II

106TH CONGRESS

2D SESSION S. 2699

To strengthen the authority of the Federal Government to protect individuals

from certain acts and practices in the sale and purchase of social security

numbers and social security account numbers, and for other purposes.

IN THE SENATE OF THE UNITED STATES

JUNE 8, 2000

Mrs. FEINSTEIN introduced the following bill; which was read twice and

referred to the Committee on Finance

A BILL

To strengthen the authority of the Federal Government to

protect individuals from certain acts and practices in

the sale and purchase of social security numbers and

social security account numbers, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Social Security Num5 ber Protection Act of 2000’’.

6 SEC. 2. FINDINGS.

7 Congress makes the following findings:
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1 (1) The inappropriate sale or purchase of social

2 security numbers is a significant factor in a growing

3 range of illegal activities, including fraud, identity

4 theft, and, in some cases, stalking and other violent

5 crimes.

6 (2) While financial institutions, health care pro7 viders, and other entities have often used social se8 curity numbers to confirm the identity of an indi9 vidual, the sale or purchase of these numbers often

10 facilitates the commission of criminal activities, and

11 also can result in serious invasions of individual pri12 vacy.

13 (3) The Federal Government requires virtually

14 every individual in the United States to obtain and

15 maintain a social security number in order to pay

16 taxes, to qualify for social security benefits, or to

17 seek employment. An unintended consequence of

18 these requirements is that social security numbers

19 have become tools that can be used to facilitate

20 crime, fraud, and invasions of the privacy of the in21 dividuals to whom the numbers are assigned. Be22 cause the Federal Government created and main23 tains this system, and because the Federal Govern24 ment does not permit individuals to exempt them25 selves from those requirements, it is appropriate for
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1 the Federal Government to take steps to stem the

2 abuse of this system.

3 (4) A social security number is simply a se4 quence of numbers. In no meaningful sense can the

5 number itself impart knowledge or ideas. Persons do

6 not sell or transfer such numbers in order to convey

7 any particularized message, nor to express to the

8 purchaser any ideas, knowledge, or thoughts.

9 (5) A social security number does not contain,

10 reflect, or convey any publicly significant informa11 tion or concern any public issue. The sale of such

12 numbers in no way facilitates uninhibited, robust,

13 and wide-open public debate, and restrictions on

14 such sale would not affect public debate.

15 (6) No one should seek to profit from the sale

16 of social security numbers in circumstances that cre17 ate a substantial risk of physical, emotional, or fi18 nancial harm to the individuals to whom those num19 bers are assigned.

20 (7) Consequently, Congress should enact legis21 lation that will offer individuals assigned such num22 bers necessary protection from the sale and purchase

23 of social security numbers in circumstances that

24 might facilitate unlawful conduct or that might oth25 erwise likely result in unfair and deceptive practices.
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1 SEC. 3. DEFINITIONS.

2 In this Act:

3 (1) COMMISSION.—The term ‘‘Commission’’

4 means the Federal Trade Commission.

5 (2) PERSON.—The term ‘‘person’’ means any

6 individual, partnership, corporation, trust, estate, co7 operative, association, or any other entity.

8 (3) SALE.—

9 (A) IN GENERAL.—The term ‘‘sale’’ means

10 obtaining, directly or indirectly, anything of

11 value in exchange for a social security number

12 or social security account number.

13 (B) EXCLUSIONS.—Such term does not

14 include—

15 (i) the submission of such a number

16 as part of the process for applying for any

17 type of government benefit or program

18 (such as a grant or loan application or a

19 welfare or other public assistance pro20 gram); or

21 (ii) transfers of such a number as

22 part of a data matching program under

23 the Computer Matching and Privacy Pro24 tection Act of 1988 (5 U.S.C. 552a note;

25 Public Law 100–503; 102 Stat. 2507).

26 (4) PURCHASE.—
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1 (A) IN GENERAL.—The term ‘‘purchase’’

2 means providing directly or indirectly, anything

3 of value in exchange for a social security num4 ber or social security account number.

5 (B) EXCLUSIONS.—Such term does not

6 include—

7 (i) the submission of such a number

8 as part of the process for applying for any

9 type of government benefit or program

10 (such as a grant or loan application or a

11 welfare or other public assistance pro12 gram); or

13 (ii) transfers of such a number as

14 part of a data matching program under

15 the Computer Matching and Privacy Pro16 tection Act of 1988 (5 U.S.C. 552a note;

17 Public Law 100–503; 102 Stat. 2507).

18 (5) SOCIAL SECURITY NUMBER; SOCIAL SECU19 RITY ACCOUNT NUMBER.—The terms ‘‘social secu20 rity number’’ and ‘‘social security account number’’

21 have the meaning given those terms in section

22 208(c) of the Social Security Act (42 U.S.C.

23 408(c)).

