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# Legislative Bulletin....................................................September 29, 2006

H.R. 4954 -- SAFE Port Act, Conference Report --- (Lungren, R-CA)

**[Order of Business]{.underline}:** The bill is scheduled for
consideration on Friday, September 29, 2006, subject to a unanimous
consent agreement in lieu of a rule.

**[Summary by Title:]{.underline}**

***Title I: Security of United States Seaports***

-   Authorizes the Secretary of Homeland Security to "verify the
    effectiveness of each facility security plan periodically" (not less
    than twice annually), by conducting unannounced inspections of port
    facilities.

-   Requires that security plans required under current law be
    resubmitted for approval if the ownership of the facility changes
    hands. In addition, the bill requires that the Facility Security
    Officer at each facility be a U.S. citizen, unless DHS grants a
    waiver.

-   Directs DHS to begin implementing the transportation security card
    program at the ten U.S. ports designated as top priority by July
    1, 2007. DHS would then have to implement the program at the next 40
    priority ports by January 1, 2008, and then at all U.S. ports by
    January 1, 2009.

-   Directs DHS, by January 1, 2009, to process and issue or deny each
    application for a transportation security card to individuals with
    current and valid merchant mariners' documents as of this bill's
    enactment. Such cards could not be issued to people convicted of
    certain felonies.

-   Requires DHS, no later than April 1, 2007 to develop and implement a
    long-range automated vessel tracking system for all vessels in
    United States waters that are equipped with the Global Maritime
    Distress and Safety System or equivalent satellite technology. Under
    current law, DHS already has this authority, however, this bill adds
    to this authority the specified date for development and
    implementation.

-   **Authorizes \$360 million for FY07-FY12 (\$60 million each year)
    for a new program** at DHS. The agency is directed to establish an
    integrated network of virtual and physical maritime security command
    centers at appropriate U.S. seaports and maritime regions, as
    determined by the DHS Secretary.

-   Directs DHS to update and finalize the rulemaking within 180 days on
    notices of arrival for foreign vessels on the Outer Continental
    Shelf.

-   Accelerates the implementation of certain crewmember identification
    requirements.

-   **A****uthorizes \$2.0 billion from 2007-2011 (\$400 million each
    year) for a new grant program** to allocate federal financial
    assistance to ports in the U.S. on the basis of risk and needs. The
    bill lists specific authorized uses of funds granted under this new
    program, some of which include covering the cost of acquisition,
    operation, and maintenance of equipment, conducting vulnerability
    assessments, conducting exercises to strengthen terrorism
    preparedness and establishing mechanisms for sharing terrorism
    threat information. The bill prohibits grant money from being used
    to supplant state or local funds for certain activities,
    constructing buildings or other physical facilities, acquiring land,
    and making state or local government cost-sharing contributions. The
    federal funds for any eligible project under this grant program are
    not to exceed 75% of the total cost of the project. The bill
    specifies that amounts authorized to be appropriated for this
    program are to originate from duties collected by U.S. Customs and
    Border Protection.

-   **Directs DHS to establish a new Port Security Training Program** to
    enhance the capabilities of each of the nation's commercial seaports
    to prevent, prepare for, respond to, mitigate against, and recover
    from threatened or actual acts of terrorism, natural disasters, and
    other emergencies. No separate funds authorized.

-   **Directs DHS to establish a new Port Security Exercise Program**
    for the purpose of testing and evaluating entities, such as the
    federal, state, local and foreign governments, commercial seaport
    personnel, and emergency response providers in their respective
    abilities to respond to acts of terrorism, natural disasters, and
    other emergencies at commercial seaports. DHS is directed to
    consolidate all existing port security exercise programs and
    conduct, on a periodic basis, port security exercises at commercial
    seaports. The DHS Secretary is also directed to establish a Remedial
    Action Management System to, among other things, identify and
    analyze each port security exercise for lessons learned and best
    practices.

