Texas Data Privacy and Security Act Becomes Effective next Month, Are you Ready?

Texas Data Privacy and Security Act Becomes Effective next Month, Are you Ready?

Starting on July 1^st, the Texas Data Privacy and Security Act (“TDPSA”) will become effective and imposes new requirements on companies who collect and/or process the personal data of Texas’ residents.

Businesses should assess whether they are covered by this new law and, if so, confirm compliance before the effective date. They should also confirm that they have implemented appropriate policies, making the appropriate disclosures in privacy notices, have procedures in place to handle consumer requests, and have a process in place for conducting data protection impact assessments.  Businesses covered by the Texas law will also need to ensure that they recognize universal opt-out mechanisms by January 1, 2025.

If you remember, the TDPSA applies to entities that: (a) conduct business in Texas or produce a product or service consumed by Texas residents; (b) process or engage in the sale of personal data; and (c) are not a “small business” as defined by the U.S. Small Business Administration. The TDPSA excludes other categories of businesses, such as non-profit organizations, institutions of higher education, and entities subject to the Health Insurance Portability and Accountability Act and the Graham-Leach Bliley Act; however, the exclusion for small businesses is unique to Texas. Small businesses that meet the first two requirements must still obtain consent from website users and customers before selling sensitive personal data.

Businesses should also be aware that the Attorney General, Ken Paxton, launched an aggressive enforcement initiative and warns that “Any entity abusing or exploiting Texans’ sensitive data will be met with the full force of the law. Companies that collect and sell data in an unauthorized manner, harm consumers financially, or use artificial intelligence irresponsibly present risks to our citizens that we take very seriously.”

Do not delay ensuring your business is ready before July 1^st effective date.

Explore our comprehensive CLIClaw Privacy Compliance Library for essential resources and step-by-step guidance to ensure your business is fully compliant.

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This article is for information purposes only. It is not intended to be and should not be relied on as legal advice for any particular matter.