[United States Statutes at Large, Volume 128, 113th Congress, 2nd Session]
[From the U.S. Government Publishing Office, www.gpo.gov]


Public Law 113-283
113th Congress

An Act


 
To amend chapter 35 of title 44, United States Code, to provide for
reform to Federal information security. <>

Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled, <>
SECTION 1. SHORT TITLE.

This Act may be cited as the ``Federal Information Security
Modernization Act of 2014''.
SEC. 2. FISMA REFORM.

(a) In General.--Chapter 35 of title 44, United States Code, is
amended by striking subchapters II and III <>  and inserting the following:

``SUBCHAPTER <>  II--INFORMATION SECURITY
``Sec. 3551. <>  Purposes

``The purposes of this subchapter are to--
``(1) provide a comprehensive framework for ensuring the
effectiveness of information security controls over information
resources that support Federal operations and assets;
``(2) recognize the highly networked nature of the current
Federal computing environment and provide effective
governmentwide management and oversight of the related
information security risks, including coordination of
information security efforts throughout the civilian, national
security, and law enforcement communities;
``(3) provide for development and maintenance of minimum
controls required to protect Federal information and information
systems;
``(4) provide a mechanism for improved oversight of Federal
agency information security programs, including through
automated security tools to continuously diagnose and improve
security;
``(5) acknowledge that commercially developed information
security products offer advanced, dynamic, robust, and effective
information security solutions, reflecting market solutions for
the protection of critical information infrastructures important
to the national defense and economic security of the nation that
are designed, built, and operated by the private sector; and
``(6) recognize that the selection of specific technical
hardware and software information security solutions should be

[[Page 3074]]

left to individual agencies from among commercially developed
products.
``Sec. 3552. <>  Definitions

``(a) <>  In General.--Except as provided
under subsection (b), the definitions under section 3502 shall apply to
this subchapter.

``(b) Additional Definitions.--As used in this subchapter:
``(1) The term `binding operational directive' means a
compulsory direction to an agency that--
``(A) is for purposes of safeguarding Federal
information and information systems from a known or
reasonably suspected information security threat,
vulnerability, or risk;
``(B) shall be in accordance with policies,
principles, standards, and guidelines issued by the
Director; and
``(C) may be revised or repealed by the Director if
the direction issued on behalf of the Director is not in
accordance with policies and principles developed by the
Director.
``(2) The term `incident' means an occurrence that--
``(A) actually or imminently jeopardizes, without
lawful authority, the integrity, confidentiality, or
availability of information or an information system; or
``(B) constitutes a violation or imminent threat of
violation of law, security policies, security
procedures, or acceptable use policies.
``(3) The term `information security' means protecting
information and information systems from unauthorized access,
use, disclosure, disruption, modification, or destruction in
order to provide--
``(A) integrity, which means guarding against
improper information modification or destruction, and
includes ensuring information nonrepudiation and
authenticity;
``(B) confidentiality, which means preserving
authorized restrictions on access and disclosure,
including means for protecting personal privacy and
proprietary information; and
``(C) availability, which means ensuring timely and
reliable access to and use of information.
``(4) The term `information technology' has the meaning
given that term in section 11101 of title 40.
``(5) The term `intelligence community' has the meaning
given that term in section 3(4) of the National Security Act of
1947 (50 U.S.C. 3003(4)).
``(6)(A) The term `national security system' means any
information system (including any telecommunications system)
used or operated by an agency or by a contractor of an agency,
or other organization on behalf of an agency--
``(i) the function, operation, or use of which--
``(I) involves intelligence activities;
``(II) involves cryptologic activities related
to national security;
``(III) involves command and control of
military forces;
``(IV) involves equipment that is an integral
part of a weapon or weapons system; or

[[Page 3075]]

``(V) subject to subparagraph (B), is critical
to the direct fulfillment of military or
intelligence missions; or
``(ii) is protected at all times by procedures
established for information that have been specifically
authorized under criteria established by an Executive
order or an Act of Congress to be kept classified in the
interest of national defense or foreign policy.
``(B) Subparagraph (A)(i)(V) does not include a system that
is to be used for routine administrative and business
applications (including payroll, finance, logistics, and
personnel management applications).
``(7) The term `Secretary' means the Secretary of Homeland
Security.
``Sec. 3553. <>  Authority and functions of
the Director and the Secretary

