,i #aaeth ,,congress #ast ,session ,h4 ,r4 #chaf ,,in ,,the ,,house ,,of ,,representatives ,september #ba1 #bjag,mr4 ,rush introduced the following bill2 which was referred to the ,committee on ,energy and ,commerce ,a ,,bill ,to require notification following a breach of security of a system containing personal information1 and for other purposes4 #a4 ,notification of information security breach 7a7 ,nationwide notification ,any person engaged in interstate commerce that owns or possesses data in electronic form containing personal information shall1 following the discovery of a breach of security of the system maintained by such person that contains such data-- 7#a7 notify each individual who is a citizen or resident of the ,united ,states whose personal information was acquired or accessed as a result of such a breach of security2 7#b7 notify the ,commission2 and 7#c7 notify the ,bureau4 7b7 ,special notification requirements 7#a7 ,third-party agents ,in the event of a breach of security by any third-party entity that has been contracted to maintain or process data in electronic form containing personal information on behalf of any other person who owns or possesses such data1 such third-party entity shall be required to notify such person of the breach of security4 ,upon receiving such notification from such third party1 such person shall provide the notification required under subsection 7a74 7#b7 ,service providers ,if a service provider becomes aware of a breach of security of data in electronic form containing personal information that is owned or possessed by another person that connects to or uses a system or network provided by the service provider for the purpose of transmitting1 routing1 or providing intermediate or transient storage of such data1 such service provider shall be required to notify of such a breach of security only the person who initiated such connection1 transmission1 routing1 or storage if such person can be reasonably identified4 ,upon receiving such notification from a service provider1 such person shall provide the notification required under subsection 7a74 7#c7 ,coordination of notification with consumer reporting agencies ,if a person is required to provide notification to more than #a1jjj individuals under subsection 7a77#a71 the person shall also notify the major consumer reporting agencies of the timing and distribution of the notices4 ,such notice shall be given to the consumer reporting agencies without unreasonable delay and1 if it will not delay notice to the affected individuals1 prior to the distribution of notices to the affected individuals4 7c7 ,timeliness of notification 7#a7 ,in general ,unless subject to a delay authorized under paragraph 7#b71 a notification required under subsection 7a7 shall be made not later than #cj days following the discovery of a breach of security1 unless the person providing notice can show that providing notice within such a timeframe is not feasible due to extraordinary circumstances necessary to prevent further breach or unauthorized disclosures1 and reasonably restore the integrity of the data system1 in which case such notification shall be made as promptly as possible4 7#b7 ,delay of notification authorized for law enforcement or national security purposes 7,a7 ,law enforcement ,if a ,federal1 ,state1 or local law enforcement agency determines that the notification required under this section would impede a civil or criminal investigation1 such notification shall be delayed upon the written request of the law enforcement agency for #cj days or such lesser period of time which the law enforcement agency determines is reasonably necessary and requests in writing4 ,a law enforcement agency may1 by a subsequent written request1 revoke such delay or extend the period of time set forth in the original request made under this paragraph if further delay is necessary4 7,b7 ,national security ,if a ,federal national security agency or homeland security agency determines that the notification required under this section would threaten national or homeland security1 such notification may be delayed for a period of time which the national security agency or homeland security agency determines is reasonably necessary and requests in writing4 ,a ,federal national security agency or homeland security agency may revoke such delay or extend the period of time set forth in the original request made under this paragraph by a subsequent written request if further delay is necessary4 7d7 ,method and content of notification 7#a7 ,direct notification 7,a7 ,method of notification ,a person required to provide notification to individuals under subsection 7a77#a7 shall be in compliance with such requirement if the person provides conspicuous and clearly identified notification by one of the following methods 7provided the selected method can reasonably be expected to reach the intended individual73 7i7 ,written notification4 7ii7 ,notification by email or other electronic