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COMMITTEE REPORT
February 15, 2000
H. 4469
Introduced by Reps. D. Smith, Harrison, Cotty, Delleney, Maddox and McGee
S. Printed 2/15/00--H.
Read the first time January 20, 2000.
To whom was referred a Bill (H. 4469), to amend Chapter 13, Title 16, Code of Laws of South Carolina, 1976, relating to forgery, larceny, and similar offenses, by adding Section 16-13-550 entitled the "Personal Information Privacy Act of 2000", etc., respectfully
That they have duly and carefully considered the same, and recommend that the same do pass with amendment:
Amend the bill, as and if amended, by striking SECTIONS 2 and 3 and inserting:
/ SECTION 2. Chapter 13, Title 16 of the 1976 Code is amended by adding:
"Section 16-13-550. (A) As used in this section:
(1) 'Identity fraud' means the actual use of personal information, except in compliance with subsection (C).
(2) 'Person' means a state or local government agency or agency employee, business or nonprofit entity or its employees, service providers, their subsidiaries and affiliates.
(3) 'Personal information' means social security numbers, driver's license numbers, checking account numbers, savings account numbers, credit card numbers, debit card numbers, personal identification numbers, electronic identification numbers, digital signatures, medical records, information relating to personal purchasing habits or preferences, or any other information which may be used to access an individual's financial resources or medical records.
(B) Except as provided in subsection (C) and notwithstanding any other state statute, it is illegal for a person to knowingly access, attempt to access, release, disclose, use, or otherwise make available personal information about an individual without obtaining the prior written authorization of that individual.
(C) Personal information may be accessed, released, disclosed, used or made available under the following conditions:
(1) with the prior written authorization of the individual;
(2) for use by any government agency, including a court or law enforcement agency, in carrying out its statutory functions;
(3) pursuant to a valid court order subpoena, warrant, levy, or other court decree or directive;
(4) in lawful compliance with the requirements of a federal statute or regulation;
(5) for the lawful acquisition, release, disclosure, or use by a person for the purposes of carrying out a bona fide credit, commercial or consumer transaction initiated by, with or without written authorization, the rightful owner of the personal information;
(6) by a person regulated under Title 38 of the 1976 Code for the purposes of paying or adjudicating claims, underwriting or rating coverage, preventing fraud and abuse, credentialing providers, authorizing health care services, reviewing the quality or utilization of services, or carrying out any other duties allowed by Title 38;
(7) by a licensed member of the South Carolina Bar when preparing to provide or directly providing legal services to a client; or
(8) when all or substantially all of the property or assets of a business are sold, exchanged, or disposed of pursuant to Title 33 of the 1976 Code, or when all or substantially all of the property or assets of a sole proprietorship, unincorporated organization, joint venture, syndicate, business trust, or any other legal business entity are otherwise sold, exchanged, or disposed of, so as to modify ownership of all or substantially all of the property or assets of that business.
(D) A person who violates the provisions of this section is guilty of a felony and, upon conviction, must be fined in the discretion of the court, but not to exceed twenty-five thousand dollars, or be imprisoned not more than ten years, or both. The court may also order restitution to the victim of identity fraud pursuant to the provisions of Section 17-25-322.
(E) In a criminal proceeding brought pursuant to this section, the crime is considered to have been committed in any county in which a part of the identity fraud took place, in any county where the personal information was accessed, or in the county where the victim of identity fraud resides.
(F) This section may not be construed to impede, restrict or prohibit the First Amendment rights of any legitimate member of the press to disclose personal information covered under this section or to affect any civil cause of action existing under state statutory or common law which may otherwise be brought against a member of the press for the acquisition or disclosure of that personal information.
(g) This section may not be construed to apply to any financial institution or entity defined in or required to comply with the federal Fair Credit Reporting Act or the federal Gramm-Leach-Bliley Financial Modernization Act, 113, Stat. 1338."
SECTION 3. (A) A joint legislative study committee is created to study personal information privacy issues, to examine the relationship of information technology and privacy issues, and to seek to establish an appropriate balance which promotes the use of information for legitimate business purposes, including biometric technology for use in preventing identity theft and fraud, while safeguarding the personal privacy rights of the citizens of South Carolina.
