According to the Legislative Budget Board (LBB), the fiscal implications of SB 2373 are currently indeterminate due to uncertainty around the number of cases that will be filed under the bill’s provisions. The legislation introduces new civil liabilities and penalties for individuals who disseminate artificially generated media or phishing communications with the intent to commit financial exploitation. While these measures could result in increased civil litigation and administrative activity, the volume of such cases is unknown, making it difficult to estimate the overall fiscal impact.

The bill also authorizes the Office of the Attorney General to pursue civil penalties of up to $1,000 per day for violations. However, the Comptroller of Public Accounts could not determine the potential revenue increase from these penalties due to the lack of predictive data on enforcement activity. Similarly, while the bill originally included a new criminal offense in the Penal Code with penalties ranging from misdemeanors to first-degree felonies, the potential impact on state correctional populations and local law enforcement resources could not be quantified.

That said, the Office of the Attorney General indicated it could absorb any additional legal or administrative responsibilities resulting from the bill using existing resources. This suggests that, at least in the near term, the bill would not necessitate additional appropriations for enforcement at the state level. Nonetheless, for local governments, which may be involved in prosecuting or adjudicating such cases, the fiscal impact remains unclear due to insufficient data on how often such conduct currently occurs or would be pursued under the new framework.

SB 2373 presents a focused and measured response to the growing problem of financial exploitation through the use of artificial intelligence and phishing communications. It fills a clear legal gap in existing fraud and impersonation statutes by creating a civil cause of action and a civil penalty framework specifically tailored to AI-generated media and digital deception. The bill also includes safeguards for victims, particularly elderly and vulnerable Texans, by allowing for confidentiality in court proceedings and recovery of damages, attorney’s fees, and injunctive relief.

Crucially, SB 2373 does not grow the size or scope of government in any meaningful way. It relies on the existing authority and infrastructure of the Office of the Attorney General, which has confirmed it can absorb any additional legal workload using current resources. There is no new agency created, no regulatory regime established, and no fiscal appropriation required. Moreover, any potential civil penalties collected could represent a revenue gain rather than a cost to taxpayers.

The bill also avoids increasing the regulatory burden on businesses. A key improvement in the committee substitute is the explicit exemption for providers of interactive computer services and telecommunications providers from liability for user-generated content. This provision ensures compliance with federal protections under Section 230 of the Communications Decency Act and maintains a business-friendly posture. As a result, SB 2373 targets only bad actors who knowingly or intentionally disseminate harmful content for exploitative purposes, without placing compliance costs or legal exposure on innocent intermediaries.

In summary, SB 2373 strengthens protections for individual liberty and property rights while maintaining a limited-government approach. It avoids new taxpayer burdens, exempts digital service providers, and reflects a stakeholder-driven drafting process. Its narrow, principled scope makes it a sound addition to Texas’s legal framework for addressing emerging digital fraud threats. Texas Policy Research recommends that lawmakers vote YES on SB 2373.

• Individual Liberty: The bill protects individuals, especially vulnerable populations, from deceptive practices that exploit their personal information or financial resources. By holding bad actors accountable for AI-generated fraud or phishing schemes, it safeguards personal autonomy and reinforces the right to be free from coercion or manipulation in digital spaces.
• Personal Responsibility: The bill reinforces the idea that individuals are responsible for their actions. It imposes liability only on those who knowingly or intentionally use technology to deceive others for financial gain. This encourages ethical behavior and deters malicious use of emerging technologies.
• Free Enterprise: The bill avoids regulatory overreach by exempting internet service providers and telecommunications companies from liability for user-generated content. This ensures that legitimate businesses, platforms, and digital services are not unfairly penalized, preserving the freedom to innovate and operate without burdensome government interference.
• Private Property Rights: Financial scams involving AI or phishing tactics often result in stolen assets or misappropriated personal data. The bill defends private property by creating civil remedies for victims and giving them the ability to recover what was wrongfully taken. This aligns with the principle that individuals have a right to protect and reclaim their property.
• Limited Government: The bill does not expand the size of government or create new regulatory bodies. It utilizes existing legal structures and agencies—primarily the courts and the Attorney General’s Office—without requiring new taxpayer spending. This focused approach preserves limited government while addressing a pressing technological threat.