181
Subtitle F—General Immigration 
Provisions 
SEC. 471. ABOLISHMENT OF INS. 
(a) IN GENERAL.—The Immigration and Naturaliza-
tion Service of the Department of Justice is abolished. 
(b) PROHIBITION.—The authority provided by sec-
tion 1502 may be used to reorganize functions or organi-
zational units within the Bureau of Border Security or the 
Bureau of Citizenship and Immigration Services, but may 
not be used to recombine the two bureaus into a single 
agency or otherwise to combine, join, or consolidate func-
tions or organizational units of the two bureaus with each 
other. 
SEC. 472. VOLUNTARY SEPARATION INCENTIVE PAYMENTS. 
(a) DEFINITIONS.—For purposes of this section—
(1) the term ‘‘employee’’ means an employee 
(as defined by section 2105 of title 5, United States 
Code) who—
(A) has completed at least 3 years of cur-
rent continuous service with 1 or more covered 
entities; and 
(B) is serving under an appointment with-
out time limitation;
182
but does not include any person under subpara-
graphs (A)–(G) of section 663(a)(2) of Public Law 
104–208 (5 U.S.C. 5597 note); 
(2) the term ‘‘covered entity’’ means—
(A) the Immigration and Naturalization 
Service; 
(B) the Bureau of Border Security of the 
Department of Homeland Security; and 
(C) the Bureau of Citizenship and Immi-
gration Services of the Department of Home-
land Security; and 
(3) the term ‘‘transfer date’’ means the date on 
which the transfer of functions specified under sec-
tion 441 takes effect. 
(b) STRATEGIC RESTRUCTURING PLAN.—Before the 
Attorney General or the Secretary obligates any resources 
for voluntary separation incentive payments under this 
section, such official shall submit to the appropriate com-
mittees of Congress a strategic restructuring plan, which 
shall include—
(1) an organizational chart depicting the cov-
ered entities after their restructuring pursuant to 
this Act;
183
(2) a summary description of how the authority 
under this section will be used to help carry out that 
restructuring; and 
(3) 
the 
information 
specified 
in 
section 
663(b)(2) of Public Law 104–208 (5 U.S.C. 5597 
note). 
As used in the preceding sentence, the ‘‘appropriate com-
mittees of Congress’’ are the Committees on Appropria-
tions, Government Reform, and the Judiciary of the 
House of Representatives, and the Committees on Appro-
priations, Governmental Affairs, and the Judiciary of the 
Senate. 
(c) AUTHORITY.—The Attorney General and the Sec-
retary may, to the extent necessary to help carry out their 
respective strategic restructuring plan described in sub-
section (b), make voluntary separation incentive payments 
to employees. Any such payment—
(1) shall be paid to the employee, in a lump 
sum, after the employee has separated from service; 
(2) shall be paid from appropriations or funds 
available for the payment of basic pay of the em-
ployee; 
(3) shall be equal to the lesser of—
184
(A) the amount the employee would be en-
titled to receive under section 5595(c) of title 5, 
United States Code; or 
(B) an amount not to exceed $25,000, as 
determined by the Attorney General or the Sec-
retary; 
(4) may not be made except in the case of any 
qualifying 
employee 
who 
voluntarily 
separates 
(whether by retirement or resignation) before the 
end of—
(A) the 3-month period beginning on the 
date on which such payment is offered or made 
available to such employee; or 
(B) the 3-year period beginning on the 
date of the enactment of this Act, 
whichever occurs first; 
(5) shall not be a basis for payment, and shall 
not be included in the computation, of any other 
type of Government benefit; and 
(6) shall not be taken into account in deter-
mining the amount of any severance pay to which 
the employee may be entitled under section 5595 of 
title 5, United States Code, based on any other sepa-
ration.
185
(d) ADDITIONAL AGENCY CONTRIBUTIONS TO THE 
RETIREMENT FUND.—
(1) IN GENERAL.—In addition to any payments 
which it is otherwise required to make, the Depart-
ment of Justice and the Department of Homeland 
Security shall, for each fiscal year with respect to 
which it makes any voluntary separation incentive 
payments under this section, remit to the Office of 
Personnel Management for deposit in the Treasury 
of the United States to the credit of the Civil Service 
Retirement and Disability Fund the amount re-
quired under paragraph (2). 
(2) AMOUNT REQUIRED.—The amount required 
under this paragraph shall, for any fiscal year, be 
the amount under subparagraph (A) or (B), which-
ever is greater. 
(A) FIRST METHOD.—The amount under 
this subparagraph shall, for any fiscal year, be 
equal to the minimum amount necessary to off-
set the additional costs to the retirement sys-
tems under title 5, United States Code (payable 
out of the Civil Service Retirement and Dis-
ability Fund) resulting from the voluntary sepa-
ration of the employees described in paragraph
186
(3), as determined under regulations of the Of-
fice of Personnel Management. 
(B) 
SECOND
METHOD.—The 
amount 
under this subparagraph shall, for any fiscal 
year, be equal to 45 percent of the sum total 
of the final basic pay of the employees described 
in paragraph (3). 
(3) COMPUTATIONS TO BE BASED ON SEPARA-
TIONS
OCCURRING
IN
THE
FISCAL
YEAR
IN-
VOLVED.—The employees described in this para-
graph are those employees who receive a voluntary 
separation incentive payment under this section 
based on their separating from service during the 
fiscal year with respect to which the payment under 
this subsection relates. 
(4) FINAL BASIC PAY DEFINED.—In this sub-
section, the term ‘‘final basic pay’’ means, with re-
spect to an employee, the total amount of basic pay 
which would be payable for a year of service by such 
employee, computed using the employee’s final rate 
of basic pay, and, if last serving on other than a 
full-time basis, with appropriate adjustment there-
for. 
(e) EFFECT OF SUBSEQUENT EMPLOYMENT WITH 
THE GOVERNMENT.—An individual who receives a vol-
187
untary separation incentive payment under this section 
and who, within 5 years after the date of the separation 
on which the payment is based, accepts any compensated 
employment with the Government or works for any agency 
of the Government through a personal services contract, 
shall be required to pay, prior to the individual’s first day 
of employment, the entire amount of the incentive pay-
ment. Such payment shall be made to the covered entity 
from which the individual separated or, if made on or after 
the transfer date, to the Deputy Secretary or the Under 
Secretary for Border and Transportation Security (for 
transfer to the appropriate component of the Department 
of Homeland Security, if necessary). 
(f) EFFECT ON EMPLOYMENT LEVELS.—
(1) INTENDED EFFECT.—Voluntary separations 
under this section are not intended to necessarily re-
duce the total number of full-time equivalent posi-
tions in any covered entity. 
(2) USE OF VOLUNTARY SEPARATIONS.—A cov-
ered entity may redeploy or use the full-time equiva-
lent positions vacated by voluntary separations 
under this section to make other positions available 
to more critical locations or more critical occupa-
tions.
188
SEC. 473. AUTHORITY TO CONDUCT A DEMONSTRATION 
PROJECT RELATING TO DISCIPLINARY AC-
TION. 
(a) IN GENERAL.—The Attorney General and the 
Secretary may each, during a period ending not later than 
5 years after the date of the enactment of this Act, con-
duct a demonstration project for the purpose of deter-
mining whether one or more changes in the policies or pro-
cedures relating to methods for disciplining employees 
would result in improved personnel management. 
(b) SCOPE.—A demonstration project under this sec-
tion—
(1) may not cover any employees apart from 
those employed in or under a covered entity; and 
(2) shall not be limited by any provision of 
chapter 43, 75, or 77 of title 5, United States Code. 
(c) 
PROCEDURES.—Under 
the 
demonstration 
project—
(1) the use of alternative means of dispute reso-
lution (as defined in section 571 of title 5, United 
States Code) shall be encouraged, whenever appro-
priate; and 
(2) each covered entity under the jurisdiction of 
the official conducting the project shall be required 
to provide for the expeditious, fair, and independent 
review of any action to which section 4303 or sub-
189
chapter II of chapter 75 of such title 5 would other-
wise apply (except an action described in section 
7512(5) of such title 5). 
(d) ACTIONS
INVOLVING
DISCRIMINATION.—Not-
withstanding any other provision of this section, if, in the 
case of any matter described in section 7702(a)(1)(B) of 
title 5, United States Code, there is no judicially review-
able action under the demonstration project within 120 
days after the filing of an appeal or other formal request 
for review (referred to in subsection (c)(2)), an employee 
shall be entitled to file a civil action to the same extent 
and in the same manner as provided in section 7702(e)(1) 
of such title 5 (in the matter following subparagraph (C) 
thereof). 
(e) CERTAIN EMPLOYEES.—Employees shall not be 
included within any project under this section if such em-
ployees are—
(1) neither managers nor supervisors; and 
(2) within a unit with respect to which a labor 
organization is accorded exclusive recognition under 
chapter 71 of title 5, United States Code. 
Notwithstanding the preceding sentence, an aggrieved em-
ployee within a unit (referred to in paragraph (2)) may 
elect to participate in a complaint procedure developed 
under the demonstration project in lieu of any negotiated
190
grievance procedure and any statutory procedure (as such 
term is used in section 7121 of such title 5). 
(f) REPORTS.—The General Accounting Office shall 
prepare and submit to the Committees on Government Re-
form and the Judiciary of the House of Representatives 
and the Committees on Governmental Affairs and the Ju-
diciary of the Senate periodic reports on any demonstra-
tion project conducted under this section, such reports to 
be submitted after the second and fourth years of its oper-
ation. Upon request, the Attorney General or the Sec-
retary shall furnish such information as the General Ac-
counting Office may require to carry out this subsection. 
(g) DEFINITION.—In this section, the term ‘‘covered 
entity’’ has the meaning given such term in section 
472(a)(2). 
SEC. 474. SENSE OF CONGRESS. 
It is the sense of Congress that—
(1) the missions of the Bureau of Border Secu-
rity and the Bureau of Citizenship and Immigration 
Services are equally important and, accordingly, they 
each should be adequately funded; and 
(2) the functions transferred under this subtitle 
should not, after such transfers take effect, operate 
at levels below those in effect prior to the enactment 
of this Act.
191
SEC. 475. DIRECTOR OF SHARED SERVICES. 
(a) IN GENERAL.—Within the Office of Deputy Sec-
retary, there shall be a Director of Shared Services. 
(b) FUNCTIONS.—The Director of Shared Services 
shall be responsible for the coordination of resources for 
the Bureau of Border Security and the Bureau of Citizen-
ship and Immigration Services, including—
(1) information resources management, includ-
ing computer databases and information technology; 
(2) records and file management; and 
(3) forms management. 
SEC. 476. SEPARATION OF FUNDING. 
(a) IN GENERAL.—There shall be established sepa-
rate accounts in the Treasury of the United States for 
appropriated funds and other deposits available for the 
Bureau of Citizenship and Immigration Services and the 
Bureau of Border Security. 
(b) SEPARATE BUDGETS.—To ensure that the Bu-
reau of Citizenship and Immigration Services and the Bu-
reau of Border Security are funded to the extent necessary 
to fully carry out their respective functions, the Director 
of the Office of Management and Budget shall separate 
the budget requests for each such entity. 
(c) FEES.—Fees imposed for a particular service, ap-
plication, or benefit shall be deposited into the account es-
192
tablished under subsection (a) that is for the bureau with 
jurisdiction over the function to which the fee relates. 
(d) FEES NOT TRANSFERABLE.—No fee may be 
transferred between the Bureau of Citizenship and Immi-
gration Services and the Bureau of Border Security for 
purposes not authorized by section 286 of the Immigration 
and Nationality Act (8 U.S.C. 1356). 
SEC. 477. REPORTS AND IMPLEMENTATION PLANS. 
(a) DIVISION OF FUNDS.—The Secretary, not later 
than 120 days after the effective date of this Act, shall 
submit to the Committees on Appropriations and the Judi-
ciary of the House of Representatives and of the Senate 
a report on the proposed division and transfer of funds, 
including unexpended funds, appropriations, and fees, be-
tween the Bureau of Citizenship and Immigration Services 
and the Bureau of Border Security. 
(b) DIVISION OF PERSONNEL.—The Secretary, not 
later than 120 days after the effective date of this Act, 
shall submit to the Committees on Appropriations and the 
Judiciary of the House of Representatives and of the Sen-
ate a report on the proposed division of personnel between 
the Bureau of Citizenship and Immigration Services and 
the Bureau of Border Security. 
(c) IMPLEMENTATION PLAN.—
193
(1) IN
GENERAL.—The Secretary, not later 
than 120 days after the effective date of this Act, 
and every 6 months thereafter until the termination 
of fiscal year 2005, shall submit to the Committees 
on Appropriations and the Judiciary of the House of 
Representatives and of the Senate an implementa-
tion plan to carry out this Act. 
(2) 
CONTENTS.—The 
implementation 
plan 
should include details concerning the separation of 
the Bureau of Citizenship and Immigration Services 
and the Bureau of Border Security, including the 
following: 
(A) Organizational structure, including the 
field structure. 
(B) Chain of command. 
(C) Procedures for interaction among such 
bureaus. 
(D) Fraud detection and investigation. 
(E) The processing and handling of re-
moval proceedings, including expedited removal 
and applications for relief from removal. 
(F) 
Recommendations 
for 
conforming 
amendments to the Immigration and Nation-
ality Act (8 U.S.C. 1101 et seq.). 
(G) Establishment of a transition team.
194
(H) Methods to phase in the costs of sepa-
rating the administrative support systems of 
the Immigration and Naturalization Service in 
order to provide for separate administrative 
support systems for the Bureau of Citizenship 
and Immigration Services and the Bureau of 
Border Security. 
(d) COMPTROLLER GENERAL STUDIES
AND RE-
PORTS.—
(1) STATUS
REPORTS
ON
TRANSITION.—Not 
later than 18 months after the date on which the 
transfer of functions specified under section 441 
takes effect, and every 6 months thereafter, until 
full implementation of this subtitle has been com-
pleted, the Comptroller General of the United States 
shall submit to the Committees on Appropriations 
and on the Judiciary of the House of Representa-
tives and the Senate a report containing the fol-
lowing: 
(A) A determination of whether the trans-
fers of functions made by subtitles D and E 
have been completed, and if a transfer of func-
tions has not taken place, identifying the rea-
sons why the transfer has not taken place.
