2015 -- H 5220

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LC000773

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2015

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A N   A C T

RELATING TO CRIMINAL OFFENSES - IDENTITY THEFT PROTECTION

     Introduced By: Representatives Ucci, Nardolillo, Regunberg, Winfield, and Corvese

     Date Introduced: January 29, 2015

     Referred To: House Corporations

     It is enacted by the General Assembly as follows:

     SECTION 1. Chapter 11-49.2 of the General Laws entitled "Identity Theft Protection" is

hereby repealed in its entirety.

CHAPTER 11-49.2

Identity Theft Protection

     11-49.2-1. Short title. -- This chapter shall be known and may be cited as the "Rhode

Island Identity Theft Protection Act of 2005."

     11-49.2-2. Legislative findings. -- It is hereby found and declared as follows:

      (1) There is a growing concern regarding the possible theft of an individual's identity and

a resulting need for measures to protect the privacy of personal information. It is the intent of the

general assembly to ensure that personal information about Rhode Island residents is protected.

To that end, the purpose of this chapter is to require businesses that own or license personal

information about Rhode Islanders to provide reasonable security for that information. For the

purpose of this chapter, the phrase "owns or licenses" is intended to include, but is not limited to,

personal information that a business retains as part of the business' internal customer account or

for the purpose of using that information in transactions with the person to whom the information

relates.

      (2) A business that owns or licenses computerized unencripted personal information

about a Rhode Island resident shall implement and maintain reasonable security procedures and

practices appropriate to the nature of the information, to protect the personal information from

unauthorized access, destruction, use, modification, or disclosure.

      (3) A business that discloses computerized unencripted personal information about a

Rhode Island resident pursuant to a contract with a nonaffiliated third-party shall require by

contract that the third-party implement and maintain reasonable security procedures and practices

appropriate to the nature of the information, to protect the personal information from

unauthorized access, destruction, use, modification, or disclosure.

     11-49.2-3. Notification of breach. -- (a) Any state agency or person that owns, maintains

or licenses computerized data that includes personal information, shall disclose any breach of the

security of the system which poses a significant risk of identity theft following discovery or

notification of the breach in the security of the data to any resident of Rhode Island whose

unencrypted personal information was, or is reasonably believed to have been, acquired by an

unauthorized person or a person without authority, to acquire said information. The disclosure

shall be made in the most expedient time possible and without unreasonable delay, consistent

with the legitimate needs of law enforcement, as provided in subdivision (c), or any measures

necessary to determine the scope of the breach and restore the reasonable integrity of the data

system.

      (b) Any state agency or person that maintains computerized unencripted data that

includes personal information that the state agency or person does not own shall notify the owner

or licensee of the information of any breach of the security of the data which poses a significant

risk of identity theft immediately, following discovery, if the personal information was, or is

reasonably believed to have been, acquired by an unauthorized person.

      (c) The notification required by this section may be delayed if a law enforcement agency

determines that the notification will impede a criminal investigation. The notification required by

this section shall be made after the law enforcement agency determines that it will not

compromise the investigation.

      (d) The notification must be prompt and reasonable following the determination of the

breach unless otherwise provided in this section. Any state agency or person required to make

notification under this section and who fails to do so promptly following the determination of a

breach or receipt of notice from law enforcement as provided for is subsection (c) is liable for a

fine as set forth in § 11-49.2-6.

     11-49.2-4. Notification of breach -- Consultation with law enforcement. --

Notification of a breach is not required if, after an appropriate investigation or after consultation

with relevant federal, state, or local law enforcement agencies, a determination is made that the

breach has not and will not likely result in a significant risk of identity theft to the individuals

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whose personal information has been acquired.

     11-49.2-5. Definitions. -- The following definitions apply to this section:

      (a) "Person" shall include any individual, partnership association, corporation or joint

venture.

      (b) For purposes for this section, "breach of the security of the system" means

unauthorized acquisition of unencrypted computerized data that compromises the security,

confidentiality, or integrity of personal information maintained by the state agency or person.

Good faith acquisition of personal information by an employee or agent of the agency for the

purposes of the agency is not a breach of the security of the system; provided, that the personal

information is not used or subject to further unauthorized disclosure.

      (c) For purposes of this section, "personal information" means an individual's first name

or first initial and last name in combination with any one or more of the following data elements,

when either the name or the data elements are not encrypted:

      (1) Social security number;

      (2) Driver's license number or Rhode Island Identification Card number;

      (3) 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.

