California SB 1386
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The contents of the act follow:
An act to amend, renumber, and add Section 1798.82 of, and to add Section
1798.29 to, the Civil Code, relating to personal information.
LEGISLATIVE COUNSEL'S DIGEST
SB 1386,
Peace. Personal information: privacy.
Existing law regulates the maintenance and dissemination of personal
information by state agencies, as defined, and requires each agency to keep an
accurate account of disclosures made pursuant to specified provisions. Existing
law also requires a business, as defined, to take all reasonable steps to
destroy a customer's records that contain personal information when the business
will no longer retain those records. Existing law provides civil remedies for
violations of these provisions.
This bill, operative July 1, 2003, would require a state agency, or a person
or business that conducts business in California, that owns or licenses
computerized data that includes personal information, as defined, to disclose in
specified ways, any breach of the security of the data, as defined, to any
resident of California whose unencrypted personal information was, or is
reasonably believed to have been, acquired by an unauthorized person. The bill
would permit the notifications required by its provisions to be delayed if a law
enforcement agency determines that it would impede a criminal investigation. The
bill would require an agency, person, or business that maintains computerized
data that includes personal information owned by another to notify the owner or
licensee of the information of any breach of security of the data, as specified.
The bill would state the intent of the Legislature to preempt all local
regulation of the subject matter of the bill. This bill would also make a
statement of legislative findings and declarations regarding privacy and
financial security.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1.
(a) The privacy and financial security of individuals is increasingly at risk
due to the ever more widespread collection of personal information by both the
private and public sector.
(b) Credit card transactions, magazine subscriptions, telephone numbers, real
estate records, automobile registrations, consumer surveys, warranty
registrations, credit reports, and Internet Web sites are all sources of
personal information and form the source material for identity thieves.
(c) Identity theft is one of the fastest growing crimes committed in
California. Criminals who steal personal information such as social security
numbers use the information to open credit card accounts, write bad checks, buy
cars, and commit other financial crimes with other people's identities. The Los
Angeles County Sheriff's Department reports that the 1,932 identity theft cases
it received in the year 2000 represented a 108 percent increase over the
previous year's caseload.
(d) Identity theft is costly to the marketplace and to consumers.
(e) According to the Attorney General, victims of identity theft must act
quickly to minimize the damage; therefore expeditious notification of possible
misuse of a person's personal information is imperative.
SEC. 2. Section 1798.29 is added to the Civil Code, to read: 1798.29.
(a) Any agency that owns or licenses computerized data that includes personal
information shall disclose any breach of the security of the system following
discovery or notification of the breach in the security of the data to any
resident of California whose unencrypted personal information was, or is
reasonably believed to have been, acquired by an unauthorized person. The
disclosure shall be made in the most expedient time possible and without
unreasonable delay, consistent with the legitimate needs of law enforcement, as
provided in subdivision (c), or any measures necessary to determine the scope of
the breach and restore the reasonable integrity of the data system.
(b) Any agency that maintains computerized data that includes personal
information that the agency does not own shall notify the owner or licensee of
the information of any breach of the security of the data immediately following
discovery, if the personal information was, or is reasonably believed to have
been, acquired by an unauthorized person.
(c) The notification required by this section may be delayed if a law
enforcement agency determines that the notification will impede a criminal
investigation. The notification required by this section shall be made after the
law enforcement agency determines that it will not compromise the investigation.
(d) For purposes of this section, "breach of the security of the
system" means unauthorized aquisition of computerized data that compromises
the security, confidentiality, or integrity of personal information maintained
by the agency. Good faith acquisition of personal information by an employee or
agent of the agency for the purposes of the agency is not a breach of the
security of the system, provided that the personal information is not used or
subject to further unauthorized disclosure.
(e) For purposes of this section, "personal information" means an
individual's first name or first initial and last name in combination with any
one or more of the following data elements, when either the name or the data
elements are not encrypted:
(1) Social security number.
(2) Driver's license number or California Identification Card number.
(3) Account number, credit or debit card number, in combination with any
required security code, access code, or password that would permit access to
an individual's financial account.
(f) For purposes of this section, "personal information" does not
include publicly available information that is lawfully made available to the
general public from federal, state, or local government records.
(g) For purposes of this section, "notice" may be provided by one
of the following methods:
(1) Written notice.
(2) Electronic notice, if the notice provided is consistent with the
provisions regarding electronic records and signatures set forth in Section
7001 of Title 15 of the United States Code.
