2015 -- H 5220 SUBSTITUTE A

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LC000773/SUB A/2

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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:

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

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hereby repealed in its entirety.

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CHAPTER 11-49.2

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Identity Theft Protection

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

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Island Identity Theft Protection Act of 2005."

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

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

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

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

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

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

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

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

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

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relates.

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

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

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

 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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system.

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

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

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

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

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

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

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

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

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compromise the investigation.

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

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

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

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

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fine as set forth in § 11-49.2-6.

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

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

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

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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.

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

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

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venture.

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

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unauthorized acquisition of unencrypted computerized data that compromises the security,

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

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

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

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information is not used or subject to further unauthorized disclosure.

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

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

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

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      (1) Social security number;

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

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      (3) Account number, credit or debit card number, in combination with any required

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security code, access code, or password that would permit access to an individual's financial

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account.

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

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methods:

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      (1) Written notice;

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

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electronic records and signatures set for the in Section 7001 of Title 15 of the United States Code;

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

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

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

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

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

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persons;

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

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the state agency or person maintains one;

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      (C) Notification to major statewide media.

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

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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.

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

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public policy and is void and unenforceable.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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amended by adding thereto the following chapter:

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CHAPTER 49.3

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IDENTITY THEFT PROTECTION ACT OF 2015

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

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Island Identity Theft Protection Act of 2015."

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

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

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

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information security program which contains reasonable security procedures and practices

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

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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

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

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

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

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

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

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

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erasure.

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

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

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

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

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

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use, modification, destruction, or disclosure. The provisions of this section shall apply to

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contracts entered into after the effective date of this act.

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

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

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

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

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

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

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information is not used or subject to further unauthorized disclosure.

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

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

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

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

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password that would permit access to the encrypted data.

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

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

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individual.

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

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

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professional or provider.

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     (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

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

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

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

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

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

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commercial entity.

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

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

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

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     (i) Social security number;

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

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identification number;

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     (iii) Account number, credit or debit card number, in combination with any required

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

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to an individual's financial account;

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     (iv) Medical or health insurance information; or

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

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permit access to an individual's personal, medical, insurance or financial account.

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     (9) "Remediation service provider" means any person which in its usual course of

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business provides services pertaining to a consumer credit report including, but not limited to,

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credit report monitoring and alerts, that are intended to mitigate the potential for identity theft.

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

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

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

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

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functions other than in an advisory nature.

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

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

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government records.

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

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methods:

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     (i) Written notice;

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

 

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

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

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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 (50,000), or the municipal

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

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shall consist of all of the following:

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

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address for the subject persons;

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

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

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     (C) Notification to major statewide media.

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

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

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

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

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significant risk of identity theft to any resident of Rhode Island whose personal information was,

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

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

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forty-five (45) calendar days after confirmation of the breach and the ability to ascertain the

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information required to fulfill the notice requirements contained in subsection (d) of this section

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and shall be consistent with the legitimate needs of law enforcement as provided in subsection (c)

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of this section. In the event that more than five hundred (500) Rhode Island residents are to be

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

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

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

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

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residents.

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

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

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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

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

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

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

 

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pursuant to § 11-49.3-4(a)(2). The municipal agency, state agency or person shall cooperate with

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

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

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

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business information or trade secrets.

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     (c) Any municipal agency, state agency or person required to make notification under this

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section and who fails to do so is liable for a violation as set forth in § 11-49.3-5.

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

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known:

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

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occurred and the number of affected individuals;

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

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     (3) Date of breach, estimated date of breach or the date range within which the breach

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occurred;

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     (4) Date that the breach was discovered;

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

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

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(ii) Remediation service providers; (iii) The attorney general; and

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

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

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when requesting the security freeze; and that fees may be required to be paid to the consumer

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reporting agencies.

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

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

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adjudged against a defendant.

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

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

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defendant.

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

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

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

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

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

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

 

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

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

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

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

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event of a breach of security; or

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

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

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

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

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event of a breach of security of the system.

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

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

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

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deemed in compliance with this chapter.

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

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

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

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

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shall be deemed in compliance with this chapter.

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     SECTION 3. This act shall take effect one year following the date of 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

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

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preserve the confidentiality and integrity of such information.

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     This act would take effect one year following the date of passage.

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