delay notice to the affected individuals, prior to the 
distribution of notices to the affected individuals. 
(c) TIMELINESS OF NOTIFICATION.— 
(1) IN GENERAL.—Unless subject to a delay au-
thorized under paragraph (2), a notification required 
under subsection (a) shall be made not later than 60 
days following the discovery of a breach of security, 
unless the person providing notice can show that 
providing notice within such a time frame is not fea-
sible due to extraordinary circumstances necessary 
to prevent further breach or unauthorized disclo-
sures, and reasonably restore the integrity of the 
data system, in which case such notification shall be 
made as promptly as possible. 
(2) DELAY OF NOTIFICATION AUTHORIZED FOR 
LAW ENFORCEMENT OR NATIONAL SECURITY PUR-
POSES.— 
(A) LAW
ENFORCEMENT.—If a Federal, 
State, or local law enforcement agency deter-
mines that the notification required under this 
section would impede a civil or criminal inves-
tigation, such notification shall be delayed upon 
the written request of the law enforcement 
agency for 30 days or such lesser period of time 
which the law enforcement agency determines is 
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reasonably necessary and requests in writing. A 
law enforcement 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. 
(B) NATIONAL
SECURITY.—If a Federal 
national security agency or homeland security 
agency determines that the notification required 
under this section would threaten national or 
homeland security, such notification may be de-
layed for a period of time which the national se-
curity agency or homeland security agency de-
termines is reasonably necessary and requests 
in writing. A Federal national security agency 
or homeland security agency may revoke such 
delay or extend the period of time set forth in 
the original request made under this paragraph 
by a subsequent written request if further delay 
is necessary. 
(d) METHOD AND CONTENT OF NOTIFICATION.— 
(1) DIRECT NOTIFICATION.— 
(A) METHOD OF NOTIFICATION.—A person 
required to provide notification to individuals 
under subsection (a)(1) shall be in compliance 
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with such requirement if the person provides 
conspicuous and clearly identified notification 
by one of the following methods (provided the 
selected method can reasonably be expected to 
reach the intended individual): 
(i) Written notification. 
(ii) Notification by email or other 
electronic means, if— 
(I) the person’s primary method 
of communication with the individual 
is by email or such other electronic 
means; or 
(II) the individual has consented 
to receive such notification and the 
notification is provided in a manner 
that is consistent with the provisions 
permitting electronic transmission of 
notices under section 101 of the Elec-
tronic Signatures in Global and Na-
tional Commerce Act (15 U.S.C. 
7001). 
(B) CONTENT OF NOTIFICATION.—Regard-
less of the method by which notification is pro-
vided to an individual under subparagraph (A), 
such notification shall include— 
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(i) a description of the personal infor-
mation that was acquired or accessed by 
an unauthorized person; 
(ii) a telephone number that the indi-
vidual may use, at no cost to such indi-
vidual, to contact the person to inquire 
about the breach of security or the infor-
mation the person maintained about that 
individual; 
(iii) notice that the individual is enti-
tled to receive, at no cost to such indi-
vidual, consumer credit reports on a quar-
terly basis for a period of 2 years, or credit 
monitoring or other service that enables 
consumers to detect the misuse of their 
personal information for a period of 2 
years, and instructions to the individual on 
requesting such reports or service from the 
person, except when the only information 
which has been the subject of the security 
breach is the individual’s first name or ini-
tial and last name, or address, or phone 
number, in combination with a credit or 
debit card number, and any required secu-
rity code; 
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(iv) the toll-free contact telephone 
numbers and addresses for the major con-
sumer reporting agencies; and 
(v) a toll-free telephone number and 
Internet website address for the Commis-
sion whereby the individual may obtain in-
formation regarding identity theft. 
