As we discussed in our prior alert, California voters had been poised to consider a citizen-initiated ballot measure that would have significantly expanded the privacy rights of California citizens and provided substantial penalties for noncompliant companies. In response to that ballot measure, the California legislature hastily pushed through privacy legislation despite the “grave, grave concerns” expressed by lawmakers.
Lawmakers were willing to enact the flawed legislation based on an assurance from the leader of the ballot measure that he would not submit the measure if the legislation was passed. However, because the deadline to submit ballot measures was June 28, 2018, lawmakers had to rush the legislation through both houses. And, since state law requires that legislation be in print for at least 72 hours before a vote, lawmakers had no opportunity to offer amendments.
Lawmakers were willing to engage in such a rushed course of action because, if the ballot measure had become law, both houses would have been required to approve any changes by a 70 percent vote instead of a simple majority. Also, because the legislation does not go into effect until January 1, 2020, lawmakers theoretically can fix any problems in the intervening time frame.
Despite its tumultuous legislative history, the legislation—titled the California Consumer Privacy Act of 2018—grants significant privacy rights to California residents. Any entity that does business in California and qualifies as a “business” under the Act will need to comply with the law or risk substantial financial penalty.
will require covered entities to implement and maintain reasonable security procedures, dispose of documents containing confidential information properly, ensure that confidential information is protected when transferred to third parties, and notify affected individuals of data breaches in the shortest time frame in the country. The new law was spearheaded by the Colorado Attorney General’s office, which is charged with enforcing its requirements. As a result of the legislation, covered entities should consider implementing written information security programs, third party vendor management controls, and incident response plans to best position themselves against potential enforcement actions and civil litigation in the future.
The Arizona Legislature has significantly expanded and strengthened the state’s data breach notification law. The 
In March, 
Alabama has officially joined the data breach notification party. Alabama Governor Kay Ivey signed Act 
South Dakota (site of Ballard’s 
In the absence of federal action, state legislators continue to propose bills that would increase data privacy and security protections for consumers. Any entity that does business in these states or maintains confidential information of their residents should monitor the legislation to determine whether and how the proposed changes may affect operations.