United States: State Of The (State) Data Breach Laws: 2017 Legislative Update, Part II

As we noted in Part I of our series, state legislatures across the country continued to refine and reshape their respective data breach notification requirements during the 2017 legislative session. While a handful of states were successful in passing new data breach notification legislation, some of those states significantly revised just when, how, and under what circumstances an entity has to notify affected consumers of a data breach. For instance, Maryland amended its Personal Information Protection Act to require consumer notification to be made within 45 days of an entity concluding that residents' personal information was affected by a breach, while Tennessee passed a bill to restore the encryption safe harbor to its breach notification statute, a provision that was arguably eliminated from its statute in 2016.

Digital Insights brings you Part II in our series, State of the (State) Data Breach Laws, examining the major amendments passed in Maryland, New Mexico, and Tennessee, and how those changes may affect your organization's breach notification requirements.

Maryland: On May 4, 2017, Maryland Governor Larry Hogan signed H.B. 974 into law, formally approving substantial revisions to the Maryland Personal Information Protection Act passed by the Maryland General Assembly. Among its important changes, H.B. 974 significantly revises the definition of "personal information" under the Old Line State's data breach notification statute to include, among other new data sets, health information created by an entity covered by the Health Insurance Portability and Accountability Act (HIPAA).   

Before H.B. 974 goes into effect on June 1, 2018, entities should take note of the following revisions the bill makes to the state's breach notification statute:

  • "Personal Information" Expanded: H.B. 974 amends Maryland's definition of "personal information" to include the following additional data sets when combined with an individual's first name or first initial and last name:
    • A passport number, or other identification number issued by the federal government;
    • A state identification card number;
    • Health information, including information about an individual's mental health;
    • A health insurance policy or certificate number, or heath insurance subscriber identification number, in combination with a unique identifier that permits access to an individual's health information; and
    • Biometric data, generated by automatic measurements of an individual's biological characteristics, that can be used to uniquely authenticate an individual's identity when accessing a system or account.

H.B. 974 also adds an individual's username or email address in combination with a password or security question and answer permitting access to the individual's email account to the definition of "personal information." Unlike the data sets above, however, a username or email address does not need to be linked to an individual's name to qualify as "personal information."

  • "Health Information" Defined: H.B. 974 defines "health information" as any information created by an entity covered by HIPAA regarding an individual's medical history, medical condition, or medical treatment or diagnosis. Consequently, a company may need to notify affected Maryland residents about the unauthorized disclosure of health information that was created by an entity covered by HIPAA, even if the notifying company is not subject to HIPAA itself.
  • 45 Days to Provide Notification: Under the revised breach notification statute, an entity must provide notice to affected Maryland residents of a data breach within 45 days after discovering the breach of the security of its system. The statute anticipates that the entity will conduct, in good faith, a reasonable and prompt investigation to determine the likelihood that personal information has been or will be misused as a result of the breach. If it is determined that the information has been or is likely to be misused, notification of affected residents must occur. Entities that maintain data containing personal information must notify the data owner within 45 days of discovery of a breach. 
    Importantly, if notification is subject to a law enforcement delay under the statute, notice to affected residents must be no later than 30 days after the law enforcement agency determines notification will not impede a criminal investigation, or will not jeopardize homeland or national security.
  • "Encryption" Revised: H.B. 974 revised the statute's definition of "encryption" to mean the protection of data using an encryption technology that renders it indecipherable without an associated encryption key. This amendment removed language that previously qualified encryption as the transformation of data using an algorithmic process "in which there is a low probability" of assigning meaning without a key.
  • Expanded Data Destruction Provisions to Cover Current and Former Employee Data: While the previous Maryland statute required entities to take reasonable steps in protecting against unauthorized access to personal information when destroying customer records, H.B. 974 expands those provisions, requiring employers to take similar precautions when destroying current and former employee records containing personal information.
  • Special Notification Method for Username/Email Breaches: Under the amendments, if only a username or email address (along with the password or security question and question permitting access to the compromised email account) and no other personal information is affected, an entity can notify affected individuals by providing directions on how to change the account's password or security question and answer, or providing additional steps to protect the compromised email account.

New Mexico: As we wrote earlier this year, New Mexico became the 48th state to require notification to consumers following a data breach when Governor Susana Martinez signed the Data Breach Notification Act (H.B. 15) into law on April 16, 2017

The Data Breach Notification Act bears similarities to many of the state data breach notification statutes already enacted: for instance, like the majority of state breach laws, the act only covers electronic data that contains personal information. And similar to the revised Maryland Personal Information Protection Act, New Mexico requires consumer notification to be made within 45 days after discovery of a breach.

Like many other states, New Mexico also requires notification to state regulators, under certain circumstances, when its residents are notified of a data breach. Under H.B. 15, an entity must notify the New Mexico Attorney General if more than 1,000 residents have to be notified. Importantly, an entity must also notify the New Mexico Attorney General if it provides notification to residents via substitute notice, regardless of the number of residents notified.

Tennessee: Back in 2016, the Tennessee Legislature passed S.B. 2005, a bill that made several amendments to the state's notification statute, including requiring notice of a data breach within 45 days. But surprisingly, one of the main purposes and stated aims of S.B. 2005 was to eliminate the statute's encryption safe harbor, which had previously exempted entities from notifying individuals about a data breach if the data affected was encrypted. Thanks to a quirk of legislative drafting, it was unclear whether the amendment as enacted actually eliminated the encryption safe harbor in the Volunteer State. The ambiguity, however, gave little comfort to entities that took measures to make their clients' personal information indecipherable to any bad actor that might obtain it.

On April 4, 2017, Tennessee unambiguously reinstated its encryption safe harbor by enacting S.B. 547. Effective the same day, S.B. 547 defined a "breach of system security" as the acquisition of "unencrypted computerized data; or encrypted computerized data and the encryption key," and defined encrypted as "computerized data that is rendered unusable, unreadable, or indecipherable without the use of a decryption process or key and in accordance with the current version of the Federal Information Processing Standard (FIPS) 140-2." As written, entities can take heart that encrypted data will fall outside of the Tennessee statute's scope so long as the encryption key is not compromised.

Please check back to Digital Insights in the coming days for Part III in our series, State of the (State) Data Breach Laws: 2017 Legislative Update, examining data breach-related legislation in Virginia and Washington state, other data security and privacy-related statutes passed in 2017, and how these changes may impact your breach notification, data security, and privacy requirements.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
Lewis Brisbois Bisgaard & Smith LLP
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Lewis Brisbois Bisgaard & Smith LLP
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions