BILL ANALYSIS                                                                                                                                                                                                    Ó



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          ASSEMBLY THIRD READING


          AB  
          964 (Chau)


          As Amended  May 28, 2015


          Majority vote


           ----------------------------------------------------------------- 
          |Committee       |Votes |Ayes                |Noes                |
          |                |      |                    |                    |
          |                |      |                    |                    |
          |----------------+------+--------------------+--------------------|
          |Privacy         |7-1   |Gatto, Calderon,    |Wilk                |
          |                |      |Chau, Cooper,       |                    |
          |                |      |Dababneh, Gordon,   |                    |
          |                |      |Low                 |                    |
          |                |      |                    |                    |
          |----------------+------+--------------------+--------------------|
          |Appropriations  |11-4  |Gomez, Bloom,       |Bigelow, Chang,     |
          |                |      |Bonta, Calderon,    |Gallagher, Wagner   |
          |                |      |Eggman, Eduardo     |                    |
          |                |      |Garcia, Holden,     |                    |
          |                |      |Quirk, Rendon,      |                    |
          |                |      |Weber, Wood         |                    |
          |                |      |                    |                    |
          |                |      |                    |                    |
           ----------------------------------------------------------------- 


          SUMMARY:  Defines, for purposes of the existing data breach  
          notification requirements for businesses and public agencies, the  
          term "encrypted" to mean "rendered unusable, unreadable, or  
          indecipherable to an unauthorized person through a security  








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          technology or methodology generally accepted in the field of  
          information security."
          FISCAL EFFECT:  According to the Assembly Appropriations  
          Committee, there is a negligible fiscal impact. 


          COMMENTS:  


          1)Data breaches are a fast-growing threat.  2014 was a  
            record-setting year in terms of the number of security breaches  
            reported.  According to a January 2015 report by the California  
            Attorney General's Office, 187 breaches were reported to the  
            California Department of Justice in 2014, compared to 167 in  
            2013 and 131 in 2012.  
            According to the Identity Theft Resource Center, there were 783  
            data breaches reported nationwide in 2014 - a 27.5% increase  
            over the previous year.  The Privacy Rights Clearinghouse  
            reports that more than 815 million records have been compromised  
            in more than 4,489 publicly acknowledged data breaches since  
            2005.


          2)Related legislation.  AB 83 (Gatto) of the current legislative  
            session requires businesses that own or maintain personal  
            information to secure that data to the extent that any  
            "reasonably prudent business" would provide, and specifies  
            certain requirements and considerations that must be part of any  
            reasonable security procedures and practices.  AB 83 is pending  
            in the Senate Judiciary Committee.  
            AB 259 (Dababneh) of the current legislative session requires a  
            public agency that is the source of a data breach to offer at  
            least 12 months of identity-theft prevention and mitigation  
            services at no cost to affected consumers.  AB 259 is pending on  
            the suspense file in the Assembly Appropriations Committee.


            SB 34 (Hill) of the current legislative session amends the Data  
            Breach Notification Law to add to the definition of "personal  








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            information" any information or data collected through the use  
            or operation of an automated license plate recognition system.   
            SB 34 is pending in the Assembly Transportation Committee.  


            SB 570 (Jackson) of the current legislative session amends the  
            Data Breach Notification Law to revise the language of the  
            breach notification itself to make it clearer and more  
            conspicuous.  SB 570 is pending on the Senate Floor. 


          3)Prior legislation.  AB 1710 (Dickinson), Chapter 855, Statutes  
            of 2014, required, among other things, that businesses that  
            maintain, own or license the personal information of California  
            residents to use reasonable and appropriate security measures to  
            protect the information.   
            AB 1950 (Wiggins), Chapter 877, Statutes of 2004, required a  
            business that owns or licenses personal information about a  
            California resident to implement and maintain reasonable  
            security procedures and practices to protect personal  
            information from unauthorized access, destruction, use,  
            modification, or disclosure.  


            SB 1386 (Peace), Chapter 915, Statutes of 2002, enacted  
            California's Data Breach Notification Law.




          Analysis Prepared by:                                               
                          Hank Dempsey / P. & C.P. / (916) 319-2200  FN:  
          0000549














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