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[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1770 Reported in House (RH)]

<DOC>

                                                 Union Calendar No. 719
114th CONGRESS
  2d Session
                                H. R. 1770

                          [Report No. 114-908]

     To require certain entities who collect and maintain personal 
 information of individuals to secure such information and to provide 
    notice to such individuals in the case of a breach of security 
          involving such information, and for other purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                             April 14, 2015

  Mrs. Blackburn (for herself, Mr. Welch, Mr. Burgess, and Mr. Upton) 
 introduced the following bill; which was referred to the Committee on 
                          Energy and Commerce

                            January 3, 2017

  Reported with an amendment, committed to the Committee of the Whole 
       House on the State of the Union, and ordered to be printed
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]
 [For text of introduced bill, see copy of bill as introduced on April 
                               14, 2015]

_______________________________________________________________________

                                 A BILL

 
     To require certain entities who collect and maintain personal 
 information of individuals to secure such information and to provide 
    notice to such individuals in the case of a breach of security 
          involving such information, and for other purposes.

 

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; PURPOSES.

    (a) Short Title.--This Act may be cited as the ``Data Security and 
Breach Notification Act of 2015''.
    (b) Purposes.--The purposes of this Act are to--
            (1) protect consumers from identity theft, economic loss or 
        economic harm, and financial fraud by establishing strong and 
        uniform national data security and breach notification 
        standards for electronic data in interstate commerce while 
        minimizing State law burdens that may substantially affect 
        interstate commerce; and
            (2) expressly preempt any related State laws to ensure 
        uniformity of this Act's standards and the consistency of their 
        application across jurisdictions.

SEC. 2. REQUIREMENTS FOR INFORMATION SECURITY.

    A covered entity shall implement and maintain reasonable security 
measures and practices to protect and secure personal information in 
electronic form against unauthorized access and acquisition as 
appropriate for the size and complexity of such covered entity and the 
nature and scope of its activities.

SEC. 3. NOTIFICATION OF INFORMATION SECURITY BREACH.

