Texas has introduced its own data privacy law to protect residents’ personal information. Businesses acting as controllers or processors needed to understand this law to avoid penalties and handle personal data correctly. The Texas Data Privacy and Security Act (TDPSA) took effect on July 1, 2024, and enforcement rules changed on January 1, 2025 when the automatic 30 day cure period expired. Texas has a population of more than 30 million, and compliance is essential for businesses operating in or serving Texas residents. This article provides an overview of the TDPSA, the subjects obligated to comply, the scope of application, the main obligations, penalties, and how expert support can simplify compliance.
What is the Texas Data Privacy Law?
It’s essential for companies operating in or serving residents of Texas to understand Texas data privacy laws. TDPSA set rules for the handling of personal data, granted consumers rights, and required transparency. By understanding the basics, companies can avoid penalties and earn the trust of Texas customers. The Texas Data Privacy and Security Act (TDPSA) regulates how companies collect, process, and share personal information. This givese Texas consumers the right to manage their data.
Consumer rights under TDPSA include:
- Right to access: Consumers can request disclosure of their personal data.
- Right to delete: Consumers can request the deletion of their data from companies.
- Opt-out rights: Consumers are asked to opt out of the sale of their personal data.
- Right of consent: Companies must obtain permission before collecting sensitive information.
Enforcement dates: TDPSA took effect on July 1, 2024, and the automatic 30 day cure period expired on January 1, 2025.
Importance: Legal compliance ensures transparency, builds trust with Texas consumers and avoids fines.
Key Terms and Definitions
TDPSA uses specific terms that companies must understand to comply correctly. Understanding these definitions ensures proper data processing and reduces risk. It helps employees, vendors, and partners act in a manner consistent with the law and avoid misconceptions regarding personal data and sensitive data.
- Personal Data: Name, address, IP address, and all the information related to a particular person.
- Sensitive Personal Data: Race, religion, sexual orientation, health information, biometric information, proper location details, and child information.
- Biometric Data: Fingerprints, vocal prints, retina scan, etc.
- Data Controller vs Data Processor: The administrator determines how the data is used, and the processor processes the data on behalf of the administrator.
- Processing Personal Data: All operations related to collecting, storing, using and distributing personal data.
Who Must Comply?
Not all companies in the United States are required to comply with the Texas Data Privacy Act, but many are. Companies need to know whether the TDPSA applies to them. By understanding the scope of application, businesses can avoid fines and handle Texas resident data appropriately, even if they’re based outside of Texas.
Criteria for applicability:
- Companies that operate in or provide products or services consumed by Texas residents.
- Processing or selling personal data.
- Small businesses as defined by the U.S. Small Business Administration were generally exempt, subject to limited exceptions related to sensitive data.
Small businesses as defined by the U.S. Small Business Administration are generally exempt, subject to limited exceptions related to sensitive data.
TDPSA coverage is broader than other state laws. For example, online retailers may be required to comply even if they don’t specifically target Texas residents.
Exemptions to the Texas Privacy Law
TDPSA does not cover all data activity. Certain businesses or circumstances are excluded. By grasping the exemptions, companies can avoid unnecessary compliance and focus on the rules that apply to their businesses. This saves time and resources while respecting consumer privacy.
Exclusions include:
- Personal or family activities.
- Data processing between jobs or enterprises (B2B).
- State government agencies.
- Entities regulated by HIPAA or GLBA.
- Utilities and utilities.
These exemptions mean that not all data activities require compliance with the TDPSA, but businesses have to verify that they fall within these categories.
Main Obligations Under TDPSA
Businesses must follow specific rules to comply with the TDPSA. These rules cover consent, data sales, advertising, privacy notices, contracts with processors, consumer rights claims, and risk assessments. By complying with these obligations, companies can mitigate legal risks, protect consumer data, and ensure transparency in all business operations.
1. Opt-in for Sensitive Data
Companies must obtain explicit consent before collecting sensitive information. Consent cannot be implied.
2. Opt-out for Sale of Personal Data
Consumers have the right to stop the sale of their personal data. The TDPSA broadly defines sales and includes data exchanges for money or other valuable consideration. Businesses must provide an easy means for consumers to opt out.
3. Opt-out for Targeted Advertising
Consumers can opt out of receiving targeted ads based on their personal data. Contextual advertising is excluded.
4. Drafting a Privacy Notice
The controller must create a privacy notice describing the following:
- Types of data to be collected
- Purpose of data collection
- When data is shared with third parties
Notifications must be clearly and accessibly written in plain language that is easy for consumers to understand.
5. Data Processing Agreements
The operator must enter into a written agreement between the administrator (controller) and the processor (processor). The agreement must clearly define the scope of liability. The processor must delete the data upon completion of the service.
6. Handling Consumer Rights Requests
Consumers can exercise the following rights:
- Verify that the operator holds its own data
- Access your data
- Correcting errors
- Delete data
- Receive a copy of your own data
The operator must respond within 45 days of the claim.
7. Conducting Data Protection Assessments
Businesses must conduct risk assessments before:
- Processing sensitive data
- Sales of data
- Data use for targeting ads
These assessments help prevent the misuse of data and demonstrate regulatory compliance.
Enforcement and Penalties
The execution of TDPSA is concise but strict. Understanding executors and potential penalties enables operators to avoid risks. Understanding enforcement enables appropriate preparation, timely response, and the avoidance of fines that damage finances and reputation.
Penalties:
- A maximum fine of $7,500 for each violation may be imposed.
- Private litigation rights are not permitted to consumers.
Proper preparation is crucial because breaches of laws and regulations lead to financial penalties and reputational damage.
Simplify Texas Privacy Law Compliance with Expert Help
Meeting the requirements of the Texas Data Privacy and Security Act (TDPSA) is a complex challenge for many companies. From acquiring consent to responding to consumer rights claims, careful attention is required at each stage. With the help of experts, companies can accurately comply with laws, reduce risks, and avoid penalties. Uprite Services specializes in compliance support. We provide practical solutions, including creating privacy notices, introducing opt-in/opt-out functions, managing data processing contracts, and conducting data protection assessments. The company’s support enables companies to maintain compliance and protect consumer data while concentrating on core operations without stress.
Why Choose Uprite:
- Expert Knowledge: We have a deep understanding of TDPSA and Texas privacy regulations.
- Tailored Solutions: Provide IT compliance solutions tailored to your business size and business.
- Comprehensive Services: Cover all compliance requirements, from privacy notices to data assessments.
- Risk Reduction: Avoid fines and maintain consumer confidence through guidance.
Conclusion
The Texas Data Privacy Act sets clear rules for how companies collect, use, and share personal data. Companies that serve Texas residents must follow these rules. If you violate, you’ll be subject to penalties. These steps allow companies to meet all TDPSA requirements, avoid fines, and protect consumer data. Compliance also helps build trust with customers, thereby strengthening the company’s reputation in the Texas market. Integrate with Uprite Services for easy compliance support.
Stephen Sweeney, CEO of of Uprite.com, with 20+ years of experience brings tech and creativity together to make cybersecurity simple and IT support seamless. He’s on a mission to help businesses stay secure and ahead of the game!