``(a) Director.--The Director shall oversee agency information
security policies and practices, including--
``(1) developing and overseeing the implementation of
policies, principles, standards, and guidelines on information
security, including through ensuring timely agency adoption of
and compliance with standards promulgated under section 11331 of
title 40;
``(2) requiring agencies, consistent with the standards
promulgated under such section 11331 and the requirements of
this subchapter, to identify and provide information security
protections commensurate with the risk and magnitude of the harm
resulting from the unauthorized access, use, disclosure,
disruption, modification, or destruction of--
``(A) information collected or maintained by or on
behalf of an agency; or
``(B) information systems used or operated by an
agency or by a contractor of an agency or other
organization on behalf of an agency;
``(3) ensuring that the Secretary carries out the
authorities and functions under subsection (b);
``(4) coordinating the development of standards and
guidelines under section 20 of the National Institute of
Standards and Technology Act (15 U.S.C. 278g-3) with agencies
and offices operating or exercising control of national security
systems (including the National Security Agency) to assure, to
the maximum extent feasible, that such standards and guidelines
are complementary with standards and guidelines developed for
national security systems;
``(5) overseeing agency compliance with the requirements of
this subchapter, including through any authorized action under
section 11303 of title 40, to enforce accountability for
compliance with such requirements; and
``(6) coordinating information security policies and
procedures with related information resources management
policies and procedures.

``(b) <>  Secretary.--The Secretary, in
consultation with the Director, shall administer the implementation of
agency information security policies and practices for information
systems, except for national security systems and information systems
described in paragraph (2) or (3) of subsection (e), including--

[[Page 3076]]

``(1) assisting the Director in carrying out the authorities
and functions under paragraphs (1), (2), (3), (5), and (6) of
subsection (a);
``(2) developing and overseeing the implementation of
binding operational directives to agencies to implement the
policies, principles, standards, and guidelines developed by the
Director under subsection (a)(1) and the requirements of this
subchapter, which may be revised or repealed by the Director if
the operational directives issued on behalf of the Director are
not in accordance with policies, principles, standards, and
guidelines developed by the Director, including--
``(A) requirements for reporting security incidents
to the Federal information security incident center
established under section 3556;
``(B) requirements for the contents of the annual
reports required to be submitted under section
3554(c)(1);
``(C) requirements for the mitigation of exigent
risks to information systems; and
``(D) <>  other operational
requirements as the Director or Secretary, in
consultation with the Director, may determine necessary;
``(3) monitoring agency implementation of information
security policies and practices;
``(4) convening meetings with senior agency officials to
help ensure effective implementation of information security
policies and practices;
``(5) coordinating Government-wide efforts on information
security policies and practices, including consultation with the
Chief Information Officers Council established under section
3603 and the Director of the National Institute of Standards and
Technology;
``(6) providing operational and technical assistance to
agencies in implementing policies, principles, standards, and
guidelines on information security, including implementation of
standards promulgated under section 11331 of title 40, including
by--
``(A) operating the Federal information security
incident center established under section 3556;
``(B) upon request by an agency, deploying
technology to assist the agency to continuously diagnose
and mitigate against cyber threats and vulnerabilities,
with or without reimbursement;
``(C) compiling and analyzing data on agency
information security; and
``(D) developing and conducting targeted operational
evaluations, including threat and vulnerability
assessments, on the information systems; and
``(7) <>  other actions as the Director
or the Secretary, in consultation with the Director, may
determine necessary to carry out this subsection.

``(c) <>  Report.--Not later than March 1 of
each year, the Director, in consultation with the Secretary, shall
submit to Congress a report on the effectiveness of information security
policies and practices during the preceding year, including--
``(1) a summary of the incidents described in the annual
reports required to be submitted under section 3554(c)(1),

[[Page 3077]]

including a summary of the information required under section
3554(c)(1)(A)(iii);
``(2) a description of the threshold for reporting major
information security incidents;
``(3) a summary of the results of evaluations required to be
performed under section 3555;
``(4) <>  an assessment of agency
compliance with standards promulgated under section 11331 of
title 40; and
``(5) <>  an assessment of agency
compliance with data breach notification policies and procedures
issued by the Director.

