Subject: File No. S7-02-12
From: Keith P Bishop
Affiliation: Former California Commissioner of Corporations

March 2, 2012

The Commissions should clarify whether Zonal Improvement Plan (ZIP) code numbers constitute "identifying information" as defined in proposed rule 162.30. See Pineda v. Williams-Sonoma Stores, Inc., 51 Cal. 4th 524 (2011) (holding that ZIP code numbers are personal identification information as that phrase is used in California's Song-Beverly Credit Card Act of 1971 (Civ. Code, 1747 et seq.)).

Proposed rule 162.30 continues the very bad agency practice of using open-ended definitions. When a term is defined by reference to a non-exclusive list, agencies invite judicial interpretation and thereby yield their policy-making functions to the judicial branch. They also increase costs to business by introducing uncertainty regarding the precise boundaries of the rule. While this serves the agency's interest in flexibility, the ultimate interest of the agency in effective regulation is sacrificed.

It is likely that many entities subject to the jurisdiction of the Commissions will not be corporations. However, the proposed rule with respect to administration of the identity theft prevention program is written as if the only entities subject to the rule will be corporations with boards of directors. Rather than adopting a rule that requires a particular governance structure, the Commissions should allow for greater private ordering.