BILL ANALYSIS
SENATE JUDICIARY COMMITTEE
Senator Ellen M. Corbett, Chair
2009-2010 Regular Session
AB 1971 (Lowenthal)
As Introduced
Hearing Date: June 10, 2010
Fiscal: Yes
Urgency: No
SK:jd
SUBJECT
California State University, University of California, and
Hastings College of the Law:
Disclosure of Alumni Personal Information
DESCRIPTION
This bill would extend the sunset date on current law which
permits the California State University (CSU), the University of
California (UC), and Hastings College of the Law (HCL), to
disclose the names, addresses, and e-mail addresses of alumni to
their "affinity partners" (nonaffiliated businesses with whom
the university has a contractual agreement to, among other
things, offer commercial products and services to alumni),
subject to specified privacy requirements. These provisions are
scheduled to sunset on January 1, 2011; this bill would extend
the provisions to January 1, 2016.
BACKGROUND
This bill is a reintroduction of last year's AB 1222
(Lowenthal), which was vetoed by the Governor. In 2005, the
Legislature passed and the Governor signed SB 569 (Torlakson,
Ch. 498, Stats. 2005) which expressly allowed CSU, UC, and HCL
to disclose the names, addresses, and e-mail addresses of alumni
to businesses with whom the university has an affinity partner
agreement. Tax-exempt organizations use affinity programs to
generate revenue by permitting the use of their name or logo to
endorse products or services. Both CSU and UC use affinity
programs to partner with commercial entities so that alumni
organizations can offer various financial products and services
to alumni. As part of the agreement, the affinity partner pays
(more)
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a fee to the alumni association in return for allowing access to
alumni association mailing lists.
Under SB 569, alumni information may only be shared for
particular purposes, and the universities must meet specified
privacy requirements including that they have a written
contractual agreement with the affinity partner business that
contains certain privacy protections. CSU, UC, and HCL may not
disclose alumni information to affinity partners without first
offering alumni an opportunity to opt out of the disclosure.
Existing law provides a statutory notice form for this purpose
and requires that the form be provided to alumni in certain
communications, such as the alumni association magazine and Web
site. These provisions sunset on January 1, 2011; this bill
would extend this sunset date to January 1, 2016. This bill
also contains related reporting requirements.
CHANGES TO EXISTING LAW
Existing law permits CSU, UC, and HCL to disclose the names,
addresses, and e-mail addresses of alumni to businesses with
whom the university has an affinity partner agreement. (Ed.
Code Secs. 89090, 92630.) Existing law provides that alumni
information may only be shared for the following specified
purposes: (1) to provide alumni with commercial opportunities
that are beneficial to the alumni or the university; (2) to
provide alumni with informational materials relating to the
university; and (3) to promote and support the educational
mission of the university. (Ed. Code Secs. 89090(a), 92630(a).)
Existing law requires CSU, UC, and HCL to meet specified privacy
requirements including that they have a written contractual
agreement with the affinity partner business that requires the
business to maintain the confidentiality of the alumni
information and provides that the business may not use the
information for any purpose other than the three purposes
permitted by the statute. (Ed. Code Secs. 89090(b)(1)(A),
92630(b)(1)(A).)
Existing law provides that CSU, UC, and HCL may not disclose
alumni information to affinity partners without first clearly
and conspicuously notifying alumni that their personal
information may be disclosed and giving the alumni an
opportunity to opt out of the disclosure. If an alumni opts out
of such sharing, his or her information may not be disclosed.
(Ed. Code Secs. 89090(b)(2), 92630(b)(2).)
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Existing law prohibits CSU, UC, and HCL from disclosing
information about any current students or an alumnus who, as a
student, indicated pursuant to the federal Family Educational
Rights and Privacy Act (FERPA) that he or she did not want his
or her personal information disclosed. (Ed. Code Secs.
89090(b)(4), 92630(b)(4).)
Existing law provides for a statutory notice form that CSU, UC,
and HCL may use to provide alumni with the opportunity to opt
out of sharing. (Ed. Code Secs. 89090(c)(1) and (2),
92630(c)(1) and (2).)
Existing law requires that the form be provided to alumni in the
following communications: (1) in the solicitation sent to
graduating students encouraging them to join the alumni
association; (2) in the alumni association magazine; (3) on the
alumni association's Web site; (4) in a one-time mailing sent to
all alumni on the university's list as of January 1, 2006; and
(5) in an annual electronic communication. (Ed. Code Secs.
89090(c)(3)(B), 92630(c)(3)(B).)
Existing law requires that alumni be provided at least two
alternative cost-free means to communicate their privacy
choices, such as calling a toll-free number or using electronic
means. (Ed. Code Secs. 89090(c)(4), 92630(c)(4).) Existing law
provides that an alumnus may opt out of sharing at any time and
CSU, UC, and HCL must comply with this direction within 45 days
of receipt. (Ed. Code Secs. 89090(c)(5)(A), 92630(c)(5)(A).)