``(d) National Security Systems.--Except for the authorities and
functions described in subsection (a)(5) and subsection (c), the
authorities and functions of the Director and the Secretary under this
section shall not apply to national security systems.
``(e) Department of Defense and Intelligence Community Systems.--(1)
The authorities <>  of the Director
described in paragraphs (1) and (2) of subsection (a) shall be delegated
to the Secretary of Defense in the case of systems described in
paragraph (2) and to the Director of National Intelligence in the case
of systems described in paragraph (3).

``(2) The systems described in this paragraph are systems that are
operated by the Department of Defense, a contractor of the Department of
Defense, or another entity on behalf of the Department of Defense that
processes any information the unauthorized access, use, disclosure,
disruption, modification, or destruction of which would have a
debilitating impact on the mission of the Department of Defense.
``(3) The systems described in this paragraph are systems that are
operated by an element of the intelligence community, a contractor of an
element of the intelligence community, or another entity on behalf of an
element of the intelligence community that processes any information the
unauthorized access, use, disclosure, disruption, modification, or
destruction of which would have a debilitating impact on the mission of
an element of the intelligence community.
``(f) Consideration.--
``(1) In general.--In carrying out the responsibilities
under subsection (b), the Secretary shall consider any
applicable standards or guidelines developed by the National
Institute of Standards and Technology and issued by the
Secretary of Commerce under section 11331 of title 40.
``(2) Directives.--The Secretary shall--
``(A) <>  consult with the
Director of the National Institute of Standards and
Technology regarding any binding operational directive
that implements standards and guidelines developed by
the National Institute of Standards and Technology; and
``(B) ensure that binding operational directives
issued under subsection (b)(2) do not conflict with the
standards and guidelines issued under section 11331 of
title 40.
``(3) Rule of construction.--Nothing in this subchapter
shall be construed as authorizing the Secretary to direct the
Secretary of Commerce in the development and promulgation of
standards and guidelines under section 11331 of title 40.

``(g) <>  Exercise of Authority.--To
ensure fiscal and policy consistency, the Secretary shall exercise the
authority under this

[[Page 3078]]

section subject to direction by the President, in coordination with the
Director.
``Sec. 3554. <>  Federal agency
responsibilities

``(a) In General.--The head of each agency shall--
``(1) be responsible for--
``(A) providing information security protections
commensurate with the risk and magnitude of the harm
resulting from unauthorized access, use, disclosure,
disruption, modification, or destruction of--
``(i) information collected or maintained by
or on behalf of the agency; and
``(ii) information systems used or operated by
an agency or by a contractor of an agency or other
organization on behalf of an agency;
``(B) complying with the requirements of this
subchapter and related policies, procedures, standards,
and guidelines, including--
``(i) information security standards
promulgated under section 11331 of title 40;
``(ii) operational directives developed by the
Secretary under section 3553(b);
``(iii) policies and procedures issued by the
Director; and
``(iv) <>  information
security standards and guidelines for national
security systems issued in accordance with law and
as directed by the President; and
``(C) ensuring that information security management
processes are integrated with agency strategic,
operational, and budgetary planning processes;
``(2) ensure that senior agency officials provide
information security for the information and information systems
that support the operations and assets under their control,
including through--
``(A) assessing the risk and magnitude of the harm
that could result from the unauthorized access, use,
disclosure, disruption, modification, or destruction of
such information or information systems;
``(B) determining the levels of information security
appropriate to protect such information and information
systems in accordance with standards promulgated under
section 11331 of title 40, for information security
classifications and related requirements;
``(C) implementing policies and procedures to cost-
effectively reduce risks to an acceptable level; and
``(D) periodically testing and evaluating
information security controls and techniques to ensure
that they are effectively implemented;
``(3) <>  delegate to the agency
Chief Information Officer established under section 3506 (or
comparable official in an agency not covered by such section)
the authority to ensure compliance with the requirements imposed
on the agency under this subchapter, including--
``(A) designating a senior agency information
security officer who shall--
``(i) carry out the Chief Information
Officer's responsibilities under this section;

