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F I S C A L I M P A C T R E P O R T

SPONSOR HCPAC

ORIGINAL DATE

LAST UPDATED

2/3/2006

2/6/2006 HB 251/HCPACS

SHORT TITLE Remedies for Identity Theft Victims

SB

ANALYST McOlash

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY06

FY07

None

(Parenthesis ( ) Indicate Expenditure Decreases)

ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT (dollars in thousands)

FY06

FY07

FY08 3 Year

Total Cost

Recurring

or Non-Rec

Fund

Affected

Total

$350.0 $350.0

Recurring General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Administrative Office of the Courts (AOC)

Attorney General’s Office (AGO)

SUMMARY

Synopsis of Bill

In the House Consumer and Public Affairs Committee Substitute:

Sections 1 – 5 are essential duplicates of provisions of HB 251. See paragraphs in one of the fol-

lowing sections.

Section 6: HB 251/HCPACs defines and substitutes “credit bureau” for consumer reporting

agency. A credit bureau is defined as any business engaged in furnishing credit information

about consumers and is broader in definition that consumer reporting agency in HB 251. Section

House Bill 251/HCPACS - Page

2

6 also adds and defines a “security freeze” as a prohibition on a credit bureau from releasing all

of parts of a credit report or any information derived from a credit report.

Section 7 adds new material allowing a consumer to place a security freeze on a credit report by

making a written request by certified or overnight mail, telephone call, or email.

In five days after such a request, the credit bureau shall:

(1)

place a security freeze on report;

(2)

send written confirmation of freeze to consumer

(3)

provide a unique personal identification number or password to the con-

sumer for authorizing later release of credit report

The credit bureau shall also notify the consumer if there have been any third party requests or

releases of information during the period of the freeze.

Section 8 provides conditions under which a consumer-reporting agency shall block, decline to

block or rescind a block of the reporting of information after a person submits a police report in-

dicating identity theft. The Act further provides that if blocked information is unblocked, the

person shall be notified. The credit bureau must delete credit reports based upon credit requests

that the credit bureau verifies were initiated because of alleged identity theft.

Section 9 provides penalties for releasing information placed under a security freeze. The af-

fected consumer may bring civil action against the credit bureau for injunctive relief to prevent

further violations and for actual damages, penalties, and fees.

Section 10 provides the effective date of July 1, 2006.

AOC

Observes that:

Section 1: HB 251 extends the statute of limitations for commencing prosecution for an

identity theft crime to within 5 years from the time the crime was discovered.

Section 2: HB 251 amends Section 30-16-24.1 NMSA 1978 to expand the elements of

the crime of theft of identity to include willfully obtaining, recording or transferring per-

sonal identifying information of another with the intent to sell or distribute the informa-

tion to another for an illegal purpose, and using the identifying information of another,

dead or alive or of a fictitious person, to avoid summons, arrest or prosecution or to im-

pede a criminal investigation. The Act adds to the definition of “personal identifying in-

formation” to track with technological advancements. The Act further provides that a

sentencing court may issue orders as are necessary to correct errors in credit reports or

identifying information, in addition to public records.

Section 3: HB 251 provides that a law enforcement officer who interviews an alleged

identity theft victim shall make a written report of the information provided by the victim

and by witnesses on appropriate forms provided by the Attorney General (AG). The Act

requires that a copy of the police report be filed with the AG.

Section 4: HB 251 provides that a person whose identity was used, without consent or au-

House Bill 251/HCPACS - Page

3

thorization, by another person who was charged, arrested or convicted of a crime while

using such identity, may file a petition in a pending criminal action or in a court of com-

petent jurisdiction requesting a determination of factual innocence and an expungement

of the petitioner’s personal identifying information from the record. The Act also pro-

vides that if a court finds the person factually innocent, the court shall order: 1) that the

person’s identifying information contained in the court records be removed; and 2) that

the arrest information be expunged pursuant to Section 29-3-8.1 NMSA 1978. Addition-

ally, under the Act, a court may at any time vacate the determination of factual innocence

if the petition, or information submitted in support of the petition, contains a material

misrepresentation or fraud.

Section 5: HB 251 provides that if a person claiming to be a victim of identity theft pro-

vides specified documents to the AG, the AG, in cooperation with the Department of

Public Safety and the Motor Vehicle Division of the Taxation and Revenue Department,

shall issue that person an identity theft passport. The passport must contain a picture of

the person to whom it was issued and other information, as the AG deems appropriate.

The Act provides that the passport shall be accepted by law enforcement officers and oth-

ers challenging the holder’s identity. The Act further provides that upon issuance, the

Motor Vehicle Department shall note on the person’s driver record that a passport has

been issued. Under the Act, the AG is required to maintain a database of identity theft

victims who have reported to a law enforcement agency or have been issued an identity

theft passport. The AG may provide access to the database to criminal justice agencies.

For purposes of identification and authentication, the AG may allow access to specific in-

formation about a person who has become a victim of identity theft to that person or that

person’s authorized representative. The Act also requires that the AG prepare and dis-

tribute to local law enforcement agencies and to the general public an information packet

regarding how to prevent identity theft.

Section 6: HB 251 provides conditions under which a consumer-reporting agency shall

block, decline to block or rescind a block of the reporting of information that a person al-

leges appears on his credit report because of identity theft. The Act further provides that

if blocked information is unblocked, the person shall be notified. Additionally, the Act

provides that a consumer-reporting agency shall delete from a person’s credit report in-

quiries for credit reports based upon credit requests that the consumer-reporting agency

verifies were initiated because of identity theft. The Act defines ‘consumer reporting

agency” and “credit report.”

Section 7: The effective date of the Act is July 1, 2006.

FISCAL IMPLICATIONS

The portion of the bill which directs the Office of the Attorney General to start, administer and

maintain an identity theft passport program will require software, hardware, staff and training to

successfully complete. This will take considerable money to initiate. A similar program started

by the Ohio Attorney General’s Office cost approximately $350,000.00 to start up. The state of

Virginia, which also has an identity theft passport program, was able to develop their program

for considerably less money, but their program appears less sophisticated than the one in Ohio.

ADMINISTRATIVE IMPLICATIONS (AOC)

House Bill 251/HCPACS - Page

4

House Bill 251 provides that a person whose identity was used, without consent or authorization,

by another person who was charged, arrested or convicted of a crime while using such identity,

may file a petition in a pending criminal action or in a court of competent jurisdiction requesting

a determination of factual innocence and an expungement of the petitioner’s personal identifying

information from the record. This may increase caseloads in the courts, where additional re-

sources will be required to handle the increase.

AMENDMENTS (AOC)

1)

Section 4.C.: Provide guidance as to who may request a vacation of the determination

of factual innocence, and the procedure for doing so.

2)

Define “identity theft passport” and provide additional direction to the AG et.al, if

necessary, as to what information a passport shall contain and the form it shall as-

sume.

BMC/nt