BILL NUMBER: AB 739 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MARCH 26, 2015
INTRODUCED BY Assembly Member Irwin
FEBRUARY 25, 2015
An act to amend Section 1798.82 of add
Section 43.99.1 to the Civil Code, relating to
privacy. civil law .
LEGISLATIVE COUNSEL'S DIGEST
AB 739, as amended, Irwin. Information privacy.
Civil law: liability: communication of cyber security: threat
information.
Existing law requires a 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. Existing law requires a person or business
conducting business in California that owns or licenses computerized
data that includes personal information, as defined, to disclose, as
specified, a breach of the security of the system or data following
discovery or notification of the security breach to any California
resident whose personal information was, or is reasonably believed to
have been, acquired by an unauthorized person, unless the
information was encrypted. Existing law also requires a person or
business that maintains computerized data that includes personal
information that the person or business does not own to notify the
owner or licensee of the information of any breach of the security of
the data immediately following discovery, as specified.
This bill would make a nonsubstantive change to those
provisions. require the Attorney General to create a
registry of private entities that intend to engage in communication
of cyber security -threat information, as defined. The
bill would also provide that there shall be no
civil or criminal liability for, and no cause of action shall arise
against, a registered entity based upon its communication of cyber
security-threat information to another private entity, or to a state
entity. The immunity from liability would only apply if the
communication is made without the intent to injure, defraud, or to
otherwise endanger any individual or public or private entity and is
made to address a vulnerability in, or to prevent a threat to the
integrity, confidentiality, or availability of, a system, network, or
critical infrastructure component of a public or private entity, to
provide support for cyber security crime investigation, or to protect
individuals or the state from harm, as specified.
Vote: majority. Appropriation: no. Fiscal committee: no
yes . State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 43.99.1 is added to the
Civil Code , to read:
43.99.1. (a) There shall be no civil or criminal liability for,
and no cause of action shall arise against, a private entity that has
registered with the Attorney General pursuant to subdivision (b),
based upon its communication of cyber security-threat information to
another private entity, or to a state entity identified by the
Attorney General. The immunity from liability granted by this section
shall only apply if the communication is made without the intent to
injure, defraud, or to otherwise endanger any individual or public or
private entity and is made for one of the following purposes:
(1) To address a vulnerability of a system, network, or critical
infrastructure component of a public or private entity.
(2) To prevent a threat to the integrity, confidentiality, or
availability of a system, network, or critical infrastructure
component of a public or private entity.
(3) To provide support for cyber security crime investigation.
(4) To protect individuals from personal or economic harm.
(5) To protect the state's economic interests, including, but not
limited to, networks, assets, and personal information.
(b) The Attorney General shall create a registry of private
entities that intend to engage in communication of cyber
security-threat information.
(c) For purposes of this section, "cyber security-threat
information" means information pertaining directly to one of the
following:
(1) A vulnerability of a system, network, or critical
infrastructure component of a public or private entity.
(2) A threat to the integrity, confidentiality, or availability of
a system, network, or critical infrastructure component of a public
or private entity.
(3) Efforts to deny access to, or to cause the degradation,
disruption, or destruction of a system, network, or critical
infrastructure component of a public or private entity.
(4) Efforts to gain unauthorized access to a system, network, or
critical infrastructure component of a public or private entity,
including efforts to gain unauthorized access for the purpose of
exfiltrating information stored on, processed on, or transitioning
through, a system, network, or critical infrastructure component of a
public or private entity.
SECTION 1. Section 1798.82 of the Civil Code is
amended to read:
1798.82. (a) A person or business that conducts business in
California, and that owns or licenses computerized data that includes
personal information, shall disclose a breach of the security of the
system following discovery or notification of the breach in the
security of the data to a resident of California whose unencrypted
personal information was, or is reasonably believed to have been,
acquired by an unauthorized person. The disclosure shall be made as
quickly as possible and without unreasonable delay, consistent with
the legitimate needs of law enforcement, as provided in subdivision
(c), or any measures necessary to determine the scope of the breach
and restore the reasonable integrity of the data system.
(b) A person or business that maintains computerized data that
includes personal information that the person or business does not
own shall notify the owner or licensee of the information of the
breach of the security of the data immediately following discovery,
if the personal information was, or is reasonably believed to have
been, acquired by an unauthorized person.
(c) The notification required by this section may be delayed if a
law enforcement agency determines that the notification will impede a
criminal investigation. The notification required by this section
shall be made promptly after the law enforcement agency determines
that it will not compromise the investigation.
(d) A person or business that is required to issue a security
breach notification pursuant to this section shall meet all of the
following requirements:
(1) The security breach notification shall be written in plain
language.
(2) The security breach notification shall include, at a minimum,
the following information:
(A) The name and contact information of the reporting person or
business subject to this section.
(B) A list of the types of personal information that were or are
reasonably believed to have been the subject of a breach.