means1 if-- 7,i7 the person's primary method of communication with the individual is by email or such other electronic means2 or 7,,ii7 the individual has consented to receive such notification and the notification is provided in a manner that is consistent with the provisions permitting electronic transmission of notices under section #aja of the ,electronic ,signatures in ,global and ,national ,commerce ,act 7#ae ,u4,s4,c4 #gjja74 7,b7 ,content of notification ,regardless of the method by which notification is provided to an individual under subparagraph 7,a71 such notification shall include-- 7i7 a description of the personal information that was acquired or accessed by an unauthorized person2 7ii7 a telephone number that the individual may use1 at no cost to such individual1 to contact the person to inquire about the breach of security or the information the person maintained about that individual2 7iii7 notice that the individual is entitled to receive1 at no cost to such individual1 consumer credit reports on a quarterly basis for a period of #e years1 credit monitoring or other service that enables consumers to detect the misuse of their personal information for a period of #aj years1 and instructions to the individual on requesting such reports or service from the person1 except when the only information which has been the subject of the security breach is the individual's first name or initial and last name1 or address1 or phone number1 in combination with a credit or debit card number1 and any required security code2 7iv7 the toll-free contact telephone numbers and addresses for the major consumer reporting agencies2 7v7 a toll-free telephone number and ,internet website address for the ,commission whereby the individual may obtain information regarding identity theft2 and 7vi7 a toll-free telephone number and ,internet website address for the ,bureau whereby the individual may obtain information regarding identity theft and credit reports4 7#b7 ,substitute notification 7,a7 ,circumstances giving rise to substitute notification ,a person required to provide notification to individuals under subsection 7a77#a7 may provide substitute notification in lieu of the direct notification required by paragraph 7#a7 if the person owns or possesses data in electronic form containing personal information of fewer than #a1jjj individuals and such direct notification is not feasible due to-- 7i7 excessive cost to the person required to provide such notification relative to the resources of such person1 as determined in accordance with the regulations issued by the ,commission under paragraph 7#c77;,a72 or 7ii7 lack of sufficient contact information for the individual required to be notified4 7,b7 ,form of substitute notification ,such substitute notification shall include-- 7i7 email notification to the extent that the person has email addresses of individuals to whom it is required to provide notification under subsection 7a77#a72 7ii7 a conspicuous notice on the ,internet website of the person 7if such person maintains such a website72 and 7iii7 notification in print and to broadcast media1 including major media in metropolitan and rural areas where the individuals whose personal information was acquired reside4 7,c7 ,content of substitute notice ,each form of substitute notice under this paragraph shall include-- 7i7 notice that individuals whose personal information is included in the breach of security are entitled to receive1 at no cost to the individuals1 consumer credit reports on a quarterly basis for a period of #e years1 credit monitoring or other service that enables consumers to detect the misuse of their personal information for a period of #aj years1 and instructions on requesting such reports or service from the person1 except when the only information which has been the subject of the security breach is the individual's first name or initial and last name1 or address1 or phone number1 in combination with a credit or debit card number1 and any required security code2 and 7ii7 a telephone number by which an individual can1 at no cost to such individual1 learn whether that individual's personal information is included in the breach of security4 7#c7 ,regulations and guidance 7,a7 ,regulations ,not later than #a year after the date of enactment of this ,act1 the ,commission shall1 by regulation under section #eec of title #e1 ,united ,states ,code1 establish criteria for determining circumstances under which substitute notification may be provided under paragraph 7#b71 including criteria for determining if notification under paragraph 7#a7 is not feasible due to excessive costs to the person required to provide such notification relative to #e the resources of such person4 ,such regulations may also identify other circumstances where substitute notification would be appropriate for any person1 including circumstances under which the cost of providing notification exceeds the benefits to consumers4 7,b7 ,guidance ,in addition1 the ,commission shall provide and publish general guidance with respect to compliance with this subsection4 ,such guidance shall include-- 7i7 a description of written or email notification that complies with the requirements of paragraph 7#a72 and 7ii7 guidance on the content of substitute notification under paragraph 7#b71 including the extent of notification to print and broadcast media that complies with the requirements of such paragraph4 7e7 ,other obligations following breach 7#a7 ,in general ,a person required to provide notification under subsection 7a7 shall1 upon request of an individual whose personal information was included in the breach of security1 provide or arrange for the provision of1 to each such individual and at no cost to such individual-- 7,a7 consumer credit reports from at least one of the major consumer reporting agencies beginning not later than #cj days following the individual's request and continuing on a quarterly basis for a period of #aj years thereafter2 or 7,b7 a credit monitoring or other service that enables consumers to detect the misuse of their personal information1 beginning not later than #cj days following the individual's request and continuing for a period of #aj years4 7#b7 ,limitation ,this subsection shall not apply if the only personal information which has been the subject of the security breach is the individual's first name or initial and last name1 or address1 or phone number1 in combination with a credit or debit card number1 and any required security code4 7#c7 ,rulemaking ,as part of the ,commission's rulemaking described in subsection 7d77#c71 the ,commission shall determine the circumstances under which a person required to provide notification under subsection 7a77#a7 shall provide or arrange for the provision of free consumer credit reports or credit monitoring or other service to affected individuals4 7#d7 ,breach of consumer reporting agency ,in the event of a breach of security of a consumer reporting agency1 that agency shall provide any consumer credit report required under paragraph 7#a77;,a7 from another consumer reporting agency4 7f7 ,exemption 7#a7 ,general exemption ,a person shall be exempt from the requirements under this section if1 following a breach of security1 such person determines that there is no reasonable risk of identity theft1 fraud1 or other unlawful conduct4 7#b7 ,presumption 7,a7 ,in general ,if the data in electronic form containing personal information is rendered unusable1 unreadable1 or indecipherable through encryption or other security technology or methodology 7if the method of encryption or such other technology or methodology is generally accepted by experts in the information security field71 there shall be a presumption that no reasonable risk of identity theft1 fraud1 or other unlawful conduct exists following a breach of security of such data4 ,any such presumption may be rebutted by facts demonstrating that the encryption or other security technologies or methodologies in a specific case1 have been or are reasonably likely to be compromised4 7,b7 ,methodologies or technologies ,not later than #a year after the date of the enactment of this ,act and biannually thereafter1 the ,commission shall issue rules 7pursuant to section #eec of title #e1 ,united ,states ,code7 or guidance to identify security methodologies or technologies which render data in electronic form unusable1 unreadable1 or indecipherable1 that shall1 if applied to such data1 establish a presumption that no reasonable risk of identity theft1 fraud1 or other unlawful conduct exists following a breach of security of such data4 ,any such presumption may be rebutted by facts demonstrating that any such methodology or technology in a specific case has been or is reasonably likely to be compromised4 ,in issuing such rules or guidance1 the ,commission shall consult with relevant industries1 consumer organizations1 and data security and identity theft prevention experts and established standards setting bodies4 7#c7 ,,ftc guidance ,not later than #a year after the date of the enactment of this ,act the ,commission shall issue guidance regarding the application of the exemption in paragraph 7#a74 7g7 ,website notice of federal trade commission ,if the ,commission1 upon receiving notification of any breach of security that is reported to the ,commission under subsection 7a77#b71 finds that notification of such a breach of security via the ,commission's ,internet website would be in the public interest or for the protection of consumers1 the ,commission shall place such a notice in a clear and conspicuous location on its ,internet website4 7h7 ,website notice of consumer financial protection bureau ,if the ,bureau1 upon receiving notification of any breach of security that is reported to the ,bureau under subsection 7a77#b71 finds that notification of such a breach of security via the ,bureau's ,internet website would be in the public interest or for the