§ 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.