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House bill would require companies to report privacy breaches

Rep. Mary Bono Mack, R-Calif., is circulating draft legislation that would require companies to provide a basic level of protection for consumers' personal information and notify the government when data is stolen.

After Mack held hearings last month on enormous data breaches at companies like Sony and Epsilon, she promised to introduce a bill to protect consumer information. The International Monetary Fund and Citigroup have also reported recent cyberattacks.

Mack's discussion draft promises to "protect consumers by requiring reasonable security policies and procedures to protect data containing personal information, and to provide for nationwide notice in the event of a security breach." According to a background staff memo, the Secure and Fortify Electronic Data [SAFE Data] Act, is based on a bill that passed the House in the last Congress.

The House Energy and Commerce Committee's Commerce, Manufacturing, and Trade Subcommittee will hold a hearing on Wednesday to discuss the bill. Mack spokesman Ken Johnson said there could be a few tweaks before it is formally introduced.

"But it's safe to say that we are going to have an aggressive timetable in place for moving the bill through subcommittee and full committee," Johnson said. "Consumers want something done soon."

Wednesday's hearing will feature testimony from Federal Trade Commissioner Edith Ramirez, as well as representatives of the U.S. Chamber of Commerce, the Business Software Alliance, the Consumer Data Industry Association, and the Electronic Privacy Information Center.

The bill would require companies to dispose of old or unnecessary data, as well as notify the government within 48 hours of discovering a breach, unless the breach is an accident.

The legislation also grants the FTC limited authority over data protection at nonprofits such as universities and charities.

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