ATP LEGAL/LEGISLATIVE UPDATES

 

 

Access ATP's Privacy in Practice Bulletin series at this link

 

 

 


 

  1. January 8, 2024: The California Privacy Rights Act and Finalized Regulations
  2. October 30, 2023: Final 2 Response to Copyright Office NOI on Generative AI
  3. July 3, 2023: Legal Alert: United States - European Union Data Privacy Framework  
  4. July 6, 2023: Legal Alert on California Privacy Laws
  5. May 31, 2023: Legislative/Regulatory Alert on State Privacy Laws
  6. March 29, 2023: ATP Comments to U.S. Department of Education on Third Party Servicers
  7. February 10, 2023: NIST Artificial Intelligence Risk Management Framework
  8. January 7, 2023: Summary of Colorado Privacy Act Proposed Rules
  9. August 23, 2022: ATP Comments on Proposed California Consumer Privacy Act Regulations
  10. APRIL 28, 2022: ATP Responds to RFI from National Institute of Standards and Technology
  11. AUGUST 6, 2021: ATP Comments on Proposed Regulation on the Use of AI
  12. JANUARY 28, 2021: Complying with California Consumer Privacy Act
  13. JUNE 11, 2020: Privacy Law Alert - Court Decision on Remote Proctoring in the Netherlands
  14. JUNE 5, 2020: REGULATORY PAYCHECK PROTECTION PROGRAM FLEXIBILITY ACT (PPPFA) SIGNED 
  15. JUNE 2, 2020: REGULATORY ALERT ON CALIFORNIA PRIVACY
  16. MAY 8, 2020: US COPYRIGHT OFFICE REGULATORY ALERT
  17. MAY 8, 2020: EDUCATION DEPARTMENT INDUSTRY ALERT
  18. MARCH 2020: ATP Submits Comments to the Office of the Privacy Commissioner of Canada
  19. FEBRUARY 25, 2020: ATP Submits Follow-up Comments on California Consumer Privacy Act (CCPA) Regulations
  20. DECEMBER 6, 2019: ATP Submits Comments on California Consumer Privacy Act (CCPA) Regulations
  21. SEPTEMBER 9, 2019: ATP Submits Comments to The European Data Protection Board (EDPB) on Proposed Guidelines for Video SurveillanceJUNE 4, 2019: ATP Defeats Potential Ban of Personality Tests in Nevada
  22. JUNE 4, 2019: ATP Defeats Potential Ban of Personality Tests in Nevada

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ATP Comments on Proposed AI Regulations


PRIVACY LAW ALERT 

Court Decision on Remote Proctoring in the Netherlands
Over the past two months a legal drama has been playing out in The Netherlands over the ability of the country's universities to use remote proctoring to monitor the validity and fairness of online exams and enable students to continue to progress their education while the institutions confront the inability of holding in-person classes/exams because of COVID-19.   While no ruling has yet been made by the Dutch Data Protection Authority, last Thursday, June 11, a local court in Amsterdam ruled that in the limited circumstances presented involving the University of Amsterdam ("UvA"), remote proctoring processing of student personal information "is not unlawful."  This decision is potentially useful, but any testing organization using video surveillance needs to understand the full scope of what the decision means --  and what it does not mean. [Read more here...]

REGULATORY PAYCHECK PROTECTION PROGRAM FLEXIBILITY ACT (PPPFA) SIGNED

On June 5, President Trump signed into law the Paycheck Protection Program Flexibility Act (PPPFA), which addresses many concerns expressed by the small business community around the PPP, the provision in the CARES Act aimed at providing COVID-19 relief.

On May 27, 2020, the House passed the PPPFA by 417-1 and the Senate approved it by unanimous consent on June 3. The new law addresses the following flaws in the original PPP program.

1. PPPFA changes amount of loan needed for payroll to 60%

The biggest complaint around the PPP loan program was that it required businesses to spend 75% of the loan on payroll. For those businesses shut down due to COVID-19, this meant playing the role of unemployment office, paying their workers to stay home and not to work. The PPPFA reduces the amount of the loan needed to be spent on payroll from 75% to 60%, thus increasing the amount of funds available for other expenses (see list below) from 25% to 40%.

