[Congressional Record Volume 167, Number 201 (Thursday, November 18, 2021)]
[Senate]
[Pages S8469-S8490]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

  SA 4799. Mr. PETERS (for himself, Mr. Portman, Mr. Warner, Ms. 
Collins, Mr. King, Mr. Rubio, Mr. Risch, Ms. Rosen, Mr. Cornyn, and Mr. 
Burr) submitted an amendment intended to be proposed to amendment SA 
3867 submitted by Mr. Reed and intended to be proposed to the bill H.R. 
4350, to authorize appropriations for fiscal year 2022 for military 
activities of the Department of Defense, for military construction, and 
for defense activities of the Department of Energy, to prescribe 
military personnel strengths for such fiscal year, and for other 
purposes; which was ordered to lie on the table; as follows:

        At the end, add the following:

   DIVISION E--FEDERAL INFORMATION SECURITY MODERNIZATION ACT OF 2021

     SEC. 5101. SHORT TITLE.

       This division may be cited as the ``Federal Information 
     Security Modernization Act of 2021''.

     SEC. 5102. DEFINITIONS.

       In this division, unless otherwise specified:

[[Page S8470]]

       (1) Additional cybersecurity procedure.--The term 
     ``additional cybersecurity procedure'' has the meaning given 
     the term in section 3552(b) of title 44, United States Code, 
     as amended by this division.
       (2) Agency.--The term ``agency'' has the meaning given the 
     term in section 3502 of title 44, United States Code.
       (3) Appropriate congressional committees.--The term 
     ``appropriate congressional committees'' means--
       (A) the Committee on Homeland Security and Governmental 
     Affairs of the Senate;
       (B) the Committee on Oversight and Reform of the House of 
     Representatives; and
       (C) the Committee on Homeland Security of the House of 
     Representatives.
       (4) Director.--The term ``Director'' means the Director of 
     the Office of Management and Budget.
       (5) Incident.--The term ``incident'' has the meaning given 
     the term in section 3552(b) of title 44, United States Code.
       (6) National security system.--The term ``national security 
     system'' has the meaning given the term in section 3552(b) of 
     title 44, United States Code.
       (7) Penetration test.--The term ``penetration test'' has 
     the meaning given the term in section 3552(b) of title 44, 
     United States Code, as amended by this division.
       (8) Threat hunting.--The term ``threat hunting'' means 
     proactively and iteratively searching for threats to systems 
     that evade detection by automated threat detection systems.

                       TITLE LI--UPDATES TO FISMA

     SEC. 5121. TITLE 44 AMENDMENTS.

       (a) Subchapter I Amendments.--Subchapter I of chapter 35 of 
     title 44, United States Code, is amended--
       (1) in section 3504--
       (A) in subsection (a)(1)(B)--
       (i) by striking clause (v) and inserting the following:
       ``(v) confidentiality, privacy, disclosure, and sharing of 
     information;'';
       (ii) by redesignating clause (vi) as clause (vii); and
       (iii) by inserting after clause (v) the following:
       ``(vi) in consultation with the National Cyber Director and 
     the Director of the Cybersecurity and Infrastructure Security 
     Agency, security of information; and''; and
       (B) in subsection (g), by striking paragraph (1) and 
     inserting the following:
       ``(1) develop, and in consultation with the Director of the 
     Cybersecurity and Infrastructure Security Agency and the 
     National Cyber Director, oversee the implementation of 
     policies, principles, standards, and guidelines on privacy, 
     confidentiality, security, disclosure and sharing of 
     information collected or maintained by or for agencies; 
     and'';
       (2) in section 3505--
       (A) in paragraph (3) of the first subsection designated as 
     subsection (c)--
       (i) in subparagraph (B)--

       (I) by inserting ``the Director of the Cybersecurity and 
     Infrastructure Security Agency, the National Cyber Director, 
     and'' before ``the Comptroller General''; and
       (II) by striking ``and'' at the end;

       (ii) in subparagraph (C)(v), by striking the period at the 
     end and inserting ``; and''; and
       (iii) by adding at the end the following:
       ``(D) maintained on a continual basis through the use of 
     automation, machine-readable data, and scanning.''; and
       (B) by striking the second subsection designated as 
     subsection (c);
       (3) in section 3506--
       (A) in subsection (b)(1)(C), by inserting ``, 
     availability'' after ``integrity''; and
       (B) in subsection (h)(3), by inserting ``security,'' after 
     ``efficiency,''; and
       (4) in section 3513--
       (A) by redesignating subsection (c) as subsection (d); and
       (B) by inserting after subsection (b) the following:
       ``(c) Each agency providing a written plan under subsection 
     (b) shall provide any portion of the written plan addressing 
     information security or cybersecurity to the Director of the 
     Cybersecurity and Infrastructure Security Agency.''.
       (b) Subchapter II Definitions.--
       (1) In general.--Section 3552(b) of title 44, United States 
     Code, is amended--
       (A) by redesignating paragraphs (1), (2), (3), (4), (5), 
     (6), and (7) as paragraphs (2), (3), (4), (5), (6), (9), and 
     (11), respectively;
       (B) by inserting before paragraph (2), as so redesignated, 
     the following:
       ``(1) The term `additional cybersecurity procedure' means a 
     process, procedure, or other activity that is established in 
     excess of the information security standards promulgated 
     under section 11331(b) of title 40 to increase the security 
     and reduce the cybersecurity risk of agency systems.'';
       (C) by inserting after paragraph (6), as so redesignated, 
     the following:
       ``(7) The term `high value asset' means information or an 
     information system that the head of an agency determines so 
     critical to the agency that the loss or corruption of the 
     information or the loss of access to the information system 
     would have a serious impact on the ability of the agency to 
     perform the mission of the agency or conduct business.
       ``(8) The term `major incident' has the meaning given the 
     term in guidance issued by the Director under section 
     3598(a).'';
       (D) by inserting after paragraph (9), as so redesignated, 
     the following:
       ``(10) The term `penetration test' means a specialized type 
     of assessment that--
       ``(A) is conducted on an information system or a component 
     of an information system; and
       ``(B) emulates an attack or other exploitation capability 
     of a potential adversary, typically under specific 
     constraints, in order to identify any vulnerabilities of an 
     information system or a component of an information system 
     that could be exploited.''; and
       (E) by inserting after paragraph (11), as so redesignated, 
     the following:
       ``(12) The term `shared service' means a centralized 
     business or mission capability that is provided to multiple 
     organizations within an agency or to multiple agencies.''.
       (2) Conforming amendments.--
       (A) Homeland security act of 2002.--Section 1001(c)(1)(A) 
     of the Homeland Security Act of 2002 (6 U.S.C. 511(1)(A)) is 
     amended by striking ``section 3552(b)(5)'' and inserting 
     ``section 3552(b)''.
       (B) Title 10.--
       (i) Section 2222.--Section 2222(i)(8) of title 10, United 
     States Code, is amended by striking ``section 3552(b)(6)(A)'' 
     and inserting ``section 3552(b)(9)(A)''.
       (ii) Section 2223.--Section 2223(c)(3) of title 10, United 
     States Code, is amended by striking ``section 3552(b)(6)'' 
     and inserting ``section 3552(b)''.
       (iii) Section 2315.--Section 2315 of title 10, United 
     States Code, is amended by striking ``section 3552(b)(6)'' 
     and inserting ``section 3552(b)''.
       (iv) Section 2339a.--Section 2339a(e)(5) of title 10, 
     United States Code, is amended by striking ``section 
     3552(b)(6)'' and inserting ``section 3552(b)''.
       (C) High-performance computing act of 1991.--Section 207(a) 
     of the High-Performance Computing Act of 1991 (15 U.S.C. 
     5527(a)) is amended by striking ``section 3552(b)(6)(A)(i)'' 
     and inserting ``section 3552(b)(9)(A)(i)''.
       (D) Internet of things cybersecurity improvement act of 
     2020.--Section 3(5) of the Internet of Things Cybersecurity 
     Improvement Act of 2020 (15 U.S.C. 278g-3a) is amended by 
     striking ``section 3552(b)(6)'' and inserting ``section 
     3552(b)''.
       (E) National defense authorization act for fiscal year 
     2013.--Section 933(e)(1)(B) of the National Defense 
     Authorization Act for Fiscal Year 2013 (10 U.S.C. 2224 note) 
     is amended by striking ``section 3542(b)(2)'' and inserting 
     ``section 3552(b)''.
       (F) Ike skelton national defense authorization act for 
     fiscal year 2011.--The Ike Skelton National Defense 
     Authorization Act for Fiscal Year 2011 (Public Law 111-383) 
     is amended--
       (i) in section 806(e)(5) (10 U.S.C. 2304 note), by striking 
     ``section 3542(b)'' and inserting ``section 3552(b)'';
       (ii) in section 931(b)(3) (10 U.S.C. 2223 note), by 
     striking ``section 3542(b)(2)'' and inserting ``section 
     3552(b)''; and
       (iii) in section 932(b)(2) (10 U.S.C. 2224 note), by 
     striking ``section 3542(b)(2)'' and inserting ``section 
     3552(b)''.
       (G) E-government act of 2002.--Section 301(c)(1)(A) of the 
     E-Government Act of 2002 (44 U.S.C. 3501 note) is amended by 
     striking ``section 3542(b)(2)'' and inserting ``section 
     3552(b)''.
       (H) National institute of standards and technology act.--
     Section 20 of the National Institute of Standards and 
     Technology Act (15 U.S.C. 278g-3) is amended--
       (i) in subsection (a)(2), by striking ``section 
     3552(b)(5)'' and inserting ``section 3552(b)''; and
       (ii) in subsection (f)--

       (I) in paragraph (3), by striking ``section 3532(1)'' and 
     inserting ``section 3552(b)''; and
       (II) in paragraph (5), by striking ``section 3532(b)(2)'' 
     and inserting ``section 3552(b)''.

       (c) Subchapter II Amendments.--Subchapter II of chapter 35 
     of title 44, United States Code, is amended--
       (1) in section 3551--
       (A) in paragraph (4), by striking ``diagnose and improve'' 
     and inserting ``integrate, deliver, diagnose, and improve'';
       (B) in paragraph (5), by striking ``and'' at the end;
       (C) in paragraph (6), by striking the period at the end and 
     inserting a semi colon; and
       (D) by adding at the end the following:
       ``(7) recognize that each agency has specific mission 
     requirements and, at times, unique cybersecurity requirements 
     to meet the mission of the agency;
       ``(8) recognize that each agency does not have the same 
     resources to secure agency systems, and an agency should not 
     be expected to have the capability to secure the systems of 
     the agency from advanced adversaries alone; and
       ``(9) recognize that a holistic Federal cybersecurity model 
     is necessary to account for differences between the missions 
     and capabilities of agencies.'';
       (2) in section 3553--
       (A) by striking the section heading and inserting 
     ``Authority and functions of the Director and the Director of 
     the Cybersecurity and Infrastructure Security Agency''.
       (B) in subsection (a)--
       (i) in paragraph (1), by inserting ``, in consultation with 
     the Director of the Cybersecurity and Infrastructure Security 
     Agency and the National Cyber Director,'' before 
     ``overseeing'';
       (ii) in paragraph (5), by striking ``and'' at the end; and
       (iii) by adding at the end the following:
       ``(8) promoting, in consultation with the Director of the 
     Cybersecurity and Infrastructure Security Agency and the 
     Director of the National Institute of Standards and 
     Technology--

[[Page S8471]]

       ``(A) the use of automation to improve Federal 
     cybersecurity and visibility with respect to the 
     implementation of Federal cybersecurity; and
       ``(B) the use of presumption of compromise and least 
     privilege principles to improve resiliency and timely 
     response actions to incidents on Federal systems.'';
       (C) in subsection (b)--
       (i) by striking the subsection heading and inserting 
     ``Cybersecurity and Infrastructure Security Agency'';
       (ii) in the matter preceding paragraph (1), by striking 
     ``The Secretary, in consultation with the Director'' and 
     inserting ``The Director of the Cybersecurity and 
     Infrastructure Security Agency, in consultation with the 
     Director and the National Cyber Director'';
       (iii) in paragraph (2)--

       (I) in subparagraph (A), by inserting ``and reporting 
     requirements under subchapter IV of this title'' after 
     ``section 3556''; and
       (II) in subparagraph (D), by striking ``the Director or 
     Secretary'' and inserting ``the Director of the Cybersecurity 
     and Infrastructure Security Agency'';

       (iv) in paragraph (5), by striking ``coordinating'' and 
     inserting ``leading the coordination of'';
       (v) in paragraph (8), by striking ``the Secretary's 
     discretion'' and inserting ``the Director of the 
     Cybersecurity and Infrastructure Security Agency's 
     discretion''; and
       (vi) in paragraph (9), by striking ``as the Director or the 
     Secretary, in consultation with the Director,'' and inserting 
     ``as the Director of the Cybersecurity and Infrastructure 
     Security Agency'';
       (D) in subsection (c)--
       (i) in the matter preceding paragraph (1), by striking 
     ``each year'' and inserting ``each year during which agencies 
     are required to submit reports under section 3554(c)'';
       (ii) by striking paragraph (1);
       (iii) by redesignating paragraphs (2), (3), and (4) as 
     paragraphs (1), (2), and (3), respectively;
       (iv) in paragraph (3), as so redesignated, by striking 
     ``and'' at the end;
       (v) by inserting after paragraph (3), as so redesignated 
     the following:
       ``(4) a summary of each assessment of Federal risk posture 
     performed under subsection (i);''; and
       (vi) in paragraph (5), by striking the period at the end 
     and inserting ``; and'';
       (E) by redesignating subsections (i), (j), (k), and (l) as 
     subsections (j), (k), (l), and (m) respectively;
       (F) by inserting after subsection (h) the following:
       ``(i) Federal Risk Assessments.--On an ongoing and 
     continuous basis, the Director of the Cybersecurity and 
     Infrastructure Security Agency shall perform assessments of 
     Federal risk posture using any available information on the 
     cybersecurity posture of agencies, and brief the Director and 
     National Cyber Director on the findings of those assessments 
     including--
       ``(1) the status of agency cybersecurity remedial actions 
     described in section 3554(b)(7);
       ``(2) any vulnerability information relating to the systems 
     of an agency that is known by the agency;
       ``(3) analysis of incident information under section 3597;
       ``(4) evaluation of penetration testing performed under 
     section 3559A;
       ``(5) evaluation of vulnerability disclosure program 
     information under section 3559B;
       ``(6) evaluation of agency threat hunting results;
       ``(7) evaluation of Federal and non-Federal cyber threat 
     intelligence;
       ``(8) data on agency compliance with standards issued under 
     section 11331 of title 40;
       ``(9) agency system risk assessments performed under 
     section 3554(a)(1)(A); and
       ``(10) any other information the Director of the 
     Cybersecurity and Infrastructure Security Agency determines 
     relevant.''; and
       (G) in subsection (j), as so redesignated--
       (i) by striking ``regarding the specific'' and inserting 
     ``that includes a summary of--
       ``(1) the specific'';
       (ii) in paragraph (1), as so designated, by striking the 
     period at the end and inserting ``; and'' and
       (iii) by adding at the end the following:
       ``(2) the trends identified in the Federal risk assessment 
     performed under subsection (i).''; and
       (H) by adding at the end the following:
       ``(n) Binding Operational Directives.--If the Director of 
     the Cybersecurity and Infrastructure Security Agency issues a 
     binding operational directive or an emergency directive under 
     this section, not later than 2 days after the date on which 
     the binding operational directive requires an agency to take 
     an action, the Director of the Cybersecurity and 
     Infrastructure Security Agency shall provide to the 
     appropriate reporting entities the status of the 
     implementation of the binding operational directive at the 
     agency.'';
       (3) in section 3554--
       (A) in subsection (a)--
       (i) in paragraph (1)--

       (I) by redesignating subparagraphs (A), (B), and (C) as 
     subparagraphs (B), (C), and (D), respectively;
       (II) by inserting before subparagraph (B), as so 
     redesignated, the following:

       ``(A) on an ongoing and continuous basis, performing agency 
     system risk assessments that--
       ``(i) identify and document the high value assets of the 
     agency using guidance from the Director;
       ``(ii) evaluate the data assets inventoried under section 
     3511 for sensitivity to compromises in confidentiality, 
     integrity, and availability;
       ``(iii) identify agency systems that have access to or hold 
     the data assets inventoried under section 3511;
       ``(iv) evaluate the threats facing agency systems and data, 
     including high value assets, based on Federal and non-Federal 
     cyber threat intelligence products, where available;
       ``(v) evaluate the vulnerability of agency systems and 
     data, including high value assets, including by analyzing--

       ``(I) the results of penetration testing performed by the 
     Department of Homeland Security under section 3553(b)(9);
       ``(II) the results of penetration testing performed under 
     section 3559A;
       ``(III) information provided to the agency through the 
     vulnerability disclosure program of the agency under section 
     3559B;
       ``(IV) incidents; and
       ``(V) any other vulnerability information relating to 
     agency systems that is known to the agency;

       ``(vi) assess the impacts of potential agency incidents to 
     agency systems, data, and operations based on the evaluations 
     described in clauses (ii) and (iv) and the agency systems 
     identified under clause (iii); and
       ``(vii) assess the consequences of potential incidents 
     occurring on agency systems that would impact systems at 
     other agencies, including due to interconnectivity between 
     different agency systems or operational reliance on the 
     operations of the system or data in the system;'';

       (III) in subparagraph (B), as so redesignated, in the 
     matter preceding clause (i), by striking ``providing 
     information'' and inserting ``using information from the 
     assessment conducted under subparagraph (A), providing, in 
     consultation with the Director of the Cybersecurity and 
     Infrastructure Security Agency, information'';
       (IV) in subparagraph (C), as so redesignated--

       (aa) in clause (ii) by inserting ``binding'' before 
     ``operational''; and
       (bb) in clause (vi), by striking ``and'' at the end; and

       (V) by adding at the end the following:

       ``(E) providing an update on the ongoing and continuous 
     assessment performed under subparagraph (A)--
       ``(i) upon request, to the inspector general of the agency 
     or the Comptroller General of the United States; and
       ``(ii) on a periodic basis, as determined by guidance 
     issued by the Director but not less frequently than annually, 
     to--

       ``(I) the Director;
       ``(II) the Director of the Cybersecurity and Infrastructure 
     Security Agency; and
       ``(III) the National Cyber Director;

       ``(F) in consultation with the Director of the 
     Cybersecurity and Infrastructure Security Agency and not less 
     frequently than once every 3 years, performing an evaluation 
     of whether additional cybersecurity procedures are 
     appropriate for securing a system of, or under the 
     supervision of, the agency, which shall--
       ``(i) be completed considering the agency system risk 
     assessment performed under subparagraph (A); and
       ``(ii) include a specific evaluation for high value assets;
       ``(G) not later than 30 days after completing the 
     evaluation performed under subparagraph (F), providing the 
     evaluation and an implementation plan, if applicable, for 
     using additional cybersecurity procedures determined to be 
     appropriate to--
       ``(i) the Director of the Cybersecurity and Infrastructure 
     Security Agency;
       ``(ii) the Director; and
       ``(iii) the National Cyber Director; and
       ``(H) if the head of the agency determines there is need 
     for additional cybersecurity procedures, ensuring that those 
     additional cybersecurity procedures are reflected in the 
     budget request of the agency in accordance with the risk-
     based cyber budget model developed pursuant to section 
     3553(a)(7);'';
       (ii) in paragraph (2)--

       (I) in subparagraph (A), by inserting ``in accordance with 
     the agency system risk assessment performed under paragraph 
     (1)(A)'' after ``information systems'';
       (II) in subparagraph (B)--

       (aa) by striking ``in accordance with standards'' and 
     inserting ``in accordance with--
       ``(i) standards''; and
       (bb) by adding at the end the following:
       ``(ii) the evaluation performed under paragraph (1)(F); and
       ``(iii) the implementation plan described in paragraph 
     (1)(G);''; and

       (III) in subparagraph (D), by inserting ``, through the use 
     of penetration testing, the vulnerability disclosure program 
     established under section 3559B, and other means,'' after 
     ``periodically'';

       (iii) in paragraph (3)--

       (I) in subparagraph (A)--

       (aa) in clause (iii), by striking ``and'' at the end;
       (bb) in clause (iv), by adding ``and'' at the end; and
       (cc) by adding at the end the following:
       ``(v) ensure that--

       ``(I) senior agency information security officers of 
     component agencies carry out responsibilities under this 
     subchapter, as directed by the senior agency information 
     security officer of the agency or an equivalent official; and
       ``(II) senior agency information security officers of 
     component agencies report to--

[[Page S8472]]

       ``(aa) the senior information security officer of the 
     agency or an equivalent official; and
       ``(bb) the Chief Information Officer of the component 
     agency or an equivalent official;''; and
       (iv) in paragraph (5), by inserting ``and the Director of 
     the Cybersecurity and Infrastructure Security Agency'' before 
     ``on the effectiveness'';
       (B) in subsection (b)--
       (i) by striking paragraph (1) and inserting the following:
       ``(1) pursuant to subsection (a)(1)(A), performing ongoing 
     and continuous agency system risk assessments, which may 
     include using guidelines and automated tools consistent with 
     standards and guidelines promulgated under section 11331 of 
     title 40, as applicable;'';
       (ii) in paragraph (2)--

       (I) by striking subparagraph (B) and inserting the 
     following:

       ``(B) comply with the risk-based cyber budget model 
     developed pursuant to section 3553(a)(7);''; and

       (II) in subparagraph (D)--

       (aa) by redesignating clauses (iii) and (iv) as clauses 
     (iv) and (v), respectively;
       (bb) by inserting after clause (ii) the following:
       ``(iii) binding operational directives and emergency 
     directives promulgated by the Director of the Cybersecurity 
     and Infrastructure Security Agency under section 3553;''; and
       (cc) in clause (iv), as so redesignated, by striking ``as 
     determined by the agency; and'' and inserting ``as determined 
     by the agency, considering--

       ``(I) the agency risk assessment performed under subsection 
     (a)(1)(A); and
       ``(II) the determinations of applying more stringent 
     standards and additional cybersecurity procedures pursuant to 
     section 11331(c)(1) of title 40; and'';

       (iii) in paragraph (5)(A), by inserting ``, including 
     penetration testing, as appropriate,'' after ``shall include 
     testing'';
       (iv) in paragraph (6), by striking ``planning, 
     implementing, evaluating, and documenting'' and inserting 
     ``planning and implementing and, in consultation with the 
     Director of the Cybersecurity and Infrastructure Security 
     Agency, evaluating and documenting'';
       (v) by redesignating paragraphs (7) and (8) as paragraphs 
     (8) and (9), respectively;
       (vi) by inserting after paragraph (6) the following:
       ``(7) a process for providing the status of every remedial 
     action and known system vulnerability to the Director and the 
     Director of the Cybersecurity and Infrastructure Security 
     Agency, using automation and machine-readable data to the 
     greatest extent practicable;''; and
       (vii) in paragraph (8)(C), as so redesignated--

       (I) by striking clause (ii) and inserting the following:

       ``(ii) notifying and consulting with the Federal 
     information security incident center established under 
     section 3556 pursuant to the requirements of section 3594;'';

       (II) by redesignating clause (iii) as clause (iv);
       (III) by inserting after clause (ii) the following:

       ``(iii) performing the notifications and other activities 
     required under subchapter IV of this title; and''; and

