BILL ANALYSIS
By: McCall
Committee Report (Substituted)
BACKGROUND AND PURPOSE
Identity theft is one of the fastest growing crimes in the nation. Last year alone, around 10 million Americans were victims of the crime, and those victimized spend on average of 600 hours and $1500 in order to try and clear their names. Not surprisingly, with over 22 million in population, Texas has one of the highest rates of identity theft.
Although the rate of internet-related identity theft scams are on the rise, 68% of identity theft crimes are still committed through traditional means. One of these traditional means is termed "dumpster diving," whereby identity thieves fish receipts and records containing personal information out of trash receptacles.
Currently, there exists no law in Texas statute that addresses how a business must dispose of a business record containing personal identifying information. C.S.H.B. 698 requires that when a business disposes of records containing consumer personal information, it must destroy or modify the record through shredding or other means that renders the information unreadable. C.S.H.B. 698 also sets out a civil penalty.
RULEMAKING AUTHORITY
This bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.
ANALYSIS
SECTION 1: Amends the title of Section 35.48 of the Business & Commerce Code to read "Retention and Disposal of Business Records."
SECTION 2: Amends Section 35.48(a) of the Business & Commerce Code by inserting definitions of "personal identifying information" and "telecommunication access device."
SECTION 3: Amends Section 35.48 of the Business & Commerce Code by inserting subsections (d), (e), (f), and (g). Subsection (d) requires businesses, when they dispose of business records containing personal identifying information, to modify the record through shredding or other means so that the personal information is rendered unreadable. Subsection (e) allows the Attorney General to recover a civil penalty for violations of this provision. Subsection (f) provides that if a business complies with this provision in good faith and the record is reconstructed through extraordinary means, that the business will not be held liable. Subsection (g) clarifies that (1) nothing in this bill interferes with a statutory mandate to retain records and that (2) nothing in this bill interferes with the right to preserve historically significant business records.
SECTION 4: Applicability of the Act.
SECTION 5: Effective Date
EFFECTIVE DATE
This Act is effective September 1, 2005.
COMPARISON OF SUBSTITUTE TO ORIGINAL
The substitute differs from the original in that the substitute alters the definition of "personal identifying information" in Section 35.48(a) of the Business & Commerce Code.
The substitute, in subsection (d), clarifies that this statute applies when a business disposes of records and does not require the business to dispose of a record.
The substitute, in subsection (f), provides that a business acting in good faith in accordance with this act shall not be liable if the record is reconstructed through extraordinary means.
The substitute, in subsection (g)(1), clarifies that nothing in this bill interferes with a statutory mandate to retain records.
The substitute, in subsection (g)(2), clarifies that nothing in this bill interferes with preserving historically significant business records.