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[House Report 110-664]
[From the U.S. Government Publishing Office]

110th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     110-664

======================================================================

 
                   FEDERAL AGENCY DATA PROTECTION ACT

                                _______
                                

  May 21, 2008.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

  Mr. Waxman, from the Committee on Oversight and Government Reform, 
                        submitted the following

                              R E P O R T

                             together with

                            ADDITIONAL VIEWS

                        [To accompany H.R. 4791]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Oversight and Government Reform, to whom was 
referred the bill (H.R. 4791) to amend title 44, United States 
Code, to strengthen requirements for ensuring the effectiveness 
of information security controls over information resources 
that support Federal operations and assets, and for other 
purposes, having considered the same, report favorably thereon 
with an amendment and recommend that the bill as amended do 
pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     6
Background and Need for Legislation..............................     6
Legislative History..............................................     8
Section-by-Section...............................................     8
Explanation of Amendments........................................    11
Committee Consideration..........................................    11
Rollcall Votes...................................................    11
Application of Law to the Legislative Branch.....................    11
Statement of Oversight Findings and Recommendations of the 
  Committee......................................................    11
Statement of General Performance Goals and Objectives............    11
Constitutional Authority Statement...............................    12
Federal Advisory Committee Act...................................    12
Unfunded Mandate Statement.......................................    12
Earmark Identification...........................................    12
Committee Estimate...............................................    12
Budget Authority and Congressional Budget Office Cost Estimate...    12
Changes in Existing Law Made by the Bill as Reported.............    14
Additional Views.................................................    22
  The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

  (a) Short Title.--This Act may be cited as the ``Federal Agency Data 
Protection Act''.
  (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Purpose.
Sec. 3. Definitions.
Sec. 4. Authority of Director of Office of Management and Budget to 
establish information security policies and procedures.
Sec. 5. Responsibilities of Federal agencies for information security.
Sec. 6. Federal agency data breach notification requirements.
Sec. 7. Protection of government computers from risks of peer-to-peer 
file sharing.
Sec. 8. Annual independent audit.
Sec. 9. Best practices for privacy impact assessments.
Sec. 10. Implementation.

SEC. 2. PURPOSE.

  The purpose of this Act is to protect personally identifiable 
information of individuals that is maintained in or transmitted by 
Federal agency information systems.

SEC. 3. DEFINITIONS.

  (a) Personally Identifiable Information and Mobile Digital Device 
Definitions.--Section 3542(b) of title 44, United States Code, is 
amended by adding at the end the following new paragraphs:
          ``(4) The term `personally identifiable information', with 
        respect to an individual, means any information about the 
        individual maintained by an agency, including information--
                  ``(A) about the individual's education, finances, or 
                medical, criminal, or employment history;
                  ``(B) that can be used to distinguish or trace the 
                individual's identity, including name, social security 
                number, date and place of birth, mother's maiden name, 
                or biometric records; or
                  ``(C) that is otherwise linked or linkable to the 
                individual.
          ``(5) The term `mobile digital device' includes any device 
        that can store or process information electronically and is 
        designed to be used in a manner not limited to a fixed 
        location, including--
                  ``(A) processing devices such as laptop computers, 
                communication devices, and other hand-held computing 
                devices; and
                  ``(B) storage devices such as portable hard drives, 
                CD-ROMs, DVDs, and other portable electronic media.''.
  (b) Conforming Amendments.--Section 208 of the E-Government Act of 
2002 (Public Law 107-347; 44 U.S.C. 3501 note) is amended--
          (1) in subsection (b)(1)(A)--
                  (A) in clause (i), by striking ``information that is 
                in an identifiable form'' and inserting ``personally 
                identifiable information''; and
                  (B) in clause (ii)(II), by striking ``information in 
                an identifiable form permitting the physical or online 
                contacting of a specific individual'' and inserting 
                ``personally identifiable information'';
          (2) in subsection (b)(2)(B)(i), by striking ``information 
        that is in an identifiable form'' and inserting ``personally 
        identifiable information'';
          (3) in subsection (b)(3)(C), by striking ``information that 
        is in an identifiable form'' and inserting ``personally 
        identifiable information''; and
          (4) in subsection (d), by striking the text and inserting 
        ``In this section, the term `personally identifiable 
        information' has the meaning given that term in section 
        3542(b)(4) of title 44, United States Code.''.

SEC. 4. AUTHORITY OF DIRECTOR OF OFFICE OF MANAGEMENT AND BUDGET TO 
                    ESTABLISH INFORMATION SECURITY POLICIES AND 
                    PROCEDURES.

  Section 3543(a) of title 44, United States Code, is amended--
          (1) by inserting before the semicolon at the end of paragraph 
        (5) the following: ``, including plans and schedules, developed 
        by the agency on the basis of priorities for addressing levels 
        of identified risk, for conducting--
                  ``(A) testing and evaluation, as required under 
                section 3544(b)(5); and
                  ``(B) remedial action, as required under section 
                3544(b)(6), to address deficiencies identified by such 
                testing and evaluation''; and
          (2) by adding at the end the following:
          ``(9) establishing minimum requirements regarding the 
        protection of personally identifiable information maintained in 
        or transmitted by mobile digital devices, including 
        requirements for the use of technologies that efficiently and 
        effectively render information unusable by unauthorized 
        persons;
          ``(10) requiring agencies to comply with--
                  ``(A) minimally acceptable system configuration 
                requirements consistent with best practices, including 
                checklists developed under section 8(c) of the Cyber 
                Security Research and Development Act (Public Law 107-
                305; 116 Stat. 2378) by the Director of the National 
                Institute of Standards and Technology; and
                  ``(B) minimally acceptable requirements for periodic 
                testing and evaluation of the implementation of such 
                configuration requirements;
          ``(11) ensuring that agency contracts for (or involving or 
        including) the provision of information technology products or 
        services include requirements for contractors to meet minimally 
        acceptable configuration requirements, as required under 
        paragraph (10);
          ``(12) ensuring the establishment through regulation and 
        guidance of contract requirements to ensure compliance with 
        this subchapter with regard to providing information security 
        for information and information systems used or operated by a 
        contractor of an agency or other organization on behalf of the 
        agency; and''.

SEC. 5. RESPONSIBILITIES OF FEDERAL AGENCIES FOR INFORMATION SECURITY.