195
(B) If the transfers of functions made by 
subtitles D and E have been completed, an 
identification of any issues that have arisen due 
to the completed transfers. 
(C) An identification of any issues that 
may arise due to any future transfer of func-
tions. 
(2) REPORT ON MANAGEMENT.—Not later than 
4 years after the date on which the transfer of func-
tions specified under section 441 takes effect, the 
Comptroller General of the United States shall sub-
mit to the Committees on Appropriations and on the 
Judiciary of the House of Representatives and the 
Senate a report, following a study, containing the 
following: 
(A) Determinations of whether the transfer 
of functions from the Immigration and Natu-
ralization Service to the Bureau of Citizenship 
and Immigration Services and the Bureau of 
Border Security have improved, with respect to 
each function transferred, the following: 
(i) Operations. 
(ii) Management, including account-
ability and communication. 
(iii) Financial administration.
196
(iv) Recordkeeping, including informa-
tion management and technology. 
(B) A statement of the reasons for the de-
terminations under subparagraph (A). 
(C) Any recommendations for further im-
provements to the Bureau of Citizenship and 
Immigration Services and the Bureau of Border 
Security. 
(3) REPORT ON FEES.—Not later than 1 year 
after the date of the enactment of this Act, the 
Comptroller General of the United States shall sub-
mit to the Committees on the Judiciary of the 
House of Representatives and of the Senate a report 
examining whether the Bureau of Citizenship and 
Immigration Services is likely to derive sufficient 
funds from fees to carry out its functions in the ab-
sence of appropriated funds.
SEC. 478. IMMIGRATION FUNCTIONS. 
(a) ANNUAL REPORT.—
(1) IN GENERAL.—One year after the date of 
the enactment of this Act, and each year thereafter, 
the Secretary shall submit a report to the President, 
to the Committees on the Judiciary and Government 
Reform of the House of Representatives, and to the 
Committees on the Judiciary and Government Af-
197
fairs of the Senate, on the impact the transfers 
made by this subtitle has had on immigration func-
tions. 
(2) MATTER INCLUDED.—The report shall ad-
dress the following with respect to the period cov-
ered by the report: 
(A) The aggregate number of all immigra-
tion applications and petitions received, and 
processed, by the Department; 
(B) Region-by-region statistics on the ag-
gregate number of immigration applications and 
petitions filed by an alien (or filed on behalf of 
an alien) and denied, disaggregated by category 
of denial and application or petition type. 
(C) The quantity of backlogged immigra-
tion applications and petitions that have been 
processed, the aggregate number awaiting proc-
essing, and a detailed plan for eliminating the 
backlog. 
(D) The average processing period for im-
migration 
applications 
and 
petitions, 
disaggregated by application or petition type. 
(E) The number and types of immigration-
related grievances filed with any official of the
198
Department of Justice, and if those grievances 
were resolved. 
(F) Plans to address grievances and im-
prove immigration services. 
(G) Whether immigration-related fees were 
used consistent with legal requirements regard-
ing such use. 
(H) Whether immigration-related questions 
conveyed by customers to the Department 
(whether conveyed in person, by telephone, or 
by means of the Internet) were answered effec-
tively and efficiently. 
(b) SENSE OF CONGRESS REGARDING IMMIGRATION 
SERVICES.—It is the sense of Congress that—
(1) the quality and efficiency of immigration 
services rendered by the Federal Government should 
be improved after the transfers made by this subtitle 
take effect; and 
(2) the Secretary should undertake efforts to 
guarantee that concerns regarding the quality and 
efficiency of immigration services are addressed after 
such effective date.
199
TITLE V—EMERGENCY 
PREPAREDNESS AND RESPONSE 
SEC. 501. UNDER SECRETARY FOR EMERGENCY PREPARED-
NESS AND RESPONSE. 
There shall be in the Department a Directorate of 
Emergency Preparedness and Response headed by an 
Under Secretary for Emergency Preparedness and Re-
sponse. 
SEC. 502. RESPONSIBILITIES. 
The Secretary, acting through the Under Secretary 
for Emergency Preparedness and Response, shall in-
clude—
(1) helping to ensure the effectiveness of emer-
gency response providers to terrorist attacks, major 
disasters, and other emergencies; 
(2) with respect to the Nuclear Incident Re-
sponse Team (regardless of whether it is operating 
as an organizational unit of the Department pursu-
ant to this title)—
(A) establishing standards and certifying 
when those standards have been met; 
(B) conducting joint and other exercises 
and training and evaluating performance; and 
(C) providing funds to the Department of 
Energy and the Environmental Protection
200
Agency, as appropriate, for homeland security 
planning, exercises and training, and equip-
ment; 
(3) providing the Federal Government’s re-
sponse to terrorist attacks and major disasters, in-
cluding—
(A) managing such response; 
(B) directing the Domestic Emergency 
Support Team, the Strategic National Stock-
pile, the National Disaster Medical System, and 
(when operating as an organizational unit of 
the Department pursuant to this title) the Nu-
clear Incident Response Team; 
(C) overseeing the Metropolitan Medical 
Response System; and 
(D) coordinating other Federal response 
resources in the event of a terrorist attack or 
major disaster; 
(4) aiding the recovery from terrorist attacks 
and major disasters; 
(5) building a comprehensive national incident 
management system with Federal, State, and local 
government personnel, agencies, and authorities, to 
respond to such attacks and disasters;
201
(6) consolidating existing Federal Government 
emergency response plans into a single, coordinated 
national response plan; and 
(7) developing comprehensive programs for de-
veloping interoperative communications technology, 
and helping to ensure that emergency response pro-
viders acquire such technology. 
SEC. 503. FUNCTIONS TRANSFERRED. 
In accordance with title XV, there shall be trans-
ferred to the Secretary the functions, personnel, assets, 
and liabilities of the following entities: 
(1) The Federal Emergency Management Agen-
cy, including the functions of the Director of the 
Federal Emergency Management Agency relating 
thereto. 
(2) The Integrated Hazard Information System 
of the National Oceanic and Atmospheric Adminis-
tration, which shall be renamed ‘‘FIRESAT’’. 
(3) The National Domestic Preparedness Office 
of the Federal Bureau of Investigation, including the 
functions of the Attorney General relating thereto. 
(4) The Domestic Emergency Support Teams 
of the Department of Justice, including the func-
tions of the Attorney General relating thereto.
202
(5) The Office of Emergency Preparedness, the 
National Disaster Medical System, and the Metro-
politan Medical Response System of the Department 
of Health and Human Services, including the func-
tions of the Secretary of Health and Human Serv-
ices and the Assistant Secretary for Public Health 
Emergency Preparedness relating thereto. 
(6) The Strategic National Stockpile of the De-
partment of Health and Human Services, including 
the functions of the Secretary of Health and Human 
Services relating thereto. 
SEC. 504. NUCLEAR INCIDENT RESPONSE. 
(a) IN GENERAL.—At the direction of the Secretary 
(in connection with an actual or threatened terrorist at-
tack, major disaster, or other emergency in the United 
States), the Nuclear Incident Response Team shall oper-
ate as an organizational unit of the Department. While 
so operating, the Nuclear Incident Response Team shall 
be subject to the direction, authority, and control of the 
Secretary. 
(b) RULE OF CONSTRUCTION.—Nothing in this title 
shall be construed to limit the ordinary responsibility of 
the Secretary of Energy and the Administrator of the En-
vironmental Protection Agency for organizing, training, 
equipping, and utilizing their respective entities in the Nu-
203
clear Incident Response Team, or (subject to the provi-
sions of this title) from exercising direction, authority, and 
control over them when they are not operating as a unit 
of the Department. 
SEC. 505. CONDUCT OF CERTAIN PUBLIC HEALTH-RELATED 
ACTIVITIES. 
(a) IN GENERAL.—With respect to all public health-
related activities to improve State, local, and hospital pre-
paredness and response to chemical, biological, radio-
logical, and nuclear and other emerging terrorist threats 
carried out by the Department of Health and Human 
Services (including the Public Health Service), the Sec-
retary of Health and Human Services shall set priorities 
and preparedness goals and further develop a coordinated 
strategy for such activities in collaboration with the Sec-
retary. 
(b) EVALUATION OF PROGRESS.—In carrying out 
subsection (a), the Secretary of Health and Human Serv-
ices shall collaborate with the Secretary in developing spe-
cific benchmarks and outcome measurements for evalu-
ating progress toward achieving the priorities and goals 
described in such subsection. 
SEC. 506. DEFINITION. 
In this title, the term ‘‘Nuclear Incident Response 
Team’’ means a resource that includes—
204
(1) those entities of the Department of Energy 
that perform nuclear or radiological emergency sup-
port functions (including accident response, search 
response, advisory, and technical operations func-
tions), radiation exposure functions at the medical 
assistance facility known as the Radiation Emer-
gency Assistance Center/Training Site (REAC/TS), 
radiological assistance functions, and related func-
tions; and 
(2) those entities of the Environmental Protec-
tion Agency that perform such support functions 
(including radiological emergency response func-
tions) and related functions. 
SEC. 507. ROLE OF FEDERAL EMERGENCY MANAGEMENT 
AGENCY. 
(a) IN GENERAL.—The functions of the Federal 
Emergency Management Agency include the following: 
(1) All functions and authorities prescribed by 
the Robert T. Stafford Disaster Relief and Emer-
gency Assistance Act (42 U.S.C. 5121 et seq.). 
(2) Carrying out its mission to reduce the loss 
of life and property and protect the Nation from all 
hazards by leading and supporting the Nation in a 
comprehensive, risk-based emergency management 
program—
205
(A) of mitigation, by taking sustained ac-
tions to reduce or eliminate long-term risk to 
people and property from hazards and their ef-
fects; 
(B) of planning for building the emergency 
management profession to prepare effectively 
for, mitigate against, respond to, and recover 
from any hazard; 
(C) of response, by conducting emergency 
operations to save lives and property through 
positioning emergency equipment and supplies, 
through evacuating potential victims, through 
providing food, water, shelter, and medical care 
to those in need, and through restoring critical 
public services; 
(D) of recovery, by rebuilding communities 
so individuals, businesses, and governments can 
function on their own, return to normal life, 
and protect against future hazards; and 
(E) of increased efficiencies, by coordi-
nating efforts relating to mitigation, planning, 
response, and recovery. 
(b) FEDERAL RESPONSE PLAN.—
(1) ROLE
OF
FEMA.—Notwithstanding any 
other provision of this Act, the Federal Emergency
206
Management Agency shall remain the lead agency 
for the Federal Response Plan established under Ex-
ecutive Order 12148 (44 Fed. Reg. 43239) and Ex-
ecutive Order 12656 (53 Fed. Reg. 47491). 
(2) REVISION OF RESPONSE PLAN.—Not later 
than 60 days after the date of enactment of this 
Act, the Director of the Federal Emergency Man-
agement Agency shall revise the Federal Response 
Plan to reflect the establishment of and incorporate 
the Department. 
SEC. 508. USE OF NATIONAL PRIVATE SECTOR NETWORKS 
IN EMERGENCY RESPONSE. 
To the maximum extent practicable, the Secretary 
shall use national private sector networks and infrastruc-
ture for emergency response to chemical, biological, radio-
logical, nuclear, or explosive disasters, and other major 
disasters. 
SEC. 509. USE OF COMMERCIALLY AVAILABLE TECH-
NOLOGY, GOODS, AND SERVICES. 
It is the sense of Congress that—
(1) the Secretary should, to the maximum ex-
tent possible, use off-the-shelf commercially devel-
oped technologies to ensure that the Department’s 
information technology systems allow the Depart-
ment to collect, manage, share, analyze, and dissemi-
207
nate information securely over multiple channels of 
communication; and 
(2) in order to further the policy of the United 
States to avoid competing commercially with the pri-
vate sector, the Secretary should rely on commercial 
sources to supply the goods and services needed by 
the Department. 
TITLE 
VI—TREATMENT 
OF 
CHARITABLE 
TRUSTS 
FOR 
MEMBERS 
OF 
THE 
ARMED 
FORCES 
OF 
THE 
UNITED 
STATES AND OTHER GOVERN-
MENTAL ORGANIZATIONS 
SEC. 601. TREATMENT OF CHARITABLE TRUSTS FOR MEM-
BERS OF THE ARMED FORCES OF THE 
UNITED 
STATES 
AND 
OTHER 
GOVERN-
MENTAL ORGANIZATIONS. 
(a) FINDINGS.—Congress finds the following: 
(1) Members of the Armed Forces of the 
United States defend the freedom and security of 
our Nation. 
(2) Members of the Armed Forces of the 
United States have lost their lives while battling the 
evils of terrorism around the world.
208
(3) Personnel of the Central Intelligence Agen-
cy (CIA) charged with the responsibility of covert 
observation of terrorists around the world are often 
put in harm’s way during their service to the United 
States. 
(4) Personnel of the Central Intelligence Agen-
cy have also lost their lives while battling the evils 
of terrorism around the world. 
(5) Employees of the Federal Bureau of Inves-
tigation (FBI) and other Federal agencies charged 
with domestic protection of the United States put 
their lives at risk on a daily basis for the freedom 
and security of our Nation. 
(6) United States military personnel, CIA per-
sonnel, FBI personnel, and other Federal agents in 
the service of the United States are patriots of the 
highest order. 
(7) CIA officer Johnny Micheal Spann became 
the first American to give his life for his country in 
the War on Terrorism declared by President George 
W. Bush following the terrorist attacks of Sep-
tember 11, 2001. 
(8) Johnny Micheal Spann left behind a wife 
and children who are very proud of the heroic ac-
tions of their patriot father.
209
(9) Surviving dependents of members of the 
Armed Forces of the United States who lose their 
lives as a result of terrorist attacks or military oper-
ations abroad receive a $6,000 death benefit, plus a 
small monthly benefit. 
(10) The current system of compensating 
spouses and children of American patriots is inequi-
table and needs improvement. 
