SB340 H JUD AM 2-28 #1
The Committee on the Judiciary moves to amend the Committee
Substitute on page two, following the enacting section, by striking
out the remainder of the Committee Substitute and inserting in lieu
thereof the following language:
ARTICLE 2A. BREACH OF SECURITY OF CONSUMER INFORMATION.
As used in this article:
(1) "Breach of the security of a system" means the
unauthorized access or acquisition of unencrypted and unredacted
computerized data that compromises the security, confidentiality or
integrity of personal information maintained by an individual or
Good faith acquisition of personal information by an employee or
agent of an individual or entity for the purposes of the individual
or the entity is not a breach of the security of the system,
provided that the personal information is not used for a purpose
other than a lawful purpose of the individual or entity or subject
to further unauthorized disclosure.
(2)"Entity" includes corporations, business trusts, estates,
partnerships, limited partnerships, limited liability partnerships,
limited liability companies, associations, organizations, joint
ventures, governments, governmental subdivisions, agencies, or instrumentalities, or any other legal entity, whether for profit or
(3)"Encrypted" means transformation of data through the use
of an algorithmic process into a form in which there is a low
probability of assigning meaning without use of a confidential
process or key.
(4)"Financial institution" has the meaning given that term
in section 6809(3), United States Code Title 15, as amended.
(5)"Individual" means a natural person.
(6)"Personal information" means the first name or first
initial and last name linked to any one or more of the following
data elements that relate to a resident of this state, when the
data elements are neither encrypted nor redacted:
(A)Social security number;
(B)Driver's license number or state identification card
number issued in lieu of a driver's license; or
(C)Financial account number, or credit card, or debit card
number in combination with any required security code, access code,
or password that would permit access to a resident's financial
The term does not include information that is lawfully
obtained from publicly available information, or from federal,
state, or local government records lawfully made available to the
(A)Written notice to the postal address in the records of
the individual or entity;
(B) Electronic notice, if the notice provided is consistent
with the provisions regarding electronic records and signatures,
set forth in Section 7001, United States Code Title 15, Electronic
Signatures in Global and National Commerce Act; and
(C)Substitute notice, if the individual or the entity
required to provide notice demonstrates that the cost of providing
notice will exceed $50,000, or that the affected class of residents
to be notified exceeds 100,000 persons or that the individual or
the entity does not have sufficient contact information or to
provide notice as described in paragraphs (A), (B) or (C).
Substitute notice consists of all of the following:
(i)E-mail notice if the individual or the entity has e-mail
addresses for the members of the affected class of residents;
(ii)Conspicuous posting of the notice on the Web site of the
individual or the entity if the individual or the commercial entity
maintains a Web site; or
(iii)Notice to major statewide media.
(8)"Redact" means alteration or truncation of data such that
no more than the last four digits of a social security number,
driver's license number, state identification card number or
account number is accessible as part of the personal information.
§46A-2A-102. Notice of breach of security of computerized personal
(a)An individual or entity that owns or licenses
computerized data that includes personal information shall give
notice of any breach of the security of the system following
discovery or notification of the breach of the security of the
system to any resident of this state whose unencrypted and
unredacted personal information was or is reasonably believed to
have been accessed and acquired by an unauthorized person. Except
as provided in subsection (e) or in order to take any measures
necessary to determine the scope of the breach and to restore the
reasonable integrity of the system, the notice shall be made
without unreasonable delay.
(b)An individual or entity must give notice of the breach of
the security of the system if encrypted information is accessed and
acquired in an unencrypted form, or if the security breach involves
a person with access to the encryption key.
(c)An individual or entity that maintains computerized data
that includes personal information that the individual or entity
does not own or license shall give notice to the owner or licensee
of the information of any breach of the security of the system as
soon as practicable following discovery, if the personal
information was or is the entity reasonably believes was accessed
and acquired by an unauthorized person.
(d)The notice shall include:
(1)To the extent possible, a description of the categories
of information that were reasonably believed to have been accessed
or acquired by an unauthorized person, including social security
numbers, drivers' license or state identification numbers and
(2)A telephone number or website address that the individual
may use to contact the entity or the agent of the entity and from
whom the individual may learn:
(A)What types of information the entity maintained about
that individual or about individuals in general; and
(B)Whether or not the entity maintained information about
(3)The toll-free contact telephone numbers and addresses for
the major credit reporting agencies and information on how to place
a fraud alert or security freeze.
(e)Notice required by this section may be delayed if a law
enforcement agency determines and advises the individual or entity
that the notice will impede a criminal or civil investigation, or
homeland or national security. Notice required by this section
must be made without unreasonable delay after the law enforcement
agency determines that notification will no longer impede the
investigation or jeopardize national or homeland security.
(f)(1) If an entity is required to notify more than 1,000 persons of a breach of security pursuant to this article, the
entity shall also notify, without unreasonable delay, all consumer
reporting agencies that compile and maintain files on a nationwide
basis, as defined by 15 U.S.C. 1681a(p), of the timing,
distribution and content of the notices.
(2) All consumer reporting agencies that compile and maintain
files on a nationwide basis, as defined by 15 U.S.C. 1681a(p),
shall provide contact information to the Attorney General for the
purpose of facilitating the notice requirements of subdivision (1)
of this subsection. Contact information provided pursuant to this
subdivision shall be in a form prescribed by the Attorney General.
(3) Nothing in this subsection shall be construed to require
the entity to provide to the consumer reporting agency the names or
other personal identifying information of breach notice recipients.
This subsection shall not apply to an entity who is subject to
Title V of the Gramm Leach Bliley Act, 15 U.S.C. 6801, et. seq.
(g) The notice required by this section shall not be
considered a debt communication as defined by the Fair Debt
Collection Practice Act in 15 U.S.C. §1692a.
§46A-2A-103. Procedures deemed in compliance with security breach
(a)An entity that maintains its own notification procedures
as part of an information privacy or security policy for the
treatment of personal information and that are consistent with the timing and delivery requirements of this article shall be deemed to
be in compliance with the notification requirements of this article
if it notifies residents of this state, and does so in accordance
with its procedures in the event of a breach of security of the
(b)A financial institution that responds in accordance with
the notification guidelines prescribed by the Federal Interagency
Guidance on Response Programs for Unauthorized Access to Customer
Information and Customer Notice is deemed to be in compliance with
(c)An entity that complies with the notification
requirements or procedures pursuant to the rules, regulation,
procedures or guidelines established by the entity's primary or
functional regulator shall be in compliance with this article.
(a)Except as provided by paragraph (c) of this section,
failure to comply with the notice provisions of this article
constitutes an unfair or deceptive act of practice in violation of
section one hundred four, article six, chapter forty-six-a of this
code, which may be enforced by the attorney general pursuant to the
enforcement provisions of this chapter.
(b)Except as provided by paragraph (c) of this section, the
attorney general shall have authority to bring action. No civil
penalty may be assessed in an action unless the court finds that the defendant has engaged in a course of repeated and willful
violations of this article. No civil penalty shall exceed one
hundred fifty thousand dollars per breach of security of the system
or series of breaches of a similar nature that are discovered in a
(c)A violation of this article by a licensed financial
institution shall be enforceable exclusively by the financial
institution's primary functional regulator.
(d) Nothing in this section shall be construed to prevent a
resident of this state whose personal information was accessed and
acquired by an unauthorized person in violation of this article
from bringing a civil action for recovery of actual damages as a
result of the violation.
This article shall apply to the discovery or notification of
a breach of the security of the system that occurs on or after the
effective date of this article.