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The House Committee on Business & Industry met on March 13th to take up the following bills: HB 1558 (Ann Johnson), HB 614 (Shaheen), HB 471 (Patterson), HB 697 (Holland),  HB 4 (Capriglione). The notice for the hearing can be found here. A video of the hearing can be found here.

 

This report is intended to give you an overview and highlight the various topics taken up. It is not a verbatim transcript of the discussions but is based upon what was audible or understandable to the observer and the desire to get details out as quickly as possible with few errors or omissions.

 

Bills not discussed: HB 207 (Murr)

 

HB 1558 (Ann Johnson) – Relating to the extension or amendment of deed restrictions in certain older subdivisions.

  • Ann Johnson – Bill seeks to allow older subdivisions to modify their deed restrictions, specifically in Huston and the South Gate community
  • Changes would happen once every 5 years
  • Bill requires community vote to be over 66%

 

Edward Aviles, South Gate Civic Club – On

  • Purpose of the bill is to allow older neighborhood prior to 1947 that do not have mandatory Property Owners Associations (POAs) to amended or extend the deed restrictions
  • Older subdivision in Houston, have deed restrictions that are one page compared to modern ones that are longer
  • South gate is looking to be on level playing field with other neighborhoods
  • Bill hopes to prevent developers from coming into neighborhoods and buying MF lots and building a 20-story high rise

 

Rep. A. Johnson closes

 

HB 1558 left pending

 

HB 614 (Shaheen) – Relating to property owners’ association fines.

  • Shaheen – Requires better transparency of HOA policies and fines
  • Bill will require HOAs to provide a copy of their polices and fines to homeowners, via website or email or mailing to homeowners
  • Bill will require HOAs to categorize restrict of convenance, property maintenance and repair, individual misconduct, or matters affecting health and safety
  • Lambert – Can you tell us some excess that are happening out in HOAs?
    • Gave an example of HOA in his district the fined a homeowner that was fined $1K for leaving car in street; the addition of transparency will help a lot of constituents in our district
  • Vasut – Is there a maxim fine in Texas law that an HOA can assess?
    • No, there’s an assumption under Texas law that fines are reasonable

 

Kim Pollock, Texas Community Association Advocates – Opposed

  • Gave example of her HOA using fines to enforce rules without having to hire a lawyer
  • Issue with the bill is that it requires volunteer homeowners to identify each category of restrictions
  • Believes this requirement is onerous to accomplish with reasonable accuracy
  • Bill would require boards to create categories for each violation
  • Bill set ups HOAs for lawsuits from homeowners because of each category of restricted governance
  • Bill requires all POAs to provided fine policy; should not need to provide separate fine policy if the rules already in a recorded governing document
  • Provided alternative language believing would be beneficial
  • Cole- Can you explain what the proposed langued would do?
    • The proposed bill provides three categories that have to be identified and then says etc., that leaves it open for interpretation; we would like each category removed

 

Rep. Shaheen – Closes

  • Reads the bill and talks about the 3 categories HOAs must have, and says if there is a concern the 4th category can be other
  • Frazier- Have you looked at how many fines have been collected HOAs in Texas?
    • No, I’d be interested to see that

 

HB 614 left pending

 

CSHB 471 (Patterson) – Relating to benefits for certain first responders and other employees related to illness and injury.

