N.Y. General Business Law § 899-bb: Data security protections

§ 899-bb. Data security protections. 1. Definitions. (a) "Compliant

regulated entity" shall mean any person or business that is subject to,

and in compliance with, any of the following data security requirements:

(i) regulations promulgated pursuant to Title V of the federal

Gramm-Leach-Bliley Act (15 U.S.C. 6801 to 6809), as amended from time to

time;

(ii) regulations implementing the Health Insurance Portability and

Accountability Act of 1996 (45 C.F.R. parts 160 and 164), as amended

from time to time, and the Health Information Technology for Economic

and Clinical Health Act, as amended from time to time;

(iii) part five hundred of title twenty-three of the official

compilation of codes, rules and regulations of the state of New York, as

amended from time to time; or

(iv) any other data security rules and regulations of, and the

statutes administered by, any official department, division, commission

or agency of the federal or New York state government as such rules,

regulations or statutes are interpreted by such department, division,

commission or agency or by the federal or New York state courts.

(b) "Private information" shall have the same meaning as defined in

section eight hundred ninety-nine-aa of this article.

(c) "Small business" shall mean any person or business with (i) fewer

than fifty employees; (ii) less than three million dollars in gross

annual revenue in each of the last three fiscal years; or (iii) less

than five million dollars in year-end total assets, calculated in

accordance with generally accepted accounting principles.

2. Reasonable security requirement. (a) Any person or business that

owns or licenses computerized data which includes private information of

a resident of New York shall develop, implement and maintain reasonable

safeguards to protect the security, confidentiality and integrity of the

private information including, but not limited to, disposal of data.

(b) A person or business shall be deemed to be in compliance with

paragraph (a) of this subdivision if it either:

(i) is a compliant regulated entity as defined in subdivision one of

this section; or

(ii) implements a data security program that includes the following:

(A) reasonable administrative safeguards such as the following, in

which the person or business:

(1) designates one or more employees to coordinate the security

program;

(2) identifies reasonably foreseeable internal and external risks;

(3) assesses the sufficiency of safeguards in place to control the

identified risks;

(4) trains and manages employees in the security program practices and

procedures;

(5) selects service providers capable of maintaining appropriate

safeguards, and requires those safeguards by contract; and

(6) adjusts the security program in light of business changes or new

circumstances; and

(B) reasonable technical safeguards such as the following, in which

the person or business:

(1) assesses risks in network and software design;

(2) assesses risks in information processing, transmission and

storage;

(3) detects, prevents and responds to attacks or system failures; and

(4) regularly tests and monitors the effectiveness of key controls,

systems and procedures; and

(C) reasonable physical safeguards such as the following, in which the

person or business:

(1) assesses risks of information storage and disposal;

(2) detects, prevents and responds to intrusions;

(3) protects against unauthorized access to or use of private

information during or after the collection, transportation and

destruction or disposal of the information; and

(4) disposes of private information within a reasonable amount of time

after it is no longer needed for business purposes by erasing electronic

media so that the information cannot be read or reconstructed.

(c) A small business as defined in paragraph (c) of subdivision one of

this section complies with subparagraph (ii) of paragraph (b) of

subdivision two of this section if the small business's security program

contains reasonable administrative, technical and physical safeguards

that are appropriate for the size and complexity of the small business,

the nature and scope of the small business's activities, and the

sensitivity of the personal information the small business collects from

or about consumers.

(d) Any person or business that fails to comply with this subdivision

shall be deemed to have violated section three hundred forty-nine of

this chapter, and the attorney general may bring an action in the name

and on behalf of the people of the state of New York to enjoin such

violations and to obtain civil penalties under section three hundred

fifty-d of this chapter.

(e) Nothing in this section shall create a private right of action.