    (a) In General.--
            (1) Restoring security.--Except as otherwise provided by 
        this section, a covered entity that uses, accesses, transmits, 
        stores, disposes of, or collects personal information shall, 
        following the discovery of a breach of security restore the 
        reasonable integrity, security, and confidentiality of the data 
        system and identify the impact of the breach pursuant to 
        paragraph (2).
            (2) Investigation.--A covered entity shall conduct in good 
        faith a reasonable and prompt investigation of the breach of 
        security to determine whether there is a reasonable risk that 
        the breach of security has resulted in, or will result in, 
        identity theft, economic loss or economic harm, or financial 
        fraud to the individuals whose personal information was subject 
        to the breach of security.
            (3) Notification to individuals required.--
                    (A) Trigger.--Unless there is no reasonable risk 
                that the breach of security has resulted in, or will 
                result in, identity theft, economic loss or economic 
                harm, or financial fraud to the individuals whose 
                personal information was affected by the breach of 
                security, the covered entity shall notify any resident 
                of the United States that has been affected by the 
                breach of security pursuant to this section.
                    (B) Notification duty.--Unless subject to a delay 
                authorized under subsection (c)--
                            (i) a breached covered entity shall notify 
                        any individual for whom an election was not 
                        made under paragraph (4)(C) not later than 25 
                        days after the non-breached covered entity 
                        declines or fails to exercise the election 
                        under paragraph (4)(C);
                            (ii) a non-breached covered entity shall 
                        notify any individual for whom the non-breached 
                        covered entity provided personal information to 
                        the breached covered entity, and such personal 
                        information was affected by the breach of 
                        security, not later than 25 days after 
                        exercising the election under paragraph (4)(C); 
                        and
                            (iii) any other covered entity shall 
                        identify the individuals affected by a breach 
                        of security and make the notification required 
                        under this subsection as expeditiously as 
                        possible, without unreasonable delay, and not 
                        later than 30 days after completing the 
                        requirements of paragraph (1).
                    (C) Notification required upon discovery of 
                additional individuals affected.--If a covered entity, 
                breached covered entity, or non-breached covered entity 
                has provided the notification to individuals required 
                under this subsection and after such notification 
                discovers additional individuals to whom notification 
                is required under this subsection with respect to the 
                same breach of security, the covered entity, breached 
                covered entity, or non-breached covered entity shall 
                make such notification to such individuals as 
                expeditiously as possible and without unreasonable 
                delay.
            (4) Non-breached covered entity election notice.--
                    (A) Notice to non-breached covered entity 
                required.--Subject to the requirements of this 
                paragraph, unless there is no reasonable risk that the 
                breach of security has resulted in, or will result in, 
                identity theft, economic loss or economic harm, or 
                financial fraud related to the personal information 
                provided by the non-breached covered entity to the 
                breached covered entity, the breached covered entity 
                shall, as expeditiously as possible and without 
                unreasonable delay within 10 days after fulfilling the 
                requirements described in paragraph (1), notify in 
                writing each non-breached covered entity of the breach 
                of security.
                    (B) Contents of notice.--The breached covered 
                entity shall include in the notice described in 
                subparagraph (A) the elements of personal information 
                received from the non-breached covered entity pursuant 
                to the contract described in subparagraph (C) 
                reasonably believed to be affected by the breach of 
                security.
                    (C) Election by non-breached covered entity after 
                receiving notice from a breached covered entity.--In 
                the case of a breached covered entity that is a party 
                to a written contract with a non-breached covered 
                entity in which the breached covered entity maintains, 
                stores, transmits, or processes data in electronic form 
                containing personal information, not later than 10 days 
                after receipt of the notice described in subparagraph 
                (A), the non-breached covered entity may elect, in 
                writing to the breached covered entity, to provide 
                notification required by paragraph (3) all individuals 
                whose personal information was provided by the non-
                breached covered entity to the breached covered entity 
                and was affected by the breach of security. Such 
                election relieves the breached covered entity of the 
                requirements under paragraph (3) with respect to such 
                individuals.
                    (D) Obligation after election.--
                            (i) Breached covered entity cooperation.--
                        If a non-breached covered entity elects under 
                        subparagraph (C) to provide notice under 
                        paragraph (3), the breached covered entity 
                        shall cooperate in all reasonable respects with 
                        the non-breached covered entity and provide any 
                        of the information the breached covered entity 
                        possesses that is described under subsection 
                        (d)(1)(B) and provide all personal information 
                        received from the non-breached covered entity 
                        that was affected by the breach of security so 
                        that the notification to such individuals is 
                        made as required under this section. Not later 
                        than 10 business days after the non-breached 
                        covered entity submits a written request for 
                        information requested under this subsection to 
                        the breached covered entity, the breached 
                        covered entity shall provide such information.
                            (ii) Non-breached covered entity 
                        cooperation.--If a non-breached covered entity 
                        does not elect to provide notice to individuals 
                        under subparagraph (C), the non-breached 
                        covered entity shall provide any of the 
                        information the non-breached covered entity 
                        possesses that is described under subsection 
                        (d)(1)(B) for any individual whose personal 
                        information was received from the non-breached 
                        covered entity that was affected by the breach 
                        of security, and cooperate in all reasonable 
                        respects with, the breached covered entity so 
                        that the notification to such individuals is 
                        made as required under this section. Not later 
                        than 10 business days after the breached 
                        covered entity submits a written request for 
                        information requested under this subsection to 
                        the non-breached covered entity, the non-
                        breached covered entity shall provide such 
                        information.
            (5) Law enforcement.--A covered entity shall as 
        expeditiously as possible notify the Commission and the Secret 
        Service or the Federal Bureau of Investigation of the fact that 
        a breach of security has occurred if the number of individuals 
        whose personal information was, or there is a reasonable basis 
        to conclude was, accessed and acquired by an unauthorized 