protection of consumers1 the ,bureau shall place such a notice in a clear and conspicuous location on its ,internet website4 7i7 ,,ftc study on notification in languages in addition to ,english ,not later than #a year after the date of enactment of this ,act1 the ,commission1 in consultation with the ,bureau1 shall conduct a study on the practicality and cost effectiveness of requiring the notification required by subsection 7d77#a7 to be provided in a language in addition to ,english to individuals known to speak only such other language4 7j7 ,general rulemaking authority ,the ,commission and ,bureau may promulgate regulations necessary under section #eec of title #e1 ,united ,states ,code1 to effectively enforce the requirements of this section4 7k7 ,treatment of persons governed by other law ,a person who is in compliance with any other ,federal law that requires such person to provide notification to individuals following a breach of security1 and that1 taken as a whole1 provides protections substantially similar to1 or greater than1 those required under this section1 as the ,commission shall determine by rule 7under section #eec of title #e1 ,united ,states ,code71 shall be deemed to be in compliance with this section4 #b4 ,application and enforcement 7a7 ,enforcement by the federal trade commission 7#a7 ,unfair or deceptive acts or practices ,a violation of section #a shall be treated as an unfair and deceptive act or practice in violation of a regulation under section #ah7;a77#a77;,b7 of the ,federal ,trade ,commission ,act 7#ae ,u4,s4,c4 #eg;a7a77#a77;,b77 regarding unfair or deceptive acts or practices4 7#b7 ,powers of commission ,the ,commission shall enforce this ,act in the same manner1 by the same means1 and with the same jurisdiction1 powers1 and duties as though all applicable terms and provisions of the ,federal ,trade ,commission ,act 7#ae ,u4,s4,c4 #da et seq47 were incorporated into and made a part of this ,act4 ,any person who violates such regulations shall be subject to the penalties and entitled to the privileges and immunities provided in that ,act4 7#c7 ,limitation ,in promulgating rules under this ,act1 the ,commission shall not require the deployment or use of any specific products or technologies1 including any specific computer software or hardware4 7b7 ,enforcement by state attorneys general 7#a7 ,civil action ,in any case in which the attorney general of a ,state1 or an official or agency of a ,state1 has reason to believe that an interest of the residents of that ,state has been or is threatened or adversely affected by any person who violates section #a of this ,act1 the attorney general1 official1 or agency of the ,state1 as parens patriae1 may bring a civil action on behalf of the residents of the ,state in a district court of the ,united ,states of appropriate jurisdiction-- 7,a7 to enjoin further violation of such section by the defendant2 7,b7 to compel compliance with such section2 or 7,c7 to obtain civil penalties in the amount determined under paragraph 7#b74 7#b7 ,civil penalties 7,a7 ,calculation ,for purposes of paragraph 7#a77;,c7 with regard to a violation of section #a1 the amount determined under this paragraph is the amount calculated by multiplying the number of violations of such section by an amount not greater than #aa1jjj4 ,each failure to send notification as required under section #c to a resident of the ,state shall be treated as a separate violation4 7,b7 ,adjustment for inflation ,beginning on the date that the ,consumer ,price ,index is first published by the ,bureau of ,labor ,statistics that is after #a year after the date of enactment of this ,act1 and each year thereafter1 the amounts specified in clause 7i7 of subparagraph 7,a7 shall be increased by the percentage increase in the ,consumer ,price ,index published on that date from the ,consumer ,price ,index published the previous year4 7,c7 ,maximum total liability ,not withstanding the number of actions which may be brought against a person under this subsection1 the maximum civil penalty for which any person may be liable under this subsection shall not exceed-- 7i7 #e1jjj1jjj for each violation of section #b2 and 7ii7 #e1jjj1jjj for all violations of section #c resulting from a single breach of security4 7#c7 ,intervention by the ,,ftc 7,a7 ,notice and intervention ,the ,state shall provide prior written notice of any action under paragraph 7#a7 to the ,commission and provide the ,commission with a copy of its complaint1 except in any case in which such prior notice is not feasible1 in which case the ,state shall serve such notice immediately upon instituting such action4 ,the ,commission shall have the right-- 7i7 to intervene in the action2 7ii7 upon so intervening1 to be heard on all matters arising therein2 and 7iii7 to file petitions for appeal4 7,b7 ,limitation on state action while federal action is pending ,if the ,commission has instituted a civil action for violation of this ,act1 no ,state attorney