-   **Requires that, by December 31, 2007, all containers entering the
    United States through the 22 ports through which the greatest volume
    of containers enter by vessel be scanned for radiation. By December
    31, 2008, the remainder of U.S. ports would have to have radiation
    detection capabilities deployed.**

-   Creates an Intermodal Rail Radiation Detection Test Center to test
    concepts specific to the challenges posed by on-dock rail.

-   Directs DHS to develop a plan within 120 days for the inspection of
    car ferries entering the U.S. from abroad.

-   Within one year, DHS would have to implement a plan to conduct
    random searches of containers (in addition to any other search
    requirements).

-   Directs DHS to implement a threat assessment screening for all port
    truck drivers with access to secure areas of a port.

-   Directs DHS to establish at least one Border Patrol unit for the
    Virgin Islands.

-   Establishes a university-based Center for Excellence for Maritime
    Domain Awareness to provide educational, technical, and analytical
    assistance for federal agencies with responsibilities for maritime
    domain awareness.

***Title II: Security of the International Supply Chain***

-   Directs the Secretary of Homeland Security (DHS) in consultation
    with federal, state, local and tribal government agencies and
    private sector stakeholders responsible for security matters
    affecting the movement of containers through the international
    supply chain, to develop, implement and update as appropriate, a
    strategic plan to enhance the security of the maritime
    transportation system. The bill outlines 12 specific requirements
    that the strategic plan must include. Some of these requirements
    include the following that the plan must:

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-   identify and address gaps and unnecessary overlaps in the roles,
    responsibilities, or authorities of the involved agencies;

-   identify and make recommendations regarding legislative, regulatory,
    and organizational changes necessary to improve coordination among
    the entities or to enhance the security of the international supply
    chain; and

-   provide measurable goals, including objectives, mechanisms, and a
    schedule, for furthering the security of commercial operations from
    point of origin to point of destination.

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-   "Encourages" DHS, in establishing the strategic plan, to consider
    proposed or established standards and practices of foreign
    governments and international organizations, including the
    International Maritime Organization, the World Customs Organization,
    the International Labor Organization, and the International
    Organization for Standardization, as appropriate, to establish
    standards and best practices for the security of containers moving
    through the international supply chain.

-   **Authorizes \$106.38 million from FY08-FY10** for DHS to develop
    and implement a plan for improving the Automated Targeting System
    for the identification of high-risk containers moving through the
    international supply chain. (The Automated Targeting System was
    established by U.S. Customs and Border Protection to assess imports
    and target those imports which pose a high risk of containing
    contraband).

[]{.mark}

-   **Authorizes \$443 million from FY08 -- FY10 for a new program**,
    the Container Security Initiative (CSI), to identify and examine
    maritime containers that pose a risk for terrorism at foreign ports
    before the containers are shipped to the U.S. The bill prohibits DHS
    from designating a foreign port under CSI unless certain
    requirements have been met. H.R.4954 outlines the requirements and
    procedures for the CSI inspections and foreign assistance
    procedures.

-   **Authorizes \$212 million for FY08-FY10, for a new grant program**,
    the Customs-Trade Partnership Against Terrorism (C-TPAT) program (a
    government-private sector program), "to strengthen and improve the
    overall security of the international supply chain and U.S. border
    security." Specifically, DHS is to implement the recommendations of
    the C-TPAT program identified by the GAO in Report GAO-05-404
    (<http://www.gao.gov/new.items/d05404.pdf>). The Secretary is
    directed to establish minimum requirements, program tiers, and
    program benefits. Under the new program, importers, brokers, air,
    sea, land carriers, and other entities in the international supply
    chain and intermodal transportation system are eligible to apply to
    voluntarily enter into partnerships with DHS. If these entities meet
    certain requirements, specified in the bill, under the C-TPAT
    program, they would be eligible for certain benefits such as reduced
    examinations and priority for processing for searchers. Within
    C-TPAT, the third tier of benefits is called the GreenLane and would
    be offered to validated C-TPAT participants demonstrating a
    sustained commitment beyond the minimum requirements for
    participation. In addition, DHS is directed to **establish a new
    pilot program** to test the feasibility costs, and benefits of
    utilizing their party entities to conduct validations of C-TPAT
    participants.