        person exceeds 10,000. Any notification provided to the Secret 
        Service or the Federal Bureau of Investigation pursuant to this 
        paragraph shall be provided not less than 10 days before 
        notification is provided to individuals pursuant to paragraph 
        (3).
    (b) Special Notification Requirements.--
            (1) Non-profit organizations.--In the event of a breach of 
        security involving personal information that would trigger 
        notification under subsection (a), a non-profit organization 
        may complete such notification according to the procedures set 
        forth in subsection (d)(2).
            (2) Coordination of notification with consumer reporting 
        agencies.--If a covered entity is required to provide 
        notification to more than 10,000 individuals under subsection 
        (a), such covered entity shall also notify a consumer reporting 
        agency that compiles and maintains files on consumers on a 
        nationwide basis, of the timing and distribution of the 
        notices. Such notice shall be given to such consumer reporting 
        agencies without unreasonable delay and, if it will not delay 
        notice to the affected individuals, prior to the distribution 
        of notices to the affected individuals.
    (c) Delay of Notification Authorized for Law Enforcement or 
National Security Purposes.--Notwithstanding paragraph (1), if a 
Federal, State, or local law enforcement agency determines that the 
notification to individuals required under this section would impede a 
civil or criminal investigation or a Federal agency determines that 
such notification would threaten national security, such notification 
shall be delayed upon written request of the law enforcement agency or 
Federal agency which the law enforcement agency or Federal agency 
determines is reasonably necessary and requests in writing. A law 
enforcement agency or Federal agency may, by a subsequent written 
request, revoke such delay or extend the period of time set forth in 
the original request made under this paragraph if further delay is 
necessary. If a law enforcement agency or Federal agency requests a 
delay of notification to individuals under this paragraph, the 
Commission shall, upon written request of the law enforcement agency or 
Federal agency, delay any public disclosure of a notification received 
by the Commission under this section relating to the same breach of 
security until the delay of notification to individuals is no longer in 
effect.
    (d) Method and Content of Notification.--
            (1) Direct notification.--
                    (A) Method of notification.--A covered entity 
                required to provide notification to an individual under 
                subsection (a) shall be in compliance with such 
                requirement if the covered entity provides such notice 
                by one of the following methods (if the selected method 
                can reasonably be expected to reach the intended 
                individual):
                            (i) Written notification by postal mail.
                            (ii) Notification by email or other 
                        electronic means, if the covered entity's 
                        primary method of communication with the 
                        individual is by email or such other electronic 
                        means or the individual has consented to 
                        receive such notification.
                    (B) Content of notification.--Regardless of the 
                method by which notification is provided to an 
                individual under subparagraph (A) with respect to a 
                breach of security, such notification shall include 
                each of the following:
                            (i) The identity of the covered entity that 
                        suffered the breach and, if such covered entity 
                        is also a breached covered entity providing 
                        notice under section 3(b)(1), the identity of 
                        each non-breached covered entity that did not 
                        elect to notify affected individuals pursuant 
                        to section 3(b)(1)(B) sufficient to show the 
                        breached covered entity's commercial 
                        relationship to the individual receiving 
                        notice.
                            (ii) A description of the personal 
                        information that was, or there is a reasonable 
                        basis to conclude was, acquired and accessed by 
                        an unauthorized person.
                            (iii) The date range of the breach of 
                        security, or an approximate date range of the 
                        breach of security if a specific date range is 
                        unknown based on the information available at 
                        the time of the notification.
                            (iv) A telephone number, or toll-free 
                        telephone number for any covered entity that 
                        does not meet the definition of a small 
                        business concern or non-profit organization, 
                        that the individual may use to contact the 
                        covered entity to inquire about the breach of 
                        security or the information the covered entity 
                        maintained about that individual.
                            (v) The toll-free contact telephone numbers 
                        and addresses for a consumer reporting agency 
                        that compiles and maintains files on consumers 
                        on a nationwide basis.
                            (vi) The toll-free telephone number and 
                        Internet website address for the Commission 
                        whereby the individual may obtain information 
                        regarding identity theft.
            (2) Substitute notification.--
                    (A) In general.--If, after making reasonable 
                efforts to contact all individuals to whom notice is 
                required under subsection (a), the covered entity finds 
                that contact information for 500 or more individuals is 
                insufficient or out-of-date, the covered entity shall 
                also provide substitute notice to those individuals, 
                which shall be reasonably calculated to reach the 
                individuals affected by the breach of security.
                    (B) Form of substitute notification.--A covered 
                entity may provide substitute notification by--
                            (i) email or other electronic notification 
                        to the extent that the covered entity has 
                        contact information for individuals to whom it 
                        is required to provide notification under 
                        subsection (a); and
                            (ii) a conspicuous notice on the covered 
                        entity's Internet website (if such covered 
                        entity maintains such a website) for at least 
                        90 days.
                    (C) Content of substitute notice.--Each form of 
                substitute notice under clauses (i) and (ii) of 
                subparagraph (B) shall include the information required 
                under paragraph (1)(B).
            (3) Direct notification by a third party.--Nothing in this 
        Act shall be construed to prevent a covered entity from 
        contracting with a third party to provide the notification 
        required under this section, provided such third party issues 
        such notification without unreasonable delay, in accordance 
        with the requirements of this section, and indicates to all 
        individuals in such notification that such third party is 
        sending such notification on behalf of the covered entity.
    (e) Requirements of Service Providers.--
            (1) In general.--If a service provider becomes aware of a 
        breach of security involving data in electronic form containing 
        personal information that is owned or licensed by a covered 
        entity that connects to or uses a system or network provided by 
        the service provider for the purpose of transmitting, routing, 
        or providing intermediate or transient storage of such data, 
        such service provider shall notify the covered entity who 
        initiated such connection, transmission, routing, or storage of 
        the data containing personal information breached, if such 
        covered entity can be reasonably identified. If a service 
        provider is acting solely as a service provider for purposes of 
        this subsection, the service provider has no other notification 
        obligations under this section.
            (2) Covered entities who receive notice from service 
        providers.--Upon receiving notification from a service provider 
        under paragraph (1), a covered entity shall provide 
        notification as required under this section.

