SB642: Bill Text

LRB-2848/1

MDE:cdc

2023 - 2024 LEGISLATURE

2023 Senate BILL 642

November 7, 2023 - Introduced by Senators Quinn and Marklein, cosponsored by Representatives Zimmerman, Gustafson, Allen, Armstrong, Behnke, Binsfeld, Dittrich, Duchow, Green, Kitchens, Kurtz, Macco, Murphy, Mursau, Novak, O'Connor, Penterman, Plumer, Pronschinske, Rettinger, Sortwell, Spiros, Steffen, Tittl, Wichgers and Wittke. Referred to Committee on Shared Revenue, Elections and Consumer Protection.

SB642,1,2 An Act to create 134.985 of the statutes; relating to: consumer data protection and providing a penalty.

Analysis by the Legislative Reference Bureau

This bill establishes requirements for controllers and processors of the personal data of consumers. The bill defines a “controller” as a person that, alone or jointly with others, determines the purpose and means of processing personal data, and the bill applies to controllers that control or process the personal data of at least 100,000 consumers or that control or process the personal data of at least 25,000 consumers and derive over 50 percent of their gross revenue from the sale of personal data. Under the bill, “personal data” means any information that is linked or reasonably linkable to an individual except for publicly available information.

The bill provides consumers with the following rights regarding their personal data: 1) to confirm whether a controller is processing the consumer's personal data and to access the personal data; 2) to correct inaccuracies in the consumer's personal data; 3) to require a controller to delete personal data provided by or about the consumer; 4) to obtain a copy of the personal data that the consumer previously provided to the controller; and 5) to opt out of the processing of the consumer's personal data for targeted advertising; the sale of the consumer's personal data; and certain forms of automated processing of the consumer's personal data. These rights are subject to certain exceptions specified in the bill. Controllers may not discriminate against a consumer for exercising rights under the bill, including by charging different prices for goods or providing a different level of quality of goods or services.

The bill requires controllers to respond to consumers' requests to invoke rights under the bill without undue delay. If a controller declines to take action regarding a consumer's request, the controller must inform the consumer of its justification without undue delay. The bill also requires that information provided in response to a consumer's request be provided free of charge once annually per consumer. Controllers must also establish processes for consumers to appeal a refusal to take action on a consumer's request. Within 60 days of receiving an appeal, a controller must inform the consumer in writing of any action taken or not taken in response to the appeal, including a written explanation of the reasons for its decisions. If the appeal is denied, the controller must provide the consumer with a method through which the consumer can contact the attorney general to submit a complaint.

Under the bill, a controller must provide consumers with a privacy notice that discloses the categories of personal data processed by the controller; the purpose of processing the personal data; the categories of third parties, if any, with whom the controller shares personal data; the categories of personal data that the controller shares with third parties; and information about how consumers may exercise their rights under the bill. Controllers may not collect or process personal data for purposes that are not relevant to or reasonably necessary for the purposes disclosed in the privacy notice. The bill's requirements do not restrict a controller's ability to collect, use, or retain data for conducting internal research, effectuating a product recall, identifying and repairing technical errors, or performing internal operations that are reasonably aligned with consumer expectations or reasonably anticipated on the basis of a consumer's relationship with the controller.

Persons that process personal data on behalf of a controller must adhere to a contract between the controller and the processor, and such contracts must satisfy certain requirements specified in the bill. The bill also requires controllers to conduct data protection assessments related to certain activities, including processing personal data for targeted advertising, selling personal data, processing personal data for profiling purposes, and processing sensitive data, as defined in the bill. The attorney general may request that a controller disclose a data protection assessment that is relevant to an investigation being conducted by the attorney general.

The attorney general has exclusive authority to enforce violations of the bill's requirements. A controller or processor that violates the bill's requirements is subject to a forfeiture of up to $7,500 per violation, and the attorney general may recover reasonable investigation and litigation expenses incurred. Before bringing an action to enforce the bill's requirements, the attorney general must first provide a controller or processor with a written notice identifying the violations. If within 30 days of receiving the notice the controller or processor cures the violation and provides the attorney general with an express written statement that the violation is cured and that no such further violations will occur, then the attorney general may not bring an action against the controller or processor. The bill also prohibits cities, villages, towns, and counties from enacting or enforcing ordinances that regulate the collection, processing, or sale of personal data.

For further information see the state fiscal estimate, which will be printed as an appendix to this bill.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

SB642,1 Section 1. 134.985 of the statutes is created to read:

SB642,3,2 134.985 Consumer data protection. (1) Definitions. In this section:

SB642,3,9 (a) “Affiliate” means a legal entity that controls, is controlled by, or is under common control with another legal entity or shares common branding with another legal entity. For the purposes of this definition, “control" or “controlled" means ownership of, or the power to vote, more than 50 percent of the outstanding shares of any class of voting security of a company; control in any manner over the election of a majority of the directors or of individuals exercising similar functions; or the power to exercise controlling influence over the management of a company.

