Texas's Amended Data Breach Notification Law Increases Complexity for Businesses

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On September 1, 2012, Texas's amended data breach notification law passed in June 2011 will go into effect, and residents of all 50 states will potentially feel the effects. Under the amended law, Texas extends the reach of its data breach notification laws beyond Texas borders to all affected "individuals."

Under the current law, any entity that "conducts business" in Texas and maintains sensitive personal information on its computer network is required to notify any "Texas resident" whose personal information is, or is reasonably believed to have been acquired by an unauthorized user. The types of Texas businesses affected includes most businesses that maintain customer information, as well as virtually any health care-related business. Yet under the new amendment, any such entity conducting business in Texas must notify all affected "individuals" regardless of whether they call Texas home or not. Thus, any entity conducting business in Texas may be required to notify residents of all 50 states in the event of a data breach involving sensitive personal information. However, for affected out-of-state residents who live in states with their own notification requirements (all but four states have their own data breach notification laws), compliance with their own state law satisfies Texas requirements.

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