A proposal in the U.S. House of Representatives would set up a new semi-independent organization allowing the U.S. government and private companies to share information about cyberthreats, but some critics questioned whether the group would be too removed from congressional scrutiny.

The draft proposal, from Representative Dan Lungren, a California Republican, would create a nonprofit National Information Sharing Organization (NISO) that would serve as the collection and distribution point for cyberthreat information shared among the federal government, state and local governments, private companies and education institutions.

NISO would also fund cybersecurity research and development.

Lungren's proposal would be a "good start" toward improving U.S. cybersecurity, but it raises some concerns about privacy of the information shared, said Gregory Nojeim, senior counsel at the Center for Democracy and Technology. Nojeim, speaking at a Tuesday hearing before the House Homeland Security Committee's cybersecurity subcommittee, recommended that the proposal put limits on what information is shared.

CDT raised several privacy concerns to another piece of cybersecurity legislation, introduced and approved in the House Intelligence Committee in the past week. The Cyber Intelligence Sharing and Protection Act is also focused on increased the cyberthreat information shared between the government and private industry, but CDT has said that the bill could give the U.S. National Security Agency new access to personal information held by U.S. companies, because of the legislation's broad definition of the kind of information that companies can share with the NSA and other government agencies.

Lungren's proposal received generally positive reviews from four witnesses during the hearing, but Kevin Kosar, an analyst focused on U.S. government issues at the Congressional Research Service, questioned whether NISO would have too much independence. While the organization would be set up by the U.S. Department of Homeland Security, only about 15% of its budget would come from the U.S. government, with the rest coming from private members.

"Whether the threat of losing that 15% contribution would be a sufficient carrot to encourage ongoing NISO compliance to government direction is unclear," he said.

There is little precedence for such a semi-independent organization set up by the U.S. government, Kosar said. A majority of NISO's board would come from private groups, and the board would have "considerable discretion" to decide what organizations outside the U.S. government could join, he said.

NISO would not be required to report to Congress or the U.S. president, he added. Kosar questioned whether the proposal provided "sufficient incentives" for NISO participants to keep from leaking information they received through the organization.

Lungren, the chairman of the subcommittee, said it's important for Congress to move ahead with a cybersecurity policy. Improved cybersecurity measures "cannot wait," he said.

"Disgruntled employees, hackers, and foreign governments are knocking on the door of [critical] systems," he said. "Congress needs to act to improve our cyber defenses."

The proposal, which Lungren said he plans to formally introduce soon, would give DHS some budget flexibility for hiring and retaining cybersecurity specialists. The bill would also direct DHS to work with operators of critical infrastructure to implement cybersecurity standards in those industries.

The proposal is a "positive step" toward a national cybersecurity policy, said Cheri McGuire, vice president of global government affairs and cybersecurity policy at Symantec. She praised the proposal for designating DHS as the lead agency for national cybersecurity efforts.

"To accomplish the goal of improving cybersecurity, we believe there needs to be improved coordination between and among entities," McGuire said. "Currently, there are several government agencies working on various aspects of cybersecurity, though there is no designated lead."

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is grant_gross@idg.com.