H.B. No. 4         AN ACT   relating to the regulation of the collection, use, processing, and   treatment of consumers' personal data by certain business entities;   imposing a civil penalty.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  This Act may be cited as the Texas Data Privacy   and Security Act.          SECTION 2.  Title 11, Business & Commerce Code, is amended by   adding Subtitle C to read as follows:   SUBTITLE C. CONSUMER DATA PROTECTION   CHAPTER 541. CONSUMER DATA PROTECTION   SUBCHAPTER A. GENERAL PROVISIONS          Sec. 541.001.  DEFINITIONS. In this chapter, unless a   different meaning is required by the context:                (1)  "Affiliate" means a legal entity that controls, is   controlled by, or is under common control with another legal entity   or shares common branding with another legal entity. For purposes   of this subdivision, "control" or "controlled" means:                      (A)  the ownership of, or power to vote, more than   50 percent of the outstanding shares of any class of voting security   of a company;                      (B)  the control in any manner over the election   of a majority of the directors or of individuals exercising similar   functions; or                      (C)  the power to exercise controlling influence   over the management of a company.                (2)  "Authenticate" means to verify through reasonable   means that the consumer who is entitled to exercise the consumer's   rights under Subchapter B is the same consumer exercising those   consumer rights with respect to the personal data at issue.                (3)  "Biometric data" means data generated by automatic   measurements of an individual's biological characteristics. The   term includes a fingerprint, voiceprint, eye retina or iris, or   other unique biological pattern or characteristic that is used to   identify a specific individual. The term does not include a   physical or digital photograph or data generated from a physical or   digital photograph, a video or audio recording or data generated   from a video or audio recording, or information collected, used, or   stored for health care treatment, payment, or operations under the   Health Insurance Portability and Accountability Act of 1996 (42   U.S.C. Section 1320d et seq.).                (4)  "Business associate" has the meaning assigned to   the term by the Health Insurance Portability and Accountability Act   of 1996 (42 U.S.C. Section 1320d et seq.).                (5)  "Child" means an individual younger than 13 years   of age.                (6)  "Consent," when referring to a consumer, means a   clear affirmative act signifying a consumer's freely given,   specific, informed, and unambiguous agreement to process personal   data relating to the consumer. The term includes a written   statement, including a statement written by electronic means, or   any other unambiguous affirmative action.  The term does not   include:                      (A)  acceptance of a general or broad terms of use   or similar document that contains descriptions of personal data   processing along with other, unrelated information;                      (B)  hovering over, muting, pausing, or closing a   given piece of content; or                      (C)  agreement obtained through the use of dark   patterns.                (7)  "Consumer" means an individual who is a resident   of this state acting only in an individual or household context. The   term does not include an individual acting in a commercial or   employment context.                (8)  "Controller" means an individual or other person   that, alone or jointly with others, determines the purpose and   means of processing personal data.                (9)  "Covered entity" has the meaning assigned to the   term by the Health Insurance Portability and Accountability Act of   1996 (42 U.S.C. Section 1320d et seq.).                (10)  "Dark pattern" means a user interface designed or   manipulated with the effect of substantially subverting or   impairing user autonomy, decision-making, or choice, and includes   any practice the Federal Trade Commission refers to as a dark   pattern.                (11)  "Decision that produces a legal or similarly   significant effect concerning a consumer" means a decision made by   the controller that results in the provision or denial by the   controller of:                      (A)  financial and lending services;                      (B)  housing, insurance, or health care services;                      (C)  education enrollment;                      (D)  employment opportunities;                      (E)  criminal justice; or                      (F)  access to basic necessities, such as food and   water.                (12)  "Deidentified data" means data that cannot   reasonably be linked to an identified or identifiable individual,   or a device linked to that individual.                (13)  "Health care provider" has the meaning assigned   to the term by the Health Insurance Portability and Accountability   Act of 1996 (42 U.S.C. Section 1320d et seq.).                (14)  "Health record" means any written, printed, or   electronically recorded material maintained by a health care   provider in the course of providing health care services to an   individual that concerns the individual and the services provided.   The term includes:                      (A)  the substance of any communication made by an   individual to a health care provider in confidence during or in   connection with the provision of health care services; or                      (B)  information otherwise acquired by the health   care provider about an individual in confidence and in connection   with health care services provided to the individual.                (15)  "Identified or identifiable individual" means a   consumer who can be readily identified, directly or indirectly.                (16)  "Institution of higher education" means:                      (A)  an institution of higher education as defined   by Section 61.003, Education Code; or                      (B)  a private or independent institution of   higher education as defined by Section 61.003, Education Code.                (17)  "Known child" means a child under circumstances   where a controller has actual knowledge of, or wilfully disregards,   the child's age.                (18)  "Nonprofit organization" means:                      (A)  a corporation organized under Chapters 20 and   22, Business Organizations Code, and the provisions of Title 1,   Business Organizations Code, to the extent applicable to nonprofit   corporations;                      (B)  an organization exempt from federal taxation   under Section 501(a), Internal Revenue Code of 1986, by being   listed as an exempt organization under Section 501(c)(3),   501(c)(6), 501(c)(12), or 501(c)(19) of that code;                      (C)  a political organization; or                      (D)  an organization that:                            (i)  is exempt from federal taxation under   Section 501(a), Internal Revenue Code of 1986, by being listed as an   exempt organization under Section 501(c)(4) of that code; and                            (ii)  is described by Section 701.052(a),   Insurance Code.                (19)  "Personal data" means any information, including   sensitive data, that is linked or reasonably linkable to an   identified or identifiable individual.  The term includes   pseudonymous data when the data is used by a controller or processor   in conjunction with additional information that reasonably links   the data to an identified or identifiable individual.  The term does   not include deidentified data or publicly available information.                (20)  "Political organization" means a party,   committee, association, fund, or other organization, regardless of   whether incorporated, that is organized and operated primarily for   the purpose of influencing or attempting to influence:                      (A)  the selection, nomination, election, or   appointment of an individual to a federal, state, or local public   office or an office in a political organization, regardless of   whether the individual is selected, nominated, elected, or   appointed; or                      (B)  the election of a   presidential/vice-presidential elector, regardless of whether the   elector is selected, nominated, elected, or appointed.                (21)  "Precise geolocation data" means information   derived from technology, including global positioning system level   latitude and longitude coordinates or other mechanisms, that   directly identifies the specific location of an individual with   precision and accuracy within a radius of 1,750 feet. The term does   not include the content of communications or any data generated by   or connected to an advanced utility metering infrastructure system   or to equipment for use by a utility.                (22)  "Process" or "processing" means an operation or   set of operations performed, whether by manual or automated means,   on personal data or on sets of personal data, such as the   collection, use, storage, disclosure, analysis, deletion, or   modification of personal data.                (23)  "Processor" means a person that processes   personal data on behalf of a controller.                (24)  "Profiling" means any form of solely automated   processing performed on personal data to evaluate, analyze, or   predict personal aspects related to an identified or identifiable   individual's economic situation, health, personal preferences,   interests, reliability, behavior, location, or movements.                (25)  "Protected health information" has the meaning   assigned to the term by the Health Insurance Portability and   Accountability Act of 1996 (42 U.S.C. Section 1320d et seq.).                (26)  "Pseudonymous data" means any information that   cannot be attributed to a specific individual without the use of   additional information, provided that the additional information   is kept separately and is subject to appropriate technical and   organizational measures to ensure that the personal data is not   attributed to an identified or identifiable individual.                (27)  "Publicly available information" means   information that is lawfully made available through government   records, or information that a business has a reasonable basis to   believe is lawfully made available to the general public through   widely distributed media, by a consumer, or by a person to whom a   consumer has disclosed the information, unless the consumer has   restricted the information to a specific audience.                (28)  "Sale of personal data" means the sharing,   disclosing, or transferring of personal data for monetary or other   valuable consideration by the controller to a third party. The term   does not include:                      (A)  the  disclosure of personal data to a   processor that processes the personal data on the controller's   behalf;                      (B)  the  disclosure of personal data to a third   party for purposes of providing a product or service requested by   the consumer;                      (C)  the disclosure or transfer of personal data   to an affiliate of the controller;                      (D)  the disclosure of information that the   consumer:                            (i)  intentionally made available to the   general public through a mass media channel; and                            (ii)  did not restrict to a specific   audience; or                      (E)  the disclosure or transfer of personal data   to a third party as an asset that is part of a merger or acquisition.                (29)  "Sensitive data" means a category of personal   data. The term includes:                      (A)  personal data revealing racial or ethnic   origin, religious beliefs, mental or physical health diagnosis,   sexuality, or citizenship or immigration status;                      (B)  genetic or biometric data that is processed   for the purpose of uniquely identifying an individual;                      (C)  personal data collected from a known child;   or                      (D)  precise geolocation data.                (30)  "State agency" means a department, commission,   board, office, council, authority, or other agency in any branch of   state government that is created by the constitution or a statute of   this state, including a university system or institution of higher   education as defined by Section 61.003, Education Code.                (31)  "Targeted advertising" means displaying to a   consumer an advertisement that is selected based on personal data   obtained from that consumer's activities over time and across   nonaffiliated websites or online applications to predict the   consumer's preferences or interests. The term does not include:                      (A)  an advertisement that:                            (i)  is based on activities within a   controller's own websites or online applications;                            (ii)  is based on the context of a consumer's   current search query, visit to a website, or online application; or                            (iii)  is directed to a consumer in response   to the consumer's request for information or feedback; or                      (B)  the processing of personal data solely for   measuring or reporting advertising performance, reach, or   frequency.                (32)  "Third party" means a person, other than the   consumer, the controller, the processor, or an affiliate of the   controller or processor.                (33)  "Trade secret" means all forms and types of   information, including business, scientific, technical, economic,   or engineering information, and any formula, design, prototype,   pattern, plan, compilation, program device, program, code, device,   method, technique, process, procedure, financial data, or list of   actual or potential customers or suppliers, whether tangible or   intangible and whether or how stored, compiled, or memorialized   physically, electronically, graphically, photographically, or in   writing if:                      (A)  the owner of the trade secret has taken   reasonable measures under the circumstances to keep the information   secret; and                      (B)  the information derives independent economic   value, actual or potential, from not being generally known to, and   not being readily ascertainable through proper means by, another   person who can obtain economic value from the disclosure or use of   the information.          