       (IV) in clause (iv), as so redesignated--

       (aa) in subclause (I), by striking ``and relevant offices 
     of inspectors general'';
       (bb) in subclause (II), by adding ``and'' at the end;
       (cc) by striking subclause (III); and
       (dd) by redesignating subclause (IV) as subclause (III);
       (C) in subsection (c)--
       (i) by redesignating paragraph (2) as paragraph (5);
       (ii) by striking paragraph (1) and inserting the following:
       ``(1) Biannual report.--Not later than 2 years after the 
     date of enactment of the Federal Information Security 
     Modernization Act of 2021 and not less frequently than once 
     every 2 years thereafter, using the continuous and ongoing 
     agency system risk assessment under subsection (a)(1)(A), the 
     head of each agency shall submit to the Director, the 
     Director of the Cybersecurity and Infrastructure Security 
     Agency, the majority and minority leaders of the Senate, the 
     Speaker and minority leader of the House of Representatives, 
     the Committee on Homeland Security and Governmental Affairs 
     of the Senate, the Committee on Oversight and Reform of the 
     House of Representatives, the Committee on Homeland Security 
     of the House of Representatives, the Committee on Commerce, 
     Science, and Transportation of the Senate, the Committee on 
     Science, Space, and Technology of the House of 
     Representatives, the appropriate authorization and 
     appropriations committees of Congress, the National Cyber 
     Director, and the Comptroller General of the United States a 
     report that--
       ``(A) summarizes the agency system risk assessment 
     performed under subsection (a)(1)(A);
       ``(B) evaluates the adequacy and effectiveness of 
     information security policies, procedures, and practices of 
     the agency to address the risks identified in the agency 
     system risk assessment performed under subsection (a)(1)(A), 
     including an analysis of the agency's cybersecurity and 
     incident response capabilities using the metrics established 
     under section 224(c) of the Cybersecurity Act of 2015 (6 
     U.S.C. 1522(c));
       ``(C) summarizes the evaluation and implementation plans 
     described in subparagraphs (F) and (G) of subsection (a)(1) 
     and whether those evaluation and implementation plans call 
     for the use of additional cybersecurity procedures determined 
     to be appropriate by the agency; and
       ``(D) summarizes the status of remedial actions identified 
     by inspector general of the agency, the Comptroller General 
     of the United States, and any other source determined 
     appropriate by the head of the agency.
       ``(2) Unclassified reports.--Each report submitted under 
     paragraph (1)--
       ``(A) shall be, to the greatest extent practicable, in an 
     unclassified and otherwise uncontrolled form; and
       ``(B) may include a classified annex.
       ``(3) Access to information.--The head of an agency shall 
     ensure that, to the greatest extent practicable, information 
     is included in the unclassified form of the report submitted 
     by the agency under paragraph (2)(A).
       ``(4) Briefings.--During each year during which a report is 
     not required to be submitted under paragraph (1), the 
     Director shall provide to the congressional committees 
     described in paragraph (1) a briefing summarizing current 
     agency and Federal risk postures.''; and
       (iii) in paragraph (5), as so redesignated, by striking the 
     period at the end and inserting ``, including the reporting 
     procedures established under section 11315(d) of title 40 and 
     subsection (a)(3)(A)(v) of this section.''; and
       (D) in subsection (d)(1), in the matter preceding 
     subparagraph (A), by inserting ``and the Director of the 
     Cybersecurity and Infrastructure Security Agency'' after 
     ``the Director''; and
       (4) in section 3555--
       (A) in the section heading, by striking ``annual 
     independent'' and inserting ``independent'';
       (B) in subsection (a)--
       (i) in paragraph (1), by inserting ``during which a report 
     is required to be submitted under section 3553(c),'' after 
     ``Each year'';
       (ii) in paragraph (2)(A), by inserting ``, including by 
     penetration testing and analyzing the vulnerability 
     disclosure program of the agency'' after ``information 
     systems''; and
       (iii) by adding at the end the following:
       ``(3) An evaluation under this section may include 
     recommendations for improving the cybersecurity posture of 
     the agency.'';
       (C) in subsection (b)(1), by striking ``annual'';
       (D) in subsection (e)(1), by inserting ``during which a 
     report is required to be submitted under section 3553(c)'' 
     after ``Each year'';
       (E) by striking subsection (f) and inserting the following:
       ``(f) Protection of Information.--(1) Agencies, evaluators, 
     and other recipients of information that, if disclosed, may 
     cause grave harm to the efforts of Federal information 
     security officers shall take appropriate steps to ensure the 
     protection of that information, including safeguarding the 
     information from public disclosure.
       ``(2) The protections required under paragraph (1) shall be 
     commensurate with the risk and comply with all applicable 
     laws and regulations.
       ``(3) With respect to information that is not related to 
     national security systems, agencies and evaluators shall make 
     a summary of the information unclassified and publicly 
     available, including information that does not identify--
       ``(A) specific information system incidents; or
       ``(B) specific information system vulnerabilities.'';
       (F) in subsection (g)(2)--
       (i) by striking ``this subsection shall'' and inserting 
     ``this subsection--
       ``(A) shall'';
       (ii) in subparagraph (A), as so designated, by striking the 
     period at the end and inserting ``; and''; and
       (iii) by adding at the end the following:
       ``(B) identify any entity that performs an independent 
     evaluation under subsection (b).''; and
       (G) by striking subsection (j) and inserting the following:
       ``(j) Guidance.--
       ``(1) In general.--The Director, in consultation with the 
     Director of the Cybersecurity and Infrastructure Security 
     Agency, the Chief Information Officers Council, the Council 
     of the Inspectors General on Integrity and Efficiency, and 
     other interested parties as appropriate, shall ensure the 
     development of guidance for evaluating the effectiveness of 
     an information security program and practices
       ``(2) Priorities.--The guidance developed under paragraph 
     (1) shall prioritize the identification of--
       ``(A) the most common threat patterns experienced by each 
     agency;
       ``(B) the security controls that address the threat 
     patterns described in subparagraph (A); and
       ``(C) any other security risks unique to the networks of 
     each agency.''; and
       (5) in section 3556(a)--
       (A) in the matter preceding paragraph (1), by inserting 
     ``within the Cybersecurity and Infrastructure Security 
     Agency'' after ``incident center''; and
       (B) in paragraph (4), by striking ``3554(b)'' and inserting 
     ``3554(a)(1)(A)''.
       (d) Conforming Amendments.--

[[Page S8473]]

       (1) Table of sections.--The table of sections for chapter 
     35 of title 44, United States Code, is amended--
       (A) by striking the item relating to section 3553 and 
     inserting the following:

``3553. Authority and functions of the Director and the Director of the 
              Cybersecurity and Infrastructure Security Agency.''; and
       (B) by striking the item relating to section 3555 and 
     inserting the following:

``3555. Independent evaluation.''.
       (2) OMB reports.--Section 226(c) of the Cybersecurity Act 
     of 2015 (6 U.S.C. 1524(c)) is amended--
       (A) in paragraph (1)(B), in the matter preceding clause 
     (i), by striking ``annually thereafter'' and inserting 
     ``thereafter during the years during which a report is 
     required to be submitted under section 3553(c) of title 44, 
     United States Code''; and
       (B) in paragraph (2)(B), in the matter preceding clause 
     (i)--
       (i) by striking ``annually thereafter'' and inserting 
     ``thereafter during the years during which a report is 
     required to be submitted under section 3553(c) of title 44, 
     United States Code''; and
       (ii) by striking ``the report required under section 
     3553(c) of title 44, United States Code'' and inserting 
     ``that report''.
       (3) NIST responsibilities.--Section 20(d)(3)(B) of the 
     National Institute of Standards and Technology Act (15 U.S.C. 
     278g-3(d)(3)(B)) is amended by striking ``annual''.
       (e) Federal System Incident Response.--
       (1) In general.--Chapter 35 of title 44, United States 
     Code, is amended by adding at the end the following:

           ``SUBCHAPTER IV--FEDERAL SYSTEM INCIDENT RESPONSE

     ``Sec. 3591. Definitions

       ``(a) In General.--Except as provided in subsection (b), 
     the definitions under sections 3502 and 3552 shall apply to 
     this subchapter.
       ``(b) Additional Definitions.--As used in this subchapter:
       ``(1) Appropriate reporting entities.--The term 
     `appropriate reporting entities' means--
       ``(A) the majority and minority leaders of the Senate;
       ``(B) the Speaker and minority leader of the House of 
     Representatives;
       ``(C) the Committee on Homeland Security and Governmental 
     Affairs of the Senate;
       ``(D) the Committee on Oversight and Reform of the House of 
     Representatives;
       ``(E) the Committee on Homeland Security of the House of 
     Representatives;
       ``(F) the appropriate authorization and appropriations 
     committees of Congress;
       ``(G) the Director;
       ``(H) the Director of the Cybersecurity and Infrastructure 
     Security Agency;
       ``(I) the National Cyber Director;
       ``(J) the Comptroller General of the United States; and
       ``(K) the inspector general of any impacted agency.
       ``(2) Awardee.--The term `awardee'--
       ``(A) means a person, business, or other entity that 
     receives a grant from, or is a party to a cooperative 
     agreement or an other transaction agreement with, an agency; 
     and
       ``(B) includes any subgrantee of a person, business, or 
     other entity described in subparagraph (A).
       ``(3) Breach.--The term `breach' means--
       ``(A) a compromise of the security, confidentiality, or 
     integrity of data in electronic form that results in 
     unauthorized access to, or an acquisition of, personal 
     information; or
       ``(B) a loss of data in electronic form that results in 
     unauthorized access to, or an acquisition of, personal 
     information.
       ``(4) Contractor.--The term `contractor' means--
       ``(A) a prime contractor of an agency or a subcontractor of 
     a prime contractor of an agency; and
       ``(B) any person or business that collects or maintains 
     information, including personally identifiable information, 
     on behalf of an agency.
       ``(5) Federal information.--The term `Federal information' 
     means information created, collected, processed, maintained, 
     disseminated, disclosed, or disposed of by or for the Federal 
     Government in any medium or form.
       ``(6) Federal information system.--The term `Federal 
     information system' means an information system used or 
     operated by an agency, a contractor, an awardee, or another 
     organization on behalf of an agency.
       ``(7) Intelligence community.--The term `intelligence 
     community' has the meaning given the term in section 3 of the 
     National Security Act of 1947 (50 U.S.C. 3003).
       ``(8) Nationwide consumer reporting agency.--The term 
     `nationwide consumer reporting agency' means a consumer 
     reporting agency described in section 603(p) of the Fair 
     Credit Reporting Act (15 U.S.C. 1681a(p)).
       ``(9) Vulnerability disclosure.--The term `vulnerability 
     disclosure' means a vulnerability identified under section 
     3559B.

     ``Sec. 3592. Notification of breach

       ``(a) Notification.--As expeditiously as practicable and 
     without unreasonable delay, and in any case not later than 45 
     days after an agency has a reasonable basis to conclude that 
     a breach has occurred, the head of the agency, in 
     consultation with a senior privacy officer of the agency, 
     shall--
       ``(1) determine whether notice to any individual 
     potentially affected by the breach is appropriate based on an 
     assessment of the risk of harm to the individual that 
     considers--
       ``(A) the nature and sensitivity of the personally 
     identifiable information affected by the breach;
       ``(B) the likelihood of access to and use of the personally 
     identifiable information affected by the breach;
       ``(C) the type of breach; and
       ``(D) any other factors determined by the Director; and
       ``(2) as appropriate, provide written notice in accordance 
     with subsection (b) to each individual potentially affected 
     by the breach--
       ``(A) to the last known mailing address of the individual; 
     or
       ``(B) through an appropriate alternative method of 
     notification that the head of the agency or a designated 
     senior-level individual of the agency selects based on 
     factors determined by the Director.
       ``(b) Contents of Notice.--Each notice of a breach provided 
     to an individual under subsection (a)(2) shall include--
       ``(1) a brief description of the rationale for the 
     determination that notice should be provided under subsection 
     (a);
       ``(2) if possible, a description of the types of personally 
     identifiable information affected by the breach;
       ``(3) contact information of the agency that may be used to 
     ask questions of the agency, which--
       ``(A) shall include an e-mail address or another digital 
     contact mechanism; and
       ``(B) may include a telephone number or a website;
       ``(4) information on any remedy being offered by the 
     agency;
       ``(5) any applicable educational materials relating to what 
     individuals can do in response to a breach that potentially 
     affects their personally identifiable information, including 
     relevant contact information for Federal law enforcement 
     agencies and each nationwide consumer reporting agency; and
       ``(6) any other appropriate information, as determined by 
     the head of the agency or established in guidance by the 
     Director.
       ``(c) Delay of Notification.--
       ``(1) In general.--The Attorney General, the Director of 
     National Intelligence, or the Secretary of Homeland Security 
     may delay a notification required under subsection (a) if the 
     notification would--
       ``(A) impede a criminal investigation or a national 
     security activity;
       ``(B) reveal sensitive sources and methods;
       ``(C) cause damage to national security; or
       ``(D) hamper security remediation actions.
       ``(2) Documentation.--
       ``(A) In general.--Any delay under paragraph (1) shall be 
     reported in writing to the Director, the Attorney General, 
     the Director of National Intelligence, the Secretary of 
     Homeland Security, the Director of the Cybersecurity and 
     Infrastructure Security Agency, and the head of the agency 
     and the inspector general of the agency that experienced the 
     breach.
       ``(B) Contents.--A report required under subparagraph (A) 
     shall include a written statement from the entity that 
     delayed the notification explaining the need for the delay.
       ``(C) Form.--The report required under subparagraph (A) 
     shall be unclassified but may include a classified annex.
       ``(3) Renewal.--A delay under paragraph (1) shall be for a 
     period of 60 days and may be renewed.
       ``(d) Update Notification.--If an agency determines there 
     is a significant change in the reasonable basis to conclude 
     that a breach occurred, a significant change to the 
     determination made under subsection (a)(1), or that it is 
     necessary to update the details of the information provided 
     to impacted individuals as described in subsection (b), the 
     agency shall as expeditiously as practicable and without 
     unreasonable delay, and in any case not later than 30 days 
     after such a determination, notify each individual who 
     received a notification pursuant to subsection (a) of those 
     changes.
       ``(e) Exemption From Notification.--
       ``(1) In general.--The head of an agency, in consultation 
     with the inspector general of the agency, may request an 
     exemption from the Director from complying with the 
     notification requirements under subsection (a) if the 
     information affected by the breach is determined by an 
     independent evaluation to be unreadable, including, as 
     appropriate, instances in which the information is--
       ``(A) encrypted; and
       ``(B) determined by the Director of the Cybersecurity and 
     Infrastructure Security Agency to be of sufficiently low risk 
     of exposure.
       ``(2) Approval.--The Director shall determine whether to 
     grant an exemption requested under paragraph (1) in 
     consultation with--
       ``(A) the Director of the Cybersecurity and Infrastructure 
     Security Agency; and
       ``(B) the Attorney General.
       ``(3) Documentation.--Any exemption granted by the Director 
     under paragraph (1) shall be reported in writing to the head 
     of the agency and the inspector general of the agency that 
     experienced the breach and the Director of the Cybersecurity 
     and Infrastructure Security Agency.
       ``(f) Rule of Construction.--Nothing in this section shall 
     be construed to limit--
       ``(1) the Director from issuing guidance relating to 
     notifications or the head of an agency from notifying 
     individuals potentially affected by breaches that are not 
     determined to be major incidents; or

[[Page S8474]]

       ``(2) the Director from issuing guidance relating to 
     notifications of major incidents or the head of an agency 
     from providing more information than described in subsection 
     (b) when notifying individuals potentially affected by 
     breaches.

     ``Sec. 3593. Congressional and Executive Branch reports

       ``(a) Initial Report.--
       ``(1) In general.--Not later than 72 hours after an agency 
     has a reasonable basis to conclude that a major incident 
     occurred, the head of the agency impacted by the major 
     incident shall submit to the appropriate reporting entities a 
     written report and, to the extent practicable, provide a 
     briefing to the Committee on Homeland Security and 
     Governmental Affairs of the Senate, the Committee on 
     Oversight and Reform of the House of Representatives, the 
     Committee on Homeland Security of the House of 
     Representatives, and the appropriate authorization and 
     appropriations committees of Congress, taking into account--
       ``(A) the information known at the time of the report;
       ``(B) the sensitivity of the details associated with the 
     major incident; and
       ``(C) the classification level of the information contained 
     in the report.
       ``(2) Contents.--A report required under paragraph (1) 
     shall include, in a manner that excludes or otherwise 
     reasonably protects personally identifiable information and 
     to the extent permitted by applicable law, including privacy 
     and statistical laws--
       ``(A) a summary of the information available about the 
     major incident, including how the major incident occurred, 
     information indicating that the major incident may be a 
     breach, and information relating to the major incident as a 
     breach, based on information available to agency officials as 
     of the date on which the agency submits the report;
       ``(B) if applicable, a description and any associated 
     documentation of any circumstances necessitating a delay in 
     or exemption to notification to individuals potentially 
     affected by the major incident under subsection (c) or (e) of 
     section 3592; and
       ``(C) if applicable, an assessment of the impacts to the 
     agency, the Federal Government, or the security of the United 
     States, based on information available to agency officials on 
     the date on which the agency submits the report.
       ``(b) Supplemental Report.--Within a reasonable amount of 
     time, but not later than 30 days after the date on which an 
     agency submits a written report under subsection (a), the 
     head of the agency shall provide to the appropriate reporting 
     entities written updates on the major incident and, to the 
     extent practicable, provide a briefing to the congressional 
     committees described in subsection (a)(1), including 
     summaries of--
       ``(1) vulnerabilities, means by which the major incident 
     occurred, and impacts to the agency relating to the major 
     incident;
       ``(2) any risk assessment and subsequent risk-based 
     security implementation of the affected information system 
     before the date on which the major incident occurred;
       ``(3) the status of compliance of the affected information 
     system with applicable security requirements at the time of 
     the major incident;
       ``(4) an estimate of the number of individuals potentially 
     affected by the major incident based on information available 
     to agency officials as of the date on which the agency 
     provides the update;
       ``(5) an assessment of the risk of harm to individuals 
     potentially affected by the major incident based on 
     information available to agency officials as of the date on 
     which the agency provides the update;
       ``(6) an update to the assessment of the risk to agency 
     operations, or to impacts on other agency or non-Federal 
     entity operations, affected by the major incident based on 
     information available to agency officials as of the date on 
     which the agency provides the update; and
       ``(7) the detection, response, and remediation actions of 
     the agency, including any support provided by the 
     Cybersecurity and Infrastructure Security Agency under 
     section 3594(d) and status updates on the notification 
     process described in section 3592(a), including any delay or 
     exemption described in subsection (c) or (e), respectively, 
     of section 3592, if applicable.
       ``(c) Update Report.--If the agency determines that there 
     is any significant change in the understanding of the agency 
     of the scope, scale, or consequence of a major incident for 
     which an agency submitted a written report under subsection 
     (a), the agency shall provide an updated report to the 
     appropriate reporting entities that includes information 
     relating to the change in understanding.
       ``(d) Annual Report.--Each agency shall submit as part of 
     the annual report required under section 3554(c)(1) of this 
     title a description of each major incident that occurred 
     during the 1-year period preceding the date on which the 
     report is submitted.
       ``(e) Delay and Exemption Report.--
       ``(1) In general.--The Director shall submit to the 
     appropriate notification entities an annual report on all 
     notification delays and exemptions granted pursuant to 
     subsections (c) and (d) of section 3592.
       ``(2) Component of other report.--The Director may submit 
     the report required under paragraph (1) as a component of the 
     annual report submitted under section 3597(b).
       ``(f) Report Delivery.--Any written report required to be 
     submitted under this section may be submitted in a paper or 
     electronic format.
       ``(g) Threat Briefing.--
       ``(1) In general.--Not later than 7 days after the date on 
     which an agency has a reasonable basis to conclude that a 
     major incident occurred, the head of the agency, jointly with 
     the National Cyber Director and any other Federal entity 
     determined appropriate by the National Cyber Director, shall 
     provide a briefing to the congressional committees described 
     in subsection (a)(1) on the threat causing the major 
     incident.
       ``(2) Components.--The briefing required under paragraph 
     (1)--
       ``(A) shall, to the greatest extent practicable, include an 
     unclassified component; and
       ``(B) may include a classified component.
       ``(h) Rule of Construction.--Nothing in this section shall 
     be construed to limit--
       ``(1) the ability of an agency to provide additional 
     reports or briefings to Congress; or
       ``(2) Congress from requesting additional information from 
     agencies through reports, briefings, or other means.

     ``Sec. 3594. Government information sharing and incident 
       response

       ``(a) In General.--
       ``(1) Incident reporting.--The head of each agency shall 
     provide any information relating to any incident, whether the 
     information is obtained by the Federal Government directly or 
     indirectly, to the Cybersecurity and Infrastructure Security 
     Agency and the Office of Management and Budget.
       ``(2) Contents.--A provision of information relating to an 
     incident made by the head of an agency under paragraph (1) 
     shall--
       ``(A) include detailed information about the safeguards 
     that were in place when the incident occurred;
       ``(B) whether the agency implemented the safeguards 
     described in subparagraph (A) correctly;
       ``(C) in order to protect against a similar incident, 
     identify--
       ``(i) how the safeguards described in subparagraph (A) 
     should be implemented differently; and
       ``(ii) additional necessary safeguards; and
       ``(D) include information to aid in incident response, such 
     as--
       ``(i) a description of the affected systems or networks;
       ``(ii) the estimated dates of when the incident occurred; 
     and
       ``(iii) information that could reasonably help identify the 
     party that conducted the incident.
       ``(3) Information sharing.--To the greatest extent 
     practicable, the Director of the Cybersecurity and 
     Infrastructure Security Agency shall share information 
     relating to an incident with any agencies that may be 
     impacted by the incident.
       ``(4) National security systems.--Each agency operating or 
     exercising control of a national security system shall share 
     information about incidents that occur on national security 
     systems with the Director of the Cybersecurity and 
     Infrastructure Security Agency to the extent consistent with 
     standards and guidelines for national security systems issued 
     in accordance with law and as directed by the President.
       ``(b) Compliance.--The information provided under 
     subsection (a) shall take into account the level of 
     classification of the information and any information sharing 
     limitations and protections, such as limitations and 
     protections relating to law enforcement, national security, 
     privacy, statistical confidentiality, or other factors 
     determined by the Director
       ``(c) Incident Response.--Each agency that has a reasonable 
     basis to conclude that a major incident occurred involving 
     Federal information in electronic medium or form, as defined 
     by the Director and not involving a national security system, 
     regardless of delays from notification granted for a major 
     incident, shall coordinate with the Cybersecurity and 
     Infrastructure Security Agency regarding--
       ``(1) incident response and recovery; and
       ``(2) recommendations for mitigating future incidents.

     ``Sec. 3595. Responsibilities of contractors and awardees

       ``(a) Notification.--
       ``(1) In general.--Unless otherwise specified in a 
     contract, grant, cooperative agreement, or an other 
     transaction agreement, any contractor or awardee of an agency 
     shall report to the agency within the same amount of time 
     such agency is required to report an incident to the 
     Cybersecurity and Infrastructure Security Agency, if the 
     contractor or awardee has a reasonable basis to conclude 
     that--
       ``(A) an incident or breach has occurred with respect to 
     Federal information collected, used, or maintained by the 
     contractor or awardee in connection with the contract, grant, 
     cooperative agreement, or other transaction agreement of the 
     contractor or awardee;
       ``(B) an incident or breach has occurred with respect to a 
     Federal information system used or operated by the contractor 
     or awardee in connection with the contract, grant, 
     cooperative agreement, or other transaction agreement of the 
     contractor or awardee; or
       ``(C) the contractor or awardee has received information 
     from the agency that the contractor or awardee is not 
     authorized to receive in connection with the contract, grant, 
     cooperative agreement, or other transaction agreement of the 
     contractor or awardee.

[[Page S8475]]

       ``(2) Procedures.--
       ``(A) Major incident.--Following a report of a breach or 
     major incident by a contractor or awardee under paragraph 
     (1), the agency, in consultation with the contractor or 
     awardee, shall carry out the requirements under sections 
     3592, 3593, and 3594 with respect to the major incident.
       ``(B) Incident.--Following a report of an incident by a 
     contractor or awardee under paragraph (1), an agency, in 
     consultation with the contractor or awardee, shall carry out 
     the requirements under section 3594 with respect to the 
     incident.
       ``(b) Effective Date.--This section shall apply on and 
     after the date that is 1 year after the date of enactment of 
     the Federal Information Security Modernization Act of 2021.

