Data Security and Breach Notification Act of 2013 - Requires commercial entities that acquire, maintain, store, or utilize personal information (covered entities) to take reasonable measures to protect and secure data in electronic form containing personal information.
Directs a covered entity that owns or licenses such data to give notice of any breach of security that the entity reasonably believes has caused or will cause identity theft or other actual financial harm to each individual: (1) who is a U.S. citizen or resident; and (2) whose personal information was, or that the covered entity reasonably believes has been, accessed and acquired by an unauthorized person.
Requires a covered entity to notify the Secret Service or the Federal Bureau of Investigation (FBI) of a security breach of personal information involving more than 10,000 individuals.
Requires a third-party entity contracted to maintain, store, or process data containing personal information to notify the covered entity of a breach of security of a system. Requires a service provider to notify the covered entity if it becomes aware of a breach of security involving personal information owned or possessed by a covered entity and if such covered entity can be reasonably identified.
Allows delays of notifications to avoid interfering with a civil or criminal investigation or threatening national or homeland security.
Sets forth the methods for notification under this Act.
Preempts information security practices of the Communications Act of 1934 applicable to telecommunication carriers, satellite operators, and cable operators.
Sets forth the enforcement authority for the Federal Trade Commission (FTC) along with civil monetary penalties for violations of this Act.
Exempts certain financial institutions and entities subject to the Health Insurance Portability and Accountability Act of 1996 (HIPAA).
[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[S. 1193 Introduced in Senate (IS)]
113th CONGRESS
1st Session
S. 1193
To require certain entities that 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 SENATE OF THE UNITED STATES
June 20, 2013
Mr. Toomey (for himself, Mr. King, Mr. Thune, Mr. Heller, Mr. Blunt,
Mr. Rubio, Mr. Coats, and Mr. Roberts) introduced the following bill;
which was read twice and referred to the Committee on Commerce,
Science, and Transportation
_______________________________________________________________________
A BILL
To require certain entities that 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.
This Act may be cited as the ``Data Security and Breach
Notification Act of 2013''.
SEC. 2. REQUIREMENTS FOR INFORMATION SECURITY.
Each covered entity shall take reasonable measures to protect and
secure data in electronic form containing personal information.
SEC. 3. NOTIFICATION OF INFORMATION SECURITY BREACH.
(a) Notification.--
(1) In general.--A covered entity that owns or licenses
data in electronic form containing personal information shall
give notice of any breach of security following discovery by
the covered entity of the breach of security to each individual
who is a citizen or resident of the United States whose
personal information was or that the covered entity reasonably
believes to have been accessed and acquired by an unauthorized
person and that the covered entity reasonably believes has
caused or will cause identity theft or other actual financial
harm.
(2) Law enforcement.--A covered entity shall notify 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 the covered entity
reasonably believes to have been accessed and acquired by an
unauthorized person exceeds 10,000.
(b) Special Notification Requirements.--
(1) Third-party agents.--
(A) In general.--In the event of a breach of
security of a system maintained by a third-party entity
that has been contracted to maintain, store, or process
data in electronic form containing personal information
on behalf of a covered entity who owns or possesses
such data, such third-party entity shall notify such
covered entity of the breach of security.
(B) Covered entities who receive notice from third
parties.--Upon receiving notification from a third
party under subparagraph (A), a covered entity shall
provide notification as required under subsection (a).
(C) Exception for service providers.--A service
provider shall not be considered a third-party agent
for purposes of this paragraph.
(2) Service providers.--
(A) 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 possessed 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 if such covered entity can be
reasonably identified.
(B) Covered entities who receive notice from
service providers.--Upon receiving notification from a
service provider under subparagraph (A), a covered
entity shall provide notification as required under
subsection (a).
(c) Timeliness of Notification.--
(1) In general.--Unless subject to a delay authorized under
paragraph (3), a notification required under subsection (a)
with respect to a breach of security shall be made as
expeditiously as practicable and without unreasonable delay.
(2) Reasonable delay.--For purposes of paragraph (1), a
delay for the purpose of allowing the covered entity time to
determine the scope of the breach of security, to identify
individuals affected by the breach of security, and to restore
the reasonable integrity of the data system that was breached,
shall be considered reasonable.
(3) Delay of notification authorized for law enforcement or
national security purposes.--
(A) Law enforcement.--If a Federal law enforcement
agency determines that the notification required under
subsection (a) would interfere with a civil or criminal
investigation, such notification shall be delayed upon
the written request of the law enforcement agency for
any period which the law enforcement agency determines
is reasonably necessary. A law enforcement agency may,
by a subsequent written request, revoke such delay or
extend the period set forth in the original request
made under this subparagraph by a subsequent request 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 delayed upon the written request of
the national security agency or homeland security
agency for any period which the national security
agency or homeland security agency determines is
reasonably necessary. A Federal national security
agency or homeland security agency may revoke such
delay or extend the period set forth in the original
request made under this subparagraph by a subsequent
written request if further delay is necessary.
