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 BillNo. 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 indecipherablebegin insert to an unauthorized personend insert through a security technology or methodology generally accepted in the field of information technology.

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.

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.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

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

P2    1

SECTION 1.  

Section 1798.29 of the Civil Code is amended
2to read:

3

1798.29.  

(a) Any agency that owns or licenses computerized
4data that includes personal information shall disclose any breach
5of the security of the system following discovery or notification
6of the breach in the security of the data to any resident of California
7whose unencrypted personal information was, or is reasonably
8believed to have been, acquired by an unauthorized person. The
9disclosure shall be made in the most expedient time possible and
10without unreasonable delay, consistent with the legitimate needs
11of law enforcement, as provided in subdivision (c), or any measures
12necessary to determine the scope of the breach and restore the
13reasonable integrity of the data system.

14(b) Any agency that maintains computerized data that includes
15personal information that the agency does not own shall notify the
16owner or licensee of the information of any breach of the security
17of the data immediately following discovery, if the personal
18information was, or is reasonably believed to have been, acquired
19by an unauthorized person.

20(c) The notification required by this section may be delayed if
21a law enforcement agency determines that the notification will
22impede a criminal investigation. The notification required by this
23section shall be made after the law enforcement agency determines
24that it will not compromise the investigation.

P3    1(d) Any agency that is required to issue a security breach
2notification pursuant to this section shall meet all of the following
3requirements:

4(1) The security breach notification shall be written in plain
5language.

6(2) The security breach notification shall include, at a minimum,
7the following information:

8(A) The name and contact information of the reporting agency
9subject to this section.

10(B) A list of the types of personal information that were or are
11reasonably believed to have been the subject of a breach.

12(C) If the information is possible to determine at the time the
13notice is provided, then any of the following: (i) the date of the
14breach, (ii) the estimated date of the breach, or (iii) the date range
15within which the breach occurred. The notification shall also
16include the date of the notice.

17(D) Whether the notification was delayed as a result of a law
18enforcement investigation, if that information is possible to
19determine at the time the notice is provided.

20(E) A general description of the breach incident, if that
21information is possible to determine at the time the notice is
22provided.

23(F) The toll-free telephone numbers and addresses of the major
24credit reporting agencies, if the breach exposed a social security
25number or a driver’s license or California identification card
26number.

27(3) At the discretion of the agency, the security breach
28notification may also include any of the following:

29(A) Information about what the agency has done to protect
30individuals whose information has been breached.

31(B) Advice on steps that the person whose information has been
32breached may take to protect himself or herself.

33(4) In the case of a breach of the security of the system involving
34personal information defined in paragraph (2) of subdivision (g)
35for an online account, and no other personal information defined
36in paragraph (1) of subdivision (g), the agency may comply with
37this section by providing the security breach notification in
38electronic or other form that directs the person whose personal
39information has been breached to promptly change his or her
40password and security question or answer, as applicable, or to take
P4    1other steps appropriate to protect the online account with the
2agency and all other online accounts for which the person uses the
3same user name or email address and password or security question
4or answer.

5(5) In the case of a breach of the security of the system involving
6personal information defined in paragraph (2) of subdivision (g)
7 for login credentials of an email account furnished by the agency,
8the agency shall not comply with this section by providing the
9security breach notification to that email address, but may, instead,
10comply with this section by providing notice by another method
11described in subdivision (i) or by clear and conspicuous notice
12delivered to the resident online when the resident is connected to
13the online account from an Internet Protocol address or online
14location from which the agency knows the resident customarily
15accesses the account.

16(e) Any agency that is required to issue a security breach
17notification pursuant to this section to more than 500 California
18residents as a result of a single breach of the security system shall
19inform the Attorney General of the date of the discovery of the
20breach, and electronically submit a single sample copy of that
21security breach notification, excluding any personally identifiable
22information, to the Attorney General. A single sample copy of a
23security breach notification shall not be deemed to be within
24subdivision (f) of Section 6254 of the Government Code.

25(f) For purposes of this section, “breach of the security of the
26system” means unauthorized acquisition of computerized data that
27compromises the security, confidentiality, or integrity of personal
28information maintained by the agency. Good faith acquisition of
29personal information by an employee or agent of the agency for
30the purposes of the agency is not a breach of the security of the
31system, provided that the personal information is not used or
32subject to further unauthorized disclosure.

33(g) For purposes of this section, “personal information” means
34either of the following:

35(1) An individual’s first name or first initial and last name in
36combination with any one or more of the following data elements,
37when either the name or the data elements are not encrypted:

38(A) Social security number.

39(B) Driver’s license number or California identification card
40number.

P5    1(C) Account number, credit or debit card number, in
2combination with any required security code, access code, or
3password that would permit access to an individual’s financial
4account.

5(D) Medical information.

6(E) Health insurance information.

7(2) A user name or email address, in combination with a
8password or security question and answer that would permit access
9to an online account.