     ``Sec. 3596. Training

       ``(a) Covered Individual Defined.--In this section, the 
     term `covered individual' means an individual who obtains 
     access to Federal information or Federal information systems 
     because of the status of the individual as an employee, 
     contractor, awardee, volunteer, or intern of an agency.
       ``(b) Requirement.--The head of each agency shall develop 
     training for covered individuals on how to identify and 
     respond to an incident, including--
       ``(1) the internal process of the agency for reporting an 
     incident; and
       ``(2) the obligation of a covered individual to report to 
     the agency a confirmed major incident and any suspected 
     incident involving information in any medium or form, 
     including paper, oral, and electronic.
       ``(c) Inclusion in Annual Training.--The training developed 
     under subsection (b) may be included as part of an annual 
     privacy or security awareness training of an agency.

     ``Sec. 3597. Analysis and report on Federal incidents

       ``(a) Analysis of Federal Incidents.--
       ``(1) Quantitative and qualitative analyses.--The Director 
     of the Cybersecurity and Infrastructure Security Agency shall 
     develop, in consultation with the Director and the National 
     Cyber Director, and perform continuous monitoring and 
     quantitative and qualitative analyses of incidents at 
     agencies, including major incidents, including--
       ``(A) the causes of incidents, including--
       ``(i) attacker tactics, techniques, and procedures; and
       ``(ii) system vulnerabilities, including zero days, 
     unpatched systems, and information system misconfigurations;
       ``(B) the scope and scale of incidents at agencies;
       ``(C) cross Federal Government root causes of incidents at 
     agencies;
       ``(D) agency incident response, recovery, and remediation 
     actions and the effectiveness of those actions, as 
     applicable;
       ``(E) lessons learned and recommendations in responding to, 
     recovering from, remediating, and mitigating future 
     incidents; and
       ``(F) trends in cross-Federal Government cybersecurity and 
     incident response capabilities using the metrics established 
     under section 224(c) of the Cybersecurity Act of 2015 (6 
     U.S.C. 1522(c)).
       ``(2) Automated analysis.--The analyses developed under 
     paragraph (1) shall, to the greatest extent practicable, use 
     machine readable data, automation, and machine learning 
     processes.
       ``(3) Sharing of data and analysis.--
       ``(A) In general.--The Director shall share on an ongoing 
     basis the analyses required under this subsection with 
     agencies and the National Cyber Director to--
       ``(i) improve the understanding of cybersecurity risk of 
     agencies; and
       ``(ii) support the cybersecurity improvement efforts of 
     agencies.
       ``(B) Format.--In carrying out subparagraph (A), the 
     Director shall share the analyses--
       ``(i) in human-readable written products; and
       ``(ii) to the greatest extent practicable, in machine-
     readable formats in order to enable automated intake and use 
     by agencies.
       ``(b) Annual Report on Federal Incidents.--Not later than 2 
     years after the date of enactment of this section, and not 
     less frequently than annually thereafter, the Director of the 
     Cybersecurity and Infrastructure Security Agency, in 
     consultation with the Director and other Federal agencies as 
     appropriate, shall submit to the appropriate notification 
     entities a report that includes--
       ``(1) a summary of causes of incidents from across the 
     Federal Government that categorizes those incidents as 
     incidents or major incidents;
       ``(2) the quantitative and qualitative analyses of 
     incidents developed under subsection (a)(1) on an agency-by-
     agency basis and comprehensively across the Federal 
     Government, including--
       ``(A) a specific analysis of breaches; and
       ``(B) an analysis of the Federal Government's performance 
     against the metrics established under section 224(c) of the 
     Cybersecurity Act of 2015 (6 U.S.C. 1522(c)); and
       ``(3) an annex for each agency that includes--
       ``(A) a description of each major incident;
       ``(B) the total number of compromises of the agency; and
       ``(C) an analysis of the agency's performance against the 
     metrics established under section 224(c) of the Cybersecurity 
     Act of 2015 (6 U.S.C. 1522(c)).
       ``(c) Publication.--A version of each report submitted 
     under subsection (b) shall be made publicly available on the 
     website of the Cybersecurity and Infrastructure Security 
     Agency during the year in which the report is submitted.
       ``(d) Information Provided by Agencies.--
       ``(1) In general.--The analysis required under subsection 
     (a) and each report submitted under subsection (b) shall use 
     information provided by agencies under section 3594(a).
       ``(2) Noncompliance reports.--
       ``(A) In general.--Subject to subparagraph (B), during any 
     year during which the head of an agency does not provide data 
     for an incident to the Cybersecurity and Infrastructure 
     Security Agency in accordance with section 3594(a), the head 
     of the agency, in coordination with the Director of the 
     Cybersecurity and Infrastructure Security Agency and the 
     Director, shall submit to the appropriate reporting entities 
     a report that includes--
       ``(i) data for the incident; and
       ``(ii) the information described in subsection (b) with 
     respect to the agency.
       ``(B) Exception for national security systems.--The head of 
     an agency that owns or exercises control of a national 
     security system shall not include data for an incident that 
     occurs on a national security system in any report submitted 
     under subparagraph (A).
       ``(3) National security system reports.--
       ``(A) In general.--Annually, the head of an agency that 
     operates or exercises control of a national security system 
     shall submit a report that includes the information described 
     in subsection (b) with respect to the agency to the extent 
     that the submission is consistent with standards and 
     guidelines for national security systems issued in accordance 
     with law and as directed by the President to--
       ``(i) the majority and minority leaders of the Senate,
       ``(ii) the Speaker and minority leader of the House of 
     Representatives;
       ``(iii) the Committee on Homeland Security and Governmental 
     Affairs of the Senate;
       ``(iv) the Select Committee on Intelligence of the Senate;
       ``(v) the Committee on Armed Services of the Senate;
       ``(vi) the Committee on Appropriations of the Senate;
       ``(vii) the Committee on Oversight and Reform of the House 
     of Representatives;
       ``(viii) the Committee on Homeland Security of the House of 
     Representatives;
       ``(ix) the Permanent Select Committee on Intelligence of 
     the House of Representatives;
       ``(x) the Committee on Armed Services of the House of 
     Representatives; and
       ``(xi) the Committee on Appropriations of the House of 
     Representatives.
       ``(B) Classified form.--A report required under 
     subparagraph (A) may be submitted in a classified form.
       ``(e) Requirement for Compiling Information.--In publishing 
     the public report required under subsection (c), the Director 
     of the Cybersecurity and Infrastructure Security Agency shall 
     sufficiently compile information such that no specific 
     incident of an agency can be identified, except with the 
     concurrence of the Director of the Office of Management and 
     Budget and in consultation with the impacted agency.

     ``Sec. 3598. Major incident definition

       ``(a) In General.--Not later than 180 days after the date 
     of enactment of the Federal Information Security 
     Modernization Act of 2021, the Director, in coordination with 
     the Director of the Cybersecurity and Infrastructure Security 
     Agency and the National Cyber Director, shall develop and 
     promulgate guidance on the definition of the term `major 
     incident' for the purposes of subchapter II and this 
     subchapter.
       ``(b) Requirements.--With respect to the guidance issued 
     under subsection (a), the definition of the term `major 
     incident' shall--
       ``(1) include, with respect to any information collected or 
     maintained by or on behalf of an agency or an information 
     system used or operated by an agency or by a contractor of an 
     agency or another organization on behalf of an agency--
       ``(A) any incident the head of the agency determines is 
     likely to have an impact on--
       ``(i) the national security, homeland security, or economic 
     security of the United States; or
       ``(ii) the civil liberties or public health and safety of 
     the people of the United States;
       ``(B) any incident the head of the agency determines likely 
     to result in an inability for the agency, a component of the 
     agency, or the Federal Government, to provide 1 or more 
     critical services;
       ``(C) any incident that the head of an agency, in 
     consultation with a senior privacy officer of the agency, 
     determines is likely to have a significant privacy impact on 
     1 or more individual;
       ``(D) any incident that the head of the agency, in 
     consultation with a senior privacy official of the agency, 
     determines is likely to have a substantial privacy impact on 
     a significant number of individuals;
       ``(E) any incident the head of the agency determines 
     impacts the operations of a high value asset owned or 
     operated by the agency;
       ``(F) any incident involving the exposure of sensitive 
     agency information to a foreign entity, such as the 
     communications of the head of the agency, the head of a 
     component of the agency, or the direct reports of the head of 
     the agency or the head of a component of the agency; and
       ``(G) any other type of incident determined appropriate by 
     the Director;

[[Page S8476]]

       ``(2) stipulate that the National Cyber Director shall 
     declare a major incident at each agency impacted by an 
     incident if the Director of the Cybersecurity and 
     Infrastructure Security Agency determines that an incident--
       ``(A) occurs at not less than 2 agencies; and
       ``(B) is enabled by--
       ``(i) a common technical root cause, such as a supply chain 
     compromise, a common software or hardware vulnerability; or
       ``(ii) the related activities of a common threat actor; and
       ``(3) stipulate that, in determining whether an incident 
     constitutes a major incident because that incident--
       ``(A) is any incident described in paragraph (1), the head 
     of an agency shall consult with the Director of the 
     Cybersecurity and Infrastructure Security Agency;
       ``(B) is an incident described in paragraph (1)(A), the 
     head of the agency shall consult with the National Cyber 
     Director; and
       ``(C) is an incident described in subparagraph (C) or (D) 
     of paragraph (1), the head of the agency shall consult with--
       ``(i) the Privacy and Civil Liberties Oversight Board; and
       ``(ii) the Chair of the Federal Trade Commission.
       ``(c) Significant Number of Individuals.--In determining 
     what constitutes a significant number of individuals under 
     subsection (b)(1)(D), the Director--
       ``(1) may determine a threshold for a minimum number of 
     individuals that constitutes a significant amount; and
       ``(2) may not determine a threshold described in paragraph 
     (1) that exceeds 5,000 individuals.
       ``(d) Evaluation and Updates.--Not later than 2 years after 
     the date of enactment of the Federal Information Security 
     Modernization Act of 2021, and not less frequently than every 
     2 years thereafter, the Director shall submit to the 
     Committee on Homeland Security and Governmental Affairs of 
     the Senate and the Committee on Oversight and Reform of the 
     House of Representatives an evaluation, which shall include--
       ``(1) an update, if necessary, to the guidance issued under 
     subsection (a);
       ``(2) the definition of the term `major incident' included 
     in the guidance issued under subsection (a); and
       ``(3) an explanation of, and the analysis that led to, the 
     definition described in paragraph (2).''.
       (2) Clerical amendment.--The table of sections for chapter 
     35 of title 44, United States Code, is amended by adding at 
     the end the following:

           ``subchapter iv--federal system incident response

``3591. Definitions.
``3592. Notification of breach.
``3593. Congressional and Executive Branch reports.
``3594. Government information sharing and incident response.
``3595. Responsibilities of contractors and awardees.
``3596. Training.
``3597. Analysis and report on Federal incidents.
``3598. Major incident definition.''.

     SEC. 5122. AMENDMENTS TO SUBTITLE III OF TITLE 40.

       (a) Modernizing Government Technology.--Subtitle G of title 
     X of Division A of the National Defense Authorization Act for 
     Fiscal Year 2018 (40 U.S.C. 11301 note) is amended--
       (1) in section 1077(b)--
       (A) in paragraph (5)(A), by inserting ``improving the 
     cybersecurity of systems and'' before ``cost savings 
     activities''; and
       (B) in paragraph (7)--
       (i) in the paragraph heading, by striking ``cio'' and 
     inserting ``CIO'';
       (ii) by striking ``In evaluating projects'' and inserting 
     the following:
       ``(A) Consideration of guidance.--In evaluating projects'';
       (iii) in subparagraph (A), as so designated, by striking 
     ``under section 1094(b)(1)'' and inserting ``by the 
     Director''; and
       (iv) by adding at the end the following:
       ``(B) Consultation.--In using funds under paragraph (3)(A), 
     the Chief Information Officer of the covered agency shall 
     consult with the necessary stakeholders to ensure the project 
     appropriately addresses cybersecurity risks, including the 
     Director of the Cybersecurity and Infrastructure Security 
     Agency, as appropriate.''; and
       (2) in section 1078--
       (A) by striking subsection (a) and inserting the following:
       ``(a) Definitions.--In this section:
       ``(1) Agency.--The term `agency' has the meaning given the 
     term in section 551 of title 5, United States Code.
       ``(2) High value asset.--The term `high value asset' has 
     the meaning given the term in section 3552 of title 44, 
     United States Code.'';
       (B) in subsection (b), by adding at the end the following:
       ``(8) Proposal evaluation.--The Director shall--
       ``(A) give consideration for the use of amounts in the Fund 
     to improve the security of high value assets; and
       ``(B) require that any proposal for the use of amounts in 
     the Fund includes a cybersecurity plan, including a supply 
     chain risk management plan, to be reviewed by the member of 
     the Technology Modernization Board described in subsection 
     (c)(5)(C).''; and
       (C) in subsection (c)--
       (i) in paragraph (2)(A)(i), by inserting ``, including a 
     consideration of the impact on high value assets'' after 
     ``operational risks'';
       (ii) in paragraph (5)--

       (I) in subparagraph (A), by striking ``and'' at the end;
       (II) in subparagraph (B), by striking the period at the end 
     and inserting ``and''; and
       (III) by adding at the end the following:

       ``(C) a senior official from the Cybersecurity and 
     Infrastructure Security Agency of the Department of Homeland 
     Security, appointed by the Director.''; and
       (iii) in paragraph (6)(A), by striking ``shall be--'' and 
     all that follows through ``4 employees'' and inserting 
     ``shall be 4 employees''.
       (b) Subchapter I.--Subchapter I of subtitle III of title 
     40, United States Code, is amended--
       (1) in section 11302--
       (A) in subsection (b), by striking ``use, security, and 
     disposal of'' and inserting ``use, and disposal of, and, in 
     consultation with the Director of the Cybersecurity and 
     Infrastructure Security Agency and the National Cyber 
     Director, promote and improve the security of,'';
       (B) in subsection (c)--
       (i) in paragraph (3)--

       (I) in subparagraph (A)--

       (aa) by striking ``including data'' and inserting ``which 
     shall--
       ``(i) include data'';
       (bb) in clause (i), as so designated, by striking ``, and 
     performance'' and inserting ``security, and performance; 
     and''; and
       (cc) by adding at the end the following:
       ``(ii) specifically denote cybersecurity funding under the 
     risk-based cyber budget model developed pursuant to section 
     3553(a)(7) of title 44.''; and

       (II) in subparagraph (B), adding at the end the following:

       ``(iii) The Director shall provide to the National Cyber 
     Director any cybersecurity funding information described in 
     subparagraph (A)(ii) that is provided to the Director under 
     clause (ii) of this subparagraph.''; and
       (ii) in paragraph (4)(B), in the matter preceding clause 
     (i), by inserting ``not later than 30 days after the date on 
     which the review under subparagraph (A) is completed,'' 
     before ``the Administrator'';
       (C) in subsection (f)--
       (i) by striking ``heads of executive agencies to develop'' 
     and inserting ``heads of executive agencies to--
       ``(1) develop'';
       (ii) in paragraph (1), as so designated, by striking the 
     period at the end and inserting ``; and''; and
       (iii) by adding at the end the following:
       ``(2) consult with the Director of the Cybersecurity and 
     Infrastructure Security Agency for the development and use of 
     supply chain security best practices.''; and
       (D) in subsection (h), by inserting ``, including 
     cybersecurity performances,'' after ``the performances''; and
       (2) in section 11303(b)--
       (A) in paragraph (2)(B)--
       (i) in clause (i), by striking ``or'' at the end;
       (ii) in clause (ii), by adding ``or'' at the end; and
       (iii) by adding at the end the following:
       ``(iii) whether the function should be performed by a 
     shared service offered by another executive agency;''; and
       (B) in paragraph (5)(B)(i), by inserting ``, while taking 
     into account the risk-based cyber budget model developed 
     pursuant to section 3553(a)(7) of title 44'' after ``title 
     31''.
       (c) Subchapter II.--Subchapter II of subtitle III of title 
     40, United States Code, is amended--
       (1) in section 11312(a), by inserting ``, including 
     security risks'' after ``managing the risks'';
       (2) in section 11313(1), by striking ``efficiency and 
     effectiveness'' and inserting ``efficiency, security, and 
     effectiveness'';
       (3) in section 11315, by adding at the end the following:
       ``(d) Component Agency Chief Information Officers.--The 
     Chief Information Officer or an equivalent official of a 
     component agency shall report to--
       ``(1) the Chief Information Officer designated under 
     section 3506(a)(2) of title 44 or an equivalent official of 
     the agency of which the component agency is a component; and
       ``(2) the head of the component agency.'';
       (4) in section 11317, by inserting ``security,'' before 
     ``or schedule''; and
       (5) in section 11319(b)(1), in the paragraph heading, by 
     striking ``CIOS'' and inserting ``Chief information 
     officers''.
       (d) Subchapter III.--Section 11331 of title 40, United 
     States Code, is amended--
       (1) in subsection (a), by striking ``section 3532(b)(1)'' 
     and inserting ``section 3552(b)'';
       (2) in subsection (b)(1)(A), by striking ``the Secretary of 
     Homeland Security'' and inserting ``the Director of the 
     Cybersecurity and Infrastructure Security Agency'';
       (3) by striking subsection (c) and inserting the following:
       ``(c) Application of More Stringent Standards.--
       ``(1) In general.--The head of an agency shall--
       ``(A) evaluate, in consultation with the senior agency 
     information security officers, the need to employ standards 
     for cost-effective, risk-based information security for all 
     systems, operations, and assets within or under the 
     supervision of the agency that are more stringent than the 
     standards promulgated by the Director under this section, if 
     such standards contain, at a minimum, the

[[Page S8477]]

     provisions of those applicable standards made compulsory and 
     binding by the Director; and
       ``(B) to the greatest extent practicable and if the head of 
     the agency determines that the standards described in 
     subparagraph (A) are necessary, employ those standards.
       ``(2) Evaluation of more stringent standards.--In 
     evaluating the need to employ more stringent standards under 
     paragraph (1), the head of an agency shall consider available 
     risk information, such as--
       ``(A) the status of cybersecurity remedial actions of the 
     agency;
       ``(B) any vulnerability information relating to agency 
     systems that is known to the agency;
       ``(C) incident information of the agency;
       ``(D) information from--
       ``(i) penetration testing performed under section 3559A of 
     title 44; and
       ``(ii) information from the vulnerability disclosure 
     program established under section 3559B of title 44;
       ``(E) agency threat hunting results under section 5145 of 
     the Federal Information Security Modernization Act of 2021;
       ``(F) Federal and non-Federal cyber threat intelligence;
       ``(G) data on compliance with standards issued under this 
     section;
       ``(H) agency system risk assessments performed under 
     section 3554(a)(1)(A) of title 44; and
       ``(I) any other information determined relevant by the head 
     of the agency.'';
       (4) in subsection (d)(2)--
       (A) in the paragraph heading, by striking ``Notice and 
     comment'' and inserting ``Consultation, notice, and 
     comment'';
       (B) by inserting ``promulgate,'' before ``significantly 
     modify''; and
       (C) by striking ``shall be made after the public is given 
     an opportunity to comment on the Director's proposed 
     decision.'' and inserting ``shall be made--
       ``(A) for a decision to significantly modify or not 
     promulgate such a proposed standard, after the public is 
     given an opportunity to comment on the Director's proposed 
     decision;
       ``(B) in consultation with the Chief Information Officers 
     Council, the Director of the Cybersecurity and Infrastructure 
     Security Agency, the National Cyber Director, the Comptroller 
     General of the United States, and the Council of the 
     Inspectors General on Integrity and Efficiency;
       ``(C) considering the Federal risk assessments performed 
     under section 3553(i) of title 44; and
       ``(D) considering the extent to which the proposed standard 
     reduces risk relative to the cost of implementation of the 
     standard.''; and
       (5) by adding at the end the following:
       ``(e) Review of Office of Management and Budget Guidance 
     and Policy.--
       ``(1) Conduct of review.--
       ``(A) In general.--Not less frequently than once every 3 
     years, the Director of the Office of Management and Budget, 
     in consultation with the Chief Information Officers Council, 
     the Director of the Cybersecurity and Infrastructure Security 
     Agency, the National Cyber Director, the Comptroller General 
     of the United States, and the Council of the Inspectors 
     General on Integrity and Efficiency shall review the efficacy 
     of the guidance and policy promulgated by the Director in 
     reducing cybersecurity risks, including an assessment of the 
     requirements for agencies to report information to the 
     Director, and determine whether any changes to that guidance 
     or policy is appropriate.
       ``(B) Federal risk assessments.--In conducting the review 
     described in subparagraph (A), the Director shall consider 
     the Federal risk assessments performed under section 3553(i) 
     of title 44.
       ``(2) Updated guidance.--Not later than 90 days after the 
     date on which a review is completed under paragraph (1), the 
     Director of the Office of Management and Budget shall issue 
     updated guidance or policy to agencies determined appropriate 
     by the Director, based on the results of the review.
       ``(3) Public report.--Not later than 30 days after the date 
     on which a review is completed under paragraph (1), the 
     Director of the Office of Management and Budget shall make 
     publicly available a report that includes--
       ``(A) an overview of the guidance and policy promulgated 
     under this section that is currently in effect;
       ``(B) the cybersecurity risk mitigation, or other 
     cybersecurity benefit, offered by each guidance or policy 
     document described in subparagraph (A); and
       ``(C) a summary of the guidance or policy to which changes 
     were determined appropriate during the review and what the 
     changes are anticipated to include.
       ``(4) Congressional briefing.--Not later than 30 days after 
     the date on which a review is completed under paragraph (1), 
     the Director shall provide to the Committee on Homeland 
     Security and Governmental Affairs of the Senate and the 
     Committee on Oversight and Reform of the House of 
     Representatives a briefing on the review.
       ``(f) Automated Standard Implementation Verification.--When 
     the Director of the National Institute of Standards and 
     Technology issues a proposed standard pursuant to paragraphs 
     (2) and (3) of section 20(a) of the National Institute of 
     Standards and Technology Act (15 U.S.C. 278g-3(a)), the 
     Director of the National Institute of Standards and 
     Technology shall consider developing and, if appropriate and 
     practical, develop, in consultation with the Director of the 
     Cybersecurity and Infrastructure Security Agency, 
     specifications to enable the automated verification of the 
     implementation of the controls within the standard.''.

     SEC. 5123. ACTIONS TO ENHANCE FEDERAL INCIDENT RESPONSE.