(2) SUBSTITUTE NOTIFICATION.— 
(A) CIRCUMSTANCES GIVING RISE TO SUB-
STITUTE NOTIFICATION.—A person required to 
provide notification to individuals under sub-
section (a)(1) may provide substitute notifica-
tion in lieu of the direct notification required by 
paragraph (1) if the person owns or possesses 
data in electronic form containing personal in-
formation of fewer than 1,000 individuals and 
such direct notification is not feasible due to— 
(i) excessive cost to the person re-
quired to provide such notification relative 
to the resources of such person, as deter-
mined in accordance with the regulations 
issued by the Commission under paragraph 
(3)(A); or 
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(ii) lack of sufficient contact informa-
tion for the individual required to be noti-
fied. 
(B) FORM
OF
SUBSTITUTE
NOTIFICA-
TION.—Such substitute notification shall in-
clude— 
(i) email notification to the extent 
that the person has email addresses of in-
dividuals to whom it is required to provide 
notification under subsection (a)(1); 
(ii) a conspicuous notice on the Inter-
net website of the person (if such person 
maintains such a website); and 
(iii) notification in print and to broad-
cast media, including major media in met-
ropolitan and rural areas where the indi-
viduals whose personal information was ac-
quired reside. 
(C) CONTENT OF SUBSTITUTE NOTICE.— 
Each form of substitute notice under this para-
graph shall include— 
(i) notice that individuals whose per-
sonal information is included in the breach 
of security are entitled to receive, at no 
cost to the individuals, consumer credit re-
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ports on a quarterly basis for a period of 
2 years, or credit monitoring or other serv-
ice that enables consumers to detect the 
misuse of their personal information for a 
period of 2 years, and instructions on re-
questing such reports or service from the 
person, except when the only information 
which has been the subject of the security 
breach is the individual’s first name or ini-
tial and last name, or address, or phone 
number, in combination with a credit or 
debit card number, and any required secu-
rity code; and 
(ii) a telephone number by which an 
individual can, at no cost to such indi-
vidual, learn whether that individual’s per-
sonal information is included in the breach 
of security. 
(3) REGULATIONS AND GUIDANCE.— 
(A) REGULATIONS.—Not later than 1 year 
after the date of enactment of this Act, the 
Commission shall, by regulation under section 
553 of title 5, United States Code, establish cri-
teria for determining circumstances under 
which substitute notification may be provided 
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under paragraph (2), including criteria for de-
termining if notification under paragraph (1) is 
not feasible due to excessive costs to the person 
required to provided such notification relative to 
the resources of such person. Such regulations 
may also identify other circumstances where 
substitute notification would be appropriate for 
any person, including circumstances under 
which the cost of providing notification exceeds 
the benefits to consumers. 
(B) GUIDANCE.—In addition, the Commis-
sion shall provide and publish general guidance 
with respect to compliance with this subsection. 
Such guidance shall include— 
(i) a description of written or email 
notification that complies with the require-
ments of paragraph (1); and 
(ii) guidance on the content of sub-
stitute notification under paragraph (2), 
including the extent of notification to print 
and broadcast media that complies with 
the requirements of such paragraph. 
(e) OTHER OBLIGATIONS FOLLOWING BREACH.— 
(1) IN GENERAL.—A person required to provide 
notification under subsection (a) shall, upon request 
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of an individual whose personal information was in-
cluded in the breach of security, provide or arrange 
for the provision of, to each such individual and at 
no cost to such individual— 
(A) consumer credit reports from at least 
one of the major consumer reporting agencies 
beginning not later than 60 days following the 
individual’s request and continuing on a quar-
terly basis for a period of 2 years thereafter; or 
(B) a credit monitoring or other service 
that enables consumers to detect the misuse of 
their personal information, beginning not later 
than 60 days following the individual’s request 
and continuing for a period of 2 years. 
(2) LIMITATION.—This subsection shall not 
apply if the only personal information which has 
been the subject of the security breach is the individ-
ual’s first name or initial and last name, or address, 
or phone number, in combination with a credit or 
debit card number, and any required security code. 
(3) RULEMAKING.—As part of the Commis-
sion’s rulemaking described in subsection (d)(3), the 
Commission shall determine the circumstances under 
which a person required to provide notification 
under subsection (a)(1) shall provide or arrange for 
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the provision of free consumer credit reports or cred-
it monitoring or other service to affected individuals. 
