SUMMARY OF FEDERAL PRIVACY ACT OF 1974:
Collection and Protection of Social Security Numbers
by Local, State and Federal Government Agencies

Copyright (c) 1990-2001 by James W. Martin, P.A. All rights reserved.

Note: This article is for background purposes only and is not intended as legal advice.

The following is a synopsis of the Federal Privacy Act of 1974 (as of 2001) which protects individuals by regulating when and how local, state and federal governments and their agencies can request individuals to disclose their Social Security Numbers (SSN) and by requiring that Social Security Numbers must be maintained as confidential by those local, state and federal governments and agencies.  The Federal Privacy Act does not apply to restrict corporations and other non-governmental entities from collecting Social Security Numbers unless they are acting on behalf of government agencies.  The Federal Privacy Act sections discussed below do not protect federal employer tax identification numbers (TIN or EIN) from disclosure as these provisions specifically apply to Social Security Numbers.  This article was written in 1992.  Some cases interpreting the law appear at the end of the article.
 

The Federal Privacy Act is difficult law to find in the law library because it is not a statutory section but a note to a statute.  It appears as a note to Section 552a of 5 United States Code Annotated:

                                                                       FEDERAL PRIVACY ACT OF 1974

                                                                                            Pub. L. 93-579

                                                                                     5 U.S.C.A. '552a note

Section 7(a)(1): 

(a)(1)  It shall be unlawful for any Federal, State or local government agency to deny to any individual any right, benefit, or privilege provided by law because of such individual's refusal to disclose his social security account number.

Section 7(a)(2):

(2)  the provisions of paragraph (1) of this subsection shall not apply with respect to--

                                (A) any disclosure which is required by Federal statute, or

                                (Bathe disclosure of a social security number to any Federal, State, or local agency maintaining a system of records in existence and operating before January 1, 1975, if such disclosure was required under statute or regulation adopted prior to such date to verify the identity of an individual.

Section 7(b):

(b)  Any Federal, State, or local government agency which requests an individual to disclose his social security account number shall inform that individual whether that disclosure is mandatory or voluntary, by what statutory or other authority such number is solicited, and what uses will be made of it.

 The Federal Privacy Act was amended in 1976 to require that Social Security Numbers be kept confidential by the local, state and federal government agencies that collect them and that the SSN not be disclosed, and it provides the same penalties for unlawful disclosure as for disclosure of a federal tax return:

                                             1976 AMENDMENT TO THE FEDERAL PRIVACY ACT OF 1974

                                                                                    42 U.S.C. '405(c)(2)(C)

 (i)  It is the policy of the United States that any State (or political subdivision thereof) may, in the administration of any tax, general public assistance, driver's license, or motor vehicle registration law within its jurisdiction, utilize the social security account numbers issued by the Secretary for the purpose of establishing the identification of individuals affected by such law, and may require any individual who is or appears to be so affected to furnish to such State (or political subdivision thereof) or any agency thereof having administrative responsibility for the law involved, the social security account number (or numbers, if he has more than one such number) issued to him by the Secretary.

 (v)  For purposes of clause (i) of this subparagraph, an agency of a State (or political subdivision thereof) charged with the administration of any general public assistance, driver's license, or motor vehicle registration law which did not use the social security account number for identification under a law or regulation adopted before January 1, 1975, may require an individual to disclose his or her social security number to such agency solely for the purpose of administering the laws referred to in clause (i) above and for the purpose of responding to requests for information from an agency operating pursuant to the provisions of part A or D of subchapter IV of this chapter.

 (vii)(I)  Social security account numbers and related records that are obtained or maintained by authorized persons pursuant to any provision of law, enacted on or after October 1, 1990, shall be confidential, and no authorized person shall disclose any such social security account number or related record.

 (II)  Paragraphs (1), (2), and (3) of section 7213(a) of Title 26 shall apply with respect to the unauthorized willful disclosure to any person of social security account numbers and related records obtained or maintained by an authorized person pursuant to a provision of law enacted on or after October 1, 1990, in the same manner and to the same extent as such paragraphs apply with respect to unauthorized disclosures of returns and return information described in such paragraphs.  Paragraph (4) of such 7213(a) of Title 26 shall apply with respect to the willful offer of any item of material value in exchange for any such social security account number or related record in the same manner and to the same extent as such paragraph applies with respect to offers (in exchange for any return or return information) described in such paragraph.

The Federal Privacy Act protects the confidentiality of Social Security Numbers in the same manner as federal tax returns: 

                                                       UNAUTHORIZED DISCLOSURE OF INFORMATION

                                                                                   Title 26, Section 7213(a)

                                                                                  (Internal Revenue Code)

 (a)  Returns and Return Information.--

 (1)  Federal Employees and Other Persons.--...[see attached for full text]

 (2)State and Other Employees.--It shall be unlawful for any person...willfully to disclose to any person, except as authorized in this title, any return or return information...acquired by him or another person...  Any violation of this paragraph shall be a felony punishable by a fine in any amount not exceeding $5,000, or imprisonment of not more than 5 years, or both, together with costs of prosecution.  [see attached for full text]

 The Florida Attorney General has confirmed that the Federal Privacy Act controls over conflicting state laws:

                                                               FLORIDA ATTORNEY GENERAL OPINION

                                        REGARDING CONFLICTS BETWEEN STATE AND FEDERAL LAWS

Government-in-the-Sunshine Manual, volume 10, II.C.4., 1988, page 63:

"If a federal statute requires particular records to be closed and the state is clearly subject to the provisions of said statute, then pursuant to the supremacy clause of the United States Constitution, Article VI, section 2, United States Constitution, the state is required to keep such records confidential." 