Sec. 541.002.  APPLICABILITY OF CHAPTER. (a) This chapter   applies only to a person that:                (1)  conducts business in this state or produces a   product or service consumed by residents of this state;                (2)  processes or engages in the sale of personal data;   and                (3)  is not a small business as defined by the United   States Small Business Administration, except to the extent that   Section 541.107 applies to a person described by this subdivision.          (b)  This chapter does not apply to:                (1)  a state agency or a political subdivision of this   state;                (2)  a financial institution or data subject to Title   V, Gramm-Leach-Bliley Act (15 U.S.C. Section 6801 et seq.);                (3)  a covered entity or business associate governed by   the privacy, security, and breach notification rules issued by the   United States Department of Health and Human Services, 45 C.F.R.   Parts 160 and 164, established under the Health Insurance   Portability and Accountability Act of 1996 (42 U.S.C. Section 1320d   et seq.), and the Health Information Technology for Economic and   Clinical Health Act (Division A, Title XIII, and Division B, Title   IV, Pub. L. No. 111-5);                (4)  a nonprofit organization;                (5)  an institution of higher education; or                (6)  an electric utility, a power generation company,   or a retail electric provider, as those terms are defined by Section   31.002, Utilities Code.          Sec. 541.003.  CERTAIN INFORMATION EXEMPT FROM CHAPTER. The   following information is exempt from this chapter:                (1)  protected health information under the Health   Insurance Portability and Accountability Act of 1996 (42 U.S.C.   Section 1320d et seq.);                (2)  health records;                (3)  patient identifying information for purposes of 42   U.S.C. Section 290dd-2;                (4)  identifiable private information:                      (A)  for purposes of the federal policy for the   protection of human subjects under 45 C.F.R. Part 46;                      (B)  collected as part of human subjects research   under the good clinical practice guidelines issued by The   International Council for Harmonisation of Technical Requirements   for Pharmaceuticals for Human Use (ICH) or of the protection of   human subjects under 21 C.F.R. Parts 50 and 56; or                      (C)  that is personal data used or shared in   research conducted in accordance with the requirements set forth in   this chapter or other research conducted in accordance with   applicable law;                (5)  information and documents created for purposes of   the Health Care Quality Improvement Act of 1986 (42 U.S.C. Section   11101 et seq.);                (6)  patient safety work product for purposes of the   Patient Safety and Quality Improvement Act of 2005 (42 U.S.C.   Section 299b-21 et seq.);                (7)  information derived from any of the health   care-related information listed in this section that is   deidentified in accordance with the requirements for   deidentification under the Health Insurance Portability and   Accountability Act of 1996 (42 U.S.C. Section 1320d et seq.);                (8)  information originating from, and intermingled to   be indistinguishable with, or information treated in the same   manner as, information exempt under this section that is maintained   by a covered entity or business associate as defined by the Health   Insurance Portability and Accountability Act of 1996 (42 U.S.C.   Section 1320d et seq.) or by a program or a qualified service   organization as defined by 42 U.S.C. Section 290dd-2;                (9)  information that is included in a limited data set   as described by 45 C.F.R. Section 164.514(e), to the extent that the   information is used, disclosed, and maintained in the manner   specified by 45 C.F.R. Section 164.514(e);                (10)  information collected or used only for public   health activities and purposes as authorized by the Health   Insurance Portability and Accountability Act of 1996 (42 U.S.C.   Section 1320d et seq.);                (11)  the collection, maintenance, disclosure, sale,   communication, or use of any personal information bearing on a   consumer's creditworthiness, credit standing, credit capacity,   character, general reputation, personal characteristics, or mode   of living by a consumer reporting agency or furnisher that provides   information for use in a consumer report, and by a user of a   consumer report, but only to the extent that the activity is   regulated by and authorized under the Fair Credit Reporting Act (15   U.S.C. Section 1681 et seq.);                (12)  personal data collected, processed, sold, or   disclosed in compliance with the Driver's Privacy Protection Act of   1994 (18 U.S.C. Section 2721 et seq.);                (13)  personal data regulated by the Family Educational   Rights and Privacy Act of 1974 (20 U.S.C. Section 1232g);                (14)  personal data collected, processed, sold, or   disclosed in compliance with the Farm Credit Act of 1971 (12 U.S.C.   Section 2001 et seq.);                (15)  data processed or maintained in the course of an   individual applying to, being employed by, or acting as an agent or   independent contractor of a controller, processor, or third party,   to the extent that the data is collected and used within the context   of that role;                (16)  data processed or maintained  as the emergency   contact information of an individual under this chapter that is   used for emergency contact purposes; or                (17)  data that is processed or maintained and is   necessary to retain to administer benefits for another individual   that relates to an individual described by Subdivision (15) and   used for the purposes of administering those benefits.          Sec. 541.004.  INAPPLICABILITY OF CHAPTER. This chapter   does not apply to the processing of personal data by a person in the   course of a purely personal or household activity.          Sec. 541.005.  EFFECT OF COMPLIANCE WITH PARENTAL CONSENT   REQUIREMENTS UNDER CERTAIN FEDERAL LAW. A controller or processor   that complies with the verifiable parental consent requirements of   the Children's Online Privacy Protection Act of 1998 (15 U.S.C.   Section 6501 et seq.) with respect to data collected online is   considered to be in compliance with any requirement to obtain   parental consent under this chapter.   SUBCHAPTER B. CONSUMER'S RIGHTS          Sec. 541.051.  CONSUMER'S PERSONAL DATA RIGHTS; REQUEST TO   EXERCISE RIGHTS. (a) A consumer is entitled to exercise the   consumer rights authorized by this section at any time by   submitting a request to a controller specifying the consumer rights   the consumer wishes to exercise. With respect to the processing of   personal data belonging to a known child, a parent or legal guardian   of the child may exercise the consumer rights on behalf of the   child.          (b)  A controller shall comply with an authenticated   consumer request to exercise the right to:                (1)  confirm whether a controller is processing the   consumer's personal data and to access the personal data;                (2)  correct inaccuracies in the consumer's personal   data, taking into account the nature of the personal data and the   purposes of the processing of the consumer's personal data;                (3)  delete personal data provided by or obtained about   the consumer;                (4)  if the data is available in a digital format,   obtain a copy of the consumer's personal data that the consumer   previously provided to the controller in a portable and, to the   extent technically feasible, readily usable format that allows the   consumer to transmit the data to another controller without   hindrance; or                (5)  opt out of the processing of the personal data for   purposes of:                      (A)  targeted advertising;                      (B)  the sale of personal data; or                      (C)  profiling in furtherance of a decision that   produces a legal or similarly significant effect concerning the   consumer.          Sec. 541.052.  CONTROLLER RESPONSE TO CONSUMER REQUEST. (a)   Except as otherwise provided by this chapter, a controller shall   comply with a request submitted by a consumer to exercise the   consumer's rights pursuant to Section 541.051 as provided by this   section.          (b)  A controller shall respond to the consumer request   without undue delay, which may not be later than the 45th day after   the date of receipt of the request. The controller may extend the   response period once by an additional 45 days when reasonably   necessary, taking into account the complexity and number of the   consumer's requests, so long as the controller informs the consumer   of the extension within the initial 45-day response period,   together with the reason for the extension.          (c)  If a controller declines to take action regarding the   consumer's request, the controller shall inform the consumer   without undue delay, which may not be later than the 45th day after   the date of receipt of the request, of the justification for   declining to take action and provide instructions on how to appeal   the decision in accordance with Section 541.053.          (d)  A controller shall provide information in response to a   consumer request free of charge, at least twice annually per   consumer. If a request from a consumer is manifestly unfounded,   excessive, or repetitive, the controller may charge the consumer a   reasonable fee to cover the administrative costs of complying with   the request or may decline to act on the request. The controller   bears the burden of demonstrating for purposes of this subsection   that a request is manifestly unfounded, excessive, or repetitive.          (e)  If a controller is unable to authenticate the request   using commercially reasonable efforts, the controller is not   required to comply with a consumer request submitted under Section   541.051 and may request that the consumer provide additional   information reasonably necessary to authenticate the consumer and   the consumer's request.          (f)  A controller that has obtained personal data about a   consumer from a source other than the consumer is considered in   compliance with a consumer's request to delete that personal data   pursuant to Section 541.051(b)(3) by:                (1)  retaining a record of the deletion request and the   minimum data necessary for the purpose of ensuring the consumer's   personal data remains deleted from the business's records and not   using the retained data for any other purpose under this chapter; or                (2)  opting the consumer out of the processing of that   personal data for any purpose other than a purpose that is exempt   under the provisions of this chapter.          Sec. 541.053.  APPEAL. (a) A controller shall establish a   process for a consumer to appeal the controller's refusal to take   action on a request within a reasonable period of time after the   consumer's receipt of the decision under Section 541.052(c).          (b)  The appeal process must be conspicuously available and   similar to the process for initiating action to exercise consumer   rights by submitting a request under Section 541.051.          (c)  A controller shall inform the consumer in writing of any   action taken or not taken in response to an appeal under this   section not later than the 60th day after the date of receipt of the   appeal, including a written explanation of the reason or reasons   for the decision.          (d)  If the controller denies an appeal, the controller shall   provide the consumer with the online mechanism described by Section   541.152 through which the consumer may contact the attorney general   to submit a complaint.          Sec. 541.054.  WAIVER OR LIMITATION OF CONSUMER RIGHTS   PROHIBITED. Any provision of a contract or agreement that waives or   limits in any way a consumer right described by Sections 541.051,   541.052, and 541.053 is contrary to public policy and is void and   unenforceable.          Sec. 541.055.  METHODS FOR SUBMITTING CONSUMER REQUESTS.   (a) A controller shall establish two or more secure and reliable   methods to enable consumers to submit a request to exercise their   consumer rights under this chapter. The methods must take into   account:                (1)  the ways in which consumers normally interact with   the controller;                (2)  the necessity for secure and reliable   communications of those requests; and                (3)  the ability of the controller to authenticate the   identity of the consumer making the request.          (b)  A controller may not require a consumer to create a new   account to exercise the consumer's rights under this subchapter but   may require a consumer to use an existing account.          (c)  Except as provided by Subsection (d), if the controller   maintains an Internet website, the controller must provide a   mechanism on the website for consumers to submit requests for   information required to be disclosed under this chapter.          (d)  A controller that operates exclusively online and has a   direct relationship with a consumer from whom the controller   collects personal information is only required to provide an e-mail   address for the submission of requests described by Subsection (c).          (e)  A consumer may designate another person to serve as the   consumer's authorized agent and act on the consumer's behalf to opt   out of the processing of the consumer's personal data under   Sections 541.051(b)(5)(A) and (B). A consumer may designate an   authorized agent using a technology, including a link to an   Internet website, an Internet browser setting or extension, or a   global setting on an electronic device, that allows the consumer to   indicate the consumer's intent to opt out of the processing. A   controller shall comply with an opt-out request received from an   authorized agent under this subsection if the controller is able to   verify, with commercially reasonable effort, the identity of the   consumer and the authorized agent's authority to act on the   consumer's behalf. A controller is not required to comply with an   opt-out request received from an authorized agent under this   subsection if:                (1)  the authorized agent does not communicate the   request to the controller in a clear and unambiguous manner;                (2)  the controller is not able to verify, with   commercially reasonable effort, that the consumer is a resident of   this state;                (3)  the controller does not possess the ability to   process the request; or                (4)  the controller does not process similar or   identical requests the controller receives from consumers for the   purpose of complying with similar or identical laws or regulations   of another state.          (f)  A technology described by Subsection (e):                (1)  may not unfairly disadvantage another controller;                (2)  may not make use of a default setting, but must   require the consumer to make an affirmative, freely given, and   unambiguous choice to indicate the consumer's intent to opt out of   any processing of a consumer's personal data; and                (3)  must be consumer-friendly and easy to use by the   average consumer.   SUBCHAPTER C.  CONTROLLER AND PROCESSOR DATA-RELATED DUTIES AND   PROHIBITIONS          Sec. 541.101.  CONTROLLER DUTIES; TRANSPARENCY. (a) A   controller:                (1)  shall limit the collection of personal data to   what is adequate, relevant, and reasonably necessary in relation to   the purposes for which that personal data is processed, as   disclosed to the consumer; and                (2)  for purposes of protecting the confidentiality,   integrity, and accessibility of personal data, shall establish,   implement, and maintain reasonable administrative, technical, and   physical data security practices that are appropriate to the volume   and nature of the personal data at issue.          (b)  A controller may not:                (1)  except as otherwise provided by this chapter,   process personal data for a purpose that is neither reasonably   necessary to nor compatible with the disclosed purpose for which   the personal data is processed, as disclosed to the consumer,   unless the controller obtains the consumer's consent;                (2)  process personal data in violation of state and   federal laws that prohibit unlawful discrimination against   consumers;                (3)  discriminate against a consumer for exercising any   of the consumer rights contained in this chapter, including by   denying goods or services, charging different prices or rates for   goods or services, or providing a different level of quality of   goods or services to the consumer; or                (4)  process the sensitive data of a consumer without   obtaining the consumer's consent, or, in the case of processing the   sensitive data of a known child, without processing that data in   accordance with the Children's Online Privacy Protection Act of   1998 (15 U.S.C. Section 6501 et seq.).          (c)  Subsection (b)(3) may not be construed to require a   controller to provide a product or service that requires the   personal data of a consumer that the controller does not collect or   maintain or to prohibit a controller from offering a different   price, rate, level, quality, or selection of goods or services to a   consumer, including offering goods or services for no fee, if the   consumer has exercised the consumer's right to opt out under   Section 541.051 or the offer is related to a consumer's voluntary   participation in a bona fide loyalty, rewards, premium features,   discounts, or club card program.          Sec. 541.102.  PRIVACY NOTICE. (a)  A controller shall   provide consumers with a reasonably accessible and clear privacy   notice that includes:                (1)  the categories of personal data processed by the   controller, including, if applicable, any sensitive data processed   by the controller;                (2)  the purpose for processing personal data;                (3)  how consumers may exercise their consumer rights   under Subchapter B, including the process by which a consumer may   appeal a controller's decision with regard to the consumer's   request;                (4)  if applicable, the categories of personal data   that the controller shares with third parties;                (5)  if applicable, the categories of third parties   with whom the controller shares personal data; and                (6)  a description of the methods required under   Section 541.055 through which consumers can submit requests to   exercise their consumer rights under this chapter.          (b)  If a controller engages in the sale of personal data   that is sensitive data, the controller shall include the following   notice:          "NOTICE: We may sell your sensitive personal data."  The   notice must be posted in the same location and in the same manner as   the privacy notice described by Subsection (a).          (c)  If a controller engages in the sale of personal data   that is biometric data, the controller shall include the following   notice:          "NOTICE: We may sell your biometric personal data."  The   notice must be posted in the same location and in the same manner as   the privacy notice described by Subsection (a).          Sec. 541.103.  SALE OF DATA TO THIRD PARTIES AND PROCESSING   DATA FOR TARGETED ADVERTISING; DISCLOSURE. If a controller sells   personal data to third parties or processes personal data for   targeted advertising, the controller shall clearly and   conspicuously disclose that process and the manner in which a   consumer may exercise the right to opt out of that process.          Sec. 541.104.  DUTIES OF PROCESSOR. (a) A processor shall   adhere to the instructions of a controller and shall assist the   controller in meeting or complying with the controller's duties or   requirements under this chapter, including:                (1)  assisting the controller in responding to consumer   rights requests submitted under Section 541.051 by using   appropriate technical and organizational measures, as reasonably   practicable, taking into account the nature of processing and the   information available to the processor;                (2)  assisting the controller with regard to complying   with the requirement relating to the security of processing   personal data and to the notification of a breach of security of the   processor's system under Chapter 521, taking into account the   nature of processing and the information available to the   processor; and                (3)  providing necessary information to enable the   controller to conduct and document data protection assessments   under Section 541.105.          (b)  A contract between a controller and a processor shall   govern the processor's data processing procedures with respect to   processing performed on behalf of the controller. The contract must   include:                (1)  clear instructions for processing data;                (2)  the nature and purpose of processing;                (3)  the type of data subject to processing;                (4)  the duration of processing;                (5)  the rights and obligations of both parties; and                (6)  a requirement that the processor shall:                      (A)  ensure that each person processing personal   data is subject to a duty of confidentiality with respect to the   data;                      (B)  at the controller's direction, delete or   return all personal data to the controller as requested after the   provision of the service is completed, unless retention of the   personal data is required by law;                      (C)  make available to the controller, on   reasonable request, all information in the processor's possession   necessary to demonstrate the processor's compliance with the   requirements of this chapter;                      (D)  allow, and cooperate with, reasonable   assessments by the controller or the controller's designated   assessor; and                      (E)  engage any subcontractor pursuant to a   written contract that requires the subcontractor to meet the   requirements of the processor with respect to the personal data.          (c)  Notwithstanding the requirement described by Subsection   (b)(6)(D), a processor, in the alternative, may arrange for a   qualified and independent assessor to conduct an assessment of the   processor's policies and technical and organizational measures in   support of the requirements under this chapter using an appropriate   and accepted control standard or framework and assessment   procedure. The processor shall provide a report of the assessment   to the controller on request.          (d)  This section may not be construed to relieve a   controller or a processor from the liabilities imposed on the   controller or processor by virtue of its role in the processing   relationship as described by this chapter.          (e)  A determination of whether a person is acting as a   controller or processor with respect to a specific processing of   data is a fact-based determination that depends on the context in   which personal data is to be processed. A processor that continues   to adhere to a controller's instructions with respect to a specific   processing of personal data remains in the role of a processor.          Sec. 541.105.  DATA PROTECTION ASSESSMENTS. (a) A   controller shall conduct and document a data protection assessment   of each of the following processing activities involving personal   data:                (1)  the processing of personal data for purposes of   targeted advertising;                (2)  the sale of personal data;                (3)  the processing of personal data for purposes of   profiling, if the profiling presents a reasonably foreseeable risk   of:                      (A)  unfair or deceptive treatment of or unlawful   disparate impact on consumers;                      (B)  financial, physical, or reputational injury   to consumers;                      (C)  a physical or other intrusion on the solitude   or seclusion, or the private affairs or concerns, of consumers, if   the intrusion would be offensive to a reasonable person; or                      (D)  other substantial injury to consumers;                (4)  the processing of sensitive data; and                (5)  any processing activities involving personal data   that present a heightened risk of harm to consumers.          (b)  A data protection assessment conducted under Subsection   (a) must:                (1)  identify and weigh the direct or indirect benefits   that may flow from the processing to the controller, the consumer,   other stakeholders, and the public, against the potential risks to   the rights of the consumer associated with that processing, as   mitigated by safeguards that can be employed by the controller to   reduce the risks; and                (2)  factor into the assessment:                      (A)  the use of deidentified data;                      (B)  the reasonable expectations of consumers;                      (C)  the context of the processing; and                      (D)  the relationship between the controller and   the consumer whose personal data will be processed.          (c)  A controller shall make a data protection assessment   requested under Section 541.153(b) available to the attorney   general pursuant to a civil investigative demand under Section   541.153.          (d)  A data protection assessment is confidential and exempt   from public inspection and copying under Chapter 552, Government   Code. Disclosure of a data protection assessment in compliance with   a request from the attorney general does not constitute a waiver of   attorney-client privilege or work product protection with respect   to the assessment and any information contained in the assessment.          (e)  A single data protection assessment may address a   comparable set of processing operations that include similar   activities.          (f)  A data protection assessment conducted by a controller   for the purpose of compliance with other laws or regulations may   constitute compliance with the requirements of this section if the   assessment has a reasonably comparable scope and effect.          Sec. 541.106.  DEIDENTIFIED OR PSEUDONYMOUS DATA. (a) A   controller in possession of deidentified data shall:                (1)  take reasonable measures to ensure that the data   cannot be associated with an individual;                (2)  publicly commit to maintaining and using   deidentified data without attempting to reidentify the data; and                (3)  contractually obligate any recipient of the   deidentified data to comply with the provisions of this chapter.          (b)  This chapter may not be construed to require a   controller or processor to:                (1)  reidentify deidentified data or pseudonymous   data;                (2)  maintain data in identifiable form or obtain,   retain, or access any data or technology for the purpose of allowing   the controller or processor to associate a consumer request with   personal data; or                (3)  comply with an authenticated consumer rights   request under Section 541.051, if the controller:                      (A)  is not reasonably capable of associating the   request with the personal data or it would be unreasonably   burdensome for the controller to associate the request with the   personal data;                      (B)  does not use the personal data to recognize   or respond to the specific consumer who is the subject of the   personal data or associate the personal data with other personal   data about the same specific consumer; and                      (C)  does not sell the personal data to any third   party or otherwise voluntarily disclose the personal data to any   third party other than a processor, except as otherwise permitted   by this section.          (c)  The consumer rights under Sections 541.051(b)(1)-(4)   and controller duties under Section 541.101 do not apply to   pseudonymous data in cases in which the controller is able to   demonstrate any information necessary to identify the consumer is   kept separately and is subject to effective technical and   organizational controls that prevent the controller from accessing   the information.          (d)  A controller that discloses pseudonymous data or   deidentified data shall exercise reasonable oversight to monitor   compliance with any contractual commitments to which the   pseudonymous data or deidentified data is subject and shall take   appropriate steps to address any breach of the contractual   commitments.          