Amended in Assembly May 28, 2015

Amended in Assembly May 13, 2015

Amended in Assembly May 5, 2015

Amended in Assembly April 23, 2015

Amended in Assembly March 26, 2015

California Legislature—2015–16 Regular Session

Assembly Bill No. 964

Introduced by Assembly Member Chau

February 26, 2015

An act to amend Sections 1798.29 and 1798.82 of the Civil Code, relating to civil law.

LEGISLATIVE COUNSEL’S DIGEST

AB 964, as amended, Chau. Civil law: privacy.

Existing law requires a person or business conducting business in California, or any state or local agency, that owns or licenses computerized data that includes personal information, as defined, to disclose in specified ways, a breach of the security of the system or data, as defined, following discovery or notification of the security breach, to any California resident whose unencrypted personal information was, or is reasonably believed to have been, acquired by an unauthorized person. Existing law requires the disclosure to be made in the most expedient time possible and without unreasonable delay, consistent with the legitimate needs of law enforcement, or any measures necessary to determine the scope of the breach and restore the reasonable integrity of the data system.

This bill would define “encrypted” for purpose of these provisions to mean rendered unusable, unreadable, or indecipherable to an unauthorized person through a security technology or methodology generally accepted in the field of information technology.

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Existing law requires a person, business, or a state or local agency, that is required to issue a security breach notification to more than 500 California residents as a result of a single breach of the security system to electronically submit a single sample copy of that security breach notification to the Attorney General.

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This bill would also require a person or business, or state or local agency that is required to issue a security breach notification under these circumstances to inform the Attorney General of the date of the discovery of the breach.

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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 1798.29 of the Civil Code is amended
to read:

1798.29.  

(a) Any agency that owns or licenses computerized
data that includes personal information shall disclose any breach
of the security of the system following discovery or notification
of the breach in the security 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. The
disclosure shall be made in the most expedient time 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) Any agency that maintains computerized data that includes
personal information that the agency does not own shall notify the
owner or licensee of the information of any 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 after the law enforcement agency determines
that it will not compromise the investigation.

(d) Any agency 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 agency
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 the 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.

(3) At the discretion of the agency, the security breach
notification may also include any of the following:

(A) Information about what the agency 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 (g)
for an online account, and no other personal information defined
in paragraph (1) of subdivision (g), the agency 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 to promptly 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
agency and all other online accounts for which the person 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 (g)
for login credentials of an email account furnished by the agency,
the agency 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 (i) 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 agency knows the resident customarily
accesses the account.

(e) Any agency 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
begin delete inform the Attorney General of the date of the discovery of the
breach, and end delete 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.

(f) 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 agency. Good faith acquisition of
personal information by an employee or agent of the agency for
the purposes of the agency is not a breach of the security of the
system, provided that the personal information is not used or
subject to further unauthorized disclosure.

(g) 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.

(h) (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.

(4) For purposes of this section, “encrypted” means rendered
unusable, unreadable, or indecipherable to an unauthorized person
through a security technology or methodology generally accepted
in the field of information security.

(i) 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 agency 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 agency does not have sufficient
contact information. Substitute notice shall consist of all of the
following:

(A) Email notice when the agency has an email address for the
subject persons.

(B) Conspicuous posting of the notice on the agency’s Internet
Web site page, if the agency maintains one.

(C) Notification to major statewide media and the Office of
Information Security within the Department of Technology.

(j) Notwithstanding subdivision (i), an agency 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 it notifies subject persons in accordance with its policies
in the event of a breach of security of the system.

(k) Notwithstanding the exception specified in paragraph (4) of
subdivision (b) of Section 1798.3, for purposes of this section,
“agency” includes a local agency, as defined in subdivision (a) of
Section 6252 of the Government Code.

SEC. 2.  

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 begin delete notification, pursuant
to subdivision (b), end delete begin insert notification end insert 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 in the
most expedient time 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
begin delete inform the Attorney General of the date of the discovery of the
breach, and end delete 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.

(4) For purposes of this section, “encrypted” means rendered
unusable, unreadable, or indecipherable to an unauthorized person
through a security technology or methodology generally accepted
in the field of information security.

(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.