While this new breakdown was less than the 50-50 split business groups advocated for, it is still an improvement. However, the law does not change the list of expenses eligible for forgiveness. It still includes rent, mortgage payments, utilities, and interest on loans. Again, this is quite a restriction on businesses that need funds for inventory, personal protection equipment, expenses around remote working, and other needs. Business groups have stated they will continue to lobby to expand eligible expenses.

2. PPPFA extends time period to use funds from 8 to 24 weeks

The second biggest issue around PPP was that it required businesses to spend the funds in the eight-week period from the date funds were received. For a business shut down by government mandate, this amounted to spending funds when, perhaps, conserving them was in order. Business owners told Congress they needed the flexibility to spend the loan after reopening, especially on payroll when workers returned to work and were not sitting idle.  Presumably, this will make receiving complete loan forgiveness more likely since the loan amount was based on one month of 2019 payroll multiplied by 2.5, which equals approximately 10 weeks. Businesses should now have the flexibility to spend the PPP funds when they like for the remainder of the year. And, another positive caveat: the PPPFA also does not require businesses to wait for 24 weeks to apply for forgiveness and can still do so after eight weeks if they prefer.

3. PPPFA pushes back a June 30 deadline to rehire workers to December 31, 2020

Small businesses complained that the PPP requirement that all workers had to be rehired by June 30, 2020, in order for their salaries to count towards forgiveness. Many businesses were concerned they might not be open, or certainly not at full capacity by this date, and would once again, be required to pay employees for not working. Under the new law, businesses now have until December 31, 2020, to rehire workers in order for their salaries to count towards forgiveness.

It is important to note, however, that the law did not change how salaries are calculated towards forgiveness. The payroll calculation used in the loan application still applies to the forgivable amount. So, employee compensation eligible for forgiveness is still capped at $100,000, and until further guidance, employer owners and contractors are still capped at $15,385. Presumably with the new law, however, having an extra six months of expenses eligible for forgiveness will make up for any gaps and ensure 100% forgiveness of the loan.

4. PPPFA eases rehire requirements

Because the intent of PPP was to keep the same number of employees on the payroll as was used to calculate the loan, it required a business to rehire the same number of full-time employees or full-time equivalents by June 30, 2020. The only exception to this rule was if an employer could document in writing an attempt to rehire an employee who rejected this offer.

The new law makes two significant changes to these requirements. First, it extends the rehire date to December 31, 2020, and second, it adds additional exceptions for a reduced head count. The law states a business can still receive forgiveness on payroll amounts if it:

  • Is unable to rehire an individual who was an employee of the eligible recipient on or before February 15, 2020;
  • Is able to demonstrate an inability to hire similarly qualified employees on or before December 31, 2020; or
  • Is able to demonstrate an inability to return to the same level of business activity as such business was operating at prior to February 15, 2020.

It remains unclear how to “demonstrate the inability to rehire similarly qualified employees” or what the standard “to demonstrate the inability to return to previous levels of business activity” would be, but hopefully forthcoming guidance will elaborate. The good news appears to be that even with a reduced head count based on these exceptions, if 60% of the loan is still used on payroll throughout the remainder of 2020, it will be forgiven. Certainly, a business will need to document in writing as thoroughly as possible its efforts to rehire employees through December 31, 2020.

5. PPPFA extends the repayment term from 2 years to 5

The new law also eases repayment terms in the event loans or portions of them are not forgiven. A business now will have five years at 1% interest to repay the loan. Further, the first payment will be deferred for six months after the SBA makes a determination on forgiveness. Since under current regulations your bank has 60 days to make a forgiveness determination and the SBA an additional 90 days, this means you could have up until May of 2021 to make the first payment on the loan.

In addition, the PPPFA also allows borrowers to take advantage of the CARES Act provision allowing deferment of the employer’s payroll taxes for Social Security. Previously, PPP did not permit deferment of these taxes on the forgivable portion of the loan.

Treasury guidelines still provide for SBA loan audits

While this new law certainly addresses many concerns, and should ease the requirements for full forgiveness of PPP loans, it is not a complete fix. Namely, it does not address the issues around SBA audits of loans as outlined in the Treasury Department “Interim Final Rules” on PPP loans issued late on May 22.

According to Treasury, the SBA has the authority to audit any loan at its discretion to determine if “the borrower may be ineligible for a PPP loan, or may be ineligible to receive the loan amount or loan forgiveness amount claimed by the borrower.” This includes loans under $2 million, which have a “safe harbor” on the issue of whether economic uncertainty made the loan necessary.

