Bill Text: MI HB4983 | 2017-2018 | 99th Legislature | Introduced

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Bill Title: Consumer protection; other; notice of security breach requirements; revise, and require public access. Amends sec. 12 of 2004 PA 452 (MCL 445.72).

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2017-09-20 - Bill Electronically Reproduced 09/19/2017 [HB4983 Detail]

Download: Michigan-2017-HB4983-Introduced.html

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HOUSE BILL No. 4983

 

 

September 19, 2017, Introduced by Reps. Hammoud, Zemke, Gay-Dagnogo, Geiss, Wittenberg, Lucido, Schor, Chang and Jones and referred to the Committee on Communications and Technology.

 

     A bill to amend 2004 PA 452, entitled

 

"Identity theft protection act,"

 

by amending section 12 (MCL 445.72), as amended by 2010 PA 315.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 12. (1) Unless the person or agency determines that the

 

security breach has not or is not likely to cause substantial loss

 

or injury to, or result in identity theft with respect to, 1 or

 

more residents of this state, a person or agency that owns or

 

licenses data that are included in a database that discovers a

 

security breach, or receives notice of a security breach under

 

subsection (2), shall provide a notice of the security breach to

 

each resident of this state who meets 1 or more of the following:

 

     (a) That resident's unencrypted and unredacted personal

 

information was accessed and acquired by an unauthorized person.

 

     (b) That resident's personal information was accessed and

 

acquired in encrypted form by a person with unauthorized access to

 

the encryption key.

 

     (2) Unless the person or agency determines that the security

 

breach has not or is not likely to cause substantial loss or injury

 

to, or result in identity theft with respect to, 1 or more

 

residents of this state, a person or agency that maintains a

 

database that includes data that the person or agency does not own

 

or license that discovers a breach of the security of the database

 

shall provide a notice to the owner or licensor of the information

 

of the security breach.

 

     (3) In determining whether a security breach is not likely to

 

cause substantial loss or injury to, or result in identity theft

 

with respect to, 1 or more residents of this state under subsection

 

(1) or (2), a person or agency shall act with the care an

 

ordinarily prudent person or agency in like position would exercise

 

under similar circumstances.

 

     (4) A person or agency shall provide any notice required under

 

this section without unreasonable delay. A person or agency may

 

delay providing notice without violating this subsection if either

 

of the following is met:

 

     (a) A delay is necessary in order for the person or agency to

 

take any measures necessary to determine the scope of the security

 

breach and restore the reasonable integrity of the database.

 

However, the agency or person shall provide the notice required

 

under this subsection without unreasonable delay after the person

 

or agency completes the measures necessary to determine the scope

of the security breach and restore the reasonable integrity of the

 

database.

 

     (b) A law enforcement agency determines and advises the agency

 

or person that providing a notice will impede a criminal or civil

 

investigation or jeopardize homeland or national security. However,

 

the agency or person shall provide the notice required under this

 

section without unreasonable delay after the law enforcement agency

 

determines that providing the notice will no longer impede the

 

investigation or jeopardize homeland or national security.

 

     (5) Except as provided in subsection (11), an agency or person

 

shall provide any notice required under this section by providing 1

 

or more of the following to the recipient:

 

     (a) Written notice sent to the recipient at the recipient's

 

postal address in the records of the agency or person.

 

     (b) Written notice sent electronically to the recipient if any

 

of the following are met:

 

     (i) The recipient has expressly consented to receive

 

electronic notice.

 

     (ii) The person or agency has an existing business

 

relationship with the recipient that includes periodic electronic

 

mail communications and based on those communications the person or

 

agency reasonably believes that it has the recipient's current

 

electronic mail address.

 

     (iii) The person or agency conducts its business primarily

 

through internet account transactions or on the internet.

 

     (c) If not otherwise prohibited by state or federal law,

 

notice given by telephone by an individual who represents the

person or agency if all of the following are met:

 

     (i) The notice is not given in whole or in part by use of a

 

recorded message.

 

     (ii) The recipient has expressly consented to receive notice

 

by telephone, or if the recipient has not expressly consented to

 

receive notice by telephone, the person or agency also provides

 

notice under subdivision (a) or (b) if the notice by telephone does

 

not result in a live conversation between the individual

 

representing the person or agency and the recipient within 3

 

business days after the initial attempt to provide telephonic

 

notice.

 

     (d) Substitute notice, if the person or agency demonstrates

 

that the cost of providing notice under subdivision (a), (b), or

 

(c) will exceed $250,000.00 or that the person or agency has to

 

provide notice to more than 500,000 residents of this state. A

 

person or agency provides substitute notice under this subdivision

 

by doing all of the following:

 

     (i) If the person or agency has electronic mail addresses for

 

any of the residents of this state who are entitled to receive the

 

notice, providing electronic notice to those residents.

 

     (ii) If the person or agency maintains a website,

 

conspicuously posting the notice on that website.

 

     (iii) Notifying major statewide media. A notification under

 

this subparagraph shall include a telephone number or a website

 

address that a person may use to obtain additional assistance and

 

information.

 

     (6) A notice under this section shall do all of the following:

     (a) For a notice provided under subsection (5)(a) or (b), be

 

written in a clear and conspicuous manner and contain the content

 

required under subdivisions (c) to (g).

 

     (b) For a notice provided under subsection (5)(c), clearly

 

communicate the content required under subdivisions (c) to (g) to

 

the recipient of the telephone call.

 

     (c) Describe Provide the date of the breach and describe the

 

security breach in general terms.