-   **Requires at least 50 full-time staff** to be engaged in the
    validation and revalidation of C-TPAT participants, and **authorizes
    \$86.1 million over the FY08 -- FY12 period** for this purpose.

-   Directs DHS to direct research, development, test, and evaluation
    efforts in furring maritime and cargo security and to ensure that
    these efforts that are funded by DHS are to be coordinated in order
    to avoid duplication of efforts.

-   Directs DHS to conduct **a new one-year pilot program** to evaluate
    and improve the security of empty containers at U.S. seaports to
    ensure the safe and secure deliver of cargo and to prevent potential
    acts of terrorism involving these containers.

[]{.mark}

***Title III: Administration***

-   Establishes an Office of Cargo Security in DHS to coordinate policy
    regarding cargo security.

-   The Director of Cargo Security is to advise the Assistant Secretary
    for Policy in the development of cargo security policy

-   Directs the secretary of State to appoint a liaison to assist the
    Secretary of Homeland Security in negotiating security related
    international agreements.

-   Reauthorizes the DHS Science and Technology Advisory Committee until
    the end of 2008. The committee is to coordinate efforts to
    incorporate security innovations into cargo security procedures.

***Title IV: Agency Resources and Oversight***

-   Directs the Secretary of Homeland Security to appoint a senior
    official to ensure that the Department's activities impact on trade
    and revenues are taken into account.

-   Creates a Director of Trade Policy to coordinate trade policy and
    consider the impact of cargo security policy on revenue.

-   Creates, in the U.S. Customs and Border Protection, an Office of
    International Trade headed by an Assistant Commissioner and
    transfers the assets of the Office of Strategic Trade and the Office
    of Regulations and Rulings to the new Office of International Trade.

-   Establishes an International Trade Committee to be chaired by the
    Commissioner of U.S. Customs and Border Protection, which includes
    various Assistant Commissioners. The Committee is to advise the
    Commissioner, coordinate policy, and make annual reports to
    Congress.

-   Directs the Commissioner to hire 200 more Customs and Border
    Protection Officers in the 2008-2012 period. The bill appropriates
    \$36 million in FY08, \$75 million in FY09, \$118 million in FY10,
    \$165 million in FY11, and \$217 million in FY12, for these
    purposes.

-   Amends the Tariff Act of 1930 by adding provisions directing the
    Secretary of Homeland Security, the U.S. Trade Representative, and
    other U.S. officials to work with international organizations like
    the World Customs Organization and the World Trade Organization to
    facilitate the efficient flow of trade.

-   Directs the Secretary to **establish the International Trade Data
    System (ITDS)**, operated by U.S. Customs and Border Protection, to
    eliminate redundant information requirements, to efficiently
    regulate the flow of commerce, and to effectively enforce
    international trade policy.

-   Creates an Interagency Steering Committee to help the Secretary of
    Homeland Security in overseeing ITDS.

[]{.mark}

***Title V: Domestic Nuclear Detection Office***

-   Establishes at DHS, a Domestic Nuclear Detection Office, to be
    headed by a Director of Domestic Nuclear Detection (appointed by the
    President). The office is to "protect against the unauthorized
    importation, possession, storage, transportation, development, or
    use of a nuclear explosive device, fissile material, or radiological
    material against the U.S."

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-   Directs DHS to coordinate the federal government's implementation of
    a global nuclear detection architecture.

-   Directs DHS to submit to Congress a research and development
    investment strategy for nuclear and radiological detection.

***Title VI: Commercial Mobile Service Alerts***

-   Establishes a new federal commission to develop a national standard
    and relevant protocols and procedures necessary to enable commercial
    mobile service providers to voluntarily transmit emergency alerts,
    capable of alerting the public to emergency situations on a
    national, regional, or local basis; provides limited liability for
    such voluntary service providers;

-   Directs the DHS Under Secretary to establish a program to research
    and evaluation program based on the results of the commission, which
    must fund further research and testing at academic institutions

-   Establishes a new grant program for remote community alert systems,
    which may not exceed \$10 million per year;

***Title VII: Other Matters***

-   Directs DHS to submit to Congress, a plan for the Essential Air
    Service airports in the U.S.

