Regular Session 2017-2018 House Bill 1846 P.N. 2566

PRINTER'S NO. 2566

THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

No.

1846

Session of

2017

INTRODUCED BY ELLIS, IRVIN, RABB, MILNE, PICKETT, BAKER, DAVIS,

QUIGLEY, BOBACK, CHARLTON, O'NEILL, GROVE, DRISCOLL, THOMAS,

MILLARD, JAMES, A. HARRIS, GODSHALL, KORTZ, C. QUINN,

D. COSTA, TOEPEL, TALLMAN AND KAMPF, OCTOBER 13, 2017

REFERRED TO COMMITTEE ON COMMERCE, OCTOBER 13, 2017

AN ACT

Amending the act of December 22, 2005 (P.L.474, No.94), entitled

"An act providing for the notification of residents whose

personal information data was or may have been disclosed due

to a security system breach; and imposing penalties," further

providing for definitions and for notification of breach;

providing for notification; further providing for notice

exemption; providing for safeguarding of personal

information; and further providing for civil relief.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. The definitions of "breach of the security of the

system," "notice" and "personal information" in section 2 of the

act of December 22, 2005 (P.L.474, No.94), known as the Breach

of Personal Information Notification Act, are amended and the

section is amended by adding definitions to read:

Section 2. Definitions.

The following words and phrases when used in this act shall

have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Breach of the security of the system." The [unauthorized

access and acquisition of computerized data that materially

compromises] loss, unauthorized access, acquisition or use of

unencrypted data, encrypted data, the confidential process or

key that is capable of compromising the security or

confidentiality of personal information maintained by the entity

as part of a database of personal information regarding multiple

individuals [and that causes or the entity reasonably believes

has caused or will cause loss or injury to any resident of this

Commonwealth]. Good faith acquisition of personal information by

an employee or agent of the entity for the purposes of the

entity is not a breach of the security of the system if the

personal information is not used for a purpose other than the

lawful purpose of the entity and is not subject to further

unauthorized disclosure.

"Bureau." The Bureau of Consumer Protection in the Office of

Attorney General.

* * *

"Health insurance information." An individual's health

insurance policy number or subscriber identification number, a

unique identifier used by a health insurer to identify the

individual or information in an individual's application and

claims history, including appeals records.

* * *

"Medical information." Information regarding an individual's

medical history, mental or physical condition or medical

treatment or diagnosis by a health care professional.

"Notice." The term shall include notice of residents and

notice of Commonwealth.

"Notice of Commonwealth." Written notice to the Director of

the Bureau of Consumer Protection of the Office of Attorney

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General.

"Notice of residents." [May be provided by any] For

residents of this Commonwealth, any of the following methods of

notification:

(1) Written notice to the last known home address for

the individual.

(2) Telephonic notice, if the customer can be reasonably

expected to receive it and the notice is given in a clear and

conspicuous manner, describes the incident in general terms

and verifies personal information but does not require the

customer to provide personal information and the customer is

provided with a telephone number to call or Internet website

to visit for further information or assistance.

(3) E-mail notice, if a prior business relationship

exists and the person or entity has a valid e-mail address

for the individual.

(4) (i) Substitute notice, if the entity demonstrates

one of the following:

(A) The cost of providing notice would exceed

$100,000.

(B) The affected class of subject persons to be

notified exceeds 175,000.

information.

(ii) Substitute notice shall consist of all of the

following:

(A) E-mail notice when the entity has an e-mail

address for the subject persons.

(B) Conspicuous posting of the notice on the

entity's Internet website if the entity maintains

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one.

"Personal information." Information that is under the

control of an individual, is not otherwise generally available

to the public through lawful means and is linked or linkable by

the person to a specific individual or linked to a device that

is associated with or routinely used by a specific individual,

including:

(1) An individual's first name or first initial and last

name in combination with and linked to any one or more of the

following data elements when the data elements are not

encrypted or redacted:

(i) Social Security number.

(ii) Driver's license number or a State

identification card number issued in lieu of a driver's

license.

(iii) Financial 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.

(1.1) Any of the following for an individual:

(i) A government-issued identification number,

including a tax identification number and a passport

number.

(ii) A postal address.

(iii) An e-mail address.

(iv) A telephone number.

(v) A fax number.

(vi) A debit or credit card number.

(vii) Medical information.

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(viii) Health insurance information.

(ix) A biometric identifier, including a fingerprint

or voice print.

(x) A unique persistent identifier, including:

(A) A number or alphanumeric string that

uniquely identifies a networked device.

(B) An identification number or service account

number, including a financial account number, credit

card or debit card number, health account number or

retail account number.

vehicle identification number or license plate

number.

(D) A security code, access code or password

that is necessary to access an individual's service

account.

(xi) A unique identifier or other uniquely assigned

or descriptive information about a personal computing or

communication device.

(xii) Information that is collected, created,

processed, used, disclosed, stored or otherwise

maintained and linked or linkable by the person to any of

the information enumerated under this paragraph.

(2) The term does not include publicly available

information that is lawfully made available to the general

public from Federal, State or local government records.

* * *

Section 2. Section 3(a) of the act is amended and the

section is amended by adding subsections to read:

Section 3. Notification of breach.

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(a) General rule.--An entity that maintains, stores or

manages computerized data that includes personal information

shall provide notice of any breach of the security of the system

following discovery of the breach of the security of the system

[to any resident of this Commonwealth 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 section 4 or in order to take any measures

necessary to determine the scope of the breach and to restore

the reasonable integrity of the data system, the notice shall be

made without unreasonable delay. For the purpose of this

section, a resident of this Commonwealth may be determined to be

an individual whose principal mailing address, as reflected in

the computerized data which is maintained, stored or managed by

the entity, is in this Commonwealth.