(b) DESIGNATION OF JOHNNY MICHEAL SPANN PA-
TRIOT TRUSTS.—Any charitable corporation, fund, foun-
dation, or trust (or separate fund or account thereof) 
which otherwise meets all applicable requirements under 
law with respect to charitable entities and meets the re-
quirements described in subsection (c) shall be eligible to 
characterize itself as a ‘‘Johnny Micheal Spann Patriot 
Trust’’. 
(c) REQUIREMENTS
FOR
THE
DESIGNATION
OF 
JOHNNY MICHEAL SPANN PATRIOT TRUSTS.—The re-
quirements described in this subsection are as follows: 
(1) Not taking into account funds or donations 
reasonably necessary to establish a trust, at least 85 
percent of all funds or donations (including any 
earnings on the investment of such funds or dona-
tions) received or collected by any Johnny Micheal 
Spann Patriot Trust must be distributed to (or, if
210
placed in a private foundation, held in trust for) sur-
viving spouses, children, or dependent parents, 
grandparents, or siblings of 1 or more of the fol-
lowing: 
(A) members of the Armed Forces of the 
United States; 
(B) personnel, including contractors, of 
elements of the intelligence community, as de-
fined in section 3(4) of the National Security 
Act of 1947; 
(C) employees of the Federal Bureau of 
Investigation; and 
(D) officers, employees, or contract em-
ployees of the United States Government, 
whose deaths occur in the line of duty and arise out 
of terrorist attacks, military operations, intelligence 
operations, or law enforcement operations or acci-
dents connected with activities occurring after Sep-
tember 11, 2001, and related to domestic or foreign 
efforts to curb international terrorism, including the 
Authorization for Use of Military Force (Public Law 
107–40; 115 Stat. 224). 
(2) Other than funds or donations reasonably 
necessary to establish a trust, not more than 15 per-
cent of all funds or donations (or 15 percent of an-
211
nual earnings on funds invested in a private founda-
tion) may be used for administrative purposes. 
(3) No part of the net earnings of any Johnny 
Micheal Spann Patriot Trust may inure to the ben-
efit of any individual based solely on the position of 
such individual as a shareholder, an officer or em-
ployee of such Trust. 
(4) None of the activities of any Johnny 
Micheal Spann Patriot Trust shall be conducted in 
a manner inconsistent with any law that prohibits 
attempting to influence legislation. 
(5) No Johnny Micheal Spann Patriot Trust 
may participate in or intervene in any political cam-
paign on behalf of (or in opposition to) any can-
didate for public office, including by publication or 
distribution of statements. 
(6) Each Johnny Micheal Spann Patriot Trust 
shall comply with the instructions and directions of 
the Director of Central Intelligence, the Attorney 
General, or the Secretary of Defense relating to the 
protection of intelligence sources and methods, sen-
sitive law enforcement information, or other sensitive 
national security information, including methods for 
confidentially disbursing funds.
212
(7) Each Johnny Micheal Spann Patriot Trust 
that receives annual contributions totaling more 
than $1,000,000 must be audited annually by an 
independent certified public accounting firm. Such 
audits shall be filed with the Internal Revenue Serv-
ice, and shall be open to public inspection, except 
that the conduct, filing, and availability of the audit 
shall be consistent with the protection of intelligence 
sources and methods, of sensitive law enforcement 
information, and of other sensitive national security 
information. 
(8) Each Johnny Micheal Spann Patriot Trust 
shall make distributions to beneficiaries described in 
paragraph (1) at least once every calendar year, be-
ginning not later than 12 months after the forma-
tion of such Trust, and all funds and donations re-
ceived and earnings not placed in a private founda-
tion dedicated to such beneficiaries must be distrib-
uted within 36 months after the end of the fiscal 
year in which such funds, donations, and earnings 
are received. 
(9)(A) When determining the amount of a dis-
tribution to any beneficiary described in paragraph 
(1), a Johnny Micheal Spann Patriot Trust should 
take into account the amount of any collateral
213
source compensation that the beneficiary has re-
ceived or is entitled to receive as a result of the 
death of an individual described in paragraph (1). 
(B) Collateral source compensation includes all 
compensation from collateral sources, including life 
insurance, pension funds, death benefit programs, 
and payments by Federal, State, or local govern-
ments related to the death of an individual described 
in paragraph (1). 
(d) TREATMENT OF JOHNNY MICHEAL SPANN PA-
TRIOT TRUSTS.—Each Johnny Micheal Spann Patriot 
Trust shall refrain from conducting the activities de-
scribed in clauses (i) and (ii) of section 301(20)(A) of the 
Federal Election Campaign Act of 1971 so that a general 
solicitation of funds by an individual described in para-
graph (1) of section 323(e) of such Act will be permissible 
if such solicitation meets the requirements of paragraph 
(4)(A) of such section. 
(e) NOTIFICATION OF TRUST BENEFICIARIES.—Not-
withstanding any other provision of law, and in a manner 
consistent with the protection of intelligence sources and 
methods and sensitive law enforcement information, and 
other sensitive national security information, the Sec-
retary of Defense, the Director of the Federal Bureau of 
Investigation, or the Director of Central Intelligence, or
214
their designees, as applicable, may forward information re-
ceived from an executor, administrator, or other legal rep-
resentative of the estate of a decedent described in sub-
paragraph (A), (B), (C), or (D) of subsection (c)(1), to 
a Johnny Micheal Spann Patriot Trust on how to contact 
individuals eligible for a distribution under subsection 
(c)(1) for the purpose of providing assistance from such 
Trust; provided that, neither forwarding nor failing to for-
ward any information under this subsection shall create 
any cause of action against any Federal department, agen-
cy, officer, agent, or employee. 
(f) REGULATIONS.—Not later than 90 days after the 
date of enactment of this Act, the Secretary of Defense, 
in coordination with the Attorney General, the Director 
of the Federal Bureau of Investigation, and the Director 
of Central Intelligence, shall prescribe regulations to carry 
out this section. 
TITLE VII—MANAGEMENT 
SEC. 701. UNDER SECRETARY FOR MANAGEMENT. 
(a) IN GENERAL.—The Secretary, acting through the 
Under Secretary for Management, shall be responsible for 
the management and administration of the Department, 
including the following: 
(1) The budget, appropriations, expenditures of 
funds, accounting, and finance.
215
(2) Procurement. 
(3) Human resources and personnel. 
(4) Information technology and communications 
systems. 
(5) Facilities, property, equipment, and other 
material resources. 
(6) Security for personnel, information tech-
nology and communications systems, facilities, prop-
erty, equipment, and other material resources. 
(7) Identification and tracking of performance 
measures relating to the responsibilities of the De-
partment. 
(8) Grants and other assistance management 
programs. 
(9) The transition and reorganization process, 
to ensure an efficient and orderly transfer of func-
tions and personnel to the Department, including 
the development of a transition plan. 
(10) The conduct of internal audits and man-
agement analyses of the programs and activities of 
the Department. 
(11) Any other management duties that the 
Secretary may designate.
(b) IMMIGRATION.—
216
(1) IN GENERAL.—In addition to the respon-
sibilities described in subsection (a), the Under Sec-
retary for Management shall be responsible for the 
following: 
(A) Maintenance of all immigration statis-
tical information of the Bureau of Border Secu-
rity and the Bureau of Citizenship and Immi-
gration Services. Such statistical information 
shall include information and statistics of the 
type contained in the publication entitled 
‘‘Statistical Yearbook of the Immigration and 
Naturalization Service’’ prepared by the Immi-
gration and Naturalization Service (as in effect 
immediately before the date on which the trans-
fer of functions specified under section 441 
takes effect), including region-by-region statis-
tics on the aggregate number of applications 
and petitions filed by an alien (or filed on be-
half of an alien) and denied by such bureau, 
and the reasons for such denials, disaggregated 
by category of denial and application or petition 
type. 
(B) Establishment of standards of reli-
ability and validity for immigration statistics 
collected by such bureaus.
217
(2) TRANSFER OF FUNCTIONS.—In accordance 
with title XV, there shall be transferred to the 
Under Secretary for Management all functions per-
formed immediately before such transfer occurs by 
the Statistics Branch of the Office of Policy and 
Planning of the Immigration and Naturalization 
Service with respect to the following programs: 
(A) The Border Patrol program. 
(B) The detention and removal program. 
(C) The intelligence program. 
(D) The investigations program. 
(E) The inspections program. 
(F) Adjudication of immigrant visa peti-
tions. 
(G) Adjudication of naturalization peti-
tions. 
(H) Adjudication of asylum and refugee 
applications. 
(I) Adjudications performed at service cen-
ters. 
(J) All other adjudications performed by 
the Immigration and Naturalization Service.
218
SEC. 702. CHIEF FINANCIAL OFFICER. 
The Chief Financial Officer shall report to the Sec-
retary, or to another official of the Department, as the 
Secretary may direct. 
SEC. 703. CHIEF INFORMATION OFFICER. 
The Chief Information Officer shall report to the Sec-
retary, or to another official of the Department, as the 
Secretary may direct. 
SEC. 704. CHIEF HUMAN CAPITAL OFFICER. 
The Chief Human Capital Officer shall report to the 
Secretary, or to another official of the Department, as the 
Secretary may direct and shall ensure that all employees 
of the Department are informed of their rights and rem-
edies under chapters 12 and 23 of title 5, United States 
Code, by—
(1) participating in the 2302(c) Certification 
Program of the Office of Special Counsel; 
(2) achieving certification from the Office of 
Special Counsel of the Department’s compliance 
with section 2302(c) of title 5, United States Code; 
and 
(3) informing Congress of such certification not 
later than 24 months after the date of enactment of 
this Act.
219
SEC. 705. ESTABLISHMENT OF OFFICER FOR CIVIL RIGHTS 
AND CIVIL LIBERTIES. 
(a) IN GENERAL.—The Secretary shall appoint in the 
Department an Officer for Civil Rights and Civil Liberties, 
who shall—
(1) review and assess information alleging 
abuses of civil rights, civil liberties, and racial and 
ethnic profiling by employees and officials of the De-
partment; and 
(2) make public through the Internet, radio, tel-
evision, or newspaper advertisements information on 
the responsibilities and functions of, and how to con-
tact, the Officer. 
(b) REPORT.—The Secretary shall submit to the 
President of the Senate, the Speaker of the House of Rep-
resentatives, and the appropriate committees and sub-
committees of Congress on an annual basis a report on 
the implementation of this section, including the use of 
funds appropriated to carry out this section, and detailing 
any allegations of abuses described under subsection 
(a)(1) and any actions taken by the Department in re-
sponse to such allegations.
220
SEC. 706. CONSOLIDATION AND CO-LOCATION OF OFFICES. 
Not later than 1 year after the date of the enactment 
of this Act, the Secretary shall develop and submit to Con-
gress a plan for consolidating and co-locating—
(1) any regional offices or field offices of agen-
cies that are transferred to the Department under 
this Act, if such officers are located in the same mu-
nicipality; and 
(2) portions of regional and field offices of 
other Federal agencies, to the extent such offices 
perform functions that are transferred to the Sec-
retary under this Act. 
TITLE 
VIII—COORDINATION 
WITH 
NON-FEDERAL 
ENTI-
TIES; INSPECTOR GENERAL; 
UNITED 
STATES 
SECRET 
SERVICE; 
COAST 
GUARD; 
GENERAL PROVISIONS 
Subtitle A—Coordination with 
Non-Federal Entities 
SEC. 801. OFFICE FOR STATE AND LOCAL GOVERNMENT 
COORDINATION. 
(a) ESTABLISHMENT.—There is established within 
the Office of the Secretary the Office for State and Local 
Government Coordination, to oversee and coordinate de-
221
partmental programs for and relationships with State and 
local governments. 
(b) 
RESPONSIBILITIES.—The 
Office 
established 
under subsection (a) shall—
(1) coordinate the activities of the Department 
relating to State and local government; 
(2) assess, and advocate for, the resources 
needed by State and local government to implement 
the national strategy for combating terrorism; 
(3) provide State and local government with 
regular information, research, and technical support 
to assist local efforts at securing the homeland; and 
(4) develop a process for receiving meaningful 
input from State and local government to assist the 
development of the national strategy for combating 
terrorism and other homeland security activities. 
Subtitle B—Inspector General 
SEC. 811. AUTHORITY OF THE SECRETARY. 
(a) IN GENERAL.—Notwithstanding the last two sen-
tences of section 3(a) of the Inspector General Act of 
1978, the Inspector General shall be under the authority, 
direction, and control of the Secretary with respect to au-
dits or investigations, or the issuance of subpoenas, that 
require access to sensitive information concerning—
222
(1) 
intelligence, 
counterintelligence, 
or 
counterterrorism matters; 
(2) ongoing criminal investigations or pro-
ceedings; 
(3) undercover operations; 
(4) the identity of confidential sources, includ-
ing protected witnesses; 
(5) other matters the disclosure of which would, 
in the Secretary’s judgment, constitute a serious 
threat to the protection of any person or property 
authorized protection by section 3056 of title 18, 
United States Code, section 202 of title 3 of such 
Code, or any provision of the Presidential Protection 
Assistance Act of 1976; or 
(6) other matters the disclosure of which would, 
in the Secretary’s judgment, constitute a serious 
threat to national security. 
(b) PROHIBITION OF CERTAIN INVESTIGATIONS.—
With respect to the information described in subsection 
(a), the Secretary may prohibit the Inspector General 
from carrying out or completing any audit or investiga-
tion, or from issuing any subpoena, after such Inspector 
General has decided to initiate, carry out, or complete 
such audit or investigation or to issue such subpoena, if 
the Secretary determines that such prohibition is nec-
223
essary to prevent the disclosure of any information de-
scribed in subsection (a), to preserve the national security, 
or to prevent a significant impairment to the interests of 
the United States.
(c) NOTIFICATION REQUIRED.—If the Secretary ex-
ercises any power under subsection (a) or (b), the Sec-
retary shall notify the Inspector General of the Depart-
ment in writing stating the reasons for such exercise. 
Within 30 days after receipt of any such notice, the In-
spector General shall transmit a copy of such notice and 
a written response thereto that includes—
(1) a statement as to whether the Inspector 
General agrees or disagrees with such exercise; and 
(2) the reasons for any disagreement, to the 
President of the Senate and the Speaker of the 
House of Representatives and to appropriate com-
mittees and subcommittees of Congress. 
