| 1 | 1 | | 89R17835 SCR-D |
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| 2 | 2 | | By: Schwertner S.B. No. 2966 |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | |
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| 6 | 6 | | |
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| 7 | 7 | | A BILL TO BE ENTITLED |
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| 8 | 8 | | AN ACT |
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| 9 | 9 | | relating to establishing a framework to govern the use of |
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| 10 | 10 | | artificial intelligence systems in critical decision-making by |
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| 11 | 11 | | private companies and ensure consumer protections; authorizing a |
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| 12 | 12 | | civil penalty. |
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| 13 | 13 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 14 | 14 | | SECTION 1. Subtitle C, Title 11, Business & Commerce Code, |
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| 15 | 15 | | is amended by adding Chapter 551 to read as follows: |
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| 16 | 16 | | CHAPTER 551. ALGORITHMIC ARTIFICIAL INTELLIGENCE SYSTEMS |
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| 17 | 17 | | Sec. 551.001. DEFINITIONS. In this chapter: |
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| 18 | 18 | | (1) "Artificial intelligence system" means any |
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| 19 | 19 | | machine learning-based system that, for any explicit or implicit |
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| 20 | 20 | | objective, infers from the inputs such system receives how to |
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| 21 | 21 | | generate outputs, including content, decisions, predictions, and |
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| 22 | 22 | | recommendations, that can influence physical or virtual |
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| 23 | 23 | | environments. |
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| 24 | 24 | | (2) "Consequential decision" means any decision that |
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| 25 | 25 | | has a material, legal, or similarly significant effect on a |
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| 26 | 26 | | consumer. |
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| 27 | 27 | | Sec. 551.002. ARTIFICIAL INTELLIGENCE FRAMEWORK. A private |
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| 28 | 28 | | company that uses an artificial intelligence system to make a |
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| 29 | 29 | | consequential decision shall establish a framework to govern the |
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| 30 | 30 | | use of the system to ensure protection of consumers. |
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| 31 | 31 | | Sec. 551.003. CIVIL PENALTY. A private company that |
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| 32 | 32 | | violates this section is liable for a civil penalty not to exceed |
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| 33 | 33 | | one dollar. |
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| 34 | 34 | | SECTION 2. This Act takes effect September 1, 2025. |
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