* * *

(d) Notice to residents of this Commonwealth.--

(1) Notification must be in plain language.

(2) Notice of the breach of the security of the system

under this section shall be made to the affected residents of

this Commonwealth and must include the following:

(i) The date, estimated date or date range of the

breach of the security of the system.

(ii) Whether the notification was delayed as a

result of a law enforcement investigation.

(iii) A list of types of information that were or

are believed to have been subject to the breach of the

security of the system.

(iv) A general description of the breach of the

security of the system.

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(v) Toll-free telephone numbers and addresses of

consumer reporting agencies if the breach of the security

of the system exposed a Social Security number or an

identification card number.

(vi) The name and contact information of the

reporting agency that was notified under section 5.

(3) The entity providing notice under this subsection

may include information about what the entity has done to

protect affected individuals and offer advice on what steps

affected individuals may take to protect their information

and what steps the individual whose information has been

breached may take to protect himself or herself.

(4) Notice under this subsection shall be made within 30

days of learning of the breach of the security of the system.

(e) Notice to Attorney General.--

(1) Notice of the breach of the security of the system

under this section shall be made to the bureau .

(2) Notice under this subsection must include the

following:

(i) The nature of the breach of the security of the

system.

(ii) The number of residents of this Commonwealth

affected by the breach of the security of the system.

(iii) Steps taken by the entity relating to the

breach of the security of the system.

(3) Notice under this subsection shall be made within 30

days of the breach of the security of the system.

(f) State agencies.--If a State agency is the subject of a

breach of security of the system, the State agency must provide

notice of the breach of security of the system required under

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subsection (a) without unreasonable delay following discovery of

the breach. A State agency under the Governor's jurisdiction

shall provide notice of a breach of the security of the system

to the Governor's Office of Administration without unreasonable

delay. Notification under this subsection shall occur

notwithstanding the procedures and policies under section 7.

(g) Counties, school districts and municipalities.--A

county, s chool district or municipality shall provide notice to

the district attorney in the county in which the breach occurred

of a breach of the security of the system required under

subsection (a) without unreasonable delay following discovery of

the breach. Notification under this subsection shall occur

notwithstanding the procedures and policies under section 7.

Section 3. The act is amended by adding a section to read:

Section 5.1. Notification.

When an entity provides notification under this act, the

entity shall also notify, without unreasonable delay, the bureau

of the timing, distribution and number of notices and any other

information as required by the bureau.

Section 4. Section 7(b) of the act is amended by adding a

paragraph to read:

Section 7. Notice exemption.

* * *

(b) Compliance with Federal requirements.--

* * *

(3) If an entity does not have a Federal or state

notification rule, regulation, procedure or guideline in

effect, the entity must comply with this act.

Section 5. The act is amended by adding a section to read:

Section 7.1. Safeguarding of personal information.

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(a) Duty.--Any entity in possession of personal information

of another person shall safeguard the data, computer files or

documents containing the information from misuse by third

parties and shall destroy, erase or make unreadable such data,

computer files or documents prior to disposal.

(b) Policy.--The entity shall develop a policy to govern the

proper storage of data which includes personally identifiable

information. The policy shall address identifying, collecting,

maintaining, displaying and transferring personally identifiable

information, using personally identifiable information in test

environments, remediating personally identifiable information

stored on legacy systems and other relevant issues. A goal of

the policy shall be to reduce the risk of future breaches of

security of the system.

personal information in the course of business shall create a

privacy protection policy, which shall be published or publicly

displayed, including posting on an Internet web page. The policy

shall protect the confidentiality of the personal information,

prohibit unlawful disclosure of personal information and limit

access to personal information. This subsection shall not apply

to a Commonwealth agency or a political subdivision.

(d) Disposal policy.--

(1) When disposing of records, each entity shall meet

the following minimum standards for proper disposal of

records containing personal information:

(i) Paper records containing personal information

shall be either redacted, burned, pulverized or shredded

so that personal data cannot practicably be read or

reconstructed.

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(ii) Electronic records and other nonpaper records

containing personal information shall be destroyed or

erased so that personal information cannot practicably be

read or reconstructed.

(2) An entity disposing of personal information may

contract with a third party to dispose of personal

information in accordance with this section. A third party

hired to dispose of material containing personal information

shall implement and monitor compliance with policies and

procedures that prohibit unauthorized access to or

acquisition of or use of personal information during the

collection, transportation and disposal of personal

information.

(e) Unfair methods of competition and unfair or deceptive

acts or practices.--The following shall be considered unfair

methods of competition and unfair or deceptive acts or practices

by an entity that collects or possesses personal information:

(1) Failing to create a storage policy as described

under subsection (b).

(2) Failing to create, publish or publicly display or

comply with a privacy protection policy as described under

subsection (c).

(3) Failing to dispose of records in a manner described

under subsection (d).

(4) Failing to provide consumers with opt-out consent

prior to the entity using, disclosing or permitting a third

party to have access to personal information of consumers or

failing to provide consumer with a means to withdraw a

previous consent.

(5) Refusing to provide service to consumers who

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exercise their right to opt out of an entity using,

disclosing or permitting a third party from having access to

their personal information.

(6) Failing to reasonably safeguard or protect personal

information, maintained by an entity or a vendor, from a

breach of the security of the system.

Section 6. Section 8 of the act is amended to read:

Section 8. Civil relief.

A violation of this act shall be deemed to be an unfair

method of competition and an unfair or deceptive act or practice

in violation of the act of December 17, 1968 (P.L.1224, No.387),

known as the Unfair Trade Practices and Consumer Protection Law.

The Office of Attorney General shall have exclusive authority to

bring an action under the Unfair Trade Practices and Consumer

Protection Law for a violation of this act.

Section 7. This act shall take effect in 60 days.

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