general1 or official or agency of a ,state1 may bring an action under this subsection during the pendency of that action against any defendant named in the complaint of the ,commission for any violation of this ,act alleged in the complaint4 7#d7 ,construction ,for purposes of bringing any civil action under paragraph 7#a71 nothing in this ,act shall be construed to prevent an attorney general of a ,state from exercising the powers conferred on the attorney general by the laws of that ,state to-- 7,a7 conduct investigations2 7,b7 administer oaths or affirmations2 or 7,c7 compel the attendance of witnesses or the production of documentary and other evidence4 7c7 ,affirmative defense for a violation of section #a 7#a7 ,in general ,it shall be an affirmative defense to an enforcement action brought under subsection 7a71 or a civil action brought under subsection 7b71 based on a violation of section #a1 that all of the personal information contained in the data in electronic form that was acquired or accessed as a result of a breach of security of the defendant is public record information that is lawfully made available to the general public from ,federal1 ,state1 or local government records and was acquired by the defendant from such records4 7#b7 ,no effect on other requirements ,nothing in this subsection shall be construed to exempt any person from the requirement to notify the ,commission of a breach of security as required under section #c7;a74 #c4 ,prohibition on certain contract clauses 7a7 ,unlawful conduct ,it shall be unlawful for any person to include a clause in a contract that-- 7#a7 prohibits an individual described in section 7#a77;a77#a7 from pursuing civil action related to the breach2 or 7#b7 requires mandatory arbitration related to the breach4 7b7 ,violation of rule ,a violation of subsection 7a7 shall be treated as a violation of a rule defining an unfair or deceptive act or practice prescribed under section #ah7;a77#a77;,b7 of the ,federal ,trade ,commission ,act 7#ae ,u4,s4,c4 #eg;a7a77#a77;,b774 7c7 ,powers of commission ,the ,commission shall enforce this section in the same manner1 by the same means1 and with the same jurisdiction1 powers1 and duties as though all applicable terms and provisions of the ,federal ,trade ,commission ,act 7#ae ,u4,s4,c4 #da et seq47 were incorporated into and made a part of this ,act4 ,any person who violates subsection 7a7 shall be subject to the penalties and entitled to the privileges and immunities provided in the ,federal ,trade ,commission ,act4 #d4 ,definitions ,in this ,act3 7#a7 ,breach of security ,the term breach of security means the unauthorized acquisition of data in electronic form containing personal information4 7#b7 ,bureau ,the term ,bureau means the ,consumer ,financial ,protection ,bureau4 7#c7 ,commission ,the term ,commission means the ,federal ,trade ,commission4 7#d7 ,consumer reporting agency ,the term consumer reporting agency has the meaning given the term consumer reporting agency that compiles and maintains files on consumers on a nationwide basis in section #fjc7p7 of the ,fair ,credit ,reporting ,act 7#ae ,u4,s4,c4 #afha;a7p774 7#e7 ,data in electronic form ,the term data in electronic form means any data stored electronically or digitally on any computer system or other database and includes recordable tapes and other mass storage devices4 7#f7 ,encryption ,the term encryption means the protection of data in electronic form in storage or in transit using an encryption technology that has been adopted by an established standards setting body which renders such data indecipherable in the absence of associated cryptographic keys necessary to enable decryption of such data4 ,such encryption must include appropriate management and safeguards of such keys to protect the integrity of the encryption4 7#g7 ,identity theft ,the term identity theft means the unauthorized use of another person's personal information for the purpose of engaging in commercial transactions under the name of such other person4 7#h7 ,non-public information ,the term non-public information means information about an individual that is of a private nature and neither available to the general public nor obtained from a public record4 7#i7 ,personal information 7,a7 ,definition ,the term personal information means any information or compilation of information that includes any of the following3 7i7 ,an individual's first name or initial and last name in combination with any or more of the following data elements for that individuals3 7,i7 ,home address or telephone number4 7,,ii7 ,mother's maiden name4 7,,iii7 ,month1 day1 and year of birth4 7,,iv7 ,user name or electronic mail address4 7ii7 ,driver's license number1 passport number1 military identification number1 alien registration number1 or other similar number issued on a government document used to verify identity4 7iii7 ,unique account identifier1 including a financial account number1 credit or debit card number1 