(f) EXEMPTION.— 
(1) GENERAL EXEMPTION.—A person shall be 
exempt from the requirements under this section if, 
following a breach of security, such person deter-
mines that there is no reasonable risk of identity 
theft, fraud, or other unlawful conduct. 
(2) PRESUMPTION.— 
(A) IN GENERAL.—If the data in electronic 
form containing personal information is ren-
dered unusable, unreadable, or indecipherable 
through encryption or other security technology 
or methodology (if the method of encryption or 
such other technology or methodology is gen-
erally accepted by experts in the information se-
curity field), there shall be a presumption that 
no reasonable risk of identity theft, fraud, or 
other unlawful conduct exists following a breach 
of security of such data. Any such presumption 
may be rebutted by facts demonstrating that 
the encryption or other security technologies or 
methodologies in a specific case, have been or 
are reasonably likely to be compromised. 
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(B) 
METHODOLOGIES
OR
TECH-
NOLOGIES.—Not later than 1 year after the 
date of the enactment of this Act and bian-
nually thereafter, the Commission shall issue 
rules (pursuant to section 553 of title 5, United 
States Code) or guidance to identify security 
methodologies or technologies which render data 
in electronic form unusable, unreadable, or in-
decipherable, that shall, if applied to such data, 
establish a presumption that no reasonable risk 
of identity theft, fraud, or other unlawful con-
duct exists following a breach of security of 
such data. Any such presumption may be rebut-
ted by facts demonstrating that any such meth-
odology or technology in a specific case has 
been or is reasonably likely to be compromised. 
In issuing such rules or guidance, the Commis-
sion shall consult with relevant industries, con-
sumer organizations, and data security and 
identity theft prevention experts and established 
standards setting bodies. 
(3) FTC GUIDANCE.—Not later than 1 year 
after the date of the enactment of this Act the Com-
mission shall issue guidance regarding the applica-
tion of the exemption in paragraph (1). 
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(g) WEBSITE NOTICE OF FEDERAL TRADE COMMIS-
SION.—If the Commission, upon receiving notification of 
any breach of security that is reported to the Commission 
under subsection (a)(2), finds that notification of such a 
breach of security via the Commission’s Internet website 
would be in the public interest or for the protection of 
consumers, the Commission shall place such a notice in 
a clear and conspicuous location on its Internet website. 
(h) FTC STUDY ON NOTIFICATION IN LANGUAGES 
IN ADDITION TO ENGLISH.—Not later than 1 year after 
the date of enactment of this Act, the Commission shall 
conduct a study on the practicality and cost effectiveness 
of requiring the notification required by subsection (d)(1) 
to be provided in a language in addition to English to indi-
viduals known to speak only such other language. 
(i) GENERAL RULEMAKING AUTHORITY.—The Com-
mission may promulgate regulations necessary under sec-
tion 553 of title 5, United States Code, to effectively en-
force the requirements of this section. 
(j) TREATMENT OF PERSONS GOVERNED BY OTHER 
LAW.—A person who is in compliance with any other Fed-
eral law that requires such person to provide notification 
to individuals following a breach of security, and that, 
taken as a whole, provides protections substantially similar 
to, or greater than, those required under this section, as 
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the Commission shall determine by rule (under section 
553 of title 5, United States Code), shall be deemed to 
be in compliance with this section. 
SEC. 4. APPLICATION AND ENFORCEMENT. 
(a) GENERAL APPLICATION.—The requirements of 
sections 2 and 3 shall only apply to those persons, partner-
ships, or corporations over which the Commission has au-
thority pursuant to section 5(a)(2) of the Federal Trade 
Commission Act (15 U.S.C. 45(a)(2)). 
(b) ENFORCEMENT BY THE FEDERAL TRADE COM-
MISSION.— 
(1) UNFAIR
OR
DECEPTIVE
ACTS
OR
PRAC-
TICES.—A violation of section 2 or 3 shall be treated 
as an unfair and deceptive act or practice in viola-
tion 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 Commis-
sion 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. Any person who violates 
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such regulations shall be subject to the penalties and 
entitled to the privileges and immunities provided in 
that Act. 
