Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2006

State of Hawaii

Sir:

Your Committees on Commerce, Consumer Protection, and Housing and Media, Arts, Science, and Technology, to which was referred S.B. No. 2293, S.D. 1, entitled:

beg leave to report as follows:

The purpose of this measure is to restrict businesses, subject to limited exceptions, from disclosing an individual's social security number to the general public.

Your Committees received testimony in support of this measure from the Department of Commerce and Consumer Affairs, the American Association of Retired People (AARP) Hawaii, the Hawaii Government Employees Association (HGEA), the Consumer Data Industry Association, Retail Merchants of Hawaii, the Hawaii State AFL-CIO, and the Chamber of Commerce of Hawaii.

As one measure from the Department of Commerce and Consumer Affair's identity theft proposals, this measure is part of a larger Senate package of identity theft bills that has evolved from the work of the Hawaii Anti-Phishing Task Force. In 2005, the Hawaii Anti-Phishing Task Force was established in the Department of the Attorney General to develop state policy on how best to prevent further occurrences of phishing and other forms of electronic commerce-based crimes in the State.

One of the tools most often used to steal an individual's identity is that individual's social security number. Your Committees find that this measure will minimize the abuses associated with the fraudulent use of an individual's social security number by restricting its use as an identifier.

Your Committees have amended this measure by:

The Department of Commerce and Consumer Affairs recognizes that the obligations imposed by this measure should also extend to government agencies. The Department also recognizes, however, that government agencies will need time to identify which government practices will need changing and then additional time to incorporate these changes into their practices. Additionally, the Department recommends that the Task Force should continue further discussion on this matter. Thus, your Committees amended this measure by changing the effective date to July 1, 2050 to allow for further discussion of the applicability and the affect of implementation of the measure on government.

The HGEA and the Hawaii State AFL-CIO suggest and your Committees recognize that adding definitions for "legitimate purpose" and "third party" in the definitions section may be appropriate, and that this is a topic for further discussion. Currently the HGEA discloses the social security numbers of their members to an international union and two insurance carriers. A definition for "legitimate purpose" and "third party" will provide further guidance for the unions to follow and comply with this measure.

Furthermore, the Consumer Data Industry Association suggests and your Committees recognize that adding an additional paragraph to section –3(b) may be appropriate to allow for an exception for public records and documents. Pursuant to the Constitution, state law, or by court rule or order, certain documents and records are required to be open to the public for inspection. Your Committees recommend further discussion on adding a paragraph that will exempt public records and documents from the provisions of this measure.

As affirmed by the records of votes of the members of your Committees on Commerce, Consumer Protection, and Housing and Media, Arts, Science, and Technology that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 2293, S.D. 1, as amended herein, and recommend that it pass Third Reading in the form attached hereto as S.B. No. 2293, S.D. 2.