  Section 3544(b) of title 44, United States Code, is amended--
          (1) in paragraph (2)(D)(iii), by striking ``as determined by 
        the agency'' and inserting ``as required by the Director under 
        section 3543(a)(10)'';
          (2) in paragraph (5)--
                  (A) by inserting after ``annually'' the following: 
                ``and as approved by the Director'';
                  (B) by striking ``and'' at the end of subparagraph 
                (A);
                  (C) by redesignating subparagraph (B) as subparagraph 
                (D); and
                  (D) by inserting after subparagraph (A) the 
                following:
                  ``(B) shall include testing and evaluation of system 
                configuration requirements as required under section 
                3543(a)(10);
                  ``(C) shall include testing of systems operated by a 
                contractor of the agency or other organization on 
                behalf of the agency, which testing requirement may be 
                satisfied by independent testing, evaluation, or audit 
                of such systems; and'';
          (3) by striking ``and'' at the end of paragraph (7);
          (4) by striking the period at the end of paragraph (8) and 
        inserting a semicolon; and
          (5) by adding at the end the following:
          ``(9) plans and procedures for ensuring the adequacy of 
        information security protections for systems maintaining or 
        transmitting personally identifiable information, including 
        requirements for--
                  ``(A) maintaining a current inventory of systems 
                maintaining or transmitting such information;
                  ``(B) implementing information security requirements 
                for mobile digital devices maintaining or transmitting 
                such information, as required by the Director 
                (including the use of technologies rendering data 
                unusable by unauthorized persons); and
                  ``(C) developing, implementing, and overseeing 
                remediation plans to address vulnerabilities in 
                information security protections for such 
                information;''.

SEC. 6. FEDERAL AGENCY DATA BREACH NOTIFICATION REQUIREMENTS.

  (a) Authority of Director of Office of Management and Budget to 
Establish Data Breach Policies.--Section 3543(a) of title 44, United 
States Code, as amended by section 4, is further amended--
          (1) by striking ``and'' at the end of paragraph (7);
          (2) in paragraph (8)--
                  (A) by striking ``and'' at the end of subparagraph 
                (D);
                  (B) by striking the period and inserting ``; and'' at 
                the end of subparagraph (E); and
                  (C) by adding at the end the following new 
                subparagraph:
                  ``(F) a summary of the breaches of information 
                security reported by agencies to the Director and the 
                Federal information security incident center pursuant 
                to paragraph (13);''; and
          (3) by adding at the end the following:
          ``(13) establishing policies, procedures, and standards for 
        agencies to follow in the event of a breach of data security 
        involving the disclosure of personally identifiable 
        information, specifically including--
                  ``(A) a requirement for timely notice to be provided 
                to those individuals whose personally identifiable 
                information could be compromised as a result of such 
                breach, except no notice shall be required if the 
                breach does not create a reasonable risk--
                          ``(i) of identity theft, fraud, or other 
                        unlawful conduct regarding such individual; or
                          ``(ii) of other harm to the individual;
                  ``(B) guidance on determining how timely notice is to 
                be provided;
                  ``(C) guidance regarding whether additional special 
                actions are necessary and appropriate, including data 
                breach analysis, fraud resolution services, identify 
                theft insurance, and credit protection or monitoring 
                services; and
                  ``(D) a requirement for timely reporting by the 
                agencies of such breaches to the Director and Federal 
                information security center.''.
  (b) Authority of Chief Information Officer to Develop and Maintain 
Inventories.--Section 3544(a)(3) of title 44, United States Code, is 
amended--
          (1) by inserting after ``authority to ensure compliance 
        with'' the following: ``and, to the extent determined necessary 
        and explicitly authorized by the head of the agency, to 
        enforce'';
          (2) by striking ``and'' at the end of subparagraph (D);
          (3) by inserting ``and'' at the end of subparagraph (E); and
          (4) by adding at the end the following:
                  ``(F) developing and maintaining an inventory of all 
                personal computers, laptops, or any other hardware 
                containing personally identifiable information;''.
  (c) Inclusion of Data Breach Notification.--Section 3544(b) of title 
44, United States Code, as amended by section 5, is further amended by 
adding at the end the following:
          ``(10) procedures for notifying individuals whose personally 
        identifiable information may have been compromised or accessed 
        following a breach of information security; and
          ``(11) procedures for timely reporting of information 
        security breaches involving personally identifiable information 
        to the Director and the Federal information security incident 
        center.''.
  (d) Authority of Agency Chief Human Capital Officers To Assess 
Federal Personal Property.--Section 1402(a) of title 5, United States 
Code, is amended--
          (1) by striking ``, and'' at the end of paragraph (5) and 
        inserting a semicolon;
          (2) by striking the period and inserting ``; and'' at the end 
        of paragraph (6); and
          (3) by adding at the end the following:
          ``(7) prescribing policies and procedures for exit interviews 
        of employees, including a full accounting of all Federal 
        personal property that was assigned to the employee during the 
        course of employment.''.

SEC. 7. PROTECTION OF GOVERNMENT COMPUTERS FROM RISKS OF PEER-TO-PEER 
                    FILE SHARING.

  (a) Plans Required.--As part of the Federal agency responsibilities 
set forth in sections 3544 and 3545 of title 44, United States Code, 
the head of each agency shall develop and implement a plan to ensure 
the security and privacy of information collected or maintained by or 
on behalf of the agency from the risks posed by certain peer-to-peer 
file sharing programs.
  (b) Contents of Plans.--Such plans shall set forth appropriate 
methods, including both technological (such as the use of software and 
hardware) and nontechnological methods (such as employee policies and 
user training), to achieve the goal of securing and protecting such 
information from the risks posed by peer-to-peer file sharing programs.
  (c) Implementation of Plans.--The head of each agency shall--
          (1) develop and implement the plan required under this 
        section as expeditiously as possible, but in no event later 
        than six months after the date of the enactment of this Act; 
        and
          (2) review and revise the plan periodically as necessary.
  (d) Review of Plans.--Not later than 18 months after the date of the 
enactment of this Act, the Comptroller General shall--
          (1) review the adequacy of the agency plans required by this 
        section; and
          (2) submit to the Committee on Oversight and Government 
        Reform of the House of Representatives and the Committee on 
        Homeland Security and Governmental Affairs of the Senate a 
        report on the results of the review, together with any 
        recommendations the Comptroller General considers appropriate.
  (e) Definitions.--In this section:
          (1) Peer-to-peer file sharing program.--The term ``peer-to-
        peer file sharing program'' means computer software that allows 
        the computer on which such software is installed (A) to 
        designate files available for transmission to another such 
        computer, (B) to transmit files directly to another such 
        computer, and (C) to request the transmission of files from 
        another such computer. The term does not include the use of 
        such software for file sharing between, among, or within 
        Federal, State, or local government agencies in order to 
        perform official agency business.
          (2) Agency.--The term ``agency'' has the meaning provided by 
        section 3502 of title 44, United States Code.

SEC. 8. ANNUAL INDEPENDENT AUDIT.

