New Law Requires All Public Agencies in California To Notify Residents Affected by a Security Breach: BB&K Attorneys Examine the Requirements and Protocol That Agencies Should Establish

by Best Best & Krieger LLP
Contact

 
PublicCEO.com - November 18, 2013.

Cities, counties, water agencies and school districts have some of our most personal information, including our date of birth, Social Security number, driver’s license number and medical information. This is the type of personal information that identity thieves thrive upon. While the extent of data breaches of local public agency information is not definitively documented, the Privacy Rights Clearinghouse – a nonprofit aimed at raising awareness of personal privacy issues – notes that 656 government data breaches have occurred nationwide since 2005. And, according to the California Attorney General, more than 2.5 million Californians were put at risk by data breaches in 2012. Such breaches have caused billions of dollars in financial losses and can take months, and even years, to wipe off an individual’s record.

Although existing California law requires businesses and state agencies to notify affected consumers when there has been a breach in the security of their information, the law has previously exempted local public agencies from the disclosure requirement. However, Assembly Bill 1149 and Senate Bill 46, which were recently signed into law and take effect this Jan. 1, extend the requirements of California’s information privacy breach notice law to all public agencies and expand the scope of personal information that prompts a disclosure of a security breach. 

In 2003, California’s first security breach notification law went into effect, and was based on the premise that individuals have a right to know when a data breach has occurred and affected them. If consumers are made aware that their personal information may have been compromised, the lawmakers believed, they can take steps to protect themselves from fraud or identity theft. Personal information that would spark a required notification under the 2003 law included the individual’s first name or first initial and last name in combination with one or more of the following data elements: Social Security number, driver’s license number, California identification card number, account number, credit or debit card number in combination with any required security code, access code or password that would permit access to an individual’s financial account, medical information or health information.

AB 1149 expands this disclosure requirement to apply to a breach of computerized data that is owned, licensed or maintained by any county, city, school district, municipal corporation, special district or other local public agency. Further, SB 46 expands the scope of personal information subject to security breach disclosure requirements to include a user name or e-mail address, in combination with a password or security question and answer, that permits access to an online account.  

New Disclosure Requirements

Starting Jan. 1, local public agencies are required to disclose when unencrypted data is believed to have been acquired by an unauthorized person. This disclosure must be made as quickly as possible and without unreasonable delay. The notice must be written in plain language and include:

1. The name and contact information of the agency.

2. A list of the types of personal information compromised.

3. The time and date of the breach.

4. The length of any delays between the breach and notice. Such delays could be caused by law enforcement investigations.

5. A general description of the incident.

6. Contact information for credit reporting agencies. 

The agency may also include information about the agency’s response and advice on preventing fraud and identity theft after a breach.  

Notice may generally take the form of a written notice or an electronic notice. A so-called substitute notice may be used if the notification would cost more than $250,000, include more than 500,000 people, or if the agency does not have adequate contact information. The substitute notice must include e-mail notice where possible, a clearly noticeable posting on the agency’s website, and notification to a major statewide media organization as well as the California Office of Information Security. Additionally, agencies are required to share notices going to more than 500 California residents with the Attorney General’s Office. Agencies that already maintain their own breach notification procedures for personal information, provide notice in compliance with those procedures, and otherwise comply with the timing requirements of the law are deemed in compliance with the law.

Additionally, SB 46 specifies that, in the case of a breach of a user name or e-mail address, in combination with a password or security question, the responsible agency may comply with the notification requirement by providing the security breach notification in electronic form and direct the person whose information has been breached to promptly change his or her user name or security question as applicable, or take other appropriate steps. SB 46 further specifies that in the case of a breach of specified personal information involving log-in credentials of an e-mail account, the responsible person or agency should not send the security breach notification to an e-mail address, but may instead comply with the notification requirement by another method that provides clear and conspicuous notice.

Establishing Protocol

Agencies that do not have existing notification procedures are advised to establish a protocol in order to timely respond in the event of a data breach. Local public agencies should develop methods to quickly gather the information required for the notice. In addition, local public agencies should institute a system to effectively communicate the information required in the notice within the allowable timeframe. In some situations, an automated notification system may be appropriate. Local public agencies also will need to develop the capability to quickly determine when a substitute notice is acceptable.

Additionally, because the law only requires disclosure for unencrypted data, local public agencies are encouraged to encrypt digital personal information. This effective security measure protects individuals and also exempts agencies from the law’s disclosure requirement. 

While AB 1149 and SB 46 create more responsibility for local public agencies, mandatory notification ensures that residents are made aware of the breach, allowing them to take appropriate action to mitigate or prevent potential financial losses due to fraudulent activity. Furthermore, the local public agencies’ costs of complying with the new law may be reimbursed by the state. To determine whether the mandatory notification requirements constitute state-reimbursable mandates, local public agencies will likely need to file a test claim with the Commission on State Mandates. If the commission determines parts or all of the notification requirements are state mandates, then local public agencies will be able to apply to the California Legislature for reimbursement of costs associated with notification.


* This article was originally published by PublicCEO.com on Nov. 14, 2013. Republished here with permission.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Best Best & Krieger LLP | Attorney Advertising

Written by:

Best Best & Krieger LLP
Contact
more
less

Best Best & Krieger LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.
Feedback? Tell us what you think of the new jdsupra.com!