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SENATE FLOOR VERSION
February 20, 2024
COMMITTEE SUBSTITUTE
FOR
SENATE BILL NO. 1337 By: Howard
An Act relating to the Security Breach Notification
Act; amending 24 O.S. 2021, Sections 162, 163, 164,
165, and 166, which relate to definitions, duty t o
disclose breach, notice , enforcement, and
application; modifying definitions; requiring notice
of security breach of certain information; re quiring
notice to Attorney General under certain
circumstances; specifying contents of required
notice; providing exemptions from certain notice
requirements; requiring confide ntiality of certain
information submitted to Attorney General;
authorizing Attorney General to promulgate rules;
clarifying compliance with certain notice
requirements; modifying authorized civi l penalties
for certain violations; providing exemptions from
certain liability; limit ing liability for violations
under certain circumstances; modifying applicabil ity
of act; updating statutory language; updating
statutory references; and providing an eff ective
date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 24 O.S. 2021, Section 162, is
amended to read as follows:
Section 162. As used in the Security Breach Notification Act:
1. “Breach of the security of a system ” means the unauthorized
access and acquisition of unencrypted and unredacted computerized
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data that compromises the security or confidentiality of personal
information maintained by an individual or enti ty as part of a
database of personal information regarding multiple individuals and
that causes, or the individual or entity reasonably believes has
caused or will cause, identity theft or ot her fraud to any resident
of this state. Good faith acquisition of personal information by an
employee or agent of an individual or entity for the purposes of the
individual or the entity is not a breach of the security of the
system, provided that the personal information is not use d for a
purpose other than a lawful purpose of the individual or entity or
subject to further unauthorized disclosure;
2. “Entity” includes corporations , business trusts, estates,
partnerships, limited partnerships, limited li ability partnerships,
limited liability companies, associations, organizations, joint
ventures, governments, governmental subdivisions, agencies, or
instrumentalities, or any other legal entity, whether for profit or
not-for-profit;
3. “Encrypted” means transformation of data through the use of
an algorithmic process i nto a form in which there is a low
probability of assigning meaning without use of a confidential
process or key, or securing the information by anothe r method that
renders the data elements unreadable or unusable;
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4. “Financial institution ” means any institution the business
of which is engaging in financial activities as defined by 15
U.S.C., Section 6809;
5. “Individual” means a natural person;
6. “Personal information ” means the an individual’s first name
or first initial and last name in combination with and linked to any
one or more of the following data elements that r elate to a resident
of this state, when the individual if any of the data elements are
neither not encrypted, nor redacted, or otherwise altered by any
method or technology in such a manner that the name or data elements
are unreadable or are encr ypted, redacted, or otherwise altered by
any method or technology but the keys to unencrypt, unredact, or
otherwise read the data elem ents have been obtained th rough the
breach of security:
a. social security number,
b. driver license number or state other unique
identification card number issued in lieu of a driver
license, or created or collected by a government
entity,
c. financial account number, or credit card or debit card
number, in combination with any required expiration
date, security code, access code, or password that
would permit access to the an individual’s financial
accounts of a resident account,
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d. unique electronic identifier or routing code in
combination with any require d security code, access
code, or password that would permit access to an
individual’s financial account, or
e. unique biometric data such as a fingerprint, retina or
iris image, or other unique physical or digital
representation of biometric dat a.
The term does not include information tha t is lawfully obtained from
publicly available information sources, or from federal, state or
local government records lawfully made available to the general
public;
7. “Notice” means:
a. written notice to the postal address in the records
of the individual or entity,
b. telephone notice,
c. electronic notice, or
d. substitute notice, if the individual or the entity
required to provide notice demonstrates that the cost
of providing notice will exceed Fifty Thousand Dollars
($50,000.00), or that the affecte d class of residents
to be notified exceeds one hundr ed thousand (100,000)
persons, or that the individual or the entity does not
have sufficient contact inf ormation or consent t o
provide notice as described in subparagraph a, b or c
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of this paragraph. Su bstitute notice consists of any
two of the following:
(1) e-mail email notice if the individual or the
entity has e-mail email addresses for the members
of the affected class of residents,
(2) conspicuous posting of the notice on the Internet
web site website of the individual or the entity
if the individual or the entity maint ains a
public Internet web site website, or
(3) notice to major stat ewide media; and
8. “Reasonable safeguards” means policies and practices that
ensure personal information is secur e, taking into consideration an
entity’s size and the type and amount of personal information . The
term includes but is not limited to conducting r isk assessments,
implementing technical and physical layered defenses, employee
training on handling persona l information, and establishing an
incident response plan ; and
9. “Redact” means alteration or tru ncation of data such that no
more than the following are accessible as par t of the personal
information:
a. five digits of a social security number, or
b. the last four digits of a driver license number, state
unique identification card number created or collected
by a government entity, or account number.
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SECTION 2. AMENDATORY 24 O.S. 2021, Section 163, is
amended to read as follows:
Section 163. A. An individual or entity that owns or licenses
computerized data that includes personal informat ion shall disclose
provide notice of any breach of the security of the system following
discovery determination or notification of the breach of the
security of the system to any resident of t his state whose
unencrypted and unredacted personal information was or is reasona bly
believed to have been access ed and acquired by an unauthorized
person and that causes, or the individual or entity reason ably
believes has caused or will cause, ident ity theft or other fraud to
any resident of this state. Except as provided in subsection D of
this section or in order to take any measures necessary to determine
the scope of the breach and to restore the reas onable integrity of
the system, the disclosure sha ll be made without unreasonable delay.
