Bill Text: CA AB964 | 2015-2016 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Civil law: privacy.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Passed) 2015-10-06 - Chaptered by Secretary of State - Chapter 522, Statutes of 2015. [AB964 Detail]

Download: California-2015-AB964-Amended.html

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BILL NUMBER: AB 964	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MARCH 26, 2015

INTRODUCED BY   Assembly Member Chau

                        FEBRUARY 26, 2015

   An act  to amend Section 1798.82 of the Civil Code, 
relating to civil law.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 964, as amended, Chau. Civil law: privacy.
   Existing law requires a person or business conducting business in
California, that owns or licenses computerized data that includes
personal information, as defined, to disclose in specified ways, a
breach of the security of the system or data, as defined, following
discovery or notification of the security breach, to any California
resident whose unencrypted personal information was, or is reasonably
believed to have been, acquired by an unauthorized person. 
Existing law requires the disclosure to be made in the most expedient
time possible and without unreasonable delay, consistent with the
legitimate needs of law enforcement, or any measures necessary to
determine the scope of the breach and restore the reasonable
integrity of the data system. 
   This bill would  state the intent of the Legislature to
enact legislation to protect the public from data breaches. 
 instead require the disclosure to be made within 30 days,
consistent with the legitimate needs of law enforcement.  
   The bill would authorize the Attorney General to grant a person or
business an additional period of time, not exceeding 30 days, in
which to make the disclosure if the Attorney General determines that
the person or business needs additional time in order to determine
the scope of the security breach, prevent further disclosures,
conduct a risk assessment, restore the integrity of the data system,
or provide notice to an entity designated to receive reports and
information about information security incidents.  
   The bill would also provide that if the data containing personal
information was encrypted, as defined, there would be a presumption
that a breach of the security of the data does not compromise the
security, confidentiality, or integrity of the personal information,
and no disclosure would be required. That presumption would be
rebuttable in a civil action against a person or business for failure
to comply with these provisions by facts demonstrating that in the
present instance, the security technologies or methodologies used to
encrypt the data have been, or are reasonably likely to have been,
compromised. 
   Vote: majority. Appropriation: no. Fiscal committee:  no
  yes  . State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

   SECTION 1.    Section 1798.82 of the   Civil
Code   is amended to read: 
   1798.82.  (a)  (1)    A person or business that
conducts business in California, and that owns or licenses
computerized data that includes personal information, shall disclose
a breach of the security of the system following discovery or
 notification   notification, pursuant to
subdivision (b),  of the breach in the security of the data to a
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,  
within 30 days,  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.   (c). 