Existing law provides that the above described provisions sunset
on January 1, 2011. (Ed. Code Secs. 89090.5, 92630.9.)
This bill would extend this sunset date to January 1, 2016.
This bill would provide for related reporting requirements to
the Senate and Assembly Judiciary Committees and would require
that the statutory notice form must be made available on the
alumni association's Internet Web site, as specified.
COMMENT
1. Stated need for the bill
The author writes:
Campus alumni associations have been established at all 23
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California State University (CSU) campuses as well as the 10
University of California (UC) campuses. The primary purpose
of these associations is to maintain relationships and build
long-term connections to graduates with the ultimate goal to
support the University in the form of donations, scholarships,
and involvement. It is common practice among public
universities throughout the country, and private institutions
in California, to offer benefits and services through affinity
partnerships with commercial vendors to alumni as one way to
stay connected to their university. Examples of these
affinity partnerships include group rates and discounts for
home and auto insurance, mortgage programs and travel
programs.
In light of California's recent revenue shortfalls and budget
reductions to public universities, the role of alumni
associations and the need for private funding of public
universities is more critical then ever to help University
leaders get non-state dollars necessary to maintain program
quality. . . .
Affinity programs must continue to support CSU and UC with
donations, scholarships, and community involvement. All 23
CSU campus associations currently use the funding they receive
from these programs to further their programming and outreach
to alumni as well as to provide both general and athletic
scholarships to students.
Co-sponsor the University of California writes that "affinity
programs generated approximately $3.6 million for UC campuses in
2007-08. Revenues generated from UC campus affinity
partnerships generally provide funding to supplement the
operational costs of campus alumni programs. The revenues are
also used by UC campus alumni associations to provide services
and benefits to students. An example is the UC Irvine alumni
association's affinity partnership revenues, of which almost 35
percent are used to support the cost of student programs and
scholarships. The funds generated by affinity partnerships
allow the UC campus alumni association to provide services and
events to alumni and students that the campuses would otherwise
not be able to offer."
In support of last year's AB 1222, an identical measure,
co-sponsor California State University noted that "[t]hroughout
the first three years of implementation of this statute both
public universities have held the privacy of their alumni in the
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highest regard, keeping meticulous record of all opt-out
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."
2. Veto of AB 1222
Last year, the Legislature passed AB 1222, which would have
extended the sunset date on current law permitting CSU, UC, and
HCL to disclose alumni personal information. In vetoing the
measure, the governor stated:
I am returning Assembly Bill 1222 without my signature. This
bill extends the sunset date on a statute that is not expiring
until January 1, 2011. Therefore, this bill is premature and
unnecessary. For these reasons, I am unable to sign this
bill.
Given that current law sunsets on January 1, 2011, the author
has reintroduced AB 1222.
3. Amendments taken last year in this Committee are included in
this year's bill
Existing law requires the Web site for each alumni association
to include a link to the opt-out form. When this Committee
heard AB 1222, it was determined that there was a lack of
consistency regarding where the forms are located on the
campuses' Web sites. In order to address the concern that alumni
may have a difficult time locating the forms, this Committee
amended the bill to require that the form be located either on
the homepage of the alumni association or in the association's
privacy policy.
In addition, this Committee amended AB 1222 to also provide that
information regarding the use of affinity partnership agreements
and opt-out requirements be given to the Senate and Assembly
Judiciary Committees by July 1, 2014.
Both of the above-described amendments are contained in AB 1971.
4. Making the case for a sunset extension
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Last year, when this Committee heard AB 1222, a number of
questions were raised regarding whether the sponsors of the
measure had demonstrated that it was appropriate to extend
existing law's sunset date to January 1, 2016, thus permitting
CSU, UC, and HCL to share alumni information with affinity
partners for another five years. In response to questions from
Committee staff, the sponsors of AB 1222 provided extensive
information that demonstrated both how the law was being used by
the universities and the manner in which alumni personal
information was being protected, as required by the statute.
The following information was provided to the Committee last
year with respect to AB 1222, and the sponsors indicate that
this information is still accurate:
a. CSU "Alumni Affinity Survey Results"
The author provided this committee with a document entitled
"CSU Alumni Affinity Survey Results." This document provides
information on a campus-by-campus basis regarding the affinity
partnership agreements each campus has entered into, including
information on when the contract expires, the use of the
revenue, and how many alumni have opted out. For example, CSU
East Bay currently has two affinity partnerships, one with
Marsh and another with Liberty Mutual. Both of these are
insurance programs. The agreements bring in $10,000 which is
used for alumni outreach. According to the survey, 11,000
alumni have opted out. CSU Fresno reported that it had four
affinity partnerships-a credit card program with Bank of
America and insurance programs offered by Marsh, Liberty
Mutual, and AIA. Revenue from the Bank of America partnership
was $1,621, Marsh $33,252, Liberty Mutual $70,000, and AIA
$578. The university uses the revenue for programming, its
alumni magazine, online social networking, and scholarships.
