Introduced Version Senate Bill 340 History

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Senate Bill No. 340

(By Senators Kessler, Chafin, Oliverio, Barnes, White, Foster, Hunter, Green, Minard, Wells, Jenkins, Yoder, Love, Guills, Unger and McKenzie)


[Introduced January 24, 2008; referred to the Committee on the Judiciary.]


A BILL to amend the Code of West Virginia, 1931, as amended, by adding thereto a new article, designated §46A-2B-101, §46A-2B-102, §46A-2B-103, §46A-2B-104, §46A-2B-105 and §46A-2B-106, all relating to the unauthorized acquisition of data that compromises the security, confidentiality or integrity of personal information maintained by the data collector; requiring notification to the consumer of any breach of consumer information security; requiring certain actions by data collectors with respect to breach of security; prohibiting waiver of provisions; making violations an unconscionable act; providing civil penalties for violations; providing other remedies; and providing that the provisions of said article are severable under certain circumstances.

Be it enacted by the Legislature of West Virginia:
That the Code of West Virginia, 1931, as amended, be amended by adding thereto a new article, designated §46A-2B-101, §46A-2B-102, §46A-2B-103, §46A-2B-104, §46A-2B-105 and §46A-2B-106, all to read as follows: ARTICLE 2B. BREACH OF SECURITY OF CONSUMER INFORMATION. §46A-2B-101. Definitions.
For the purposes of this article, the following terms have the following meanings:
(1) "Breach of the security of the data" means unauthorized acquisition of computerized or noncomputerized data that compromises the security, confidentiality or integrity of personal information maintained by the data collector. Good faith acquisition of personal information by an employee or agent of the data collector for a legitimate purpose of the data collector is not a breach of the security of the data, if the personal information is not used for a purpose unrelated to the data collector or subject to further unauthorized disclosure. Breach of the security of noncomputerized data may include, but is not limited to, unauthorized photocopying, facsimiles or other paper- based transmittal of documents.
(2) "Consumer" means an individual.
(3) "Consumer reporting agency" means any person which, for monetary fees, dues or on a cooperative nonprofit basis, regularly engages, in whole or in part, in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing consumer reports to third parties.
(4) "Consumer report" or "credit report" means any written, oral or other communication of any information by a consumer reporting agency bearing on a consumer's credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics or mode of living which is used or expected to be used or collected, in whole or in part, for the purpose of serving as a factor in establishing the consumer's eligibility for:
(A) Credit or insurance to be used primarily for personal, family or household purposes, except that nothing in this article authorizes the use of credit evaluations, credit scoring or insurance scoring in the underwriting of personal lines of property or casualty insurance;
(B) Employment purposes; or
(C) Any other purpose authorized under section 15 U.S.C. 1681b.
(5) "Credit card" has the same meaning as in section 103 of the Truth in Lending Act.
(6) "Data Collector" includes, but is not limited to, a sole proprietorship, partnership, corporation, association or other group, however organized and whether or not organized to operate at a profit, including a financial institution organized, chartered or holding a license or authorization certificate under the law of this state, any other state, the United States, or of any other country, or the parent or subsidiary of a financial institution, and any other entity that, for any purpose, whether by automated collection or otherwise, handles, collects, disseminates or otherwise deals with personal information
(7) "Debit card" means any card or device issued by a financial institution to a consumer for use in initiating an electronic fund transfer from the account holding assets of the consumer at the financial institution, for the purpose of transferring money between accounts or obtaining money, property, labor or services.
(8) "Person" means any individual, firm, partnership, association, corporation, limited liability company, organization or any other entity, but does not include the state or any political subdivision of the state or any agency of the state. 
(9) "Personal information" means a consumer's last name, address or phone number in combination with any one or more of the following data elements, when either the name or the data elements are not encrypted or redacted, or encrypted with an encryption key that was also acquired:
(A) Social Security number;
(B) Driver's license number or state identification card number;
(C) Account number, credit or debit card number, if circumstances exist where the number could be used without additional identifying information, access codes or passwords;
(D) Account passwords or personal identification numbers or other access codes;
(E) Biometric data; or
(F) Any of items listed in items (A) through (E) of this subdivision, when not in connection with the consumer's last name, address or telephone number, if the information compromised would be sufficient to perform or attempt to perform identity theft against the person whose information was compromised.