       (a) Responsibilities of the Cybersecurity and 
     Infrastructure Security Agency.--
       (1) In general.--Not later than 180 days after the date of 
     enactment of this Act, the Director of the Cybersecurity and 
     Infrastructure Security Agency shall--
       (A) develop a plan for the development of the analysis 
     required under section 3597(a) of title 44, United States 
     Code, as added by this division, and the report required 
     under subsection (b) of that section that includes--
       (i) a description of any challenges the Director 
     anticipates encountering; and
       (ii) the use of automation and machine-readable formats for 
     collecting, compiling, monitoring, and analyzing data; and
       (B) provide to the appropriate congressional committees a 
     briefing on the plan developed under subparagraph (A).
       (2) Briefing.--Not later than 1 year after the date of 
     enactment of this Act, the Director of the Cybersecurity and 
     Infrastructure Security Agency shall provide to the 
     appropriate congressional committees a briefing on--
       (A) the execution of the plan required under paragraph 
     (1)(A); and
       (B) the development of the report required under section 
     3597(b) of title 44, United States Code, as added by this 
     division.
       (b) Responsibilities of the Director of the Office of 
     Management and Budget.--
       (1) FISMA.--Section 2 of the Federal Information Security 
     Modernization Act of 2014 (44 U.S.C. 3554 note) is amended--
       (A) by striking subsection (b); and
       (B) by redesignating subsections (c) through (f) as 
     subsections (b) through (e), respectively.
       (2) Incident data sharing.--
       (A) In general.--The Director shall develop guidance, to be 
     updated not less frequently than once every 2 years, on the 
     content, timeliness, and format of the information provided 
     by agencies under section 3594(a) of title 44, United States 
     Code, as added by this division.
       (B) Requirements.--The guidance developed under 
     subparagraph (A) shall--
       (i) prioritize the availability of data necessary to 
     understand and analyze--

       (I) the causes of incidents;
       (II) the scope and scale of incidents within the 
     environments and systems of an agency;
       (III) a root cause analysis of incidents that--

       (aa) are common across the Federal Government; or
       (bb) have a Government-wide impact;

       (IV) agency response, recovery, and remediation actions and 
     the effectiveness of those actions; and
       (V) the impact of incidents;

       (ii) enable the efficient development of--

       (I) lessons learned and recommendations in responding to, 
     recovering from, remediating, and mitigating future 
     incidents; and
       (II) the report on Federal incidents required under section 
     3597(b) of title 44, United States Code, as added by this 
     division;

       (iii) include requirements for the timeliness of data 
     production; and
       (iv) include requirements for using automation and machine-
     readable data for data sharing and availability.
       (3) Guidance on responding to information requests.--Not 
     later than 1 year after the date of enactment of this Act, 
     the Director shall develop guidance for agencies to implement 
     the requirement under section 3594(c) of title 44, United 
     States Code, as added by this division, to provide 
     information to other agencies experiencing incidents.
       (4) Standard guidance and templates.--Not later than 1 year 
     after the date of enactment of this Act, the Director, in 
     consultation with the Director of the Cybersecurity and 
     Infrastructure Security Agency, shall develop guidance and 
     templates, to be reviewed and, if necessary, updated not less 
     frequently than once every 2 years, for use by Federal 
     agencies in the activities required under sections 3592, 
     3593, and 3596 of title 44, United States Code, as added by 
     this division.
       (5) Contractor and awardee guidance.--
       (A) In general.--Not later than 1 year after the date of 
     enactment of this Act, the Director, in coordination with the 
     Secretary of Homeland Security, the Secretary of Defense, the 
     Administrator of General Services, and the heads of other 
     agencies determined appropriate by the Director, shall issue 
     guidance to Federal agencies on how to deconflict, to the 
     greatest extent practicable, existing regulations, policies, 
     and procedures relating to the responsibilities of 
     contractors and awardees established under section 3595 of 
     title 44, United States Code, as added by this division.
       (B) Existing processes.--To the greatest extent 
     practicable, the guidance issued under subparagraph (A) shall 
     allow contractors and awardees to use existing processes for 
     notifying Federal agencies of incidents involving information 
     of the Federal Government.
       (6) Updated briefings.--Not less frequently than once every 
     2 years, the Director shall provide to the appropriate 
     congressional committees an update on the guidance and 
     templates developed under paragraphs (2) through (4).

[[Page S8478]]

       (c) Update to the Privacy Act of 1974.--Section 552a(b) of 
     title 5, United States Code (commonly known as the ``Privacy 
     Act of 1974'') is amended--
       (1) in paragraph (11), by striking ``or'' at the end;
       (2) in paragraph (12), by striking the period at the end 
     and inserting ``; or''; and
       (3) by adding at the end the following:
       ``(13) to another agency in furtherance of a response to an 
     incident (as defined in section 3552 of title 44) and 
     pursuant to the information sharing requirements in section 
     3594 of title 44 if the head of the requesting agency has 
     made a written request to the agency that maintains the 
     record specifying the particular portion desired and the 
     activity for which the record is sought.''.

     SEC. 5124. ADDITIONAL GUIDANCE TO AGENCIES ON FISMA UPDATES.

       Not later than 1 year after the date of enactment of this 
     Act, the Director, in coordination with the Director of the 
     Cybersecurity and Infrastructure Security Agency, shall issue 
     guidance for agencies on--
       (1) performing the ongoing and continuous agency system 
     risk assessment required under section 3554(a)(1)(A) of title 
     44, United States Code, as amended by this division;
       (2) implementing additional cybersecurity procedures, which 
     shall include resources for shared services;
       (3) establishing a process for providing the status of each 
     remedial action under section 3554(b)(7) of title 44, United 
     States Code, as amended by this division, to the Director and 
     the Cybersecurity and Infrastructure Security Agency using 
     automation and machine-readable data, as practicable, which 
     shall include--
       (A) specific guidance for the use of automation and 
     machine-readable data; and
       (B) templates for providing the status of the remedial 
     action;
       (4) interpreting the definition of ``high value asset'' 
     under section 3552 of title 44, United States Code, as 
     amended by this division; and
       (5) a requirement to coordinate with inspectors general of 
     agencies to ensure consistent understanding and application 
     of agency policies for the purpose of evaluations by 
     inspectors general.

     SEC. 5125. AGENCY REQUIREMENTS TO NOTIFY PRIVATE SECTOR 
                   ENTITIES IMPACTED BY INCIDENTS.

       (a) Definitions.--In this section:
       (1) Reporting entity.--The term ``reporting entity'' means 
     private organization or governmental unit that is required by 
     statute or regulation to submit sensitive information to an 
     agency.
       (2) Sensitive information.--The term ``sensitive 
     information'' has the meaning given the term by the Director 
     in guidance issued under subsection (b).
       (b) Guidance on Notification of Reporting Entities.--Not 
     later than 180 days after the date of enactment of this Act, 
     the Director shall issue guidance requiring the head of each 
     agency to notify a reporting entity of an incident that is 
     likely to substantially affect--
       (1) the confidentiality or integrity of sensitive 
     information submitted by the reporting entity to the agency 
     pursuant to a statutory or regulatory requirement; or
       (2) the agency information system or systems used in the 
     transmission or storage of the sensitive information 
     described in paragraph (1).

               TITLE LII--IMPROVING FEDERAL CYBERSECURITY

     SEC. 5141. MOBILE SECURITY STANDARDS.

       (a) In General.--Not later than 1 year after the date of 
     enactment of this Act, the Director shall--
       (1) evaluate mobile application security guidance 
     promulgated by the Director; and
       (2) issue guidance to secure mobile devices, including for 
     mobile applications, for every agency.
       (b) Contents.--The guidance issued under subsection (a)(2) 
     shall include--
       (1) a requirement, pursuant to section 3506(b)(4) of title 
     44, United States Code, for every agency to maintain a 
     continuous inventory of every--
       (A) mobile device operated by or on behalf of the agency; 
     and
       (B) vulnerability identified by the agency associated with 
     a mobile device; and
       (2) a requirement for every agency to perform continuous 
     evaluation of the vulnerabilities described in paragraph 
     (1)(B) and other risks associated with the use of 
     applications on mobile devices.
       (c) Information Sharing.--The Director, in coordination 
     with the Director of the Cybersecurity and Infrastructure 
     Security Agency, shall issue guidance to agencies for sharing 
     the inventory of the agency required under subsection (b)(1) 
     with the Director of the Cybersecurity and Infrastructure 
     Security Agency, using automation and machine-readable data 
     to the greatest extent practicable.
       (d) Briefing.--Not later than 60 days after the date on 
     which the Director issues guidance under subsection (a)(2), 
     the Director, in coordination with the Director of the 
     Cybersecurity and Infrastructure Security Agency, shall 
     provide to the appropriate congressional committees a 
     briefing on the guidance.

     SEC. 5142. DATA AND LOGGING RETENTION FOR INCIDENT RESPONSE.

       (a) Recommendations.--Not later than 2 years after the date 
     of enactment of this Act, and not less frequently than every 
     2 years thereafter, the Director of the Cybersecurity and 
     Infrastructure Security Agency, in consultation with the 
     Attorney General, shall submit to the Director 
     recommendations on requirements for logging events on agency 
     systems and retaining other relevant data within the systems 
     and networks of an agency.
       (b) Contents.--The recommendations provided under 
     subsection (a) shall include--
       (1) the types of logs to be maintained;
       (2) the time periods to retain the logs and other relevant 
     data;
       (3) the time periods for agencies to enable recommended 
     logging and security requirements;
       (4) how to ensure the confidentiality, integrity, and 
     availability of logs;
       (5) requirements to ensure that, upon request, in a manner 
     that excludes or otherwise reasonably protects personally 
     identifiable information, and to the extent permitted by 
     applicable law (including privacy and statistical laws), 
     agencies provide logs to--
       (A) the Director of the Cybersecurity and Infrastructure 
     Security Agency for a cybersecurity purpose; and
       (B) the Federal Bureau of Investigation to investigate 
     potential criminal activity; and
       (6) requirements to ensure that, subject to compliance with 
     statistical laws and other relevant data protection 
     requirements, the highest level security operations center of 
     each agency has visibility into all agency logs.
       (c) Guidance.--Not later than 90 days after receiving the 
     recommendations submitted under subsection (a), the Director, 
     in consultation with the Director of the Cybersecurity and 
     Infrastructure Security Agency and the Attorney General, 
     shall, as determined to be appropriate by the Director, 
     update guidance to agencies regarding requirements for 
     logging, log retention, log management, sharing of log data 
     with other appropriate agencies, or any other logging 
     activity determined to be appropriate by the Director.

     SEC. 5143. CISA AGENCY ADVISORS.

       (a) In General.--Not later than 120 days after the date of 
     enactment of this Act, the Director of the Cybersecurity and 
     Infrastructure Security Agency shall assign not less than 1 
     cybersecurity professional employed by the Cybersecurity and 
     Infrastructure Security Agency to be the Cybersecurity and 
     Infrastructure Security Agency advisor to the senior agency 
     information security officer of each agency.
       (b) Qualifications.--Each advisor assigned under subsection 
     (a) shall have knowledge of--
       (1) cybersecurity threats facing agencies, including any 
     specific threats to the assigned agency;
       (2) performing risk assessments of agency systems; and
       (3) other Federal cybersecurity initiatives.
       (c) Duties.--The duties of each advisor assigned under 
     subsection (a) shall include--
       (1) providing ongoing assistance and advice, as requested, 
     to the agency Chief Information Officer;
       (2) serving as an incident response point of contact 
     between the assigned agency and the Cybersecurity and 
     Infrastructure Security Agency; and
       (3) familiarizing themselves with agency systems, 
     processes, and procedures to better facilitate support to the 
     agency in responding to incidents.
       (d) Limitation.--An advisor assigned under subsection (a) 
     shall not be a contractor.
       (e) Multiple Assignments.--One individual advisor may be 
     assigned to multiple agency Chief Information Officers under 
     subsection (a).

     SEC. 5144. FEDERAL PENETRATION TESTING POLICY.

       (a) In General.--Subchapter II of chapter 35 of title 44, 
     United States Code, is amended by adding at the end the 
     following:

     ``Sec. 3559A. Federal penetration testing

       ``(a) Definitions.--In this section:
       ``(1) Agency operational plan.--The term `agency 
     operational plan' means a plan of an agency for the use of 
     penetration testing.
       ``(2) Rules of engagement.--The term `rules of engagement' 
     means a set of rules established by an agency for the use of 
     penetration testing.
       ``(b) Guidance.--
       ``(1) In general.--The Director shall issue guidance that--
       ``(A) requires agencies to use, when and where appropriate, 
     penetration testing on agency systems; and
       ``(B) requires agencies to develop an agency operational 
     plan and rules of engagement that meet the requirements under 
     subsection (c).
       ``(2) Penetration testing guidance.--The guidance issued 
     under this section shall--
       ``(A) permit an agency to use, for the purpose of 
     performing penetration testing--
       ``(i) a shared service of the agency or another agency; or
       ``(ii) an external entity, such as a vendor; and
       ``(B) require agencies to provide the rules of engagement 
     and results of penetration testing to the Director and the 
     Director of the Cybersecurity and Infrastructure Security 
     Agency, without regard to the status of the entity that 
     performs the penetration testing.
       ``(c) Agency Plans and Rules of Engagement.--The agency 
     operational plan and rules of engagement of an agency shall--
       ``(1) require the agency to--
       ``(A) perform penetration testing on the high value assets 
     of the agency; or

[[Page S8479]]

       ``(B) coordinate with the Director of the Cybersecurity and 
     Infrastructure Security Agency to ensure that penetration 
     testing is being performed;
       ``(2) establish guidelines for avoiding, as a result of 
     penetration testing--
       ``(A) adverse impacts to the operations of the agency;
       ``(B) adverse impacts to operational environments and 
     systems of the agency; and
       ``(C) inappropriate access to data;
       ``(3) require the results of penetration testing to include 
     feedback to improve the cybersecurity of the agency; and
       ``(4) include mechanisms for providing consistently 
     formatted, and, if applicable, automated and machine-
     readable, data to the Director and the Director of the 
     Cybersecurity and Infrastructure Security Agency.
       ``(d) Responsibilities of CISA.--The Director of the 
     Cybersecurity and Infrastructure Security Agency shall--
       ``(1) establish a process to assess the performance of 
     penetration testing by both Federal and non-Federal entities 
     that establishes minimum quality controls for penetration 
     testing;
       ``(2) develop operational guidance for instituting 
     penetration testing programs at agencies;
       ``(3) develop and maintain a centralized capability to 
     offer penetration testing as a service to Federal and non-
     Federal entities; and
       ``(4) provide guidance to agencies on the best use of 
     penetration testing resources.
       ``(e) Responsibilities of OMB.--The Director, in 
     coordination with the Director of the Cybersecurity and 
     Infrastructure Security Agency, shall--
       ``(1) not less frequently than annually, inventory all 
     Federal penetration testing assets; and
       ``(2) develop and maintain a standardized process for the 
     use of penetration testing.
       ``(f) Prioritization of Penetration Testing Resources.--
       ``(1) In general.--The Director, in coordination with the 
     Director of the Cybersecurity and Infrastructure Security 
     Agency, shall develop a framework for prioritizing Federal 
     penetration testing resources among agencies.
       ``(2) Considerations.--In developing the framework under 
     this subsection, the Director shall consider--
       ``(A) agency system risk assessments performed under 
     section 3554(a)(1)(A);
       ``(B) the Federal risk assessment performed under section 
     3553(i);
       ``(C) the analysis of Federal incident data performed under 
     section 3597; and
       ``(D) any other information determined appropriate by the 
     Director or the Director of the Cybersecurity and 
     Infrastructure Security Agency.
       ``(g) Exception for National Security Systems.--The 
     guidance issued under subsection (b) shall not apply to 
     national security systems.
       ``(h) Delegation of Authority for Certain Systems.--The 
     authorities of the Director described in subsection (b) shall 
     be delegated--
       ``(1) to the Secretary of Defense in the case of systems 
     described in section 3553(e)(2); and
       ``(2) to the Director of National Intelligence in the case 
     of systems described in 3553(e)(3).''.
       (b) Deadline for Guidance.--Not later than 180 days after 
     the date of enactment of this Act, the Director shall issue 
     the guidance required under section 3559A(b) of title 44, 
     United States Code, as added by subsection (a).
       (c) Clerical Amendment.--The table of sections for chapter 
     35 of title 44, United States Code, is amended by adding 
     after the item relating to section 3559 the following:

``3559A. Federal penetration testing.''.
       (d) Penetration Testing by the Secretary of Homeland 
     Security.--Section 3553(b) of title 44, United States Code, 
     as amended by section 5121, is further amended--
       (1) in paragraph (8)(B), by striking ``and'' at the end;
       (2) by redesignating paragraph (9) as paragraph (10); and
       (3) by inserting after paragraph (8) the following:
       ``(9) performing penetration testing with or without 
     advance notice to, or authorization from, agencies, to 
     identify vulnerabilities within Federal information systems; 
     and''.

     SEC. 5145. ONGOING THREAT HUNTING PROGRAM.

       (a) Threat Hunting Program.--
       (1) In general.--Not later than 540 days after the date of 
     enactment of this Act, the Director of the Cybersecurity and 
     Infrastructure Security Agency shall establish a program to 
     provide ongoing, hypothesis-driven threat-hunting services on 
     the network of each agency.
       (2) Plan.--Not later than 180 days after the date of 
     enactment of this Act, the Director of the Cybersecurity and 
     Infrastructure Security Agency shall develop a plan to 
     establish the program required under paragraph (1) that 
     describes how the Director of the Cybersecurity and 
     Infrastructure Security Agency plans to--
       (A) determine the method for collecting, storing, 
     accessing, and analyzing appropriate agency data;
       (B) provide on-premises support to agencies;
       (C) staff threat hunting services;
       (D) allocate available human and financial resources to 
     implement the plan; and
       (E) provide input to the heads of agencies on the use of--
       (i) more stringent standards under section 11331(c)(1) of 
     title 40, United States Code; and
       (ii) additional cybersecurity procedures under section 3554 
     of title 44, United States Code.
       (b) Reports.--The Director of the Cybersecurity and 
     Infrastructure Security Agency shall submit to the 
     appropriate congressional committees--
       (1) not later than 30 days after the date on which the 
     Director of the Cybersecurity and Infrastructure Security 
     Agency completes the plan required under subsection (a)(2), a 
     report on the plan to provide threat hunting services to 
     agencies;
       (2) not less than 30 days before the date on which the 
     Director of the Cybersecurity and Infrastructure Security 
     Agency begins providing threat hunting services under the 
     program under subsection (a)(1), a report providing any 
     updates to the plan developed under subsection (a)(2); and
       (3) not later than 1 year after the date on which the 
     Director of the Cybersecurity and Infrastructure Security 
     Agency begins providing threat hunting services to agencies 
     other than the Cybersecurity and Infrastructure Security 
     Agency, a report describing lessons learned from providing 
     those services.

     SEC. 5146. CODIFYING VULNERABILITY DISCLOSURE PROGRAMS.

       (a) In General.--Chapter 35 of title 44, United States 
     Code, is amended by inserting after section 3559A, as added 
     by section 5144 of this division, the following:

     ``Sec. 3559B. Federal vulnerability disclosure programs

       ``(a) Definitions.--In this section:
       ``(1) Report.--The term `report' means a vulnerability 
     disclosure made to an agency by a reporter.
       ``(2) Reporter.--The term `reporter' means an individual 
     that submits a vulnerability report pursuant to the 
     vulnerability disclosure process of an agency.
       ``(b) Responsibilities of OMB.--
       ``(1) Limitation on legal action.--The Director, in 
     consultation with the Attorney General, shall issue guidance 
     to agencies to not recommend or pursue legal action against a 
     reporter or an individual that conducts a security research 
     activity that the head of the agency determines--
       ``(A) represents a good faith effort to follow the 
     vulnerability disclosure policy of the agency developed under 
     subsection (d)(2); and
       ``(B) is authorized under the vulnerability disclosure 
     policy of the agency developed under subsection (d)(2).
       ``(2) Sharing information with cisa.--The Director, in 
     coordination with the Director of the Cybersecurity and 
     Infrastructure Security Agency and in consultation with the 
     National Cyber Director, shall issue guidance to agencies on 
     sharing relevant information in a consistent, automated, and 
     machine readable manner with the Cybersecurity and 
     Infrastructure Security Agency, including--
       ``(A) any valid or credible reports of newly discovered or 
     not publicly known vulnerabilities (including 
     misconfigurations) on Federal information systems that use 
     commercial software or services;
       ``(B) information relating to vulnerability disclosure, 
     coordination, or remediation activities of an agency, 
     particularly as those activities relate to outside 
     organizations--
       ``(i) with which the head of the agency believes the 
     Director of the Cybersecurity and Infrastructure Security 
     Agency can assist; or
       ``(ii) about which the head of the agency believes the 
     Director of the Cybersecurity and Infrastructure Security 
     Agency should know; and
       ``(C) any other information with respect to which the head 
     of the agency determines helpful or necessary to involve the 
     Cybersecurity and Infrastructure Security Agency.
       ``(3) Agency vulnerability disclosure policies.--The 
     Director shall issue guidance to agencies on the required 
     minimum scope of agency systems covered by the vulnerability 
     disclosure policy of an agency required under subsection 
     (d)(2).
       ``(c) Responsibilities of CISA.--The Director of the 
     Cybersecurity and Infrastructure Security Agency shall--
       ``(1) provide support to agencies with respect to the 
     implementation of the requirements of this section;
       ``(2) develop tools, processes, and other mechanisms 
     determined appropriate to offer agencies capabilities to 
     implement the requirements of this section; and
       ``(3) upon a request by an agency, assist the agency in the 
     disclosure to vendors of newly identified vulnerabilities in 
     vendor products and services.
       ``(d) Responsibilities of Agencies.--
       ``(1) Public information.--The head of each agency shall 
     make publicly available, with respect to each internet domain 
     under the control of the agency that is not a national 
     security system--
       ``(A) an appropriate security contact; and
       ``(B) the component of the agency that is responsible for 
     the internet accessible services offered at the domain.
       ``(2) Vulnerability disclosure policy.--The head of each 
     agency shall develop and make publicly available a 
     vulnerability disclosure policy for the agency, which shall--
       ``(A) describe--
       ``(i) the scope of the systems of the agency included in 
     the vulnerability disclosure policy;

[[Page S8480]]

       ``(ii) the type of information system testing that is 
     authorized by the agency;
       ``(iii) the type of information system testing that is not 
     authorized by the agency; and
       ``(iv) the disclosure policy of the agency for sensitive 
     information;
       ``(B) with respect to a report to an agency, describe--
       ``(i) how the reporter should submit the report; and
       ``(ii) if the report is not anonymous, when the reporter 
     should anticipate an acknowledgment of receipt of the report 
     by the agency;
       ``(C) include any other relevant information; and
       ``(D) be mature in scope, to cover all Federal information 
     systems used or operated by that agency or on behalf of that 
     agency.
       ``(3) Identified vulnerabilities.--The head of each agency 
     shall incorporate any vulnerabilities reported under 
     paragraph (2) into the vulnerability management process of 
     the agency in order to track and remediate the vulnerability.
       ``(e) Paperwork Reduction Act Exemption.--The requirements 
     of subchapter I (commonly known as the `Paperwork Reduction 
     Act') shall not apply to a vulnerability disclosure program 
     established under this section.
       ``(f) Congressional Reporting.--Not later than 90 days 
     after the date of enactment of the Federal Information 
     Security Modernization Act of 2021, and annually thereafter 
     for a 3-year period, the Director shall provide to the 
     Committee on Homeland Security and Governmental Affairs of 
     the Senate and the Committee on Oversight and Reform of the 
     House of Representatives a briefing on the status of the use 
     of vulnerability disclosure policies under this section at 
     agencies, including, with respect to the guidance issued 
     under subsection (b)(3), an identification of the agencies 
     that are compliant and not compliant.
       ``(g) Exemptions.--The authorities and functions of the 
     Director and Director of the Cybersecurity and Infrastructure 
     Security Agency under this section shall not apply to 
     national security systems.
       ``(h) Delegation of Authority for Certain Systems.--The 
     authorities of the Director and the Director of the 
     Cybersecurity and Infrastructure Security Agency described in 
     this section shall be delegated--
       ``(1) to the Secretary of Defense in the case of systems 
     described in section 3553(e)(2); and
       ``(2) to the Director of National Intelligence in the case 
     of systems described in section 3553(e)(3).''.
       (b) Clerical Amendment.--The table of sections for chapter 
     35 of title 44, United States Code, is amended by adding 
     after the item relating to section 3559A, as added by section 
     204, the following:

``3559B. Federal vulnerability disclosure programs.''.

     SEC. 5147. IMPLEMENTING PRESUMPTION OF COMPROMISE AND LEAST 
                   PRIVILEGE PRINCIPLES.

       (a) Guidance.--Not later than 1 year after the date of 
     enactment of this Act, the Director shall provide an update 
     to the appropriate congressional committees on progress in 
     increasing the internal defenses of agency systems, 
     including--
       (1) shifting away from ``trusted networks'' to implement 
     security controls based on a presumption of compromise;
       (2) implementing principles of least privilege in 
     administering information security programs;
       (3) limiting the ability of entities that cause incidents 
     to move laterally through or between agency systems;
       (4) identifying incidents quickly;
       (5) isolating and removing unauthorized entities from 
     agency systems quickly;
       (6) otherwise increasing the resource costs for entities 
     that cause incidents to be successful; and
       (7) a summary of the agency progress reports required under 
     subsection (b).
       (b) Agency Progress Reports.--Not later than 1 year after 
     the date of enactment of this Act, the head of each agency 
     shall submit to the Director a progress report on 
     implementing an information security program based on the 
     presumption of compromise and least privilege principles, 
     which shall include--
       (1) a description of any steps the agency has completed, 
     including progress toward achieving requirements issued by 
     the Director;
       (2) an identification of activities that have not yet been 
     completed and that would have the most immediate security 
     impact; and
       (3) a schedule to implement any planned activities.