   (2) If the data containing personal information was encrypted,
there shall be a presumption that a breach of the data does not
comprise the security, confidentiality, or integrity of the personal
information contained therein, and no disclosure is required. That
presumption shall be rebuttable in a civil action pursuant to
subdivision (b) of Section 1798.84 against a person or business for
failure to make the required disclosure by facts demonstrating that
in the present instance the security technologies or methodologies
used to encrypt the data have been, or are reasonably likely to have
been, compromised and disclosure is required in accordance with
paragraph (1).  
   (3) If a person or business requires additional time to disclose a
breach, it shall provide the Attorney General records or other
evidence demonstrating the need to delay disclosure. If the Attorney
General determines that the person or business needs additional time
in order to determine the scope of a security breach, prevent further
disclosures, conduct a risk assessment, restore the integrity of the
data system, or provide notice to an entity designated to receive
reports and information about information security incidents,
threats, and vulnerabilities, it may grant the person or business an
additional period of time, not exceeding 30 days, in which to make
the disclosure. The Attorney General shall grant additional time to
make the disclosure in writing specifying the amount of additional
time granted. 
   (b) A 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 the
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 promptly after the law enforcement agency determines
that it will not compromise the investigation.
   (d) A person or business that is required to issue a security
breach notification pursuant to this section shall meet all of the
following requirements:
   (1) The security breach notification shall be written in plain
language.
   (2) The security breach notification shall include, at a minimum,
the following information:
   (A) The name and contact information of the reporting person or
business subject to this section.
   (B) A list of the types of personal information that were or are
reasonably believed to have been the subject of a breach.
   (C) If the information is possible to determine at the time the
notice is provided, then any of the following: (i) the date of the
breach, (ii) the estimated date of the breach, or (iii) the date
range within which the breach occurred. The notification shall also
include the date of the notice.
   (D) Whether notification was delayed  pursuant to paragraph
(3) of subdivision (a) or  as a result of a law enforcement
investigation, if that information is possible to determine at the
time the notice is provided.
   (E) A general description of the breach incident, if that
information is possible to determine at the time the notice is
provided.
   (F) The toll-free telephone numbers and addresses of the major
credit reporting agencies if the breach exposed a social security
number or a driver's license or California identification card
number.
   (G) If the person or business providing the notification was the
source of the breach, an offer to provide appropriate identity theft
prevention and mitigation services, if any, shall be provided at no
cost to the affected person for not less than 12 months, along with
all information necessary to take advantage of the offer to any
person whose information was or may have been breached if the breach
exposed or may have exposed personal information defined in
subparagraphs (A) and (B) of paragraph (1) of subdivision (h).
   (3) At the discretion of the person or business, the security
breach notification may also include any of the following:
   (A) Information about what the person or business has done to
protect individuals whose information has been breached.
   (B) Advice on steps that the person whose information has been
breached may take to protect himself or herself.
   (4) In the case of a breach of the security of the system
involving personal information defined in paragraph (2) of
subdivision (h) for an online account, and no other personal
information defined in paragraph (1) of subdivision (h), the person
or business may comply with this section by providing the security
breach notification in electronic or other form that directs the
person whose personal information has been breached promptly to
change his or her password and security question or answer, as
applicable, or to take other steps appropriate to protect the online
account with the person or business and all other online accounts for
which the person whose personal information has been breached uses
the same user name or email address and password or security question
or answer.
   (5) In the case of a breach of the security of the system
involving personal information defined in paragraph (2) of
subdivision (h) for login credentials of an email account furnished
by the person or business, the person or business shall not comply
with this section by providing the security breach notification to
that email address, but may, instead, comply with this section by
providing notice by another method described in subdivision (j) or by
clear and conspicuous notice delivered to the resident online when
the resident is connected to the online account from an Internet
Protocol address or online location from which the person or business
knows the resident customarily accesses the account.
   (e) A covered entity under the federal Health Insurance
Portability and Accountability Act of 1996 (42 U.S.C. Sec. 1320d et
seq.) will be deemed to have complied with the notice requirements in
subdivision (d) if it has complied completely with Section 13402(f)
of the federal Health Information Technology for Economic and
Clinical Health Act (Public Law 111-5). However, nothing in this
subdivision shall be construed to exempt a covered entity from any
other provision of this section.
   (f) A person or business that is required to issue a security
breach notification pursuant to this section to more than 500
California residents as a result of a single breach of the security
system shall electronically submit a single sample copy of that
security breach notification, excluding any personally identifiable
information, to the Attorney General. A single sample copy of a
security breach notification shall not be deemed to be within
subdivision (f) of Section 6254 of the Government Code.
   (g) 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.
   (h) For purposes of this section, "personal information" means
either of the following:
   (1) 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:
   (A) Social security number.
   (B) Driver's license number or California identification card
number.
   (C) 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.
   (D) Medical information.
   (E) Health insurance information.
   (2) A user name or email address, in combination with a password
or security question and answer that would permit access to an online
account.
   (i) (1) 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.
   (2) For purposes of this section, "medical information" means any
information regarding an individual's medical history, mental or
physical condition, or medical treatment or diagnosis by a health
care professional.
   (3) For purposes of this section, "health insurance information"
means an individual's health insurance policy number or subscriber
identification number, any unique identifier used by a health insurer
to identify the individual, or any information in an individual's
application and claims history, including any appeals records. 
   (4) For purposes of this section, "encrypted" means rendered
unusable, unreadable, or indecipherable through a security technology
or methodology generally accepted in the field of information
security.
   (j) 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) Email notice when the person or business has an email address
for the subject persons.
   (B) Conspicuous posting of the notice on the Internet Web site
page of the person or business, if the person or business maintains
one.
   (C) Notification to major statewide media.
   (k) Notwithstanding subdivision (j), 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. 
  SECTION 1.    It is the intent of the Legislature
to enact legislation to protect the public from data breaches.