BILL ANALYSIS AB 1971 Page 1 Date of Hearing: April 13, 2010 ASSEMBLY COMMITTEE ON JUDICIARY Mike Feuer, Chair AB 1971 (Lowenthal) - As Introduced: February 17, 2010 PROPOSED CONSENT SUBJECT : CSU AND UC: ALUMNI DISCLOSURES KEY ISSUE : SHOULD the sunset on the law that permits our state universities TO DISCLOSE NAMES AND ADDRESSES OF ALUMNI to certain business partners, UNDER LIMITED CIRCUMSTANCES, BE EXTENDED? FISCAL EFFECT : As currently in print this bill is keyed fiscal. SYNOPSIS Current law permits California State University, University of California, and Hasting College of Law to release the names and addresses of alumni to businesses with whom the universities have an "affinity partnership" agreement. These "affinity partners" are generally businesses that have signed an agreement with the universities to offer alumni certain goods or services at discounted rates. The affinity partners pay a fee to the university or alumni foundation to obtain the names and addresses of the alumni. The partners must also agree not to share the information or to use it for any purpose other than offering the service. The universities are only allowed to release such information if the alumni are given multiple opportunities to opt out of having their information released. The current provisions will sunset on January 1, 2011. This non-controversial bill seeks to extend the sunset date to January 1, 2016. In addition, this bill would require that the required opt-out form be available through an electronic link on the homepage of the alumni association's Internet Web site or in the site's privacy policy. Last year's AB 1222, by the same author, was identical to this measure. That bill passed out of this Committee on consent and did not receive a single "No" vote in any subsequent committee or floor vote. However, the Governor vetoed the bill because the existing law was not due to expire until January of 2011 and the bill was therefore premature. Obviously that argument is no longer germane. This bill passed out of the Assembly Higher Education Committee last AB 1971 Page 2 week on 9-0 vote. There is no known opposition to the bill. SUMMARY : Extends until January 1, 2016, the sunset on an existing law that permits California State University (CSU), the University of California (UC), and the Hastings College of Law (HCL) to release the names and addresses of alumni to certain business partners and requires that an electronic link to a required opt-out form be located on either the homepage of the alumni association's Internet Web site or in the association's privacy policy. EXISTING LAW : 1)Prohibits any state officer or state agency from disclosing an individual's name and address for commercial purposes, unless such action is specifically authorized by law. (Civil Code section 1798.60.) 2)Requires that a financial institution, when it has an agreement to release customer information to an "affinity partner," as defined, provide its customers with an annual written opportunity to opt out of the disclosure of the customer's nonpublic personal information. (Financial Code sections 4053(b), 4053(d), 4054.6.) 3)Requires the State Bar to give its members, in the annual dues statement, an opportunity to opt out of the sale or disclosure of member information not reasonably related to regulatory purposes. (Business and Professions Code section 6001.) 4)Permits the trustees, regents, directors, and alumni association of CSU and UC to distribute the names, addresses, and email addresses of alumni for the following purposes: a) To provide informational materials relating to the university; b) To provide commercial opportunities; or c) To promote and support the educational mission of the university. (Education Code sections 89090(a), 92630(a).) 5)Permits the names, addresses, and email addresses of CSU and UC alumni to be distributed to a business with whom the universities have a contractual agreement as long as: a) The business must maintain the confidentiality of alumni AB 1971 Page 3 names and addresses; b) CSU and UC must retain the right to approve or reject any purpose for which the information is to be used; c) CSU and UC must retain the right to review and approve the text of mailings; and d) The agreement must prohibit the business from using the information for any purposes other than those specifically allowed. (Education Code sections 89090(b)(1)(A), 92630(b)(1)(A).) 6)Prohibits the disclosure of the following: a) Names, addresses, and email addresses of alumni who have directed the trustee or an alumni association not to disclose their names or addresses; b) Any information regarding current students of CSU or UC; and c) Any information regarding alumni who as students indicated they did not want their information disclosed. (Education Code sections 89090(b)(3)-(4), 92630(b)(3)-(4).) 7)Requires CSU and UC to provide alumni with multiple opportunities to opt out of having their information shared with affinity partners, including: a) Upon graduation; b) In the alumni association magazine or newsletter on an annual basis; c) A one-time mailing to all alumni on the university mailing list as of January 1, 2006; d) A website link; and e) An annual electronic email notice to alumni whose email addresses are available. (Education Code sections 89090(c)(3)(B), 92630(c)(3).) 8)Requires CSU to provide at least two cost-free means for alumni to communicate their privacy choice. (Education Code sections 89090(c)(4), 92630(c)(4).) 