So, despite the changes to PPP, the SBA can still look at how a business calculated the original loan amount and review whether it had “access to credit elsewhere” when determining if all or a portion of the loan should be forgiven. All businesses, especially those with loans in excess of $2 million, should prepare to explain why the funds were financially necessary at the date of application.

This comes down to the issue of liquidity. Did a business have large cash reserves or lines of credit it could have tapped to stay afloat during the shutdown? If so, the SBA may determine the borrower was ineligible for the PPP loan. While borrowers should not worry about criminal penalties if such a determination is made, unless they committed outright fraud, they could be required to repay the loan in full.

It remains doubtful that the SBA will conduct many audits of PPP loans, as almost 4.5 million have been doled out, and it simply does not have the capacity to review many. That being said, thorough documentation of the financial health of the business at the time of the loan application and detailed tracking of how the loan is expended will prevent any issues down the road. It is important to note that the responsibility for accurately calculating the loan amount and the forgiveness amount rests with the borrower.

Conclusion

All in all, the PPPFA is a win for small businesses. The law will ease many of the burdens placed on businesses that received PPP loans, and for many that may still apply for them. It is also positive that politicians on both sides of the aisle listened to small business owners and took quick, decisive action, putting their constituents before partisan wrangling.

Unfortunately, there are still plenty of questions left unanswered and fixes necessary, so more regulations are likely to be forthcoming with more changes to the PPP program.


REGULATORY ALERT ON CALIFORNIA PRIVACY

California’s Attorney General announced on June 2, 2020 that he had submitted proposed final regulations implementing the California Consumer Privacy Act (“CCPA”) to the California Office of Administrative Law (“OAL”). In order to have a chance for the regulations to be finalized before the date that the CCPA will be enforced, Attorney General Xavier Becerra requested an expedited review from the OAL. Nevertheless, the OAL has thirty (30) working days, plus potentially sixty (60) additional calendar days, to review the regulations to confirm that they comply with California’s Administrative Procedure Act.

Despite the likelihood that final regulations will NOT be available by July 1, the AG reiterated that his office is committed to enforcing the CCPA as of that date.  NOTE: only for-profit organizations are covered by the CCPA.  Accordingly, the ATP encourages its members who are within the scope of the law to take reasonable steps to achieve compliance with the CCPA by July 1, including:

  • modification and posting of your Privacy Policy;
  • arrangements to provide required Notice of the collection and use of test taker’s personal information PRIOR to its collection;
  • review of your third-party contracts that may involve the use of test taker’s personal information; and
  • adoption of internal procedures for responding (within the required 45 days) to requests by a test taker to know what personal information your business has on the individual, requests to correct that information, and requests to delete that person’s information.   

Taking these steps will enable you to present evidence of good faith compliance with the CCPA in the event of any enforcement investigations of complaints against your organization.

The Attorney General also issued a Statement of Reasons to explain the relationship between the final regulations and the statute.  According to ATP General Counsel Alan Thiemann, while this summary does NOT relate specifically to testing organizations or testing situations, it is a good summary and overview of the content of the proposed final CCPA regulations.”  The ATP will continue to monitor the situation and provide an update when these regulations are adopted as final.


US COPYRIGHT OFFICE REGULATORY ALERT

On May 8, the US Copyright Office (Library of Congress) published an Interim Rule and Request for Comment on new definition for the term "secure test" due to the COVID-19 pandemic.  This definition will enable the testing industry to use on a temporary basis the secure test registration procedures for tests that are remotely proctored "to accommodate the ongoing national emergency."  85 Fed. Reg. 27296 (May 8, 2020).  Comments are due by June 8, 2020.  Read a copy of the notice HERE.

The previous Interim Rule, adopted on June 12, 2017, declared that item bank secure test items were ineligible for copyright protection under the "secure test" procedures, which rule was subsequently modified by another version of the Interim Rule, adopted on November 13, 2017, where the Copyright Office established a "group registration" for secure test items.  However, under both of the 2017 Interim Rules, the Office has continued to apply its 1979 definition of "secure test" that holds a secure test may only be registered for copyright protection if it is "administered at a specified center" (i.e., at a single physical test center location) [see 37 CFR 202.13(b)(1)].  The ATP, in its comments on the previous Interim Rules, submitted on April 2, 2018, noted that with the advent of online testing (e.g., CAT, CBT) any definition of "secure test" based on use of a test center (or given on a single scheduled date) is drastically outdated, since many online secure assessments are given "on demand" and are administered at home or at an office.

