Relating to a limitation on civil liability of business entities in connection with a breach of system security, the official text

S.B. No. 2610

AN ACT

relating to a limitation on civil liability of business entities in

connection with a breach of system security.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Subtitle C, Title 11, Business & Commerce Code,

is amended by adding Chapter 542 to read as follows:

CHAPTER 542. CYBERSECURITY PROGRAM

Sec. 542.001. DEFINITIONS. In this chapter:

(1) "Breach of system security" has the meaning

assigned by Section 521.053.

(2) "Exemplary damages" has the meaning assigned by

Section 41.001, Civil Practice and Remedies Code.

(3) "Personal identifying information" and "sensitive

personal information" have the meanings assigned by Section

521.002.

Sec. 542.002. APPLICABILITY OF CHAPTER. This chapter

applies only to a business entity in this state that:

(1) has fewer than 250 employees; and

(2) owns or licenses computerized data that includes

sensitive personal information.

Sec. 542.003. CYBERSECURITY PROGRAM SAFE HARBOR: EXEMPLARY

DAMAGES PROHIBITED. Notwithstanding any other law, in an action

arising from a breach of system security, a person harmed as a

result of the breach may not recover exemplary damages from a

business entity to which this chapter applies if the entity

demonstrates that at the time of the breach the entity implemented

and maintained a cybersecurity program in compliance with Section

542.004.

Sec. 542.004. CYBERSECURITY PROGRAM. (a) For purposes of

Section 542.003, a cybersecurity program must:

(1) contain administrative, technical, and physical

safeguards for the protection of personal identifying information

and sensitive personal information;

(2) conform to an industry-recognized cybersecurity

framework as described by Subsection (b);

(3) be designed to:

(A) protect the security of personal identifying

information and sensitive personal information;

(B) protect against any threat or hazard to the

integrity of personal identifying information and sensitive

personal information; and

(C) protect against unauthorized access to or

acquisition of personal identifying information and sensitive

personal information that would result in a material risk of

identity theft or other fraud to the individual to whom the

information relates; and

(4) with regard to the scale and scope, meet the

following requirements:

(A) for a business entity with fewer than 20

employees, simplified requirements, including password policies

and appropriate employee cybersecurity training;

(B) for a business entity with at least 20

employees but fewer than 100 employees, moderate requirements,

including the requirements of the Center for Internet Security

Controls Implementation Group 1; and

(C) for a business entity with at least 100

employees but fewer than 250 employees, compliance with the

requirements of Subsection (b).

(b) A cybersecurity program under this section conforms to

an industry-recognized cybersecurity framework for purposes of

this section if the program conforms to:

(1) a current version of or any combination of current

versions of the following:

(A) the Framework for Improving Critical

Infrastructure Cybersecurity published by the National Institute

of Standards and Technology (NIST);

(B) the NIST's special publication 800-171;

(C) the NIST's special publications 800-53 and

800-53a;

(D) the Federal Risk and Authorization

Management Program's FedRAMP Security Assessment Framework;

(E) the Center for Internet Security Critical

Security Controls for Effective Cyber Defense;

(F) the ISO/IEC 27000-series information

security standards published by the International Organization for

Standardization and the International Electrotechnical Commission;

(G) the Health Information Trust Alliance's

Common Security Framework;

(H) the Secure Controls Framework;

(I) the Service Organization Control Type 2

Framework; or

(J) other similar frameworks or standards of the

cybersecurity industry;

(2) if the business entity is subject to its

requirements, the current version of the following:

(A) the Health Insurance Portability and

Accountability Act of 1996 (42 U.S.C. Section 1320d et seq.);

(B) Title V, Gramm-Leach-Bliley Act (15 U.S.C.

Section 6801 et seq.);

(C) the Federal Information Security

Modernization Act of 2014 (Pub. L. No. 113-283); or

(D) the Health Information Technology for

Economic and Clinical Health Act (Division A, Title XIII, and

Division B, Title IV, Pub. L. No. 111-5); and

(3) if applicable to the business entity, a current

version of the Payment Card Industry Data Security Standard.

(c) If any standard described by Subsection (b)(1) is

published and updated, a business entity's cybersecurity program

continues to meet the requirements of a program under this section

if the entity updates the program to meet the updated standard not

later than the later of:

(1) the implementation date published in the updated

standard; or

(2) the first anniversary of the date on which the

updated standard is published.

Sec. 542.005. CONSTRUCTION OF CHAPTER; NO PRIVATE CAUSE OF

ACTION. This chapter may not be construed to create a private cause

of action or change a common law or statutory duty.

SECTION 2. Section 542.003, Business & Commerce Code, as

added by this Act, applies only to a cause of action that accrues on

or after the effective date of this Act.

SECTION 3. This Act takes effect September 1, 2025.

______________________________
______________________________

President of the Senate
Speaker of the House

I hereby certify that S.B. No. 2610 passed the Senate on

April 30, 2025, by the following vote: Yeas 31, Nays 0.

______________________________

Secretary of the Senate

I hereby certify that S.B. No. 2610 passed the House on

May 28, 2025, by the following vote: Yeas 109, Nays 27, two

present not voting.

______________________________

Chief Clerk of the House

Approved:

______________________________

Date

______________________________

Governor