-   Directs each state or local government that receives a homeland
    security grant to submit a report to DHS that contains a list of all
    expenditures made by the state or locality using the grant funds.

-   Provides that if the President determines that one or more
    "substances of concern" (defined in the bill) have been released in
    a disaster area, the President **may carry out a program** for the
    coordination, protection, assessment and monitoring of the health
    and safety of individuals with high expose levels, and **authorizes
    such sums as necessary** for that purpose.

***Title VIII: Unlawful Internet Gambling Enforcement***

-   Modifies the definition "bets or wagers" to mean "the staking of
    risking by any person of something of value upon the outcome of a
    contest of others, a sporting event, or a game predominantly subject
    to chance, upon an agreement or understanding that the person or
    another person will receive something of value in the event of a
    certain outcome" and specifies that purchasing a chance to win a
    lottery ticket or other prize is *within* the definition;

-   Provides that the U.S. District Courts have original and exclusive
    jurisdiction to prevent and restrain violations of the Wire Act,
    including issuing injunctive or declarative relief and temporary
    restraining orders against persons in order to prevent or restrain a
    violation;

-   Allows the U.S. Attorney General to direct insured depository
    institutions to seize funds of gambling businesses that violate the
    Wire Act;

> *Example*: These provisions would allow law enforcement to take action
> injunctive action against an internet service provider to remove
> advertisements or shut down accounts for illegal gambling websites;

-   Stipulates that nothing in the Act supersedes or prohibits activity
    that is allowed under the Interstate Horseracing Act (15 U.S.C. 3001
    et seq.); and

-   States the sense of Congress that "this Act does not change which
    activities related to horse racing may or may not be allowed under
    federal law." Further states that the Act "is not intended to
    resolve any existing disagreements over how to interpret the
    relationship between the Interstate Horseracing Act and other
    federal statutes."

-   Defines various terms in the U.S. Code, such as creditor, credit
    card, card issuer, electronic fund transfer, restricted transaction,
    unlawful gambling, etc.) to facilitate the new prohibitions against
    payment to unlawful gambling entities; key terms include:

    -   Financial Transaction Provider -- a creditor, credit card
        issuer, or financial institution (such as Visa or Paypal) which
        may be utilized to effect a credit transaction, electronic fund
        transfer or other type of payment or credit.

    -   Unlawful Gambling -- to place, receive, or knowingly transmit a
        bet or wager using a communication facility in any way where the
        bet is unlawful under any applicable federal or state law where
        the bet took place.

-   Prohibits any person engaged in a gambling business from knowingly
    accepting credit, electronic fund transfer, check, draft or proceeds
    from any other form of financial transaction in connection with
    another person engaged in unlawful internet gambling (known as a
    'restricted transaction' in the definitions section). This section
    defines the various types of transactions that will be blocked or
    prevented, which may be expanded by the Treasury Secretary or the
    Federal Reserve Board of Governors through additional regulations;

-   Directs the Treasury Secretary and Federal Reserve Board of
    Governors (in consultation with the Attorney General) to prescribe
    regulations requiring each designated payment system to identify and
    block or otherwise prevent restricted transactions through the
    establishment of policies reasonably designed to prevent such
    transactions (by coding transactions or other means);

-   Provides that a financial transaction provider be considered in
    compliance with these regulations if such persons rely on and comply
    with the applicable polices and procedures set forth by the
    designated payment system of which it is a member;

-   Provides immunity from liability for any person that identifies and
    blocks or prevents a transaction that is reasonably believed to be a
    restricted transaction; and

-   Provides that the requirements of this section (regarding blocking
    restricted transactions) be enforced exclusively by the federal
    functional regulations and the Federal Trade Commission.