Despite its announced intention to open a public rulemaking on a new definition of "secure test" in January 2018, the Office has failed to resolve the testing industry's concerns about either the "group registration" process of the out-dated definition of "secure test."

Because of the "COVID-19 disruption," the Notice states that the Office now recognizes that "certain examinations that normally would qualify for registration as secure tests may be ineligible for this option because they currently are being administered remotely rather than at specified centers. The interim rule allows otherwise-eligible tests that are administered online during the national emergency to qualify as secure tests."  The Office states that to be eligible, the test administrator must employ measures to maintain the security and integrity of the test that it reasonably determines to be substantially equivalent to the security and integrity provided by in-person proctors.

The new Interim Rule does not specify particular measures that are required to meet this standard - the Office states that publishers generally should have flexibility to tailor such processes to their specific needs.  But the Office does provide some examples of "sufficient measures" including some combination of video monitoring and/or recording, the disabling of certain functions on test takers' computers (e.g., copying and pasting), technological measures to prevent access to external websites and other prohibited materials, and identity verification of the individual taking the test.  In other words, the Interim Rule does not eliminate the requirement that a secure test must be administered ''under supervision,'' which means that ''test proctors or the equivalent supervise the administration of the test.''

Finally, the Office warns that, "This accommodation should not be seen as determinative of the final rule in this proceeding, which will be established on the basis of the overall rulemaking record." The Office recognizes, however, that the "specified centers" limitation was a concern for many test publishers even before the COVID-19 emergency - as noted above, ATP and other commenters urged the Office to amend the definition to facilitate a broader range of testing models. Accordingly, the Office has declared it will monitor what happens under the interim rule to help it evaluate whether and under what conditions remote testing should be permitted under the secure tests regulations once the emergency period ends.

The Notice also indicates that the Office intends to discuss how the change implemented by the interim rule has operated in practice with interested parties. To accomplish this input, the Office states it will issue guidelines identifying which parties may request ex parte meetings with the Office in this proceeding.  General Counsel Alan Thiemann, noting that ATP has asserted the need for a new definition of "secure test" since April 2018, explained that the ATP will seek a meeting with the Office.  Thiemann went on to observe that, "Unfortunately, it has taken the lack of any "in-person" testing because of the COVID-19 virus problem to force the Copyright Office to act."

If any ATP Member has experienced problems at the Copyright Office related to disqualification of registration applications because of online/remote-proctoring, please contact Alan Thiemann at (202) 904-2467 or by email at [email protected].


EDUCATION DEPARTMENT INDUSTRY ALERT

May 8, 2020 ED Secretary Betsy DeVos has announced that $180 million in grants will soon be available from the federal emergency relief package to help fund statewide virtual learning projects.  Another $127 million is going for workforce learning projects.  From what we know about the ED Office of Technology's perspective on the use of similar funds, e-assessment projects would qualify for this money.  ATP Members should pursue these opportunities in partnership with their preferred SEAs.

The CARES Act provides $307.5 million for these discretionary grants, which the Department will divide between two competitions: $180 million for the Rethink K-12 Education Models Grant and $127.5 million for the Reimagining Workforce Preparation Grant.  

The Rethink K-12 Education Models Grant is aimed at opening new, innovative ways for students to access K-12 education with an emphasis on meeting students' needs during the coronavirus national emergency. The competition is open to state educational agencies which can apply for funds in one of the three categories:

  1. Microgrants for families, so that states can ensure they have access to the technology and educational services they need to advance their learning
  2. Statewide virtual learning and course access programs, so that students will always be able to access a full range of subjects, even those not taught in the traditional or assigned setting
  3. New, field-initiated models for providing remote education not yet imagined, to ensure that every child is learning and preparing for successful careers and lives

The Reimagining Workforce Preparation Grants are designed to expand short-term postsecondary programs and work-based learning programs in order to get Americans back to work and help small businesses return to being our country's engines for economic growth.

State applicants will have 60 days to apply. As with most of the Department of Education's discretionary grant competitions, applications will be evaluated by a panel of independent peer reviewers, and the highest-scoring applications will be funded.  For additional information about how to apply, please visit https://oese.ed.gov/offices/education-stabilization-fund/states-highest-coronavirus-burden/.

