According to the Legislative Budget Board (LBB), the fiscal implications for SB 2425 are minimal for both state and local governments. Agencies involved, such as the Texas Department of Motor Vehicles (TxDMV), Department of Public Safety, and the State Office of Administrative Hearings, are anticipated to absorb any new responsibilities or administrative tasks using existing resources and appropriations.

This suggests that the processes for issuing authorizations to operate automated motor vehicles, enforcing compliance, and managing any hearings or reviews under the bill’s enforcement provisions will not require additional appropriations or expansion of agency infrastructure. It also implies that the anticipated volume of enforcement actions, such as license suspensions or the newly created Class B misdemeanor offense, is expected to be low enough not to burden the court system or correctional facilities.

For local governments, including municipal law enforcement or courts, the bill is similarly expected to have no significant fiscal impact. Any associated costs related to the enforcement, prosecution, or supervision of offenses under this legislation are considered negligible. This assessment likely reflects the bill’s regulatory structure, which places primary oversight at the state level and limits direct local regulatory involvement.

In summary, SB 2425 is designed to be a cost-neutral regulatory framework for governing highly automated motor vehicles, relying on current agency structures and resources without placing a financial burden on state or local entities.

SB 2425 establishes a statewide regulatory framework for the deployment of Level 4 and Level 5 automated motor vehicles (AMVs) in Texas. The bill builds on the state’s 2017 groundwork by creating a structured authorization process through the Texas Department of Motor Vehicles (TxDMV), requiring safety documentation and first responder interaction plans, and granting enforcement powers to both TxDMV and the Department of Public Safety (DPS). It also applies to AMVs used in commercial transport or as part of transportation network companies (TNCs). The bill’s approach reflects the need for a uniform legal environment for AV deployment across Texas—a policy choice that is reasonable and aligned with industry needs.

However, while preemption is appropriate in this context, the bill goes too far in expanding administrative authority and introduces new criminal penalties that raise significant concerns. TxDMV is granted broad power to revoke or restrict authorization based on its own determinations, without requiring an evidentiary hearing in advance or ensuring meaningful appeal rights. Furthermore, the bill creates a Class B misdemeanor offense for operating without state authorization, even when no harm occurs—penalizing innovation through criminalization rather than regulatory compliance mechanisms. These provisions threaten the principle of limited government and present a risk of disproportionate enforcement.

Additionally, there is no sunset clause or mandated legislative review to reassess the program as technology and industry conditions evolve. The bill would benefit from amendments that limit discretionary enforcement authority, provide clearer standards for administrative actions, ensure robust due process protections, and reevaluate the necessity and scope of the criminal offense provision.

While the goal of a consistent statewide policy is sound, the current form of the bill introduces structural and legal concerns that should be addressed before passage. Accordingly, Texas Policy Research recommends that lawmakers vote NO on SB 2425 unless amended as described above.

• Individual Liberty: The bill enhances individual liberty in one sense by fostering the development of automated vehicle technology, which may eventually increase mobility options for Texans who are elderly, disabled, or otherwise unable to drive. However, it also introduces a new Class B misdemeanor for operating an AMV without state authorization. This criminalizes behavior that may not result in harm and transfers significant decision-making power to unelected agency officials. The lack of robust due process for administrative decisions (like license revocations or enforcement actions) raises concerns about arbitrary limitations on liberty.
• Personal Responsibility: The bill imposes clear responsibilities on “authorization holders” rather than human drivers, which is appropriate for the technology in question. These entities are required to ensure compliance with safety standards, submit first-responder interaction plans, and maintain insurance and operational accountability. While this is a reasonable extension of personal responsibility to the appropriate party in an autonomous system, it also highlights the need for balanced enforcement and non-punitive compliance pathways to encourage innovation while maintaining safety.
• Free Enterprise: The bill explicitly prohibits discriminatory regulation by political subdivisions or state agencies, which prevents local roadblocks that could hinder the AMV industry. This supports innovation and investment by providing a consistent, predictable statewide regulatory environment—an important win for free enterprise. However, the breadth of the rulemaking and enforcement authority granted to TxDMV could allow for burdensome regulations in the future, especially if the rules are applied inconsistently or are influenced by larger market players to the disadvantage of new entrants.
• Private Property Rights: Because local governments derive their authority from the state, statewide preemption in this bill does not infringe upon individual private property rights. The bill does not authorize AMVs to trespass on private land, seize data, or interfere with property use. Any concerns regarding the use of public rights-of-way or infrastructure are matters of public resource management, not private property infringement. Therefore, the bill does not meaningfully affect this liberty principle.
• Limited Government: Perhaps the bill’s most direct tension with liberty lies in its expansion of executive authority. It centralizes significant power in TxDMV and DPS, including enforcement discretion, rulemaking authority, and the ability to suspend or revoke authorization with minimal procedural protections. It also adds a criminal offense for what is fundamentally a regulatory issue. These provisions undermine the principle of limited government by allowing administrative overreach and opening the door to regulatory creep without appropriate checks and balances.