Senate File 2308 - Reprinted



                                       SENATE FILE       
                                       BY  COMMITTEE ON COMMERCE

                                       (SUCCESSOR TO SSB 3200)


    Passed Senate, Date               Passed House,  Date             
    Vote:  Ayes        Nays           Vote:  Ayes        Nays         
                 Approved                            

                                      A BILL FOR

  1 An Act relating to identity theft by providing for the
  2    notification of a breach in the security of personal
  3    information requesting the establishment of an interim study
  4    committee relating to disclosure of personal information by
  5    public officials, entities, and affiliated organizations, and
  6    providing penalties.
  7 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
  8 SF 2308
  9 rn/nh/ml/12

PAG LIN



  1  1    Section 1.  NEW SECTION.  715C.1  DEFINITIONS.
  1  2    As used in this chapter, unless the context otherwise
  1  3 requires:
  1  4    1.  "Breach of security" means unauthorized acquisition of
  1  5 personal information maintained
  1  5 in computerized form
  1  5 by a person that compromises
  1  6 the security, confidentiality, or integrity of the personal
  1  7 information.  Good faith acquisition of personal information
  1  8 by a person or that person's employee or agent for a
  1  9 legitimate purpose of that person is not a breach of security,
  1 10 provided that the personal information is not used in
  1 11 violation of applicable law or in a manner that harms or poses
  1 12 an actual threat to the security, confidentiality, or
  1 13 integrity of the personal
  1 13 information.
  1 22    2.  "Consumer" means an individual who is a resident of
  1 23 this state.
  1 24    3.  "Consumer reporting agency" means the same as defined
  1 25 by the federal Fair Credit Reporting Act, 15 U.S.C. } 1681a.
  1 26    4.  "Debt" means the same as provided in section 537.7102.
  1 27    5.  "Encryption" means the use of an algorithmic process to
  1 28 transform data into a form in which the data is rendered
  1 29 unreadable or unusable without the use of a confidential
  1 30 process or key.
  1 31    6.  "Extension of credit" means the right to defer payment
  1 32 of debt or to incur debt and defer its payment offered or
  1 33 granted primarily for personal, family, or household purposes.
  1 34    7.  "Financial institution" means the same as defined in
  1 35 section 536C.2, subsection 6.
  2  1    8.  "Identity theft" means the same as provided in section
  2  2 715A.8.
  2  3    9.  "Payment card" means the same as defined in section
  2  4 715A.10, subsection 3, paragraph "b".
  2  5    10.  "Person" means an individual; corporation; business
  2  6 trust; estate; trust; partnership; limited liability company;
  2  7 association; joint venture; government; governmental
  2  8 subdivision, agency, or instrumentality; public corporation;
  2  9 or any other legal or commercial entity.
  2 10    11.  "Personal information" means an individual's first
  2 11 name or first initial and last name in combination with any
  2 12 one or more of the following data elements that relate to the
  2 13 individual if any of the data elements are not encrypted,
  2 14 redacted, or otherwise altered by any method or technology in
  2 15 such a manner that the name or data elements are unreadable:
  2 16    a.  Social security number.
  2 17    b.  Driver's license number or other unique identification
  2 18 number created or collected by a government body.
  2 19    c.  Financial account number, credit card number, or debit
  2 20 card number in combination with any required security code,
  2 21 access code, or password that would permit access to an
  2 22 individual's financial account.
  2 23    d.  Unique electronic identifier or routing code, in
  2 24 combination with any required security code, access code, or
  2 25 password that would permit access to an individual's financial
  2 26 account.
  2 27    e.  Unique biometric data, such as a fingerprint,
  2 28 retina or iris image, or other unique
  2 29 physical representation or digital representation of biometric
  2 30 data.
  2 31    "Personal information" does not include information that is
  2 32 lawfully obtained from publicly available sources, or from
  2 33 federal, state, or local government records lawfully made
  2 34 available to the general public.
  2 35    12.  "Redacted" means altered or truncated so that no more
  3  1 than five digits of a social security
  3  1 number or the last four digits of other
  3  2 numbers designated in section 715A.8, subsection 1, paragraph
  3  3 "a", is accessible as part of the data.
  3  4    Sec. 2.  NEW SECTION.  715C.2  SECURITY BREACH == CONSUMER
  3  5 NOTIFICATION == REMEDIES.
  3  6    1.  Any person who owns or licenses computerized
  3  7 data that includes a consumer's personal information that is
  3  8 used in the course of the person's business, vocation,
  3  9 occupation, or volunteer activities and that was subject to a
  3 10 breach of security shall give notice of the breach of security
  3 11 following discovery of such breach of security, or receipt of
  3 12 notification under subsection 2, to any consumer whose
  3 13 personal information was included in the information that was
  3 14 breached.  The consumer notification shall be made in the most
  3 15 expeditious manner possible and without unreasonable delay,
  3 16 consistent with the legitimate needs of law enforcement as
  3 17 provided in subsection 3, and consistent with any measures
  3 18 necessary to sufficiently determine contact information for
  3 19 the affected consumers, determine the scope of the breach, and
  3 20 restore the reasonable integrity, security, and
  3 21 confidentiality of the data.
  3 22    2.  Any person who maintains or otherwise possesses
  3 23 personal information on behalf of another person shall notify
  3 24 the owner or licensor of the information of any breach of
  3 25 security immediately following discovery of such breach of
