Privacy & Information Security Law Blog

On April 13, 2023, the Indiana Senate concurred to the Indiana House’s amendments of Senate Bill 5 (“SB 5”) a day after the House returned the bill to the Senate with amendments, and a couple days after the Indiana House unanimously voted to approve SB 5. SB 5 now will head to Governor Eric Holcomb for a final signature, where he will have seven days upon transmission to sign SB 5 into law or veto it. This could make Indiana the seventh U.S. state to enact comprehensive privacy legislation.

Applicability

SB 5 would apply to a person that conducts business in Indiana or produces products or services that are targeted to residents of Indiana and that during a calendar year: (1) controls or processes personal data of at least one hundred thousand (100,000) consumers who are Indiana residents; or (2) controls or processes personal data of at least twenty-five thousand (25,000) consumers who are Indiana residents and derive more than fifty percent (50%) of gross revenue from the sale of personal data.

SB 5’s protections would apply to residents of Indiana who act for a personal, family or household purpose, with express exemption for individuals acting in a commercial or employment context. The bill also contains a number of exemptions, including exceptions for financial institutions, affiliates, and data subject to Title V of the Gramm-Leach-Bliley Act, covered entities and business associates under the Health Insurance Portability and Accountability Act of 1996, nonprofit organizations and institutions of higher education. 

Controller Obligations

Similar to the other comprehensive state privacy laws, SB 5 would require controllers to limit the collection of personal data to what is adequate, relevant and reasonably necessary in relation to the purposes for which such data is processed, as disclosed to the consumer. In addition, controllers will need consumer’s consent to process sensitive data or to process personal data for purposes that are neither reasonably necessary for nor compatible with the disclosed purposes for which the personal data is processed. SB 5 also requires controllers to establish, implement and maintain reasonable administrative, technical and physical data security practices to protect the confidentiality, integrity and accessibility of personal data.

Controllers will need to provide consumers with a reasonably accessible, clear, and meaningful privacy notice that includes: (1) the categories of personal data processed by the controller; (2) the purpose for processing personal data; (3) how consumers may exercise their consumer rights under the law, including how a consumer may appeal a controller’s decision with regard to the consumer’s request; (4) the categories of personal data that the controller shares with third parties, if any; and (5) the categories of third parties, if any, with whom the controller shares personal data.

SB 5 also will require controllers to conduct and document a data protection impact assessment for each of the following processing activities involving personal data: (1) the processing of personal data for purposes of targeted advertising; (2) the sale of personal data; (3) the processing of personal data for purposes of profiling, if such profiling presents certain reasonably foreseeable risks; (4) the processing of sensitive data; and (5) any processing activities involving personal data that present a heightened risk of harm to consumers.

Consumer Rights

SB 5 provides consumers with the following rights: (1) to confirm whether or not a controller is processing the consumer’s personal data and to access such personal data; (2) to correct inaccuracies in the consumer’s personal data that the consumer previously provided to a controller; (3) to delete personal data provided by or obtained about a consumer; (4) to obtain either a copy of or a representative summary of the consumer’s personal data that the consumer previously provided to the controller in a portable and readily usable format that allows the consumer to transmit the data or summary to another controller without hindrance; and (5) to opt out of the processing of the consumer’s personal data for purposes of (A) targeted advertising, (B) the sale of personal data, or (C) profiling in furtherance of decisions that produce legal or similarly significant effects concerning the consumer.

Controllers would have 45 days to respond to consumer rights requests, with a potential 45-day extension in certain circumstances.

Enforcement

SB 5 does not contain a private right of action and would be enforced exclusively by the Indiana Attorney General. The bill provides a 30-day cure period for violations where a company must (1) cure a potential violation, and (2) provide the Attorney General with express written statement that the alleged violation has been cured and actions will be taken to ensure no further violations will occur.  In the case a violation is not cured, the Attorney General may initiate an action and may seek an injunction to restrain any violations of the law and a civil penalty up to $7,500 for each violation under the law.

Effective Date

If passed as law, SB 5 will take effect on January 1, 2026.

Update: On May 1, 2023, Governor Eric Holcomb signed SB 5 into law, making Indiana the seventh U.S. state to enact comprehensive privacy legislation.