This U.S. District Court opinion discusses the purposes of the Federal Privacy Act of 1974: 

                                                         DOYLE V. WILSON, 529 F.Supp. 1343 (Dela. 1982)

                The Federal Privacy Act and the requirements of Section 7(b) are discussed in Doyle v. Wilson, 529 F.Supp. 1343 (Dela. 1982) at pages 1348-1350.  The following are extracts from those pages:

 "In enacting Section 7, Congress sought to curtail the expanding use of social security numbers by federal and local agencies and, by so doing, to eliminate the threat to individual privacy and confidentiality of information posed by common numerical identifiers.  See S.Rep.No. 1183, 93rd Cong., 2d Sess. reprinted in (1974) U.S.Code Cong. & Ad.News 6916, 6944.  Underlying this legislative effort was the recognition that widespread use of a standard identification number in collecting information could lead to the establishment of a national data bank or similar informational system, which could store data gathered about individuals from many sources and facilitate government surveillance of its citizens.  Id. at 6944-45, 6957.  It was anticipated that as use of the social security number proliferated, the incentive to consolidate records and to broaden access to them by other agencies of government would in all likelihood correspondingly increase.  Id. at 6945.  Thus, Congress saw a need for federal legislation to restore to the individual the option to refuse to disclose his social security number without repercussion, except in the specifically delineated circumstances outlined in Section 7(a)(2)."

"Drawing from the language of section 7 and section 405(c)(2)(C), the Court concludes that the State Treasurer's practice of requiring the disclosure of social security numbers, for the purpose of securing a refund of a motor vehicle fine, could pass muster only if the following elements were proved.  First, the practice of mandatory disclosure must fall within either of the two pertinent statutory exceptions described above:  (1) it must be incident to the administration of a state driver's license or motor vehicle registration law under 42 U.S.C. s 405; or (2) disclosure of the social security number on refund vouchers must be required under a statute or regulation adopted prior to January 1, 1975, under a system of records in existence and operating before that date pursuant to section 7(a)(2) of the Privacy Act.  Second, besides proving either of these two elements, the State Treasurer would have the additional burden of demonstrating compliance with section 7(b) of the Privacy Act, viz., that refund applicants tendering their social security numbers are provided with the following information:  whether disclosure is mandatory or voluntary, by what statute or other authority such number is solicited, and what uses will be made of it." [Emphasis added]

"As noted previously, this section [7(b)] imposes an affirmative obligation on state agencies to inform individuals who have been requested to disclose their social security numbers of certain information, including the uses to which the number will be put.  In enacting this specific measure, Congress intended to "permit an individual to make an informed decision whether or not to disclose the social security account number" and "to bring recognition to, and discourage, unnecessary or improper uses of that number."  Analysis of House and Senate Compromise Amendments to the Federal Privacy Act, printed in 120 Cong.Rec. S21,817 (Dec. 17, 1974) and in 120 Cong.Rec. H12,243 (Dec. 18, 1974), quoted in Greater Cleveland Wel. Rights Org. v. Bauer, supra [462 F.Supp. 1313 (N.D.Ohio 1978], 462 F.Supp. at 1319 n.3.  Thus, adequate explanations of the information required by section 7(b) is critical to the right afforded by section 7(a) to withhold disclosure of the social security number, except in limited circumstances.

 "The voucher routinely used by the Justice of the Peace Court for refunds of motor vehicle fines, which is submitted to the State Treasurer, nowhere indicates whether disclosure is mandatory, by what statutory or other authority such number is solicited, or what uses will be made of it.  In this case, Doyle himself, after refusing to disclose his number, eventually was informed of the relevant information--that disclosure was mandatory pursuant to a practice of the State Treasurer's Office, and that the number would be used merely for identification purposes.  The requirements of section 7(b) are not fulfilled, however, when no affirmative effort is made to disclose this information at or before the number is requested and a citizen, like Doyle, must instead pry the pertinent facts from a state agency.  Doe v. Sharp, 491 F.Supp. 346, 350 (D.Mass.1980).  In addition, there is no indication that individuals who fail to question the use of their social security number on the voucher are in any way apprised of the explanations required by section 7(b).  Thus, it is apparent that a more "meaningful disclosure" of the information listed in section 7(b) must be provided by the State Treasurer's Office in advance to those individuals required to reveal their social security numbers in order to conform to federal law." [Emphasis added].

The U.S. Supreme Court recognized the Federal Privacy Act in this opinion:

                       U.S. DEPT. OF JUSTICE V. REPORTERS COMMITTEE FOR FREEDOM OF THE PRESS

                                                               109 S.Ct. 1468, 103 L.Ed. 774, 57 U.S.L.W. 4373

                                                                                           March 22, 1989

109 S.Ct. 1468, at 1478:

 "Also supporting our conclusion that a strong privacy interest inheres in the nondisclosure of compiled computerized information is the Privacy Act of 1974, codified at 5 U.S.C. '552a (1982 ed. and Supp. V).  The Privacy Act was passed largely out of concern over "the impact of computer data banks on individual privacy."  H.R. Rep. No. 93-1416, p. 7 (1974)."

The following case discusses notice requirements of the Federal Privacy Act:

Yeager v. Hackensack Water Co., 615 F.Supp. 1087 (N.J.D.C. 1985)

 The following case was a federal prosecution for disclosure of confidential information protected by the Federal Privacy Act:

U.S. v. Trabert, 978 F.Supp. 1368 (D.C.Colo. 1997)