SB642,3,12 (b) “Authenticate" means verifying through reasonable means that the consumer, entitled to exercise his or her consumer rights under sub. (2), is the same consumer exercising such consumer rights with respect to the personal data at issue.

SB642,3,19 (c) “Biometric data" means data generated by automatic measurements of an individual's biological characteristics, such as a fingerprint, voiceprint, eye retinas, irises, or other unique biological patterns or characteristics that are used to identify a specific individual. “Biometric data" does not include a physical or digital photograph, a video or audio recording or data generated therefrom, or information collected, used, or stored for health care treatment, payment, or operations under the federal Health Insurance Portability and Accountability Act of 1996.

SB642,3,20 (d) “Business associate” has the meaning given in 45 CFR 160.103.

SB642,3,21 (e) “Child” means an individual younger than 13 years of age.

SB642,4,4 (f) “Consent" means a clear affirmative act signifying a consumer's freely given, specific, informed, and unambiguous agreement to process personal data relating to the consumer. “Consent” may include a written statement, including a statement written by electronic means, or any other unambiguous affirmative action.

SB642,4,7 (g) “Consumer" means an individual who is a resident of this state acting only in an individual or household context. “Consumer" does not include an individual acting in a commercial or employment context.

SB642,4,9 (h) “Controller" means a person that, alone or jointly with others, determines the purpose and means of processing personal data.

SB642,4,10 (i) “Covered entity” has the meaning given in 45 CFR 160.103.

SB642,4,12 (ja) “Cures Act” means the federal 21st Century Cures Act and valid federal regulations enacted pursuant to such provisions.

SB642,4,17 (jg) “Decisions that produce legal or similarly significant effects concerning a consumer" means a decision made by the controller that results in the provision or denial by the controller of financial and lending services, housing, insurance, education enrollment, criminal justice, employment opportunities, health care services, or access to basic necessities, such as food and water.

SB642,4,19 (ka) “Deidentified data" means data that cannot reasonably be linked to an identified or identifiable individual, or a device linked to such person.

SB642,4,21 (kb) “Identified or identifiable individual" means a person who can be readily identified, directly or indirectly.

SB642,4,24 (La) “HIPAA” means the federal Health Insurance Portability and Accountability Act and valid federal regulations enacted pursuant to the act, including 45 CFR 164.500 to 164.534.

SB642,5,3 (Lg) “HITECH” means the federal Health Information Technology for Economic and Clinical Health Act and valid federal regulations enacted pursuant to the act.

SB642,5,4 (m) “Institution of higher education” has the meaning given in s. 39.32 (1) (a).

SB642,5,7 (n) “Nonprofit organization" means any corporation organized under ch. 181, any organization identified under s. 895.486 (2) (e), or any organization exempt from taxation under section 501 (c) (3), (6), or (12) of the Internal Revenue Code.

SB642,5,10 (o) “Personal data" means any information that is linked or reasonably linkable to an identified or identifiable individual. “Personal data" does not include deidentified data or publicly available information.

SB642,5,16 (p) “Precise geolocation data" means information derived from technology, including global positioning system level latitude and longitude coordinates or other mechanisms, that directly identifies the specific location of an individual with precision and accuracy within a radius of 1,750 feet. “Precise geolocation data" does not include the content of communications or any data generated by or connected to advanced utility metering infrastructure systems or equipment for use by a utility.

SB642,5,20 (q) “Process" or “processing" means any operation or set of operations performed, whether by manual or automated means, on personal data or on sets of personal data, such as the collection, use, storage, disclosure, analysis, deletion, or modification of personal data.

SB642,5,22 (r) “Processor” means an individual or person that processes personal data on behalf of a controller.

SB642,6,2 (s) “Profiling" means any form of automated processing performed on personal data to evaluate, analyze, or predict personal aspects related to an identified or identifiable individual's economic situation, health, personal preferences, interests, reliability, behavior, location, or movements.

SB642,6,7 (t) “Pseudonymous data" means personal data that cannot be attributed to a specific individual without the use of additional information, provided that such additional information is kept separately and is subject to appropriate technical and organizational measures to ensure that the personal data is not attributed to an identified or identifiable individual.

SB642,6,13 (u) “Publicly available information" means information that is lawfully made available through federal, state, or local government records, or information that a business has a reasonable basis to believe is lawfully made available to the general public through widely distributed media, by the consumer, or by a person to whom the consumer has disclosed the information, unless the consumer has restricted the information to a specific audience.

SB642,6,16 (v) “Sale of personal data" means the exchange of personal data for monetary consideration by the controller to a 3rd party. “Sale of personal data" does not include any of the following:

SB642,6,18 1. The disclosure of personal data to a processor that processes the personal data on behalf of the controller.