B. An individual or entity must disclose shall provide notice
of the breach of the security of the system if enc rypted or redacted
information is accessed and acquire d in an unencrypted or unredacted
form or if the security breach involves a person with access to the
encryption key and the ind ividual or entity reasonably believes that
such breach has caused or will cause identity theft or other fraud
to any resident of this state.
C. An individual or entity that maintains computerized data
that includes personal information that the individual or entity
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does not own or license shall notify provide notice to the owner or
licensee of the infor mation of any breach of the security of the
system as soon as practicable following discovery determination, if
the personal information was or if the entity reasonably believes it
was accessed and acquired by an unauthorized person.
D. Notice required by this section may be delayed if a law
enforcement agency determines and advises the individual or entity
that the notice will impede a criminal or civil investigation or
homeland or national security. Notice required by this section must
be made without unre asonable delay after the law enforcement agen cy
determines that notification will no longer impede the inve stigation
or jeopardize national or homeland security.
E. 1. An individual or entity required to pro vide notice in
accordance with subsection A, B, or C of this section shall also
provide notice to the Attorney General of such breach without
unreasonable delay but in no event more than sixty (60) days after
providing notice to impacted resi dents of this state as required by
this section. The notice shall include the date of the breach, the
date of its determination, the nature of the breach, the type o f
personal information exposed, the number of residents of this st ate
affected, the estimated monetary impact of the br each to the extent
such impact can be determined, and any reasonable safeguards the
entity employs.
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2. A breach of a security system where fewer than five hundred
(500) residents of this state are affected within a single brea ch
shall be exempt from the notice requirements of paragraph 1 of this
subsection.
3. A breach of a security system maintained by a credit bureau
where fewer than one thousand (1,000) residents of this state are
affected within a single breach shall be exempt from the notice
requirements of paragraph 1 of this subsection.
F. Any personal information submitted to the Attorney Gener al
shall be kept confidential pursuant to Section 24A.12 of Title 51 of
the Oklahoma Statutes .
G. The Attorney General may promulgate rules as necessary to
effectuate the provisions of this se ction.
SECTION 3. AMENDATORY 24 O.S. 2021, Section 164, is
amended to read as follows:
Section 164. A. An individual or entity that maintains its own
notification procedures as part of an inf ormation privacy or
security policy for the treatment of personal information and that
are consistent with the timing requirements of this act the Security
Breach Notification Act shall be deemed to be in compliance with the
notification requirements of this act subsection A, B, or C of
Section 163 of this title if it the individual or entity notifies
residents of this state in accordance with its proc edures in the
event of a breach of security of the system.
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B. The following entities shall be deemed to be in compliance
with the notification requirements of subs ection A, B, or C of
Section 163 of this title if such entities provide the notice to the
Attorney General as required by subsection E of Section 163 of this
title:
1. A financial institution that complies with the notification
requirements prescribed by the Federal Gramm-Leach-Bliley Act and
the federal Interagency Guidance on Response Programs for
Unauthorized Access to Custome r Information and Customer Notice is
deemed to be in compliance with the provisions of this act. ;
2. An entity that complies with the notification requirements
prescribed by the Okla homa Hospital Cybersecurity Protection Act of
2023 or the Health Insurance Portability a nd Accountability Act of
1996 (HIPAA); and
3. An entity that complies with the notification requirements
or procedures pursuant to the rules, regulation regulations,
procedures, or guidelines established by the primary or functional
federal regulator of the entity shall be deemed to be in compliance
with the provisions of this act .
SECTION 4. AMENDATORY 24 O.S. 2021, Section 165, is
amended to read as follows:
Section 165. A. A violation of this act the Security Breach
Notification Act that results in injury or loss to residents of this
state may be enforced by the Attorney General or a dis trict attorney
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in the same manner as an unl awful practice under t he Oklahoma
Consumer Protection Act.
B. Except as provided in subsection C D of this section, the
Attorney General or a district attorney shall have exclu sive
authority to bring an action and may obtain either actual damages
for a violation of this act or the Security Breach Notification Act
and a civil penalty not to exceed One Hundre d Fifty Thousand Dollars
($150,000.00) per breach of the security of the system or series of
breaches of a similar nature that are discovered determined in a
single investigation or Two Thousand Dollars ($2,000.00) for each
resident of the state for each breach, whichever is greater, or a
combination of such actual damages and civil penalty. Civil
penalties shall be based upon the magnitude of the breach, the
extent to which the behavio r of the individual or entity contributed
to the breach, and any failure to provide the notice required by
Section 163 of this title.
C. 1. An individual or entity that uses reasonable safeguards
and provides notice as re quired by Section 163 or 164 of this title
shall not be subject to civil penalties and may use such compliance
as an affirmative defense in a civil a ction filed under the Security
Breach Notification A ct.
2. An individual or entity that fails to use reasonable
safeguards but provides notice as required by Section 163 or 164 of
this title shall not be subject to the civil penalty set forth in
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subsection B of this section. Such individuals or entities shall be
subject to a civil penalty of One Hundred Dolla rs ($100.00) for each
resident of this state for each breach not to exceed a total penalt y
of One Hundred Thousand Dollars ($10 0,000.00).
C. D. A violation of this act the Security Breach Notification
Act by a state-chartered or state-licensed financial institution
shall be enforceable exclusively by the primary state regulator of
the financial institution.
SECTION 5. AMENDATORY 24 O.S. 2021, Section 166, is
amended to read as follows:
Section 166. This act The Security Breach N otification Act
shall apply to the discovery determination or notification of a
breach of the security of the system th at occurs on or after
November 1, 2008 January 1, 2025.
SECTION 6. This act shall become effective January 1, 2025.
COMMITTEE REPORT BY: COMMITTEE ON JUDICIARY
February 20, 2024 - DO PASS AS AMENDED BY CS