Sec. 541.107.  REQUIREMENTS FOR SMALL BUSINESSES.  (a)  A   person described by Section 541.002(a)(3) may not engage in the   sale of personal data that is sensitive data without receiving   prior consent from the consumer.          (b)  A person who violates this section is subject to the   penalty under Section 541.155.   SUBCHAPTER D. ENFORCEMENT          Sec. 541.151.  ENFORCEMENT AUTHORITY EXCLUSIVE. The   attorney general has exclusive authority to enforce this chapter.          Sec. 541.152.  INTERNET WEBSITE AND COMPLAINT MECHANISM.   The attorney general shall post on the attorney general's Internet   website:                (1)  information relating to:                      (A)  the responsibilities of a controller under   Subchapters B and C;                      (B)  the responsibilities of a processor under   Subchapter C; and                      (C)  a consumer's rights under Subchapter B; and                (2)  an online mechanism through which a consumer may   submit a complaint under this chapter to the attorney general.          Sec. 541.153.  INVESTIGATIVE AUTHORITY. (a) If the   attorney general has reasonable cause to believe that a person has   engaged in or is engaging in a violation of this chapter, the   attorney general may issue a civil investigative demand. The   procedures established for the issuance of a civil investigative   demand under Section 15.10 apply to the same extent and manner to   the issuance of a civil investigative demand under this section.          (b)  The attorney general may request, pursuant to a civil   investigative demand issued under Subsection (a), that a controller   disclose any data protection assessment that is relevant to an   investigation conducted by the attorney general. The attorney   general may evaluate the data protection assessment for compliance   with the requirements set forth in Sections 541.101, 541.102, and   541.103.          Sec. 541.154.  NOTICE OF VIOLATION OF CHAPTER; OPPORTUNITY   TO CURE. Before bringing an action under Section 541.155, the   attorney general shall notify a person in writing, not later than   the 30th day before bringing the action, identifying the specific   provisions of this chapter the attorney general alleges have been   or are being violated. The attorney general may not bring an action   against the person if:                (1)  within the 30-day period, the person cures the   identified violation; and                (2)  the person provides the attorney general a written   statement that the person:                      (A)  cured the alleged violation;                      (B)  notified the consumer that the consumer's   privacy violation was addressed, if the consumer's contact   information has been made available to the person;                      (C)  provided supportive documentation to show   how the privacy violation was cured; and                      (D)  made changes to internal policies, if   necessary, to ensure that no such further violations will occur.          Sec. 541.155.  CIVIL PENALTY; INJUNCTION. (a) A person who   violates this chapter following the cure period described by   Section 541.154 or who breaches a written statement provided to the   attorney general under that section is liable for a civil penalty in   an amount not to exceed $7,500 for each violation.          (b)  The attorney general may bring an action in the name of   this state to:                (1)  recover a civil penalty under this section;                (2)  restrain or enjoin the person from violating this   chapter; or                (3)  recover the civil penalty and seek injunctive   relief.          (c)  The attorney general may recover reasonable attorney's   fees and other reasonable expenses incurred in investigating and   bringing an action under this section.          (d)  The attorney general shall deposit a civil penalty   collected under this section in accordance with Section 402.007,   Government Code.          Sec. 541.156.  NO PRIVATE RIGHT OF ACTION. This chapter may   not be construed as providing a basis for, or being subject to, a   private right of action for a violation of this chapter or any other   law.   SUBCHAPTER E. CONSTRUCTION OF CHAPTER; EXEMPTIONS FOR CERTAIN USES   OF CONSUMER PERSONAL DATA          Sec. 541.201.  CONSTRUCTION OF CHAPTER. (a) This chapter   may not be construed to restrict a controller's or processor's   ability to:                (1)  comply with federal, state, or local laws, rules,   or regulations;                (2)  comply with a civil, criminal, or regulatory   inquiry, investigation, subpoena, or summons by federal, state,   local, or other governmental authorities;                (3)  investigate, establish, exercise, prepare for, or   defend legal claims;                (4)  provide a product or service specifically   requested by a consumer or the parent or guardian of a child,   perform a contract to which the consumer is a party, including   fulfilling the terms of a written warranty, or take steps at the   request of the consumer before entering into a contract;                (5)  take immediate steps to protect an interest that   is essential for the life or physical safety of the consumer or of   another individual and in which the processing cannot be manifestly   based on another legal basis;                (6)  prevent, detect, protect against, or respond to   security incidents, identity theft, fraud, harassment, malicious   or deceptive activities, or any illegal activity;                (7)  preserve the integrity or security of systems or   investigate, report, or prosecute those responsible for breaches of   system security;                (8)  engage in public or peer-reviewed scientific or   statistical research in the public interest that adheres to all   other applicable ethics and privacy laws and is approved,   monitored, and governed by an institutional review board or similar   independent oversight entity that determines:                      (A)  if the deletion of the information is likely   to provide substantial benefits that do not exclusively accrue to   the controller;                      (B)  whether the expected benefits of the research   outweigh the privacy risks; and                      (C)  if the controller has implemented reasonable   safeguards to mitigate privacy risks associated with research,   including any risks associated with reidentification; or                (9)  assist another controller, processor, or third   party with any of the requirements under this subsection.          (b)  This chapter may not be construed to prevent a   controller or processor from providing personal data concerning a   consumer to a person covered by an evidentiary privilege under the   laws of this state as part of a privileged communication.          (c)  This chapter may not be construed as imposing a   requirement on controllers and processors that adversely affects   the rights or freedoms of any person, including the right of free   speech.          (d)  This chapter may not be construed as requiring a   controller, processor, third party, or consumer to disclose a trade   secret.          Sec. 541.202.  