      (d) For purposes of this section, "notice" 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 set for the in Section 7001 of Title 15 of the United States Code;

      (3) Substitute notice, if the state agency or person demonstrates that the cost of providing

notice would exceed twenty-five thousand dollars ($25,000), or that the affected class of subject

persons to be notified exceeds fifty thousand (50,000), or the state agency or person does not have

sufficient contact information. Substitute notice shall consist of all of the following:

      (A) E-mail notice when the state agency or person has an e-mail address for the subject

persons;

      (B) Conspicuous posting of the notice on the state agency's or person's website page, if

the state agency or person maintains one;

      (C) Notification to major statewide media.

     11-49.2-6. Penalties for violation. -- (a) Each violation of this chapter is a civil violation

for which a penalty of not more than a hundred dollars ($100) per occurrence and not more than

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twenty-five thousand dollars ($25,000) may be adjudged against a defendant.

      (b) No Waiver of Notification. - Any waiver of a provision of this section is contrary to

public policy and is void and unenforceable.

     11-49.2-7. Agencies with security breach procedures. -- Any state agency or person

that maintains its own security breach procedures as part of an information security policy for the

treatment of personal information and otherwise complies with the timing requirements of § 11-

49.2-3, shall be deemed to be in compliance with the security breach notification requirements of

§ 11-49.2-3, provided such person notifies subject persons in accordance with such person's

policies in the event of a breach of security. Any person that maintains such a security breach

procedure pursuant to the rules, regulations, procedures or guidelines established by the primary

or functional regulator, as defined in 15 USC 6809(2), shall be deemed to be in compliance with

the security breach notification requirements of this section, provided such person notifies subject

persons in accordance with the policies or the rules, regulations, procedures or guidelines

established by the primary or functional regulator in the event of a breach of security of the

system. A financial institution, trust company, credit union or its affiliates that is subject to and

examined for, and found in compliance with the Federal Interagency Guidelines on Response

Programs for Unauthorized Access to Customer Information and Customer Notice shall be

deemed in compliance with this chapter. A provider of health care, health care service plan,

health insurer, or a covered entity governed by the medical privacy and security rules issued by

the federal Department of Health and Human Services, Parts 160 and 164 of Title 45 of the Code

of Federal Regulations, established pursuant to the Health Insurance Portability and

Accountability Act of 1996 (HIPAA) shall be deemed in compliance with this chapter.

     SECTION 2. Title 11 of the General Laws entitled "CRIMINAL OFFENSES" is hereby

amended by adding thereto the following chapter:

CHAPTER 49.3

IDENTITY THEFT PROTECTION ACT OF 2015

     11-49.3-1. Short title. -- This chapter shall be known and may be cited as the "Rhode

Island Identity Theft Protection Act of 2015."

     11-49.3-2. Risk-based information security program. -- (a) A municipal agency, state

agency or person that stores, collects, processes, maintains, acquires, uses, owns or licenses

personal information about a Rhode Island resident shall implement and maintain a risk-based

information security program which contains reasonable security procedures and practices

appropriate to the size and scope of the organization, the nature of the information and the

purpose for which the information was collected in order to protect the personal information from

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unauthorized access, use, modification, destruction or disclosure and to preserve the

confidentiality, integrity, and availability of such information. A municipal agency, state agency

or person shall not retain personal information for a period longer than is reasonably required to

provide the services requested, to meet the purpose for which it was collected, or in accordance

with a written retention policy or as may be required by law. A municipal agency, state agency or

person shall destroy all personal information, regardless of the medium that such information is

in, in a secure manner, including, but not limited to, shredding, pulverization, incineration, or

erasure.

      (b) A municipal agency, state agency or person that discloses personal information about

a Rhode Island resident to a nonaffiliated third party shall require by written contract that the

third party implement and maintain reasonable security procedures and practices appropriate to

the size and scope of the organization, the nature of the information and the purpose for which the

information was collected in order to protect the personal information from unauthorized access,

use, modification, destruction, or disclosure.

     11-49.3-3. Definitions. -- (a) The following definitions apply to this section:

     (1) "Breach of the security of the system" means unauthorized access or acquisition of

unencrypted computerized data information that compromises the security, confidentiality, or

integrity of personal information maintained by the municipal agency, state agency or person.