 

     (d) Describe the type of personal information that is the

 

subject of the unauthorized access or use.

 

     (e) If applicable, generally describe what the agency or

 

person providing the notice has done to protect data from further

 

security breaches.

 

     (f) Include a telephone number where a notice recipient may

 

obtain assistance or additional information.

 

     (g) Remind notice recipients of the need to remain vigilant

 

for incidents of fraud and identity theft.

 

     (7) A person or agency may provide any notice required under

 

this section pursuant to an agreement between that person or agency

 

and another person or agency, if the notice provided pursuant to

 

the agreement does not conflict with any provision of this section.

 

     (8) Except as provided in this subsection, after After a

 

person or agency provides a notice under this section, the person

 

or agency shall do all of the following:

 

     (a) Except as provided in this subdivision, notify each

 

consumer reporting agency that compiles and maintains files on

 

consumers on a nationwide basis, as defined in 15 USC 1681a(p), of

the security breach without unreasonable delay. A notification

 

under this subsection subdivision shall include the number of

 

notices that the person or agency provided to residents of this

 

state and the timing of those notices. This subsection subdivision

 

does not apply if either of the following is met:

 

     (i) (a) The person or agency is required under this section to

 

provide notice of a security breach to 1,000 or fewer residents of

 

this state.

 

     (ii) (b) The person or agency is subject to 15 USC 6801 to

 

6809.

 

     (b) Post the notice in a prominent and conspicuous place on

 

its internet website that is fully accessible to its customers and

 

the public. In addition, the person or agency shall ensure that the

 

website includes the following information about all of its

 

security breaches sorted chronologically according to the date of

 

each breach:

 

     (i) If the person or agency provided notice of the breach

 

under state or federal law, a copy of that notice.

 

     (ii) If the person or agency did not provide notice of the

 

breach, the date and a general description of the security breach;

 

a description of the type of personal information that was the

 

subject of the unauthorized access or use; and a general

 

description of any action taken by the person or agency in

 

connection with that security breach to protect data from further

 

unauthorized access or use.

 

     (c) If the person or agency conducts business in this state

 

and in connection with that business requests personal identifying

information from an individual, notify the individual that

 

information about the person's or agency's security breach history

 

is available at its website described in subdivision (b).

 

     (d) Provide all of the information it posts on its website

 

under subdivision (b) to the department of the attorney general.

 

     (9) A financial institution that is subject to, and has

 

notification procedures in place that are subject to examination by

 

the financial institution's appropriate regulator for compliance

 

with, the interagency guidance on response programs for

 

unauthorized access to customer information and customer notice

 

prescribed by the board of governors of the federal reserve system

 

and the other federal bank and thrift regulatory agencies, or

 

similar guidance prescribed and adopted by the national credit

 

union administration, and its affiliates, is considered to be in

 

compliance with this section.

 

     (10) A person or agency that is subject to and complies with

 

the health insurance portability and accountability act of 1996,

 

Public Law 104-191, and with regulations promulgated under that

 

act, 45 CFR parts 160 and 164, for the prevention of unauthorized

 

access to customer information and customer notice is considered to

 

be in compliance with this section.

 

     (11) A public utility that sends monthly billing or account

 

statements to the postal address of its customers may provide

 

notice of a security breach to its customers in the manner

 

described in subsection (5), or alternatively by providing all of

 

the following:

 

     (a) As applicable, notice as described in subsection (5)(b).

     (b) Notification to the media reasonably calculated to inform

 

the customers of the public utility of the security breach.

 

     (c) Conspicuous posting of the notice of the security breach

 

on the website of the public utility.

 

     (d) Written notice sent in conjunction with the monthly

 

billing or account statement to the customer at the customer's

 

postal address in the records of the public utility.

 

     (12) A person that provides notice of a security breach in the

 

manner described in this section when a security breach has not

 

occurred, with the intent to defraud, is guilty of a misdemeanor

 

punishable as follows:

 

     (a) Except as otherwise provided under subdivisions (b) and

 

(c), by imprisonment for not more than 93 days or a fine of not

 

more than $250.00 for each violation, or both.

 

     (b) For a second violation, by imprisonment for not more than

 

93 days or a fine of not more than $500.00 for each violation, or

 

both.

 

     (c) For a third or subsequent violation, by imprisonment for

 

not more than 93 days or a fine of not more than $750.00 for each

 

violation, or both.

 

     (13) Subject to subsection (14), a person that knowingly fails

 

to provide any notice of a security breach required under this

 

section may be ordered to pay a civil fine of not more than $250.00

 

for each failure to provide notice. The attorney general or a

 

prosecuting attorney may bring an action to recover a civil fine

 

under this section.

 

     (14) The aggregate liability of a person for civil fines under

subsection (13) for multiple violations of subsection (13) that

 

arise from the same security breach shall not exceed $750,000.00.

 

     (15) Subsections (12) and (13) do not affect the availability

 

of any civil remedy for a violation of state or federal law.

 

     (16) This section applies to the discovery or notification of

 

a breach of the security of a database that occurs on or after July

 

2, 2006.

 

     (17) This section does not apply to the access or acquisition

 

by a person or agency of federal, state, or local government

 

records or documents lawfully made available to the general public.

 

     (18) This section deals with subject matter that is of

 

statewide concern, and any charter, ordinance, resolution,

 

regulation, rule, or other action by a municipal corporation or

 

other political subdivision of this state to regulate, directly or

 

indirectly, any matter expressly set forth in this section is

 

preempted.

 

     Enacting section 1. This amendatory act takes effect 90 days

 

after the date it is enacted into law.