24 (6) STATE.—The term ‘‘State’’ means any

25 State of the United States, the District of Columbia,
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1 Puerto Rico, the Northern Mariana Islands, the

2 United States Virgin Islands, Guam, American

3 Samoa, and any territory or possession of the

4 United States.

5 SEC. 4. REGULATION OF THE SALE AND PURCHASE OF SO6 CIAL SECURITY NUMBERS AND SOCIAL SECU7 RITY ACCOUNT NUMBERS.

8 (a) PROHIBITION.—It shall be unlawful for any per9 son to sell or purchase a social security number or a social

10 security account number in a manner that violates a regu11 lation promulgated by the Commission under subsection

12 (b).

13 (b) REGULATIONS.—

14 (1) IN GENERAL.—The Commission, after con15 sultation with the Commissioner of Social Security,

16 the Department of Justice, and other Federal agen17 cies as the Commission deems appropriate, shall pro18 mulgate regulations restricting the sale and pur19 chase of social security numbers and social security

20 account numbers and any unfair or deceptive acts or

21 practices in connection with the sale and purchase of

22 social security numbers and social security account

23 numbers.

24 (2) REQUIREMENTS.—

25 (A) RESTRICTIONS AND CONDITIONS.—
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1 (i) IN GENERAL.—In promulgating

2 such regulations, the Commission shall im3 pose restrictions and conditions on the sale

4 and purchase of social security numbers

5 and social security account numbers that

6 are no broader than necessary—

7 (I) to provide reasonable assur8 ances that social security numbers

9 and social security account numbers

10 will not be used to commit or facili11 tate fraud, deception, or crime; and

12 (II) to prevent an undue risk of

13 bodily, emotional, or financial harm to

14 an individual.

15 (ii) REQUIRED CONSIDERATIONS FOR

16 PREVENTION OF UNDUE RISK.—For pur17 poses of clause (i)(II), the Commission

18 shall consider—

19 (I) the nature, likelihood, and se20 verity of the anticipated harm;

21 (II) the nature, likelihood, and

22 extent of any benefits that could be

23 realized from the sale or purchase of

24 the numbers; and

25 (III) any other relevant factors.
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1 (B) EXCEPTIONS.—The regulations pro2 mulgated under this subsection shall include ex3 ceptions which permit the sale and purchase of

4 social security numbers and social security ac5 count numbers—

6 (i) to the extent necessary for law en7 forcement or national security purposes;

8 (ii) to the extent necessary for public

9 health purposes;

10 (iii) to the extent necessary in emer11 gency situations to protect the health or

12 safety of one or more individuals;

13 (iv) to the extent necessary for re14 search conducted for the purpose of ad15 vancing public knowledge, on the condition

16 that the researcher provides adequate as17 surances that—

18 (I) the social security numbers or

19 social security account numbers will

20 not be used to harass, target, or pub21 licly reveal information concerning

22 any identifiable individual;

23 (II) information about identifi24 able individuals obtained from the re25 search will not be used to make deci-
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1 sions that directly affect the rights,

2 benefits, or privileges of specific indi3 viduals; and

4 (III) the researcher has in place

5 appropriate safeguards to protect the

6 privacy and confidentiality of any in7 formation about identifiable individ8 uals;

9 (v) to the extent consistent with an

10 individual’s voluntary and affirmative writ11 ten consent to the sale or purchase of a so12 cial security number or a social security

13 account number that has been assigned to

14 that individual; and

15 (vi) under other appropriate cir16 cumstances as the Commission may deter17 mine are consistent with the findings set

18 forth in section 2 and the principles set

19 forth in subparagraph (A).

20 (c) RULEMAKING.—

21 (1) IN GENERAL.—Not later than 1 year after

22 the date of enactment of this Act, the Commission

23 shall promulgate the regulations required under sub24 section (b) in accordance with section 553 of title 5,

25 United States Code.
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1 (2) EFFECTIVE DATE.—Subsection (a) and the

2 regulations promulgated under subsection (b) and

3 section 208 of the Social Security Act (42 U.S.C.

4 408) (as amended by section 5) shall take effect 30

5 days after the date on which the final regulations

6 issued under subsection (b) are published in the

7 Federal Register.

8 (d) ENFORCEMENT.—Any violation of a regulation

9 promulgated under subsection (b) shall be treated in the

10 same manner as a violation of a rule promulgated under

11 section 18(a)(1)(B) of the Federal Trade Commission Act

12 (15 U.S.C. 57a(a)(1)(B)) regarding unfair or deceptive

13 acts or practices.

14 (e) ADMINISTRATION AND APPLICABILITY OF ACT.—

15 (1) THE COMMISSION.—

16 (A) IN GENERAL.—The Commission shall

17 prevent any person from violating this section,

18 and any regulation promulgated thereunder, in

19 the same manner, by the same means, and with

20 the same jurisdiction, powers, and duties as

21 though all applicable terms and provisions of

22 the Federal Trade Commission Act (15 U.S.C.

