Amended in Assembly April 27, 2015

Amended in Assembly March 26, 2015

California Legislature—2015–16 Regular Session

Assembly Bill No. 83

Introduced by Assembly Member Gatto

January 6, 2015

An act to amend Section 1798.81.5 of the Civil Code, relating to personal data.

LEGISLATIVE COUNSEL’S DIGEST

AB 83, as amended, Gatto. Information Practices Act of 1977.

Existing law requires a person or business that owns, licenses, or maintains personal information about a California resident to implement and maintain reasonable security procedures and practices appropriate to the nature of the information, to protect the personal information from unauthorized access, destruction, use, modification, or disclosure.

This bill would define “reasonable security procedures and practices” for purposes of these provisions as requiring, at a minimum, begin delete the encryption of private data to the degree that any reasonably prudent business would provide, end delete begin insert security of personal information, including geophysical location information, to the degree that any reasonably prudent business would provide, end insert as specified. begin delete The bill would define “private data” to include specified types personally identifying medical, financial, and geophysical information. The bill would also authorize the Department of Justice to specify security procedures, practices, and technical standards that it deems to be presumptively reasonable within a particular industry. end delete

Vote: majority. Appropriation: no. Fiscal committee:  begin delete yes end delete begin insert no end insert . State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 1798.81.5 of the Civil Code is amended
to read:

1798.81.5.  

(a) (1) It is the intent of the Legislature to ensure
that personal information about California residents is protected.
To that end, the purpose of this section is to encourage businesses
that own, license, or maintain personal information about
Californians to provide reasonable security for that information.

(2) For the purpose of this section, the terms “own” and
“license” include personal information that a business retains as
part of the business’ internal customer account or for the purpose
of using that information in transactions with the person to whom
the information relates. The term “maintain” includes personal
information that a business maintains but does not own or license.

(b) A business that owns, licenses, or maintains personal
information about a California resident shall implement and
maintain reasonable security procedures and practices appropriate
to the nature of the information, to protect the personal information
from unauthorized access, destruction, use, modification, or
disclosure.

(c) A business that discloses personal information about a
California resident pursuant to a contract with a nonaffiliated third
party that is not subject to subdivision (b) shall require by contract
that the third party implement and maintain reasonable security
procedures and practices appropriate to the nature of the
information, to protect the personal information from unauthorized
access, destruction, use, modification, or disclosure.

(d) For purposes of this section, the following terms have the
following meanings:

(1) “Personal information” means an individual’s first name or
first initial and his or her 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 or redacted:

(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.

begin insert

(E) Geophysical location information.

end insert begin insert

(2) “Geophysical location information” means any personally
identifiable information describing or concerning the duration of
a transportation service provided to an individual, the location
and route of a transportation service provided to an individual,
or, if applicable, the monetary exchange associated with a
transportation service provided to an individual.

end insert begin delete

(2)

end delete

begin insert (3) end insert  “Medical information” means any individually identifiable
information, in electronic or physical form, regarding the
individual’s medical history or medical treatment or diagnosis by
a health care professional.

begin delete

(3)

end delete

begin insert (4) end insert  “Personal information” does not include publicly available
information that is lawfully made available to the general public
from federal, state, or local government records.

begin delete

(4) “Private data” means any of the following information:

(A) Medical information.

(B) Personally identifiable financial information, as that term
is defined in subdivision (b) of Section 4052 of the Financial Code.

(C) Geophysical location information.

(D) The combination of an individual’s first name or first initial
and his or her last name, with any of the following:

(i) Mother’s maiden name.

(ii) Social Security Number.

(iii) Date of birth.

end delete

(e) The provisions of this section do not apply to any of the
following:

(1) A provider of health care, health care service plan, or
contractor regulated by the Confidentiality of Medical Information
Act (Part 2.6 (commencing with Section 56) of Division 1).

(2) A financial institution as defined in Section 4052 of the
Financial Code and subject to the California Financial Information
Privacy Act (Division 1.2 (commencing with Section 4050) of the
Financial Code).

(3) A covered entity governed by the medical privacy and
security rules issued by the federal Department of Health and
Human Services, Parts 160 and 164 of Title 45 of the Code of
Federal Regulations, established pursuant to the Health Insurance
Portability and Availability Act of 1996 (HIPAA).

(4) An entity that obtains information under an agreement
pursuant to Article 3 (commencing with Section 1800) of Chapter
1 of Division 2 of the Vehicle Code and is subject to the
confidentiality requirements of the Vehicle Code.

(5) A business that is regulated by state or federal law providing
greater protection to personal information than that provided by
this section in regard to the subjects addressed by this section.
Compliance with that state or federal law shall be deemed
compliance with this section with regard to those subjects. This
paragraph does not relieve a business from a duty to comply with
any other requirements of other state and federal law regarding
the protection and privacy of personal information.

(f) For purposes of this section, “reasonable security procedures
and practices” as they pertain to the storage and transmission of
begin delete private data end delete begin insert personal information end insert shall require, at a minimum, the
begin delete encryption end delete begin insert security end insert of that information to the degree that any
reasonably prudent business would begin delete provide, taking into account
factors, including, but not limited to, the business’ size, available
technology, publically available threat information, generally
accepted standards, and the customs and practices of the specific
industry within which the business operates, to the extent
commercially reasonable. end delete begin insert provide. All of the following shall also
apply: end insert

begin insert

(1) At a minimum, the business shall:

end insert begin insert

(A) Identify reasonably foreseeable internal and external risks
to the privacy and security of personal information that could
result in the unauthorized disclosure, misuse, alteration,
destruction, or other compromise of the information.

end insert begin insert

(B) Establish, implement, and maintain safeguards reasonably
designed to ensure the security of the personal information,
including, but not limited to, protecting against unauthorized loss,
misuse, alteration, destruction, access to, or use of the information.

end insert begin insert

(C) Regularly assess the sufficiency of any safeguards in place
to control reasonably foreseeable internal and external risks, and
evaluate and adjust those safeguards in light of the assessment.

end insert begin insert

(D) Evaluate and adjust any material changes in the operations
or business arrangements of the business, or any other
circumstances, that create a material impact on the privacy or
security of personal information under control of the business.

end insert begin insert

(2) The reasonableness of the security procedures and practices
shall be determined in light of all of the following:

end insert begin insert

(A) The degree of the privacy risk associated with the personal
information under the business’s control.

end insert begin insert

(B) The foreseeability of threats to the security of the
information.

end insert begin insert

(C) The existence of widely accepted practices in administrative,
technical, and physical safeguards for protecting personal
information.

end insert begin insert

(D) The cost of implementing and regularly reviewing the
safeguards.

end insert begin delete

(g) The Department of Justice may, at its discretion, specify
security procedures and practices, including related technical
standards, that it deems to be presumptively reasonable within a
particular industry.

end delete