BILL ANALYSIS

C.S.H.B. 130

By: Bonnen

Homeland Security, Public Safety & Veterans' Affairs

Committee Report (Substituted)

BACKGROUND AND PURPOSE

According to the Asian Development Bank, the 14th Five-Year Plan for National Economic and Social Development of the People's Republic of China (PRC) identifies dominance in biotechnology as critical to strengthening the PRC's science and technological power, and the U.S. Department of State reports that the PRC is implementing an aggressive military-civil fusion strategy to develop the most technologically advanced military in the world. The bill author has informed the committee that a foreign adversary company houses the world's largest gene bank, which could give it a decided commercial advantage in developing pharmaceuticals and other health care solutions. Further, because biotechnology is often stressed as an important component to national power in foreign adversary military literature, the flow of U.S. IP and genetic data to the medical infrastructure of foreign adversaries' militaries may be considered a crucial component of this effort. C.S.H.B. 130 seeks to prevent foreign adversary companies from being able to collect and weaponize Texan genomic data by prohibiting foreign adversary genomic sequencers from being used in medical and research facilities in Texas. The bill would also require that Texan genomic data only be stored at a location in the United States.

CRIMINAL JUSTICE IMPACT

It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.

ANALYSIS

C.S.H.B. 130 amends the Health and Safety Code to establish the Texas Genomic Act of 2025 for the purpose of ensuring that a medical facility, research facility, company, or nonprofit organization that conducts research on or testing of genome sequencing or the human genome in Texas and acting on behalf of a foreign adversary does not gain access to the genetic information of Texas residents. The bill establishes that it is the state's policy to oppose the collection and analysis of genomic information by a foreign adversary or for use by a foreign adversary and to support sanctions the U.S. Department of Commerce or the U.S. Department of Defense imposes on a medical facility, research facility, company, or nonprofit organization engaged in the collection and analysis of genomic information for use by a foreign adversary.

C.S.H.B. 130 prohibits a medical facility, research facility, company, or nonprofit organization subject to the bill's provisions from using a genome sequencer or software produced by or on behalf of the following:

· a foreign adversary;

· a state-owned enterprise of a foreign adversary;

· a company or nonprofit organization domiciled within the borders of a country that is a foreign adversary; or

· an owned or controlled subsidiary or affiliate of a company or nonprofit organization domiciled within the borders of a country that is a foreign adversary.

The bill requires such a medical facility, research facility, company, or nonprofit organization to do the following:

· store all such genome sequencing data of Texas residents only at a location in the United States;

· for such a facility, company, or organization that stores genome sequencing data of Texas residents, including storage of genome sequencing data through a contract with a third-party data storage company, ensure the security of the genome sequencing data using reasonable encryption methods, restriction on access, and other cybersecurity best practices; and

· ensure genome sequencing data of Texas residents, other than open data, is inaccessible to any person located within the borders of a country that is a foreign adversary.

C.S.H.B. 130 requires such a facility, company, or organization to certify to the attorney general that the facility, company, or organization is in compliance with the bill's provisions not later than December 31 of each year and requires an attorney representing the facility, company, or organization to submit the certification. The bill authorizes the attorney general to investigate an allegation of a violation of the bill's provisions and authorizes any person to notify the attorney general of such a violation or potential violation.

C.S.H.B. 130 makes a medical facility, research facility, company, or nonprofit organization that violates the bill's provisions liable to the state for a civil penalty of $10,000 for each violation. The bill authorizes the attorney general to bring an action to recover that civil penalty in a district court in Travis County or in a county in which any part of the violation occurs. The bill requires the attorney general to deposit a civil penalty collected under these provisions in the state treasury to the credit of the general revenue fund. The bill authorizes the attorney general to recover reasonable expenses incurred in obtaining the civil penalty, including court costs, reasonable attorney's fees, investigative costs, witness fees, and deposition expenses.

C.S.H.B. 130 authorizes a Texas resident who is a patient or research subject of a medical facility, research facility, company, or nonprofit organization subject to the bill's provisions and who is harmed by the storage or use of the patient's or subject's genome sequencing data in violation of those provisions to bring an action in the county in which the plaintiff resides against the facility, company, or organization that committed the violation. The bill entitles such an individual to obtain the following:

· the greater of the following:

o actual damages; or

o statutory damages in an amount not to exceed $5,000 for each violation; and

· court costs and reasonable attorney's fees.

The bill exempts an action brought under these provisions from Civil Practice and Remedies Code provisions relating to the standards for recovery of exemplary damages and factors precluding such recovery.

C.S.H.B. 130 defines the following terms for purposes of its provisions:

· "company" as a sole proprietorship, organization, association, corporation, partnership, joint venture, limited partnership, limited liability partnership, or limited liability company that exists to make a profit, including a wholly owned subsidiary, majority-owned subsidiary, parent company, or affiliate of those entities or business associations;

· "domicile" as the country in which:

o a company or nonprofit organization is formed, incorporated, or registered and headquartered;

o a company's or nonprofit organization's affairs are primarily conducted; or

o the majority of the company's ownership shares are held;

· "foreign adversary" by reference to federal regulations relating to the determination of foreign adversaries;

· "genome sequencer" as any device or platform used to conduct genome sequencing, resequencing, or isolation or other genome research;

· "genome sequencing" as any method used to determine the identity and order of nucleotide bases in the human genome;

· "human genome" as the set of DNA found in human cells;

· "medical facility" as a facility licensed or registered by a state or federal agency to provide health care services that receives any state funding, including pass-through federal money provided to a state agency for grant awards; and

· "software" as computer programs and related equipment used for genome sequencing or the operation, control, analysis, research, or other functions of genome sequencers.

C.S.H.B. 130 applies only to a cause of action that accrues on or after the bill's effective date. A cause of action that accrues before the bill's effective date is governed by the law in effect on the date the cause of action accrued, and the former law is continued in effect for that purpose.

EFFECTIVE DATE

September 1, 2025.

COMPARISON OF INTRODUCED AND SUBSTITUTE

While C.S.H.B. 130 may differ from the introduced in minor or nonsubstantive ways, the following summarizes the substantial differences between the introduced and committee substitute versions of the bill.

The substitute revises the provision of the introduced requiring a medical facility, research facility, company, or nonprofit organization subject to the bill's provisions to ensure genome sequencing data of Texas residents, other than open data, is inaccessible to any person located outside of the United States by requiring such an entity to ensure that data is inaccessible instead to any person located within the borders of a country that is a foreign adversary. Additionally, the substitute omits the provisions from the introduced that authorized such a medical facility, research facility, company, or nonprofit organization that stores such data to apply to the attorney general in the form and manner prescribed by attorney general rule to allow remote access to such data by persons located outside of the United States and that authorized the attorney general to allow such access after making certain determinations.

The substitute includes a provision absent from the introduced authorizing an action brought by a Texas resident who is a patient or research subject of a medical facility, research facility, company, or nonprofit organization subject to the bill's provisions and who is harmed by the storage or use of the patient's or subject's genome sequencing data in violation of the bill's provisions to be brought in the county in which the plaintiff resides.