  (a) Requirement for Audit Instead of Evaluation.--Section 3545 of 
title 44, United States Code, is amended--
          (1) in the section heading, by striking ``evaluation'' and 
        inserting ``audit'' ; and
          (2) in paragraphs (1) and (2) of subsection (a), by striking 
        ``evaluation'' and inserting ``audit'' both places it appears.
  (b) Additional Specific Requirements for Audits.--Section 3545(a) of 
such title is amended--
          (1) in paragraph (2)--
                  (A) in subparagraph (A), by striking ``subset of the 
                agency's information systems;'' and inserting the 
                following: ``subset of--
                  ``(i) the information systems used or operated by the 
                agency; and
                  ``(ii) the information systems used, operated, or 
                supported on behalf of the agency by a contractor of 
                the agency, any subcontractor (at any tier) of such a 
                contractor, or any other entity;'';
                  (B) in subparagraph (B), by striking ``and'' at the 
                end;
                  (C) in subparagraph (C), by striking the period and 
                inserting ``; and''; and
                  (D) by adding at the end the following new 
                subparagraph:
          ``(D) a conclusion whether the agency's information security 
        controls are effective, including an identification of any 
        significant deficiencies in such controls.''; and
          (2) by adding at the end the following new paragraph:
  ``(3) Each audit under this section shall conform to generally 
accepted government auditing standards.''.
  (c) Conforming Amendments.--
          (1) Each of the following provisions of section 3545 of title 
        44, United States Code, is amended by striking ``evaluation'' 
        and inserting ``audit'' each place it appears:
                  (A) Subsection (b)(1).
                  (B) Subsection (b)(2).
                  (C) Subsection (c).
                  (D) Subsection (e)(1).
                  (E) Subsection (e)(2).
          (2) Section 3545(d) of such title is amended to read as 
        follows:
  ``(d) Existing Audits.--The audit required by this section may be 
based in whole or in part on an audit relating to programs or practices 
of the applicable agency.''.
          (3) Section 3545(f) of such title is amended by striking 
        ``evaluators'' and inserting ``auditors''.
          (4) Section 3545(g)(1) of such title is amended by striking 
        ``evaluations'' and inserting ``audits''.
          (5) Section 3545(g)(3) of such title is amended by striking 
        ``Evaluations'' and inserting ``Audits''.
          (6) Section 3543(a)(8)(A) of such title is amended by 
        striking ``evaluations'' and inserting ``audits''.
          (7) Section 3544(b)(5)(D) of such title (as redesignated by 
        section 5(2)(C)) is amended by striking ``a evaluation'' and 
        inserting ``an audit''.

SEC. 9. BEST PRACTICES FOR PRIVACY IMPACT ASSESSMENTS.

  Section 208(b)(3) of the E-Government Act of 2002 (Public Law 107-
347; 44 U.S.C. 3501 note) is amended--
          (1) in subparagraph (B), by striking ``and'' at the end;
          (2) in subparagraph (C), by striking the period and inserting 
        ``; and'', and
          (3) by adding at the end the following:
                  ``(D) develop best practices for agencies to follow 
                in conducting privacy impact assessments.''.

SEC. 10. IMPLEMENTATION.

  Except as otherwise specifically provided in this Act, implementation 
of this Act and the amendments made by this Act shall begin not later 
than 90 days after the date of the enactment of this Act.

                          Purpose and Summary

    H.R. 4791, the ``Federal Agency Data Protection Act,'' was 
introduced December 18, 2007, by Reps. Wm. Lacy Clay, Edolphus 
Towns, and Henry A. Waxman. The legislation strengthens 
protections of personally identifiable information of 
individuals that is maintained in or transmitted by federal 
agency information systems.

                  Background and Need for Legislation

    Weaknesses in federal information security threaten both 
the operability of federal programs and the privacy of citizens 
whose personal information is maintained in government computer 
systems. To minimize vulnerabilities in federal information 
systems, the Federal Information Security Management Act 
(FISMA) was enacted in December 2002 as part of the Electronic 
Government Act of 2002.\1\ FISMA reauthorized and strengthened 
provisions in the Government Information Security Reform Act 
(GISRA) that require federal agencies to identify and minimize 
potential risks to the security of their information and 
information systems.
---------------------------------------------------------------------------
    \1\P.L. 107-347.
---------------------------------------------------------------------------
    FISMA requires that federal agencies assess the state of 
their information security management and submit these findings 
to the Office of Management and Budget (OMB) in September of 
each year. It also charges each federal agency's Chief 
Information Officer (CIO) with evaluating the state of his or 
her agency's information security management through a 
questionnaire developed by OMB. The results of each evaluation 
must be independently reviewed by the agency's Inspector 
General (IG) (or another independent evaluator on behalf of the 
IG) and then submitted to OMB. OMB must summarize these 
findings and submit its analysis in an annual report to 
Congress.
    FISMA requires agencies, as part of their information 
security stewardship responsibilities, to:
           conduct periodic risk assessments that 
        evaluate likely threats against their information and 
        systems;
           categorize the appropriate levels of risk 
        among different information systems and to develop 
        plans to minimize the risk posed by various threats;
           provide employees with security awareness 
        training;
           maintain a detailed inventory of all 
        information systems, both in-house and those operated 
        by outside contractors; and
           develop a contingency plan for the 
        continuation of operations in the event that systems 
        are compromised.
    In July 2005, GAO reported that weaknesses in federal 
information security persist despite FISMA.\2\ According to 
GAO:
---------------------------------------------------------------------------
    \2\Government Accountability Office, Information Security: 
Weaknesses Persist at Federal Agencies Despite Progress Made in 
Implementing Related Statutory Requirements, (Jul. 2005) (GAO-05-552).

          Pervasive weaknesses * * * threaten the integrity, 
        confidentiality, and availability of federal 
        information and information systems. * * * These 
        weaknesses exist primarily because agencies have not 
        yet fully implemented strong information security 
        management programs. These weaknesses put federal 
        operations and assets at risk of fraud, misuse, and 
        destruction. In addition, they place financial data at 
        risk of unauthorized modification or destruction, 
        sensitive information at risk of inappropriate 
        disclosure, and critical operations at risk of 
---------------------------------------------------------------------------
        disruption.