SEC. 4. ENFORCEMENT.

    (a) Enforcement by the Federal Trade Commission.--
            (1) Unfair or deceptive acts or practices.--A violation of 
        section 2 or 3 shall be treated as an unfair and deceptive act 
        or practice in violation of a regulation under section 
        18(a)(1)(B) of the Federal Trade Commission Act (15 U.S.C. 
        57a(a)(1)(B)) regarding unfair or deceptive acts or practices.
            (2) Powers of commission.--The Commission shall enforce 
        this Act in the same manner, by the same means, and with the 
        same jurisdiction, powers, and duties as though all applicable 
        terms and provisions of the Federal Trade Commission Act (15 
        U.S.C. 41 et seq.) were incorporated into and made a part of 
        this Act, and any covered entity who violates this Act shall be 
        subject to the penalties and entitled to the privileges and 
        immunities provided in the Federal Trade Commission Act (15 
        U.S.C. 41 et seq.), and as provided in clauses (ii) and (iii) 
        of section 5(5)(A). Notwithstanding section 5(m) of the Federal 
        Trade Commission Act, the Commission may impose civil penalties 
        for violations of section 3 in an amount not greater than 
        $1,000 per violation. Each failure to send notification as 
        required under section 3 to a resident of the United States 
        shall be treated as a separate violation.
            (3) Maximum total liability for first-time violation of 
        section 2.--The maximum total civil penalty for which any 
        covered entity is liable under this subsection for all 
        violations of section 2 resulting from the same related act or 
        omission may not exceed $8,760,000, if such act or omission 
        constitutes the covered entity's first violation of section 2.
            (4) Maximum total liability for first-time violation of 
        section 3.--The maximum total civil penalty for which any 
        covered entity is liable under this subsection for all 
        violations of section 3 resulting from the same related act or 
        omission may not exceed $17,520,000, if such act or omission 
        constitutes the covered entity's first violation of section 3.
    (b) Enforcement by State Attorneys General.--
            (1) Civil action.--In any case in which the attorney 
        general of a State has reason to believe that an interest of 
        the residents of that State has been or is threatened or 
        adversely affected by any covered entity who violates section 2 
        or 3 of this Act, the attorney general of the State, as parens 
        patriae, may bring a civil action on behalf of the residents of 
        the State in a district court of the United States of 
        appropriate jurisdiction to--
                    (A) enjoin further violation of such section by the 
                defendant;
                    (B) compel compliance with such section; or
                    (C) obtain civil penalties in the amount determined 
                under paragraph (2).
            (2) Civil penalties.--
                    (A) Calculation.--
                            (i) Treatment of violations of section 2.--
                        For purposes of paragraph (1)(C) with regard to 
                        all violations of section 2 resulting from the 
                        same related act or omission, the amount 
                        determined under this paragraph is the amount 
                        calculated by multiplying the number of days 
                        that a covered entity is not in compliance with 
                        such section by an amount not greater than 
                        $11,000.
                            (ii) Treatment of violations of section 
                        3.--For purposes of paragraph (1)(C) with 
                        regard to a violation of section 3, 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 $1,000. Each failure to send 
                        notification as required under section 3 to a 
                        resident of the State shall be treated as a 
                        separate violation.
                    (B) Maximum total liability.--Notwithstanding the 
                number of actions which may be brought against a 
                covered entity under this subsection, the maximum civil 
                penalty for which any covered entity may be liable 
                under this subsection shall not exceed--
                            (i) $2,500,000 for each violation of 
                        section 2; and
                            (ii) $2,500,000 for all violations of 
                        section 3 resulting from a single breach of 
                        security.
                    (C) Adjustment for inflation.--Beginning on the 
                date that the Consumer Price Index is first published 
                by the Bureau of Labor Statistics that is after one 
                year after the date of enactment of this Act, and each 
                year thereafter, the amounts specified in clauses (i) 
                and (ii) of subparagraph (A) and clauses (i) and (ii) 
                of subparagraph (B) shall be increased by the 
                percentage increase in the Consumer Price Index 
                published on that date from the Consumer Price Index 
                published the previous year.
                    (D) Penalty factors.--In determining the amount of 
                such a civil penalty, the degree of culpability, any 
                history of prior such conduct, ability to pay, effect 
                on ability to continue to do business, and such other 
                matters as justice may require shall be taken into 
                account.
            (3) Intervention by the federal trade commission.--
                    (A) Notice and intervention.--In all cases, the 
                State shall provide prior written notice of any action 
                under paragraph (1) to the Commission and provide the 
                Commission with a copy of its complaint, except in any 
                case in which such prior notice is not feasible, in 
                which case the State shall serve such notice 
                immediately upon instituting such action. The 
                Commission shall have the right--
                            (i) to intervene in the action;
                            (ii) upon so intervening, to be heard on 
                        all matters arising therein; and
                            (iii) to file petitions for appeal.
                    (B) Pending proceedings.--If the Federal Trade 
                Commission initiates a Federal civil action for a 
                violation of this Act, no State attorney general may 
                bring an action for a violation of this Act that 
                resulted from the same or related acts or omissions 
                against a defendant named in the civil action initiated 
                by the Federal Trade Commission.
            (4) Construction.--For purposes of bringing any civil 
        action under paragraph (1), 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--
                    (A) conduct investigations;
                    (B) administer oaths or affirmations; or
                    (C) compel the attendance of witnesses or the 
                production of documentary and other evidence.
    (c) No Private Cause of Action.--Nothing in this Act shall be 
construed to establish a private cause of action against a person for a 
violation of this Act.

