BILL ANALYSIS
AB 1222
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Date of Hearing: April 27, 2009
ASSEMBLY COMMITTEE ON JUDICIARY
Mike Feuer, Chair
AB 1222 (Lowenthal) - As Amended: April 13, 2009
PROPOSED CONSENT (As Proposed to be Amended)
SUBJECT : CALIFORNIA STATE UNIVERSITY AND UNIVERSITY OF
CALIFORNIA ALUMNI: DISCLOSURE
KEY ISSUE : SHOULD CURRENT LAWS, WHICH ALLOW CALIFORNIA STATE
UNIVERSITY (CSU) AND THE UNIVERSITY OF CALIFORNIA (UC) TO
DISCLOSE NAMES AND ADDRESSES OF ALUMNI UNDER LIMITED
CIRCUMSTANCES, BE EXTENDED AN ADDITIONAL FIVE YEARS FROM THE
DATE THEY ARE CURRENTLY SCHEDULED TO EXPIRE?
FISCAL EFFECT : As currently in print this bill is keyed fiscal.
SYNOPSIS
Current law permits California State University and the
University of California to release the names and addresses of
their alumni to businesses with whom the universities have an
affinity partner agreement. However, the universities are only
allowed to release such information if certain privacy
requirements are met, and if alumni are given multiple cost-free
opportunities to opt out and not have their information
released. The current provisions will sunset on January 1,
2011. This non-controversial bill seeks to extend an additional
five years the current sunset date.
SUMMARY : Extends for an additional five years from the date
they are currently scheduled to expire laws that permit
California State University (CSU) and the University of
California (UC) to release the names and addresses of their
alumni to businesses with whom the universities have an affinity
partner agreement, providing certain privacy requirements are
met. Specifically, this bill :
1)Extends by five years the repeal dates for the current
statutes that allow CSU and UC to release the names and
addresses of their alumni to businesses with whom the
universities have an affinity partner agreement.
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2)Continues to provide that, in order to release alumni
information to their affinity business partners, the
universities must meet certain privacy requirements and offer
alumni multiple opportunities to opt out of having their
information shared.
EXISTING LAW :
1)Contains a body of statutes, known as the California
Information Practices Act of 1977, which prohibits an
individual's name and address from being distributed for
commercial purposes, or being sold or rented by a state
office, officer, department, division, bureau, board,
commission, or other state agency, unless such action is
specifically authorized by law. (Civil Code section 1798.60.)
2)Requires that a financial institution, when it has an
agreement with an affinity partner to issue a credit card or
financial product or service, to provide its customers with an
annual written opportunity to opt out of the disclosure of the
customer's nonpublic personal information. (Financial Code
sections 4053(b), 4053(d), 4054.6.)
3)Requires the State Bar to give its members, in the annual dues
statement, an opportunity to opt out of the sale or disclosure
of member information not reasonably related to regulatory
purposes. (Business and Professions Code section 6001.)
4)Permits the trustees, regents, directors, and alumni
association of CSU and UC to distribute the names, addresses,
and email addresses of alumni for the following purposes:
a) To provide informational materials relating to the
university;
b) To provide commercial opportunities; or
c) To promote and support the educational mission of the
university. (Education Code sections 89090(a), 92630(a).)
5)Permits the names, addresses, and email addresses of CSU and
UC alumni to be distributed to a business with whom the
universities have a contractual agreement as long as:
a) The business must maintain the confidentiality of alumni
names and addresses;
b) CSU and UC must retain the right to approve or reject
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any purpose for which the information is to be used;
c) CSU and UC must retain the right to review and approve
the text of mailings; and
d) The agreement must prohibit the business from using the
information for any purposes other than those specifically
allowed in the bill. (Education Code sections
89090(b)(1)(A), 92630(b)(1)(A).)
6)Prohibits the disclosure of the following:
a) Names, addresses, and email addresses of alumni who have
directed the trustee or an alumni association not to
disclose their names or addresses;
b) Any information regarding current students of CSU or UC;
and
c) Any information regarding alumni who as students
indicated they did not want their information disclosed.