  • Patterson – Bill is for Firefighters/Police Officers/EMS professionals who are injured in the line of duty and cannot get back to work in a quick fashion
  • Bill is an effort to make sure first responders are taken care of when stricken with on duty injury and illnesses
  • Bill seeks to allow that first responders injured on duty keep their jobs with pay for at least a year while recovering
  • Most of pay would come from workers compensation insurance
  • First sections give employees and employers multiple options
  • CS deletes one section related to lifetime income benefits; issue is still being discussed, does exist in standalone bill by Rep. Burros
  • CS New definition for Tobacco clause, a person that regularly uses tobacco in the last 7 years vs. ambiguous nature of the code today
  • Final section relates to heart attack and strokes, under current law medical event has to happen while on duty; section stretches time to 8 hours after shift is over
  • Hinojosa – There are two sections in the bill that say if the firefighter can take sick leave, vacation time, or have a volunteer person fill in temporarily; it seems to be that the employee can chose who volunteers?
    • If the person was injured and can’t get back at that time and can’t use their accrued sick leave, they can have a likened qualified professional fill in for them
  • Hinojosa – This section says you have a year and then a determination can be made; what I don’t see is if any determination is made that you still need it; is there some review of condition to verify if you still qualify for that?
    • Yes, that is also left up to the city to determine if they still need it; there needs to be a cutoff, but we don’t want a person injured in the line of duty to be out of a job
  • Hinojosa – It seems like an automatic without an evaluation of the employee?
    • They are evaluated through that whole year, but after that the city has a decision to make
  • Frazier – speaks in favor of the bill
  • Lambert – Speaks in favor of the bill; constituent had concerns about the langue that would open up the bill to other employees, can you speak on who the bill is for
    • We are talking about emergency medical first responders

 

Bennett Sandlin, Texas Municipal League – Opposed

  • Against the bill only because of section 1; supportive of sections 2-4
  • Concerned with the paid sick leave or injury leave, currently mirrored in civil service statute
  • Paid sick leave doesn’t work for small cities that can’t afford it
  • Comp is covered by insurance but paid sick leave is paid out of pocket and not insurable
  • Comp is a better solution for small cities; happy to work for rep on the issues if the
  • Comp is not perfect it’s the only solution small cities have to temporary replace a first responder
  • Cole- Will you support paid sick leave being a part of workers comp?
    • Yes absolutely
  • Frazier- They don’t get both, correct?
    • Under this bill they can, but I believe its an oversight and not the reason for my testimony today
  • Frazier – You do agree that an injured firefighter should get leave?
    • Yes

 

Matthew Sapp, Frisco Firefighter Association – For

  • Section one is very important, if someone is in favor of part of the bill, we need time to allow us to get back to work
  • Gave examples of many firefighters that were injured and took large amounts of time to get back to work

 

Matt Bachop, Texas Association of Firefighters – For

  • Under this bill it makes sure that injured first responders get their full salary
  • To Rep. Hinojosa’s question, volunteers have to be approved by department head
  • TML states small cities can’t afford this, but small cities have already budgeted for this

 

Chris Jones, Combine Law Enforcement Association of Texas (CLEAT) – For

  • Workers’ comp has a very long history of denying claims, 9/10 they will deny it
  • This bill is a stop gap so that first responders can get their salary while claim appeal is going on
  • There is no requirement a physician issue a Maximum Medical Improvement (MMI) rating for up to 2 years; officers don’t have the ability to decide to either take pension benefits or disability pension until after MMI has been issued
  • Regarding the heart attack provision; there needs to be some time period that allows for the calming down period to occur when officers are off duty

 

Rep. Patterson – Closes

  • Got an email from TML last Thursday saying they don’t agree with section 1 and gave no language to modify it
  • TML risk pool was a part of the discussion, but TML was not
  • Frazier – Thank you for taking on this challenge, in my 20 years of service it’s been a huge problem

 

HB 471 is left pending

 

HB 697 (Holland) – Relating to seller’s disclosures regarding fuel gas piping in residential real property.