SB642,6,20 2. The disclosure of personal data to a 3rd party for purposes of providing a product or service requested by the consumer.

SB642,6,21 3. The disclosure or transfer of personal data to an affiliate of the controller.

SB642,6,24 4. The disclosure of information that a consumer intentionally made available to the general public via a channel of mass media and did not restrict to a specific audience.

SB642,7,3 5. The disclosure or transfer of personal data to a 3rd party as an asset that is part of a merger, acquisition, bankruptcy, or other transaction in which the 3rd party assumes control of all or part of the controller's assets.

SB642,7,4 (w) “Sensitive data” includes the following:

SB642,7,6 1. Personal data revealing racial or ethnic origin, religious beliefs, mental or physical health diagnosis, sexual orientation, or citizenship or immigration status.

SB642,7,8 2. The processing of genetic or biometric data for the purpose of uniquely identifying an individual.

SB642,7,9 3. The personal data collected from a known child.

SB642,7,10 4. Precise geolocation data.

SB642,7,15 (x) “Targeted advertising" means displaying advertisements to a consumer where the advertisement is selected based on personal data obtained from that consumer's activities over time and across nonaffiliated websites or online applications to predict such consumer's preferences or interests. “Targeted advertising" does not include any of the following:

SB642,7,17 1. Advertisements based on activities within a controller's own websites or online applications.

SB642,7,19 2. Advertisements based on the context of a consumer's current search query, visit to a website, or online application.

SB642,7,21 3. Advertisements directed to a consumer in response to the consumer's request for information or feedback.

SB642,7,23 4. Processing personal data processed solely for measuring or reporting advertising performance, reach, or frequency.

SB642,8,3 (y) “Third party” means a person or association, authority, board, department, commission, independent agency, institution, office, society, or other body in state or local government created or authorized to be created by the constitution or any law, other than a consumer, controller, processor, or an affiliate of the processor or the controller.

SB642,8,4 (z) “Trade secret” has the meaning given in s. 134.90.

SB642,8,11 (2) Personal data rights; consumers. (a) A consumer may invoke the consumer rights authorized under this subsection at any time by submitting a request to a controller specifying the consumer rights the consumer wishes to invoke. A known child's parent or legal guardian may invoke such consumer rights on behalf of the child regarding processing personal data belonging to the known child. A controller shall comply with an authenticated consumer request to exercise any of the following rights:

SB642,8,14 1. To confirm whether or not a controller is processing the consumer's personal data and to access such personal data, unless such confirmation or access would require the controller to reveal a trade secret.

SB642,8,17 2. To correct inaccuracies in the consumer's personal data, taking into account the nature of the personal data and the purposes of the processing of the consumer's personal data.

SB642,8,18 3. To delete personal data provided by or obtained about the consumer.

SB642,8,24 4. To obtain a copy of the consumer's personal data that the consumer previously provided to the controller in a portable and, to the extent technically feasible, readily usable format that allows the consumer to transmit the data to another controller without hindrance, where the processing is carried out by automated means, provided such controller shall not be required to reveal any trade secret.

SB642,9,3 5. To opt out of the processing of the personal data for purposes of targeted advertising, the sale of personal data, or profiling in furtherance of decisions that produce legal or similarly significant effects concerning the consumer.

SB642,9,6 (b) 1. Except as otherwise provided in this section, a controller shall comply with a request by a consumer to exercise the consumer rights authorized under par. (a).

SB642,9,12 2. A controller shall respond to a consumer without undue delay, but in all cases within 45 days of receipt of a request submitted under par. (a). The response period may be extended once by 45 additional days when reasonably necessary, taking into account the complexity and number of the consumer's requests, so long as the controller informs the consumer of any such extension within the initial 45-day response period, together with the reason for the extension.

SB642,9,16 3. If a controller declines to take action regarding a consumer's request, the controller shall inform the consumer without undue delay, but in all cases and at the latest within 45 days of receipt of the request, of the justification for declining to take action and instructions for how to appeal the decision under par. (c).

SB642,9,23 4. Information provided in response to a consumer request shall be provided by a controller free of charge, once annually per consumer. If requests from a consumer are manifestly unfounded, technically infeasible, excessive, or repetitive, the controller may charge the consumer a reasonable fee to cover the administrative costs of complying with the request or decline to act on the request. The controller bears the burden of demonstrating the manifestly unfounded, technically infeasible, excessive, or repetitive nature of the request.

SB642,9,25 5. If a controller is unable to authenticate the request using commercially reasonable efforts, the controller may not be required to comply with a request to initiate an action under par. (a) and may request that the consumer provide additional information reasonably necessary to authenticate the consumer and the consumer's request.