(Adds reaction from technology industry, details on bill)
By Doina Chiacu and Joseph Menn
WASHINGTON, July 29 (Reuters) - Senator Patrick Leahy introduced legislation on Tuesday to ban the U.S. government's bulk collection of Americans' telephone records and Internet data and narrow how much information it can seek in any particular search.
The bill, which has White House backing, goes further than a version passed in May by the U.S. House of Representatives in reducing bulk collection and immediately drew warmer response from privacy advocates and technology companies.
Revelations last year by former National Security Agency contractor Edward Snowden prompted President Barack Obama to ask Congress in January to rein in the bulk collection and storage of records of millions of U.S. domestic telephone calls.
Many American technology companies also have been clamoring for changes after seeing their international business suffer as foreign governments worried they would collect data and hand it over to U.S. spy agencies.
"If enacted, this bill would represent the most significant reform of government surveillance authorities since Congress passed the USA Patriot Act 13 years ago," said Leahy, the Democratic chairman of the Senate Judiciary Committee, said on the Senate floor.
Congress leaves for a five-week break on Friday, and it was unclear if lawmakers would take on the legislation before November elections.
Leahy proposed greater limits on the terms that analysts use to search databases held by phone companies such as Verizon Communications Inc or AT&T Inc.
The bill, called the USA Freedom Act, would prohibit the government from collecting all information from a particular service provider or a broad geographic area, such as a city or area code, Leahy's office said.
It would expand government and company reporting to the public and direct the Foreign Intelligence Surveillance Court, which reviews intelligence collection inside U.S. borders, to appoint advocates on privacy and civil liberties issues.
Leahy's measure "is an improvement on the House-passed version at every step," said Harley Geiger, senior counsel for the Center for Democracy and Technology, a nonprofit advocacy group.
Many other civil liberties and technology groups endorsed the legislation.
The Information Technology Industry Council, with such members as Google Inc, Facebook Inc, Microsoft Corp and IBM Inc, said passing the bill would mean saving U.S. jobs dependent on an open Internet by "effectively putting an end to bulk collection."
Several groups called for additional steps, noting that the bill left intact the presidential order guiding collection overseas and also section 702 of the FISA Amendments Act of 2008, which allows broad collection in the United States of email to, from or about foreign targets.
"This is a marathon, not a sprint, and we have miles left to go," said Laura W. Murphy, Washington legislative director for the American Civil Liberties Union.
Leahy acknowledged there was more work to be done, saying "I'd like to get most of what we need, then work on the rest."
The Senate bill would end the bulk business-records collection of phone records authorized by Section 215 of the USA Patriot Act, enacted after the Sept. 11, 2001 attacks.
It instead would authorize searches for call records "two hops" from a search term and limits the types of search terms. The records indicate connections and duration of calls but do not include content.
Leahy's bill would require the government to report the number of individuals whose information has been collected. It gives companies four options to report on the number of government requests they get.
National Security Council spokesman Ned Price said Leahy had done "remarkable work" balancing security and privacy concerns in the bill. (Additional reporting by Roberta Rampton and Alina Selyukh; editing by Lisa Von Ahn, Jonathan Oatis and Bernard Orr)