Good faith acquisition of personal information by an employee or agent of the agency for the

purposes of the agency is not a breach of the security of the system; provided, that the personal

information is not used or subject to further unauthorized disclosure.

     (2) "Encrypted" means the transformation of data through the use of a one hundred

twenty-eight (128) bit or higher algorithmic process into a form in which there is a low

probability of assigning meaning without use of a confidential process or key. Data shall not be

considered to be encrypted if it is acquired in combination with any key, security code, or

password that would permit access to the encrypted data.

     (3) "Health Insurance Information" means an individual’s health insurance policy number

or subscriber identification number, any unique identifier used by a health insurer to identify the

individual, or any information in an individual’s application and claims history, including any

appeals records.

     (4) "Medical Information" means any information regarding an individual's medical

history, mental or physical condition, or medical treatment or diagnosis by a health care

professional.

     (5) "Municipal Agency" means any department, division, agency, commission, board,

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office, bureau, authority, quasi-public authority, or school, fire or water district within Rhode

Island other than a state agency and any other agency that is in any branch of municipal

government and exercises governmental functions other than in an advisory nature.

     (6) "Owner" means the original collector of the information.

     (7) "Person" shall include any individual, sole proprietorship, partnership, association,

corporation, or joint venture, business or legal entity, trust, estate, cooperative or other

commercial entity.

     (8) "State agency" means any department, division, agency, commission, board, office,

bureau, authority, or quasi-public authority within Rhode Island, either branch of the Rhode

Island general assembly, or an agency or committee thereof, the judiciary, or any other agency

that is in any branch of Rhode Island state government and which exercises governmental

functions other than in an advisory nature.

     (9) "Personal information" means an individual's first name or first initial and last name

in combination with any one or more of the following data elements, when either the name or the

data elements are not encrypted or are in hard copy paper format:

     (i) Social security number;

     (ii) Driver's license number, or Rhode Island identification card number or tribal

identification number;

     (iii) Account number, credit or debit card number, in combination with or without any

required security code, access code, password or personal identification number that would

permit access to an individual's financial account;

     (iv) Medical or health insurance information; or

     (v) E-mail address with any required security code, access code, or password that would

permit access to an individual's account.

     (b) For purposes of this section, personal information does not include publicly available

information that is lawfully made available to the general public from federal, state or local

government records.

     (c) For purposes of this section, "notice" may be provided by one of the following

methods:

     (i) Written notice;

     (ii) Electronic notice, if the notice provided is consistent with the provisions regarding

electronic records and signatures set for the in 15 U.S.C. §7001;

     (iii) Substitute notice, if the municipal agency, state agency or person demonstrates that

the cost of providing notice would exceed twenty-five thousand dollars ($25,000), or that the

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affected class of subject persons to be notified exceeds fifty thousand dollars ($50,000), or the

municipal agency, state agency or person does not have sufficient contact information. Substitute

notice shall consist of all of the following:

     (A) E-mail notice when the municipal agency, state agency or person has an e-mail

address for the subject persons;

     (B) Conspicuous posting of the notice on the municipal agency's, state agency's or

person's website page, if the municipal agency, state agency or person maintains one; and

     (C) Notification to major statewide media.

     11-49.3-4. Notification of breach. -- (a) (1) Any municipal agency, state agency or

person that stores, collects, processes, maintains, acquires, uses, owns or licenses data that

includes personal information, shall provide notification as set forth in this section of any

disclosure of personal information, or any breach of the security of the system, which poses a risk

of identity theft to any resident of Rhode Island whose personal information was, or is reasonably

believed to have been, acquired by an unauthorized person or entity. A municipal agency, state

agency or person that owns the personal information that is subject to a breach shall notify

according to this subsection (a) and any municipal agency, state agency or person that stores,

collects, processes, maintains, acquires, licenses or uses personal information, but does not own

such information, shall notify as set forth in subsection (b) of this section.

     (2) The notification shall be made in the most expedient time possible but no later than

fifteen (15) calendar days after discovery. In the event that any Rhode Island residents are to be

notified, the municipal agency, state agency or person shall notify the attorney general and the

major credit reporting agencies as to the timing, content and distribution of the notices and the

approximate number of affected individuals. Notification to the attorney general and the major

credit reporting agencies shall be made without delaying notice to affected Rhode Island

residents.