     SEC. 5148. AUTOMATION REPORTS.

       (a) OMB Report.--Not later than 180 days after the date of 
     enactment of this Act, the Director shall submit to the 
     appropriate congressional committees a report on the use of 
     automation under paragraphs (1), (5)(C) and (8)(B) of section 
     3554(b) of title 44, United States Code.
       (b) GAO Report.--Not later than 1 year after the date of 
     enactment of this Act, the Comptroller General of the United 
     States shall perform a study on the use of automation and 
     machine readable data across the Federal Government for 
     cybersecurity purposes, including the automated updating of 
     cybersecurity tools, sensors, or processes by agencies.

     SEC. 5149. EXTENSION OF FEDERAL ACQUISITION SECURITY COUNCIL.

       Section 1328 of title 41, United States Code, is amended by 
     striking ``the date that'' and all that follows and inserting 
     ``December 31, 2026.''.

     SEC. 5150. COUNCIL OF THE INSPECTORS GENERAL ON INTEGRITY AND 
                   EFFICIENCY DASHBOARD.

       (a) Dashboard Required.--Section 11(e)(2) of the Inspector 
     General Act of 1978 (5 U.S.C. App.) is amended--
       (1) in subparagraph (A), by striking ``and'' at the end;
       (2) by redesignating subparagraph (B) as subparagraph (C); 
     and
       (3) by inserting after subparagraph (A) the following:
       ``(B) that shall include a dashboard of open information 
     security recommendations identified in the independent 
     evaluations required by section 3555(a) of title 44, United 
     States Code; and''.

     SEC. 5151. QUANTITATIVE CYBERSECURITY METRICS.

       (a) Definition of Covered Metrics.--In this section, the 
     term ``covered metrics'' means the metrics established, 
     reviewed, and updated under section 224(c) of the 
     Cybersecurity Act of 2015 (6 U.S.C. 1522(c)).
       (b) Updating and Establishing Metrics.--Not later than 1 
     year after the date of enactment of this Act, the Director of 
     the Cybersecurity and Infrastructure Security Agency, in 
     coordination with the Director, shall--
       (1) evaluate any covered metrics established as of the date 
     of enactment of this Act; and
       (2) as appropriate and pursuant to section 224(c) of the 
     Cybersecurity Act of 2015 (6 U.S.C. 1522(c))--
       (A) update the covered metrics; and
       (B) establish new covered metrics.
       (c) Implementation.--
       (1) In general.--Not later than 540 days after the date of 
     enactment of this Act, the Director, in coordination with the 
     Director of the Cybersecurity and Infrastructure Security 
     Agency, shall promulgate guidance that requires each agency 
     to use covered metrics to track trends in the cybersecurity 
     and incident response capabilities of the agency.
       (2) Performance demonstration.--The guidance issued under 
     paragraph (1) and any subsequent guidance shall require 
     agencies to share with the Director of the Cybersecurity and 
     Infrastructure Security Agency data demonstrating the 
     performance of the agency using the covered metrics included 
     in the guidance.
       (3) Penetration tests.--On not less than 2 occasions during 
     the 2-year period following the date on which guidance is 
     promulgated under paragraph (1), the Director shall ensure 
     that not less than 3 agencies are subjected to substantially 
     similar penetration tests, as determined by the Director, in 
     coordination with the Director of the Cybersecurity and 
     Infrastructure Security Agency, in order to validate the 
     utility of the covered metrics.
       (4) Analysis capacity.--The Director of the Cybersecurity 
     and Infrastructure Security Agency shall develop a capability 
     that allows for the analysis of the covered metrics, 
     including cross-agency performance of agency cybersecurity 
     and incident response capability trends.
       (d) Congressional Reports.--
       (1) Utility of metrics.--Not later than 1 year after the 
     date of enactment of this Act, the Director of the 
     Cybersecurity and Infrastructure Security Agency shall submit 
     to the appropriate congressional committees a report on the 
     utility of the covered metrics.
       (2) Use of metrics.--Not later than 180 days after the date 
     on which the Director promulgates guidance under subsection 
     (c)(1), the Director shall submit to the appropriate 
     congressional committees a report on the results of the use 
     of the covered metrics by agencies.
       (e) Cybersecurity Act of 2015 Updates.--Section 224 of the 
     Cybersecurity Act of 2015 (6 U.S.C. 1522) is amended--
       (1) by striking subsection (c) and inserting the following:
       ``(c) Improved Metrics.--
       ``(1) In general.--The Director of the Cybersecurity and 
     Infrastructure Security Agency, in coordination with the 
     Director, shall establish, review, and update metrics to 
     measure the cybersecurity and incident response capabilities 
     of agencies in accordance with the responsibilities of 
     agencies under section 3554 of title 44, United States Code.
       ``(2) Qualities.--With respect to the metrics established, 
     reviewed, and updated under paragraph (1)--
       ``(A) not less than 2 of the metrics shall be time-based, 
     such as a metric of--
       ``(i) the amount of time it takes for an agency to detect 
     an incident; and
       ``(ii) the amount of time that passes between--

       ``(I) the detection of an incident and the remediation of 
     the incident; and
       ``(II) the remediation of an incident and the recovery from 
     the incident; and

       ``(B) the metrics may include other measurable outcomes.'';
       (2) by striking subsection (e); and
       (3) by redesignating subsection (f) as subsection (e).

                  TITLE LIII--RISK-BASED BUDGET MODEL

     SEC. 5161. DEFINITIONS.

       In this title:
       (1) Appropriate congressional committees.--The term 
     ``appropriate congressional committees'' means--

[[Page S8481]]

       (A) the Committee on Homeland Security and Governmental 
     Affairs and the Committee on Appropriations of the Senate; 
     and
       (B) the Committee on Homeland Security and the Committee on 
     Appropriations of the House of Representatives.
       (2) Covered agency.--The term ``covered agency'' has the 
     meaning given the term ``executive agency'' in section 133 of 
     title 41, United States Code.
       (3) Director.--The term ``Director'' means the Director of 
     the Office of Management and Budget.
       (4) Information technology.--The term ``information 
     technology''--
       (A) has the meaning given the term in section 11101 of 
     title 40, United States Code; and
       (B) includes the hardware and software systems of a Federal 
     agency that monitor and control physical equipment and 
     processes of the Federal agency.
       (5) Risk-based budget.--The term ``risk-based budget'' 
     means a budget--
       (A) developed by identifying and prioritizing cybersecurity 
     risks and vulnerabilities, including impact on agency 
     operations in the case of a cyber attack, through analysis of 
     cyber threat intelligence, incident data, and tactics, 
     techniques, procedures, and capabilities of cyber threats; 
     and
       (B) that allocates resources based on the risks identified 
     and prioritized under subparagraph (A).

     SEC. 5162. ESTABLISHMENT OF RISK-BASED BUDGET MODEL.

       (a) In General.--
       (1) Model.--Not later than 1 year after the first 
     publication of the budget submitted by the President under 
     section 1105 of title 31, United States Code, following the 
     date of enactment of this Act, the Director, in consultation 
     with the Director of the Cybersecurity and Infrastructure 
     Security Agency and the National Cyber Director and in 
     coordination with the Director of the National Institute of 
     Standards and Technology, shall develop a standard model for 
     creating a risk-based budget for cybersecurity spending.
       (2) Responsibility of director.--Section 3553(a) of title 
     44, United States Code, as amended by section 5121 of this 
     division, is further amended by inserting after paragraph (6) 
     the following:
       ``(7) developing a standard risk-based budget model to 
     inform Federal agency cybersecurity budget development; 
     and''.
       (3) Contents of model.--The model required to be developed 
     under paragraph (1) shall--
       (A) consider Federal and non-Federal cyber threat 
     intelligence products, where available, to identify threats, 
     vulnerabilities, and risks;
       (B) consider the impact of agency operations of compromise 
     of systems, including the interconnectivity to other agency 
     systems and the operations of other agencies;
       (C) indicate where resources should be allocated to have 
     the greatest impact on mitigating current and future threats 
     and current and future cybersecurity capabilities;
       (D) be used to inform acquisition and sustainment of--
       (i) information technology and cybersecurity tools;
       (ii) information technology and cybersecurity 
     architectures;
       (iii) information technology and cybersecurity personnel; 
     and
       (iv) cybersecurity and information technology concepts of 
     operations; and
       (E) be used to evaluate and inform Government-wide 
     cybersecurity programs of the Department of Homeland 
     Security.
       (4) Required updates.--Not less frequently than once every 
     3 years, the Director shall review, and update as necessary, 
     the model required to be developed under this subsection.
       (5) Publication.--The Director shall publish the model 
     required to be developed under this subsection, and any 
     updates necessary under paragraph (4), on the public website 
     of the Office of Management and Budget.
       (6) Reports.--Not later than 1 year after the date of 
     enactment of this Act, and annually thereafter for each of 
     the 2 following fiscal years or until the date on which the 
     model required to be developed under this subsection is 
     completed, whichever is sooner, the Director shall submit a 
     report to Congress on the development of the model.
       (b) Required Use of Risk-based Budget Model.--
       (1) In general.--Not later than 2 years after the date on 
     which the model developed under subsection (a) is published, 
     the head of each covered agency shall use the model to 
     develop the annual cybersecurity and information technology 
     budget requests of the agency.
       (2) Agency performance plans.--Section 3554(d)(2) of title 
     44, United States Code, is amended by inserting ``and the 
     risk-based budget model required under section 3553(a)(7)'' 
     after ``paragraph (1)''.
       (c) Verification.--
       (1) In general.--Section 1105(a)(35)(A)(i) of title 31, 
     United States Code, is amended--
       (A) in the matter preceding subclause (I), by striking ``by 
     agency, and by initiative area (as determined by the 
     administration)'' and inserting ``and by agency'';
       (B) in subclause (III), by striking ``and'' at the end; and
       (C) by adding at the end the following:

       ``(V) a validation that the budgets submitted were 
     developed using a risk-based methodology; and
       ``(VI) a report on the progress of each agency on closing 
     recommendations identified under the independent evaluation 
     required by section 3555(a)(1) of title 44.''.

       (2) Effective date.--The amendments made by paragraph (1) 
     shall take effect on the date that is 2 years after the date 
     on which the model developed under subsection (a) is 
     published.
       (d) Reports.--
       (1) Independent evaluation.--Section 3555(a)(2) of title 
     44, United States Code, is amended--
       (A) in subparagraph (B), by striking ``and'' at the end;
       (B) in subparagraph (C), by striking the period at the end 
     and inserting ``; and''; and
       (C) by adding at the end the following:
       ``(D) an assessment of how the agency implemented the risk-
     based budget model required under section 3553(a)(7) and an 
     evaluation of whether the model mitigates agency cyber 
     vulnerabilities.''.
       (2) Assessment.--Section 3553(c) of title 44, United States 
     Code, as amended by section 5121, is further amended by 
     inserting after paragraph (5) the following:
       ``(6) an assessment of--
       ``(A) Federal agency implementation of the model required 
     under subsection (a)(7);
       ``(B) how cyber vulnerabilities of Federal agencies changed 
     from the previous year; and
       ``(C) whether the model mitigates the cyber vulnerabilities 
     of the Federal Government.''.
       (e) GAO Report.--Not later than 3 years after the date on 
     which the first budget of the President is submitted to 
     Congress containing the validation required under section 
     1105(a)(35)(A)(i)(V) of title 31, United States Code, as 
     amended by subsection (c), the Comptroller General of the 
     United States shall submit to the appropriate congressional 
     committees a report that includes--
       (1) an evaluation of the success of covered agencies in 
     developing risk-based budgets;
       (2) an evaluation of the success of covered agencies in 
     implementing risk-based budgets;
       (3) an evaluation of whether the risk-based budgets 
     developed by covered agencies mitigate cyber vulnerability, 
     including the extent to which the risk-based budgets inform 
     Federal Government-wide cybersecurity programs; and
       (4) any other information relating to risk-based budgets 
     the Comptroller General determines appropriate.

       TITLE LIV--PILOT PROGRAMS TO ENHANCE FEDERAL CYBERSECURITY

     SEC. 5181. ACTIVE CYBER DEFENSIVE STUDY.

       (a) Definition.--In this section, the term ``active defense 
     technique''--
       (1) means an action taken on the systems of an entity to 
     increase the security of information on the network of an 
     agency by misleading an adversary; and
       (2) includes a honeypot, deception, or purposefully feeding 
     false or misleading data to an adversary when the adversary 
     is on the systems of the entity.
       (b) Study.--Not later than 180 days after the date of 
     enactment of this Act, the Director of the Cybersecurity and 
     Infrastructure Security Agency, in coordination with the 
     Director, shall perform a study on the use of active defense 
     techniques to enhance the security of agencies, which shall 
     include--
       (1) a review of legal restrictions on the use of different 
     active cyber defense techniques in Federal environments, in 
     consultation with the Department of Justice;
       (2) an evaluation of--
       (A) the efficacy of a selection of active defense 
     techniques determined by the Director of the Cybersecurity 
     and Infrastructure Security Agency; and
       (B) factors that impact the efficacy of the active defense 
     techniques evaluated under subparagraph (A);
       (3) recommendations on safeguards and procedures that shall 
     be established to require that active defense techniques are 
     adequately coordinated to ensure that active defense 
     techniques do not impede threat response efforts, criminal 
     investigations, and national security activities, including 
     intelligence collection; and
       (4) the development of a framework for the use of different 
     active defense techniques by agencies.

     SEC. 5182. SECURITY OPERATIONS CENTER AS A SERVICE PILOT.

       (a) Purpose.--The purpose of this section is for the 
     Cybersecurity and Infrastructure Security Agency to run a 
     security operation center on behalf of another agency, 
     alleviating the need to duplicate this function at every 
     agency, and empowering a greater centralized cybersecurity 
     capability.
       (b) Plan.--Not later than 1 year after the date of 
     enactment of this Act, the Director of the Cybersecurity and 
     Infrastructure Security Agency shall develop a plan to 
     establish a centralized Federal security operations center 
     shared service offering within the Cybersecurity and 
     Infrastructure Security Agency.
       (c) Contents.--The plan required under subsection (b) shall 
     include considerations for--
       (1) collecting, organizing, and analyzing agency 
     information system data in real time;
       (2) staffing and resources; and
       (3) appropriate interagency agreements, concepts of 
     operations, and governance plans.
       (d) Pilot Program.--
       (1) In general.--Not later than 180 days after the date on 
     which the plan required

[[Page S8482]]

     under subsection (b) is developed, the Director of the 
     Cybersecurity and Infrastructure Security Agency, in 
     consultation with the Director, shall enter into a 1-year 
     agreement with not less than 2 agencies to offer a security 
     operations center as a shared service.
       (2) Additional agreements.--After the date on which the 
     briefing required under subsection (e)(1) is provided, the 
     Director of the Cybersecurity and Infrastructure Security 
     Agency, in consultation with the Director, may enter into 
     additional 1-year agreements described in paragraph (1) with 
     agencies.
       (e) Briefing and Report.--
       (1) Briefing.--Not later than 260 days after the date of 
     enactment of this Act, the Director of the Cybersecurity and 
     Infrastructure Security Agency shall provide to the Committee 
     on Homeland Security and Governmental Affairs of the Senate 
     and the Committee on Homeland Security and the Committee on 
     Oversight and Reform of the House of Representatives a 
     briefing on the parameters of any 1-year agreements entered 
     into under subsection (d)(1).
       (2) Report.--Not later than 90 days after the date on which 
     the first 1-year agreement entered into under subsection (d) 
     expires, the Director of the Cybersecurity and Infrastructure 
     Security Agency shall submit to the Committee on Homeland 
     Security and Governmental Affairs of the Senate and the 
     Committee on Homeland Security and the Committee on Oversight 
     and Reform of the House of Representatives a report on--
       (A) the agreement; and
       (B) any additional agreements entered into with agencies 
     under subsection (d).

  DIVISION F--CYBER INCIDENT REPORTING ACT OF 2021 AND CISA TECHNICAL 
                CORRECTIONS AND IMPROVEMENTS ACT OF 2021

            TITLE LXI--CYBER INCIDENT REPORTING ACT OF 2021

     SEC. 6101. SHORT TITLE.

       This title may be cited as the ``Cyber Incident Reporting 
     Act of 2021''.

     SEC. 6102. DEFINITIONS.

       In this title:
       (1) Covered cyber incident; covered entity; cyber 
     incident.--The terms ``covered cyber incident'', ``covered 
     entity'', and ``cyber incident'' have the meanings given 
     those terms in section 2230 of the Homeland Security Act of 
     2002, as added by section 6103 of this title.
       (2) Director.--The term ``Director'' means the Director of 
     the Cybersecurity and Infrastructure Security Agency.
       (3) Information system; ransom payment; ransomware attack; 
     security vulnerability.--The terms ``information system'', 
     ``ransom payment'', ``ransomware attack'', and ``security 
     vulnerability'' have the meanings given those terms in 
     section 2200 of the Homeland Security Act of 2002, as added 
     by section 6203 of this division.

     SEC. 6103. CYBER INCIDENT REPORTING.

       (a) Cyber Incident Reporting.--Title XXII of the Homeland 
     Security Act of 2002 (6 U.S.C. 651 et seq.) is amended--
       (1) in section 2209(b) (6 U.S.C. 659(b)), as so 
     redesignated by section 6203(b) of this division--
       (A) in paragraph (11), by striking ``and'' at the end;
       (B) in paragraph (12), by striking the period at the end 
     and inserting ``; and''; and
       (C) by adding at the end the following:
       ``(13) receiving, aggregating, and analyzing reports 
     related to covered cyber incidents (as defined in section 
     2230) submitted by covered entities (as defined in section 
     2230) and reports related to ransom payments submitted by 
     entities in furtherance of the activities specified in 
     sections 2202(e), 2203, and 2231, this subsection, and any 
     other authorized activity of the Director, to enhance the 
     situational awareness of cybersecurity threats across 
     critical infrastructure sectors.''; and
       (2) by adding at the end the following:

                 ``Subtitle C--Cyber Incident Reporting

     ``SEC. 2230. DEFINITIONS.

       ``In this subtitle:
       ``(1) Center.--The term `Center' means the center 
     established under section 2209.
       ``(2) Council.--The term `Council' means the Cyber Incident 
     Reporting Council described in section 1752(c)(1)(H) of the 
     William M. (Mac) Thornberry National Defense Authorization 
     Act for Fiscal Year 2021 (6 U.S.C. 1500(c)(1)(H)).
       ``(3) Covered cyber incident.--The term `covered cyber 
     incident' means a substantial cyber incident experienced by a 
     covered entity that satisfies the definition and criteria 
     established by the Director in the final rule issued pursuant 
     to section 2232(b).
       ``(4) Covered entity.--The term `covered entity' means--
       ``(A) any Federal contractor; or
       ``(B) an entity that owns or operates critical 
     infrastructure that satisfies the definition established by 
     the Director in the final rule issued pursuant to section 
     2232(b).
       ``(5) Cyber incident.--The term `cyber incident' has the 
     meaning given the term `incident' in section 2200.
       ``(6) Cyber threat.--The term `cyber threat'--
       ``(A) has the meaning given the term `cybersecurity threat' 
     in section 2200; and
       ``(B) does not include any activity related to good faith 
     security research, including participation in a bug-bounty 
     program or a vulnerability disclosure program.
       ``(7) Federal contractor.--The term `Federal contractor' 
     means a business, nonprofit organization, or other private 
     sector entity that holds a Federal Government contract or 
     subcontract at any tier, grant, cooperative agreement, or 
     other transaction agreement, unless that entity is a party 
     only to--
       ``(A) a service contract to provide housekeeping or 
     custodial services; or
       ``(B) a contract to provide products or services unrelated 
     to information technology that is below the micro-purchase 
     threshold, as defined in section 2.101 of title 48, Code of 
     Federal Regulations, or any successor regulation.
       ``(8) Federal entity; information system; security 
     control.--The terms `Federal entity', `information system', 
     and `security control' have the meanings given those terms in 
     section 102 of the Cybersecurity Act of 2015 (6 U.S.C. 1501).
       ``(9) Significant cyber incident.--The term `significant 
     cyber incident' means a cybersecurity incident, or a group of 
     related cybersecurity incidents, that the Secretary 
     determines is likely to result in demonstrable harm to the 
     national security interests, foreign relations, or economy of 
     the United States or to the public confidence, civil 
     liberties, or public health and safety of the people of the 
     United States.
       ``(10) Small organization.--The term `small organization'--
       ``(A) means--
       ``(i) a small business concern, as defined in section 3 of 
     the Small Business Act (15 U.S.C. 632); or
       ``(ii) any nonprofit organization, including faith-based 
     organizations and houses of worship, or other private sector 
     entity with fewer than 200 employees (determined on a full-
     time equivalent basis); and
       ``(B) does not include--
       ``(i) a business, nonprofit organization, or other private 
     sector entity that is a covered entity; or
       ``(ii) a Federal contractor.

     ``SEC. 2231. CYBER INCIDENT REVIEW.