COLLECTION, USE, OR RETENTION OF DATA FOR   CERTAIN PURPOSES. (a) The requirements imposed on controllers and   processors under this chapter may not restrict a controller's or   processor's ability to collect, use, or retain data to:                (1)  conduct internal research to develop, improve, or   repair products, services, or technology;                (2)  effect a product recall;                (3)  identify and repair technical errors that impair   existing or intended functionality; or                (4)  perform internal operations that:                      (A)  are reasonably aligned with the expectations   of the consumer;                      (B)  are reasonably anticipated based on the   consumer's existing relationship with the controller; or                      (C)  are otherwise compatible with processing   data in furtherance of the provision of a product or service   specifically requested by a consumer or the performance of a   contract to which the consumer is a party.          (b)  A requirement imposed on a controller or processor under   this chapter does not apply if compliance with the requirement by   the controller or processor, as applicable, would violate an   evidentiary privilege under the laws of this state.          Sec. 541.203.  DISCLOSURE OF PERSONAL DATA TO THIRD-PARTY   CONTROLLER OR PROCESSOR. (a) A controller or processor that   discloses personal data to a third-party controller or processor,   in compliance with the requirements of this chapter, does not   violate this chapter if the third-party controller or processor   that receives and processes that personal data is in violation of   this chapter, provided that, at the time of the data's disclosure,   the disclosing controller or processor did not have actual   knowledge that the recipient intended to commit a violation.          (b)  A third-party controller or processor receiving   personal data from a controller or processor in compliance with the   requirements of this chapter does not violate this chapter for the   transgressions of the controller or processor from which the   third-party controller or processor receives the personal data.          Sec. 541.204.  PROCESSING OF CERTAIN PERSONAL DATA BY   CONTROLLER OR OTHER PERSON. (a) Personal data processed by a   controller under this subchapter may not be processed for any   purpose other than a purpose listed in this subchapter unless   otherwise allowed by this chapter. Personal data processed by a   controller under this subchapter may be processed to the extent   that the processing of the data is:                (1)  reasonably necessary and proportionate to the   purposes listed in this subchapter; and                (2)  adequate, relevant, and limited to what is   necessary in relation to the specific purposes listed in this   subchapter.          (b)  Personal data collected, used, or retained under   Section 541.202(a) must, where applicable, take into account the   nature and purpose of such collection, use, or retention. The   personal data described by this subsection is subject to reasonable   administrative, technical, and physical measures to protect the   confidentiality, integrity, and accessibility of the personal data   and to reduce reasonably foreseeable risks of harm to consumers   relating to the collection, use, or retention of personal data.          (c)  A controller that processes personal data under an   exemption in this subchapter bears the burden of demonstrating that   the processing of the personal data qualifies for the exemption and   complies with the requirements of Subsections (a) and (b).          (d)  The processing of personal data by an entity for the   purposes described by Section 541.201 does not solely make the   entity a controller with respect to the processing of the data.          Sec. 541.205.  LOCAL PREEMPTION.  This chapter supersedes   and preempts any ordinance, resolution, rule, or other regulation   adopted by a political subdivision regarding the processing of   personal data by a controller or processor.          SECTION 3.  (a) The Department of Information Resources,   under the management of the chief privacy officer, shall review the   implementation of the requirements of Chapter 541, Business &   Commerce Code, as added by this Act.          (b)  Not later than September 1, 2024, the Department of   Information Resources shall create an online portal available on   the department's Internet website for members of the public to   provide feedback and recommend changes to Chapter 541, Business &   Commerce Code, as added by this Act. The online portal must remain   open for receiving feedback from the public for at least 90 days.          (c)  Not later than January 1, 2025, the Department of   Information Resources shall make available to the public a report   detailing the status of the implementation of the requirements of   Chapter 541, Business & Commerce Code, as added by this Act, and any   recommendations to the legislature regarding changes to that law.          (d)  This section expires September 1, 2025.          SECTION 4.  Data protection assessments required to be   conducted under Section 541.105, Business & Commerce Code, as added   by this Act, apply only to processing activities generated after   the effective date of this Act and are not retroactive.          SECTION 5.  Not later than July 1, 2024, the attorney general   shall post the information and online mechanism required by Section   541.152, Business & Commerce Code, as added by this Act.          SECTION 6.  The provisions of this Act are hereby declared   severable, and if any provision of this Act or the application of   such provision to any person or circumstance is declared invalid   for any reason, such declaration shall not affect the validity of   the remaining portions of this Act.          SECTION 7.  (a) Except as provided by Subsection (b) of this   section, this Act takes effect July 1, 2024.          (b)  Section 541.055(e), Business & Commerce Code, as added   by this Act, takes effect January 1, 2025.       ______________________________ ______________________________      President of the Senate Speaker of the House                   I certify that H.B. No. 4 was passed by the House on April 5,   2023, by the following vote:  Yeas 146, Nays 0, 1 present, not   voting; that the House refused to concur in Senate amendments to   H.B. No. 4 on May 15, 2023, and requested the appointment of a   conference committee to consider the differences between the two   houses; and that the House adopted the conference committee report   on H.B. No. 4 on May 28, 2023, by the following vote:  Yeas 144,   Nays 0, 1 present, not voting.     ______________________________   Chief Clerk of the House               I certify that H.B. No. 4 was passed by the Senate, with   amendments, on May 10, 2023, by the following vote:  Yeas 30, Nays   0; at the request of the House, the Senate appointed a conference   committee to consider the differences between the two houses; and   that the Senate adopted the conference committee report on H.B. No.   4 on May 27, 2023, by the following vote:  Yeas 31, Nays 0.     ______________________________   Secretary of the Senate      APPROVED: __________________                   Date                       __________________                 Governor