Amended in Assembly March 26, 2015

California Legislature—2015–16 Regular Session

Assembly BillNo. 739


Introduced by Assembly Member Irwin

February 25, 2015


An act tobegin delete amend Section 1798.82 ofend deletebegin insert add Section 43.99.1 toend insert the Civil Code, relating tobegin delete privacy.end deletebegin insert civil law.end insert

LEGISLATIVE COUNSEL’S DIGEST

AB 739, as amended, Irwin. begin deleteInformation privacy. end deletebegin insertCivil law: liability: communication of cyber security: threat information.end insert

Existing lawbegin insert 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 lawend insert 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 wouldbegin delete make a nonsubstantive change to those provisions.end deletebegin insert require the Attorney General to create a registry of private entities that intend to engage in communication of cyber securityend insertbegin insert-threat information, as defined. The bill would also provide thatend insertbegin insert 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.end insert

Vote: majority. Appropriation: no. Fiscal committee: begin deleteno end deletebegin insertyesend insert. State-mandated local program: no.

The people of the State of California do enact as follows:

P2    1begin insert

begin insertSECTION 1.end insert  

end insert

begin insertSection 43.99.1 is added to the end insertbegin insertCivil Codeend insertbegin insert, to
2read:end insert

begin insert
3

begin insert43.99.1.end insert  

(a) There shall be no civil or criminal liability for,
4and no cause of action shall arise against, a private entity that
5has registered with the Attorney General pursuant to subdivision
6(b), based upon its communication of cyber security-threat
7information to another private entity, or to a state entity identified
8by the Attorney General. The immunity from liability granted by
9this section shall only apply if the communication is made without
10the intent to injure, defraud, or to otherwise endanger any
11individual or public or private entity and is made for one of the
12following purposes:

13(1) To address a vulnerability of a system, network, or critical
14infrastructure component of a public or private entity.

15(2) To prevent a threat to the integrity, confidentiality, or
16availability of a system, network, or critical infrastructure
17component of a public or private entity.

18(3) To provide support for cyber security crime investigation.

19(4) To protect individuals from personal or economic harm.

20(5) To protect the state’s economic interests, including, but not
21limited to, networks, assets, and personal information.

P3    1(b) The Attorney General shall create a registry of private
2entities that intend to engage in communication of cyber
3security-threat information.

4(c) For purposes of this section, “cyber security-threat
5information” means information pertaining directly to one of the
6following:

7(1) A vulnerability of a system, network, or critical infrastructure
8component of a public or private entity.

9(2) A threat to the integrity, confidentiality, or availability of a
10 system, network, or critical infrastructure component of a public
11or private entity.

12(3) Efforts to deny access to, or to cause the degradation,
13disruption, or destruction of a system, network, or critical
14infrastructure component of a public or private entity.

15(4) Efforts to gain unauthorized access to a system, network,
16or critical infrastructure component of a public or private entity,
17including efforts to gain unauthorized access for the purpose of
18exfiltrating information stored on, processed on, or transitioning
19through, a system, network, or critical infrastructure component
20of a public or private entity.

end insert
begin delete
21

SECTION 1.  

Section 1798.82 of the Civil Code is amended
22to read:

23

1798.82.  

(a) A person or business that conducts business in
24California, and that owns or licenses computerized data that
25includes personal information, shall disclose a breach of the
26security of the system following discovery or notification of the
27breach in the security of the data to a resident of California whose
28unencrypted personal information was, or is reasonably believed
29to have been, acquired by an unauthorized person. The disclosure
30shall be made as quickly as possible and without unreasonable
31delay, consistent with the legitimate needs of law enforcement, as
32provided in subdivision (c), or any measures necessary to determine
33the scope of the breach and restore the reasonable integrity of the
34data system.

35(b) A person or business that maintains computerized data that
36includes personal information that the person or business does not
37own shall notify the owner or licensee of the information of the
38breach of the security of the data immediately following discovery,
39if the personal information was, or is reasonably believed to have
40been, acquired by an unauthorized person.

P4    1(c) The notification required by this section may be delayed if
2a law enforcement agency determines that the notification will
3impede a criminal investigation. The notification required by this
4section shall be made promptly after the law enforcement agency
5determines that it will not compromise the investigation.

6(d) A person or business that is required to issue a security
7breach notification pursuant to this section shall meet all of the
8following requirements:

9(1) The security breach notification shall be written in plain
10language.

11(2) The security breach notification shall include, at a minimum,
12the following information:

13(A) The name and contact information of the reporting person
14or business subject to this section.

15(B) A list of the types of personal information that were or are
16reasonably believed to have been the subject of a breach.

17(C) If the information is possible to determine at the time the
18notice is provided, then any of the following: (i) the date of the
19breach, (ii) the estimated date of the breach, or (iii) the date range
20within which the breach occurred. The notification shall also
21include the date of the notice.

22(D) Whether notification was delayed as a result of a law
23enforcement investigation, if that information is possible to
24determine at the time the notice is provided.

25(E) A general description of the breach incident, if that
26information is possible to determine at the time the notice is
27provided.

28(F) The toll-free telephone numbers and addresses of the major
29credit reporting agencies if the breach exposed a social security
30number or a driver’s license or California identification card
31number.

32(G) If the person or business providing the notification was the
33source of the breach, an offer to provide appropriate identity theft
34prevention and mitigation services, if any, shall be provided at no
35cost to the affected person for not less than 12 months, along with
36all information necessary to take advantage of the offer to any
37person whose information was or may have been breached if the
38breach exposed or may have exposed personal information defined
39in subparagraphs (A) and (B) of paragraph (1) of subdivision (h).

P5    1(3) At the discretion of the person or business, the security
2breach notification may also include any of the following:

3(A) Information about what the person or business has done to
4protect individuals whose information has been breached.

5(B) Advice on steps that the person whose information has been
6breached may take to protect himself or herself.

7(4) In the case of a breach of the security of the system involving
8personal information defined in paragraph (2) of subdivision (h)
9for an online account, and no other personal information defined
10in paragraph (1) of subdivision (h), the person or business may
11comply with this section by providing the security breach
12notification in electronic or other form that directs the person whose
13personal information has been breached promptly to change his
14or her password and security question or answer, as applicable, or
15to take other steps appropriate to protect the online account with
16the person or business and all other online accounts for which the
17 person whose personal information has been breached uses the
18same user name or email address and password or security question
19or answer.

20(5) In the case of a breach of the security of the system involving
21personal information defined in paragraph (2) of subdivision (h)
22for login credentials of an email account furnished by the person
23or business, the person or business shall not comply with this
24section by providing the security breach notification to that email
25address, but may, instead, comply with this section by providing
26notice by another method described in subdivision (j) or by clear
27and conspicuous notice delivered to the resident online when the
28resident is connected to the online account from an Internet
29Protocol address or online location from which the person or
30business knows the resident customarily accesses the account.

31(e) A covered entity under the federal Health Insurance
32Portability and Accountability Act of 1996 (42 U.S.C. Sec. 1320d
33et seq.) will be deemed to have complied with the notice
34requirements in subdivision (d) if it has complied completely with
35Section 13402(f) of the federal Health Information Technology
36for Economic and Clinical Health Act (Public Law 111-5).
37However, nothing in this subdivision shall be construed to exempt
38a covered entity from any other provision of this section.

39(f) A person or business that is required to issue a security breach
40notification pursuant to this section to more than 500 California
P6    1residents as a result of a single breach of the security system shall
2electronically submit a single sample copy of that security breach
3notification, excluding any personally identifiable information, to
4the Attorney General. A single sample copy of a security breach
5notification shall not be deemed to be within subdivision (f) of
6Section 6254 of the Government Code.

7(g) For purposes of this section, “breach of the security of the
8system” means unauthorized acquisition of computerized data that
9compromises the security, confidentiality, or integrity of personal
10information maintained by the person or business. Good faith
11acquisition of personal information by an employee or agent of
12the person or business for the purposes of the person or business
13is not a breach of the security of the system, provided that the
14personal information is not used or subject to further unauthorized
15disclosure.

16(h) For purposes of this section, “personal information” means
17either of the following:

18(1) An individual’s first name or first initial and last name in
19combination with any one or more of the following data elements,
20when either the name or the data elements are not encrypted:

21(A) Social security number.

22(B) Driver’s license number or California identification card
23number.

24(C) Account number, credit or debit card number, in
25combination with any required security code, access code, or
26password that would permit access to an individual’s financial
27account.

28(D) Medical information.

29(E) Health insurance information.

30(2) A user name or email address, in combination with a
31password or security question and answer that would permit access
32to an online account.

33(i) (1) For purposes of this section, “personal information” does
34not include publicly available information that is lawfully made
35available to the general public from federal, state, or local
36government records.

37(2) For purposes of this section, “medical information” means
38any information regarding an individual’s medical history, mental
39or physical condition, or medical treatment or diagnosis by a health
40care professional.

P7    1(3) For purposes of this section, “health insurance information”
2means an individual’s health insurance policy number or subscriber
3identification number, any unique identifier used by a health insurer
4to identify the individual, or any information in an individual’s
5application and claims history, including any appeals records.

6(j) For purposes of this section, “notice” may be provided by
7one of the following methods:

8(1) Written notice.

9(2) Electronic notice, if the notice provided is consistent with
10the provisions regarding electronic records and signatures set forth
11in Section 7001 of Title 15 of the United States Code.

12(3) Substitute notice, if the person or business demonstrates that
13the cost of providing notice would exceed two hundred fifty
14thousand dollars ($250,000), or that the affected class of subject
15persons to be notified exceeds 500,000, or the person or business
16does not have sufficient contact information. Substitute notice
17shall consist of all of the following:

18(A) Email notice when the person or business has an email
19address for the subject persons.

20(B) Conspicuous posting of the notice on the Internet Web site
21page of the person or business, if the person or business maintains
22one.

23(C) Notification to major statewide media.

24(k) Notwithstanding subdivision (j), a person or business that
25maintains its own notification procedures as part of an information
26security policy for the treatment of personal information and is
27otherwise consistent with the timing requirements of this part, shall
28be deemed to be in compliance with the notification requirements
29of this section if the person or business notifies subject persons in
30accordance with its policies in the event of a breach of security of
31the system.

end delete


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