9)Provides that the provisions relating to UC (which include UC Hastings College of Law as well as other UC campuses) apply only to the extent that the UC Regents or UC Hastings Board of Directors act by resolution to make them applicable. (Education Code section 92630.5.) AB 1971 Page 4 10)Provides that the information-sharing provisions shall remain in effect until January 1, 2011, and as of that date is repealed, unless a later enacted statute deletes or extends that date. (Education Code sections 89090.5, 92630.9.) COMMENTS : SB 569 (Chapter, Stats. of 2005) enacted the existing provisions giving authority to CSU, UC, and HCL to disclose the names and addresses of alumni to so-called "affinity partners." Under these affinity partnerships, a business obtains the names and addresses of alumni for a fee and, in return, offers specified goods and services to alumni, typically at discounted rates or on favorable terms. As part of the affinity agreement, the business must agree to keep the names and addresses of alumni confidential and to only use those names for the purpose of offering its commercial goods or services. In addition, existing law requires universities or alumni associations to provide alumni with an "opt-out" form that allows them to prohibit the disclosure of their names and addresses to affinity partners. The opt-out form must be communicated to the alumni on an annual basis and in a variety of forms. Alumni must have at least two cost-free means for communicating their privacy wishes (e.g. a toll-free number or electronic communication.) These arrangements help universities and alumni associations raise money, give affinity partners access to a list of potential consumers, and give interested alumni access to discounted goods and services. The provisions of the existing law are scheduled to sunset on January 1, 2011. This bill would extend the sunset on existing law until January 1, 2016. In addition, this bill would require that the "opt-out" form that permits alumni to prevent the disclosure of their information be accessible on the homepage of the alumni association's Internet Web site or in the site's privacy policy. Existing law already requires that this form be made available in various ways, including through a link on the alumni associations Internet Web site. This bill would simply specify that the link must be either on the alumni association's home page or in the privacy policy posted on the association's Web site. Privacy concerns were addressed in prior legislation . Opponents of the original legislation - mainly privacy rights groups - voiced concerns about possible identity theft and argued that personal information should only be disclosed on an opt-in (rather than opt-out) basis. However, the existing legislation AB 1971 Page 5 limits the conditions under which information may be issued and agreements must require the affinity partner to keep the names and addresses confidential and to only use information for the agreed upon purpose. As to the "opt in" versus "opt out" issue, the sponsors countered that an opt-in provision would be too expensive and, as a practical matter, would exclude many alumni who might not necessarily object to this use of their information but who never take the time to opt in. As a compromise on this later point, the original legislation was amended to require CSU, UC, and HCL to annually provide alumni with the opportunity to opt out and to communicate this option to alumni in a variety of ways. This year's measure, in addition to extending the sunset date, will presumably make it somewhat easier for alumni to opt-out by requiring that a link to the opt-out form be available in an accessible and logical place on the alumni association's Internet Web site. ARGUMENTS IN SUPPORT : The author states that it is common practice for public universities nationwide, as well as private institutions in California, to offer benefits and services to alumni through affinity partnerships with commercial vendors as a way to stay connected with alumni. Affinity partnerships include group rates and discounts for home and auto insurance, mortgage programs, and travel programs. The ultimate goal of these programs is to support the university in the form of donations, scholarships, and involvement. The author states that in light of recent revenue problems in California, the need for private funding through programs such as these is more critical than ever. The author states that the campuses that have these programs use the funding to further their programming and outreach to alumni, as well as to provide scholarships to students. The author states that for the three years the statute has been in place, the universities "have held the privacy of their alumni in the highest regard, keeping meticulous record of all opt-out information obtained from alumni as well as continually following the letter of the law by ensuring ample opportunities for alumni to have their information removed from records." Prior Related Legislation . SB 1 (Speier), Chapter 241, 2003: Established the California Financial Information Privacy Act (IPA), which focused on privacy and broader consumer protections and inadvertently impacted the ability of public university alumni associations to develop these affinity programs. AB 1971 Page 6 Specifically, the IPA prohibited public institutions (including CSU) from distributing the names or contact information for any individuals, including their alumni. SB 569 (Torlakson), Chapter 498, 2005: Until January 1, 2011, permits the California State University (CSU), the University of California (UC), and Hastings College of the Law (HCL) to release the names and addresses of their alumni to businesses with whom they have affinity-partner agreements (i.e. commercial vendors that have contracts with the institutions to offer alumni commercial products and services, often at discounted rates). The bill requires certain privacy requirements to be met, including requiring the businesses to maintain the confidentiality of the names and addresses of the alumni. The institutions must provide their alumni with the opportunity to opt-out of having their information shared. AB 1222 (Lowenthal), 2009: Identical to this bill. As noted above, this measure was vetoed by the Governor on the grounds that, at that time, it was premature to extend the sunset on a bill that was not set to expire until January 1, 2011. REGISTERED SUPPORT / OPPOSITION : Support California Postsecondary Education Committee California State University University of California Opposition None on file Analysis Prepared by : Thomas Clark / JUD. / (916) 319-2334