Honorable Angie Chen Button, Chair, House Committee on Trade, Workforce & Economic Development
FROM:
Jerry McGinty, Director, Legislative Budget Board
IN RE:
HB5118 by Bhojani (relating to a study on employer and state agency use of automated employment decision tools in assessing an applicant’s suitability for a position.), Committee Report 1st House, Substituted
Estimated Two-year Net Impact to General Revenue Related Funds for HB5118, Committee Report 1st House, Substituted: a negative impact of ($1,215,000) 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 to General Revenue Related Funds
2026
($1,215,000)
2027
$0
2028
$0
2029
$0
2030
$0
All Funds, Five-Year Impact:
Fiscal Year
Probable Savings/(Cost) from General Revenue Fund 1
2026
($1,215,000)
2027
$0
2028
$0
2029
$0
2030
$0
Fiscal Analysis
This bill would require the Texas Workforce Commission (TWC) and the Department of Information Resources (DIR) to conduct a study on the use of artificial intelligence (AI) systems and automated employment decision tools (AEDT) in employer and state agency hiring practices. The bill mandates TWC to adopt rules for the administration of the chapter.
The bill would require TWC to submit a report to the Governor, Lieutenant Governor, Speaker of the House, and legislative committee chairs by November 15, 2026, including study results, recommendations for legislative action, a sector-specific risk assessment, and a funding proposal for future AI bias research.
Methodology
Based on the analysis of TWC, the agency would need $1,215,000 in one-time funding to hire a contractor to conduct the study in fiscal year 2026 to meet the deadline required in the bill.
Based on the analysis of DIR, this estimate assumes no significant fiscal impact to the state for the agency to implement the bill's provision.
Technology
TWC does not anticipates information technology expenditures.
Local Government Impact
No significant fiscal implication to units of local government is anticipated.
Source Agencies:
313 Department of Information Resources, 320 Texas Workforce Commission