(d) ACCESS TO INFORMATION BY CONGRESS.—The 
exercise of authority by the Secretary described in sub-
section (b) should not be construed as limiting the right 
of Congress or any committee of Congress to access any 
information it seeks. 
(e) OVERSIGHT
RESPONSIBILITY.—The Inspector 
General Act of 1978 (5 U.S.C. App.) is amended by insert-
ing after section 8I the following:
224
‘‘SPECIAL PROVISIONS CONCERNING THE DEPARTMENT 
OF HOMELAND SECURITY 
‘‘SEC. 8J. Notwithstanding any other provision of 
law, in carrying out the duties and responsibilities speci-
fied in this Act, the Inspector General of the Department 
of Homeland Security shall have oversight responsibility 
for the internal investigations performed by the Office of 
Internal Affairs of the United States Customs Service and 
the Office of Inspections of the United States Secret Serv-
ice. The head of each such office shall promptly report 
to the Inspector General the significant activities being 
carried out by such office.’’. 
SEC. 812. LAW ENFORCEMENT POWERS OF INSPECTOR 
GENERAL AGENTS. 
(a) IN GENERAL.—Section 6 of the Inspector General 
Act of 1978 (5 U.S.C. App.) is amended by adding at the 
end the following: 
‘‘(e)(1) In addition to the authority otherwise pro-
vided by this Act, each Inspector General appointed under 
section 3, any Assistant Inspector General for Investiga-
tions under such an Inspector General, and any special 
agent supervised by such an Assistant Inspector General 
may be authorized by the Attorney General to—
225
‘‘(A) carry a firearm while engaged in official 
duties as authorized under this Act or other statute, 
or as expressly authorized by the Attorney General; 
‘‘(B) make an arrest without a warrant while 
engaged in official duties as authorized under this 
Act or other statute, or as expressly authorized by 
the Attorney General, for any offense against the 
United States committed in the presence of such In-
spector General, Assistant Inspector General, or 
agent, or for any felony cognizable under the laws 
of the United States if such Inspector General, As-
sistant Inspector General, or agent has reasonable 
grounds to believe that the person to be arrested has 
committed or is committing such felony; and 
‘‘(C) seek and execute warrants for arrest, 
search of a premises, or seizure of evidence issued 
under the authority of the United States upon prob-
able cause to believe that a violation has been com-
mitted. 
‘‘(2) The Attorney General may authorize exercise of 
the powers under this subsection only upon an initial de-
termination that—
‘‘(A) the affected Office of Inspector General is 
significantly hampered in the performance of respon-
226
sibilities established by this Act as a result of the 
lack of such powers; 
‘‘(B) available assistance from other law en-
forcement agencies is insufficient to meet the need 
for such powers; and 
‘‘(C) adequate internal safeguards and manage-
ment procedures exist to ensure proper exercise of 
such powers. 
‘‘(3) The Inspector General offices of the Department 
of Commerce, Department of Education, Department of 
Energy, Department of Health and Human Services, De-
partment of Homeland Security, Department of Housing 
and Urban Development, Department of the Interior, De-
partment of Justice, Department of Labor, Department 
of State, Department of Transportation, Department of 
the Treasury, Department of Veterans Affairs, Agency for 
International Development, Environmental Protection 
Agency, Federal Deposit Insurance Corporation, Federal 
Emergency Management Agency, General Services Admin-
istration, National Aeronautics and Space Administration, 
Nuclear Regulatory Commission, Office of Personnel Man-
agement, Railroad Retirement Board, Small Business Ad-
ministration, Social Security Administration, and the Ten-
nessee Valley Authority are exempt from the requirement
227
of paragraph (2) of an initial determination of eligibility 
by the Attorney General. 
‘‘(4) The Attorney General shall promulgate, and re-
vise as appropriate, guidelines which shall govern the exer-
cise of the law enforcement powers established under para-
graph (1). 
‘‘(5)(A) Powers authorized for an Office of Inspector 
General under paragraph (1) may be rescinded or sus-
pended upon a determination by the Attorney General that 
any of the requirements under paragraph (2) is no longer 
satisfied or that the exercise of authorized powers by that 
Office of Inspector General has not complied with the 
guidelines promulgated by the Attorney General under 
paragraph (4). 
‘‘(B) Powers authorized to be exercised by any indi-
vidual under paragraph (1) may be rescinded or suspended 
with respect to that individual upon a determination by 
the Attorney General that such individual has not com-
plied with guidelines promulgated by the Attorney General 
under paragraph (4). 
‘‘(6) A determination by the Attorney General under 
paragraph (2) or (5) shall not be reviewable in or by any 
court. 
‘‘(7) To ensure the proper exercise of the law enforce-
ment powers authorized by this subsection, the Offices of
228
Inspector General described under paragraph (3) shall, 
not later than 180 days after the date of enactment of 
this subsection, collectively enter into a memorandum of 
understanding to establish an external review process for 
ensuring that adequate internal safeguards and manage-
ment procedures continue to exist within each Office and 
within any Office that later receives an authorization 
under paragraph (2). The review process shall be estab-
lished in consultation with the Attorney General, who shall 
be provided with a copy of the memorandum of under-
standing that establishes the review process. Under the 
review process, the exercise of the law enforcement powers 
by each Office of Inspector General shall be reviewed peri-
odically by another Office of Inspector General or by a 
committee of Inspectors General. The results of each re-
view shall be communicated in writing to the applicable 
Inspector General and to the Attorney General. 
‘‘(8) No provision of this subsection shall limit the 
exercise of law enforcement powers established under any 
other statutory authority, including United States Mar-
shals Service special deputation.’’. 
(b) PROMULGATION OF INITIAL GUIDELINES.—
(1) DEFINITION.—In this subsection, the term 
‘‘memoranda of understanding’’ means the agree-
ments between the Department of Justice and the
229
Inspector General offices described under section 
6(e)(3) of the Inspector General Act of 1978 (5 
U.S.C. App) (as added by subsection (a) of this sec-
tion) that—
(A) are in effect on the date of enactment 
of this Act; and 
(B) authorize such offices to exercise au-
thority that is the same or similar to the au-
thority under section 6(e)(1) of such Act. 
(2) IN
GENERAL.—Not later than 180 days 
after the date of enactment of this Act, the Attorney 
General shall promulgate guidelines under section 
6(e)(4) of the Inspector General Act of 1978 (5 
U.S.C. App) (as added by subsection (a) of this sec-
tion) applicable to the Inspector General offices de-
scribed under section 6(e)(3) of that Act. 
(3) MINIMUM REQUIREMENTS.—The guidelines 
promulgated under this subsection shall include, at 
a minimum, the operational and training require-
ments in the memoranda of understanding. 
(4) NO
LAPSE
OF
AUTHORITY.—The memo-
randa of understanding in effect on the date of en-
actment of this Act shall remain in effect until the 
guidelines promulgated under this subsection take 
effect.
230
(c) EFFECTIVE DATES.—
(1) IN GENERAL.—Subsection (a) shall take ef-
fect 180 days after the date of enactment of this 
Act. 
(2) INITIAL GUIDELINES.—Subsection (b) shall 
take effect on the date of enactment of this Act. 
Subtitle C—United States Secret 
Service 
SEC. 821. FUNCTIONS TRANSFERRED. 
In accordance with title XV, there shall be trans-
ferred to the Secretary the functions, personnel, assets, 
and obligations of the United States Secret Service, which 
shall be maintained as a distinct entity within the Depart-
ment, including the functions of the Secretary of the 
Treasury relating thereto. 
Subtitle D—Acquisitions 
SEC. 831. RESEARCH AND DEVELOPMENT PROJECTS. 
(a) AUTHORITY.—During the 5-year period following 
the effective date of this Act, the Secretary may carry out 
a pilot program under which the Secretary may exercise 
the following authorities: 
(1) IN GENERAL.—When the Secretary carries 
out basic, applied, and advanced research and devel-
opment projects, including the expenditure of funds 
for such projects, the Secretary may exercise the
231
same authority (subject to the same limitations and 
conditions) with respect to such research and 
projects as the Secretary of Defense may exercise 
under section 2371 of title 10, United States Code 
(except for subsections (b) and (f)), after making a 
determination that the use of a contract, grant, or 
cooperative agreement for such project is not fea-
sible or appropriate. The annual report required 
under subsection (b) of this section, as applied to 
the Secretary by this paragraph, shall be submitted 
to the President of the Senate and the Speaker of 
the House of Representatives. 
(2) PROTOTYPE
PROJECTS.—The Secretary 
may, under the authority of paragraph (1), carry out 
prototype projects in accordance with the require-
ments and conditions provided for carrying out pro-
totype projects under section 845 of the National 
Defense Authorization Act for Fiscal Year 1994 
(Public Law 103–160). In applying the authorities 
of that section 845, subsection (c) of that section 
shall apply with respect to prototype projects under 
this paragraph, and the Secretary shall perform the 
functions of the Secretary of Defense under sub-
section (d) thereof.
232
(b) REPORT.—Not later than 2 years after the effec-
tive date of this Act, and annually thereafter, the Comp-
troller General shall report to the Committee on Govern-
ment Reform of the House of Representatives and the 
Committee on Governmental Affairs of the Senate on—
(1) whether use of the authorities described in 
subsection (a) attracts nontraditional Government 
contractors and results in the acquisition of needed 
technologies; and 
(2) if such authorities were to be made perma-
nent, whether additional safeguards are needed with 
respect to the use of such authorities. 
(c) PROCUREMENT OF TEMPORARY AND INTERMIT-
TENT SERVICES.—The Secretary may—
(1) procure the temporary or intermittent serv-
ices of experts or consultants (or organizations 
thereof) in accordance with section 3109(b) of title 
5, United States Code; and 
(2) whenever necessary due to an urgent home-
land security need, procure temporary (not to exceed 
1 year) or intermittent personal services, including 
the services of experts or consultants (or organiza-
tions thereof), without regard to the pay limitations 
of such section 3109.
233
(d) DEFINITION OF NONTRADITIONAL GOVERNMENT 
CONTRACTOR.—In this section, the term ‘‘nontraditional 
Government contractor’’ has the same meaning as the 
term ‘‘nontraditional defense contractor’’ as defined in 
section 845(e) of the National Defense Authorization Act 
for Fiscal Year 1994 (Public Law 103–160; 10 U.S.C. 
2371 note). 
SEC. 832. PERSONAL SERVICES. 
The Secretary—
(1) may procure the temporary or intermittent 
services of experts or consultants (or organizations 
thereof) in accordance with section 3109 of title 5, 
United States Code; and 
(2) may, whenever necessary due to an urgent 
homeland security need, procure temporary (not to 
exceed 1 year) or intermittent personal services, in-
cluding the services of experts or consultants (or or-
ganizations thereof), without regard to the pay limi-
tations of such section 3109. 
SEC. 833. SPECIAL STREAMLINED ACQUISITION AUTHOR-
ITY. 
(a) AUTHORITY.—
(1) IN GENERAL.—The Secretary may use the 
authorities set forth in this section with respect to 
any procurement made during the period beginning
234
on the effective date of this Act and ending Sep-
tember 30, 2007, if the Secretary determines in 
writing that the mission of the Department (as de-
scribed in section 101) would be seriously impaired 
without the use of such authorities. 
(2) DELEGATION.—The authority to make the 
determination described in paragraph (1) may not 
be delegated by the Secretary to an officer of the 
Department who is not appointed by the President 
with the advice and consent of the Senate. 
(3) NOTIFICATION.—Not later than the date 
that is 7 days after the date of any determination 
under paragraph (1), the Secretary shall submit to 
the Committee on Government Reform of the House 
of Representatives and the Committee on Govern-
mental Affairs of the Senate—
(A) notification of such determination; and 
(B) the justification for such determination. 
(b) INCREASED MICRO-PURCHASE THRESHOLD FOR 
CERTAIN PROCUREMENTS.—
(1) IN
GENERAL.—The Secretary may des-
ignate certain employees of the Department to make 
procurements described in subsection (a) for which 
in the administration of section 32 of the Office of 
Federal Procurement Policy Act (41 U.S.C. 428) the
235
amount specified in subsections (c), (d), and (f) of 
such section 32 shall be deemed to be $7,500. 
(2) NUMBER OF EMPLOYEES.—The number of 
employees designated under paragraph (1) shall 
be—
(A) fewer than the number of employees of 
the Department who are authorized to make 
purchases 
without 
obtaining 
competitive 
quotations, pursuant to section 32(c) of the Of-
fice of Federal Procurement Policy Act (41 
U.S.C. 428(c)); 
(B) sufficient to ensure the geographic dis-
persal of the availability of the use of the pro-
curement authority under such paragraph at lo-
cations reasonably considered to be potential 
terrorist targets; and 
(C) sufficiently limited to allow for the 
careful monitoring of employees designated 
under such paragraph. 
(3) REVIEW.—Procurements made under the 
authority of this subsection shall be subject to review 
by a designated supervisor on not less than a month-
ly basis. The supervisor responsible for the review 
shall be responsible for no more than 7 employees 
making procurements under this subsection.
236
(c) SIMPLIFIED ACQUISITION PROCEDURES.—
(1) IN GENERAL.—With respect to a procure-
ment described in subsection (a), the Secretary may 
deem the simplified acquisition threshold referred to 
in section 4(11) of the Office of Federal Procure-
ment Policy Act (41 U.S.C. 403(11)) to be—
(A) in the case of a contract to be awarded 
and performed, or purchase to be made, within 
the United States, $200,000; and 
(B) in the case of a contract to be awarded 
and performed, or purchase to be made, outside 
of the United States, $300,000. 
(2) 
CONFORMING
AMENDMENTS.—Section 
18(c)(1) of the Office of Federal Procurement Policy 
Act is amended—
(A) by striking ‘‘or’’ at the end of subpara-
graph (F); 
(B) by striking the period at the end of 
subparagraph (G) and inserting ‘‘; or’’; and 
(C) by adding at the end the following: 
‘‘(H) the procurement is by the Secretary of 
Homeland Security pursuant to the special proce-
dures provided in section 833(c) of the Homeland 
Security Act of 2002.’’.