(3) LIMITATION.—In promulgating rules under 
this Act, the Commission shall not require the de-
ployment or use of any specific products or tech-
nologies, including any specific computer software or 
hardware. 
(c) ENFORCEMENT
BY STATE ATTORNEYS GEN-
ERAL.— 
(1) CIVIL ACTION.—In any case in which the 
attorney general of a State, or an official or agency 
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 person who violates sec-
tion 2 or 3 of this Act, the attorney general, official, 
or agency 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 appro-
priate jurisdiction— 
(A) to enjoin further violation of such sec-
tion by the defendant; 
(B) to compel compliance with such sec-
tion; or 
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(C) to 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 a violation of section 
2, the amount determined under this para-
graph is the amount calculated by multi-
plying the number of days that a person 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 para-
graph is the amount calculated by multi-
plying the number of violations of such 
section by an amount not greater than 
$11,000. Each failure to send notification 
as required under section 3 to a resident of 
the State shall be treated as a separate 
violation. 
(B) ADJUSTMENT
FOR
INFLATION.—Be-
ginning on the date that the Consumer Price 
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Index is first published by the Bureau of Labor 
Statistics that is after 1 year after the date of 
enactment of this Act, and each year thereafter, 
the amounts specified in clauses (i) and (ii) of 
subparagraph (A) shall be increased by the per-
centage increase in the Consumer Price Index 
published on that date from the Consumer 
Price Index published the previous year. 
(C) MAXIMUM
TOTAL
LIABILITY.—Not-
withstanding the number of actions which may 
be brought against a person under this sub-
section, the maximum civil penalty for which 
any person may be liable under this subsection 
shall not exceed— 
(i) $5,000,000 for each violation of 
section 2; and 
(ii) $5,000,000 for all violations of 
section 3 resulting from a single breach of 
security. 
(3) INTERVENTION BY THE FTC.— 
(A) NOTICE
AND
INTERVENTION.—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 
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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) LIMITATION ON STATE ACTION WHILE 
FEDERAL ACTION IS PENDING.—If the Commis-
sion has instituted a civil action for violation of 
this Act, no State attorney general, or official 
or agency of a State, may bring an action under 
this subsection during the pendency of that ac-
tion against any defendant named in the com-
plaint of the Commission for any violation of 
this Act alleged in the complaint. 
(4) CONSTRUCTION.—For purposes of bringing 
any civil action under paragraph (1), nothing in this 
Act shall be construed to prevent an attorney gen-
eral 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 
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(C) compel the attendance of witnesses or 
the production of documentary and other evi-
dence. 
(d) AFFIRMATIVE DEFENSE FOR A VIOLATION OF 
SECTION 3.— 
(1) IN GENERAL.—It shall be an affirmative de-
fense to an enforcement action brought under sub-
section (b), or a civil action brought under sub-
section (c), based on a violation of section 3, that all 
of the personal information contained in the data in 
electronic form that was acquired or accessed as a 
result of a breach of security of the defendant is 
public record information that is lawfully made 
available to the general public from Federal, State, 
or local government records and was acquired by the 
defendant from such records. 
(2) NO EFFECT ON OTHER REQUIREMENTS.— 
Nothing in this subsection shall be construed to ex-
empt any person from the requirement to notify the 
Commission of a breach of security as required 
under section 3(a). 
SEC. 5. DEFINITIONS. 
In this Act, the following definitions apply: 
(1) BREACH OF SECURITY.—The term ‘‘breach 
of security’’ means the unauthorized acquisition of 
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data in electronic form containing personal informa-
tion. 
(2) COMMISSION.—The term ‘‘Commission’’ 
means the Federal Trade Commission. 
(3) CONSUMER REPORTING AGENCY.—The term 
‘‘consumer reporting agency’’ has the meaning given 
the term ‘‘consumer reporting agency that compiles 
and maintains files on consumers on a nationwide 
basis’’ in section 603(p) of the Fair Credit Report-
ing Act (15 U.S.C. 1681a(p)). 
(4) 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. 