  • Holland – Sellers disclosure notice is required by sellers
  • Notice is a disclosure of seller’s knowledge of the condition of the property
  • Bill adds the type of fuel gas piping if applicable to the seller’s form, box checked will notify they type of fuels gas piping in the property, black iron pipe, cooper, corrugated stainless steel tubing
  • Lambert – Does this form get fill out before the inspection or post inspection?
    • It should be filled out prior to the home being listed

 

Becky Teal, Self – For

  • CSST is the problem addressed in this bill
  • Bill has no negative impact
  • Proposed langued identifies what kind of gas and the conduit in the pipe
  • Gave example of her child that died because a pipe he moved in his attic that exploded
  • Lambert – Sorry for your loss thank you for your testimony
  • Frazier – Thank you for being here

 

Ariana Kistner, Self – For

  • Served as a fire marshal; participated in 100 of investigations may of which were because of CSST
  • Could have been prevent if homeowners knew what type of piping was in their home

 

Rep. Holland – Closes

  • Reiterate the purposed of this bill is to disclose material facts, not provided a negative stigma on any product or products

 

HB 697 is left pending

 

CS HB 4 (Capriglione) – Relating to the regulation of the collection, use, processing, and treatment of consumers’ personal data by certain business entities; imposing a civil penalty.

  • Capriglione – Gave an example of a person who was killed by stalker who purchased personal data
  • Bill will provide every Texas consumer with 5 right to control their personal data
    • Right to know when personal data is being collected
    • Right to access personal data and receive that data in readable format
    • Right to correct and delete personal data
    • Right to opt out of collection and sale of data
    • Right to not face retaliation or discrimination for exercising your rights
  • Bill requires companies have at least 2 ways that a consumer can exercise their rights; must also post methods in privacy notice is easily accessible and easy to ready
  • Bill states that website must warn consumers in the sale of sensitive personal data or biometric personal data
  • Bill departs from other states who the bill applies to;
  • Bill applies to any company that has products or services consumed by Texas residents, engages in the sale or processing of personal data, is not a small business
  • Small businesses would still be required to receive consent from a consumer before selling sensitive data
  • Bill includes most expansion of definition of the sale of personal data; definition ensures that any transfer of personal data to a third for any monetary gain is considered a sale of data
  • Personal data is generally considered data that is considered linkable to an individual; but many forms of ID on the internet are not linkable i.e., IP address, username, home address; however, if layered together can link to a specific person, this is referred to as pseudonymous data
  • Bill states that if company layers pseudonymous data to link to an individual it is considered personal data
  • AG office has sole authority over enforcement of this bill
  • Civil penalties are $7.5K per violation, AGs office must provide companies with 30-day care period, there is no private right of action under this bill
  • Lambert – Idea of what the bill encapsulates in terms of protections for minors?
    • Are federal laws like HIPPA; under this bill a parent or guardian may exercise their right on behalf of the child 13 or younger; bill also states that data by children is sensitive; children 13-18 can exercise any of rights of the bill themselves
  • Hinojosa – There is a section that says, the AG can engage in a civil investigative demand if he has reasonable cause to believe that a person is about to engage in a violation; can you help me better understand that language, I’m concerned about it?
    • The bill requires that companies have data assessment report; the language you’re referring to would allow the AG access to that report; that being said I think it’s reasonable to remove the section “about to”
  • Hinojosa – Does the bill apply to an entity that that state contracts with?
    • Yes, a private company regardless of a contact or not is still subject to the langue in here
  • Longoria – Can you explain the difference between the Virginia bill and yours?
    • We looked at the VA bill as our starting point and look at how we could improve upon it; the biggest being pseudonymous data; we focused on the sale of data and what that means, we were able to broaden that scope of what sale means; another big peace is who this is applicable to, VA bill says how many customers a company had, we wanted to use how many sales a business had

 

David Dunmoyer, Texas Public Policy Foundation – For

  • Everything we do online transfers some sort of our personal data
  • The opacity and data collection means data is not always stored securely
  • This bill provides solutions to the problem Texans are facing
  • This bill gives Texas consumers digital rights; and establishes data minimization standards
  • By enforcing this bill through AG Texans can exercise their digital rights with recourse

 

Stephen Scurlock, Independent Bankers Association of Texas – For

  • Financial institutions are listed as exempted institutions in the bill
  • FFIEC updates rules and FTC
  • When a data breach occurs anywhere banks suffer the vast majority of losses

 