[[Page 3079]]

``(ii) possess professional qualifications,
including training and experience, required to
administer the functions described under this
section;
``(iii) have information security duties as
that official's primary duty; and
``(iv) head an office with the mission and
resources to assist in ensuring agency compliance
with this section;
``(B) developing and maintaining an agencywide
information security program as required by subsection
(b);
``(C) developing and maintaining information
security policies, procedures, and control techniques to
address all applicable requirements, including those
issued under section 3553 of this title and section
11331 of title 40;
``(D) training and overseeing personnel with
significant responsibilities for information security
with respect to such responsibilities; and
``(E) assisting senior agency officials concerning
their responsibilities under paragraph (2);
``(4) ensure that the agency has trained personnel
sufficient to assist the agency in complying with the
requirements of this subchapter and related policies,
procedures, standards, and guidelines;
``(5) <>  ensure
that the agency Chief Information Officer, in coordination with
other senior agency officials, reports annually to the agency
head on the effectiveness of the agency information security
program, including progress of remedial actions;
``(6) ensure that senior agency officials, including chief
information officers of component agencies or equivalent
officials, carry out responsibilities under this subchapter as
directed by the official delegated authority under paragraph
(3); and
``(7) ensure that all personnel are held accountable for
complying with the agency-wide information security program
implemented under subsection (b).

``(b) Agency Program.--Each agency shall develop, document, and
implement an agency-wide information security program to provide
information security for the information and information systems that
support the operations and assets of the agency, including those
provided or managed by another agency, contractor, or other source, that
includes--
``(1) <>  periodic assessments of
the risk and magnitude of the harm that could result from the
unauthorized access, use, disclosure, disruption, modification,
or destruction of information and information systems that
support the operations and assets of the agency, which may
include using automated tools consistent with standards and
guidelines promulgated under section 11331 of title 40;
``(2) <>  policies and procedures that--
``(A) are based on the risk assessments required by
paragraph (1);
``(B) cost-effectively reduce information security
risks to an acceptable level;
``(C) ensure that information security is addressed
throughout the life cycle of each agency information
system; and

[[Page 3080]]

``(D) ensure compliance with--
``(i) the requirements of this subchapter;
``(ii) policies and procedures as may be
prescribed by the Director, and information
security standards promulgated under section 11331
of title 40;
``(iii) minimally acceptable system
configuration requirements, as determined by the
agency; and
``(iv) <>  any other
applicable requirements, including standards and
guidelines for national security systems issued in
accordance with law and as directed by the
President;
``(3) subordinate plans for providing adequate information
security for networks, facilities, and systems or groups of
information systems, as appropriate;
``(4) security awareness training to inform personnel,
including contractors and other users of information systems
that support the operations and assets of the agency, of--
``(A) information security risks associated with
their activities; and
``(B) their responsibilities in complying with
agency policies and procedures designed to reduce these
risks;
``(5) <>  periodic testing and evaluation
of the effectiveness of information security policies,
procedures, and practices, to be performed with a frequency
depending on risk, but no less than annually, of which such
testing--
``(A) shall include testing of management,
operational, and technical controls of every information
system identified in the inventory required under
section 3505(c);
``(B) may include testing relied on in an evaluation
under section 3555; and
``(C) shall include using automated tools,
consistent with standards and guidelines promulgated
under section 11331 of title 40;
``(6) a process for planning, implementing, evaluating, and
documenting remedial action to address any deficiencies in the
information security policies, procedures, and practices of the
agency;
``(7) <>  procedures for detecting,
reporting, and responding to security incidents, which--
``(A) shall be consistent with the standards and
guidelines described in section 3556(b);
``(B) may include using automated tools; and
``(C) <>  shall
include--
``(i) mitigating risks associated with such
incidents before substantial damage is done;
``(ii) notifying and consulting with the
Federal information security incident center
established in section 3556; and
``(iii) notifying and consulting with, as
appropriate--
``(I) law enforcement agencies and
relevant Offices of Inspector General
and Offices of General Counsel;
``(II) <>  an
office designated by the President for
any incident involving a national
security system;
``(III) for a major incident, the
committees of Congress described in
subsection (c)(1)--