SEC. 5. DEFINITIONS.

    In this Act:
            (1) Breach of security.--The term ``breach of security''--
                    (A) means a compromise of the security, 
                confidentiality, or integrity of, or loss of, data in 
                electronic form that results in, or there is a 
                reasonable basis to conclude has resulted in, 
                unauthorized access to and acquisition of personal 
                information from a covered entity; and
                    (B) does not include the good faith acquisition of 
                personal information by an employee or agent of the 
                covered entity for the purposes of the covered entity, 
                if the personal information is not used or subject to 
                further unauthorized disclosure.
            (2) Breached covered entity.--The term ``breached covered 
        entity'' means a covered entity that has incurred a breach of 
        security affecting data in electronic form containing personal 
        information of a non-breached covered entity that has directly 
        contracted the breached covered entity to maintain, store, or 
        process data in electronic form containing personal information 
        on behalf of such non-breached covered entity. For purposes of 
        this definition, the term ``breached covered entity'' shall not 
        include a service provider that is subject to section 3(e).
            (3) Commission.--The term ``Commission'' means the Federal 
        Trade Commission.
            (4) Consumer reporting agency that compiles and maintains 
        files on consumers on a nationwide basis.--The term ``consumer 
        reporting agency that compiles and maintains files on consumers 
        on a nationwide basis'' has the meaning given that term in 
        section 603(p) of the Fair Credit Reporting Act (15 U.S.C. 
        1681a(p)).
            (5) Covered entity.--
                    (A) In general.--The term ``covered entity'' 
                means--
                            (i) a sole proprietorship, partnership, 
                        corporation, trust, estate, cooperative, 
                        association, or other entity in or affecting 
                        commerce that acquires, maintains, stores, 
                        sells, or otherwise uses data in electronic 
                        form that includes personal information, over 
                        which the Commission has authority pursuant to 
                        section 5(a)(2) of the Federal Trade Commission 
                        Act (15 U.S.C. 45(a)(2));
                            (ii) notwithstanding section 5(a)(2) of the 
                        Federal Trade Commission Act (15 U.S.C. 
                        45(a)(2)), common carriers subject to the 
                        Communications Act of 1934 (47 U.S.C. 151 et 
                        seq.); and
                            (iii) notwithstanding any jurisdictional 
                        limitation of the Federal Trade Commission Act 
                        (15 U.S.C. 41 et seq.), any non-profit 
                        organization.
                    (B) Exceptions.--The term ``covered entity'' does 
                not include--
                            (i) a covered entity, as defined in section 
                        160.103 of title 45, Code of Federal 
                        Regulations;
                            (ii) a business associate, as defined in 
                        section 160.103 of title 45, Code of Federal 
                        Regulations, acting in its capacity as a 
                        business associate;
                            (iii) if a covered entity, as defined in 
                        section 160.103 of title 45, Code of Federal 
                        Regulations, is a hybrid entity, as defined in 
                        section 164.105 of title 45, Code of Federal 
                        Regulations, then the health care component of 
                        such hybrid entity;
                            (iv) a broker, dealer, investment adviser, 
                        futures commission merchant, special purpose 
                        vehicle, finance company, or person engaged in 
                        providing insurance that is subject to title V 
                        of Public Law 106-102 (15 U.S.C. 6801 et seq.);
                            (v) a State-chartered credit union, as 
                        defined in section 101(6) of the Federal Credit 
                        Union Act (12 U.S.C. 1752(6)), that is not an 
                        insured credit union as defined in section 
                        101(7) of such Act (12 U.S.C. 1752(7)); or
                            (vi) a credit union service organization as 
                        outlined in section 106(7)(I) of the Federal 
                        Credit Union Act (12 U.S.C. 1757(7)(I)).
            (6) 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 devices.
            (7) Encrypted.--The term ``encrypted'', used with respect 
        to data in electronic form, in storage or in transit--
                    (A) means the data is protected using an encryption 
                technology that has been generally accepted by experts 
                in the field of information security at the time the 
                breach of security occurred that renders such data 
                indecipherable in the absence of associated 
                cryptographic keys necessary to enable decryption of 
                such data; and
                    (B) includes appropriate management and safeguards 
                of such cryptographic keys in order to protect the 
                integrity of the encryption.
            (8) Non-breached covered entity.--The term ``non-breached 