23 41 et seq.) were incorporated into and made a

24 part of this Act.
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1 (B) APPLICATION OF PENALTIES, PRIVI2 LEGES, AND IMMUNITIES.—Any person who vio3 lates such a regulation shall be subject to the

4 penalties and entitled to the privileges and im5 munities provided in the Federal Trade Com6 mission Act (15 U.S.C. 41 et seq.) as though

7 all applicable terms and provisions of the Fed8 eral Trade Commission Act (15 U.S.C. 41 et

9 seq.) were incorporated into and made a part of

10 this Act.

11 (C) RULE OF CONSTRUCTION.—Nothing

12 contained in this Act shall be construed to limit

13 the authority of the Commission under any

14 other provision of law.

15 (2) ACTIONS BY STATES.—

16 (A) IN GENERAL.—In any case in which

17 the Attorney General of a State has reason to

18 believe that an interest of the residents of that

19 State has been or is threatened or adversely af20 fected by an act or practice that violates any

21 regulation of the Commission promulgated

22 under subsection (b), the State, as parens

23 patriae, may bring a civil action on behalf of

24 the residents of the State in a district court of
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1 the United States of appropriate jurisdiction,

2 to—

3 (i) enjoin that act or practice;

4 (ii) enforce compliance with the regu5 lation;

6 (iii) obtain damages, restitution, or

7 other compensation on behalf of residents

8 of the State; or

9 (iv) obtain such other legal and equi10 table relief as the district court may con11 sider to be appropriate.

12 Before filing an action under this paragraph,

13 the Attorney General of the State involved shall

14 provide to the Commission and to the Attorney

15 General of the United States a written notice of

16 that action and a copy of the complaint for that

17 action. If the Attorney General of the State in18 volved determines that it is not feasible to pro19 vide such notice and copy before the filing of

20 the action, the Attorney General of such State

21 shall provide the written notice and the copy of

22 the complaint to the Commission and to the At23 torney General of the United States as soon as

24 practicable after the filing of the complaint.
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1 (B) RIGHT TO INTERVENE.—Upon receipt

2 of a notice under subparagraph (A), the Com3 mission and the Attorney General of the United

4 States each shall have the right—

5 (i) to move to stay the action, pending

6 the final disposition of a pending Federal

7 matter, as described in subparagraph (C);

8 (ii) to intervene in the action that is

9 the subject of the notice;

10 (iii) upon so intervening, to be heard

11 on all matters arising under the action;

12 and

13 (iv) to file petitions for appeal.

14 (C) PROHIBITION ON STATE ACTION.—If

15 the Attorney General has instituted a criminal

16 proceeding or the Commission has instituted a

17 civil action for a violation of this Act or of any

18 regulations promulgated under this Act, no

19 State may, during the pendency of such pro20 ceeding or action, bring an action under this

21 section against any defendant named in the

22 criminal proceeding or civil action for any viola23 tion of this Act that is alleged in that pro24 ceeding or action.
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1 (D) RULE OF CONSTRUCTION.—For pur2 poses of bringing any civil action under sub3 paragraph (A), nothing in this Act shall be con4 strued to prevent an Attorney General of a

5 State from exercising the powers conferred on

6 that Attorney General by the laws of that State

7 to conduct investigations, administer oaths and

8 affirmations, or compel the attendance of wit9 nesses or the production of documentary and

10 other evidence.

11 (E) VENUE; SERVICE OF PROCESS.—Any

12 action brought under this section may be

13 brought in any district court of the United

14 States that meets applicable requirements relat15 ing to venue under section 1391 of title 28,

16 United States Code. In an action brought under

17 this section, process may be served in any dis18 trict in which the defendant is an inhabitant or

19 may be found.

20 SEC. 5. CRIMINAL SANCTIONS UNDER THE SOCIAL SECU21 RITY ACT.

22 Section 208 of the Social Security Act (42 U.S.C.

23 408) is amended—
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1 (1) in subsection (a)(8), by striking ‘‘or compels

2 the disclosure of’’ and inserting ‘‘, compels the dis3 closure of, or knowingly sells or purchases’’; and

4 (2) in subsection (c)—

5 (A) by striking ‘‘Any’’ and inserting ‘‘(1)

6 Any’’; and

7 (B) by adding at the end the following new

8 paragraph:

9 ‘‘(2)(A) For purposes of subsection (a)(8)—

10 ‘‘(i) the term ‘sells’ means obtains, directly or

11 indirectly, anything of value in exchange for a social

12 security number or a social security account number;

13 and

14 ‘‘(ii) the term ‘purchases’ means provides, di15 rectly or indirectly, anything of value in exchange

16 for a social security number or a social security ac17 count number.

18 ‘‘(B) Such terms do not include the submission of a

19 social security number or a social security account number

20 as part of the process for applying for any type of govern21 ment benefit or program (such as a grant or loan applica22 tion or a welfare or other public assistance program) or

23 transfers of such a number as part of a data matching

24 program under the Computer Matching and Privacy Pro-
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1 tection Act of 1988 (5 U.S.C. 552a note; Public Law 100–

2 503; 102 Stat. 2507).’’.

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