BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                        AB 83


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          ASSEMBLY THIRD READING


          AB  
          83 (Gatto)


          As Amended  April 27, 2015


          Majority vote


           ------------------------------------------------------------------- 
          |Committee       |Votes |Ayes                 |Noes                 |
          |----------------+------+---------------------+---------------------|
          |Privacy         |9-1   |Gatto, Baker,        |Wilk                 |
          |                |      |Calderon, Chang,     |                     |
          |                |      |Chau, Cooper,        |                     |
          |                |      |Dababneh, Gordon,    |                     |
          |                |      |Low                  |                     |
           ------------------------------------------------------------------- 


          SUMMARY:  Requires businesses that own or maintain personal  
          information to secure that data to the extent that any "reasonably  
          prudent business" would provide, adds "geophysical location  
          information" to the definition of personal information, and  
          specifies certain requirements and considerations that must be  
          part of any set of reasonable security procedures and practices.   
          Specifically, this bill:  


          1)Defines, for purposes of the existing requirement that  
            businesses implement and maintain reasonable security procedures  
            and practices to protect personal information, "reasonable  
            security procedures and practices" as they pertain to the  
            storage and transmission of personal information to require, at  
            a minimum, the security of that information to the degree that  








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            any reasonably prudent business would provide.
          2)Requires, as part of "reasonable security procedures and  
            practices", a business to do, at a minimum, the following: 


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


             c)   Regularly assess the sufficiency of any safeguards in  
               place to control reasonably foreseeable internal and external  
               risks; and,


             d)   Evaluate and adjust such safeguards in response to regular  
               sufficiency assessments, 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.


          3)Provides that the reasonableness of the security procedures and  
            practices shall be determined in light of:
             a)   The degree of the privacy risk associated with the  
               personal information under the business's control;
             b)   The foreseeability of threats to the security of such  
               information;


             c)   Widely accepted practices in administrative, technical,  








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               and physical safeguards for protecting personal information;  
               and,


             d)   The cost of implementing and regularly reviewing such  
               safeguards.


          4)Adds "geophysical location information" to the definition of  
            "personal information" for purposes of existing data security  
            requirements for businesses that own, license or maintain such  
            personal information.  
          5)Defines "geophysical location information" to mean "any  
            personally identifiable information describing or concerning the  
            duration of the 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."


          FISCAL EFFECT:  None.  This bill is keyed non-fiscal by the  
          Legislative Counsel.


          COMMENTS:  


          1)Purpose of this bill.  This bill is intended to clarify the  
            existing standard for the security of personal information held  
            by businesses by explicitly imposing a "reasonably prudent  
            business" standard, and specifying certain practices and  
            procedures that are inherently reasonable.  This bill also adds  
            geophysical location information to the definition of personal  
            information as it applies to existing data security requirements  
            for businesses.  This bill is author-sponsored. 


          2)The "reasonably prudent business" standard.  The core concept of  








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            this bill is that "reasonable security procedures and practices"  
            for the maintenance and transmission of personal information are  
            those that a "reasonably prudent business" would apply.  This  
            bill would import this standard and all relevant case law to  
            apply to the data protection efforts of businesses holding the  
            personal information of Californians, as well as specify certain  
            practices and considerations that must be part of any set of  
            "reasonable security practices and procedures."  


          3)Related legislation  .   AB 964 (Chau), of the current legislative  
            session, would require data breach notifications made by  
            businesses and public agencies to include the date of discovery  
            of the breach in their notice to the Attorney General.  AB 964  
            is currently pending in the Assembly Appropriations Committee. 




          Analysis Prepared by:                                               
                          Hank Dempsey / P. & C.P. / (916) 319-2200  FN:  
          0000266