"Personal information" does not include publicly available information that is lawfully made available to the general public from federal, state or local government records if the information has not been aggregated or consolidated into an electronic database or similar system by the governmental agency or by another person.
§46A-2B-102. Notice of breach.
(a) Except as provided in subsection (d) of this section, any data collector that owns or uses personal information in any form, whether computerized, paper or otherwise, that includes personal information concerning a West Virginia resident shall notify the resident that there has been a breach of the security of the data following discovery or notification of the breach. The disclosure notification shall be made in the most expedient time possible and without unreasonable delay, consistent with the legitimate needs of law enforcement, as provided in subsection (d) of this section, or with any measures necessary to determine the scope of the breach and restore the reasonable integrity, security and confidentiality of the data system.
(b) For purposes of this section, notice to consumers may be provided by one of the following methods:
(1) Written notice;
(2) Electronic notice, if the notice provided is consistent with the provisions regarding electronic records and signatures, for notice legally required to be in writing, set forth in Section 7001, Title 15 of the United States Code, Electronic Signatures in Global and National Commerce Act; or
(3) Substitute notice, if the data collector demonstrates that the cost of providing notice would exceed two hundred fifty thousand dollars or that the affected class of subject persons to be notified exceeds two hundred fifty thousand people, or the data collector does not have sufficient contact information. Substitute notice consists of all of the following:
(A) Conspicuous posting of the notice on the Internet site of the data collector, if the data collector maintains a public Internet page; and
(B) Notification to major statewide media. The notice to media shall include a toll-free phone number where a consumer can learn whether or not that consumer's personal information is included in the security breach.
(c) 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, driver's license or state identification numbers and financial data; and
(2) A toll-free number that the consumer may use to contact the data collector or person or the agent of the data collector or person and from whom the consumer may learn:
(A) What types of information the data collector or person maintained about that consumer or about consumers in general;
(B) Whether or not the data collector or person maintained information about that consumer; and
(C) The toll-free contact telephone numbers and addresses for the major credit reporting agencies.
(d) The notification required by this section may be delayed if a law-enforcement agency determines, in writing, that the notification may impede a criminal investigation. The notification required by this section shall be made after the law-enforcement agency determines that the notification will not compromise the investigation.
(e) A data collector required to provide notification under this article shall provide, or arrange for the provision of, to each consumer to whom notification is provided under subsection (b) of this section and on request, and at no cost to the consumer, consumer credit reports from at least one of the major credit reporting agencies beginning not later than two months following a breach of security, and continuing on a quarterly basis for a period of two years after that.  The data collector shall, in the alternative, pay for security freeze fees for each of the major nationwide credit reporting agencies and for fees associated with two temporary lifts per agency for a twelve month period.
§46A-2B-103. Waiver invalid.
Any waiver of the provisions of this article is contrary to public policy, and is void and unenforceable.
§46A-2B-104. Unconscionable acts.
Violation of any provision of this article constitutes an unconscionable act and is subject to the penalties set forth in article seven of this chapter.
§46A-2B-105. Remedies and enforcement.
(a) Any consumer injured by a violation of this article may institute a civil action to recover damages.
(b) Any data collector that violates, proposes to violate or has violated this article may be enjoined as provided in article seven of this chapter.
(c) The Attorney General may enforce this article.
(d) The rights and remedies available under this section are cumulative to each other and to any other rights and remedies available under law.
§46A-2B-106. Severability.
The provisions of this article are severable. If any phrase, clause, sentence, provision or section is declared to be invalid or preempted, in whole or in part, by federal law or regulation, the validity of the remainder of this article is not affected by the federal law or regulation.

NOTE: The purpose of this bill is to provide a procedure to notify consumers when the unauthorized acquisition of data that compromises the security, confidentiality or integrity of personal information maintained by the data collector occurs. The bill requires that consumers be notified of a breach of information security maintained by the data collector. Civil penalties and other remedies are provided for violations. This article is new; therefore, strike-throughs and underscoring have been omitted.
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