237
(d) APPLICATION OF CERTAIN COMMERCIAL ITEMS 
AUTHORITIES.—
(1) IN GENERAL.—With respect to a procure-
ment described in subsection (a), the Secretary may 
deem any item or service to be a commercial item 
for the purpose of Federal procurement laws. 
(2) LIMITATION.—The $5,000,000 limitation 
provided in section 31(a)(2) of the Office of Federal 
Procurement Policy Act (41 U.S.C. 427(a)(2)) and 
section 303(g)(1)(B) of the Federal Property and 
Administrative Services Act of 1949 (41 U.S.C. 
253(g)(1)(B)) shall be deemed to be $7,500,000 for 
purposes of property or services under the authority 
of this subsection. 
(3) CERTAIN AUTHORITY.—Authority under a 
provision of law referred to in paragraph (2) that 
expires under section 4202(e) of the Clinger-Cohen 
Act of 1996 (divisions D and E of Public Law 104–
106; 10 U.S.C. 2304 note) shall, notwithstanding 
such section, continue to apply for a procurement 
described in subsection (a). 
(e) REPORT.—Not later than 180 days after the end 
of fiscal year 2005, the Comptroller General shall submit 
to the Committee on Governmental Affairs of the Senate 
and the Committee on Government Reform of the House
238
of Representatives a report on the use of the authorities 
provided in this section. The report shall contain the fol-
lowing: 
(1) An assessment of the extent to which prop-
erty and services acquired using authorities provided 
under this section contributed to the capacity of the 
Federal workforce to facilitate the mission of the 
Department as described in section 101. 
(2) An assessment of the extent to which prices 
for property and services acquired using authorities 
provided under this section reflected the best value. 
(3) The number of employees designated by 
each executive agency under subsection (b)(1). 
(4) An assessment of the extent to which the 
Department has implemented subsections (b)(2) and 
(b)(3) to monitor the use of procurement authority 
by employees designated under subsection (b)(1). 
(5) Any recommendations of the Comptroller 
General for improving the effectiveness of the imple-
mentation of the provisions of this section. 
SEC. 834. UNSOLICITED PROPOSALS. 
(a) REGULATIONS REQUIRED.—Within 1 year of the 
date of enactment of this Act, the Federal Acquisition 
Regulation shall be revised to include regulations with re-
gard to unsolicited proposals.
239
(b) CONTENT OF REGULATIONS.—The regulations 
prescribed under subsection (a) shall require that before 
initiating a comprehensive evaluation, an agency contact 
point shall consider, among other factors, that the pro-
posal—
(1) is not submitted in response to a previously 
published agency requirement; and 
(2) contains technical and cost information for 
evaluation and overall scientific, technical or socio-
economic merit, or cost-related or price-related fac-
tors. 
SEC. 835. PROHIBITION ON CONTRACTS WITH CORPORATE 
EXPATRIATES. 
(a) IN GENERAL.—The Secretary may not enter into 
any contract with a foreign incorporated entity which is 
treated as an inverted domestic corporation under sub-
section (b). 
(b) INVERTED DOMESTIC CORPORATION.—For pur-
poses of this section, a foreign incorporated entity shall 
be treated as an inverted domestic corporation if, pursuant 
to a plan (or a series of related transactions)—
(1) the entity completes after the date of enact-
ment of this Act, the direct or indirect acquisition of 
substantially all of the properties held directly or in-
directly by a domestic corporation or substantially
240
all of the properties constituting a trade or business 
of a domestic partnership; 
(2) after the acquisition at least 80 percent of 
the stock (by vote or value) of the entity is held—
(A) in the case of an acquisition with re-
spect to a domestic corporation, by former 
shareholders of the domestic corporation by rea-
son of holding stock in the domestic corpora-
tion; or 
(B) in the case of an acquisition with re-
spect to a domestic partnership, by former part-
ners of the domestic partnership by reason of 
holding a capital or profits interest in the do-
mestic partnership; and 
(3) the expanded affiliated group which after 
the acquisition includes the entity does not have sub-
stantial business activities in the foreign country in 
which or under the law of which the entity is created 
or organized when compared to the total business 
activities of such expanded affiliated group. 
(c) DEFINITIONS AND SPECIAL RULES.—
(1) RULES FOR APPLICATION OF SUBSECTION 
(b).—In applying subsection (b) for purposes of sub-
section (a), the following rules shall apply:
241
(A) CERTAIN
STOCK
DISREGARDED.—
There shall not be taken into account in deter-
mining ownership for purposes of subsection 
(b)(2)—
(i) stock held by members of the ex-
panded affiliated group which includes the 
foreign incorporated entity; or 
(ii) stock of such entity which is sold 
in a public offering related to the acquisi-
tion described in subsection (b)(1). 
(B) PLAN DEEMED IN CERTAIN CASES.—If 
a foreign incorporated entity acquires directly 
or indirectly substantially all of the properties 
of a domestic corporation or partnership during 
the 4-year period beginning on the date which 
is after the date of enactment of this Act and 
which is 2 years before the ownership require-
ments of subsection (b)(2) are met, such ac-
tions shall be treated as pursuant to a plan. 
(C) CERTAIN TRANSFERS DISREGARDED.—
The 
transfer 
of 
properties 
or 
liabilities 
(including by contribution or distribution) shall 
be disregarded if such transfers are part of a 
plan a principal purpose of which is to avoid 
the purposes of this section.
242
(D) SPECIAL RULE FOR RELATED PART-
NERSHIPS.—For purposes of applying sub-
section (b) to the acquisition of a domestic 
partnership, except as provided in regulations, 
all domestic partnerships which are under com-
mon control (within the meaning of section 482 
of the Internal Revenue Code of 1986) shall be 
treated as I partnership. 
(E) TREATMENT OF CERTAIN RIGHTS.—
The Secretary shall prescribe such regulations 
as may be necessary to—
(i) treat warrants, options, contracts 
to acquire stock, convertible debt instru-
ments, and other similar interests as stock; 
and 
(ii) treat stock as not stock. 
(2) EXPANDED AFFILIATED GROUP.—The term 
‘‘expanded affiliated group’’ means an affiliated 
group as defined in section 1504(a) of the Internal 
Revenue Code of 1986 (without regard to section 
1504(b) of such Code), except that section 1504 of 
such Code shall be applied by substituting ‘‘more 
than 50 percent’’ for ‘‘at least 80 percent’’ each 
place it appears.
243
(3) FOREIGN
INCORPORATED
ENTITY.—The 
term ‘‘foreign incorporated entity’’ means any entity 
which is, or but for subsection (b) would be, treated 
as a foreign corporation for purposes of the Internal 
Revenue Code of 1986. 
(4) 
OTHER
DEFINITIONS.—The 
terms 
‘‘person’’, ‘‘domestic’’, and ‘‘foreign’’ have the mean-
ings given such terms by paragraphs (1), (4), and 
(5) of section 7701 (a) of the Internal Revenue Code 
of 1986, respectively. 
(d) WAIVERS.—The Secretary shall waive subsection 
(a) with respect to any specific contract if the Secretary 
determines that the waiver is required in the interest of 
homeland security, or to prevent the loss of any jobs in 
the United States or prevent the Government from incur-
ring any additional costs that otherwise would not occur. 
Subtitle E—Human Resources 
Management 
SEC. 841. ESTABLISHMENT OF HUMAN RESOURCES MAN-
AGEMENT SYSTEM. 
(a) AUTHORITY.—
(1) SENSE OF CONGRESS.—It is the sense of 
Congress that—
(A) it is extremely important that employ-
ees of the Department be allowed to participate
244
in a meaningful way in the creation of any 
human resources management system affecting 
them; 
(B) such employees have the most direct 
knowledge of the demands of their jobs and 
have a direct interest in ensuring that their 
human resources management system is condu-
cive to achieving optimal operational effi-
ciencies; 
(C) the 21st century human resources 
management system envisioned for the Depart-
ment should be one that benefits from the input 
of its employees; and 
(D) this collaborative effort will help se-
cure our homeland. 
(2) IN GENERAL.—Subpart I of part III of title 
5, United States Code, is amended by adding at the 
end the following:
‘‘CHAPTER 97—DEPARTMENT OF 
HOMELAND SECURITY
‘‘Sec. 
‘‘9701. Establishment of human resources management system.
‘‘§ 9701. Establishment of human resources manage-
ment system 
‘‘(a) IN GENERAL.—Notwithstanding any other pro-
vision of this part, the Secretary of Homeland Security
245
may, in regulations prescribed jointly with the Director 
of the Office of Personnel Management, establish, and 
from time to time adjust, a human resources management 
system for some or all of the organizational units of the 
Department of Homeland Security. 
‘‘(b) SYSTEM REQUIREMENTS.—Any system estab-
lished under subsection (a) shall—
‘‘(1) be flexible; 
‘‘(2) be contemporary; 
‘‘(3) not waive, modify, or otherwise affect—
‘‘(A) the public employment principles of 
merit and fitness set forth in section 2301, in-
cluding the principles of hiring based on merit, 
fair treatment without regard to political affili-
ation or other nonmerit considerations, equal 
pay for equal work, and protection of employees 
against reprisal for whistleblowing; 
‘‘(B) any provision of section 2302, relat-
ing to prohibited personnel practices; 
‘‘(C)(i) any provision of law referred to in 
section 2302(b)(1), (8), and (9); or 
‘‘(ii) any provision of law implementing 
any provision of law referred to in section 
2302(b)(1), (8), and (9) by—
246
‘‘(I) providing for equal employment 
opportunity through affirmative action; or 
‘‘(II) providing any right or remedy 
available to any employee or applicant for 
employment in the civil service; 
‘‘(D) any other provision of this part (as 
described in subsection (c)); or 
‘‘(E) any rule or regulation prescribed 
under any provision of law referred to in any of 
the preceding subparagraphs of this paragraph; 
‘‘(4) ensure that employees may organize, bar-
gain collectively, and participate through labor orga-
nizations of their own choosing in decisions which 
affect them, subject to any exclusion from coverage 
or limitation on negotiability established by law; and 
‘‘(5) permit the use of a category rating system 
for evaluating applicants for positions in the com-
petitive service. 
‘‘(c) OTHER NONWAIVABLE PROVISIONS.—The other 
provisions of this part as referred to in subsection 
(b)(3)(D), are (to the extent not otherwise specified in 
subparagraph (A), (B), (C), or (D) of subsection (b)(3))—
‘‘(1) subparts A, B, E, G, and H of this part; 
and
247
‘‘(2) chapters 41, 45, 47, 55, 57, 59, 72, 73, 
and 79, and this chapter. 
‘‘(d) LIMITATIONS RELATING TO PAY.—Nothing in 
this section shall constitute authority—
‘‘(1) to modify the pay of any employee who 
serves in—
‘‘(A) an Executive Schedule position under 
subchapter II of chapter 53 of title 5, United 
States Code; or 
‘‘(B) a position for which the rate of basic 
pay is fixed in statute by reference to a section 
or level under subchapter II of chapter 53 of 
such title 5; 
‘‘(2) to fix pay for any employee or position at 
an annual rate greater than the maximum amount 
of cash compensation allowable under section 5307 
of such title 5 in a year; or 
‘‘(3) to exempt any employee from the applica-
tion of such section 5307. 
‘‘(e) PROVISIONS TO ENSURE COLLABORATION WITH 
EMPLOYEE REPRESENTATIVES.—
‘‘(1) IN GENERAL.—In order to ensure that the 
authority of this section is exercised in collaboration 
with, and in a manner that ensures the participation 
of employee representatives in the planning, develop-
248
ment, and implementation of any human resources 
management system or adjustments to such system 
under this section, the Secretary of Homeland Secu-
rity and the Director of the Office of Personnel 
Management shall provide for the following: 
‘‘(A) NOTICE
OF
PROPOSAL.—The Sec-
retary and the Director shall, with respect to 
any proposed system or adjustment—
‘‘(i) provide to each employee rep-
resentative representing any employees 
who might be affected, a written descrip-
tion of the proposed system or adjustment 
(including the reasons why it is considered 
necessary); 
‘‘(ii) give each representative 30 cal-
endar days (unless extraordinary cir-
cumstances require earlier action) to re-
view and make recommendations with re-
spect to the proposal; and 
‘‘(iii) give any recommendations re-
ceived from any such representatives under 
clause (ii) full and fair consideration in de-
ciding whether or how to proceed with the 
proposal.
249
‘‘(B) 
PRE-IMPLEMENTATION
CONGRES-
SIONAL
NOTIFICATION, CONSULTATION, AND 
MEDIATION.—Following receipt of recommenda-
tions, if any, from employee representatives 
with respect to a proposal described in subpara-
graph (A), the Secretary and the Director shall 
accept such modifications to the proposal in re-
sponse to the recommendations as they deter-
mine advisable and shall, with respect to any 
parts of the proposal as to which they have not 
accepted the recommendations—
‘‘(i) notify Congress of those parts of 
the proposal, together with the rec-
ommendations of employee representatives; 
‘‘(ii) meet and confer for not less than 
30 calendar days with any representatives 
who have made recommendations, in order 
to attempt to reach agreement on whether 
or how to proceed with those parts of the 
proposal; and 
‘‘(iii) at the Secretary’s option, or if 
requested by a majority of the employee 
representatives 
who 
have 
made 
rec-
ommendations, use the services of the Fed-
eral Mediation and Conciliation Service
250
during such meet and confer period to fa-
cilitate the process of attempting to reach 
agreement. 
‘‘(C) IMPLEMENTATION.—
‘‘(i) Any part of the proposal as to 
which the representatives do not make a 
recommendation, or as to which their rec-
ommendations are accepted by the Sec-
retary and the Director, may be imple-
mented immediately. 
‘‘(ii) With respect to any parts of the 
proposal as to which recommendations 
have been made but not accepted by the 
Secretary and the Director, at any time 
after 30 calendar days have elapsed since 
the initiation of the congressional notifica-
tion, consultation, and mediation proce-
dures set forth in subparagraph (B), if the 
Secretary determines, in the Secretary’s 
sole and unreviewable discretion, that fur-
ther consultation and mediation is unlikely 
to produce agreement, the Secretary may 
implement any or all of such parts, includ-
ing any modifications made in response to
251
the recommendations as the Secretary de-
termines advisable. 