(C) If the information is possible to determine at the time the
notice is provided, then any of the following: (i) the date of the
breach, (ii) the estimated date of the breach, or (iii) the date
range within which the breach occurred. The notification shall also
include the date of the notice.
(D) Whether notification was delayed as a result of a law
enforcement investigation, if that information is 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.
(F) The toll-free telephone numbers and addresses of the major
credit reporting agencies if the breach exposed a social security
number or a driver's license or California identification card
number.
(G) If the person or business providing the notification was the
source of the breach, an offer to provide appropriate identity theft
prevention and mitigation services, if any, shall be provided at no
cost to the affected person for not less than 12 months, along with
all information necessary to take advantage of the offer to any
person whose information was or may have been breached if the breach
exposed or may have exposed personal information defined in
subparagraphs (A) and (B) of paragraph (1) of subdivision (h).
(3) At the discretion of the person or business, the security
breach notification may also include any of the following:
(A) Information about what the person or business has done to
protect individuals whose information has been breached.
(B) Advice on steps that the person whose information has been
breached may take to protect himself or herself.
(4) In the case of a breach of the security of the system
involving personal information defined in paragraph (2) of
subdivision (h) for an online account, and no other personal
information defined in paragraph (1) of subdivision (h), the person
or business may comply with this section by providing the security
breach notification in electronic or other form that directs the
person whose personal information has been breached promptly to
change his or her password and security question or answer, as
applicable, or to take other steps appropriate to protect the online
account with the person or business and all other online accounts for
which the person whose personal information has been breached uses
the same user name or email address and password or security question
or answer.
(5) In the case of a breach of the security of the system
involving personal information defined in paragraph (2) of
subdivision (h) for login credentials of an email account furnished
by the person or business, the person or business shall not comply
with this section by providing the security breach notification to
that email address, but may, instead, comply with this section by
providing notice by another method described in subdivision (j) or by
clear and conspicuous notice delivered to the resident online when
the resident is connected to the online account from an Internet
Protocol address or online location from which the person or business
knows the resident customarily accesses the account.
(e) A covered entity under the federal Health Insurance
Portability and Accountability Act of 1996 (42 U.S.C. Sec. 1320d et
seq.) will be deemed to have complied with the notice requirements in
subdivision (d) if it has complied completely with Section 13402(f)
of the federal Health Information Technology for Economic and
Clinical Health Act (Public Law 111-5). However, nothing in this
subdivision shall be construed to exempt a covered entity from any
other provision of this section.
(f) A person or business that is required to issue a security
breach notification pursuant to this section to more than 500
California residents as a result of a single breach of the security
system shall electronically submit a single sample copy of that
security breach notification, excluding any personally identifiable
information, to the Attorney General. A single sample copy of a
security breach notification shall not be deemed to be within
subdivision (f) of Section 6254 of the Government Code.
(g) For purposes of this section, "breach of the security of the
system" means unauthorized acquisition of computerized data that
compromises the security, confidentiality, or integrity of personal
information maintained by the person or business. Good faith
acquisition of personal information by an employee or agent of the
person or business for the purposes of the person or business is not
a breach of the security of the system, provided that the personal
information is not used or subject to further unauthorized
disclosure.
(h) For purposes of this section, "personal information" means
either of the following:
(1) An individual's first name or first initial and 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:
(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.
(E) Health insurance information.
(2) A user name or email address, in combination with a password
or security question and answer that would permit access to an online
account.
(i) (1) For purposes of this section, "personal information" does
not include publicly available information that is lawfully made
available to the general public from federal, state, or local
government records.
(2) For purposes of this section, "medical information" means any
information regarding an individual's medical history, mental or
physical condition, or medical treatment or diagnosis by a health
care professional.
(3) For purposes of this section, "health insurance information"
means an individual's health insurance policy number or subscriber
identification number, any unique identifier used by a health insurer
to identify the individual, or any information in an individual's
application and claims history, including any appeals records.
(j) For purposes of this section, "notice" may be provided by one
of the following methods:
(1) Written notice.
(2) Electronic notice, if the notice provided is consistent with
the provisions regarding electronic records and signatures set forth
in Section 7001 of Title 15 of the United States Code.
(3) Substitute notice, if the person or business demonstrates that
the cost of providing notice would exceed two hundred fifty thousand
dollars ($250,000), or that the affected class of subject persons to
be notified exceeds 500,000, or the person or business does not have
sufficient contact information. Substitute notice shall consist of
all of the following:
(A) Email notice when the person or business has an email address
for the subject persons.
(B) Conspicuous posting of the notice on the Internet Web site
page of the person or business, if the person or business maintains
one.
(C) Notification to major statewide media.
(k) Notwithstanding subdivision (j), a person or business that
maintains its own notification procedures as part of an information
security policy for the treatment of personal information and is
otherwise consistent with the timing requirements of this part, shall
be deemed to be in compliance with the notification requirements of
this section if the person or business notifies subject persons in
accordance with its policies in the event of a breach of security of
the system.