        covered entity'' means a covered entity that has not incurred 
        the breach of security involving data in electronic form 
        containing personal information that it owns or licenses but 
        whose data has been affected by the breach of security incurred 
        by a breached covered entity it directly contracts to maintain, 
        store, or process data in electronic form containing personal 
        information on behalf of the non-breached covered entity.
            (9) Non-profit organization.--The term ``non-profit 
        organization'' means an organization that is described in 
        section 501(c)(3) of the Internal Revenue Code of 1986 and 
        exempt from tax under section 501(a) of such Code.
            (10) Personal information.--
                    (A) In general.--The term ``personal information'' 
                means any information or compilation of information in 
                electronic form that includes the following:
                            (i) An individual's first and last name or 
                        first initial and last name in combination with 
                        all of the following:
                                    (I) Home address or telephone 
                                number.
                                    (II) Mother's maiden name, if 
                                identified as such.
                                    (III) Month, day, and year of 
                                birth.
                            (ii) A financial account number or credit 
                        or debit card number or other identifier, in 
                        combination with any security code, access 
                        code, or password that is required for an 
                        individual to obtain credit, withdraw funds, or 
                        engage in a financial transaction.
                            (iii) A unique account identifier (other 
                        than for an account described in clause (ii)), 
                        electronic identification number, biometric 
                        data unique to an individual, user name, or 
                        routing code in combination with any associated 
                        security code, access code, biometric data 
                        unique to an individual, or password that is 
                        required for an individual to obtain money, or 
                        purchase goods, services, or any other thing of 
                        value.
                            (iv) A non-truncated social security 
                        number.
                            (v) Any information that pertains to the 
                        transmission of specific calls, including, for 
                        outbound calls, the number called, and the 
                        time, location, or duration of any call and, 
                        for inbound calls, the number from which the 
                        call was placed, and the time, location, or 
                        duration of any call.
                            (vi) A user name or email address, in 
                        combination with a password or security 
                        question and answer that would permit access to 
                        an online account.
                            (vii) A driver's license number, passport 
                        number, or alien registration number or other 
                        government-issued unique identification number.
                    (B) Exceptions.--The term ``personal information'' 
                does not include--
                            (i) information that is encrypted or 
                        rendered unusable, unreadable, or 
                        indecipherable through data security technology 
                        or methodology that is generally accepted by 
                        experts in the field of information security at 
                        the time the breach of security occurred, such 
                        as redaction or access controls; or
                            (ii) information available in a publicly 
                        available source, including information 
                        obtained from a news report, periodical, or 
                        other widely distributed media, or from 
                        Federal, State, or local government records.
            (11) Service provider.--The term ``service provider'' means 
        a covered entity subject to the Communications Act of 1934 (47 
        U.S.C. 151 et seq.) that provides electronic data transmission, 
        routing, intermediate and transient storage, or connection to 
        its system or network, where such entity providing such service 
        does not select or modify the content of the electronic data, 
        is not the sender or the intended recipient of the data, and 
        does not differentiate personal information from other 
        information that such entity transmits, routes, stores, or for 
        which such entity provides connections. 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 
        transmission, routing, intermediate and transient storage, or 
        connections.
            (12) Small business concern.--The term ``small business 
        concern'' has the meaning given such term under section 3 of 
        the Small Business Act (15 U.S.C. 632).
            (13) State.--The term ``State'' means each of the several 
        States, the District of Columbia, the Commonwealth of Puerto 
        Rico, Guam, American Samoa, the Virgin Islands of the United 
        States, the Commonwealth of the Northern Mariana Islands, any 
        other territory or possession of the United States, and each 
        federally recognized Indian tribe.