(3) Substitute notice, if the agency demonstrates that the cost of
providing notice would exceed two hundred fifty thousand dollars ($250,000),
or that the affected class of subject persons to be notified exceeds 500,000,
or the agency does not have sufficient contact information. Substitute notice
shall consist of all of the following:
(A) E-mail notice when the agency has an e-mail address for the subject
persons.
(B) Conspicuous posting of the notice on the agency's Web site page, if
the agency maintains one.
(C) Notification to major statewide media.
(h) Notwithstanding subdivision
(g), an agency that maintains its own notification procedures as part of an
information security policy for the treatment of personal information and is
otherwise consistent with the timing requirements of this part shall be deemed
to be in compliance with the notification requirements of this section if it
notifies subject persons in accordance with its policies in the event of a
breach of security of the system.
SEC. 3. Section 1798.82 of the Civil Code is amended and renumbered to read:
1798.84.
(a) Any customer injured by a violation of this title may institute a civil
action to recover damages.
(b) Any business that violates, proposes to violate, or has violated this
title may be enjoined.
(c) The rights and remedies available under this section are cumulative to
each other and to any other rights and remedies available under law.
SEC. 4. Section 1798.82 is added to the Civil Code, to read: 1798.82.
(a) Any person or business that conducts business in California, and that
owns or licenses computerized data that includes personal information, shall
disclose any breach of the security of the system following discovery or
notification of the breach in the security of the data to any resident of
California whose unencrypted personal information was, or is reasonably believed
to have been, acquired by an unauthorized person. The disclosure shall be made
in the most expedient time possible and without unreasonable delay, consistent
with the legitimate needs of law enforcement, as provided in subdivision (c), or
any measures necessary to determine the scope of the breach and restore the
reasonable integrity of the data system.
(b) Any person or business that maintains computerized data that includes
personal information that the person or business does not own shall notify the
owner or licensee of the information of any breach of the security of the data
immediately following discovery, if the personal information was, or is
reasonably believed to have been, acquired by an unauthorized person.
(c) The notification required by this section may be delayed if a law
enforcement agency determines that the notification will impede a criminal
investigation. The notification required by this section shall be made after the
law enforcement agency determines that it will not compromise the investigation.
(d) For purposes of this section, "breach of the security of the
system" means unauthorized acquisition of computerized data that
compromises the security, confidentiality, or integrity of personal information
maintained by the person or business. Good faith acquisition of personal
information by an employee or agent of the person or business for the purposes
of the person or business is not a breach of the security of the system,
provided that the personal information is not used or subject to further
unauthorized disclosure.
(e) For purposes of this section, "personal information" means an
individual's first name or first initial and last name in combination with any
one or more of the following data elements, when either the name or the data
elements are not encrypted:
(1) Social security number.
(2) Driver's license number or California Identification Card number.
(3) Account number, credit or debit card number, in combination with any
required security code, access code, or password that would permit access to
an individual's financial account.
(f) For purposes of this section, "personal information" does not
include publicly available information that is lawfully made available to the
general public from federal, state, or local government records.
(g) For purposes of this section, "notice" may be provided by one
of the following methods:
(1) Written notice.
(2) Electronic notice, if the notice provided is consistent with the
provisions regarding electronic records and signatures set forth in Section
7001 of Title 15 of the United States Code.
(3) Substitute notice, if the person or business demonstrates that the cost
of providing notice would exceed two hundred fifty thousand dollars
($250,000), or that the affected class of subject persons to be notified
exceeds 500,000, or the person or business does not have sufficient contact
information. Substitute notice shall consist of all of the following:
(A) E-mail notice when the person or business has an e-mail address for
the subject persons.
(B) Conspicuous posting of the notice on the Web site page of the person
or business, if the person or business maintains one.
(C) Notification to major statewide media.
(h) Notwithstanding subdivision (g), a person or business that maintains its
own notification procedures as part of an information security policy for the
treatment of personal information and is otherwise consistent with the timing
requirements of this part, shall be deemed to be in compliance with the
notification requirements of this section if the person or business notifies
subject persons in accordance with its policies in the event of a breach of
security of the system.
SEC. 5. This act shall become operative on July 1, 2003.
SEC. 6. This act deals with subject matter that is of statewide concern, and
it is the intent of the Legislature that this act supersede and preempt all
rules, regulations, codes, statutes, or ordinances or all cities, counties,
cities and counties, municipalities, and other local agencies regarding the
matters expressly set forth in this act.