(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:
(i) Written notification, sent to the
postal address of the individual in the records
of the covered entity.
(ii) Telephone.
(iii) Email or other electronic means.
(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, to the extent
practicable, shall include--
(i) the date, estimated date, or estimated
date range of the breach of security;
(ii) a description of the personal
information that was accessed and acquired, or
reasonably believed to have been accessed and
acquired, by an unauthorized person as a part
of the breach of security; and
(iii) information that the individual can
use to contact the covered entity to inquire
about--
(I) the breach of security; or
(II) the personal information the
covered entity maintained about that
individual.
(2) Substitute notification.--
(A) Circumstances giving rise to substitute
notification.--A covered entity required to provide
notification to an individual under subsection (a) may
provide substitute notification in lieu of the direct
notification required by paragraph (1) if such direct
notification is not feasible due to--
(i) excessive cost to the covered entity
required to provide such notification relative
to the resources of such covered entity; or
(ii) lack of sufficient contact information
for the individual required to be notified.
(B) Form of substitute notification.--Such
substitute notification shall include at least one of
the following:
(i) A conspicuous notice on the Internet
website of the covered entity (if such covered
entity maintains such a website).
(ii) Notification in print and to broadcast
media, including major media in metropolitan
and rural areas where the individuals whose
personal information was acquired reside.
(e) Treatment of Persons Governed by Other Federal Law.--Except as
provided in section 4(b), a covered entity who is in compliance with
any other Federal law that requires such covered entity to provide
notification to individuals following a breach of security 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
apply to--
(1) those persons, partnerships, or corporations 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)); and
(2) 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.).
(b) Application to Cable Operators, Satellite Operators, and
Telecommunications Carriers.--Sections 222, 338, and 631 of the
Communications Act of 1934 (47 U.S.C. 222, 338, and 551), and any
regulations promulgated thereunder, shall not apply with respect to the
information security practices, including practices relating to the
notification of unauthorized access to data in electronic form, of any
covered entity otherwise subject to those sections.
(c) Enforcement by Federal Trade Commission.--
(1) Unfair or deceptive acts or practices.--A violation of
section 2 or 3 shall be treated as an unfair or 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.--
(A) In general.--Except as provided in subsection
(a), 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.
(B) Privileges and immunities.--Any person who
violates section 2 or 3 shall be subject to the
penalties and entitled to the privileges and immunities
provided in such Act.
(3) 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 for all
actions shall not exceed--
(A) $500,000 for all violations of section 2
resulting from the same related act or omission; and
(B) $500,000 for all violations of section 3
resulting from a single breach of security.
(d) 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''
means unauthorized access and acquisition of data in electronic
form containing personal information.
(2) Commission.--The term ``Commission'' means the Federal
Trade Commission.
(3) Covered entity.--
(A) In general.--The term ``covered entity'' means
a sole proprietorship, partnership, corporation, trust,
estate, cooperative, association, or other commercial
entity that acquires, maintains, stores, or utilizes
personal information.
(B) Exemptions.--The term ``covered entity'' does
not include the following:
(i) Financial institutions subject to title
V of the Gramm-Leach-Bliley Act (15 U.S.C. 6801
et seq.).
(ii) An entity covered by the regulations
issued under section 264(c) of the Health
Insurance Portability and Accountability Act of
1996 (Public Law 104-191) to the extent that
such entity is subject to the requirements of
such regulations with respect to protected
health information.
(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) Personal information.--
(A) In general.--The term ``personal information''
means an individual's first name or first initial and
last name 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 government
document used to verify identity.
(iii) Financial account number or credit or
debit card number, in combination with any
required security code, access code, or
password that is necessary to permit access to
an individual's financial account.
(B) Exclusions.--
(i) Public record information.--Personal
information does not include information
obtained about an individual which has been
lawfully made publicly available by a Federal,
State, or local government entity or widely
distributed by media.
(ii) Encrypted, redacted, or secured
data.--Personal information does not include
information that is encrypted, redacted, or
secured by any other method or technology that
removes elements that personally identify an
individual or that otherwise renders the
information unusable.
(6) Service provider.--The term ``service provider'' means
an entity that provides electronic data transmission, routing,
intermediate, and transient storage, or connections to its
system or network, where such entity providing such services
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.
SEC. 6. EFFECT ON OTHER LAWS.
This Act preempts any law, rule, regulation, requirement, standard,
or other provision having the force and effect of law of any State, or
political subdivision of a State, relating to the protection or
security of data in electronic form containing personal information or
the notification of a breach of security.
SEC. 7. EFFECTIVE DATE.
This Act shall take effect on the date that is 1 year after the
date of enactment of this Act.
<all>
Introduced in Senate
Read twice and referred to the Committee on Commerce, Science, and Transportation.
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