Senate Commerce Committee Statement to Senate, No. 1233 — State of New Jersey (June 16, 2021)

Summary

A Senate Commerce Committee statement to the Senate on Senate Bill No. 1233 with committee amendments, State of New Jersey, dated June 16, 2021, reporting the bill favorably. As amended, the bill requires any person or entity that owns or licenses personal information about a resident of this State to develop and maintain a written comprehensive information security program with administrative, technical and physical safeguards. The definition of "person" includes financial service firms, investment firms and digital asset businesses, and excludes certain insured depository institutions, insured credit unions and financial institutions. A willful, knowing or reckless violation would be an unlawful practice under the consumer fraud act, with penalties of not more than $10,000 for a first offense and not more than $20,000 for any subsequent offense.

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SENATE COMMERCE COMMITTEE

STATEMENT TO

SENATE, No.
1233

with
committee amendments

STATE
OF NEW JERSEY

DATED: JUNE
16, 2021

The Senate Commerce Committee reports favorably and with
committee amendments Senate Bill No. 1233.

As amended, this bill requires any person,
corporation, association, partnership or other legal entity that owns or
licenses personal information about a resident of this State to develop,
implement, and maintain a comprehensive information security program that is
written in one or more readily accessible parts and contains administrative,
technical, and physical safeguards that are necessary to protect the personal
information. The definition of “person” means a natural person, corporation,
association, partnership or other legal entity, other than an
agency, department, board, commission, bureau, division or authority of the
State or any political subdivision thereof. It also includes, but is not
limited to, a financial service firm, investment firm, and digital asset
business. “Person” does not include certain insured depository institutions,
insured credit unions, and financial institutions or affiliates of a financial
institution.

The bill provides that it would be an unlawful
practice under the consumer fraud act, P.L.1960, c.39 (C.56:8-1 et seq.), to willfully,
knowingly or recklessly violate the provisions of the bill. An unlawful
practice is punishable by a monetary penalty of not more than $10,000 for a
first offense and not more than $20,000 for any subsequent offense. Additionally,
a violation can result in cease and desist orders issued by the Attorney
General, the assessment of punitive damages, and the awarding of treble damages
and costs to those injured as a result of the violation.

COMMITTEE AMENDMENTS:

The committee amended the bill to:

(1) clarify that certain entities are included within
the definition of “person”; and

(2) exclude certain insured depository institutions,
insured credit unions, and financial institutions and affiliates from the
provisions of the bill.

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