BILL ANALYSIS Ó AB 83 Page 1 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 AB 83 Page 2 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, AB 83 Page 3 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 AB 83 Page 4 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