BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 1971
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          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  








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          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  








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               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.)









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          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  








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          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.   








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          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