electronic identification number1 user name1 or routing code4 7iv7 ,partial or complete ,social ,security number4 7v7 ,unique biometric or genetic data such as a fingerprint1 voice print1 a retina or iris image1 or any other unique physical representations4 7vi7 ,information that could be used to access an individual's account1 such as user name and password or email address and password4 7vii7 ,any two or more of the following data elements3 7,i7 ,an individual's first and last name or first initial and last name4 7,,ii7 ,a unique account identifier1 including a financial account number or credit or debit card number1 electronic identification number1 user name1 or routing code4 7,,iii7 ,any security code1 access code1 or password1 or source code that could be used to generate such codes or passwords4 7viii7 ,information generated or derived from the operation or use of an electronic communications device that is sufficient to identify the street name and name of the city or town in which the device is located4 7ix7 ,any information regarding an individual's medical history1 mental or physical condition1 medical treatment or diagnosis by a health care professional1 or the provision of health care to the individual1 including health information provided to a website or mobile application4 7x7 ,a health insurance policy number or subscriber identification number and any unique identifier used by a health insurer to identify the individual1 or any information in an individual's health insurance application and claims history1 including any appeals records4 7xi7 ,digitized or other electronic signature4 7xii7 ,nonpublic communications or other user-created content such as emails1 photographs1 or videos4 7xiii7 ,any record or information concerning payroll1 income1 financial accounts1 mortgages1 loans1 lines of credit1 utility bills1 accumulated purchases1 or any other information regarding financial assets1 obligations1 or spending habits4 7xiv7 ,any additional element the ,commission defines as personal information4 7,b7 ,modified definition by rulemaking ,the ,commission may1 by rule promulgated under section #eec of title #e1 ,united ,states ,code1 modify the definition of personal information under subparagraph 7,a74 7#aj7 ,public record information ,the term public record information means information about an individual which has been obtained originally from records of a ,federal1 ,state1 or local government entity that are available for public inspection4 7#aa7 ,service provider ,the term service provider means an entity that provides to a user transmission1 routing1 intermediate and transient storage1 or connections to its system or network1 for electronic communications1 between or among points specified by such user of material of the user's choosing1 without modification to the content of the material as sent or received4 ,any such entity shall be treated as a service provider under this ,act only to the extent that it is engaged in the provision of such transmission1 routing1 intermediate and transient storage1 or connections4 7#ab7 ,state ,the term ,state means each of the several ,states1 the ,district of ,columbia1 the ,commonwealth of ,puerto ,rico1 ,guam1 ,american ,samoa1 the ,united ,states ,virgin ,islands1 the ,commonwealth of the ,northern ,mariana ,islands1 any other territory or possession of the ,united ,states1 and each federally recognized ,indian ,tribe4 #e4 ,effect on other laws 7a7 ,preemption of state information security laws ,this ,act supersedes any provision of a statute1 regulation1 or rule of a ,state or political subdivision of a ,state1 with respect to those entities covered by the regulations issued pursuant to this ,act1 that expressly requires notification to individuals of a breach of security resulting in unauthorized access to or acquisition of data in electronic form containing personal information4 7b7 ,additional preemption 7#a7 ,in general ,no person other than a person specified in section #b7;b7 may bring a civil action under the laws of any ,state if such action is premised in whole or in part upon the defendant violating any provision of this ,act4 7#b7 ,protection of consumer protection laws ,this subsection shall not be construed to limit the enforcement of any ,state consumer protection law by an attorney general of a ,state4 7c7 ,protection of certain state laws ,this ,act shall not be construed to preempt the applicability of-- 7#a7 ,state trespass1 contract1 or tort law2 or 7#b7 other ,state laws to the extent that those laws relate to acts of fraud4 7d7 ,preservation of ,,ftc authority ,nothing in this ,act may be construed to limit or affect the ,commission's authority under any other provision of law4 #f4 ,effective date ,this ,act shall take effect #a year after the date of enactment of this ,act4 #g4 ,authorization of appropriations ,there is authorized to be appropriated to the ,commission #a1jjj1jjj for each of fiscal years #bjah through #bjbc to carry out this ,act4