    These concerns were echoed during a number of significant 
data breaches at government agencies during 2006. According to 
the Congressional Research Service, agencies reporting 
incidents of potentially compromised data during FY 2006 
included the Departments of Veterans Affairs, Transportation, 
and Energy, and the Internal Revenue Service.\3\ In addition, 
the Department of State also suffered a series of hacking 
attacks.
---------------------------------------------------------------------------
    \3\Library of Congress, Congressional Research Service, Data 
Security Breaches: Context and Incident Summaries (May 2007) (RL33199).
---------------------------------------------------------------------------
    In February 2008 testimony before the Subcommittee on 
Information Policy, Census, and the National Archives and the 
Subcommittee on Government Management, Organization, and 
Procurement, GAO reiterated that federal agencies ``continue to 
confront longstanding information security control 
deficiencies'' and that there are ``opportunities for federal 
agencies to bolster information security.''\4\
---------------------------------------------------------------------------
    \4\Government Accountability Office, Information Security: Although 
Progress Reported, Agencies Need to Resolve Significant Deficiencies 
(Feb. 2008) (GAO-08-496T).
---------------------------------------------------------------------------
    Reps. Clay, Towns, and Waxman introduced H.R. 4791, the 
Federal Agency Data Protection Act in order to strengthen 
current requirements for protecting data that is stored or 
transmitted by federal agency systems. The bill would amend 
FISMA by adding several new information security policies and 
procedures. The following key provisions are contained in the 
legislation:
           a comprehensive definition of ``personally 
        identifiable information'' that would encompass a 
        broader category of information about an individual and 
        provide greater clarity for agencies to determine what 
        types of information need protection;
           requirements for OMB to review agency plans 
        and schedules for conducting tests and evaluations, 
        develop policies and procedures in order to secure 
        personally identifiable information that is stored on 
        mobile digital devices, and develop effective system 
        configuration requirements for agency systems;
           requirements for agency compliance with OMB 
        established policies and procedures regarding minimally 
        acceptable system configuration requirements and 
        testing and evaluation requirements;
           data breach notification to Director, 
        federal information security incident center, and to 
        individuals whose personally identifiable information 
        could be compromised as a result of such breach;
           requirements for the development of agency 
        plans to reduce the risks posed by peer-to-peer file 
        sharing programs;
           requirements for an annual independent audit 
        of agency information security programs in conformance 
        with generally acceptable government auditing 
        standards; and
           a requirement for OMB to develop best 
        practices for agencies conducting privacy impact 
        assessments.

                          Legislative History

    H.R. 4791, legislation to strengthen current requirements 
for protecting personally identifiable information that is 
stored or transmitted by federal agency systems, was introduced 
on December 18, 2007, by Reps. Wm. Lacy Clay, Edolphus Towns, 
and Henry A. Waxman. H.R. 4791 was referred to the Committee on 
Oversight and Government Reform.
    The Subcommittee on Information Policy, Census, and the 
National Archives and the Subcommittee on Government 
Management, Organization, and Procurement held a joint 
oversight hearing on June 4, 2007, to review the future of 
FISMA. The witnesses were Karen S. Evans, Administrator, Office 
of E-Government and Information Technology, Office of 
Management and Budget; Gregory C. Wilshusen, Director, 
Information Security Issues, Government Accountability Office; 
Vance Hitch, Chief Information Officer, U.S. Department of 
Justice; Phil Bond, President and CEO, Information Technology 
Association of America; Paul Kurtz, Partner & Chief Operating 
Officer, Good Harbor Consulting, LLC; John W. Carlson, 
Executive Director, Financial Services Roundtable/BITS; and 
James Andrew Lewis, Director and Senior Fellow, Technology and 
Public Policy Program, Center for Strategic and International 
Studies.
    The Subcommittee on Information Policy, Census, and 
National Archives and the Subcommittee on Government 
Management, Organization, and Procurement held a joint 
legislative hearing on February 14, 2008, to review H.R. 4791. 
The witnesses were Karen S. Evans, Administrator, Office of 
Management and Budget; Gregory C. Wilshusen, Director, 
Government Accountability Office; Alan Paller, Director, SANS 
Institute (Research); Bruce McConnell, President, McConnell 
International, LLC; and Tim Bennett, President, Cyber Security 
Industry Alliance.
    The full Committee held a business meeting on April 16, 
2008, and approved H.R. 4791, as amended, by voice vote.

                           Section-by-Section

Section 1: Short title and table of contents

    This section states that the Act may be cited as the 
``Federal Data Protection Act'' and provides a table of 
contents.

Section 2: Purpose

    The purpose of this Act is to protect personally 
identifiable information of individuals that is maintained in 
or transmitted by federal agency information systems.

Section 3: Definitions

    This Section establishes a comprehensive definition of 
``personally identifiable information'' to clearly cover all 
information about an individual, including personal information 
about subjects such as one's financial transactions or medical 
history, identifying information that can be used to locate or 
trace a person, and any other information associated with the 
individual. This definition will ensure that agencies develop 
controls to secure all personally identifiable information.
    This section also defines ``mobile digital device'' to 
include any device that can store or process information 
electronically and is designed to be used in a manner not 
limited to a fixed location.

Section 4: Authority of Director of Office of Management and Budget to 
        establish information security policies and procedures

    This section requires OMB, when approving or disapproving 
agency information security programs, to ensure that such 
programs include testing, evaluation, and remediation according 
to risk.
    In addition, this section requires OMB to establish minimum 
requirements regarding the protection of personally 
identifiable information maintained in or transmitted by mobile 
digital devices, including requirements for the use of 
technologies that efficiently and effectively render 
information unusable by unauthorized persons.
    This section also requires OMB to ensure agency compliance 
with minimally acceptable system configuration requirements 
consistent with best practices, including those developed by 
NIST. While FISMA required agencies to ensure compliance with 
agency-selected configuration requirements, it did not require 
that such requirements meet any standards. Moreover, this 
section has provisions that ensure that agency contracts for 
(or involving or including) the provision of information 
technology products or services include requirements for 
contractors meet minimally acceptable configuration 
requirements. Finally, this section directs OMB to ensure that 
information systems operated by contractors on behalf of a 
federal agency comply with the information security 
requirements of FISMA.

Section 5: Responsibilities of Federal agencies for information 
        security

    This section would require agencies to meet minimally 
acceptable system configuration requirements as OMB directs 
pursuant to Section 4 of this Act.
    This section also requires agencies to include testing and 
evaluation of system configuration requirements as OMB directs 
pursuant to Section 4 of the Act. Moreover, this section 
clarifies that this includes testing of systems operated by a 
contractor of the agency or other organization on behalf of the 
agency, which testing requirement may be satisfied by 
independent testing, evaluation, or audit of such systems.
    Finally, this section requires agencies to have plans and 
procedures for ensuring the adequacy of information security 
protections for systems maintaining or transmitting personally 
identifiable information, including requirements for 
maintaining a current inventory of such systems; implementing 
requirements for mobile digital devices, and developing, 
implementing, and overseeing remediation plans to address 
vulnerabilities in information security protections for such 
information.

Section 6: Federal agency data breach notification requirements

    This section requires OMB to keep a summary of information 
breaches reported to the Director and the federal information 
security incident center. It also requires OMB to establish 
policies, procedures, and standards for agencies to follow in 
the event of a data breach involving disclosure of personally 
identifiable information, including a timely notice to those 
whose information could be compromised as a result of said 
breach. OMB would be required to give guidance on whether 
additional actions are necessary, such as a data breach 
analysis, fraud resolution services, identity theft insurance 
or credit protection services.
    This section also requires agency CIOs to develop and 
maintain inventories of all personal computers, laptops, or any 
other hardware containing personally identifiable information.
    In addition, this section requires agencies to establish 
procedures for notifying individuals whose personally 
identifiable information may have been compromised and 
procedures for timely reporting of information security 
breaches involving personally identifiable information to the 
Director and the federal information security incident center.
    Finally, this section gives authority to agency Chief Human 
Capital Officers to prescribe policies and procedures for exit 
interviews of employees, including a full accounting of all 
federal personal property that was assigned to the employee 
during the course of employment.

