A License to Repair; Texas law has far reaching impact.

The State of Texas recently passed H.B. No. 2833 stating you must hold a license as a security services contractor if you “engage in business activity in which a license is required.” The law then outlines that a company acts as an “Investigations Company” under Section 1702.104, (4) (b) “…includes information obtained or furnished through the review and analysis of, and the investigation into the content of, computer-based data not available to the public.” Investigation is a key word in the statute and appears to be broadly defined and it has lead to confusion and controversy.

This law apparently prompted the Texas Private Security Board, a State of Texas agency, to start putting computer repair shops on notice that they will need a private investigator’s license to continue to operate as a computer repair business.  Unfortunately for private business and the citizens who seek out this very valuable and needed service there are criminal and civil penalties attached. Also the rigors of obtaining a PI license have the potential to close many PC repair shops. In response to this law, a law suit has been filed by The Institute for Justice, an organization that litigates for entrepreneurs who feel their rights are being violated by the government. 

H.B. No. 2833 appears to have far reaching implications in the world of IT and there are several areas that could be directly impacted.  Some areas of concern are;

·        Consumers who seek out service from a repair specialist who isn’t a licensed PI;

·        Outsourced IT operations who have to recruit IT personnel;

·        Consultants who implement IT solutions for customers;

·        Companies who collect, store, and search electronically stored information for possible eDiscovery legal requests that was recently covered in a recent blog entry posted by another DCIG analyst, Greg Buckles.

Although the original intent of the law is hard to determine it would appear that the Texas Department of Public Safety attempted to alleviate some confusion through an opinion provided by the Public Security Bureau, although the opinion has done little to clarify the current situation.  Due to the civil risk to IT professionals a law such as this could have the unintended consequence of squeezing an already short supply of IT professionals, forcing small business owners out of business, and businesses having fewer qualified IT consulting options.

A great deal of focus in the news has been on PC repair shops, but another area of concern is how IT responds to legal requests within a company.  If your company collects, stores, and searches Electronically Stored Information (ESI) for the purposes of legal requests then does your company fall into the definition of an “Investigations Company” and thus subject to licensing?  This is an area of concern that no doubt will need further clarification. 

Time, debate, and litigation will bear out the final results, but it is clear this law has far reaching impact.  Companies, IT professionals, and consumers should ensure they are not operating outside the boundaries set forth in this law due to the attached civil and criminal penalties.  It is obvious this law has created a lot of confusion and no matter what the legislature intended when it enacted this law, the State of Texas has created a storm of controversy, and one to which IT professionals will be paying close attention.