(B) The joint legislative study committee shall be composed of fifteen members to include:
(1) three members of the House of Representatives to be appointed by the Chairman of the House Judiciary Committee;
(2) three members of the Senate to be appointed by the Chairman of the Senate Judiciary Committee;
(3) two members of the media, one to be appointed by the Chairman of the House Judiciary Committee and one to be appointed by the Chairman of the Senate Judiciary Committee;
(4) one member of the South Carolina Merchants Association to be jointly appointed by the Chairmen of the House and Senate Judiciary Committees;
(5) the representative of the National Organization Mandating Equitable Databases or if that organization chooses not to participate, then a representative of a similar personal privacy protection advocacy group to be jointly appointed by the Chairmen of the House and Senate judiciary committees;
(6) two consumer victims of identity fraud, one to be appointed by the Chairman of the House Judiciary Committee and one to be appointed by the Chairman of the Senate Judiciary Committee; and
(7) three members of the financial services industry, one to be appointed by the Chairman of the Senate Judiciary Committee, one to be appointed by the Chairman of the House Judiciary Committee and one to be jointly appointed by both Chairmen.
(C) The study committee shall submit its report to the General Assembly no later than October 15, 2000, at which time the committee shall be dissolved.
(D) The study committee shall be staffed by personnel as provided and assigned by the Chairman of the House Judiciary Committee from the House staff and by the Chairman of the Senate Judiciary Committee from the Senate staff." /
Renumber sections to conform.
Amend title to conform.
JAMES H. HARRISON, for Committee.
EXPLANATION OF IMPACT:
Joint Legislative Study Committee
The creation of a Joint Legislative Study Committee as outlined within the proposed legislation is projected to cost the general fund approximately $2,700 per meeting (12 members @ $225/day). Please note that the proposed legislation indicates that the committee will conclude its business no later than October 15, 2000.
SC Department of Corrections
The SC Department of Corrections forecasts no fiscal impact to the General Fund of the State with the passage of the proposed legislation.
SC Department of Probation, Parole & Pardon Services
The SC Department of Probation, Parole & Pardon Services forecasts a minimal fiscal impact to the General Fund of the State with the passage of the proposed legislation.
SC Judicial Department
The Judicial Department initially forecasts a minimal fiscal impact to the General Fund of the State should this bill become law. Should the department find that the caseload brought on by the passage of this proposed legislation exceeding what their current pool of circuit court judges can absorb, additional judges would be needed. The cost associated with one additional judge and staff (administrative assistant, court reporter and law clerk) is approximately $303,593 for personal services and associated operating expenses and $26,620 of non-recurring cost for automation and furniture. The addition of new judges would also require more courtroom space, an expense borne by county governments.
Approved By:
Don Addy
Office of State Budget
TO AMEND CHAPTER 13, TITLE 16, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO FORGERY, LARCENY, AND SIMILAR OFFENSES, BY ADDING SECTION 16-13-550 ENTITLED THE "PERSONAL INFORMATION PRIVACY ACT OF 2000" SO AS TO PROVIDE FOR THE OFFENSE OF IDENTITY FRAUD WHICH IS THE KNOWING ACCESS TO, RELEASE, DISCLOSURE, OR USE OF PERSONAL INFORMATION ABOUT AN INDIVIDUAL WITHOUT OBTAINING THE PRIOR WRITTEN AUTHORIZATION OF THE INDIVIDUAL; TO PROVIDE PENALTIES; AND TO PROVIDE FOR A JOINT LEGISLATIVE STUDY COMMITTEE TO STUDY PERSONAL INFORMATION PRIVACY ISSUES, TO PROVIDE FOR ITS MEMBERSHIP, AND TO PROVIDE THE STUDY COMMITTEE SHALL REPORT TO THE GENERAL ASSEMBLY BY OCTOBER 15, 2000.
