisions

For healthcare providers, TRAIGA and companion legislation SB 1188 impose specific obligations. Healthcare providers must disclose AI use in treatment contexts and obtain informed consent. SB 1188 further requires provider review of AI‑generated medical records and restricts offshoring of electronic medical records.

TRAIGA also amends Texas's existing biometric privacy law to clarify notice and consent requirements and expands exemptions for AI systems developed for security or fraud‑prevention purposes. Additionally, processors must assist controllers in meeting compliance obligations for AI systems.

Practical Steps for Businesses

Map your AI use cases

Identify where you develop or deploy AI systems and whether those activities fall under TRAIGA's scope.

Document intent

Maintain detailed records of the purpose of each AI system, design decisions and testing protocols to demonstrate that you did not intend prohibited uses.

Adopt recognized frameworks

Implement governance programs aligned with the NIST AI Risk Management Framework or similar standards to qualify for safe‑harbor protections.

Review vendor contracts

Ensure third‑party AI providers comply with TRAIGA, and require representations and warranties regarding intended use and adherence to safe‑harbor requirements.

Prepare for notice obligations

If your organization interacts with consumers using AI, develop clear disclosures and avoid "dark patterns" that could mislead users.

Monitor enforcement and guidance

Follow updates from the Texas Attorney General's office and the AI Council. Adjust your compliance program as new guidance is issued.

Navigate Texas AI Regulations with Confidence

Don't let TRAIGA compliance overwhelm your AI initiatives. Whether you're developing cutting-edge AI systems or deploying existing technologies, Castroland Legal provides comprehensive guidance on Texas AI governance requirements.

Our specialized attorneys help map your AI use cases, document compliance intent, and implement frameworks that qualify for safe harbor protections. Contact Castroland Legal to ensure your AI practices meet TRAIGA requirements while maintaining competitive advantage in the evolving regulatory landscape.

Key TRAIGA Requirements Summary

  • Intent-based liability standard for prohibited AI practices
  • Mandatory disclosure for government AI interactions
  • Safe harbor provisions for NIST framework compliance
  • Healthcare-specific consent and disclosure obligations
  • Biometric privacy protections and notice requirements

Prohibited AI Uses

  • Systems designed to incite self-harm or criminal activity
  • AI intended to unlawfully discriminate or infringe constitutional rights
  • Government social scoring without consent
  • Explicit content involving minors

Safe Harbor Protection Available

Companies following NIST AI Risk Management Framework, complying with state guidelines, or conducting proactive testing may avoid liability.