[[Page 3081]]

``(aa) <>
not later than 7 days after the
date on which there is a
reasonable basis to conclude
that the major incident has
occurred; and
``(bb) after the initial
notification under item (aa),
within a reasonable period of
time after additional
information relating to the
incident is discovered,
including the summary required
under subsection (c)(1)(A)(i);
and
``(IV) <>  any
other agency or office, in accordance
with law or as directed by the
President; and
``(8) <>  plans and procedures to
ensure continuity of operations for information systems that
support the operations and assets of the agency.

``(c) Agency Reporting.--
``(1) Annual report.--
``(A) In general.--Each agency shall submit to the
Director, the Secretary, the Committee on Government
Reform, the Committee on Homeland Security, and the
Committee on Science of the House of Representatives,
the Committee on Homeland Security and Governmental
Affairs and the Committee on Commerce, Science, and
Transportation of the Senate, the appropriate
authorization and appropriations committees of Congress,
and the Comptroller General a report on the adequacy and
effectiveness of information security policies,
procedures, and practices, including--
``(i) a description of each major information
security incident or related sets of incidents,
including summaries of--
``(I) the threats and threat actors,
vulnerabilities, and impacts relating to
the incident;
``(II) <>  the risk
assessments conducted under section
3554(a)(2)(A) of the affected
information systems before the date on
which the incident occurred;
``(III) the status of compliance of
the affected information systems with
applicable security requirements at the
time of the incident; and
``(IV) the detection, response, and
remediation actions;
``(ii) the total number of information
security incidents, including a description of
incidents resulting in significant compromise of
information security, system impact levels, types
of incident, and locations of affected systems;
``(iii) a description of each major
information security incident that involved a
breach of personally identifiable information, as
defined by the Director, including--
``(I) the number of individuals
whose information was affected by the
major information security incident; and
``(II) a description of the
information that was breached or
exposed; and

[[Page 3082]]

``(iv) <>  any other
information as the Director or the Secretary, in
consultation with the Director, may require.
``(B) Unclassified report.--
``(i) In general.--Each report submitted under
subparagraph (A) shall be in unclassified form,
but may include a classified annex.
``(ii) Access to information.--The head of an
agency shall ensure that, to the greatest extent
practicable, information is included in the
unclassified version of the reports submitted by
the agency under subparagraph (A).
``(2) Other plans and reports.--Each agency shall address
the adequacy and effectiveness of information security policies,
procedures, and practices in management plans and reports.

``(d) <>  Performance Plan.--(1) In addition to
the requirements of subsection (c), each agency, in consultation with
the Director, shall include as part of the performance plan required
under section 1115 of title 31 a description of--
``(A) the time periods; and
``(B) the resources, including budget, staffing, and
training,

that are necessary to implement the program required under subsection
(b).
``(2) The description under paragraph (1) shall be based on the risk
assessments required under subsection (b)(1).
``(e) Public Notice and Comment.--Each agency shall provide the
public with timely notice and opportunities for comment on proposed
information security policies and procedures to the extent that such
policies and procedures affect communication with the public.
``Sec. 3555. <>  Annual independent evaluation

``(a) In General.--(1) Each year each agency shall have performed an
independent evaluation of the information security program and practices
of that agency to determine the effectiveness of such program and
practices.
``(2) Each evaluation under this section shall include--
``(A) <>  testing of the effectiveness of
information security policies, procedures, and practices of a
representative subset of the agency's information systems;
``(B) <>  an assessment of the
effectiveness of the information security policies, procedures,
and practices of the agency; and
``(C) separate presentations, as appropriate, regarding
information security relating to national security systems.

``(b) Independent Auditor.--Subject to subsection (c)--
``(1) for each agency with an Inspector General appointed
under the Inspector General Act of 1978, the annual evaluation
required by this section shall be performed by the Inspector
General or by an independent external auditor, as determined by
the Inspector General of the agency; and
``(2) for each agency to which paragraph (1) does not apply,
the head of the agency shall engage an independent external
auditor to perform the evaluation.

