The Legislative Budget Board (LBB) has provided a fiscal note on SB 20, stating that the bill may lead to increased demands on state and local correctional resources. By establishing a new criminal offense related to possessing or promoting obscene visual material depicting a child, the bill could result in more individuals being placed under community supervision or sentenced to confinement. However, the exact fiscal impact cannot be determined due to a lack of data on the prevalence of this conduct and how often individuals would be prosecuted under this new statute.

At the state level, agencies such as the Office of Court Administration and the Comptroller of Public Accounts indicate that the financial burden remains uncertain. Costs may arise from additional court proceedings, law enforcement investigations, and increased incarceration rates, particularly for repeat offenders who would face third-degree and second-degree felony charges. While it is likely that the Texas Department of Criminal Justice would experience some increase in inmate population and parole supervision caseloads, the LBB could not estimate the extent of these impacts.

At the local government level, counties may face higher costs associated with pretrial detention, prosecution, and local jail expenses. If the bill leads to an increase in arrests and convictions, local governments may need to allocate additional resources for public defenders, district attorneys, and county jails. However, similar to the state level, the lack of reliable data on the prevalence of the targeted conduct makes it difficult to quantify these costs accurately.

Overall, while SB 20 is expected to impose some financial burden on the criminal justice system, the actual fiscal impact remains indeterminate due to insufficient data on potential enforcement levels.

SB 20 represents a necessary legal update to address the evolving challenges of digital child exploitation, particularly with the rise of AI-generated and digitally manipulated content. The bill creates a new criminal offense under Section 43.235 of the Texas Penal Code, making it illegal to possess, access, or promote obscene visual material that appears to depict a child under 18 in sexually explicit content, regardless of whether the image is an actual child, an animation, or AI-generated. The penalties range from a state jail felony for first-time offenses to a second-degree felony for repeat offenders. Additionally, SB 20 amends Texas's organized crime statute (Section 71.02(a)) to include this new offense, ensuring harsher penalties for individuals involved in criminal enterprises related to such content.

From a policy and legal standpoint, SB 20 aligns with existing obscenity and child protection laws while modernizing enforcement mechanisms to reflect technological advancements. The bill upholds individual liberty and personal responsibility by ensuring minors are protected from exploitation, even in digital forms. Furthermore, it does not impose undue burdens on businesses or private property rights, as it strictly targets criminal behavior rather than lawful online activity. The bill also avoids government overreach, as it does not create broad surveillance measures but rather enhances penalties for offenders who knowingly engage in these activities.

Despite uncertainties regarding fiscal impact, as noted by the Legislative Budget Board (LBB), the overall societal benefits—deterring digital child exploitation, closing legal loopholes, and equipping law enforcement with modern tools—outweigh potential costs. Texas Republican, Democratic, and Libertarian platforms all support measures to protect minors from exploitation, although civil liberty concerns regarding digital censorship may arise. Nonetheless, given the narrow focus of the bill on obscene and unlawful content, Texas Policy Research recommends lawmakers vote YES on SB 20 as a measured and necessary legislative response to emerging threats in child protection.