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The Texas Pro-Entrepreneurship & AI Workforce Act (TX-AI-Workforce)

Texas state companion to the AI Workforce Act. Extends SOSDirect business formation, the Texas Workforce Commission, and the Tex. Tax Code Sec. 171.651 franchise-tax R&D credit into AI-era reskilling and startup formation.

THE TEXAS PRO-ENTREPRENEURSHIP & AI WORKFORCE ACT (TX-AI-WORKFORCE)

A Texas Bill to Make Texas the Easiest State in the Nation to Start, Retrain, and Build in the AI Era

Vehicle: State passage. Texas Legislature, regular session. Primary referral to the House Business & Industry Committee and Senate Business & Commerce Committee; tax provisions to House Ways & Means and Senate Finance; education provisions to House Public Education / Higher Education and Senate Education K-16.

Relationship to federal AI Workforce Act: Coordinated with the federal Pro-Entrepreneurship & AI Workforce Act, substituting Texas-appropriate mechanisms given Texas’s no-income-tax regime.

SECTION 1. SHORT TITLE

This Act may be cited as the “Texas Pro-Entrepreneurship & AI Workforce Act (TX-AI-Workforce).”

SECTION 2. LEGISLATIVE FINDINGS AND INTENT

The Legislature finds that Texas operates one of the nation’s most-used business-formation portals (SOSDirect) under the Secretary of State; that Texas business entities are organized under the Texas Business Organizations Code (Tex. Bus. Orgs. Code, Ch. 1 et seq.); that the Texas Workforce Commission under Tex. Lab. Code Title 4 administers federal WIOA workforce programs through 28 Local Workforce Development Boards; that the Tex. Tax Code Subch. M (Sec. 171.651 et seq.) provides a franchise-tax credit for qualified research expenditures; that the Texas Enterprise Fund and Texas Research Incentive Program operate under Tex. Gov’t Code Ch. 481; and that the Tex. Bus. & Com. Code Ch. 541 (Texas Data Privacy and Security Act) governs consumer data handling. This Act extends these frameworks to accelerate AI-era reskilling and startup formation.

TITLE I — DEFINITIONS & COORDINATION WITH TEXAS LAW

Vehicle (Texas): Definitional.

Sec. 101. Definitions

For purposes of this Act:

  1. (a) “Qualified AI startup” means a Texas-formed business entity under Tex. Bus. Orgs. Code whose principal business is AI-related software or services and that has fewer than 50 full-time-equivalent employees at the time of claiming an incentive under Title IV.
  2. (b) “AI-displaced worker” means a Texas-domiciled worker whose separation from employment is documented, by the former employer, as attributable in whole or substantial part to AI-driven process change.
  3. (c) “TWC provider” means a training provider on the Texas Eligible Training Provider List under 29 U.S.C. Sec. 3152 and Tex. Lab. Code Ch. 302.

Sec. 102. Coordination with Existing Texas Law

  1. (a) This Act shall be construed consistently with:
  • Tex. Bus. Orgs. Code (entity formation: Ch. 2-Ch. 3 generally, Ch. 101 LLCs, Ch. 21 for-profit corporations, Ch. 152 partnerships).
  • Tex. Tax Code Ch. 171 (franchise tax) and Subch. M (Sec. 171.651 et seq. R&D credit).
  • Tex. Gov’t Code Ch. 481 (Texas Economic Development and Tourism Office; Texas Enterprise Fund; Texas Research Incentive Program).
  • Tex. Lab. Code Title 4 (TWC) and Ch. 302 (workforce training).
  • Tex. Educ. Code Ch. 28 and Ch. 29 (K-12 curriculum and programs) and Ch. 61 (THECB).
  • Tex. Bus. & Com. Code Ch. 541 (Texas Data Privacy and Security Act).

TITLE II — STATE BUSINESS-FORMATION REFORM

Vehicle (Texas): Regular order. Extends existing SOSDirect processes; minimal fiscal impact.

Sec. 201. SOSDirect Streamlining

  1. (a) The Secretary of State shall operate a same-business-day formation pathway through SOSDirect for domestic limited liability companies under Tex. Bus. Orgs. Code Ch. 101 and for-profit corporations under Ch. 21.
  2. (b) The Secretary of State shall publish, not later than 12 months after the effective date of this Act, a machine-readable API for formation filings preserving existing fee structures under Tex. Bus. Orgs. Code Ch. 4.