``(c) National Security Systems.--For each agency operating or
exercising control of a national security system, that portion

[[Page 3083]]

of the evaluation required by this section directly relating to a
national security system shall be performed--
``(1) only by an entity designated by the agency head; and
``(2) in such a manner as to ensure appropriate protection
for information associated with any information security
vulnerability in such system commensurate with the risk and in
accordance with all applicable laws.

``(d) Existing Evaluations.--The evaluation required by this section
may be based in whole or in part on an audit, evaluation, or report
relating to programs or practices of the applicable agency.
``(e) Agency Reporting.--(1) Each year, not later than such date
established by the Director, the head of each agency shall submit to the
Director the results of the evaluation required under this section.
``(2) <>  To the extent an evaluation required
under this section directly relates to a national security system, the
evaluation results submitted to the Director shall contain only a
summary and assessment of that portion of the evaluation directly
relating to a national security system.

``(f) Protection of Information.--Agencies and evaluators shall take
appropriate steps to ensure the protection of information which, if
disclosed, may adversely affect information security. Such protections
shall be commensurate with the risk and comply with all applicable laws
and regulations.
``(g) OMB Reports to Congress.--(1) The Director shall summarize the
results of the evaluations conducted under this section in the report to
Congress required under section 3553(c).
``(2) The Director's report to Congress under this subsection shall
summarize information regarding information security relating to
national security systems in such a manner as to ensure appropriate
protection for information associated with any information security
vulnerability in such system commensurate with the risk and in
accordance with all applicable laws.
``(3) <>  Evaluations and any other descriptions
of information systems under the authority and control of the Director
of National Intelligence or of National Foreign Intelligence Programs
systems under the authority and control of the Secretary of Defense
shall be made available to Congress only through the appropriate
oversight committees of Congress, in accordance with applicable laws.

``(h) <>  Comptroller General.--The
Comptroller General shall periodically evaluate and report to Congress
on--
``(1) the adequacy and effectiveness of agency information
security policies and practices; and
``(2) implementation of the requirements of this subchapter.

``(i) <>  Assessment Technical Assistance.--The
Comptroller General may provide technical assistance to an Inspector
General or the head of an agency, as applicable, to assist the Inspector
General or head of an agency in carrying out the duties under this
section, including by testing information security controls and
procedures.

``(j) <>  Guidance.--The Director, in
consultation with the Secretary, the Chief Information Officers Council
established under section 3603, 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.

[[Page 3084]]

``Sec. 3556. <>  Federal information security
incident center

``(a) In General.--The Secretary shall ensure the operation of a
central Federal information security incident center to--
``(1) provide timely technical assistance to operators of
agency information systems regarding security incidents,
including guidance on detecting and handling information
security incidents;
``(2) <>  compile and analyze information
about incidents that threaten information security;
``(3) inform operators of agency information systems about
current and potential information security threats, and
vulnerabilities;
``(4) provide, as appropriate, intelligence and other
information about cyber threats, vulnerabilities, and incidents
to agencies to assist in risk assessments conducted under
section 3554(b); and
``(5) <>  consult with the
National Institute of Standards and Technology, agencies or
offices operating or exercising control of national security
systems (including the National Security Agency), and such other
agencies or offices in accordance with law and as directed by
the President regarding information security incidents and
related matters.

``(b) National Security Systems.--Each agency operating or
exercising control of a national security system shall share information
about information security incidents, threats, and vulnerabilities with
the Federal information security incident center to the extent
consistent with standards and guidelines for national security systems,
issued in accordance with law and as directed by the President.
``Sec. 3557. <>  National security systems

``The head of each agency operating or exercising control of a
national security system shall be responsible for ensuring that the
agency--
``(1) provides information security protections commensurate
with the risk and magnitude of the harm resulting from the
unauthorized access, use, disclosure, disruption, modification,
or destruction of the information contained in such system;
``(2) <>  implements information security
policies and practices as required by standards and guidelines
for national security systems, issued in accordance with law and
as directed by the President; and
``(3) <>  complies with the requirements
of this subchapter.
``Sec. 3558. <>  Effect on existing law

