New Mexico Data Breach Notification Bill Includes Payment Card Breach Provisions

Jan. 31 — A data breach notification bill (H.B. 224) introduced in the New Mexico House Jan. 29 would require covered entities to notify affected individuals within 10 days of discovering a breach of their unencrypted personal information and notify the state attorney general within 10 business days of discovering a breach if more than 50 New Mexico residents must be notified.

The bill includes unique provisions regarding payment card breaches, including ones that would set a shorter notification deadline and allow card issuers to sue to recover costs associated with a breach and individuals to sue for statutory damages.

In addition to breach notification requirements, H.B. 224, which was introduced by Rep. William R. Rehm (R), the measure seeks to add data security and data disposal requirements for companies operating in the state

If H.B. 224 is enacted, New Mexico would join the roster of 46 states and the District of Columbia with data breach notification laws.

Payment Card Breaches

H.B. 224 would require that companies facing the breach of unencrypted payment card data “notify each merchant services providers to which the credit card number or debit card number was transmitted” within two business days of discovering a breach.

Unlike the general data breach notice requirement, the bill would set a risk of harm threshold for when notice is required for payment card breaches.

H.B. 224 would require notification in a payment card breach if an individual's magnetic strip or other listed information is disclosed:

  •  without the approval or direction of the card issuer;
  •  resulting in the compromised security and confidentiality of access device data; and
  •  creating a material risk of harm or actual harm to a cardholder.
  •  

    Under the proposed law, if the breach of card data involves a breach of an card reader or the improper retention of payment card stripe data, card issuers could sue to recover administrative costs, such as replacing cards, covering fraudulent charges and covering the costs of notification.

    Target Corp.'s hacking breach affecting millions of customers has raised interest in payment card security and breaches.

    Data Security, Disposal

    The measure would require companies to “implement and maintain reasonable security procedures and practices appropriate to the nature of the information to protect the personal identifying information from unauthorized access, destruction, use, modification or disclosure.”

    In addition, companies would be required to include those data security standard in contracts with “non-affiliated third parties,” with which they shared personal information.

    H.B. 224 would mandate that personal data contained in electronic, paper or other form be disposed of in a way “to make the personal identifying information unreadable or undecipherable.”

    Enforcement

    Under the proposed law, the state attorney general would be authorized to go to court to seek injunctive relief and recovery of actual damages related to a breach.

    If the court determined that a failure to provide breach notification was the result of a company “knowingly or recklessly” violating the law, it could impose a civil penalty of the greater of $5,000 or $10 per instance of failure to notify, up to a maximum of $150,000.

    In addition, the law would establish an individual right of action. Individuals would be allowed to sue for actual damages or statutory damages of $100. If a court found a company's conduct to be “willful,” then it would be authorized to award the greater of three times the actual damages or $300 in statutory damages.

    H.B. 224 was referred Jan. 29 to the House Consumer & Public Affairs Committee and House Judiciary Committee for consideration.

    Other States

    In addition to New Mexico, only Alabama, Kentucky and South Dakota don't have any type of data breach notice law.

    The Kentucky House Jan. 30 unanimously approved a public sector data breach bill.

    Alabama's Legislature convened Jan. 14. As of Jan. 31, no breach notice bills had been introduced.

    South Dakota's Legislature convened Jan. 14. But as of Jan. 31, no breach notice bills had been introduced.

    H.B. 224, as introduced, is available at http://www.nmlegis.gov/Sessions/14%20Regular/bills/house/HB0224.pdf.