10(h) (1) For purposes of this section, “personal information”
11does not include publicly available information that is lawfully
12made available to the general public from federal, state, or local
13government records.

14(2) For purposes of this section, “medical information” means
15any information regarding an individual’s medical history, mental
16or physical condition, or medical treatment or diagnosis by a health
17care professional.

18(3) For purposes of this section, “health insurance information”
19means an individual’s health insurance policy number or subscriber
20identification number, any unique identifier used by a health insurer
21to identify the individual, or any information in an individual’s
22application and claims history, including any appeals records.

23(4) For purposes of this section, “encrypted” means rendered
24unusable, unreadable, or indecipherablebegin insert to an unauthorized personend insert
25 through a security technology or methodology generally accepted
26in the field of information security.

27(i) For purposes of this section, “notice” may be provided by
28one of the following methods:

29(1) Written notice.

30(2) Electronic notice, if the notice provided is consistent with
31the provisions regarding electronic records and signatures set forth
32in Section 7001 of Title 15 of the United States Code.

33(3) Substitute notice, if the agency demonstrates that the cost
34of providing notice would exceed two hundred fifty thousand
35dollars ($250,000), or that the affected class of subject persons to
36be notified exceeds 500,000, or the agency does not have sufficient
37contact information. Substitute notice shall consist of all of the
38following:

39(A) Email notice when the agency has an email address for the
40subject persons.

P6    1(B) Conspicuous posting of the notice on the agency’s Internet
2Web site page, if the agency maintains one.

3(C) Notification to major statewide media and the Office of
4Information Security within the Department of Technology.

5(j) Notwithstanding subdivision (i), an agency that maintains
6its own notification procedures as part of an information security
7policy for the treatment of personal information and is otherwise
8consistent with the timing requirements of this part shall be deemed
9to be in compliance with the notification requirements of this
10section if it notifies subject persons in accordance with its policies
11in the event of a breach of security of the system.

12(k) Notwithstanding the exception specified in paragraph (4) of
13subdivision (b) of Section 1798.3, for purposes of this section,
14“agency” includes a local agency, as defined in subdivision (a) of
15Section 6252 of the Government Code.

16

SEC. 2.  

Section 1798.82 of the Civil Code is amended to read:

17

1798.82.  

(a) A person or business that conducts business in
18California, and that owns or licenses computerized data that
19includes personal information, shall disclose a breach of the
20security of the system following discovery or notification, pursuant
21to subdivision (b), of the breach in the security of the data to a
22resident of California whose unencrypted personal information
23was, or is reasonably believed to have been, acquired by an
24unauthorized person. The disclosure shall be made in the most
25expedient time possible and without unreasonable delay, consistent
26with the legitimate needs of law enforcement, as provided in
27subdivision (c), or any measures necessary to determine the scope
28of the breach and restore the reasonable integrity of the data system.

29(b) A person or business that maintains computerized data that
30includes personal information that the person or business does not
31own shall notify the owner or licensee of the information of the
32breach of the security of the data immediately following discovery,
33if the personal information was, or is reasonably believed to have
34been, acquired by an unauthorized person.

35(c) The notification required by this section may be delayed if
36a law enforcement agency determines that the notification will
37impede a criminal investigation. The notification required by this
38section shall be made promptly after the law enforcement agency
39determines that it will not compromise the investigation.

P7    1(d) A person or business that is required to issue a security
2breach notification pursuant to this section shall meet all of the
3following requirements:

4(1) The security breach notification shall be written in plain
5language.

6(2) The security breach notification shall include, at a minimum,
7the following information:

8(A) The name and contact information of the reporting person
9or business subject to this section.

10(B) A list of the types of personal information that were or are
11reasonably believed to have been the subject of a breach.

12(C) If the information is possible to determine at the time the
13notice is provided, then any of the following: (i) the date of the
14breach, (ii) the estimated date of the breach, or (iii) the date range
15within which the breach occurred. The notification shall also
16include the date of the notice.

17(D) Whether notification was delayed as a result of a law
18enforcement investigation, if that information is possible to
19determine at the time the notice is provided.

20(E) A general description of the breach incident, if that
21information is possible to determine at the time the notice is
22provided.

23(F) The toll-free telephone numbers and addresses of the major
24credit reporting agencies if the breach exposed a social security
25number or a driver’s license or California identification card
26number.

27(G) If the person or business providing the notification was the
28source of the breach, an offer to provide appropriate identity theft
29prevention and mitigation services, if any, shall be provided at no
30cost to the affected person for not less than 12 months, along with
31all information necessary to take advantage of the offer to any
32person whose information was or may have been breached if the
33breach exposed or may have exposed personal information defined
34in subparagraphs (A) and (B) of paragraph (1) of subdivision (h).

35(3) At the discretion of the person or business, the security
36breach notification may also include any of the following:

37(A) Information about what the person or business has done to
38protect individuals whose information has been breached.