SEC. 6. EFFECT ON OTHER LAWS.

    (a) Preemption of State Information Security Laws.--No State or 
political subdivision of a State shall, with respect to a covered 
entity subject to this Act, adopt, maintain, enforce, or impose or 
continue in effect any law, rule, regulation, duty, requirement, 
standard, or other provision having the force and effect of law 
relating to or with respect to the security of data in electronic form 
or notification following a security breach of such data.
    (b) Common Law.--This section shall not exempt a covered entity 
from liability under common law.
    (c) Certain FTC Enforcement Limited to Data Security and Breach 
Notification.--
            (1) Data security and breach notification.--Insofar as 
        sections 201, 202, 222, 338, and 631 of the Communications Act 
        of 1934 (47 U.S.C. 201, 202, 222, 338, and 551), and any 
        regulations promulgated thereunder, apply to covered entities 
        with respect to securing information in electronic form from 
        unauthorized access and acquisition, including notification of 
        unauthorized access and acquisition to data in electronic form 
        containing personal information, such sections and regulations 
        promulgated thereunder shall have no force or effect, unless 
        such regulations pertain solely to 9-1-1 calls.
            (2) Rule of construction.--Nothing in this subsection 
        otherwise limits the Federal Communications Commission's 
        authority with respect to sections 201, 202, 222, 338, and 631 
        of the Communications Act of 1934 (47 U.S.C. 201, 202, 222, 
        338, and 551).
    (d) Preservation of Commission Authority.--Nothing in this Act may 
be construed in any way to limit or affect the Commission's authority 
under any other provision of law.

SEC. 7. EDUCATION AND OUTREACH FOR SMALL BUSINESSES.

    The Commission shall conduct education and outreach for small 
business concerns on data security practices and how to prevent hacking 
and other unauthorized access to, acquisition of, or use of data 
maintained by such small business concerns.

SEC. 8. WEBSITE ON DATA SECURITY BEST PRACTICES.

    The Commission shall establish and maintain an Internet website 
containing non-binding best practices for businesses regarding data 
security and how to prevent hacking and other unauthorized access to, 
acquisition of, or use of data maintained by such businesses.

SEC. 9. EFFECTIVE DATE.

    This Act shall take effect 1 year after the date of enactment of 
this Act.
                                                 Union Calendar No. 719

114th CONGRESS

  2d Session

                               H. R. 1770

                          [Report No. 114-908]

_______________________________________________________________________

                                 A BILL

     To require certain entities who collect and maintain personal 
 information of individuals to secure such information and to provide 
    notice to such individuals in the case of a breach of security 
          involving such information, and for other purposes.

_______________________________________________________________________

                            January 3, 2017

  Reported with an amendment, committed to the Committee of the Whole 
       House on the State of the Union, and ordered to be printed
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