``Nothing in this subchapter, section 11331 of title 40, or section
20 of the National Standards and Technology Act (15 U.S.C. 278g-3) may
be construed as affecting the authority of the President, the Office of
Management and Budget or the Director thereof, the National Institute of
Standards and Technology, or the head of any agency, with respect to the
authorized use or disclosure of information, including with regard to
the protection of personal privacy under section 552a of title 5, the
disclosure of information under section 552 of title 5, the management
and disposition of records under chapters 29, 31, or 33 of title 44, the
management of information resources under subchapter I of chapter 35 of
this

[[Page 3085]]

title, or the disclosure of information to the Congress or the
Comptroller General of the United States.''.
(b) <>  Major Incident.--The Director of
the Office of Management and Budget shall--
(1) <>  develop guidance on what
constitutes a major incident for purposes of section 3554(b) of
title 44, United States Code, as added by subsection (a); and
(2) <>  provide to Congress
periodic briefings on the status of the developing of the
guidance until the date on which the guidance is issued.

(c) <>  Continuous Diagnostics.--
During the 2 year period beginning on the date of enactment of this Act,
the Director of the Office of Management and Budget, with the assistance
of the Secretary of Homeland Security, shall include in each report
submitted under section 3553(c) of title 44, United States Code, as
added by subsection (a), an assessment of the adoption by agencies of
continuous diagnostics technologies, including through the Continuous
Diagnostics and Mitigation program, and other advanced security tools to
provide information security, including challenges to the adoption of
such technologies or security tools.

(d) <>  Breaches.--
(1) Requirements.--The Director of the Office of Management
and Budget shall ensure that data breach notification policies
and guidelines are updated periodically and require--
(A) except as provided in paragraph (4), notice by
the affected agency to each committee of Congress
described in section 3554(c)(1) of title 44, United
States Code, as added by subsection (a), the Committee
on the Judiciary of the Senate, and the Committee on the
Judiciary of the House of Representatives, which shall--
(i) <>  be provided
expeditiously and not later than 30 days after the
date on which the agency discovered the
unauthorized acquisition or access; and
(ii) include--
(I) information about the breach,
including a summary of any information
that the agency knows on the date on
which notification is provided about how
the breach occurred;
(II) <>  an estimate of the number
of individuals affected by the breach,
based on information that the agency
knows on the date on which notification
is provided, including an assessment of
the risk of harm to affected
individuals;
(III) a description of any
circumstances necessitating a delay in
providing notice to affected
individuals; and
(IV) <>  an
estimate of whether and when the agency
will provide notice to affected
individuals; and
(B) notice by the affected agency to affected
individuals, pursuant to data breach notification
policies and guidelines, which shall be provided as
expeditiously as practicable and without unreasonable
delay after the agency discovers the unauthorized
acquisition or access.
(2) National security; law enforcement; remediation.--The
Attorney General, the head of an element of the intelligence
community (as such term is defined under section

[[Page 3086]]

3(4) of the National Security Act of 1947 (50 U.S.C. 3003(4)),
or the Secretary of Homeland Security may delay the notice to
affected individuals under paragraph (1)(B) if the notice would
disrupt a law enforcement investigation, endanger national
security, or hamper security remediation actions.
(3) <>  Reports.--
(A) Director of omb.--During the first 2 years
beginning after the date of enactment of this Act, the
Director of the Office of Management and Budget shall,
on an annual basis--
(i) <>  assess agency
implementation of data breach notification
policies and guidelines in aggregate; and
(ii) include the assessment described in
clause (i) in the report required under section
3553(c) of title 44, United States Code.
(B) Secretary of homeland security.--During the
first 2 years beginning after the date of enactment of
this Act, the Secretary of Homeland Security shall
include an assessment of the status of agency
implementation of data breach notification policies and
guidelines in the requirements under section
3553(b)(2)(B) of title 44, United States Code.
(4) <>  Exception.--Any element of the
intelligence community (as such term is defined under section
3(4) of the National Security Act of 1947 (50 U.S.C. 3003(4))
that is required to provide notice under paragraph (1)(A) shall
only provide such notice to appropriate committees of Congress.
(5) Rule of construction.--Nothing in paragraph (1) shall be
construed to alter any authority of a Federal agency or
department.