(Education Code sections 89090(b)(3)-(4), 92630(b)(3)-(4).)
7)Requires CSU and UC to provide notice to the alumni (which can
be satisfied using a form in the statute). (Education Code
sections 89090(c)(2), 92630(c)(2).)
8)Requires CSU and UC to provide alumni with multiple
opportunities to opt out of having their information shared
with affinity partners, including:
a) Upon graduation;
b) In the alumni association magazine or newsletter on an
annual basis;
c) A one-time mailing to all alumni on the university
mailing list as of January 1, 2006;
d) A website link; and
e) An annual electronic email notice to alumni whose email
addresses are available. (Education Code sections
89090(c)(3)(B), 92630(c)(3).)
9)Requires CSU to provide at least two cost-free means for
alumni to communicate their privacy choice. (Education Code
sections 89090(c)(4), 92630(c)(4).)
10)Provides that the provisions relating to UC (which include UC
Hastings College of Law as well as other UC campuses) apply
only to the extent that the UC Regents or UC Hastings Board of
Directors act by resolution to make them applicable.
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(Education Code section 92630.5.)
11)Provides that the information-sharing provisions shall remain
in effect until January 1, 2011, and as of that date is
repealed, unless a later enacted statute deletes or extends
that date. (Education Code sections 89090.5, 92630.9.)
COMMENTS : The previous bill, SB 569 (Torlakson) 2005, provided
authority to CSU and UC to allow the controlled disclosure of
alumni names and addresses to businesses that are "affinity
partners" of those universities. In support of that bill, CSU
states that use of affinity programs help generate much needed
funds for the university.
What are affinity programs ? An affinity program provides a
means whereby a tax-exempt organization may generate funds by
allowing the use of its name and/or logo to endorse products or
services. In the case of UC and CSU, through partnerships with
commercial entities, affinity programs allow alumni
organizations to offer a variety of financial products to
graduates and alumni members, such as group rates and discounts
for home and auto insurance, mortgage programs, credit cards,
and other credit lines. In return for allowing access to alumni
association mailing lists, the affinity partner pays a fee to
the campus association.
In support of the previous bill, SB 569, CSU stated that funds
were needed because of serious cuts to their programs, and that
affinity program funds could help provide scholarships,
mentoring, career advising and placement, public service, and
recognition of outstanding teaching and research, all vital
programs. The other sponsor of that bill, UC, stated that its
alumni associations received about $5 million annually from
affinity programs and that UC used the funds to support
operations and a number of programs and services. Opponents
argued that personal information should only be provided on an
opt-in (rather than opt-out) basis, and that consumers object to
having their information shared without consent. Other
opponents voiced concern over the potential of identity theft.
Sponsors argued that an opt-in provision would be too expensive.
Amendments were made to address the strong privacy concerns,
including requirements that CSU and UC annually provide alumni
with the opportunity to opt out.
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The provisions allowing UC and CSU to share alumni information
with their affinity partners and requiring numerous privacy
protections will sunset as of January 1, 2011. This bill seeks
to eliminate those sunset dates, thus extending the provisions
indefinitely.
Privacy Concerns Appear to Have Been Met by Opt-Out
Requirements . The opt-out requirements in the current law have
been carefully followed by CSU and UC during the years the
information-sharing provisions have been in place. The author
provided documentation from both CSU and UC that demonstrates
that they are taking the opt-out requirements very seriously and
are mindful of the need to adhere closely to the statutory
privacy and opt-out requirements. Supporters of this bill, CSU,
state that they required all campuses to use a uniform opt-out
letter to alumni that was approved by their general counsel, to
ensure that the correct information was given and that alumni
were provided sufficient opportunities to opt out. CSU states
that it also encouraged campuses to provide as many options as
possible beyond the minimum requirement of two opt-out
opportunities. CSU states that although no specific period of
time was statutorily required to receive the opt-out notices
back, they advised all campuses to give 30-45 days at a minimum
for alumni to return their opt-out forms. They also required
campuses to immediately remove alumni who had opted out from
lists within the 45 days as required by the statutes.