ATP Members who are interested in such opportunities should monitor the Department's announcements to keep abreast of developments.  General information on similar tech funding can be found at https://tech.ed.gov/funding/.

ATP Members should be aware, however, that in the past, ED has required that these projects be Openly Licensed Educational Resources.  The Department defines openly licensed educational resources as teaching, learning, and research resources that reside in the public domain or have been released under a license that permits their free use, reuse, modification, and sharing with others.  Digital openly licensed resources can include complete online courses, modular digital textbooks as well as more granular resources such as images, videos, and assessment items.

While the ATP has been lobbying Congress to make COVID-19 economic stimulus money available without Open Educational Materials (OEM) requirements, so far no express language exempting funding has been inserted.


ATP Submits Comments to the Office of the Privacy Commissioner of Canada

In early March, The Association of Test Publishers submitted comments expressing the views of the testing industry, especially members from Canada, in response to a request from the Office of the Privacy Commissioner of Canada (“OPC”) for feedback on its recommendations for the regulation of artificial intelligence (“AI”). 

In the comments, ATP acknowledged its appreciation for the opportunity provided by the OPC to give feedback on its proposals for the enhancement of the Personal Information Protection and Electronic Data Act (“PIPEDA”). 

“We strongly believe that there are specific circumstances commonly found in the testing industry where the use of AI is both appropriate and necessary, where its use is justified when balanced against the rights of individual test takers, and where this technology should be allowed within the existing constraints of PIPEDA . Therefore, we requested that the OPC carefully craft proposed language consistent with these explanations clarifying how those proposals should be written for incorporation into PIPEDA,” stated Hazel Wheldon, CEO of Canadian based MHS, and an ATP Board member. [Read full comments as submitted here.]


ATP Submits Follow-up Comments on California

Consumer Privacy Act (CCPA) Regulations

On February 25, 2020 The Association of Test Publishers submitted further comments on behalf of the testing industry to the California Office of the Attorney General to address the Modified Regulations for implementing the California Consumer Privacy Act. [Read Letter to California AG's office]


 

ATP Submits Comments on California Consumer Privacy Act (CCPA) Regulations

On Friday, December 6, the ATP filed comprehensive comments with the California Attorney General addressing the concerns of the testing industry over the proposed regulations for implementing the California Consumer Privacy Act (“CCPA”).   Although the CCPA will be effective on January 1, 2020, final regulations are not expected to be released until the Spring.

Read ATP's full comments here 


ATP Submits Comments to The European Data Protection Board (EDPB) on Proposed Guidelines for Video Surveillance

On Monday, September 9, 2019 ATP submitted comments to the EDPB raising ATP members' concerns about a number of items contained within new Video Surveillance Guidelines proposed by the Board.

ATP General Counsel Alan Thiemann noted, "ATP respects the goals of the Guidelines to ensure that individual privacy is protected but feels the need to point out to the EDP Board that there are certain circumstances common in the testing industry where video surveillance is both appropriate and necessary."

Read the full EDPB Guidelines here.

Read ATP's Comments here.


ATP Defeats Potential Ban of Personality Tests in Nevada

On Tuesday, June 4, 2019 the Nevada Legislature adjourned sine die, thereby ending the 2019 legislative session.  With the conclusion of this year’s calendar, the proposal introduced in February to ban the use of pre-employment personality tests is dead.

As originally introduced, Nevada Assembly Bill AB132 would have prohibited an employer from conditioning employment on a test of the personality traits, behavioral traits or character traits of a prospective employee.   However, because of the ATP’s efforts, that language was deleted when the Assembly passed the bill in mid-April solely related to physical testing for marijuana in pre-employment situations. That stripped down version of AB132 was passed by the Senate on May 24, along with further amendments related to the marijuana provisions – but leaving intact the removal of the pre-employment testing language. 

ATP General Counsel Alan Thiemann reported that, “the ATP Industrial/Organizational Division prepared a comprehensive letter of opposition to this bill that was praised by the Nevada business community for its focus on the scientific basis for testing, and convinced the bill’s sponsor to drop that provision.”  ATP CEO G Harris noted that the National Federation of Independent Businesses (“NFIB”) local lobbyist, Randi Thomspon, provided significant support in drawing attention to the ATP letter and in providing insights on the process as it moved along: “We truly appreciate Randi’s assistance, which we hope will lead to further cooperation with NFIB in other state activities.”


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