Section 7: Protection of Government computers from risks of peer-to-
        peer file sharing

    The growth in the use of peer-to-peer file sharing programs 
has soared and this growth poses a risk to the security of 
federal systems and networks. When federal employees install 
software to activate file sharing, they can provide an easy 
path for intruders to gain access to and compromise information 
on an agency's computer systems and networks. While the risk of 
unauthorized peer-to-peer file sharing is well-known, federal 
agencies have been slow to develop concerted plans for dealing 
with the threat.
    This section requires the head of each agency to develop 
and implement a plan to ensure the security and privacy of 
information collected or maintained by or on behalf of the 
agency with respect to the risks posed by certain peer-to-peer 
file sharing programs. Further, to ensure that agencies develop 
viable plans, the legislation calls on GAO to review agency 
plans within 18 months of enactment.

Section 8: Annual independent audit

    A fundamental element of the information security reforms 
of FISMA is the requirement for an annual independent 
evaluation of each agency's information security program. After 
about five years of experience with the implementation of the 
Act, it is clear that one weakness is the inconsistency of 
these annual evaluations.
    This section would strengthen the annual evaluation process 
by requiring that such evaluations be audits, not merely 
evaluations, and that such audits conform to generally accepted 
government auditing standards. It further requires such audits 
to reach a conclusion as to whether the agency's information 
security controls are effective, including an identification of 
any significant deficiencies in such controls.

Section 9: Best practices for privacy impact assessments

    This section requires the Director of the OMB to develop 
best practices for agencies to follow in conducting privacy 
impact assessments.

Section 10: Implementation

    Section 10 requires that implementation of this Act and the 
amendments made by this Act shall begin not later than 90 days 
after the date of the enactment of this Act.

                       Explanation of Amendments

    Subcommittee Chairman Wm. Lacy Clay offered an amendment in 
the nature of a substitute, which was accepted by voice vote. 
The Clay amendment creates a discrete data breach notification 
section, requires agency CIOs to maintain inventories of all 
hardware containing personally identifiable information, and 
clarifies CIOs' authority to enforce data breach policies. In 
addition, the amendment clarifies the definition of peer-to-
peer file sharing programs and deletes two sections of the 
introduced bill regarding privacy impact assessments.

                        Committee Consideration

    On Wednesday, April 16, 2008, the Committee ordered H.R. 
4791 favorably reported to the House by a voice vote.

                             Rollcall Votes

    No rollcall votes were taken on this legislation.

              Application of Law to the Legislative Branch

    Section 102(b)(3) of Public Law 104-1 requires a 
description of the application of this bill to the legislative 
branch where the bill relates to the terms and conditions of 
employment or access to public services and accommodations. 
This bill provides and strengthens requirements for ensuring 
the effectiveness of information security controls over 
information resources. As such this bill does not relate to 
employment or access to public services and accommodations.

  Statement of Oversight Findings and Recommendations of the Committee

    In compliance with clause 3(c)(1) of rule XIII and clause 
(2)(b)(1) of rule X of the Rules of the House of 
Representatives, the Committee's oversight findings and 
recommendations are reflected in the descriptive portions of 
this report, including the need to strengthen protections of 
personally identifiable information stored on federal 
information systems.

         Statement of General Performance Goals and Objectives

    In accordance with clause 3(c)(4) of rule XIII of the Rules 
of the House of Representatives, the Committee's performance 
goals and objectives are reflected in the descriptive portions 
of this report, including strengthening information security 
controls in the federal government.

                   Constitutional Authority Statement

    Under clause 3(d)(1) of rule XIII of the Rules of the House 
of Representatives, the Committee must include a statement 
citing the specific powers granted to Congress to enact the law 
proposed by H.R. 4791. Article I, Section 8, Clause 18 of the 
Constitution of the United States grants the Congress the power 
to enact this law.

                     Federal Advisory Committee Act

    The Committee finds that the legislation does not establish 
or authorize the establishment of an advisory committee within 
the definition of 5 U.S.C. App., Section 5(b).

                       Unfunded Mandate Statement

    Section 423 of the Congressional Budget and Impoundment 
Control Act (as amended by Section 101(a)(2) of the Unfunded 
Mandate Reform Act, P.L. 104-4) requires a statement whether 
the provisions of the reported include unfunded mandates. In 
compliance with this requirement the Committee has received a 
letter from the Congressional Budget Office that is included 
herein.

                         Earmark Identification

    H.R. 4791 does not contain any congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined in 
clause 9(d), 9(e), or 9(f) of rule XXI.

                           Committee Estimate

    Clause 3(d)(2) of rule XIII of the Rules of the House of 
Representatives requires an estimate and a comparison by the 
Committee of the costs that would be incurred in carrying out 
H.R. 4791. However, clause 3(d)(3)(B) of that rule provides 
that this requirement does not apply when the Committee has 
included in its report a timely submitted cost estimate of the 
bill prepared by the Director of the Congressional Budget 
Office under section 402 of the Congressional Budget Act.

     Budget Authority and Congressional Budget Office Cost Estimate

    With respect to the requirements of clause 3(c)(2) of rule 
XIII of the Rules of the House of Representatives and section 
308(a) of the Congressional Budget Act of 1974 and with respect 
to requirements of clause (3)(c)(3) of rule XIII of the Rules 
of the House of Representatives and section 402 of the 
Congressional Budget Act of 1974, the Committee has received 
the following cost estimate for H.R. 4791 from the Director of 
Congressional Budget Office:
                                                       May 14, 2008
Hon. Henry A. Waxman,
Chairman, Committee on Oversight and Government Reform, House of 
        Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 4791, the Federal 
Agency Data Protection Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Matthew 
Pickford.
            Sincerely,
                                                   Peter R. Orszag.
    Enclosure.

H.R. 4791--Federal Agency Data Protection Act

    Summary: H.R. 4791 would amend current law to enhance the 
protection of certain information collected by the federal 
government. CBO estimates that implementing the bill would cost 
about $106 million over the 2009-2013 period, assuming 
appropriation of the necessary amounts. The bill could also 
affect direct spending by agencies not funded through annual 
appropriations (such as the Tennessee Valley Authority) or by 
agencies whose activities are considered off-budget (such as 
the U.S. Postal Service). CBO estimates, however, that any 
increase in spending by those agencies would not be significant 
or would be offset by corresponding increases in rates charged 
by those entities.
    The bill contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would not affect the budgets of state, local, or tribal 
governments.
    Estimated Cost to the Federal Government: The estimated 
budgetary impact of H.R. 4791 is shown in the following table. 
The cost of this legislation falls primarily within budget 
function 800 (general government) but also would affect budget 
functions that contain spending for inspectors general.