In addition, CSU states that is has required campuses to report
(and continues to require annual reporting) on affinity
contracts already in place, as well as potential future
contracts. They required all current contracts to be modified
as required by the statute to ensure alumni information would
only be used for permissible purposes. CSU General Counsel must
approve all new contracts. Campuses also keep track of all of
their opt-out numbers and responses to notifications.
The Affinity Program Reportedly Provides Necessary Funds to the
Universities . Sponsors CSU and UC state that the program has
provided important funding for their programs and that without
the affinity programs they would face serious problems in
supporting their activities, sustaining and attracting
membership, and facilitating future donations worth millions of
dollars.
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Funding Generated by the Current Provisions . CSU states that it
does not yet have a complete breakdown of funding data. The
system currently allows each campus flexibility in how it spends
the affinity funds. However, CSU states that the Chico campus
has about $45,000 in annual affinity revenue and uses 2/3 of
this for alumni outreach and the remaining is used to pay for
alumni outreach staff salaries. Fresno State receives about
$105,000 in revenue and about $15,000 of this went out as
scholarships, whereas the rest went to alumni outreach including
the magazine, online social networking, and alumni programming.
CSU states in support of this bill that any dollars collected
from affinity programs is a dollar saved for the campus,
suggesting that it may not be crucial to track where all of the
revenue is going.
CSU states there have thus far been no security breaches and no
complaints. CSU states that none of their 23 campuses have
reported any security breach and there have been no complaints
from alumni who asked for their information to be removed or who
did not receive an opt-out form. Campuses send out annual
opt-out notifications through email, alumni magazines, and
mailings. The number of opt-outs have declined from 4-10% (in
the initial opt-out period) to under 5% (in the annual
opt-outs).
ARGUMENTS IN SUPPORT : The author states that it is common
practice for public universities nationwide, as well as private
institutions in California, to offer benefits and services to
alumni through affinity partnerships with commercial vendors, as
a way to stay connected with alumni. Affinity partnerships
include group rates and discounts for home and auto insurance,
mortgage programs, and travel programs. The ultimate goal of
these programs is to support the university in the form of
donations, scholarships, and involvement. The author states
that in light of recent revenue problems in California, the need
for private funding through programs such as these is more
critical than ever so that universities can maintain the quality
of their programs. The author states that the campuses that
have these programs use the funding to further their programming
and outreach to alumni, as well as to provide both general and
athletic scholarships to students.
The author states that for the three years the statute has been
in place, CSU and UC "have held the privacy of their alumni in
the highest regard, keeping meticulous record of all opt-out
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information obtained from alumni as well as continually
following the letter of the law by ensuring ample opportunities
for alumni to have their information removed from records."
Consumer Groups : Privacy Rights Clearinghouse state that
although they don't oppose the bill they wish to have the 5 year
sunset to ensure there is sufficient information available to
make sure CSU and UC comply with the current law's provisions
and protect alumni's personal information and privacy.
Prior Related Legislation . SB 1 (Speier), Chapter 241, 2003:
Established the California Financial Information Privacy Act
(IPA), which focused on privacy and broader consumer protections
and inadvertently impacted the ability of public university
alumni associations to develop these affinity programs.
Specifically, the IPA prohibited public institutions (including
CSU) from distributing the names or contact information for any
individuals, including their alumni.
SB 569 (Torlakson), Chapter 498, 2005: Until January 1, 2011,
permits the California State University (CSU), the University of
California (UC), and Hastings College of the Law (HCL) to
release the names and addresses of their alumni to businesses
with whom they have affinity-partner agreements (i.e. commercial
vendors that have contracts with the institutions to offer
alumni commercial products and services, often at discounted
rates). The bill requires certain privacy requirements to be
met, including requiring the businesses to maintain the
confidentiality of the names and addresses of the alumni. The
institutions must provide their alumni with the opportunity to
opt-out of having their information shared.
REGISTERED SUPPORT / OPPOSITION :
Support
University of California
California State University
Opposition
None on file
Analysis Prepared by : Drew Liebert and Rachel Anderson / JUD. /
(916) 319-2334
AB 1222
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