‘‘(iii) The Secretary shall promptly 
notify Congress of the implementation of 
any part of the proposal and shall furnish 
with such notice an explanation of the pro-
posal, any changes made to the proposal as 
a result of recommendations from em-
ployee representatives, and of the reasons 
why implementation is appropriate under 
this subparagraph. 
‘‘(D) CONTINUING COLLABORATION.—If a 
proposal described in subparagraph (A) is im-
plemented, the Secretary and the Director 
shall—
‘‘(i) develop a method for each em-
ployee representative to participate in any 
further planning or development which 
might become necessary; and 
‘‘(ii) give each employee representative 
adequate access to information to make 
that participation productive. 
‘‘(2) PROCEDURES.—Any procedures necessary 
to carry out this subsection shall be established by 
the Secretary and the Director jointly as internal
252
rules of departmental procedure which shall not be 
subject to review. Such procedures shall include 
measures to ensure—
‘‘(A) in the case of employees within a unit 
with respect to which a labor organization is ac-
corded exclusive recognition, representation by 
individuals designated or from among individ-
uals nominated by such organization; 
‘‘(B) in the case of any employees who are 
not within such a unit, representation by any 
appropriate organization which represents a 
substantial percentage of those employees or, if 
none, in such other manner as may be appro-
priate, consistent with the purposes of the sub-
section; 
‘‘(C) the fair and expeditious handling of 
the consultation and mediation process de-
scribed in subparagraph (B) of paragraph (1), 
including procedures by which, if the number of 
employee 
representatives 
providing 
rec-
ommendations exceeds 5, such representatives 
select a committee or other unified representa-
tive with which the Secretary and Director may 
meet and confer; and
253
‘‘(D) the selection of representatives in a 
manner consistent with the relative number of 
employees represented by the organizations or 
other representatives involved. 
‘‘(f) PROVISIONS RELATING TO APPELLATE PROCE-
DURES.—
(1) SENSE OF CONGRESS.—It is the sense of 
Congress that—
‘‘(A) employees of the Department are en-
titled to fair treatment in any appeals that they 
bring in decisions relating to their employment; 
and 
‘‘(B) in prescribing regulations for any 
such appeals procedures, the Secretary and the 
Director of the Office of Personnel Manage-
ment—
‘‘(i) should ensure that employees of 
the Department are afforded the protec-
tions of due process; and 
‘‘(ii) toward that end, should be re-
quired to consult with the Merit Systems 
Protection Board before issuing any such 
regulations.
254
‘‘(2) REQUIREMENTS.—Any regulations under 
this section which relate to any matters within the 
purview of chapter 77—
‘‘(A) shall be issued only after consultation 
with the Merit Systems Protection Board; 
‘‘(B) shall ensure the availability of proce-
dures which shall—
‘‘(i) be consistent with requirements 
of due process; and 
‘‘(ii) provide, to the maximum extent 
practicable, for the expeditious handling of 
any matters involving the Department; and 
‘‘(C) shall modify procedures under chap-
ter 77 only insofar as such modifications are 
designed to further the fair, efficient, and expe-
ditious resolution of matters involving the em-
ployees of the Department. 
‘‘(g) PROVISIONS RELATING
TO LABOR-MANAGE-
MENT RELATIONS.—Nothing in this section shall be con-
strued as conferring authority on the Secretary of Home-
land Security to modify any of the provisions of section 
842 of the Homeland Security Act of 2002. 
‘‘(h) SUNSET PROVISION.—Effective 5 years after 
the conclusion of the transition period defined under sec-
tion 1501 of the Homeland Security Act of 2002, all au-
255
thority to issue regulations under this section (including 
regulations which would modify, supersede, or terminate 
any regulations previously issued under this section) shall 
cease to be available.’’. 
(3) TECHNICAL
AND
CONFORMING
AMEND-
MENT.—The table of chapters for part III of title 5, 
United States Code, is amended by adding at the 
end of the following:
‘‘97. Department of Homeland Security .................................... 9701’’.
(b) EFFECT ON PERSONNEL.—
(1) NONSEPARATION
OR
NONREDUCTION
IN 
GRADE
OR
COMPENSATION
OF
FULL-TIME
PER-
SONNEL AND PART-TIME PERSONNEL HOLDING PER-
MANENT POSITIONS.—Except as otherwise provided 
in this Act, the transfer under this Act of full-time 
personnel (except special Government employees) 
and part-time personnel holding permanent positions 
shall not cause any such employee to be separated 
or reduced in grade or compensation for 1 year after 
the date of transfer to the Department. 
(2) POSITIONS COMPENSATED IN ACCORDANCE 
WITH EXECUTIVE SCHEDULE.—Any person who, on 
the day preceding such person’s date of transfer 
pursuant to this Act, held a position compensated in 
accordance with the Executive Schedule prescribed 
in chapter 53 of title 5, United States Code, and
256
who, without a break in service, is appointed in the 
Department to a position having duties comparable 
to the duties performed immediately preceding such 
appointment shall continue to be compensated in 
such new position at not less than the rate provided 
for such position, for the duration of the service of 
such person in such new position. 
(3) COORDINATION RULE.—Any exercise of au-
thority under chapter 97 of title 5, United States 
Code (as amended by subsection (a)), including 
under any system established under such chapter, 
shall be in conformance with the requirements of 
this subsection. 
SEC. 842. LABOR-MANAGEMENT RELATIONS. 
(a) LIMITATION ON EXCLUSIONARY AUTHORITY.—
(1) IN GENERAL.—No agency or subdivision of 
an agency which is transferred to the Department 
pursuant to this Act shall be excluded from the cov-
erage of chapter 71 of title 5, United States Code, 
as a result of any order issued under section 
7103(b)(1) of such title 5 after June 18, 2002, un-
less—
(A) the mission and responsibilities of the 
agency (or subdivision) materially change; and
257
(B) a majority of the employees within 
such agency (or subdivision) have as their pri-
mary duty intelligence, counterintelligence, or 
investigative work directly related to terrorism 
investigation. 
(2) EXCLUSIONS
ALLOWABLE.—Nothing in 
paragraph (1) shall affect the effectiveness of any 
order to the extent that such order excludes any por-
tion of an agency or subdivision of an agency as to 
which—
(A) recognition as an appropriate unit has 
never been conferred for purposes of chapter 71 
of such title 5; or 
(B) any such recognition has been revoked 
or otherwise terminated as a result of a deter-
mination under subsection (b)(1). 
(b) 
PROVISIONS
RELATING
TO
BARGAINING 
UNITS.—
(1) LIMITATION
RELATING
TO
APPROPRIATE 
UNITS.—Each unit which is recognized as an appro-
priate unit for purposes of chapter 71 of title 5, 
United States Code, as of the day before the effec-
tive date of this Act (and any subdivision of any 
such unit) shall, if such unit (or subdivision) is 
transferred to the Department pursuant to this Act,
258
continue to be so recognized for such purposes, un-
less—
(A) the mission and responsibilities of such 
unit (or subdivision) materially change; and 
(B) a majority of the employees within 
such unit (or subdivision) have as their primary 
duty intelligence, counterintelligence, or inves-
tigative work directly related to terrorism inves-
tigation. 
(2) LIMITATION
RELATING
TO
POSITIONS
OR 
EMPLOYEES.—No position or employee within a unit 
(or subdivision of a unit) as to which continued rec-
ognition is given in accordance with paragraph (1) 
shall be excluded from such unit (or subdivision), for 
purposes of chapter 71 of such title 5, unless the 
primary job duty of such position or employee— 
(A) materially changes; and 
(B) consists of intelligence, counterintel-
ligence, or investigative work directly related to 
terrorism investigation. 
In the case of any positions within a unit (or sub-
division) which are first established on or after the 
effective date of this Act and any employees first ap-
pointed on or after such date, the preceding sentence 
shall be applied disregarding subparagraph (A).
259
(c) WAIVER.—If the President determines that the 
application of subsections (a), (b), and (d) would have a 
substantial adverse impact on the ability of the Depart-
ment to protect homeland security, the President may 
waive the application of such subsections 10 days after 
the President has submitted to Congress a written expla-
nation of the reasons for such determination. 
(d) COORDINATION RULE.—No other provision of 
this Act or of any amendment made by this Act may be 
construed or applied in a manner so as to limit, supersede, 
or otherwise affect the provisions of this section, except 
to the extent that it does so by specific reference to this 
section. 
(e) RULE OF CONSTRUCTION.—Nothing in section 
9701(e) of title 5, United States Code, shall be considered 
to apply with respect to any agency or subdivision of any 
agency, which is excluded from the coverage of chapter 
71 of title 5, United States Code, by virtue of an order 
issued in accordance with section 7103(b) of such title and 
the preceding provisions of this section (as applicable), or 
to any employees of any such agency or subdivision or to 
any individual or entity representing any such employees 
or any representatives thereof.
260
Subtitle F—Federal Emergency 
Procurement Flexibility 
SEC. 851. DEFINITION. 
In this subtitle, the term ‘‘executive agency’’ has the 
meaning given that term under section 4(1) of the Office 
of Federal Procurement Policy Act (41 U.S.C. 403(1)). 
SEC. 852. PROCUREMENTS FOR DEFENSE AGAINST OR RE-
COVERY FROM TERRORISM OR NUCLEAR, BI-
OLOGICAL, CHEMICAL, OR RADIOLOGICAL 
ATTACK. 
The authorities provided in this subtitle apply to any 
procurement of property or services by or for an executive 
agency that, as determined by the head of the executive 
agency, are to be used to facilitate defense against or re-
covery from terrorism or nuclear, biological, chemical, or 
radiological attack, but only if a solicitation of offers for 
the procurement is issued during the 1-year period begin-
ning on the date of the enactment of this Act. 
SEC. 853. INCREASED SIMPLIFIED ACQUISITION THRESH-
OLD FOR PROCUREMENTS IN SUPPORT OF 
HUMANITARIAN OR PEACEKEEPING OPER-
ATIONS OR CONTINGENCY OPERATIONS. 
(a) TEMPORARY THRESHOLD AMOUNTS.—For a pro-
curement referred to in section 852 that is carried out 
in support of a humanitarian or peacekeeping operation
261
or a contingency operation, the simplified acquisition 
threshold definitions shall be applied as if the amount de-
termined under the exception provided for such an oper-
ation in those definitions were—
(1) in the case of a contract to be awarded and 
performed, or purchase to be made, inside the 
United States, $200,000; or 
(2) in the case of a contract to be awarded and 
performed, or purchase to be made, outside the 
United States, $300,000. 
(b) SIMPLIFIED ACQUISITION THRESHOLD DEFINI-
TIONS.—In this section, the term ‘‘simplified acquisition 
threshold definitions’’ means the following: 
(1) Section 4(11) of the Office of Federal Pro-
curement Policy Act (41 U.S.C. 403(11)). 
(2) Section 309(d) of the Federal Property and 
Administrative Services Act of 1949 (41 U.S.C. 
259(d)). 
(3) Section 2302(7) of title 10, United States 
Code. 
(c) SMALL BUSINESS RESERVE.—For a procurement 
carried out pursuant to subsection (a), section 15(j) of the 
Small Business Act (15 U.S.C. 644(j)) shall be applied 
as if the maximum anticipated value identified therein is 
equal to the amounts referred to in subsection (a).
262
SEC. 854. INCREASED MICRO-PURCHASE THRESHOLD FOR 
CERTAIN PROCUREMENTS. 
In the administration of section 32 of the Office of 
Federal Procurement Policy Act (41 U.S.C. 428) with re-
spect to a procurement referred to in section 852, the 
amount specified in subsections (c), (d), and (f) of such 
section 32 shall be deemed to be $7,500. 
SEC. 855. APPLICATION OF CERTAIN COMMERCIAL ITEMS 
AUTHORITIES TO CERTAIN PROCUREMENTS. 
(a) AUTHORITY.—
(1) IN GENERAL.—The head of an executive 
agency may apply the provisions of law listed in 
paragraph (2) to a procurement referred to in sec-
tion 852 without regard to whether the property or 
services are commercial items. 
(2) COMMERCIAL ITEM LAWS.—The provisions 
of law referred to in paragraph (1) are as follows: 
(A) Sections 31 and 34 of the Office of 
Federal Procurement Policy Act (41 U.S.C. 
427, 430). 
(B) Section 2304(g) of title 10, United 
States Code. 
(C) Section 303(g) of the Federal Property 
and Administrative Services Act of 1949 (41 
U.S.C. 253(g)).
263
(b) INAPPLICABILITY OF LIMITATION ON USE OF 
SIMPLIFIED ACQUISITION PROCEDURES.—
(1) IN GENERAL.—The $5,000,000 limitation 
provided in section 31(a)(2) of the Office of Federal 
Procurement Policy Act (41 U.S.C. 427(a)(2)), sec-
tion 2304(g)(1)(B) of title 10, United States Code, 
and section 303(g)(1)(B) of the Federal Property 
and Administrative Services Act of 1949 (41 U.S.C. 
253(g)(1)(B)) shall not apply to purchases of prop-
erty or services to which any of the provisions of law 
referred to in subsection (a) are applied under the 
authority of this section. 
(2) OMB GUIDANCE.—The Director of the Of-
fice of Management and Budget shall issue guidance 
and procedures for the use of simplified acquisition 
procedures for a purchase of property or services in 
excess of $5,000,000 under the authority of this sec-
tion. 
(c) CONTINUATION OF AUTHORITY FOR SIMPLIFIED 
PURCHASE PROCEDURES.—Authority under a provision of 
law referred to in subsection (a)(2) that expires under sec-
tion 4202(e) of the Clinger-Cohen Act of 1996 (divisions 
D and E of Public Law 104–106; 10 U.S.C. 2304 note) 
shall, notwithstanding such section, continue to apply for
264
use by the head of an executive agency as provided in sub-
sections (a) and (b). 
SEC. 856. USE OF STREAMLINED PROCEDURES. 
(a) REQUIRED USE.—The head of an executive agen-
cy shall, when appropriate, use streamlined acquisition au-
thorities and procedures authorized by law for a procure-
ment referred to in section 852, including authorities and 
procedures that are provided under the following provi-
sions of law: 
(1) FEDERAL PROPERTY AND ADMINISTRATIVE 
SERVICES ACT OF 1949.—In title III of the Federal 
Property and Administrative Services Act of 1949: 
(A) Paragraphs (1), (2), (6), and (7) of 
subsection (c) of section 303 (41 U.S.C. 253), 
relating to use of procedures other than com-
petitive procedures under certain circumstances 
(subject to subsection (e) of such section). 
(B) Section 303J (41 U.S.C. 253j), relat-
ing to orders under task and delivery order con-
tracts. 
(2) TITLE 10, UNITED STATES CODE.—In chap-
ter 137 of title 10, United States Code: 
(A) Paragraphs (1), (2), (6), and (7) of 
subsection (c) of section 2304, relating to use 
of procedures other than competitive procedures
265
under certain circumstances (subject to sub-
section (e) of such section). 
(B) Section 2304c, relating to orders 
under task and delivery order contracts. 
(3) OFFICE OF FEDERAL PROCUREMENT POL-
ICY ACT.—Paragraphs (1)(B), (1)(D), and (2) of 
section 18(c) of the Office of Federal Procurement 
Policy Act (41 U.S.C. 416(c)), relating to inapplica-
bility of a requirement for procurement notice. 
(b) WAIVER OF CERTAIN SMALL BUSINESS THRESH-
OLD
REQUIREMENTS.—Subclause 
(II) 
of 
section 
8(a)(1)(D)(i) of the Small Business Act (15 U.S.C. 
637(a)(1)(D)(i)) and clause (ii) of section 31(b)(2)(A) of 
such Act (15 U.S.C. 657a(b)(2)(A)) shall not apply in the 
use of streamlined acquisition authorities and procedures 
referred to in paragraphs (1)(A) and (2)(A) of subsection 
(a) for a procurement referred to in section 852. 
SEC. 857. REVIEW AND REPORT BY COMPTROLLER GEN-
ERAL. 
(a) REQUIREMENTS.—Not later than March 31, 
2004, the Comptroller General shall—
(1) complete a review of the extent to which 
procurements of property and services have been 
made in accordance with this subtitle; and
266
(2) submit a report on the results of the review 
to the Committee on Governmental Affairs of the 
Senate and the Committee on Government Reform 
of the House of Representatives. 
(b) CONTENT OF REPORT.—The report under sub-
section (a)(2) shall include the following matters: 
(1) ASSESSMENT.—The Comptroller General’s 
assessment of—
(A) the extent to which property and serv-
ices procured in accordance with this title have 
contributed to the capacity of the workforce of 
Federal Government employees within each ex-
ecutive agency to carry out the mission of the 
executive agency; and 
(B) the extent to which Federal Govern-
ment employees have been trained on the use of 
technology. 
(2) RECOMMENDATIONS.—Any recommenda-
tions of the Comptroller General resulting from the 
assessment described in paragraph (1). 
(c) CONSULTATION.—In preparing for the review 
under subsection (a)(1), the Comptroller shall consult with 
the Committee on Governmental Affairs of the Senate and 
the Committee on Government Reform of the House of 
Representatives on the specific issues and topics to be re-
267
viewed. The extent of coverage needed in areas such as 
technology integration, employee training, and human 
capital management, as well as the data requirements of 
the study, shall be included as part of the consultation. 
SEC. 858. IDENTIFICATION OF NEW ENTRANTS INTO THE 
FEDERAL MARKETPLACE. 
The head of each executive agency shall conduct mar-
ket research on an ongoing basis to identify effectively the 
capabilities, including the capabilities of small businesses 
and new entrants into Federal contracting, that are avail-
able in the marketplace for meeting the requirements of 
the executive agency in furtherance of defense against or 
recovery from terrorism or nuclear, biological, chemical, 
or radiological attack. The head of the executive agency 
shall, to the maximum extent practicable, take advantage 
of commercially available market research methods, in-
cluding use of commercial databases, to carry out the re-
search.
Subtitle G—Support Anti-terrorism 
by 
Fostering 
Effective 
Tech-
nologies Act of 2002
SEC. 861. SHORT TITLE. 
This subtitle may be cited as the ‘‘Support Anti-ter-
rorism by Fostering Effective Technologies Act of 2002’’ 
or the ‘‘SAFETY Act’’.
268
SEC. 862. ADMINISTRATION. 
(a) IN GENERAL.—The Secretary shall be responsible 
for the administration of this subtitle. 
(b) DESIGNATION OF QUALIFIED ANTI-TERRORISM 
TECHNOLOGIES.—The Secretary may designate anti-ter-
rorism technologies that qualify for protection under the 
system of risk management set forth in this subtitle in 
accordance with criteria that shall include, but not be lim-
ited to, the following: 
(1) Prior United States government use or 
demonstrated substantial utility and effectiveness. 
(2) Availability of the technology for immediate 
deployment in public and private settings. 
(3) Existence of extraordinarily large or ex-
traordinarily unquantifiable potential third party li-
ability risk exposure to the Seller or other provider 
of such anti-terrorism technology. 
(4) Substantial likelihood that such anti-ter-
rorism technology will not be deployed unless protec-
tions under the system of risk management provided 
under this subtitle are extended. 
(5) Magnitude of risk exposure to the public if 
such anti-terrorism technology is not deployed. 
(6) Evaluation of all scientific studies that can 
be feasibly conducted in order to assess the capa-
269
bility of the technology to substantially reduce risks 
of harm. 
(7) Anti-terrorism technology that would be ef-
fective in facilitating the defense against acts of ter-
rorism, including technologies that prevent, defeat or 
respond to such acts. 
(c) REGULATIONS.—The Secretary may issue such 
regulations, after notice and comment in accordance with 
section 553 of title 5, United States, Code, as may be nec-
essary to carry out this subtitle. 
SEC. 863. LITIGATION MANAGEMENT. 
(a) FEDERAL CAUSE OF ACTION.—
(1) IN GENERAL.—There shall exist a Federal 
cause of action for claims arising out of, relating to, 
or resulting from an act of terrorism when qualified 
anti-terrorism technologies have been deployed in de-
fense against or response or recovery from such act 
and such claims result or may result in loss to the 
Seller. The substantive law for decision in any such 
action shall be derived from the law, including choice 
of law principles, of the State in which such acts 
of terrorism occurred, unless such law is inconsistent 
with or preempted by Federal law. Such Federal 
cause of action shall be brought only for claims for 
injuries that are proximately caused by sellers that
270
provide qualified anti-terrorism technology to Fed-
eral and non-Federal government customers. 
(2) JURISDICTION.—Such appropriate district 
court of the United States shall have original and 
exclusive jurisdiction over all actions for any claim 
for loss of property, personal injury, or death arising 
out of, relating to, or resulting from an act of ter-
rorism when qualified anti-terrorism technologies 
have been deployed in defense against or response or 
recovery from such act and such claims result or 
may result in loss to the Seller. 
(b) SPECIAL RULES.—In an action brought under 
this section for damages the following provisions apply: 
(1) PUNITIVE DAMAGES.—No punitive damages 
intended to punish or deter, exemplary damages, or 
other damages not intended to compensate a plain-
tiff for actual losses may be awarded, nor shall any 
party be liable for interest prior to the judgment. 
(2) NONECONOMIC DAMAGES.—
(A) IN GENERAL.—Noneconomic damages 
may be awarded against a defendant only in an 
amount directly proportional to the percentage 
of responsibility of such defendant for the harm 
to the plaintiff, and no plaintiff may recover
271
noneconomic damages unless the plaintiff suf-
fered physical harm. 
(B) DEFINITION.—For purposes of sub-
paragraph (A), the term ‘‘noneconomic dam-
ages’’ means damages for losses for physical 
and emotional pain, suffering, inconvenience, 
physical impairment, mental anguish, disfigure-
ment, loss of enjoyment of life, loss of society 
and companionship, loss of consortium, hedonic 
damages, injury to reputation, and any other 
nonpecuniary losses. 
(c) COLLATERAL SOURCES.—Any recovery by a 
plaintiff in an action under this section shall be reduced 
by the amount of collateral source compensation, if any, 
that the plaintiff has received or is entitled to receive as 
a result of such acts of terrorism that result or may result 
in loss to the Seller. 
(d) GOVERNMENT CONTRACTOR DEFENSE.—
(1) IN GENERAL.—Should a product liability or 
other lawsuit be filed for claims arising out of, relat-
ing to, or resulting from an act of terrorism when 
qualified anti-terrorism technologies approved by the 
Secretary, as provided in paragraphs (2) and (3) of 
this subsection, have been deployed in defense 
against or response or recovery from such act and
272
such claims result or may result in loss to the Seller, 
there shall be a rebuttable presumption that the gov-
ernment contractor defense applies in such lawsuit. 
This presumption shall only be overcome by evidence 
showing that the Seller acted fraudulently or with 
willful misconduct in submitting information to the 
Secretary during the course of the Secretary’s con-
sideration of such technology under this subsection. 
This presumption of the government contractor de-
fense shall apply regardless of whether the claim 
against the Seller arises from a sale of the product 
to Federal Government or non-Federal Government 
customers. 
(2) EXCLUSIVE
RESPONSIBILITY.—The Sec-
retary will be exclusively responsible for the review 
and approval of anti-terrorism technology for pur-
poses of establishing a government contractor de-
fense in any product liability lawsuit for claims aris-
ing out of, relating to, or resulting from an act of 
terrorism when qualified anti-terrorism technologies 
approved by the Secretary, as provided in this para-
graph and paragraph (3), have been deployed in de-
fense against or response or recovery from such act 
and such claims result or may result in loss to the 
Seller. Upon the Seller’s submission to the Secretary
273
for approval of anti-terrorism technology, the Sec-
retary will conduct a comprehensive review of the de-
sign of such technology and determine whether it 
will perform as intended, conforms to the Seller’s 
specifications, and is safe for use as intended. The 
Seller will conduct safety and hazard analyses on 
such technology and will supply the Secretary with 
all such information. 
(3) CERTIFICATE.—For anti-terrorism tech-
nology reviewed and approved by the Secretary, the 
Secretary will issue a certificate of conformance to 
the Seller and place the anti-terrorism technology on 
an Approved Product List for Homeland Security. 
(e) EXCLUSION.—Nothing in this section shall in any 
way limit the ability of any person to seek any form of 
recovery from any person, government, or other entity 
that—
(1) attempts to commit, knowingly participates 
in, aids and abets, or commits any act of terrorism, 
or any criminal act related to or resulting from such 
act of terrorism; or 
(2) participates in a conspiracy to commit any 
such act of terrorism or any such criminal act. 
SEC. 864. RISK MANAGEMENT. 
(a) IN GENERAL.—
274
(1) LIABILITY
INSURANCE
REQUIRED.—Any 
person or entity that sells or otherwise provides a 
qualified anti-terrorism technology to Federal and 
non-Federal government customers (‘‘Seller’’) shall 
obtain liability insurance of such types and in such 
amounts as shall be required in accordance with this 
section and certified by the Secretary to satisfy oth-
erwise compensable third-party claims arising out of, 
relating to, or resulting from an act of terrorism 
when qualified anti-terrorism technologies have been 
deployed in defense against or response or recovery 
from such act. 
(2) MAXIMUM AMOUNT.—For the total claims 
related to 1 such act of terrorism, the Seller is not 
required to obtain liability insurance of more than 
the maximum amount of liability insurance reason-
ably available from private sources on the world 
market at prices and terms that will not unreason-
ably distort the sales price of Seller’s anti-terrorism 
technologies. 
(3) SCOPE OF COVERAGE.—Liability insurance 
obtained pursuant to this subsection shall, in addi-
tion to the Seller, protect the following, to the extent 
of their potential liability for involvement in the 
manufacture, qualification, sale, use, or operation of
275
qualified anti-terrorism technologies deployed in de-
fense against or response or recovery from an act of 
terrorism: 
(A) contractors, subcontractors, suppliers, 
vendors and customers of the Seller. 
(B) contractors, subcontractors, suppliers, 
and vendors of the customer. 
(4) THIRD PARTY CLAIMS.—Such liability in-
surance under this section shall provide coverage 
against third party claims arising out of, relating to, 
or resulting from the sale or use of anti-terrorism 
technologies. 
(b) RECIPROCAL WAIVER OF CLAIMS.—The Seller 
shall enter into a reciprocal waiver of claims with its con-
tractors, subcontractors, suppliers, vendors and cus-
tomers, and contractors and subcontractors of the cus-
tomers, involved in the manufacture, sale, use or operation 
of qualified anti-terrorism technologies, under which each 
party to the waiver agrees to be responsible for losses, in-
cluding business interruption losses, that it sustains, or 
for losses sustained by its own employees resulting from 
an activity resulting from an act of terrorism when quali-
fied anti-terrorism technologies have been deployed in de-
fense against or response or recovery from such act.
276
(c) EXTENT
OF LIABILITY.—Notwithstanding any 
other provision of law, liability for all claims against a 
Seller arising out of, relating to, or resulting from an act 
of terrorism when qualified anti-terrorism technologies 
have been deployed in defense against or response or re-
covery from such act and such claims result or may result 
in loss to the Seller, whether for compensatory or punitive 
damages or for contribution or indemnity, shall not be in 
an amount greater than the limits of liability insurance 
coverage required to be maintained by the Seller under 
this section. 
SEC. 865. DEFINITIONS. 
For purposes of this subtitle, the following definitions 
apply: 
(1) 
QUALIFIED
ANTI-TERRORISM
TECH-
NOLOGY.—For purposes of this subtitle, the term 
‘‘qualified anti-terrorism technology’’ means any 
product, equipment, service (including support serv-
ices), device, or technology (including information 
technology) designed, developed, modified, or pro-
cured for the specific purpose of preventing, detect-
ing, identifying, or deterring acts of terrorism or 
limiting the harm such acts might otherwise cause, 
that is designated as such by the Secretary.
277
(2) ACT OF TERRORISM.—(A) The term ‘‘act of 
terrorism’’ means any act that the Secretary deter-
mines meets the requirements under subparagraph 
(B), as such requirements are further defined and 
specified by the Secretary. 