Whereas, the South Carolina General Assembly recognizes the need to protect the personal privacy rights of citizens of this State; and
Whereas, in South Carolina and the nation, there has been a tremendous increase in the collection, handling, and distribution of information in recent years; and
Whereas, the growth of information technology and increased access to personal information can lead to the misuse of private information and to fraud; and
Whereas, there is a growing number of identity fraud crimes in South Carolina and in the United States with an estimated ninety-five percent of financial crimes arrests involving identity theft; and
Whereas, federal officials estimate there are over four hundred thousand identity-based crimes per year costing an estimated forty billion dollars annually; and
Whereas, the impact of the identity theft problem is felt both nationally and locally, and the victims of identity theft include citizens, merchants, government, banks, and corporations; and
Whereas, the impact of identity theft on victims includes ruined credit, lost time, lost opportunity, and emotional stress. Now, therefore,
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. This act may be referred to as the "Personal Information Privacy Act of 2000".
SECTION 2. Chapter 13, Title 16 of the 1976 Code is amended by adding:
"Section 16-13-550. (A) As used in this section:
(1) 'Identity fraud' means the actual use of personal information, except in compliance with subsection (C).
(2) 'Person' means a state or local government agency or agency employee, business or nonprofit entity or its employee.
(3) 'Personal information' means social security numbers, driver's license numbers, checking account numbers, savings account numbers, credit card numbers, debit card numbers, personal identification numbers, electronic identification numbers, digital signatures, medical records, information relating to personal purchasing habits or preferences, or any other numbers or information which may be used to access an individual's financial resources.
(B) Except as provided in subsection (C) and notwithstanding any other state statute, it is illegal for a person to knowingly access, attempt to access, release, disclose, use, or otherwise make available personal information about an individual without obtaining the prior written authorization of that individual.
(C) Personal information may be accessed, released, disclosed, used or made available under the following conditions:
(1) with the prior written authorization of the individual;
(2) for use by any government agency, including a court or law enforcement agency, in carrying out its legitimate functions;
(3) pursuant to a valid court order or subpoena; and
(4) in compliance with a federal statute or regulation.
(D) A person who violates the provisions of this section is guilty of a felony and, upon conviction, must be fined in the discretion of the court, but not to exceed twenty-five thousand dollars, or be imprisoned not more than ten years, or both. The court may also order restitution to the victim of identity fraud pursuant to the provisions of Section 17-25-322.
(E) In a criminal proceeding brought pursuant to this section, the crime is considered to have been committed in any county in which a part of the identity fraud took place, in any county where the personal information was accessed, or in the county where the victim of identity fraud resides."
SECTION 3. (A) A joint legislative study committee to study personal information privacy issues is created to study and examine the relationship of information technology and privacy issues and to establish an appropriate balance which promotes the use of information for legitimate business purposes, including biometric technology for use in preventing identity theft and fraud, while safeguarding the personal privacy rights of the citizens of South Carolina.
(B) The joint legislative study committee shall be composed of twelve members to include:
(1) three members of the House of Representatives to be appointed by the Chairman of the House Judiciary Committee;
(2) three members of the Senate to be appointed by the Chairman of the Senate Judiciary Committee;
(3) two members of the media, one to be appointed by the Chairman of the House Judiciary Committee and one to be appointed by the Chairman of the Senate Judiciary Committee;
(4) one member of the South Carolina Merchants Association to be jointly appointed by the Chairmen of the House and Senate Judiciary Committees;
(5) the President of the National Organization Mandating Equitable Databases or his designee; and
(6) two consumer victims of identity fraud, one to be appointed by the Chairman of the House Judiciary Committee and one to be appointed by the Chairman of the Senate Judiciary Committee.
(C) The study committee shall submit its report to the General Assembly no later than October 15, 2000, at which time the committee shall be dissolved.
(D) The study committee shall be staffed by personnel as provided and assigned by the Chairman of the House Judiciary Committee from the House staff and by the Chairman of the Senate Judiciary Committee from the Senate staff.
SECTION 4. This act takes effect upon approval by the Governor and Section 2 applies to all offenses committed on or after that date.
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