(5) 
ENCRYPTION.—The 
term 
‘‘encryption’’ 
means the protection of data in electronic form in 
storage or in transit using an encryption technology 
that has been adopted by an established standards 
setting body which renders such data indecipherable 
in the absence of associated cryptographic keys nec-
essary to enable decryption of such data. Such 
encryption must include appropriate management 
and safeguards of such keys to protect the integrity 
of the encryption. 
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(6) IDENTITY
THEFT.—The term ‘‘identity 
theft’’ means the unauthorized use of another per-
son’s personal information for the purpose of engag-
ing in commercial transactions under the name of 
such other person. 
(7) INFORMATION BROKER.—The term ‘‘infor-
mation broker’’— 
(A) means a commercial entity whose busi-
ness is to collect, assemble, or maintain per-
sonal information concerning individuals who 
are not current or former customers of such en-
tity in order to sell such information or provide 
access to such information to any nonaffiliated 
third party in exchange for consideration, 
whether such collection, assembly, or mainte-
nance of personal information is performed by 
the information broker directly, or by contract 
or subcontract with any other entity; and 
(B) does not include a commercial entity to 
the extent that such entity processes informa-
tion collected by and received from a non-
affiliated third party concerning individuals who 
are current or former customers or employees 
of such third party to enable such third party 
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to (1) provide benefits for its employees or (2) 
directly transact business with its customers. 
(8) PERSONAL INFORMATION.— 
(A) DEFINITION.—The term ‘‘personal in-
formation’’ means an individual’s first name or 
initial and last name, or address, or phone 
number, in combination with any 1 or more of 
the following data elements for that individual: 
(i) Social Security number. 
(ii) Driver’s license number, passport 
number, military identification number, or 
other similar number issued on a govern-
ment document used to verify identity. 
(iii) Financial account number, or 
credit or debit card number, and any re-
quired security code, access code, or pass-
word that is necessary to permit access to 
an individual’s financial account. 
(B) MODIFIED
DEFINITION
BY
RULE-
MAKING.—The Commission may, by rule pro-
mulgated under section 553 of title 5, United 
States Code, modify the definition of ‘‘personal 
information’’ under subparagraph (A)— 
(i) for the purpose of section 2 to the 
extent that such modification will not un-
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reasonably impede interstate commerce, 
and will accomplish the purposes of this 
Act; or 
(ii) for the purpose of section 3, to the 
extent that such modification is necessary 
to accommodate changes in technology or 
practices, will not unreasonably impede 
interstate commerce, and will accomplish 
the purposes of this Act. 
(9) PUBLIC RECORD INFORMATION.—The term 
‘‘public record information’’ means information 
about an individual which has been obtained origi-
nally from records of a Federal, State, or local gov-
ernment entity that are available for public inspec-
tion. 
(10) NON-PUBLIC
INFORMATION.—The term 
‘‘non-public information’’ means information about 
an individual that is of a private nature and neither 
available to the general public nor obtained from a 
public record. 
(11) SERVICE PROVIDER.—The term ‘‘service 
provider’’ means an entity that provides to a user 
transmission, routing, intermediate and transient 
storage, or connections to its system or network, for 
electronic communications, between or among points 
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specified by such user of material of the user’s 
choosing, without modification to the content of the 
material as sent or received. 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 tran-
sient storage or connections. 
SEC. 6. EFFECT ON OTHER LAWS. 
(a) PREEMPTION OF STATE INFORMATION SECURITY 
LAWS.—This Act supersedes any provision of a statute, 
regulation, or rule of a State or political subdivision of 
a State, with respect to those entities covered by the regu-
lations issued pursuant to this Act, that expressly— 
(1) requires information security practices and 
treatment of data containing personal information 
similar to any of those required under section 2; and 
(2) requires notification to individuals of a 
breach of security resulting in unauthorized access 
to or acquisition of data in electronic form con-
taining personal information. 
(b) ADDITIONAL PREEMPTION.— 
(1) IN GENERAL.—No person other than a per-
son specified in section 4(c) may bring a civil action 
under the laws of any State if such action is pre-
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