       ``(a) Activities.--The Center shall--
       ``(1) receive, aggregate, analyze, and secure, using 
     processes consistent with the processes developed pursuant to 
     the Cybersecurity Information Sharing Act of 2015 (6 U.S.C. 
     1501 et seq.) reports from covered entities related to a 
     covered cyber incident to assess the effectiveness of 
     security controls, identify tactics, techniques, and 
     procedures adversaries use to overcome those controls and 
     other cybersecurity purposes, including to support law 
     enforcement investigations, to assess potential impact of 
     incidents on public health and safety, and to have a more 
     accurate picture of the cyber threat to critical 
     infrastructure and the people of the United States;
       ``(2) receive, aggregate, analyze, and secure reports to 
     lead the identification of tactics, techniques, and 
     procedures used to perpetuate cyber incidents and ransomware 
     attacks;
       ``(3) coordinate and share information with appropriate 
     Federal departments and agencies to identify and track ransom 
     payments, including those utilizing virtual currencies;
       ``(4) leverage information gathered about cybersecurity 
     incidents to--
       ``(A) enhance the quality and effectiveness of information 
     sharing and coordination efforts with appropriate entities, 
     including agencies, sector coordinating councils, information 
     sharing and analysis organizations, technology providers, 
     critical infrastructure owners and operators, cybersecurity 
     and incident response firms, and security researchers; and
       ``(B) provide appropriate entities, including agencies, 
     sector coordinating councils, information sharing and 
     analysis organizations, technology providers, cybersecurity 
     and incident response firms, and security researchers, with 
     timely, actionable, and anonymized reports of cyber incident 
     campaigns and trends, including, to the maximum extent 
     practicable, related contextual information, cyber threat 
     indicators, and defensive measures, pursuant to section 2235;
       ``(5) establish mechanisms to receive feedback from 
     stakeholders on how the Agency can most effectively receive 
     covered cyber incident reports, ransom payment reports, and 
     other voluntarily provided information;
       ``(6) facilitate the timely sharing, on a voluntary basis, 
     between relevant critical infrastructure owners and operators 
     of information relating to covered cyber incidents and ransom 
     payments, particularly with respect to ongoing cyber threats 
     or security vulnerabilities and identify and disseminate ways 
     to prevent or mitigate similar incidents in the future;
       ``(7) for a covered cyber incident, including a ransomware 
     attack, that also satisfies the definition of a significant 
     cyber incident, or is part of a group of related cyber 
     incidents that together satisfy such definition, conduct a 
     review of the details surrounding the covered cyber incident 
     or group of those incidents and identify and disseminate ways 
     to prevent or mitigate similar incidents in the future;
       ``(8) with respect to covered cyber incident reports under 
     section 2232(a) and 2233 involving an ongoing cyber threat or 
     security vulnerability, immediately review those reports for 
     cyber threat indicators that can be anonymized and 
     disseminated, with defensive measures, to appropriate 
     stakeholders, in coordination with other divisions within the 
     Agency, as appropriate;
       ``(9) publish quarterly unclassified, public reports that 
     may be based on the unclassified information contained in the 
     briefings required under subsection (c);

[[Page S8483]]

       ``(10) proactively identify opportunities and perform 
     analyses, consistent with the protections in section 2235, to 
     leverage and utilize data on ransomware attacks to support 
     law enforcement operations to identify, track, and seize 
     ransom payments utilizing virtual currencies, to the greatest 
     extent practicable;
       ``(11) proactively identify opportunities, consistent with 
     the protections in section 2235, to leverage and utilize data 
     on cyber incidents in a manner that enables and strengthens 
     cybersecurity research carried out by academic institutions 
     and other private sector organizations, to the greatest 
     extent practicable;
       ``(12) on a not less frequently than annual basis, analyze 
     public disclosures made pursuant to parts 229 and 249 of 
     title 17, Code of Federal Regulations, or any subsequent 
     document submitted to the Securities and Exchange Commission 
     by entities experiencing cyber incidents and compare such 
     disclosures to reports received by the Center; and
       ``(13) in accordance with section 2235 and subsection (b) 
     of this section, as soon as possible but not later than 24 
     hours after receiving a covered cyber incident report, ransom 
     payment report, voluntarily submitted information pursuant to 
     section 2233, or information received pursuant to a request 
     for information or subpoena under section 2234, make 
     available the information to appropriate Sector Risk 
     Management Agencies and other appropriate Federal agencies.
       ``(b) Interagency Sharing.--The National Cyber Director, in 
     consultation with the Director and the Director of the Office 
     of Management and Budget--
       ``(1) may establish a specific time requirement for sharing 
     information under subsection (a)(13); and
       ``(2) shall determine the appropriate Federal agencies 
     under subsection (a)(13).
       ``(c) Periodic Briefing.--Not later than 60 days after the 
     effective date of the final rule required under section 
     2232(b), and on the first day of each month thereafter, the 
     Director, in consultation with the National Cyber Director, 
     the Attorney General, and the Director of National 
     Intelligence, shall provide to the majority leader of the 
     Senate, the minority leader of the Senate, the Speaker of the 
     House of Representatives, the minority leader of the House of 
     Representatives, the Committee on Homeland Security and 
     Governmental Affairs of the Senate, and the Committee on 
     Homeland Security of the House of Representatives a briefing 
     that characterizes the national cyber threat landscape, 
     including the threat facing Federal agencies and covered 
     entities, and applicable intelligence and law enforcement 
     information, covered cyber incidents, and ransomware attacks, 
     as of the date of the briefing, which shall--
       ``(1) include the total number of reports submitted under 
     sections 2232 and 2233 during the preceding month, including 
     a breakdown of required and voluntary reports;
       ``(2) include any identified trends in covered cyber 
     incidents and ransomware attacks over the course of the 
     preceding month and as compared to previous reports, 
     including any trends related to the information collected in 
     the reports submitted under sections 2232 and 2233, 
     including--
       ``(A) the infrastructure, tactics, and techniques malicious 
     cyber actors commonly use; and
       ``(B) intelligence gaps that have impeded, or currently are 
     impeding, the ability to counter covered cyber incidents and 
     ransomware threats;
       ``(3) include a summary of the known uses of the 
     information in reports submitted under sections 2232 and 
     2233; and
       ``(4) be unclassified, but may include a classified annex.

     ``SEC. 2232. REQUIRED REPORTING OF CERTAIN CYBER INCIDENTS.

       ``(a) In General.--
       ``(1) Covered cyber incident reports.--A covered entity 
     that is a victim of a covered cyber incident shall report the 
     covered cyber incident to the Director not later than 72 
     hours after the covered entity reasonably believes that the 
     covered cyber incident has occurred.
       ``(2) Ransom payment reports.--An entity, including a 
     covered entity and except for an individual or a small 
     organization, that makes a ransom payment as the result of a 
     ransomware attack against the entity shall report the payment 
     to the Director not later than 24 hours after the ransom 
     payment has been made.
       ``(3) Supplemental reports.--A covered entity shall 
     promptly submit to the Director an update or supplement to a 
     previously submitted covered cyber incident report if new or 
     different information becomes available or if the covered 
     entity makes a ransom payment after submitting a covered 
     cyber incident report required under paragraph (1).
       ``(4) Preservation of information.--Any entity subject to 
     requirements of paragraph (1), (2), or (3) shall preserve 
     data relevant to the covered cyber incident or ransom payment 
     in accordance with procedures established in the final rule 
     issued pursuant to subsection (b).
       ``(5) Exceptions.--
       ``(A) Reporting of covered cyber incident with ransom 
     payment.--If a covered cyber incident includes a ransom 
     payment such that the reporting requirements under paragraphs 
     (1) and (2) apply, the covered entity may submit a single 
     report to satisfy the requirements of both paragraphs in 
     accordance with procedures established in the final rule 
     issued pursuant to subsection (b).
       ``(B) Substantially similar reported information.--The 
     requirements under paragraphs (1), (2), and (3) shall not 
     apply to an entity required by law, regulation, or contract 
     to report substantially similar information to another 
     Federal agency within a substantially similar timeframe.
       ``(C) Domain name system.--The requirements under 
     paragraphs (1), (2) and (3) shall not apply to an entity or 
     the functions of an entity that the Director determines 
     constitute critical infrastructure owned, operated, or 
     governed by multi-stakeholder organizations that develop, 
     implement, and enforce policies concerning the Domain Name 
     System, such as the Internet Corporation for Assigned Names 
     and Numbers or the Internet Assigned Numbers Authority.
       ``(6) Manner, timing, and form of reports.--Reports made 
     under paragraphs (1), (2), and (3) shall be made in the 
     manner and form, and within the time period in the case of 
     reports made under paragraph (3), prescribed in the final 
     rule issued pursuant to subsection (b).
       ``(7) Effective date.--Paragraphs (1) through (4) shall 
     take effect on the dates prescribed in the final rule issued 
     pursuant to subsection (b).
       ``(b) Rulemaking.--
       ``(1) Notice of proposed rulemaking.--Not later than 2 
     years after the date of enactment of this section, the 
     Director, in consultation with Sector Risk Management 
     Agencies, the Department of Justice, and other Federal 
     agencies, shall publish in the Federal Register a notice of 
     proposed rulemaking to implement subsection (a).
       ``(2) Final rule.--Not later than 18 months after 
     publication of the notice of proposed rulemaking under 
     paragraph (1), the Director shall issue a final rule to 
     implement subsection (a).
       ``(3) Subsequent rulemakings.--
       ``(A) In general.--The Director is authorized to issue 
     regulations to amend or revise the final rule issued pursuant 
     to paragraph (2).
       ``(B) Procedures.--Any subsequent rules issued under 
     subparagraph (A) shall comply with the requirements under 
     chapter 5 of title 5, United States Code, including the 
     issuance of a notice of proposed rulemaking under section 553 
     of such title.
       ``(c) Elements.--The final rule issued pursuant to 
     subsection (b) shall be composed of the following elements:
       ``(1) A clear description of the types of entities that 
     constitute covered entities, based on--
       ``(A) the consequences that disruption to or compromise of 
     such an entity could cause to national security, economic 
     security, or public health and safety;
       ``(B) the likelihood that such an entity may be targeted by 
     a malicious cyber actor, including a foreign country; and
       ``(C) the extent to which damage, disruption, or 
     unauthorized access to such an entity, including the 
     accessing of sensitive cybersecurity vulnerability 
     information or penetration testing tools or techniques, will 
     likely enable the disruption of the reliable operation of 
     critical infrastructure.
       ``(2) A clear description of the types of substantial cyber 
     incidents that constitute covered cyber incidents, which 
     shall--
       ``(A) at a minimum, require the occurrence of--
       ``(i) the unauthorized access to an information system or 
     network with a substantial loss of confidentiality, 
     integrity, or availability of such information system or 
     network, or a serious impact on the safety and resiliency of 
     operational systems and processes;
       ``(ii) a disruption of business or industrial operations 
     due to a cyber incident; or
       ``(iii) an occurrence described in clause (i) or (ii) due 
     to loss of service facilitated through, or caused by, a 
     compromise of a cloud service provider, managed service 
     provider, or other third-party data hosting provider or by a 
     supply chain compromise;
       ``(B) consider--
       ``(i) the sophistication or novelty of the tactics used to 
     perpetrate such an incident, as well as the type, volume, and 
     sensitivity of the data at issue;
       ``(ii) the number of individuals directly or indirectly 
     affected or potentially affected by such an incident; and
       ``(iii) potential impacts on industrial control systems, 
     such as supervisory control and data acquisition systems, 
     distributed control systems, and programmable logic 
     controllers; and
       ``(C) exclude--
       ``(i) any event where the cyber incident is perpetuated by 
     good faith security research or in response to an invitation 
     by the owner or operator of the information system for third 
     parties to find vulnerabilities in the information system, 
     such as through a vulnerability disclosure program or the use 
     of authorized penetration testing services; and
       ``(ii) the threat of disruption as extortion, as described 
     in section 2201(9)(A).
       ``(3) A requirement that, if a covered cyber incident or a 
     ransom payment occurs following an exempted threat described 
     in paragraph (2)(C)(ii), the entity shall comply with the 
     requirements in this subtitle in reporting the covered cyber 
     incident or ransom payment.
       ``(4) A clear description of the specific required contents 
     of a report pursuant to subsection (a)(1), which shall 
     include the following information, to the extent applicable 
     and available, with respect to a covered cyber incident:

[[Page S8484]]

       ``(A) A description of the covered cyber incident, 
     including--
       ``(i) identification and a description of the function of 
     the affected information systems, networks, or devices that 
     were, or are reasonably believed to have been, affected by 
     such incident;
       ``(ii) a description of the unauthorized access with 
     substantial loss of confidentiality, integrity, or 
     availability of the affected information system or network or 
     disruption of business or industrial operations;
       ``(iii) the estimated date range of such incident; and
       ``(iv) the impact to the operations of the covered entity.
       ``(B) Where applicable, a description of the 
     vulnerabilities, tactics, techniques, and procedures used to 
     perpetuate the covered cyber incident.
       ``(C) Where applicable, any identifying or contact 
     information related to each actor reasonably believed to be 
     responsible for such incident.
       ``(D) Where applicable, identification of the category or 
     categories of information that were, or are reasonably 
     believed to have been, accessed or acquired by an 
     unauthorized person.
       ``(E) The name and other information that clearly 
     identifies the entity impacted by the covered cyber incident.
       ``(F) Contact information, such as telephone number or 
     electronic mail address, that the Center may use to contact 
     the covered entity or an authorized agent of such covered 
     entity, or, where applicable, the service provider of such 
     covered entity acting with the express permission of, and at 
     the direction of, the covered entity to assist with 
     compliance with the requirements of this subtitle.
       ``(5) A clear description of the specific required contents 
     of a report pursuant to subsection (a)(2), which shall be the 
     following information, to the extent applicable and 
     available, with respect to a ransom payment:
       ``(A) A description of the ransomware attack, including the 
     estimated date range of the attack.
       ``(B) Where applicable, a description of the 
     vulnerabilities, tactics, techniques, and procedures used to 
     perpetuate the ransomware attack.
       ``(C) Where applicable, any identifying or contact 
     information related to the actor or actors reasonably 
     believed to be responsible for the ransomware attack.
       ``(D) The name and other information that clearly 
     identifies the entity that made the ransom payment.
       ``(E) Contact information, such as telephone number or 
     electronic mail address, that the Center may use to contact 
     the entity that made the ransom payment or an authorized 
     agent of such covered entity, or, where applicable, the 
     service provider of such covered entity acting with the 
     express permission of, and at the direction of, that entity 
     to assist with compliance with the requirements of this 
     subtitle.
       ``(F) The date of the ransom payment.
       ``(G) The ransom payment demand, including the type of 
     virtual currency or other commodity requested, if applicable.
       ``(H) The ransom payment instructions, including 
     information regarding where to send the payment, such as the 
     virtual currency address or physical address the funds were 
     requested to be sent to, if applicable.
       ``(I) The amount of the ransom payment.
       ``(6) A clear description of the types of data required to 
     be preserved pursuant to subsection (a)(4) and the period of 
     time for which the data is required to be preserved.
       ``(7) Deadlines for submitting reports to the Director 
     required under subsection (a)(3), which shall--
       ``(A) be established by the Director in consultation with 
     the Council;
       ``(B) consider any existing regulatory reporting 
     requirements similar in scope, purpose, and timing to the 
     reporting requirements to which such a covered entity may 
     also be subject, and make efforts to harmonize the timing and 
     contents of any such reports to the maximum extent 
     practicable; and
       ``(C) balance the need for situational awareness with the 
     ability of the covered entity to conduct incident response 
     and investigations.
       ``(8) Procedures for--
       ``(A) entities to submit reports required by paragraphs 
     (1), (2), and (3) of subsection (a), including the manner and 
     form thereof, which shall include, at a minimum, a concise, 
     user-friendly web-based form;
       ``(B) the Agency to carry out the enforcement provisions of 
     section 2233, including with respect to the issuance, 
     service, withdrawal, and enforcement of subpoenas, appeals 
     and due process procedures, the suspension and debarment 
     provisions in section 2234(c), and other aspects of 
     noncompliance;
       ``(C) implementing the exceptions provided in subsection 
     (a)(5); and
       ``(D) protecting privacy and civil liberties consistent 
     with processes adopted pursuant to section 105(b) of the 
     Cybersecurity Act of 2015 (6 U.S.C. 1504(b)) and anonymizing 
     and safeguarding, or no longer retaining, information 
     received and disclosed through covered cyber incident reports 
     and ransom payment reports that is known to be personal 
     information of a specific individual or information that 
     identifies a specific individual that is not directly related 
     to a cybersecurity threat.
       ``(9) A clear description of the types of entities that 
     constitute other private sector entities for purposes of 
     section 2230(b)(7).
       ``(d) Third Party Report Submission and Ransom Payment.--
       ``(1) Report submission.--An entity, including a covered 
     entity, that is required to submit a covered cyber incident 
     report or a ransom payment report may use a third party, such 
     as an incident response company, insurance provider, service 
     provider, information sharing and analysis organization, or 
     law firm, to submit the required report under subsection (a).
       ``(2) Ransom payment.--If an entity impacted by a 
     ransomware attack uses a third party to make a ransom 
     payment, the third party shall not be required to submit a 
     ransom payment report for itself under subsection (a)(2).
       ``(3) Duty to report.--Third-party reporting under this 
     subparagraph does not relieve a covered entity or an entity 
     that makes a ransom payment from the duty to comply with the 
     requirements for covered cyber incident report or ransom 
     payment report submission.
       ``(4) Responsibility to advise.--Any third party used by an 
     entity that knowingly makes a ransom payment on behalf of an 
     entity impacted by a ransomware attack shall advise the 
     impacted entity of the responsibilities of the impacted 
     entity regarding reporting ransom payments under this 
     section.
       ``(e) Outreach to Covered Entities.--
       ``(1) In general.--The Director shall conduct an outreach 
     and education campaign to inform likely covered entities, 
     entities that offer or advertise as a service to customers to 
     make or facilitate ransom payments on behalf of entities 
     impacted by ransomware attacks, potential ransomware attack 
     victims, and other appropriate entities of the requirements 
     of paragraphs (1), (2), and (3) of subsection (a).
       ``(2) Elements.--The outreach and education campaign under 
     paragraph (1) shall include the following:
       ``(A) An overview of the final rule issued pursuant to 
     subsection (b).
       ``(B) An overview of mechanisms to submit to the Center 
     covered cyber incident reports and information relating to 
     the disclosure, retention, and use of incident reports under 
     this section.
       ``(C) An overview of the protections afforded to covered 
     entities for complying with the requirements under paragraphs 
     (1), (2), and (3) of subsection (a).
       ``(D) An overview of the steps taken under section 2234 
     when a covered entity is not in compliance with the reporting 
     requirements under subsection (a).
       ``(E) Specific outreach to cybersecurity vendors, incident 
     response providers, cybersecurity insurance entities, and 
     other entities that may support covered entities or 
     ransomware attack victims.
       ``(F) An overview of the privacy and civil liberties 
     requirements in this subtitle.
       ``(3) Coordination.--In conducting the outreach and 
     education campaign required under paragraph (1), the Director 
     may coordinate with--
       ``(A) the Critical Infrastructure Partnership Advisory 
     Council established under section 871;
       ``(B) information sharing and analysis organizations;
       ``(C) trade associations;
       ``(D) information sharing and analysis centers;
       ``(E) sector coordinating councils; and
       ``(F) any other entity as determined appropriate by the 
     Director.
       ``(f) Organization of Reports.--Notwithstanding chapter 35 
     of title 44, United States Code (commonly known as the 
     `Paperwork Reduction Act'), the Director may request 
     information within the scope of the final rule issued under 
     subsection (b) by the alteration of existing questions or 
     response fields and the reorganization and reformatting of 
     the means by which covered cyber incident reports, ransom 
     payment reports, and any voluntarily offered information is 
     submitted to the Center.

     ``SEC. 2233. VOLUNTARY REPORTING OF OTHER CYBER INCIDENTS.

       ``(a) In General.--Entities may voluntarily report 
     incidents or ransom payments to the Director that are not 
     required under paragraph (1), (2), or (3) of section 2232(a), 
     but may enhance the situational awareness of cyber threats.
       ``(b) Voluntary Provision of Additional Information in 
     Required Reports.--Entities may voluntarily include in 
     reports required under paragraph (1), (2), or (3) of section 
     2232(a) information that is not required to be included, but 
     may enhance the situational awareness of cyber threats.
       ``(c) Application of Protections.--The protections under 
     section 2235 applicable to covered cyber incident reports 
     shall apply in the same manner and to the same extent to 
     reports and information submitted under subsections (a) and 
     (b).

     ``SEC. 2234. NONCOMPLIANCE WITH REQUIRED REPORTING.

       ``(a) Purpose.--In the event that an entity that is 
     required to submit a report under section 2232(a) fails to 
     comply with the requirement to report, the Director may 
     obtain information about the incident or ransom payment by 
     engaging the entity directly to request information about the 
     incident or ransom payment, and if the Director is unable to 
     obtain information through such engagement, by issuing a 
     subpoena to the entity, pursuant to subsection (c), to gather 
     information sufficient to determine whether a

[[Page S8485]]

     covered cyber incident or ransom payment has occurred, and, 
     if so, whether additional action is warranted pursuant to 
     subsection (d).
       ``(b) Initial Request for Information.--
       ``(1) In general.--If the Director has reason to believe, 
     whether through public reporting or other information in the 
     possession of the Federal Government, including through 
     analysis performed pursuant to paragraph (1) or (2) of 
     section 2231(a), that an entity has experienced a covered 
     cyber incident or made a ransom payment but failed to report 
     such incident or payment to the Center within 72 hours in 
     accordance with section 2232(a), the Director shall request 
     additional information from the entity to confirm whether or 
     not a covered cyber incident or ransom payment has occurred.
       ``(2) Treatment.--Information provided to the Center in 
     response to a request under paragraph (1) shall be treated as 
     if it was submitted through the reporting procedures 
     established in section 2232.
       ``(c) Authority to Issue Subpoenas and Debar.--
       ``(1) In general.--If, after the date that is 72 hours from 
     the date on which the Director made the request for 
     information in subsection (b), the Director has received no 
     response from the entity from which such information was 
     requested, or received an inadequate response, the Director 
     may issue to such entity a subpoena to compel disclosure of 
     information the Director deems necessary to determine whether 
     a covered cyber incident or ransom payment has occurred and 
     obtain the information required to be reported pursuant to 
     section 2232 and any implementing regulations.
       ``(2) Civil action.--
       ``(A) In general.--If an entity fails to comply with a 
     subpoena, the Director may refer the matter to the Attorney 
     General to bring a civil action in a district court of the 
     United States to enforce such subpoena.
       ``(B) Venue.--An action under this paragraph may be brought 
     in the judicial district in which the entity against which 
     the action is brought resides, is found, or does business.
       ``(C) Contempt of court.--A court may punish a failure to 
     comply with a subpoena issued under this subsection as 
     contempt of court.
       ``(3) Non-delegation.--The authority of the Director to 
     issue a subpoena under this subsection may not be delegated.
       ``(4) Debarment of federal contractors.--If a covered 
     entity that is a Federal contractor fails to comply with a 
     subpoena issued under this subsection--
       ``(A) the Director may refer the matter to the 
     Administrator of General Services; and
       ``(B) upon receiving a referral from the Director, the 
     Administrator of General Services may impose additional 
     available penalties, including suspension or debarment.
       ``(5) Authentication.--
       ``(A) In general.--Any subpoena issued electronically 
     pursuant to this subsection shall be authenticated with a 
     cryptographic digital signature of an authorized 
     representative of the Agency, or other comparable successor 
     technology, that allows the Agency to demonstrate that such 
     subpoena was issued by the Agency and has not been altered or 
     modified since such issuance.
       ``(B) Invalid if not authenticated.--Any subpoena issued 
     electronically pursuant to this subsection that is not 
     authenticated in accordance with subparagraph (A) shall not 
     be considered to be valid by the recipient of such subpoena.
       ``(d) Actions by Attorney General and Federal Regulatory 
     Agencies.--
       ``(1) In general.--Notwithstanding section 2235(a) and 
     subsection (b)(2) of this section, if the Attorney General or 
     the appropriate Federal regulatory agency determines, based 
     on information provided in response to a subpoena issued 
     pursuant to subsection (c), that the facts relating to the 
     covered cyber incident or ransom payment at issue may 
     constitute grounds for a regulatory enforcement action or 
     criminal prosecution, the Attorney General or the appropriate 
     Federal regulatory agency may use that information for a 
     regulatory enforcement action or criminal prosecution.
       ``(2) Application to certain entities and third parties.--A 
     covered cyber incident or ransom payment report submitted to 
     the Center by an entity that makes a ransom payment or third 
     party under section 2232 shall not be used by any Federal, 
     State, Tribal, or local government to investigate or take 
     another law enforcement action against the entity that makes 
     a ransom payment or third party.
       ``(3) Rule of construction.--Nothing in this subtitle shall 
     be construed to provide an entity that submits a covered 
     cyber incident report or ransom payment report under section 
     2232 any immunity from law enforcement action for making a 
     ransom payment otherwise prohibited by law.
       ``(e) Considerations.--When determining whether to exercise 
     the authorities provided under this section, the Director 
     shall take into consideration--
       ``(1) the size and complexity of the entity;
       ``(2) the complexity in determining if a covered cyber 
     incident has occurred; and
       ``(3) prior interaction with the Agency or awareness of the 
     entity of the policies and procedures of the Agency for 
     reporting covered cyber incidents and ransom payments.
       ``(f) Exclusions.--This section shall not apply to a State, 
     local, Tribal, or territorial government entity.
       ``(g) Report to Congress.--The Director shall submit to 
     Congress an annual report on the number of times the 
     Director--
       ``(1) issued an initial request for information pursuant to 
     subsection (b);
       ``(2) issued a subpoena pursuant to subsection (c); or
       ``(3) referred a matter to the Attorney General for a civil 
     action pursuant to subsection (c)(2).
       ``(h) Publication of the Annual Report.--The Director shall 
     publish a version of the annual report required under 
     subsection (g) on the website of the Agency, which shall 
     include, at a minimum, the number of times the Director--
       ``(1) issued an initial request for information pursuant to 
     subsection (b); or
       ``(2) issued a subpoena pursuant to subsection (c).
       ``(i) Anonymization of Reports.--The Director shall ensure 
     any victim information contained in a report required to be 
     published under subsection (h) be anonymized before the 
     report is published.

     ``SEC. 2235. INFORMATION SHARED WITH OR PROVIDED TO THE 
                   FEDERAL GOVERNMENT.