The survey indicated that 4.1 percent of alumni opted out in
the initial mailing and 22 alumni have opted out on a
quarterly basis. CSU Long Beach reported that its two
affinity partnerships-a Bank of America credit card program
and Marsh insurance program-brought in $135,000 (Bank of
America) and $30,000 (Marsh). The revenue was used to support
alumni outreach, communications, and scholarships. 18,000
alumni, or nine percent, opted out. CSU San Diego has two
affinity partnerships - an AIA insurance program and a GE
Money credit card program. In 2008, 3,093 alumni participated
in these programs, which raised $235,000. 27,000 alumni opted
out. CSU Los Angeles has two programs - a Bank of America
credit card program and a Marsh insurance program. In 2009,
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these programs raised $132,000 and 10,057 alumni participated.
3,200 alumni opted out of the sharing of their information.
b. UC alumni association affinity programs
In response to Committee staff requests last year, UC provided
similar information concerning its alumni association affinity
programs indicating that the UC campuses offer affinity
programs for various products and services including credit
card and insurance products and hotel, rental car, and jewelry
discounts. At UC Berkeley, 35,000 alumni have opted out of
disclosure, and the programs brought in $1.35 million which
was used for operations. At UCLA, the Bank of America
affinity program (credit cards) had 38,142 open accounts and
brought in $1.17 million while the campus' affinity program
with Marsh (insurance) had 6,247 policies in force and total
annual revenue equaled $168,000. The revenue from the
programs funded alumni and student programs, salaries of
full-time alumni association staff, and technology and
infrastructure improvements. UC Irvine's alumni association
also has an affinity program for various products and
services, including credit card, insurance, and travel
programs. 5,054 alumni participate in the program and 15,386
opted out. The programs raise $111,000, which goes to fund
programs and operations.
c. Information relating to privacy protections
When SB 569 was first considered in the Legislature it did not
contain many of the privacy protections that are now included
in the law. However, as a result of negotiations with
legislative staff, the author, and interested parties, the
bill was amended to include these various privacy protections.
Those included expressly providing alumni with notice that
their personal information may be disclosed to the
university's affinity partner and giving them the opportunity
to opt out of that disclosure. SB 569 was also amended to
require a statutory notice form. In addition, CSU, UC, and
HCL were required to provide the form to alumni in certain
communications such as the alumni magazine and in a one-time
mailing to alumni.
Opt-out forms : In response to Committee staff inquiries when
AB 1222 was being considered last year, CSU indicated that all
new alumni receive the opt out form upon graduation and prior
to the release of any of their information to third party
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vendors. Existing alumni who have received the initial opt
out form also receive a notification annually. CSU also
stated that all of its campuses that have magazines include
the opt out form in those magazines on an annual basis. Those
campuses which do not have magazines include the privacy and
opt out information using the method they normally use to
contact their alumni (e.g., e-mail, e-mail newsletters).
UC stated that its alumni associations send out forms and
notifications when they have addresses or contact information
for alumni. UC also provided the committee with examples of
opt out forms contained in alumni magazines.
Annual electronic notice : CSU indicated last year that "all
campuses send out an annual electronic notification to all
addressable alumni in their database. For new alumni they
also wait the 45 day waiting period prior to releasing any
information to third party vendors and also remove any names
that opt-out past the 45 day window with their vendors upon
receipt of the opt-out."
UC indicated that it notifies alumni of the affinity programs
and their opt out rights "to the extent we have e-mail
addresses."
Statutory form : CSU indicated that its campuses are using a
form that was developed through the Chancellor's Office of
General Counsel that complies with the statutory requirements.
CSU also provided committee staff with examples of these
forms. UC stated that some campuses are using the statutory
form while others are not. UC also provided the committee
with an example of the alternative form which contains the
required information.
5. Amendment regarding Hastings College of the Law
In response to Committee staff inquiries, Hastings College of
the Law indicates that it has not entered into any affinity
partnership agreements and thus it is okay to remove HCL from
the bill. As a result, the author has agreed to the following
amendment, which would delete HCL's authority to disclose alumni
information to affinity partners:
On page 9, line 1, delete "or the Hastings College of the Law"
On page 9, line 21, delete "or the Hastings College of the Law"
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On page 10, line 14, delete "or the Hastings College of the Law"
On page 10, line 17, delete "or the Hastings College of the Law"
On page 13, line 36, delete "and the Hastings College of the
Law"
Support : None Known
Opposition : None Known
HISTORY
Source : California State University; University of California
Related Pending Legislation : None Known
Prior Legislation : See Background.
Prior Vote :
Assembly Higher Education Committee (Ayes 9, Noes 0)
Assembly Judiciary Committee (Ayes 10, Noes 0)
Assembly Appropriations Committee (Ayes 17, Noes 0)
Assembly Floor (Ayes 74, Noes 0)
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