LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 89TH LEGISLATIVE REGULAR SESSION April 8, 2025 TO: Honorable Giovanni Capriglione, Chair, House Committee on Delivery of Government Efficiency FROM: Jerry McGinty, Director, Legislative Budget Board IN RE: HB4437 by Capriglione (Relating to a requirement that the Department of Information Resources implement and develop certain systems and databases to authenticate and track certain digital content.), As Introduced Estimated Two-year Net Impact to General Revenue Related Funds for HB4437, As Introduced: a negative impact of ($2,253,885) through the biennium ending August 31, 2027. The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill. General Revenue-Related Funds, Five- Year Impact: Fiscal Year Probable Net Positive/(Negative) Impact toGeneral Revenue Related Funds2026($1,429,982)2027($823,903)2028($823,903)2029($823,903)2030($823,903)All Funds, Five-Year Impact: Fiscal Year Probable Savings/(Cost) fromGeneral Revenue Fund1 Change in Number of State Employees from FY 20252026($1,429,982)2.02027($823,903)2.02028($823,903)2.02029($823,903)2.02030($823,903)2.0 Fiscal AnalysisThe bill would require the Department of Information Resources (DIR) to implement and maintain a tamper-evident, and readily verifiable, digital watermarking system for all images posted on a state website, authorizing DIR to assist agencies with implementation.The bill would require DIR to develop and maintain a hashmark sharing database for hashes related to child sexual abuse materials, and authorize collaboration with the Department of Public Safety and any other federal, state, or local agency. The database would be accessible to any state agency, private sector entity, or law enforcement agency for purposes of training artificial intelligence or content moderation systems, or taking other action to prevent dissemination of child sexual abuse material on any platform.
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 89TH LEGISLATIVE REGULAR SESSION
April 8, 2025
TO: Honorable Giovanni Capriglione, Chair, House Committee on Delivery of Government Efficiency FROM: Jerry McGinty, Director, Legislative Budget Board IN RE: HB4437 by Capriglione (Relating to a requirement that the Department of Information Resources implement and develop certain systems and databases to authenticate and track certain digital content.), As Introduced
TO: Honorable Giovanni Capriglione, Chair, House Committee on Delivery of Government Efficiency
FROM: Jerry McGinty, Director, Legislative Budget Board
IN RE: HB4437 by Capriglione (Relating to a requirement that the Department of Information Resources implement and develop certain systems and databases to authenticate and track certain digital content.), As Introduced
Honorable Giovanni Capriglione, Chair, House Committee on Delivery of Government Efficiency
Honorable Giovanni Capriglione, Chair, House Committee on Delivery of Government Efficiency
Jerry McGinty, Director, Legislative Budget Board
Jerry McGinty, Director, Legislative Budget Board
HB4437 by Capriglione (Relating to a requirement that the Department of Information Resources implement and develop certain systems and databases to authenticate and track certain digital content.), As Introduced
HB4437 by Capriglione (Relating to a requirement that the Department of Information Resources implement and develop certain systems and databases to authenticate and track certain digital content.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for HB4437, As Introduced: a negative impact of ($2,253,885) through the biennium ending August 31, 2027. The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
Estimated Two-year Net Impact to General Revenue Related Funds for HB4437, As Introduced: a negative impact of ($2,253,885) through the biennium ending August 31, 2027. The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
General Revenue-Related Funds, Five- Year Impact:
2026 ($1,429,982)
2027 ($823,903)
2028 ($823,903)
2029 ($823,903)
2030 ($823,903)
All Funds, Five-Year Impact:
2026 ($1,429,982) 2.0
2027 ($823,903) 2.0
2028 ($823,903) 2.0
2029 ($823,903) 2.0
2030 ($823,903) 2.0
Fiscal Analysis
The bill would require the Department of Information Resources (DIR) to implement and maintain a tamper-evident, and readily verifiable, digital watermarking system for all images posted on a state website, authorizing DIR to assist agencies with implementation.The bill would require DIR to develop and maintain a hashmark sharing database for hashes related to child sexual abuse materials, and authorize collaboration with the Department of Public Safety and any other federal, state, or local agency. The database would be accessible to any state agency, private sector entity, or law enforcement agency for purposes of training artificial intelligence or content moderation systems, or taking other action to prevent dissemination of child sexual abuse material on any platform.
Methodology
This analysis assumes DIR would require two additional full-time equivalent positions (2.0 FTEs) to implement the provisions of the bill. The additional FTEs include 2.0 Systems Analysts V to develop and provide education and support services, and monitor and manage service providers. These FTEs would need to be knowledgeable in C2PA (Coalition for Content Provenance and Authenticity) and have technical expertise in digital content credentials. Personnel costs for the 2.0 FTEs would be $304,982 in fiscal year 2026, and $298,903 in each subsequent fiscal year.
Technology
It is assumed that DIR would need to procure a service to provide an enterprise level system that enables image capture, documentation, and cryptographic hash database that is also available and verifiable by the general public through the web. Technology costs to procure content credentialing services are estimated to be $1,125,000 in fiscal year 2026, and $525,000 in each subsequent fiscal year.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies: b > td > 313 Department of Information Resources
313 Department of Information Resources
LBB Staff: b > td > JMc, RStu, LCO, CSmi, NV
JMc, RStu, LCO, CSmi, NV