  3 26 security if a consumer's personal information was included in
  3 27 the information that was breached.
  3 28    3.  The consumer notification requirements of this section
  3 29 may be delayed if a law enforcement agency determines that the
  3 30 notification will impede a criminal investigation and the
  3 31 agency has made a written request that the notification be
  3 32 delayed.  The notification required by this section shall be
  3 33 made after the law enforcement agency determines that the
  3 34 notification will not compromise the investigation and
  3 35 notifies the person required to give notice in writing.
  4  1    4.  For purposes of this section, notification to the
  4  2 consumer may be provided by one of the following methods:
  4  3    a.  Written notice
  4  3 to the last available
  4  3 address the person has in the person's records.
  4  4    b.  Electronic notice if the person's customary method of
  4  5 communication with the consumer is by electronic means or is
  4  6 consistent with the provisions regarding electronic records
  4  7 and signatures set forth in chapter 554D and the federal
  4  8 Electronic Signatures in Global and National Commerce Act, 15
  4  9 U.S.C. } 7001.
  4 10    c.  Substitute notice, if the person demonstrates that the
  4 11 cost of providing notice would exceed two hundred fifty
  4 12 thousand dollars, that the affected class of consumers to be
  4 13 notified exceeds three hundred fifty thousand persons, or if
  4 14 the person does not have sufficient contact information to
  4 15 provide notice.  Substitute notice shall consist of the
  4 16 following:
  4 17    (1)  Electronic mail notice when the person has an
  4 18 electronic mail address for the affected consumers.
  4 19    (2)  Conspicuous posting of the notice or a link to the
  4 20 notice on the internet web site of the person if the person
  4 21 maintains an internet web site.
  4 22    (3)  Notification to major statewide media.
  4 23    5.  Notice pursuant to this section shall include, at a
  4 24 minimum, all of the following:
  4 25    a.  A description of the breach of security.
  4 26    b.  The approximate date of the breach of security.
  4 27    c.  The type of personal information obtained as a result
  4 28 of the breach of security.
  4 29    d.  Contact information for consumer reporting agencies.
  4 30    e.  Advice to the consumer to report suspected incidents of
  4 31 identity theft to local law enforcement or the attorney
  4 32 general.
  4 33    6.  Notwithstanding subsection 1, notification is not
  4 34 required if, after an appropriate investigation or after
  4 35 consultation with the relevant federal, state, or local
  5  1 agencies responsible for law enforcement, the person
  5  2 determined that no reasonable likelihood of
  5  2 financial
  5  2 harm to the
  5  3 consumers whose personal information has been acquired has
  5  4 resulted or will result from the breach.  Such a determination
  5  5 must be documented in writing and the documentation must be
  5  6 maintained for five years.
  5  7    7.  This section does not apply to any of the following:
  5  8    a.  A person who complies with notification requirements or
  5  9 breach of security procedures that provide greater protection
  5 10 to personal information and at least as thorough disclosure
  5 11 requirements than that provided by this section pursuant to
  5 12 the rules, regulations, procedures, guidance, or guidelines
  5 13 established by the person's primary or functional federal
  5 14 regulator.
  5 15    b.  A person who complies with a state or federal law that
  5 16 provides greater protection to personal information and at
  5 17 least as thorough disclosure requirements for breach of
  5 18 security or personal information than that provided by this
  5 19 section.
  5 20    c.  A person who is subject to and complies with
  5 21 regulations promulgated pursuant to Title V of the
  5 22 Gramm=Leach=Bliley Act of 1999, 15 U.S.C. } 6801=6809.
  5 23    8.  a.  A violation of this chapter is an unlawful practice
  5 24 pursuant to section 714.16 and, in addition to the remedies
  5 25 provided to the attorney general pursuant to section 714.16,
  5 26 subsection 7, the attorney general may seek and obtain an
  5 27 order that a party held to violate this section pay damages to
  5 28 the attorney general on behalf of a person injured by the
  5 29 violation.
  5 30    b.  The rights and remedies available under this section
  5 31 are cumulative to each other and to any other rights and
  5 32 remedies available under the law.
  5 32    Sec. 3.  DISCLOSURE OF PERSONAL INFORMATION BY
  5 32 PUBLIC OFFICIALS, ENTITIES, OR AFFILIATED
  5 32 ORGANIZATIONS == INTERIM STUDY COMMITTEE REQUESTED.
  5 32    The legislative council is requested to establish
  5 32 an interim study committee to assess and review the
  5 32 extent to which public officials, entities, and
  5 32 affiliated organizations in possession of or with
  5 32 access to personal identifying information of a
  5 32 resident of this state which could, if disclosed,
  5 32 render the resident vulnerable to identity theft, are
  5 32 disclosing or selling such information for
  5 32 compensation.  Based upon this assessment and review,
  5 32 the committee shall develop recommendations relating
  5 32 to these practices.  The committee shall be composed
  5 32 of ten members representing both political parties and
  5 32 both houses of the general assembly.  Five members
  5 32 shall be members of the senate, three of whom shall be
  5 32 appointed by the majority leader of the senate and two
  5 32 of whom shall be appointed by the minority leader of
  5 32 the senate.  The other five members shall be members
  5 32 of the house of representatives, three of whom shall
  5 32 be appointed by the speaker of the house of
  5 32 representatives and two of whom shall be appointed by
  5 32 the minority leader of the house of representatives.
  5 32 The committee shall issue a report of its
  5 32 recommendations to the general assembly by January 15,
  5 32 2009.
  5 33 SF 2308
  5 34 rn/nh/ml/12