------------------------------------------------------------------------
                                  By fiscal year in millions of dollars--

                                 ---------------------------------------
                                   2009    2010    2011    2012    2013
------------------------------------------------------------------------
              CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Estimated Authorization Level...      25      20      21      21      22
Estimated Outlays...............      23      20      20      21      22
------------------------------------------------------------------------

    Basis of estimate: For this estimate, CBO assumes that the 
bill will be enacted near the start of fiscal year 2009, that 
the necessary funds will be provided for each year, and that 
spending will follow historical patterns for similar 
activities.
    H.R. 4791 would require the Office of Management and Budget 
(OMB) to establish additional security policies and procedures 
for federal agencies that collect and maintain personal 
information for employees or other individuals. The bill also 
would require agencies to establish security standards and 
notification procedures to be followed when personal 
information has been unlawfully accessed. Finally, the bill 
would require federal agencies to audit their information 
programs and practices.
    Most of the provisions of the bill would codify and expand 
current practices of the federal government. Under the 
provisions of the Federal Information Security Management Act 
(FISMA), the Privacy Act, and OMB memoranda, federal agencies 
are already required to protect information about individuals, 
maintain standards for notifications of security breaches, and 
perform annual reviews to evaluate the security of their 
information systems. Agencies spent nearly $6 billion on such 
activities in fiscal year 2007, including about $20 million to 
perform security evaluations under FISMA.
    CBO expects that implementing the legislation would require 
agencies to perform formal audits on information security 
systems rather than the evaluations they perform under existing 
law. Based on information from OMB and other agencies, CBO 
estimates that implementing those audit requirements would 
increase costs by $23 million in 2009 to cover additional 
personnel and administrative costs in the affected agencies. We 
estimate that such costs would fall to about $20 million a year 
after 2009, once audit standards and procedures have been 
developed.
    Intergovernmental and private-sector impact: The bill 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would not affect the budgets of state, 
local, or tribal governments.
    Estimate prepared by: Federal Costs: Matthew Pickford; 
Impact on State, Local, and Tribal Governments: Elizabeth Cove; 
Impact on the Private Sector: Paige Piper/Bach.
    Estimate approved by: Theresa Gullo, Deputy Assistant 
Director for Budget Analysis.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

                      TITLE 44, UNITED STATES CODE

           *       *       *       *       *       *       *
CHAPTER 35--COORDINATION OF FEDERAL INFORMATION POLICY

           *       *       *       *       *       *       *

SUBCHAPTER III--INFORMATION SECURITY

           *       *       *       *       *       *       *

Sec. 3542. Definitions

  (a) * * *
  (b) Additional Definitions.--As used in this subchapter:
          (1) * * *

           *       *       *       *       *       *       *

          (4) The term ``personally identifiable information'', 
        with respect to an individual, means any information 
        about the individual maintained by an agency, including 
        information--
                  (A) about the individual's education, 
                finances, or medical, criminal, or employment 
                history;
                  (B) that can be used to distinguish or trace 
                the individual's identity, including name, 
                social security number, date and place of 
                birth, mother's maiden name, or biometric 
                records; or
                  (C) that is otherwise linked or linkable to 
                the individual.
          (5) The term ``mobile digital device'' includes any 
        device that can store or process information 
        electronically and is designed to be used in a manner 
        not limited to a fixed location, including--
                  (A) processing devices such as laptop 
                computers, communication devices, and other 
                hand-held computing devices; and
                  (B) storage devices such as portable hard 
                drives, CD-ROMs, DVDs, and other portable 
                electronic media.

Sec. 3543. Authority and functions of the Director

  (a) In General.--The Director shall oversee agency 
information security policies and practices, including--
          (1) * * *

           *       *       *       *       *       *       *

          (5) reviewing at least annually, and approving or 
        disapproving, agency information security programs 
        required under section 3544(b), including plans and 
        schedules, developed by the agency on the basis of 
        priorities for addressing levels of identified risk, 
        for conducting--
                  (A) testing and evaluation, as required under 
                section 3544(b)(5); and
                  (B) remedial action, as required under 
                section 3544(b)(6), to address deficiencies 
                identified by such testing and evaluation;

           *       *       *       *       *       *       *

          (7) overseeing the operation of the Federal 
        information security incident center required under 
        section 3546; [and]
          (8) reporting to Congress no later than March 1 of 
        each year on agency compliance with the requirements of 
        this subchapter, including--
                  (A) a summary of the findings of 
                [evaluations] audits required by section 3545;

           *       *       *       *       *       *       *

                  (D) planned remedial action to address such 
                deficiencies; [and]
                  (E) a summary of, and the views of the 
                Director on, the report prepared by the 
                National Institute of Standards and Technology 
                under section 20(d)(10) of the National 
                Institute of Standards and Technology Act (15 
                U.S.C. 278g-3)[.]; and
                  (F) a summary of the breaches of information 
                security reported by agencies to the Director 
                and the Federal information security incident 
                center pursuant to paragraph (13);
          (9) establishing minimum requirements regarding the 
        protection of personally identifiable information 
        maintained in or transmitted by mobile digital devices, 
        including requirements for the use of technologies that 
        efficiently and effectively render information unusable 
        by unauthorized persons;
          (10) requiring agencies to comply with--
                  (A) minimally acceptable system configuration 
                requirements consistent with best practices, 
                including checklists developed under section 
                8(c) of the Cyber Security Research and 
                Development Act (Public Law 107-305; 116 Stat. 
                2378) by the Director of the National Institute 
                of Standards and Technology; and
                  (B) minimally acceptable requirements for 
                periodic testing and evaluation of the 
                implementation of such configuration 
                requirements;
          (11) ensuring that agency contracts for (or involving 
        or including) the provision of information technology 
        products or services include requirements for 
        contractors to meet minimally acceptable configuration 
        requirements, as required under paragraph (10);
          (12) ensuring the establishment through regulation 
        and guidance of contract requirements to ensure 
        compliance with this subchapter with regard to 
        providing information security for information and 
        information systems used or operated by a contractor of 
        an agency or other organization on behalf of the 
        agency; and
          (13) establishing policies, procedures, and standards 
        for agencies to follow in the event of a breach of data 
        security involving the disclosure of personally 
        identifiable information, specifically including--
                  (A) a requirement for timely notice to be 
                provided to those individuals whose personally 
                identifiable information could be compromised 
                as a result of such breach, except no notice 
                shall be required if the breach does not create 
                a reasonable risk--
                          (i) of identity theft, fraud, or 
                        other unlawful conduct regarding such 
                        individual; or
                          (ii) of other harm to the individual;
                  (B) guidance on determining how timely notice 
                is to be provided;
                  (C) guidance regarding whether additional 
                special actions are necessary and appropriate, 
                including data breach analysis, fraud 
                resolution services, identify theft insurance, 
                and credit protection or monitoring services; 
                and
                  (D) a requirement for timely reporting by the 
                agencies of such breaches to the Director and 
                Federal information security center.

