Minnesota Session Laws - 2005, Regular Session

                            CHAPTER 167-H.F.No. 2121 
                  An act relating to commerce; requiring businesses that 
                  possess personal data to notify persons whose personal 
                  information has been disclosed to unauthorized 
                  persons; proposing coding for new law in Minnesota 
                  Statutes, chapter 325E. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  [325E.61] [DATA WAREHOUSES; NOTICE REQUIRED FOR 
        CERTAIN DISCLOSURES.] 
           Subdivision 1.  [DISCLOSURE OF PERSONAL INFORMATION; NOTICE 
        REQUIRED.] (a) Any person or business that conducts business in 
        this state, and that owns or licenses data that includes 
        personal information, shall disclose any breach of the security 
        of the system following discovery or notification of the breach 
        in the security of the data to any resident of this state whose 
        unencrypted personal information was, or is reasonably believed 
        to have been, acquired by an unauthorized person.  The 
        disclosure must be made in the most expedient time possible and 
        without unreasonable delay, consistent with the legitimate needs 
        of law enforcement, as provided in paragraph (c), or with any 
        measures necessary to determine the scope of the breach, 
        identify the individuals affected, and restore the reasonable 
        integrity of the data system. 
           (b) Any person or business that maintains data that 
        includes personal information that the person or business does 
        not own shall notify the owner or licensee of the information of 
        any breach of the security of the data 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 to a date certain if a law enforcement agency 
        affirmatively determines that the notification will impede a 
        criminal investigation. 
           (d) For purposes of this section, "breach of the security 
        of the system" means unauthorized acquisition of computerized 
        data that compromises the security, confidentiality, or 
        integrity of personal information maintained by the person or 
        business.  Good faith acquisition of personal information by an 
        employee or agent of the person or business for the purposes of 
        the person or business is not a breach of the security system, 
        provided that the personal information is not used or subject to 
        further unauthorized disclosure. 
           (e) 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 is not 
        encrypted: 
           (1) Social Security number; 
           (2) driver's license number or Minnesota identification 
        card number; or 
           (3) account number or 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. 
           (f) 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. 
           (g) For purposes of this section, "notice" may be provided 
        by one of the following methods: 
           (1) written notice to the most recent available address the 
        person or business has in its records; 
           (2) electronic notice, if the notice provided is consistent 
        with the provisions regarding electronic records and signatures 
        in United States Code, title 15, section 7001; or 
           (3) substitute notice, if the person or business 
        demonstrates that the cost of providing notice would exceed 
        $250,000, or that the affected class of subject persons to be 
        notified exceeds 500,000, or the person or business does not 
        have sufficient contact information.  Substitute notice must 
        consist of all of the following: 
           (i) e-mail notice when the person or business has an e-mail 
        address for the subject persons; 
           (ii) conspicuous posting of the notice on the Web site page 
        of the person or business, if the person or business maintains 
        one; and 
           (iii) notification to major statewide media. 
           (h) Notwithstanding paragraph (g), a person or business 
        that maintains its own notification procedures as part of an 
        information security policy for the treatment of personal 
        information and is otherwise consistent with the timing 
        requirements of this section, shall be deemed to be in 
        compliance with the notification requirements of this section if 
        the person or business notifies subject persons in accordance 
        with its policies in the event of a breach of security of the 
        system. 
           Subd. 2.  [COORDINATION WITH CONSUMER REPORTING AGENCIES.] 
        If a person discovers circumstances requiring notification under 
        this section of more than 500 persons at one time, the person 
        shall also notify, within 48 hours, all consumer reporting 
        agencies that compile and maintain files on consumers on a 
        nationwide basis, as defined by United States Code, title 15, 
        section 1681a, of the timing, distribution, and content of the 
        notices. 
           Subd. 3.  [WAIVER PROHIBITED.] Any waiver of the provisions 
        of this section is contrary to public policy and is void and 
        unenforceable. 
           Subd. 4.  [EXEMPTION.] This section does not apply to any 
        "financial institution" as defined by United States Code, title 
        15, section 6809(3), and to entities subject to the federal 
        privacy and security regulations adopted under the federal 
        Health Insurance Portability and Accountability Act of 1996, 
        Public Law 104-191. 
           Subd. 5.  [SECURITY ASSESSMENTS.] Each government entity 
        shall conduct a comprehensive security assessment of any 
        personal information maintained by the government entity. 
           Subd. 6.  [REMEDIES AND ENFORCEMENT.] The attorney general 
        shall enforce this section under section 8.31. 
           Sec. 2.  [EFFECTIVE DATE.] 
           Section 1 is effective January 1, 2006. 
           Presented to the governor May 31, 2005 
           Signed by the governor June 2, 2005, 4:45 p.m.