39(B) Advice on steps that the person whose information has been
40breached may take to protect himself or herself.

P8    1(4) In the case of a breach of the security of the system involving
2personal information defined in paragraph (2) of subdivision (h)
3for an online account, and no other personal information defined
4in paragraph (1) of subdivision (h), the person or business may
5comply with this section by providing the security breach
6notification in electronic or other form that directs the person whose
7personal information has been breached promptly to change his
8or her password and security question or answer, as applicable, or
9to take other steps appropriate to protect the online account with
10the person or business and all other online accounts for which the
11person whose personal information has been breached uses the
12same user name or email address and password or security question
13or answer.

14(5) In the case of a breach of the security of the system involving
15personal information defined in paragraph (2) of subdivision (h)
16for login credentials of an email account furnished by the person
17or business, the person or business shall not comply with this
18section by providing the security breach notification to that email
19address, but may, instead, comply with this section by providing
20notice by another method described in subdivision (j) or by clear
21and conspicuous notice delivered to the resident online when the
22resident is connected to the online account from an Internet
23Protocol address or online location from which the person or
24business knows the resident customarily accesses the account.

25(e) A covered entity under the federal Health Insurance
26Portability and Accountability Act of 1996 (42 U.S.C. Sec. 1320d
27et seq.) will be deemed to have complied with the notice
28requirements in subdivision (d) if it has complied completely with
29Section 13402(f) of the federal Health Information Technology
30for Economic and Clinical Health Act (Public Law 111-5).
31However, nothing in this subdivision shall be construed to exempt
32a covered entity from any other provision of this section.

33(f) A person or business that is required to issue a security breach
34notification pursuant to this section to more than 500 California
35residents as a result of a single breach of the security system shall
36inform the Attorney General of the date of the discovery of the
37breach, and electronically submit a single sample copy of that
38security breach notification, excluding any personally identifiable
39information, to the Attorney General. A single sample copy of a
P9    1security breach notification shall not be deemed to be within
2 subdivision (f) of Section 6254 of the Government Code.

3(g) For purposes of this section, “breach of the security of the
4system” means unauthorized acquisition of computerized data that
5compromises the security, confidentiality, or integrity of personal
6information maintained by the person or business. Good faith
7acquisition of personal information by an employee or agent of
8the person or business for the purposes of the person or business
9is not a breach of the security of the system, provided that the
10personal information is not used or subject to further unauthorized
11disclosure.

12(h) For purposes of this section, “personal information” means
13either of the following:

14(1) An individual’s first name or first initial and last name in
15combination with any one or more of the following data elements,
16when either the name or the data elements are not encrypted:

17(A) Social security number.

18(B) Driver’s license number or California identification card
19number.

20(C) Account number, credit or debit card number, in
21combination with any required security code, access code, or
22password that would permit access to an individual’s financial
23account.

24(D) Medical information.

25(E) Health insurance information.

26(2) A user name or email address, in combination with a
27password or security question and answer that would permit access
28to an online account.

29(i) (1) For purposes of this section, “personal information” does
30not include publicly available information that is lawfully made
31available to the general public from federal, state, or local
32government records.

33(2) For purposes of this section, “medical information” means
34any information regarding an individual’s medical history, mental
35or physical condition, or medical treatment or diagnosis by a health
36care professional.

37(3) For purposes of this section, “health insurance information”
38means an individual’s health insurance policy number or subscriber
39identification number, any unique identifier used by a health insurer
P10   1to identify the individual, or any information in an individual’s
2application and claims history, including any appeals records.

3(4) For purposes of this section, “encrypted” means rendered
4unusable, unreadable, or indecipherablebegin insert to an unauthorized personend insert
5 through a security technology or methodology generally accepted
6in the field of information security.

7(j) For purposes of this section, “notice” may be provided by
8one of the following methods:

9(1) Written notice.

10(2) Electronic notice, if the notice provided is consistent with
11the provisions regarding electronic records and signatures set forth
12in Section 7001 of Title 15 of the United States Code.

13(3) Substitute notice, if the person or business demonstrates that
14the cost of providing notice would exceed two hundred fifty
15thousand dollars ($250,000), or that the affected class of subject
16persons to be notified exceeds 500,000, or the person or business
17does not have sufficient contact information. Substitute notice
18shall consist of all of the following:

19(A) Email notice when the person or business has an email
20address for the subject persons.

21(B) Conspicuous posting of the notice on the Internet Web site
22page of the person or business, if the person or business maintains
23one.

24(C) Notification to major statewide media.

25(k) Notwithstanding subdivision (j), a person or business that
26maintains its own notification procedures as part of an information
27security policy for the treatment of personal information and is
28otherwise consistent with the timing requirements of this part, shall
29be deemed to be in compliance with the notification requirements
30of this section if the person or business notifies subject persons in
31accordance with its policies in the event of a breach of security of
32the system.



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