           *       *       *       *       *       *       *

Sec. 3544. Federal agency responsibilities

  (a) In General.--The head of each agency shall--
          (1) * * *

           *       *       *       *       *       *       *

          (3) delegate to the agency Chief Information Officer 
        established under section 3506 (or comparable official 
        in an agency not covered by such section) the authority 
        to ensure compliance with and, to the extent determined 
        necessary and explicitly authorized by the head of the 
        agency, to enforce the requirements imposed on the 
        agency under this subchapter, including--
                  (A) * * *

           *       *       *       *       *       *       *

                  (D) training and overseeing personnel with 
                significant responsibilities for information 
                security with respect to such responsibilities; 
                [and]
                  (E) assisting senior agency officials 
                concerning their responsibilities under 
                paragraph (2); and
                  (F) developing and maintaining an inventory 
                of all personal computers, laptops, or any 
                other hardware containing personally 
                identifiable information;

           *       *       *       *       *       *       *

  (b) Agency Program.--Each agency shall develop, document, and 
implement an agencywide information security program, approved 
by the Director under section 3543(a)(5), to provide 
information security for the information and information 
systems that support the operations and assets of the agency, 
including those provided or managed by another agency, 
contractor, or other source, that includes--
          (1) * * *
          (2) policies and procedures that--
                  (A) * * *

           *       *       *       *       *       *       *

                  (D) ensure compliance with--
                          (i) * * *

           *       *       *       *       *       *       *

                          (iii) minimally acceptable system 
                        configuration requirements, [as 
                        determined by the agency] as required 
                        by the Director under section 
                        3543(a)(10); and

           *       *       *       *       *       *       *

          (5) periodic testing and evaluation of the 
        effectiveness of information security policies, 
        procedures, and practices, to be performed with a 
        frequency depending on risk, but no less than annually 
        and as approved by the Director, of which such 
        testing--
                  (A) shall include testing of management, 
                operational, and technical controls of every 
                information system identified in the inventory 
                required under section 3505(c); [and]
                  (B) shall include testing and evaluation of 
                system configuration requirements as required 
                under section 3543(a)(10);
                  (C) shall include testing of systems operated 
                by a contractor of the agency or other 
                organization on behalf of the agency, which 
                testing requirement may be satisfied by 
                independent testing, evaluation, or audit of 
                such systems; and
                  [(B)] (D) may include testing relied on in [a 
                evaluation] an audit under section 3545;

           *       *       *       *       *       *       *

          (7) procedures for detecting, reporting, and 
        responding to security incidents, consistent with 
        standards and guidelines issued pursuant to section 
        3546(b), including--
                  (A) * * *

           *       *       *       *       *       *       *

                  (C) notifying and consulting with, as 
                appropriate--
                          (i) * * *

           *       *       *       *       *       *       *

                          (iii) any other agency or office, in 
                        accordance with law or as directed by 
                        the President; [and]
          (8) plans and procedures to ensure continuity of 
        operations for information systems that support the 
        operations and assets of the agency[.];
          (9) plans and procedures for ensuring the adequacy of 
        information security protections for systems 
        maintaining or transmitting personally identifiable 
        information, including requirements for--
                  (A) maintaining a current inventory of 
                systems maintaining or transmitting such 
                information;
                  (B) implementing information security 
                requirements for mobile digital devices 
                maintaining or transmitting such information, 
                as required by the Director (including the use 
                of technologies rendering data unusable by 
                unauthorized persons); and
                  (C) developing, implementing, and overseeing 
                remediation plans to address vulnerabilities in 
                information security protections for such 
                information;
          (10) procedures for notifying individuals whose 
        personally identifiable information may have been 
        compromised or accessed following a breach of 
        information security; and
          (11) procedures for timely reporting of information 
        security breaches involving personally identifiable 
        information to the Director and the Federal information 
        security incident center.

           *       *       *       *       *       *       *

Sec. 3545. Annual independent [evaluation] audit

  (a) In General.--(1) Each year each agency shall have 
performed an independent [evaluation] audit of the information 
security program and practices of that agency to determine the 
effectiveness of such program and practices.
  (2) Each [evaluation] audit under this section shall 
include--
          (A) testing of the effectiveness of information 
        security policies, procedures, and practices of a 
        representative [subset of the agency's information 
        systems;] subset of--
                  (i) the information systems used or operated 
                by the agency; and
                  (ii) the information systems used, operated, 
                or supported on behalf of the agency by a 
                contractor of the agency, any subcontractor (at 
                any tier) of such a contractor, or any other 
                entity;
          (B) an assessment (made on the basis of the results 
        of the testing) of compliance with--
                  (i) * * *

           *       *       *       *       *       *       *

                  (ii) related information security policies, 
                procedures, standards, and guidelines; [and]
          (C) separate presentations, as appropriate, regarding 
        information security relating to national security 
        systems[.]; and
          (D) a conclusion whether the agency's information 
        security controls are effective, including an 
        identification of any significant deficiencies in such 
        controls.
  (3) Each audit under this section shall conform to generally 
accepted government auditing standards.
  (b) Independent Auditor.--Subject to subsection (c)--
          (1) for each agency with an Inspector General 
        appointed under the Inspector General Act of 1978 or 
        any other law, the annual [evaluation] audit required 
        by this section shall be performed by the Inspector 
        General or by an independent external auditor, as 
        determined by the Inspector General of the agency; and
          (2) for each agency to which paragraph (1) does not 
        apply, the head of the agency shall engage an 
        independent external auditor to perform the 
        [evaluation] audit.
  (c) National Security Systems.--For each agency operating or 
exercising control of a national security system, that portion 
of the [evaluation] audit required by this section directly 
relating to a national security system shall be performed--
          (1) * * *

           *       *       *       *       *       *       *

  [(d) Existing Evaluations.--The evaluation required by this 
section may be based in whole or in part on an audit, 
evaluation, or report relating to programs or practices of the 
applicable agency.]
  (d) Existing Audits.--The audit required by this section may 
be based in whole or in part on an audit relating to programs 
or practices of the applicable agency.
  (e) Agency Reporting.--(1) Each year, not later than such 
date established by the Director, the head of each agency shall 
submit to the Director the results of the [evaluation] audit 
required under this section.
  (2) To the extent an [evaluation] audit required under this 
section directly relates to a national security system, the 
[evaluation] audit results submitted to the Director shall 
contain only a summary and assessment of that portion of the 
[evaluation] audit directly relating to a national security 
system.
  (f) Protection of Information.--Agencies and [evaluators] 
auditors shall take appropriate steps to ensure the protection 
of information which, if disclosed, may adversely affect 
information security. Such protections shall be commensurate 
with the risk and comply with all applicable laws and 
regulations.
  (g) OMB Reports to Congress.--(1) The Director shall 
summarize the results of the [evaluations] audits conducted 
under this section in the report to Congress required under 
section 3543(a)(8).