Sec. 202. One-Stop Texas Business Portal

  1. (a) The Texas Economic Development and Tourism Office, in coordination with the Secretary of State, the Comptroller of Public Accounts, and TWC, shall operate a One-Stop Texas Business Portal integrating:
  • Business-entity formation under Tex. Bus. Orgs. Code.
  • Texas franchise-tax registration under Tex. Tax Code Ch. 171.
  • Texas unemployment-tax registration under Tex. Lab. Code Ch. 204.
  • TWC Employer of Record registration.

TITLE III — TEXAS AI WORKFORCE TRANSITION

Vehicle (Texas): Regular order with fiscal provisions. Implemented through TWC and the Local Workforce Development Boards.

Sec. 301. AI Workforce Transition Accounts

  1. (a) An AI-displaced worker is eligible to establish an AI Workforce Transition Account at a Local Workforce Development Board through which the worker may pay tuition to a TWC provider for reskilling to an occupation covered by a Texas Recognized Merit Credential under TX-ACSA Sec. 201 or a Federal FRAC.
  2. (b) Funding for AI Workforce Transition Accounts shall be provided through biennial appropriations and through Texas’s allocation of Federal workforce funds under 29 U.S.C. Sec. 3161 et seq.

Sec. 302. TWC Integration

  1. (a) TWC shall administer AI Workforce Transition Accounts through the existing Local Workforce Development Board framework established under Tex. Lab. Code Ch. 302.
  2. (b) Account administration shall not increase administrative overhead above 10 percent of the amount appropriated under Sec. 301.

TITLE IV — TEXAS AI ENTREPRENEURSHIP INCENTIVES

Vehicle (Texas): Regular order with tax provisions. Coordinated with Tex. Tax Code Subch. M; capped biennially in the General Appropriations Act.

Sec. 401. Texas AI-Startup Franchise-Tax Incentive

  1. (a) A qualified AI startup may elect to claim an incentive equal to a percentage of qualified in-State research and development expenditures, subject to an annual aggregate program cap set biennially in the General Appropriations Act.
  2. (b) The incentive shall be administered by the Comptroller consistent with Tex. Tax Code Sec. 171.651 et seq. credit mechanics.

Sec. 402. Capital Access via Texas Economic Development Programs

  1. (a) The Texas Economic Development and Tourism Office is authorized to prioritize applications from qualified AI startups under the Texas Enterprise Fund, Texas Research Incentive Program, and Governor’s University Research Initiative under Tex. Gov’t Code Ch. 481 on terms consistent with the statutory mandates of those programs.
  2. (b) Nothing in this Section shall authorize any expansion of those programs’ aggregate authority beyond amounts specifically appropriated by the Legislature.

TITLE V — K-12 & POSTSECONDARY AI FLUENCY

Vehicle (Texas): Regular order. Extends existing K-12 and postsecondary curriculum authorities; no statewide mandate created.

Sec. 501. K-12 AI-Fluency Curriculum Option

  1. (a) The State Board of Education shall, consistent with Tex. Educ. Code Ch. 28 and the Texas Essential Knowledge and Skills framework, approve optional AI-fluency curriculum packages for use by school districts, open-enrollment charter schools, and ESA-participating schools under Ch. 29 Subch. J.
  2. (b) Curriculum packages shall be optional; nothing in this Title shall be construed to mandate any particular AI-fluency curriculum.

Sec. 502. Community-College & University AI-Fluency Programs

  1. (a) Texas Public Community Colleges under Tex. Educ. Code Ch. 130 and institutions of higher education under Ch. 61 may offer AI-fluency certificate programs aligning with the TRMC Registry under TX-ACSA Sec. 201.
  2. (b) AI-fluency certificates aligned with a TRMC shall be treated consistently with other workforce-certificate programs for purposes of THECB performance-funding policies adopted under Ch. 61.

TITLE VI — IMPLEMENTATION & GENERAL PROVISIONS

Vehicle (Texas): Structural.

Sec. 601. Severability

If any provision of this Act, or its application to any person or circumstance, is held invalid, the invalidity shall not affect the remainder of this Act.

Sec. 602. Effective Date

This Act shall take effect September 1 of the year following enactment.

Canonical federal version: AI Workforce. Other Texas bills: TX-ACSA, TX-MEWRA, TX-GT&P.