(e) Technical and Conforming Amendments.--
(1) Table of sections.--The table of sections for chapter 35
of title 44, United States Code is amended by striking the
matter relating to subchapters II and III <>  and inserting the following:

``subchapter ii--information security

``3551. Purposes.
``3552. Definitions.
``3553. Authority and functions of the Director and the Secretary.
``3554. Federal agency responsibilities.
``3555. Annual independent evaluation.
``3556. Federal information security incident center.
``3557. National security systems.
``3558. Effect on existing law.''.

(2) Cybersecurity research and development act.--Section
8(d)(1) of the Cybersecurity Research and Development Act (15
U.S.C. 7406) is amended by striking ``section 3534'' and
inserting ``section 3554''.
(3) Homeland security act of 2002.--The Homeland Security
Act of 2002 (6 U.S.C. 101 et seq.) is amended--
(A) in section 223 (6 U.S.C. 143)
(i) in the section heading, by inserting
``federal and'' before ``non-federal'';
(ii) in the matter preceding paragraph (1), by
striking ``the Under Secretary for Intelligence
and Analysis, in cooperation with the Assistant
Secretary for Infrastructure Protection'' and
inserting ``the Under Secretary appointed under
section 103(a)(1)(H)'';

[[Page 3087]]

(iii) in paragraph (2), by striking the period
at the end and inserting ``; and''; and
(iv) by adding at the end the following:
``(3) fulfill the responsibilities of the Secretary to
protect Federal information systems under subchapter II of
chapter 35 of title 44, United States Code.'';
(B) in section 1001(c)(1)(A) (6 U.S.C.
511(c)(1)(A)), by striking ``section 3532(3)'' and
inserting ``section 3552(b)(5)''; and
(C) in the table of contents in section 1(b), by
striking the item relating to section 223 and inserting
the following:

``Sec. 223. Enhancement of Federal and non-Federal cybersecurity.''.

(4) 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--
(A) in subsection (a)(2), by striking ``section
3532(b)(2)'' and inserting ``section 3552(b)(5)''; and
(B) in subsection (e)--
(i) in paragraph (2), by striking ``section
3532(1)'' and inserting ``section 3552(b)(2)'';
and
(ii) in paragraph (5), by striking ``section
3532(b)(2)'' and inserting ``section 3552(b)(5)''.
(5) Title 10.--Title 10, United States Code, is amended--
(A) <>  in section 2222(j)(5),
by striking ``section 3542(b)(2)'' and inserting
``section 3552(b)(5)'';
(B) in section 2223(c)(3), by striking ``section
3542(b)(2)'' and inserting ``section 3552(b)(5)''; and
(C) in section 2315, by striking ``section
3542(b)(2)'' and inserting ``section 3552(b)(5)''.

(f) Other Provisions.--
(1) <>  Circular a-130.--Not later
than 1 year after the date of enactment of this Act, the
Director of the Office of Management and Budget shall amend or
revise Office of Management and Budget Circular A-130 to
eliminate inefficient or wasteful reporting.
The <>  Director of the Office of
Management and Budget shall provide quarterly briefings to
Congress on the status of the amendment or revision required
under this paragraph.
(2) ISPAB.--Section 21(b) of the National Institute of
Standards and Technology Act (15 U.S.C. 278g-4(b)) is amended--
(A) in paragraph (2), by inserting ``, the Secretary
of Homeland Security,'' after ``the Institute''; and

[[Page 3088]]

(B) in paragraph (3), by inserting ``the Secretary
of Homeland Security,'' after ``the Secretary of
Commerce,''.

Approved December 18, 2014.

LEGISLATIVE HISTORY--S. 2521:
---------------------------------------------------------------------------

SENATE REPORTS: No. 113-256 (Comm. on Homeland Security and Governmental
Affairs).
CONGRESSIONAL RECORD, Vol. 160 (2014):
Dec. 8, considered and passed Senate.
Dec. 10, considered and passed House.