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-   Provides that the U.S. government should:

1)  encourage cooperation by foreign governments and relevant
    international entities in identifying whether internet gambling
    operations are being used for money laundering, corruption, or other
    crimes;

2)  advance policies that promote the cooperation of foreign
    governments, through information sharing and other measures; and

3)  encourage the Financial Action Task Force on Money Laundering to
    study the extent to which internet gambling operations are being
    used for money laundering purposes.

    -   Directs the Treasury Secretary to submit an annual report to
        Congress on any deliberations between the U.S. government and
        other countries on issues relating to internet gambling.

**[Possible Conservative Concerns]{.underline}**: Some conservatives may
be concerned that during a time of deficit spending, this bill creates
several new federal programs at an unknown cost to taxpayers. In
addition, a recent Heritage Foundation paper warned that in addressing
port security, it is a "bad idea to throw money at the problem." The
Homeland Security Inspector General has found that money being poured
into current port security grant programs is being wasted and has
yielded minimal security benefits. (Sources:
http://www.heritage.org/Research/HomelandDefense/wm1014.cfm,

<http://www.rawstory.com/news/2006/HSportsreport.pdf>)

[]{.mark}

[**Committee Action**:]{.underline} H.R. 4954 was introduced on March
14, 2006 and was referred to the Committee on Homeland Security, which
considered it, held a mark-up, and reported the bill by voice vote on
April 26, 2006. The House passed this bill on May 4, 2006, by a vote of
421-2. The Senate passed their version of the bill on September 14, 2006
by a vote of 98-0.

[**Cost to Taxpayers**:]{.underline} An updated CBO score is not
available for the updated version of this legislation. However,
according to CBO, the original House-passed version of H.R. 4954
authorized \$8.9 billion in appropriations from 2007-2011. In addition,
the bill also authorized \$881 million for 2012. From these
authorizations, CBO estimates the total cost will be \$7.4 billion from
2007-2011, with \$2 billion in spending after 2011.

**[Does the Bill Comply with House Rules Regarding
Earmarks?]{.underline}** The Conference Report includes the following
regarding "airdropped" (not passed by either the House or the Senate)
earmarks contained in the bill:

> Compliance With House Resolution 1000
>
> In compliance with H. Res. 1000, (109th Congress), the following
> provisions have been included in H.R. 4954:
>
> The bill contains language requiring disclosure under House Resolution
> 1000 on page 46, lines 16 through page 47, line 10. This section
> requires the establishment of an intermodal rail radiation detection
> test center to be located at a port with the majority of its cargo
> leaving the facility using on-dock, intermodal rail. The language is
> from an amendment offered by Senator Cantwell.
>
> The bill also contains language requiring disclosure on page 50, lines
> 1 through 10. This section requires the establishment of a Border
> Patrol unit in the United State Virgin Islands. The language is from
> an amendment offered by Delegate Christensen.
>
> The bill also contains language requiring disclosure on page 190, line
> 16 through page 191, line 3. This section authorizes such sums as may
> be necessary for the Northern Border Air Wing Branch located in Great
> Falls, Montana. The language is from an amendment offered by Senator
> Baucus.
>
> The bill also contains language requiring disclosure on page 193,
> lines 8 through 12. This section amends the conveyance date for United
> States Coast Guard Property in Portland, Maine. The language is from
> an amendment offered by Senator Collins.

[**Does the Bill Expand the Size and Scope of the Federal
Government?**:]{.underline} Yes. The bill **creates several new
programs** and creates several new federal bureaucratic offices and
positions.

**[Does the Bill Contain Any New State-Government, Local-Government, or
Private-Sector Mandates?]{.underline}**: An updated CBO score is not
available for this legislation.

**[Constitutional Authority]{.underline}**: The Homeland Security
Committee, in Committee Report 109-447, finds constitutional authority
in Article I, Section 8, Clause 1, which grants Congress the power to
provide for the common Defense of the United States.

**[RSC Staff Contact:]{.underline}** Joelle Cannon;
<joelle.cannon@mail.house.gov>, (202) 226-0718.