Briana Gordley, Texas Appleseed – For

  • Gaps for victims of domestic violence, elder abuse etc. are very large and have lack of protection
  • One small gap issue in the bill; a controller is given up to 45 days and can apply for extension of 45 days, for people actively fleeing dangerous environments, 45 days is to many
  • Gave solution that gives individuals opportunity to let companies know personal safety is at risk

 

Steve Perkins, Self – Against

  • Texas needs a privacy law, but this bill does not provide the best privacy for Texans unless language is changed
  • Bill says that website must provide disclosure agreement; under provision of this bill, it says I can opt out, but companies have 90 days to comply; by the time they comply they could have already sold my data
  • Believes bill should include a universal opt out mechanism
  • Lambert – In your opinion this is not a good first step?
    • It is a good first step; would like to see it strengthened and not let companies have the data in the first place
  • Lambert – You would agree that because congress hasn’t passed anything that states need to step up and do something?
    • Yes, states are stuck with this
  • Frazier – How much have you worked with the author and this office?
    • I would say a few times over the past few years

 

Jordan Crenshaw, U.S. Chamber of Commerce – Neutral

  • Data driven economy helps small business compete with larger companies
  • 80% of small business nationwide said that the use of tech platforms has helped them compete with small companies; 83% of Texas small business say without access to these tools their business would struggle to survive; 79% of them say that heavy handed limitations on data would hamper their business
  • Three key areas similar to what other states are doing are important:
    • Enforcement, 5 states have passed comprehensive, none have passed a private right of actions, state AGs are best positioned to be the enforcers of privacy legislation
    • Definition of sale, overly broad definitions could chill societal beneficial uses of data, like public safety
    • Compliance, business that do not have robust resources need time to comply
  • This bill represents a reasonable model that has followed many state models across the country
  • Urge to harmonize privacy laws with other states with other states to give small business a more level playing field

 

Megan Morrow, Texas Association of Business – For

  • Current version encompasses standards that Texas business agree on
  • Hope these are the only privacy measures placed on Texas business this session

 

Ryan Harkins, Microsoft – for

  • Believe that the public has lost trust in technology
  • Only way to earn trust back is to pass laws that allow consumers to protect their data
  • Any privacy law must contain a strong definition so that it will apply to modern data sets; no just data that is identified but data that is identifiable, the bill does a good job of coving this; have definitions that will strengthen this definition
  • Any privacy bill provides has to empower consumers with the rights to control their data
  • The definition of sale in this bill is appropriate, where cash is not exchanged
  • Bill needs to impose affirmative obligation on companies to be responsible stewards on data they collect
  • Strong support of this bill
  • Longoria – How do rank HB in comparison to other legislation you’ve seen in the past?
    • It’s among the strongest we seen, and also is very reasonable

 

Gregory Porter, Texas for Liberty – Against

  • Late to the process, testifying for a few reasons
  • Concern is that large corporations becoming a form of indirect governance
  • Concerned that we have to negotiate with large corporations to have privacy
  • Believes that the bill comes from the perspective that the corporation owns individuals’ data
  • Would propose a bill that says the consumer owns their data
  • Bill offers a lot of protections but just enough loopholes for companies to exploit

 

Servando Esparza, Tech Net – For

  • CS for the doesn’t include everything we asked for, but bill takes into interoperability while at the same time provides privacy and security for consumers
  • CS is 35 pages but the importance of every definitions in there is significant
  • There are federal laws that due preempt the state, Rep. Capriglione created a bill that consumer groups and other support

 

Rep. Capriglione – Closes

  • This bill strengthens the storage of your data that’s out there already and the protections of the storage
  • Bills definition of “consent” specifically prevents coercion; bill says company cannot discriminate against an individual who does not want their data collected
  • This is the first time we are protecting personal private sensitive information requiring an individual to option; sensitive data is personal data revealing racial or ethnic origin, mental or physical health diagnosis, etc.
  • This bill would make the strongest data privacy laws and ultimately be a model for the rest of the country

 

HB 4 is left pending