           *       *       *       *       *       *       *

  (3) [Evaluations] Audits and any other descriptions of 
information systems under the authority and control of the 
Director of Central Intelligence or of National Foreign 
Intelligence Programs systems under the authority and control 
of the Secretary of Defense shall be made available to Congress 
only through the appropriate oversight committees of Congress, 
in accordance with applicable laws.

           *       *       *       *       *       *       *

                              ----------                              

              SECTION 208 OF THE E-GOVERNMENT ACT OF 2002

SEC. 208. PRIVACY PROVISIONS.

  (a) * * *
  (b) Privacy Impact Assessments.--
          (1) Responsibilities of agencies.--
                  (A) In general.--An agency shall take actions 
                described under subparagraph (B) before--
                          (i) developing or procuring 
                        information technology that collects, 
                        maintains, or disseminates [information 
                        that is in an identifiable form] 
                        personally identifiable information; or
                          (ii) initiating a new collection of 
                        information that--
                                  (I) * * *
                                  (II) includes any 
                                [information in an identifiable 
                                form permitting the physical or 
                                online contacting of a specific 
                                individual] personally 
                                identifiable information, if 
                                identical questions have been 
                                posed to, or identical 
                                reporting requirements imposed 
                                on, 10 or more persons, other 
                                than agencies, 
                                instrumentalities, or employees 
                                of the Federal Government.

           *       *       *       *       *       *       *

          (2) Contents of a privacy impact assessment.--
                  (A) * * *
                  (B) Guidance.--The guidance shall--
                          (i) ensure that a privacy impact 
                        assessment is commensurate with the 
                        size of the information system being 
                        assessed, the sensitivity of 
                        [information that is in an identifiable 
                        form] personally identifiable 
                        information in that system, and the 
                        risk of harm from unauthorized release 
                        of that information; and

           *       *       *       *       *       *       *

          (3) Responsibilities of the director.--The Director 
        shall--
                  (A) * * *
                  (B) oversee the implementation of the privacy 
                impact assessment process throughout the 
                Government; [and]
                  (C) require agencies to conduct privacy 
                impact assessments of existing information 
                systems or ongoing collections of [information 
                that is in an identifiable form] personally 
                identifiable information as the Director 
                determines appropriate[.]; and
                  (D) develop best practices for agencies to 
                follow in conducting privacy impact 
                assessments.

           *       *       *       *       *       *       *

  (d) Definition.--[In this section, the term ``identifiable 
form'' means any representation of information that permits the 
identity of an individual to whom the information applies to be 
reasonably inferred by either direct or indirect means.] In 
this section, the term ``personally identifiable information'' 
has the meaning given that term in section 3542(b)(4) of title 
44, United States Code.

           *       *       *       *       *       *       *

                              ----------                              

              SECTION 1402 OF TITLE 5, UNITED STATES CODE

Sec. 1402. Authority and functions of agency Chief Human Capital 
                    Officers

  (a) The functions of each Chief Human Capital Officer shall 
include--
          (1) * * *

           *       *       *       *       *       *       *

          (5) identifying best practices and benchmarking 
        studies[, and];
          (6) applying methods for measuring intellectual 
        capital and identifying links of that capital to 
        organizational performance and growth[.]; and
          (7) prescribing policies and procedures for exit 
        interviews of employees, including a full accounting of 
        all Federal personal property that was assigned to the 
        employee during the course of employment.

           *       *       *       *       *       *       *

              ADDITIONAL VIEWS OF RANKING MEMBER TOM DAVIS

    Secure information is the lifeblood of effective 
government. But we've seen a wide range of incidents involving 
data loss or theft, privacy breaches, and security incidents at 
federal agencies.
    In almost all of these cases, Congress and the public would 
not have learned of these events had we not requested the 
information. After all, despite the volume of sensitive 
information held by agencies--tax returns, military records, 
health records, to name a few--there currently is no 
requirement agencies notify citizens whose personal information 
may have been compromised. We need to ensure the public knows 
when its sensitive personal information has been lost or 
compromised.
    Therefore I am pleased we incorporated my legislation, H.R. 
2124, which requires timely notice be provided to individuals 
whose sensitive personal information could be compromised by a 
breach of data security at a Federal agency.
    In addition to focusing on ensuring adequate protection of 
individuals' personal information held by the federal 
government, I have also spent years focusing on general, 
government-wide information management and security policy.
    For example, the Privacy Act and the E-Government Act of 
2002 outline the parameters for the protection of personal 
information. The Federal Information Security Management Act 
(FISMA), which I authored, requires each agency to create a 
comprehensive risk-based approach to agency- wide information 
security management, through preparedness, evaluation, and 
reporting requirements.
    These laws created a solid foundation for federal 
information security, making security management an integral 
part of an agency's operations and ensuring agencies are 
actively using best practices to secure the federal 
government's systems.
    But it is now incumbent upon us to take federal information 
security to the next level--to find new and innovative ways to 
secure government information.
    Unfortunately, I do not believe H.R. 4791 does enough. Most 
of the provisions contained in this bill are a grab bag of 
vague requirements, additional mandates, and misplaced 
priorities. It casts dynamic concepts in stone. And it gives 
agency personnel more boxes to check.
    I have long called for a bill with teeth--and an 
opportunity to discuss and debate the overall issues associated 
with improving federal information security. I think we have 
missed some key opportunities in that regard.
    For example:
    (1) We haven't seriously considered, to my knowledge, the 
need to pursue providing incentives for agency success--such as 
financial incentives for agencies which excel.
    (2) We haven't given enough consideration, to my knowledge, 
to the need to pursue funding penalties and personnel reforms 
which provide real motivation for an agency to improve its 
information security.
    (3) Although I've pushed the scorecards for many years, we 
need increased Congressional oversight of agency information 
security practices.
    (4) Have we done enough to bring greater consistency across 
the IG community regarding standards and review regarding 
improved information security?
    (5) And in our recent review of this issue, I do not 
believe we have considered, nor do we address, what I believe 
is one of the most important and complex problems associated 
with these issues: the difficulties faced by agency Chief 
Information Officers in their attempts to be successful and 
effective--both in terms of their status within their agencies 
and their underlying statutory authority.
    (6) Also, have we taken a serious look at whether the 
creation of a federal CIO or an Information Czar at OMB would 
improve the federal government's ability to handle and process 
information? I do not believe so.
    Public confidence in government is essential. In the end, 
the public demands effective government. And effective 
government depends on secure information. I remain concerned 
that this legislation falls short in a number of these 
important areas.

                                                         Tom Davis.

                                  

```