BILL ANALYSIS SB 20 Page 1 SENATE THIRD READING SB 20 (Simitian) As Amended August 25, 2009 Majority vote SENATE VOTE :26-9 JUDICIARY 7-3 APPROPRIATIONS 12-1 ------------------------------------------------------------------ |Ayes:|Feuer, Brownley, Evans, |Ayes:|De Leon, Ammiano, Charles | | |Jones, Krekorian, Lieu, | |Calderon, Coto, Davis, | | |Monning | |Fuentes, Hall, John A. | | | | |Perez, Skinner, Solorio, | | | | |Torlakson, Hill | | | | | | |-----+--------------------------+-----+---------------------------| |Nays:|Tran, Knight, Silva |Nays:|Audra Strickland | | | | | | ------------------------------------------------------------------ SUMMARY : Requires that a notice required under California's data security breach law must contain specified information and a copy of notice must be sent to appropriate state agencies, as specified. Specifically, this bill : 1)Provides that when an agency, person, or business is required to issue a data security breach notification pursuant to existing law, that notification must be written in plain language and shall include at a minimum all of the following information: a) The name and contact information of the reporting agency, person, or business; b) A list of the types of personal information, as defined, that were reasonably believed to have been the subject of the breach; c) The date, estimated date, or date range of when the breach occurred, if that information is possible to determine at the time the notice is provided; d) Whether the notification was delayed as a result of a law enforcement investigation, if that information is SB 20 Page 2 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; and, f) The toll-free telephone numbers and addresses of the major credit reporting agencies if the breach exposed a social security number or driver's license or state identification card number. 1)Provides that, at the discretion of the reporting agency, person, or business, the notification may include other information, including information about what the agency has done to protect the individuals affected by the breach and what steps those individuals may take to protect themselves. 2)Provides that an agency, person, or business that is required to issue a data security breach notification to more than 500 California residents must also submit a notification to the Attorney General. 3)Provides that if substitute notice is used, as permitted by existing law, then the reporting person, business, or agency must also provide notification to the Office of Information Security within the office of the State Chief Information Officer. EXISTING LAW : 1)Requires any state agency that owns or licenses computerized data that includes personal information to disclose any breach 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. Requires any state agency that maintains , but does not own, personal information to notify the owner or licensor of the data of any breach. Provides further that disclosure shall be made in the most expedient time possible and without unreasonable delay. 2)Requires any person or business that conducts business in California, and that owns or licenses computerized data that includes personal information to disclose any breach of the data to any resident of California whose unencrypted personal SB 20 Page 3 information was, or is reasonably believed to have been, acquired by an unauthorized person. Requires any person or business that maintains , but does not own, personal information to notify the owner or licensor of the data of any breach. Provides further that disclosure shall be made in the most expedient time possible and without unreasonable delay. 3)Provides that notice required under the above provisions may be made by written notice or electronic notice, if the latter is consistent with federal electronic signature standards. Provides, however, that substitute notice may be used if the person, business, or agency determines that the cost of providing notice would exceed $250,000 or that the affected class of subject persons exceeds 500,000, or the person, business, or agency does not have sufficient contact information. 4)Provides that substitute notice, when used, shall consist of all of the following: a) E-mail notice when the e-mail address of subject persons is known; b) Conspicuous posting of the notice on the Web site of the person, business, or agency if the person, business, or agency maintains one; and, c) Notification to major statewide media. 5)Notwithstanding the above notice requirements, a person, business, or agency that maintains its own notification procedures as part of an information security policy that is consistent with the requirements of the security breach law, shall be deemed to be in compliance with the notification of state law if the agency, person, or business notifies subject persons in accordance with its own policies. FISCAL EFFECT : According to the Assembly Appropriations analysis, minor absorbable costs for state agencies to comply with the specified notification requirements. COMMENTS : Under existing law, a person, business, or state agency that keeps, maintains, or leases computerized data that contains personal information must provide appropriate notices SB 20 Page 4 if that personal information is compromised as a result of a data breach. The law permits the person, business, or state agency to use "substitute notice" if the number of persons affected would make personal notice prohibitively expensive or impractical, or if the affected person's contact information is not available. However, beyond these provisions, existing law does not create any requirements as to the form and content of the required notices. This bill seeks to correct that deficiency by requiring notices to contain specified information that will be useful to the affected resident and ensure that there is greater uniformity in the content of security breach notices. In addition, this bill would require that notification be sent to the state Attorney General's office for any breaches that affect more than 500 California residents. Finally, this bill would also provide that if "substitute notice" is used, as permitted by existing law, then a copy of the notice should also be sent to the Office of Information Security within the office of the State Chief Information Officer. According to the author, although existing California law requires notices in the event of a data breach, it is more or less silent on the required content of those notices. As a result, the author contends, existing notices often fail to provide the affected individual with critical information about the nature and scope of the breach. According to the author, without such information, the consumer is often uncertain about how to respond to the breach. The author believes that this measure will "make relatively modest but helpful changes" that provide affected individuals with useful knowledge about the security breach. Finally, the author rejects as unfounded the argument made by some opponents that revealing the exact time of the breach and the number of persons affected will somehow provide information that will help the computer hacker. The author responds that "the hacker already knows when they [sic] have been successful. The point here is to provide affected individuals with crucial information." The author points out that the inclusion of the date of the breach - which some opponents strenuously object to - allows the affected consumer to examine their records and determine, with greater precision, if they have been victimized by identity theft. Two recent amendments - one deleting the requirement that the notice include the number of persons affected, and a second clarifying that the notice may include an estimated date or date SB 20 Page 5 range in lieu of a specific date of a breach - have apparently removed all previously registered opposition to the bill. Analysis Prepared by : Thomas Clark / JUD. / (916) 319-2334 FN: 0002366