     (b) Any municipal agency, state agency or person that stores, collects, processes,

maintains, acquires, uses, licenses, provides services using, or has access to personal information

about Rhode Island residents that the municipal agency, state agency or person does not own shall

notify and cooperate fully with the owner of the information of any breach of the security of the

data which poses a risk of identity theft immediately following discovery, if the personal

information was, or is reasonably believed to have been, acquired by an unauthorized person.

     (c) The notification required by this section may be delayed if a federal, state or local law

enforcement agency determines that the notification will impede a criminal investigation. The

federal, state or local law enforcement agency must notify the municipal agency, state agency or

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person of the request to delay notification without unreasonable delay. If notice is delayed due to

such determination then as soon as the federal, state or municipal law enforcement agency

determines and informs the municipal agency, state agency or person that notification no longer

poses a risk of impeding an investigation, notice shall be provided, as soon as practicable and

without unreasonable delay but no later than fifteen (15) calendar days after the law enforcement

agency determination. The municipal agency, state agency or person shall cooperate with federal,

state or municipal law enforcement in its investigation of any breach of security or unauthorized

acquisition or use, which shall include the sharing of information relevant to the incident;

provided however, that such disclosure shall not require the disclosure of confidential business

information or trade secrets.

     (d) The notification must be prompt and reasonable following the determination of the

breach unless otherwise provided in this section. Any municipal agency, state agency or person

required to make notification under this section and who fails to do so is liable for a violation as

set forth in § 11-49.3-5.

     (e) The notification to individuals must include the following information to the extent

known:

     (1) A general description of the incident, including how the security breach occurred and

the number of affected individuals;

     (2) The type of information that was subject to the breach;

     (3) Date that the breach occurred;

     (4) Date that the breach was discovered;

     (5) A clear and concise description of any remediation services offered to affected

individuals including toll free numbers and websites to contact: (i) the credit reporting agencies;

(ii) remediation service providers; (iii) the Attorney General; and

     (6) A clear and concise description of: the consumer's right to file or obtain a police

report; how a consumer requests a security freeze and the necessary information to be provided

when requesting the security freeze; and any fees required to be paid to the consumer reporting

agencies.

     11-49.3-5. Penalties for violation. -- (a) Each reckless violation of this chapter is a civil

violation for which a penalty of not more than one hundred dollars ($100) per record may be

adjudged against a defendant.

     (b) Each knowing and willful violation of this chapter is a civil violation for which a

penalty of not more than two hundred dollars ($200) per record may be adjudged against a

defendant.

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     (c) Whenever the attorney general has reason to believe that a violation of this chapter

has occurred and that proceedings would be in the public interest, the attorney general may bring

an action in the name of the state against the business or person in violation.

     (d) Any waiver of a provision of this section is contrary to public policy and is void and

unenforceable.

     11-49.3-6. Agencies or persons with security breach procedures. -- (a) Any municipal

agency, state agency or person shall be deemed to be in compliance with the security breach

notification requirements of § 11-49.3-4, if:

     (1) The municipal agency, state agency or person maintains its own security breach

procedures as part of an information security policy for the treatment of personal information and

otherwise complies with the timing requirements of § 11-49.3-4, and notifies subject persons in

accordance with such municipal agency’s, state agency’s, or person's notification policies in the

event of a breach of security; or

     (2) The person maintains a security breach procedure pursuant to the rules, regulations,

procedures or guidelines established by the primary or functional regulator, as defined in 15

U.S.C. 6809(2), and notifies subject persons in accordance with the policies or the rules,

regulations, procedures or guidelines established by the primary or functional regulator in the

event of a breach of security of the system.

     (b) A financial institution, trust company, credit union or its affiliates that is subject to

and examined for, and found in compliance with the Federal Interagency Guidelines on Response

Programs for Unauthorized Access to Customer Information and Customer Notice shall be

deemed in compliance with this chapter.

     (c) A provider of health care, health care service plan, health insurer, or a covered entity

governed by the medical privacy and security rules issued by the federal Department of Health

and Human Services, Parts 160 and 164 of Title 45 of the Code of Federal Regulations,

established pursuant to the Health Insurance Portability and Accountability Act of 1996 (HIPAA)

shall be deemed in compliance with this chapter.

     SECTION 3. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO CRIMINAL OFFENSES - IDENTITY THEFT PROTECTION

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     This act would create the Identity Theft Protection Act of 2015, to protect personal

information from unauthorized access, use, modification, destruction or disclosure, and to

preserve the confidentiality and integrity of such information.

     This act would take effect upon passage.

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