Texas Enacts Comprehensive Privacy Law: A Closer Look at HB 4
Introduction
The state of Texas is on the verge of joining the ranks of states with comprehensive privacy legislation. The Texas Legislature recently passed HB 4, known as the Texas Data Privacy and Security Act, which now awaits approval from Governor Greg Abbott. If enacted, Texas will become the 10th state to introduce such a comprehensive privacy law, signaling a growing trend towards stronger data protection measures across the United States.
Key Provisions of HB 4
HB 4 introduces several noteworthy provisions that distinguish it from other state privacy laws. Notably, the law does not rely on common monetary thresholds but instead employs a unique three-factor applicability standard for determining coverage. Entities must comply with the law if they:
- Conduct business in Texas or generate products or services consumed by Texas residents.
- Process or engage in the sale of personal data.
- Do not qualify as a small business according to the U.S. Small Business Administration’s definition (less than 500 employees).
Moreover, HB 4 includes requirements for opt-in consent for sensitive data collection and use, opt-outs for targeted advertising and data sales, data protection assessments, provisions addressing “dark patterns,” and a 30-day cure period. These provisions aim to enhance transparency, empower individuals to exercise control over their personal data, and promote responsible data practices among businesses operating in Texas.
Unique Aspects and Potential Impacts
HB 4 introduces some unique language nuances that may have implications for its interpretation and application. For instance, the law applies to businesses that provide services “consumed by” Texas residents rather than being strictly “targeted at” them. This distinction could potentially sweep in out-of-state businesses and catch some organizations by surprise, prompting them to actively exclude Texans from their services to avoid triggering the law.
Additionally, the 30-day cure provision in HB 4 stands out with its requirement for tangible evidence that a privacy violation has been addressed. Merely notifying the attorney general of a cure is not sufficient. This provision underscores the importance of demonstrating concrete steps taken to rectify privacy violations and further strengthens the law’s focus on promoting accountability and remediation.
Conclusion
With the passage of HB 4, Texas is poised to become a significant player in the realm of comprehensive state privacy laws. If Governor Abbott signs the bill into law, Texas will join a growing number of states that recognize the importance of safeguarding individuals’ personal data and empowering them with privacy rights. HB 4’s unique coverage thresholds and provisions, coupled with its familiar aspects, will have a far-reaching impact on businesses operating in Texas. As the state’s privacy landscape evolves, organizations must proactively assess their data practices and ensure compliance with the new requirements to protect the privacy and trust of their customers.
Disclaimer: This blog post is for informational purposes only and does not constitute legal advice. Please consult with a qualified attorney for guidance on compliance with privacy laws in your jurisdiction.
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