According to the Legislative Budget Board (LBB), HB 581 is not expected to have any significant fiscal impact on the State of Texas. The agencies likely to be involved in administering or enforcing the bill, such as the Office of Court Administration, the Office of the Attorney General, and the Comptroller of Public Accounts, indicated that any associated costs could be absorbed within their existing budgets and staffing levels.

Similarly, the bill is not expected to create substantial financial burdens for local governments. While local entities may be indirectly involved in civil enforcement proceedings or in assisting with age verification compliance, the fiscal analysis concludes that these impacts would be minimal and manageable without additional appropriations or local tax burdens.

Overall, HB 581 appears to have been structured in a way that introduces regulatory responsibilities without requiring new state infrastructure or extensive programmatic funding. This fiscal neutrality supports the bill's feasibility from a budgetary standpoint, though agencies would still be expected to monitor the emergence of AI-generated content tools and respond accordingly within their current operational frameworks.

HB 581 seeks to address a growing concern in the digital era: the use of artificial intelligence to generate sexually explicit “deepfake” material that can be harmful to minors and exploitative of identifiable individuals. The bill takes commendable steps by requiring age verification and informed consent for any person whose likeness is used in AI-generated sexual content. These provisions align with important liberty principles—particularly protecting individual autonomy and preventing involuntary exploitation in digital spaces.

However, despite good intentions, the bill’s current form raises significant concerns regarding its practical scope, enforceability, and implications for free enterprise. The definition of a “publicly accessible tool” is overly broad and risks sweeping in a wide range of general-purpose or benign AI technologies. This could impose substantial compliance burdens on small developers and platforms that are not engaged in harmful activity, potentially chilling innovation. Additionally, while HB 581 does not create new criminal offenses or rulemaking authority, it does establish a severe civil penalty structure without adequate procedural guardrails or clear limitations.

Because these concerns affect multiple liberty principles—limited government, free enterprise, and even the application of individual liberty through overly expansive regulation—a vote against the bill in its current form is warranted unless amended. Strengthening the bill with clearer definitions, safe harbor protections, and tiered compliance standards would make it more targeted, enforceable, and constitutionally sound.

In summary, while the bill addresses a real issue and parts of it should be commended, it requires significant revision to avoid unintended consequences. Therefore, Texas Policy Research recommends that lawmakers vote NO on HB 581 unless amended as described above.

• Individual Liberty: The bill enhances protections for individuals whose likeness or identity might be misused in AI-generated sexually explicit content, particularly without their consent. This upholds individual autonomy and dignity, shielding people, especially minors, from digital exploitation. However, the bill's vague and expansive definitions (e.g., “publicly accessible tool”) risk overregulating platforms or creators not engaged in harmful conduct. If not narrowly tailored, this could encroach on constitutionally protected expression and the legitimate use of generative technologies.
• Personal Responsibility: The legislation places the onus on commercial actors to verify user age and obtain consent from persons whose likeness is used. This affirms the principle that individuals and businesses should be accountable for the consequences of the tools they create or operate. It also discourages negligent or reckless development and deployment of AI systems that could cause real-world harm.
• Free Enterprise: While intending to curb harmful practices, the bill could inadvertently chill innovation by imposing unclear and potentially burdensome compliance mandates on AI developers and platforms. Without refined definitions and safe harbor provisions, the legislation may subject a wide range of technologies to costly liability risk, stifling legitimate business activity and deterring startups from operating in Texas.
• Private Property Rights: The bill reinforces the concept that a person’s likeness and identity are forms of property that should not be used without consent. This approach recognizes the unique and personal nature of an individual’s image, especially when deployed in sexually explicit contexts, and strengthens the legal recourse for misuse.
• Limited Government: Although the bill doesn’t grant new criminal enforcement powers or rulemaking authority, it establishes significant civil penalties (up to $250,000 per incident) and broad regulatory expectations without providing clear limits. This opens the door to disproportionate enforcement and regulatory overreach. A more restrained, clearly scoped framework would better align with the principle of limited government.