       ``(a) Disclosure, Retention, and Use.--
       ``(1) Authorized activities.--Information provided to the 
     Center or Agency pursuant to section 2232 or 2233 may be 
     disclosed to, retained by, and used by, consistent with 
     otherwise applicable provisions of Federal law, any Federal 
     agency or department, component, officer, employee, or agent 
     of the Federal Government solely for--
       ``(A) a cybersecurity purpose;
       ``(B) the purpose of identifying--
       ``(i) a cyber threat, including the source of the cyber 
     threat; or
       ``(ii) a security vulnerability;
       ``(C) the purpose of responding to, or otherwise preventing 
     or mitigating, a specific threat of death, a specific threat 
     of serious bodily harm, or a specific threat of serious 
     economic harm, including a terrorist act or use of a weapon 
     of mass destruction;
       ``(D) the purpose of responding to, investigating, 
     prosecuting, or otherwise preventing or mitigating, a serious 
     threat to a minor, including sexual exploitation and threats 
     to physical safety; or
       ``(E) the purpose of preventing, investigating, disrupting, 
     or prosecuting an offense arising out of a cyber incident 
     reported pursuant to section 2232 or 2233 or any of the 
     offenses listed in section 105(d)(5)(A)(v) of the 
     Cybersecurity Act of 2015 (6 U.S.C. 1504(d)(5)(A)(v)).
       ``(2) Agency actions after receipt.--
       ``(A) Rapid, confidential sharing of cyber threat 
     indicators.--Upon receiving a covered cyber incident or 
     ransom payment report submitted pursuant to this section, the 
     center shall immediately review the report to determine 
     whether the incident that is the subject of the report is 
     connected to an ongoing cyber threat or security 
     vulnerability and where applicable, use such report to 
     identify, develop, and rapidly disseminate to appropriate 
     stakeholders actionable, anonymized cyber threat indicators 
     and defensive measures.
       ``(B) Standards for sharing security vulnerabilities.--With 
     respect to information in a covered cyber incident or ransom 
     payment report regarding a security vulnerability referred to 
     in paragraph (1)(B)(ii), the Director shall develop 
     principles that govern the timing and manner in which 
     information relating to security vulnerabilities may be 
     shared, consistent with common industry best practices and 
     United States and international standards.
       ``(3) Privacy and civil liberties.--Information contained 
     in covered cyber incident and ransom payment reports 
     submitted to the Center or the Agency pursuant to section 
     2232 shall be retained, used, and disseminated, where 
     permissible and appropriate, by the Federal Government in 
     accordance with processes to be developed for the protection 
     of personal information consistent with processes adopted 
     pursuant to section 105 of the Cybersecurity Act of 2015 (6 
     U.S.C. 1504) and in a manner that protects from unauthorized 
     use or disclosure any information that may contain--
       ``(A) personal information of a specific individual; or
       ``(B) information that identifies a specific individual 
     that is not directly related to a cybersecurity threat.
       ``(4) Digital security.--The Center and the Agency shall 
     ensure that reports submitted to the Center or the Agency 
     pursuant to section 2232, and any information contained in 
     those reports, are collected, stored, and protected at a 
     minimum in accordance with the requirements for moderate 
     impact Federal information systems, as described in Federal 
     Information Processing Standards Publication 199, or any 
     successor document.
       ``(5) Prohibition on use of information in regulatory 
     actions.--A Federal, State, local, or Tribal government shall 
     not use information about a covered cyber incident or ransom 
     payment obtained solely through reporting directly to the 
     Center or the Agency in accordance with this subtitle to 
     regulate, including through an enforcement action, the 
     activities of the covered entity or entity that made a ransom 
     payment.
       ``(b) No Waiver of Privilege or Protection.--The submission 
     of a report to the Center or the Agency under section 2232 
     shall not constitute a waiver of any applicable privilege or 
     protection provided by law, including trade secret protection 
     and attorney-client privilege.
       ``(c) Exemption From Disclosure.--Information contained in 
     a report submitted to the Office under section 2232 shall be 
     exempt

[[Page S8486]]

     from disclosure under section 552(b)(3)(B) of title 5, United 
     States Code (commonly known as the `Freedom of Information 
     Act') and any State, Tribal, or local provision of law 
     requiring disclosure of information or records.
       ``(d) Ex Parte Communications.--The submission of a report 
     to the Agency under section 2232 shall not be subject to a 
     rule of any Federal agency or department or any judicial 
     doctrine regarding ex parte communications with a decision-
     making official.
       ``(e) Liability Protections.--
       ``(1) In general.--No cause of action shall lie or be 
     maintained in any court by any person or entity and any such 
     action shall be promptly dismissed for the submission of a 
     report pursuant to section 2232(a) that is submitted in 
     conformance with this subtitle and the rule promulgated under 
     section 2232(b), except that this subsection shall not apply 
     with regard to an action by the Federal Government pursuant 
     to section 2234(c)(2).
       ``(2) Scope.--The liability protections provided in 
     subsection (e) shall only apply to or affect litigation that 
     is solely based on the submission of a covered cyber incident 
     report or ransom payment report to the Center or the Agency.
       ``(3) Restrictions.--Notwithstanding paragraph (2), no 
     report submitted to the Agency pursuant to this subtitle or 
     any communication, document, material, or other record, 
     created for the sole purpose of preparing, drafting, or 
     submitting such report, may be received in evidence, subject 
     to discovery, or otherwise used in any trial, hearing, or 
     other proceeding in or before any court, regulatory body, or 
     other authority of the United States, a State, or a political 
     subdivision thereof, provided that nothing in this subtitle 
     shall create a defense to discovery or otherwise affect the 
     discovery of any communication, document, material, or other 
     record not created for the sole purpose of preparing, 
     drafting, or submitting such report.
       ``(f) Sharing With Non-Federal Entities.--The Agency shall 
     anonymize the victim who reported the information when making 
     information provided in reports received under section 2232 
     available to critical infrastructure owners and operators and 
     the general public.
       ``(g) Proprietary Information.--Information contained in a 
     report submitted to the Agency under section 2232 shall be 
     considered the commercial, financial, and proprietary 
     information of the covered entity when so designated by the 
     covered entity.
       ``(h) Stored Communications Act.--Nothing in this subtitle 
     shall be construed to permit or require disclosure by a 
     provider of a remote computing service or a provider of an 
     electronic communication service to the public of information 
     not otherwise permitted or required to be disclosed under 
     chapter 121 of title 18, United States Code (commonly known 
     as the `Stored Communications Act').''.
       (b) Technical and Conforming Amendment.--The table of 
     contents in section 1(b) of the Homeland Security Act of 2002 
     (Public Law 107-296; 116 Stat. 2135) is amended by inserting 
     after the items relating to subtitle B of title XXII the 
     following:

                 ``Subtitle C--Cyber Incident Reporting

``Sec. 2230. Definitions.
``Sec. 2231. Cyber Incident Review.
``Sec. 2232. Required reporting of certain cyber incidents.
``Sec. 2233. Voluntary reporting of other cyber incidents.
``Sec. 2234. Noncompliance with required reporting.
``Sec. 2235. Information shared with or provided to the Federal 
              Government.''.

     SEC. 6104. FEDERAL SHARING OF INCIDENT REPORTS.

       (a) Cyber Incident Reporting Sharing.--
       (1) In general.--Notwithstanding any other provision of law 
     or regulation, any Federal agency, including any independent 
     establishment (as defined in section 104 of title 5, United 
     States Code), that receives a report from an entity of a 
     cyber incident, including a ransomware attack, shall provide 
     the report to the Director as soon as possible, but not later 
     than 24 hours after receiving the report, unless a shorter 
     period is required by an agreement made between the 
     Cybersecurity Infrastructure Security Agency and the 
     recipient Federal agency. The Director shall share and 
     coordinate each report pursuant to section 2231(b) of the 
     Homeland Security Act of 2002, as added by section 6103 of 
     this title.
       (2) Rule of construction.--The requirements described in 
     paragraph (1) shall not be construed to be a violation of any 
     provision of law or policy that would otherwise prohibit 
     disclosure within the executive branch.
       (3) Protection of information.--The Director shall comply 
     with any obligations of the recipient Federal agency 
     described in paragraph (1) to protect information, including 
     with respect to privacy, confidentiality, or information 
     security, if those obligations would impose greater 
     protection requirements than this Act or the amendments made 
     by this Act.
       (4) FOIA exemption.--Any report received by the Director 
     pursuant to paragraph (1) shall be exempt from disclosure 
     under section 552(b)(3) of title 5, United States Code 
     (commonly known as the ``Freedom of Information Act'').
       (b) Creation of Council.--Section 1752(c) of the William M. 
     (Mac) Thornberry National Defense Authorization Act for 
     Fiscal Year 2021 (6 U.S.C. 1500(c)) is amended--
       (1) in paragraph (1)--
       (A) in subparagraph (G), by striking ``and'' at the end;
       (B) by redesignating subparagraph (H) as subparagraph (I); 
     and
       (C) by inserting after subparagraph (G) the following:
       ``(H) lead an intergovernmental Cyber Incident Reporting 
     Council, in coordination with the Director of the Office of 
     Management and Budget, the Attorney General, and the Director 
     of the Cybersecurity and Infrastructure Security Agency and 
     in consultation with Sector Risk Management Agencies (as 
     defined in section 2201 of the Homeland Security Act of 2002 
     (6 U.S.C. 651)) and other appropriate Federal agencies, to 
     coordinate, deconflict, and harmonize Federal incident 
     reporting requirements, including those issued through 
     regulations, for covered entities (as defined in section 2230 
     of such Act) and entities that make a ransom payment (as 
     defined in such section 2201 (6 U.S.C. 651)); and''; and
       (2) by adding at the end the following:
       ``(3) Rule of construction.--Nothing in paragraph (1)(H) 
     shall be construed to provide any additional regulatory 
     authority to any Federal entity.''.
       (c) Harmonizing Reporting Requirements.--The National Cyber 
     Director shall, in consultation with the Director, the 
     Attorney General, the Cyber Incident Reporting Council 
     described in section 1752(c)(1)(H) of the William M. (Mac) 
     Thornberry National Defense Authorization Act for Fiscal Year 
     2021 (6 U.S.C. 1500(c)(1)(H)), and the Director of the Office 
     of Management and Budget, to the maximum extent practicable--
       (1) periodically review existing regulatory requirements, 
     including the information required in such reports, to report 
     cyber incidents and ensure that any such reporting 
     requirements and procedures avoid conflicting, duplicative, 
     or burdensome requirements; and
       (2) coordinate with the Director, the Attorney General, and 
     regulatory authorities that receive reports relating to cyber 
     incidents to identify opportunities to streamline reporting 
     processes, and where feasible, facilitate interagency 
     agreements between such authorities to permit the sharing of 
     such reports, consistent with applicable law and policy, 
     without impacting the ability of such agencies to gain timely 
     situational awareness of a covered cyber incident or ransom 
     payment.

     SEC. 6105. RANSOMWARE VULNERABILITY WARNING PILOT PROGRAM.

       (a) Program.--Not later than 1 year after the date of 
     enactment of this Act, the Director shall establish a 
     ransomware vulnerability warning program to leverage existing 
     authorities and technology to specifically develop processes 
     and procedures for, and to dedicate resources to, identifying 
     information systems that contain security vulnerabilities 
     associated with common ransomware attacks, and to notify the 
     owners of those vulnerable systems of their security 
     vulnerability.
       (b) Identification of Vulnerable Systems.--The pilot 
     program established under subsection (a) shall--
       (1) identify the most common security vulnerabilities 
     utilized in ransomware attacks and mitigation techniques; and
       (2) utilize existing authorities to identify Federal and 
     other relevant information systems that contain the security 
     vulnerabilities identified in paragraph (1).
       (c) Entity Notification.--
       (1) Identification.--If the Director is able to identify 
     the entity at risk that owns or operates a vulnerable 
     information system identified in subsection (b), the Director 
     may notify the owner of the information system.
       (2) No identification.--If the Director is not able to 
     identify the entity at risk that owns or operates a 
     vulnerable information system identified in subsection (b), 
     the Director may utilize the subpoena authority pursuant to 
     section 2209 of the Homeland Security Act of 2002 (6 U.S.C. 
     659) to identify and notify the entity at risk pursuant to 
     the procedures within that section.
       (3) Required information.--A notification made under 
     paragraph (1) shall include information on the identified 
     security vulnerability and mitigation techniques.
       (d) Prioritization of Notifications.--To the extent 
     practicable, the Director shall prioritize covered entities 
     for identification and notification activities under the 
     pilot program established under this section.
       (e) Limitation on Procedures.--No procedure, notification, 
     or other authorities utilized in the execution of the pilot 
     program established under subsection (a) shall require an 
     owner or operator of a vulnerable information system to take 
     any action as a result of a notice of a security 
     vulnerability made pursuant to subsection (c).
       (f) Rule of Construction.--Nothing in this section shall be 
     construed to provide additional authorities to the Director 
     to identify vulnerabilities or vulnerable systems.
       (g) Termination.--The pilot program established under 
     subsection (a) shall terminate on the date that is 4 years 
     after the date of enactment of this Act.

     SEC. 6106. RANSOMWARE THREAT MITIGATION ACTIVITIES.

       (a) Joint Ransomware Task Force.--
       (1) In general.--Not later than 180 days after the date of 
     enactment of this Act, the National Cyber Director, in 
     consultation with the Attorney General and the Director of 
     the Federal Bureau of Investigation, shall establish and 
     chair the Joint Ransomware

[[Page S8487]]

     Task Force to coordinate an ongoing nationwide campaign 
     against ransomware attacks, and identify and pursue 
     opportunities for international cooperation.
       (2) Composition.--The Joint Ransomware Task Force shall 
     consist of participants from Federal agencies, as determined 
     appropriate by the National Cyber Director in consultation 
     with the Secretary of Homeland Security.
       (3) Responsibilities.--The Joint Ransomware Task Force, 
     utilizing only existing authorities of each participating 
     agency, shall coordinate across the Federal Government the 
     following activities:
       (A) Prioritization of intelligence-driven operations to 
     disrupt specific ransomware actors.
       (B) Consult with relevant private sector, State, local, 
     Tribal, and territorial governments and international 
     stakeholders to identify needs and establish mechanisms for 
     providing input into the Task Force.
       (C) Identifying, in consultation with relevant entities, a 
     list of highest threat ransomware entities updated on an 
     ongoing basis, in order to facilitate--
       (i) prioritization for Federal action by appropriate 
     Federal agencies; and
       (ii) identify metrics for success of said actions.
       (D) Disrupting ransomware criminal actors, associated 
     infrastructure, and their finances.
       (E) Facilitating coordination and collaboration between 
     Federal entities and relevant entities, including the private 
     sector, to improve Federal actions against ransomware 
     threats.
       (F) Collection, sharing, and analysis of ransomware trends 
     to inform Federal actions.
       (G) Creation of after-action reports and other lessons 
     learned from Federal actions that identify successes and 
     failures to improve subsequent actions.
       (H) Any other activities determined appropriate by the task 
     force to mitigate the threat of ransomware attacks against 
     Federal and non-Federal entities.
       (b) Clarifying Private Sector Lawful Defensive Measures.--
     Not later than 180 days after the date of enactment of this 
     Act, the National Cyber Director, in coordination with the 
     Secretary of Homeland Security and the Attorney General, 
     shall submit to the Committee on Homeland Security and 
     Governmental Affairs and the Committee on the Judiciary of 
     the Senate and the Committee on Homeland Security, the 
     Committee on the Judiciary, and the Committee on Oversight 
     and Reform of the House of Representatives a report that 
     describes defensive measures that private sector actors can 
     take when countering ransomware attacks and what laws need to 
     be clarified to enable that action.
       (c) Rule of Construction.--Nothing in this section shall be 
     construed to provide any additional authority to any Federal 
     agency.

     SEC. 6107. CONGRESSIONAL REPORTING.

       (a) Report on Stakeholder Engagement.--Not later than 30 
     days after the date on which the Director issues the final 
     rule under section 2232(b) of the Homeland Security Act of 
     2002, as added by section 6103(b) of this title, the Director 
     shall submit to the Committee on Homeland Security and 
     Governmental Affairs of the Senate and the Committee on 
     Homeland Security of the House of Representatives a report 
     that describes how the Director engaged stakeholders in the 
     development of the final rule.
       (b) Report on Opportunities to Strengthen Security 
     Research.--Not later than 1 year after the date of enactment 
     of this Act, the Director shall submit to the Committee on 
     Homeland Security and Governmental Affairs of the Senate and 
     the Committee on Homeland Security of the House of 
     Representatives a report describing how the National 
     Cybersecurity and Communications Integration Center 
     established under section 2209 of the Homeland Security Act 
     of 2002 (6 U.S.C. 659) has carried out activities under 
     section 2231(a)(9) of the Homeland Security Act of 2002, as 
     added by section 6103(a) of this title, by proactively 
     identifying opportunities to use cyber incident data to 
     inform and enable cybersecurity research within the academic 
     and private sector.
       (c) Report on Ransomware Vulnerability Warning Pilot 
     Program.--Not later than 1 year after the date of enactment 
     of this Act, and annually thereafter for the duration of the 
     pilot program established under section 6105, the Director 
     shall submit to the Committee on Homeland Security and 
     Governmental Affairs of the Senate and the Committee on 
     Homeland Security of the House of Representatives a report, 
     which may include a classified annex, on the effectiveness of 
     the pilot program, which shall include a discussion of the 
     following:
       (1) The effectiveness of the notifications under section 
     6105(c) in mitigating security vulnerabilities and the threat 
     of ransomware.
       (2) Identification of the most common vulnerabilities 
     utilized in ransomware.
       (3) The number of notifications issued during the preceding 
     year.
       (4) To the extent practicable, the number of vulnerable 
     devices or systems mitigated under this pilot by the Agency 
     during the preceding year.
       (d) Report on Harmonization of Reporting Regulations.--
       (1) In general.--Not later than 180 days after the date on 
     which the National Cyber Director convenes the Council 
     described in section 1752(c)(1)(H) of the William M. (Mac) 
     Thornberry National Defense Authorization Act for Fiscal Year 
     2021 (6 U.S.C. 1500(c)(1)(H)), the National Cyber Director 
     shall submit to the appropriate congressional committees a 
     report that includes--
       (A) a list of duplicative Federal cyber incident reporting 
     requirements on covered entities and entities that make a 
     ransom payment;
       (B) a description of any challenges in harmonizing the 
     duplicative reporting requirements;
       (C) any actions the National Cyber Director intends to take 
     to facilitate harmonizing the duplicative reporting 
     requirements; and
       (D) any proposed legislative changes necessary to address 
     the duplicative reporting.
       (2) Rule of construction.--Nothing in paragraph (1) shall 
     be construed to provide any additional regulatory authority 
     to any Federal agency.
       (e) GAO Reports.--
       (1) Implementation of this act.--Not later than 2 years 
     after the date of enactment of this Act, the Comptroller 
     General of the United States shall submit to the Committee on 
     Homeland Security and Governmental Affairs of the Senate and 
     the Committee on Homeland Security of the House of 
     Representatives a report on the implementation of this Act 
     and the amendments made by this Act.
       (2) Exemptions to reporting.--Not later than 1 year after 
     the date on which the Director issues the final rule required 
     under section 2232(b) of the Homeland Security Act of 2002, 
     as added by section 6103 of this title, the Comptroller 
     General of the United States shall submit to the Committee on 
     Homeland Security and Governmental Affairs of the Senate and 
     the Committee on Homeland Security of the House of 
     Representatives a report on the exemptions to reporting under 
     paragraphs (2) and (5) of section 2232(a) of the Homeland 
     Security Act of 2002, as added by section 6103 of this title, 
     which shall include--
       (A) to the extent practicable, an evaluation of the 
     quantity of incidents not reported to the Federal Government;
       (B) an evaluation of the impact on impacted entities, 
     homeland security, and the national economy of the ransomware 
     criminal ecosystem of incidents and ransom payments, 
     including a discussion on the scope of impact of incidents 
     that were not reported to the Federal Government;
       (C) an evaluation of the burden, financial and otherwise, 
     on entities required to report cyber incidents under this 
     Act, including an analysis of entities that meet the 
     definition of a small organization and would be exempt from 
     ransom payment reporting but not for being a covered entity; 
     and
       (D) a description of the consequences and effects of the 
     exemptions.
       (f) Report on Effectiveness of Enforcement Mechanisms.--Not 
     later than 1 year after the date on which the Director issues 
     the final rule required under section 2232(b) of the Homeland 
     Security Act of 2002, as added by section 6103 of this title, 
     the Director shall submit to the Committee on Homeland 
     Security and Governmental Affairs of the Senate and the 
     Committee on Homeland Security of the House of 
     Representatives a report on the effectiveness of the 
     enforcement mechanisms within section 2234 of the Homeland 
     Security Act of 2002, as added by section 6103 of this title.

  TITLE LXII--CISA TECHNICAL CORRECTIONS AND IMPROVEMENTS ACT OF 2021

     SEC. 6201. SHORT TITLE.

       This title may be cited as the ``CISA Technical Corrections 
     and Improvements Act of 2021''.

     SEC. 6202. REDESIGNATIONS.

       (a) In General.--Subtitle A of title XXII of the Homeland 
     Security Act of 2002 (6 U.S.C. 651 et seq.) is amended--
       (1) by redesignating section 2217 (6 U.S.C. 665f) as 
     section 2220;
       (2) by redesignating section 2216 (6 U.S.C. 665e) as 
     section 2219;
       (3) by redesignating the fourth section 2215 (relating to 
     Sector Risk Management Agencies) (6 U.S.C. 665d) as section 
     2218;
       (4) by redesignating the third section 2215 (relating to 
     the Cybersecurity State Coordinator) (6 U.S.C. 665c) as 
     section 2217; and
       (5) by redesignating the second section 2215 (relating to 
     the Joint Cyber Planning Office) (6 U.S.C. 665b) as section 
     2216.
       (b) Technical and Conforming Amendments.--Section 2202(c) 
     of the Homeland Security Act of 2002 (6 U.S.C. 652(c)) is 
     amended--
       (1) in paragraph (11), by striking ``and'' at the end;
       (2) in the first paragraph (12)--
       (A) by striking ``section 2215'' and inserting ``section 
     2217''; and
       (B) by striking ``and'' at the end; and
       (3) by redesignating the second and third paragraphs (12) 
     as paragraphs (13) and (14), respectively.
       (c) Additional Technical Amendment.--
       (1) Amendment.--Section 904(b)(1) of the DOTGOV Act of 2020 
     (title IX of division U of Public Law 116-260) is amended, in 
     the matter preceding subparagraph (A), by striking ``Homeland 
     Security Act'' and inserting ``Homeland Security Act of 
     2002''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall take effect as if enacted as part of the DOTGOV Act of 
     2020 (title IX of division U of Public Law 116-260).

[[Page S8488]]

  


     SEC. 6203. CONSOLIDATION OF DEFINITIONS.

       (a) In General.--Title XXII of the Homeland Security Act of 
     2002 (6 U.S.C. 651) is amended by inserting before the 
     subtitle A heading the following:

     ``SEC. 2200. DEFINITIONS.

       ``Except as otherwise specifically provided, in this title:
       ``(1) Agency.--The term `Agency' means the Cybersecurity 
     and Infrastructure Security Agency.
       ``(2) Agency information.--The term `agency information' 
     means information collected or maintained by or on behalf of 
     an agency.
       ``(3) Agency information system.--The term `agency 
     information system' means an information system used or 
     operated by an agency or by another entity on behalf of an 
     agency.
       ``(4) Appropriate congressional committees.--The term 
     `appropriate congressional committees' means--
       ``(A) the Committee on Homeland Security and Governmental 
     Affairs of the Senate; and
       ``(B) the Committee on Homeland Security of the House of 
     Representatives.
       ``(5) Cloud service provider.--The term `cloud service 
     provider' means an entity offering products or services 
     related to cloud computing, as defined by the National 
     Institutes of Standards and Technology in NIST Special 
     Publication 800-145 and any amendatory or superseding 
     document relating thereto.
       ``(6) Critical infrastructure information.--The term 
     `critical infrastructure information' means information not 
     customarily in the public domain and related to the security 
     of critical infrastructure or protected systems, including--
       ``(A) actual, potential, or threatened interference with, 
     attack on, compromise of, or incapacitation of critical 
     infrastructure or protected systems by either physical or 
     computer-based attack or other similar conduct (including the 
     misuse of or unauthorized access to all types of 
     communications and data transmission systems) that violates 
     Federal, State, or local law, harms interstate commerce of 
     the United States, or threatens public health or safety;
       ``(B) the ability of any critical infrastructure or 
     protected system to resist such interference, compromise, or 
     incapacitation, including any planned or past assessment, 
     projection, or estimate of the vulnerability of critical 
     infrastructure or a protected system, including security 
     testing, risk evaluation thereto, risk management planning, 
     or risk audit; or
       ``(C) any planned or past operational problem or solution 
     regarding critical infrastructure or protected systems, 
     including repair, recovery, reconstruction, insurance, or 
     continuity, to the extent it is related to such interference, 
     compromise, or incapacitation.
       ``(7) Cyber threat indicator.--The term `cyber threat 
     indicator' means information that is necessary to describe or 
     identify--
       ``(A) malicious reconnaissance, including anomalous 
     patterns of communications that appear to be transmitted for 
     the purpose of gathering technical information related to a 
     cybersecurity threat or security vulnerability;
       ``(B) a method of defeating a security control or 
     exploitation of a security vulnerability;
       ``(C) a security vulnerability, including anomalous 
     activity that appears to indicate the existence of a security 
     vulnerability;
       ``(D) a method of causing a user with legitimate access to 
     an information system or information that is stored on, 
     processed by, or transiting an information system to 
     unwittingly enable the defeat of a security control or 
     exploitation of a security vulnerability;
       ``(E) malicious cyber command and control;
       ``(F) the actual or potential harm caused by an incident, 
     including a description of the information exfiltrated as a 
     result of a particular cybersecurity threat;
       ``(G) any other attribute of a cybersecurity threat, if 
     disclosure of such attribute is not otherwise prohibited by 
     law; or
       ``(H) any combination thereof.
       ``(8) Cybersecurity purpose.--The term `cybersecurity 
     purpose' means the purpose of protecting an information 
     system or information that is stored on, processed by, or 
     transiting an information system from a cybersecurity threat 
     or security vulnerability.
       ``(9) Cybersecurity risk.--The term `cybersecurity risk'--
       ``(A) means threats to and vulnerabilities of information 
     or information systems and any related consequences caused by 
     or resulting from unauthorized access, use, disclosure, 
     degradation, disruption, modification, or destruction of such 
     information or information systems, including such related 
     consequences caused by an act of terrorism; and
       ``(B) does not include any action that solely involves a 
     violation of a consumer term of service or a consumer 
     licensing agreement.
       ``(10) Cybersecurity threat.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     the term `cybersecurity threat' means an action, not 
     protected by the First Amendment to the Constitution of the 
     United States, on or through an information system that may 
     result in an unauthorized effort to adversely impact the 
     security, availability, confidentiality, or integrity of an 
     information system or information that is stored on, 
     processed by, or transiting an information system.
       ``(B) Exclusion.--The term `cybersecurity threat' does not 
     include any action that solely involves a violation of a 
     consumer term of service or a consumer licensing agreement.
       ``(11) Defensive measure.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     the term `defensive measure' means an action, device, 
     procedure, signature, technique, or other measure applied to 
     an information system or information that is stored on, 
     processed by, or transiting an information system that 
     detects, prevents, or mitigates a known or suspected 
     cybersecurity threat or security vulnerability.
       ``(B) Exclusion.--The term `defensive measure' does not 
     include a measure that destroys, renders unusable, provides 
     unauthorized access to, or substantially harms an information 
     system or information stored on, processed by, or transiting 
     such information system not owned by--
       ``(i) the entity operating the measure; or
       ``(ii) another entity or Federal entity that is authorized 
     to provide consent and has provided consent to that private 
     entity for operation of such measure.
       ``(12) Homeland security enterprise.--The term `Homeland 
     Security Enterprise' means relevant governmental and 
     nongovernmental entities involved in homeland security, 
     including Federal, State, local, and Tribal government 
     officials, private sector representatives, academics, and 
     other policy experts.
       ``(13) Incident.--The term `incident' means an occurrence 
     that actually or imminently jeopardizes, without lawful 
     authority, the integrity, confidentiality, or availability of 
     information on an information system, or actually or 
     imminently jeopardizes, without lawful authority, an 
     information system.
       ``(14) Information sharing and analysis organization.--The 
     term `Information Sharing and Analysis Organization' means 
     any formal or informal entity or collaboration created or 
     employed by public or private sector organizations, for 
     purposes of--
       ``(A) gathering and analyzing critical infrastructure 
     information, including information related to cybersecurity 
     risks and incidents, in order to better understand security 
     problems and interdependencies related to critical 
     infrastructure, including cybersecurity risks and incidents, 
     and protected systems, so as to ensure the availability, 
     integrity, and reliability thereof;
       ``(B) communicating or disclosing critical infrastructure 
     information, including cybersecurity risks and incidents, to 
     help prevent, detect, mitigate, or recover from the effects 
     of a interference, compromise, or a incapacitation problem 
     related to critical infrastructure, including cybersecurity 
     risks and incidents, or protected systems; and
       ``(C) voluntarily disseminating critical infrastructure 
     information, including cybersecurity risks and incidents, to 
     its members, State, local, and Federal Governments, or any 
     other entities that may be of assistance in carrying out the 
     purposes specified in subparagraphs (A) and (B).
       ``(15) Information system.--The term `information system' 
     has the meaning given the term in section 3502 of title 44, 
     United States Code.
       ``(16) Intelligence community.--The term `intelligence 
     community' has the meaning given the term in section 3(4) of 
     the National Security Act of 1947 (50 U.S.C. 3003(4)).
       ``(17) Managed service provider.--The term `managed service 
     provider' means an entity that delivers services, such as 
     network, application, infrastructure, or security services, 
     via ongoing and regular support and active administration on 
     the premises of a customer, in the data center of the entity 
     (such as hosting), or in a third party data center.
       ``(18) Monitor.--The term `monitor' means to acquire, 
     identify, or scan, or to possess, information that is stored 
     on, processed by, or transiting an information system.
       ``(19) National cybersecurity asset response activities.--
     The term `national cybersecurity asset response activities' 
     means--
       ``(A) furnishing cybersecurity technical assistance to 
     entities affected by cybersecurity risks to protect assets, 
     mitigate vulnerabilities, and reduce impacts of cyber 
     incidents;
       ``(B) identifying other entities that may be at risk of an 
     incident and assessing risk to the same or similar 
     vulnerabilities;
       ``(C) assessing potential cybersecurity risks to a sector 
     or region, including potential cascading effects, and 
     developing courses of action to mitigate such risks;
       ``(D) facilitating information sharing and operational 
     coordination with threat response; and
       ``(E) providing guidance on how best to utilize Federal 
     resources and capabilities in a timely, effective manner to 
     speed recovery from cybersecurity risks.
       ``(20) National security system.--The term `national 
     security system' has the meaning given the term in section 
     11103 of title 40, United States Code.
       ``(21) Ransom payment.--The term `ransom payment' means the 
     transmission of any money or other property or asset, 
     including virtual currency, or any portion thereof, which has 
     at any time been delivered as ransom in connection with a 
     ransomware attack.
       ``(22) Ransomware attack.--The term `ransomware attack'--
       ``(A) means a cyber incident that includes the use or 
     threat of use of unauthorized or malicious code on an 
     information system, or the use or threat of use of another 
     digital

[[Page S8489]]

     mechanism such as a denial of service attack, to interrupt or 
     disrupt the operations of an information system or compromise 
     the confidentiality, availability, or integrity of electronic 
     data stored on, processed by, or transiting an information 
     system to extort a demand for a ransom payment; and
       ``(B) does not include any such event where the demand for 
     payment is made by a Federal Government entity, good faith 
     security research, or in response to an invitation by the 
     owner or operator of the information system for third parties 
     to identify vulnerabilities in the information system.
       ``(23) Sector risk management agency.--The term `Sector 
     Risk Management Agency' means a Federal department or agency, 
     designated by law or Presidential directive, with 
     responsibility for providing institutional knowledge and 
     specialized expertise of a sector, as well as leading, 
     facilitating, or supporting programs and associated 
     activities of its designated critical infrastructure sector 
     in the all hazards environment in coordination with the 
     Department.
       ``(24) Security control.--The term `security control' means 
     the management, operational, and technical controls used to 
     protect against an unauthorized effort to adversely affect 
     the confidentiality, integrity, and availability of an 
     information system or its information.
       ``(25) Security vulnerability.--The term `security 
     vulnerability' means any attribute of hardware, software, 
     process, or procedure that could enable or facilitate the 
     defeat of a security control.
       ``(26) Sharing.--The term `sharing' (including all 
     conjugations thereof) means providing, receiving, and 
     disseminating (including all conjugations of each such 
     terms).
       ``(27) Supply chain compromise.--The term `supply chain 
     compromise' means a cyber incident within the supply chain of 
     an information system that an adversary can leverage to 
     jeopardize the confidentiality, integrity, or availability of 
     the information technology system or the information the 
     system processes, stores, or transmits, and can occur at any 
     point during the life cycle.
       ``(28) Virtual currency.--The term `virtual currency' means 
     the digital representation of value that functions as a 
     medium of exchange, a unit of account, or a store of value.
       ``(29) Virtual currency address.--The term `virtual 
     currency address' means a unique public cryptographic key 
     identifying the location to which a virtual currency payment 
     can be made.''.
       (b) Technical and Conforming Amendments.--The Homeland 
     Security Act of 2002 (6 U.S.C. 101 et seq.) is amended--
       (1) by amending section 2201 to read as follows:

     ``SEC. 2201. DEFINITION.

       ``In this subtitle, the term `Cybersecurity Advisory 
     Committee' means the advisory committee established under 
     section 2219(a).'';
       (2) in section 2202--
       (A) in subsection (a)(1), by striking ``(in this subtitle 
     referred to as the Agency)'';
       (B) in subsection (f)--
       (i) in paragraph (1), by inserting ``Executive'' before 
     ``Assistant Director''; and
       (ii) in paragraph (2), by inserting ``Executive'' before 
     ``Assistant Director'';
       (3) in section 2203(a)(2), by striking ``as the `Assistant 
     Director''' and inserting ``as the `Executive Assistant 
     Director''';
       (4) in section 2204(a)(2), by striking ``as the `Assistant 
     Director''' and inserting ``as the `Executive Assistant 
     Director''';
       (5) in section 2209--
       (A) by striking subsection (a);
       (B) by redesignating subsections (b) through (o) as 
     subsections (a) through (n), respectively;
       (C) in subsection (c)(1)--
       (i) in subparagraph (A)(iii), as so redesignated, by 
     striking ``, as that term is defined under section 3(4) of 
     the National Security Act of 1947 (50 U.S.C. 3003(4))''; and
       (ii) in subparagraph (B)(ii), by striking ``information 
     sharing and analysis organizations'' and inserting 
     ``Information Sharing and Analysis Organizations'';
       (D) in subsection (d), as so redesignated--
       (i) in the matter preceding paragraph (1), by striking 
     ``subsection (c)'' and inserting ``subsection (b)''; and
       (ii) in paragraph (1)(E)(ii)(II), by striking ``information 
     sharing and analysis organizations'' and inserting 
     ``Information Sharing and Analysis Organizations'';
       (E) in subsection (j), as so redesignated, by striking 
     ``subsection (c)(8)'' and inserting ``subsection (b)(8)''; 
     and
       (F) in subsection (n), as so redesignated--
       (i) in paragraph (2)(A), by striking ``subsection (c)(12)'' 
     and inserting ``subsection (b)(12)''; and
       (ii) in paragraph (3)(B)(i), by striking ``subsection 
     (c)(12)'' and inserting ``subsection (b)(12)'';
       (6) in section 2210--
       (A) by striking subsection (a);
       (B) by redesignating subsections (b) through (d) as 
     subsections (a) through (c), respectively;
       (C) in subsection (b), as so redesignated--
       (i) by striking ``information sharing and analysis 
     organizations (as defined in section 2222(5))'' and inserting 
     ``Information Sharing and Analysis Organizations''; and
       (ii) by striking ``(as defined in section 2209)''; and
       (D) in subsection (c), as so redesignated, by striking 
     ``subsection (c)'' and inserting ``subsection (b)'';
       (7) in section 2211, by striking subsection (h);
       (8) in section 2212, by striking ``information sharing and 
     analysis organizations (as defined in section 2222(5))'' and 
     inserting ``Information Sharing and Analysis Organizations'';
       (9) in section 2213--
       (A) by striking subsection (a);
       (B) by redesignating subsections (b) through (f) as 
     subsections (a) through (e); respectively;
       (C) in subsection (b), as so redesignated, by striking 
     ``subsection (b)'' each place it appears and inserting 
     ``subsection (a)'';
       (D) in subsection (c), as so redesignated, in the matter 
     preceding paragraph (1), by striking ``subsection (b)'' and 
     inserting ``subsection (a)''; and
       (E) in subsection (d), as so redesignated--
       (i) in paragraph (1)--

       (I) in the matter preceding subparagraph (A), by striking 
     ``subsection (c)(2)'' and inserting ``subsection (b)(2)'';
       (II) in subparagraph (A), by striking ``subsection (c)(1)'' 
     and inserting ``subsection (b)(1)''; and
       (III) in subparagraph (B), by striking ``subsection 
     (c)(2)'' and inserting ``subsection (b)(2)''; and

       (ii) in paragraph (2), by striking ``subsection (c)(2)'' 
     and inserting ``subsection (b)(2)'';
       (10) in section 2216, as so redesignated--
       (A) in subsection (d)(2), by striking ``information sharing 
     and analysis organizations'' and inserting ``Information 
     Sharing and Analysis Organizations''; and
       (B) by striking subsection (f) and inserting the following:
       ``(f) Cyber Defense Operation Defined.--In this section, 
     the term `cyber defense operation' means the use of a 
     defensive measure.'';
       (11) in section 2218(c)(4)(A), as so redesignated, by 
     striking ``information sharing and analysis organizations'' 
     and inserting ``Information Sharing and Analysis 
     Organizations''; and
       (12) in section 2222--
       (A) by striking paragraphs (3), (5), and (8);
       (B) by redesignating paragraph (4) as paragraph (3); and
       (C) by redesignating paragraphs (6) and (7) as paragraphs 
     (4) and (5), respectively.
       (c) Table of Contents Amendments.--The table of contents in 
     section 1(b) of the Homeland Security Act of 2002 (Public Law 
     107-296; 116 Stat. 2135) is amended--
       (1) by inserting before the item relating to subtitle A of 
     title XXII the following:

``Sec. 2200. Definitions.'';
       (2) by striking the item relating to section 2201 and 
     inserting the following:

``Sec. 2201. Definition.''; and
       (3) by striking the item relating to section 2214 and all 
     that follows through the item relating to section 2217 and 
     inserting the following:

``Sec. 2214. National Asset Database.
``Sec. 2215. Duties and authorities relating to .gov internet domain.
``Sec. 2216. Joint Cyber Planning Office.
``Sec. 2217. Cybersecurity State Coordinator.
``Sec. 2218. Sector Risk Management Agencies.
``Sec. 2219. Cybersecurity Advisory Committee.
``Sec. 2220. Cybersecurity Education and Training Programs.''.
       (d) Cybersecurity Act of 2015 Definitions.--Section 102 of 
     the Cybersecurity Act of 2015 (6 U.S.C. 1501) is amended--
       (1) by striking paragraphs (4) through (7) and inserting 
     the following:
       ``(4) Cybersecurity purpose.--The term `cybersecurity 
     purpose' has the meaning given the term in section 2200 of 
     the Homeland Security Act of 2002.
       ``(5) Cybersecurity threat.--The term `cybersecurity 
     threat' has the meaning given the term in section 2200 of the 
     Homeland Security Act of 2002.
       ``(6) Cyber threat indicator.--The term `cyber threat 
     indicator' has the meaning given the term in section 2200 of 
     the Homeland Security Act of 2002.
       ``(7) Defensive measure.--The term `defensive measure' has 
     the meaning given the term in section 2200 of the Homeland 
     Security Act of 2002.'';
       (2) by striking paragraph (13) and inserting the following:
       ``(13) Monitor.-- The term `monitor' has the meaning given 
     the term in section 2200 of the Homeland Security Act of 
     2002.''; and
       (3) by striking paragraphs (16) and (17) and inserting the 
     following:
       ``(16) Security control.--The term `security control' has 
     the meaning given the term in section 2200 of the Homeland 
     Security Act of 2002.
       ``(17) Security vulnerability.--The term `security 
     vulnerability' has the meaning given the term in section 2200 
     of the Homeland Security Act of 2002.''.

     SEC. 6204. ADDITIONAL TECHNICAL AND CONFORMING AMENDMENTS.

       (a) Federal Cybersecurity Enhancement Act of 2015.--The 
     Federal Cybersecurity Enhancement Act of 2015 (6 U.S.C. 1521 
     et seq.) is amended--
       (1) in section 222 (6 U.S.C. 1521)--
       (A) in paragraph (2), by striking ``section 2210'' and 
     inserting ``section 2200''; and
       (B) in paragraph (4), by striking ``section 2209'' and 
     inserting ``section 2200'';
       (2) in section 223(b) (6 U.S.C. 151 note), by striking 
     ``section 2213(b)(1)'' each place it appears and inserting 
     ``section 2213(a)(1)'';

[[Page S8490]]

       (3) in section 226 (6 U.S.C. 1524)--
       (A) in subsection (a)--
       (i) in paragraph (1), by striking ``section 2213'' and 
     inserting ``section 2200'';
       (ii) in paragraph (2), by striking ``section 102'' and 
     inserting ``section 2200 of the Homeland Security Act of 
     2002'';
       (iii) in paragraph (4), by striking ``section 2210(b)(1)'' 
     and inserting ``section 2210(a)(1)''; and
       (iv) in paragraph (5), by striking ``section 2213(b)'' and 
     inserting ``section 2213(a)''; and
       (B) in subsection (c)(1)(A)(vi), by striking ``section 
     2213(c)(5)'' and inserting ``section 2213(b)(5)''; and
       (4) in section 227(b) (6 U.S.C. 1525(b)), by striking 
     ``section 2213(d)(2)'' and inserting ``section 2213(c)(2)''.
       (b) Public Health Service Act.--Section 2811(b)(4)(D) of 
     the Public Health Service Act (42 U.S.C. 300hh-10(b)(4)(D)) 
     is amended by striking ``section 228(c) of the Homeland 
     Security Act of 2002 (6 U.S.C. 149(c))'' and inserting 
     ``section 2210(b) of the Homeland Security Act of 2002 (6 
     U.S.C. 660(b))''.
       (c) William M. (Mac) Thornberry National Defense 
     Authorization Act of Fiscal Year 2021.--Section 9002 of the 
     William M. (Mac) Thornberry National Defense Authorization 
     Act for Fiscal Year 2021 (6 U.S.C. 652a) is amended--
       (1) in subsection (a)--
       (A) in paragraph (5), by striking ``section 2222(5) of the 
     Homeland Security Act of 2002 (6 U.S.C. 671(5))'' and 
     inserting ``section 2200 of the Homeland Security Act of 
     2002''; and
       (B) by amending paragraph (7) to read as follows:
       ``(7) Sector risk management agency.--The term `Sector Risk 
     Management Agency' has the meaning given the term in section 
     2200 of the Homeland Security Act of 2002.'';
       (2) in subsection (c)(3)(B), by striking ``section 
     2201(5)'' and inserting ``section 2200''; and
       (3) in subsection (d)--
       (A) by striking ``section 2215'' and inserting ``section 
     2218''; and
       (B) by striking ``, as added by this section''.
       (d) National Security Act of 1947.--Section 113B of the 
     National Security Act of 1947 (50 U.S.C. 3049a(b)(4)) is 
     amended by striking ``section 226 of the Homeland Security 
     Act of 2002 (6 U.S.C. 147)'' and inserting ``section 2208 of 
     the Homeland Security Act of 2002 (6 U.S.C. 658)''.
       (e) IoT Cybersecurity Improvement Act of 2020.--Section 
     5(b)(3) of the IoT Cybersecurity Improvement Act of 2020 (15 
     U.S.C. 278g-3c) is amended by striking ``section 2209(m) of 
     the Homeland Security Act of 2002 (6 U.S.C. 659(m))'' and 
     inserting ``section 2209(l) of the Homeland Security Act of 
     2002 (6 U.S.C. 659(l))''.
       (f) Small Business Act.--Section 21(a)(8)(B) of the Small 
     Business Act (15 U.S.C. 648(a)(8)(B)) is amended by striking 
     ``section 2209(a)'' and inserting ``section 2200''.
       (g) Title 46.--Section 70101(2) of title 46, United States 
     Code, is amended by striking ``section 227 of the Homeland 
     Security Act of 2002 (6 U.S.C. 148)'' and inserting ``section 
     2200 of the Homeland Security Act of 2002''.

            TITLE LXIII--FEDERAL CYBERSECURITY REQUIREMENTS

     SEC. 6301. EXEMPTION FROM FEDERAL CYBERSECURITY REQUIREMENTS.

       (a) In General.--Section 225(b)(2) of the Federal 
     Cybersecurity Enhancement Act of 2015 (6 U.S.C. 1523(b)(2)) 
     is amended to read as follows:
       ``(2) Exception.--
       ``(A) In general.--A particular requirement under paragraph 
     (1) shall not apply to an agency information system of an 
     agency if--
       ``(i) with respect to the agency information system, the 
     head of the agency submits to the Director an application for 
     an exemption from the particular requirement, in which the 
     head of the agency personally certifies to the Director with 
     particularity that--

       ``(I) operational requirements articulated in the 
     certification and related to the agency information system 
     would make it excessively burdensome to implement the 
     particular requirement;
       ``(II) the particular requirement is not necessary to 
     secure the agency information system or agency information 
     stored on or transiting the agency information system; and
       ``(III) the agency has taken all necessary steps to secure 
     the agency information system and agency information stored 
     on or transiting the agency information system;

       ``(ii) the head of the agency or the designee of the head 
     of the agency has submitted the certification described in 
     clause (i) to the appropriate congressional committees and 
     any other congressional committee with jurisdiction over the 
     agency; and
       ``(iii) the Director grants the exemption from the 
     particular requirement.
       ``(B) Duration of exemption.--
       ``(i) In general.--An exemption granted under subparagraph 
     (A) shall expire on the date that is 1 year after the date on 
     which the Director grants the exemption.
       ``(ii) Renewal.--Upon the expiration of an exemption 
     granted to an agency under subparagraph (A), the head of the 
     agency may apply for an additional exemption.''.
       (b) Report on Exemptions.--Section 3554(c)(1) of title 44, 
     United States Code, as amended by section 5121 of this Act, 
     is further amended--
       (1) in subparagraph (C), by striking ``and'' at the end;
       (2) in subparagraph (D), by striking the period at the end 
     and inserting ``; and''; and
       (3) by adding at the end the following:
       ``(E) with respect to any exemptions the agency is granted 
     by the Director of the Office of Management and Budget under 
     section 225(b)(2) of the Federal Cybersecurity Enhancement 
     Act of 2015 (6 U.S.C. 1523(b)(2)) that is effective on the 
     date of submission of the report, includes--
       ``(i) an identification of the particular requirements from 
     which any agency information system (as defined in section 
     2210 of the Homeland Security Act of 2002 (6 U.S.C. 660)) is 
     exempted; and
       ``(ii) for each requirement identified under subclause 
     (I)--

       ``(I) an identification of the agency information system 
     described in subclause (I) exempted from the requirement; and
       ``(II) an estimate of the date on which the agency will to 
     be able to comply with the requirement.''.

       (c) Effective Date.--This section and the amendments made 
     by this section shall take effect on the date that is 1 year 
     after the date of enactment of this Act.
                                 ______