(B) REQUIREMENTS.—An act meets the re-
quirements of this subparagraph if the act—
(i) is unlawful; 
(ii) causes harm to a person, property, or 
entity, in the United States, or in the case of 
a domestic United States air carrier or a 
United States-flag vessel (or a vessel based 
principally in the United States on which 
United States income tax is paid and whose in-
surance coverage is subject to regulation in the 
United States), in or outside the United States; 
and 
(iii) uses or attempts to use instrumental-
ities, weapons or other methods designed or in-
tended to cause mass destruction, injury or 
other loss to citizens or institutions of the 
United States. 
(3) 
INSURANCE
CARRIER.—The 
term 
‘‘insurance carrier’’ means any corporation, associa-
tion, society, order, firm, company, mutual, partner-
278
ship, individual aggregation of individuals, or any 
other legal entity that provides commercial property 
and casualty insurance. Such term includes any af-
filiates of a commercial insurance carrier. 
(4) LIABILITY INSURANCE.—
(A) IN GENERAL.—The term ‘‘liability in-
surance’’ means insurance for legal liabilities 
incurred by the insured resulting from—
(i) loss of or damage to property of 
others; 
(ii) ensuing loss of income or extra ex-
pense incurred because of loss of or dam-
age to property of others; 
(iii) bodily injury (including) to per-
sons other than the insured or its employ-
ees; or 
(iv) loss resulting from debt or default 
of another. 
(5) LOSS.—The term ‘‘loss’’ means death, bod-
ily injury, or loss of or damage to property, includ-
ing business interruption loss. 
(6) 
NON-FEDERAL
GOVERNMENT
CUS-
TOMERS.—The term ‘‘non-Federal Government cus-
tomers’’ means any customer of a Seller that is not 
an agency or instrumentality of the United States
279
Government with authority under Public Law 85-
804 to provide for indemnification under certain cir-
cumstances for third-party claims against its con-
tractors, including but not limited to State and local 
authorities and commercial entities. 
Subtitle H—Miscellaneous 
Provisions
SEC. 871. ADVISORY COMMITTEES. 
(a) IN GENERAL.—The Secretary may establish, ap-
point members of, and use the services of, advisory com-
mittees, as the Secretary may deem necessary. An advi-
sory committee established under this section may be ex-
empted by the Secretary from Public Law 92–463, but 
the Secretary shall publish notice in the Federal Register 
announcing the establishment of such a committee and 
identifying its purpose and membership. Notwithstanding 
the preceding sentence, members of an advisory committee 
that is exempted by the Secretary under the preceding 
sentence who are special Government employees (as that 
term is defined in section 202 of title 18, United States 
Code) shall be eligible for certifications under subsection 
(b)(3) of section 208 of title 18, United States Code, for 
official actions taken as a member of such advisory com-
mittee.
280
(b) TERMINATION.—Any advisory committee estab-
lished by the Secretary shall terminate 2 years after the 
date of its establishment, unless the Secretary makes a 
written determination to extend the advisory committee to 
a specified date, which shall not be more than 2 years 
after the date on which such determination is made. The 
Secretary may make any number of subsequent extensions 
consistent with this subsection.
SEC. 872. REORGANIZATION. 
(a) REORGANIZATION.—The Secretary may allocate 
or reallocate functions among the officers of the Depart-
ment, and may establish, consolidate, alter, or discontinue 
organizational units within the Department, but only—
(1) pursuant to section 1502(b); or 
(2) after the expiration of 60 days after pro-
viding notice of such action to the appropriate con-
gressional committees, which shall include an expla-
nation of the rationale for the action. 
(b) LIMITATIONS.—
(1) IN GENERAL.—Authority under subsection 
(a)(1) does not extend to the abolition of any agen-
cy, entity, organizational unit, program, or function 
established or required to be maintained by this Act. 
(2) ABOLITIONS.—Authority under subsection 
(a)(2) does not extend to the abolition of any agen-
281
cy, entity, organizational unit, program, or function 
established or required to be maintained by statute. 
SEC. 873. USE OF APPROPRIATED FUNDS. 
(a) DISPOSAL OF PROPERTY.—
(1) STRICT
COMPLIANCE.—If specifically au-
thorized to dispose of real property in this or any 
other Act, the Secretary shall exercise this authority 
in strict compliance with section 204 of the Federal 
Property and Administrative Services Act of 1949 
(40 U.S.C. 485). 
(2) DEPOSIT
OF
PROCEEDS.—The Secretary 
shall deposit the proceeds of any exercise of property 
disposal authority into the miscellaneous receipts of 
the Treasury in accordance with section 3302(b) of 
title 31, United States Code. 
(b) GIFTS.—Gifts or donations of services or property 
of or for the Department may not be accepted, used, or 
disposed of unless specifically permitted in advance in an 
appropriations Act and only under the conditions and for 
the purposes specified in such appropriations Act. 
(c) BUDGET REQUEST.—Under section 1105 of title 
31, United States Code, the President shall submit to 
Congress a detailed budget request for the Department 
for fiscal year 2004, and for each subsequent fiscal year.
282
SEC. 874. FUTURE YEAR HOMELAND SECURITY PROGRAM. 
(a) IN GENERAL.—Each budget request submitted to 
Congress for the Department under section 1105 of title 
31, United States Code, shall, at or about the same time, 
be accompanied by a Future Years Homeland Security 
Program. 
(b) CONTENTS.—The Future Years Homeland Secu-
rity Program under subsection (a) shall be structured, and 
include the same type of information and level of detail, 
as the Future Years Defense Program submitted to Con-
gress by the Department of Defense under section 221 
of title 10, United States Code. 
(c) EFFECTIVE DATE.—This section shall take effect 
with respect to the preparation and submission of the fis-
cal year 2005 budget request for the Department and for 
any subsequent fiscal year, except that the first Future 
Years Homeland Security Program shall be submitted not 
later than 90 days after the Department’s fiscal year 2005 
budget request is submitted to Congress. 
SEC. 875. MISCELLANEOUS AUTHORITIES. 
(a) SEAL.—The Department shall have a seal, whose 
design is subject to the approval of the President. 
(b) PARTICIPATION OF MEMBERS OF THE ARMED 
FORCES.—With respect to the Department, the Secretary 
shall have the same authorities that the Secretary of 
Transportation has with respect to the Department of
283
Transportation under section 324 of title 49, United 
States Code. 
(c) REDELEGATION OF FUNCTIONS.—Unless other-
wise provided in the delegation or by law, any function 
delegated under this Act may be redelegated to any subor-
dinate.
SEC. 876. MILITARY ACTIVITIES. 
Nothing in this Act shall confer upon the Secretary 
any authority to engage in warfighting, the military de-
fense of the United States, or other military activities, nor 
shall anything in this Act limit the existing authority of 
the Department of Defense or the Armed Forces to engage 
in warfighting, the military defense of the United States, 
or other military activities. 
SEC. 877. REGULATORY AUTHORITY AND PREEMPTION. 
(a) REGULATORY AUTHORITY.—Except as otherwise 
provided in sections 306(c), 862(c), and 1806(b), this Act 
vests no new regulatory authority in the Secretary or any 
other Federal official, and transfers to the Secretary or 
another Federal official only such regulatory authority as 
exists on the date of enactment of this Act within any 
agency, program, or function transferred to the Depart-
ment pursuant to this Act, or that on such date of enact-
ment is exercised by another official of the executive 
branch with respect to such agency, program, or function.
284
Any such transferred authority may not be exercised by 
an official from whom it is transferred upon transfer of 
such agency, program, or function to the Secretary or an-
other Federal official pursuant to this Act. This Act may 
not be construed as altering or diminishing the regulatory 
authority of any other executive agency, except to the ex-
tent that this Act transfers such authority from the agen-
cy. 
(b) PREEMPTION OF STATE OR LOCAL LAW.—Ex-
cept as otherwise provided in this Act, this Act preempts 
no State or local law, except that any authority to preempt 
State or local law vested in any Federal agency or official 
transferred to the Department pursuant to this Act shall 
be transferred to the Department effective on the date of 
the transfer to the Department of that Federal agency or 
official. 
SEC. 878. COUNTERNARCOTICS OFFICER. 
The Secretary shall appoint a senior official in the 
Department to assume primary responsibility for coordi-
nating policy and operations within the Department and 
between the Department and other Federal departments 
and agencies with respect to interdicting the entry of ille-
gal drugs into the United States, and tracking and sev-
ering connections between illegal drug trafficking and ter-
rorism. Such official shall—
285
(1) ensure the adequacy of resources within the 
Department for illicit drug interdiction; and 
(2) serve as the United States Interdiction Co-
ordinator for the Director of National Drug Control 
Policy.
SEC. 879. OFFICE OF INTERNATIONAL AFFAIRS. 
(a) ESTABLISHMENT.—There is established within 
the Office of the Secretary an Office of International Af-
fairs. The Office shall be headed by a Director, who shall 
be a senior official appointed by the Secretary. 
(b) DUTIES OF THE DIRECTOR.—The Director shall 
have the following duties: 
(1) To promote information and education ex-
change with nations friendly to the United States in 
order to promote sharing of best practices and tech-
nologies relating to homeland security. Such ex-
change shall include the following: 
(A) Exchange of information on research 
and development on homeland security tech-
nologies. 
(B) Joint training exercises of first re-
sponders. 
(C) Exchange of expertise on terrorism 
prevention, response, and crisis management.
286
(2) To identify areas for homeland security in-
formation and training exchange where the United 
States has a demonstrated weakness and another 
friendly nation or nations have a demonstrated ex-
pertise. 
(3) To plan and undertake international con-
ferences, exchange programs, and training activities. 
(4) To manage international activities within 
the Department in coordination with other Federal 
officials with responsibility for counter-terrorism 
matters. 
SEC. 880. PROHIBITION OF THE TERRORISM INFORMATION 
AND PREVENTION SYSTEM. 
Any and all activities of the Federal Government to 
implement the proposed component program of the Citizen 
Corps known as Operation TIPS (Terrorism Information 
and Prevention System) are hereby prohibited.
SEC. 881. REVIEW OF PAY AND BENEFIT PLANS. 
Notwithstanding any other provision of this Act, the 
Secretary shall, in consultation with the Director of the 
Office of Personnel Management, review the pay and ben-
efit plans of each agency whose functions are transferred 
under this Act to the Department and, within 90 days 
after the date of enactment, submit a plan to the Presi-
dent of the Senate and the Speaker of the House of Rep-
287
resentatives and the appropriate committees and sub-
committees of Congress, for ensuring, to the maximum ex-
tent practicable, the elimination of disparities in pay and 
benefits throughout the Department, especially among law 
enforcement personnel, that are inconsistent with merit 
system principles set forth in section 2301 of title 5, 
United States Code. 
SEC. 882. OFFICE FOR NATIONAL CAPITAL REGION CO-
ORDINATION. 
(a) ESTABLISHMENT.—
(1) IN GENERAL.—There is established within 
the Office of the Secretary the Office of National 
Capital Region Coordination, to oversee and coordi-
nate Federal programs for and relationships with 
State, local, and regional authorities in the National 
Capital Region, as defined under section 2674(f)(2) 
of title 10, United States Code. 
(2) DIRECTOR.—The Office established under 
paragraph (1) shall be headed by a Director, who 
shall be appointed by the Secretary. 
(3) COOPERATION.—The Secretary shall co-
operate with the Mayor of the District of Columbia, 
the Governors of Maryland and Virginia, and other 
State, local, and regional officers in the National 
Capital Region to integrate the District of Columbia,
288
Maryland, and Virginia into the planning, coordina-
tion, and execution of the activities of the Federal 
Government for the enhancement of domestic pre-
paredness against the consequences of terrorist at-
tacks. 
(b) 
RESPONSIBILITIES.—The 
Office 
established 
under subsection (a)(1) shall—
(1) coordinate the activities of the Department 
relating to the National Capital Region, including 
cooperation with the Office for State and Local Gov-
ernment Coordination; 
(2) assess, and advocate for, the resources 
needed by State, local, and regional authorities in 
the National Capital Region to implement efforts to 
secure the homeland; 
(3) provide State, local, and regional authorities 
in the National Capital Region with regular informa-
tion, research, and technical support to assist the ef-
forts of State, local, and regional authorities in the 
National Capital Region in securing the homeland; 
(4) develop a process for receiving meaningful 
input from State, local, and regional authorities and 
the private sector in the National Capital Region to 
assist in the development of the homeland security 
plans and activities of the Federal Government;
289
(5) coordinate with Federal agencies in the Na-
tional Capital Region on terrorism preparedness, to 
ensure adequate planning, information sharing, 
training, and execution of the Federal role in domes-
tic preparedness activities; 
(6) coordinate with Federal, State, local, and 
regional agencies, and the private sector in the Na-
tional Capital Region on terrorism preparedness to 
ensure adequate planning, information sharing, 
training, and execution of domestic preparedness ac-
tivities among these agencies and entities; and 
(7) serve as a liaison between the Federal Gov-
ernment and State, local, and regional authorities, 
and private sector entities in the National Capital 
Region to facilitate access to Federal grants and 
other programs. 
(c) ANNUAL REPORT.—The Office established under 
subsection (a) shall submit an annual report to Congress 
that includes—
(1) the identification of the resources required 
to fully implement homeland security efforts in the 
National Capital Region; 
(2) an assessment of the progress made by the 
National Capital Region in implementing homeland 
security efforts; and
290
(3) recommendations to Congress regarding the 
additional resources needed to fully implement 
homeland security efforts in the National Capital 
Region. 
(d) LIMITATION.—Nothing contained in this section 
shall be construed as limiting the power of State and local 
governments. 
SEC. 883. REQUIREMENT TO COMPLY WITH LAWS PRO-
TECTING 
EQUAL 
EMPLOYMENT 
OPPOR-
TUNITY AND PROVIDING WHISTLEBLOWER 
PROTECTIONS. 
Nothing in this Act shall be construed as exempting 
the Department from requirements applicable with respect 
to executive agencies—
(1) to provide equal employment protection for 
employees of the Department (including pursuant to 
the provisions in section 2302(b)(1) of title 5, 
United States Code, and the Notification and Fed-
eral Employee Antidiscrimination and Retaliation 
Act of 2002 (Pub. L. 107–174)); or 
(2) to provide whistleblower protections for em-
ployees of the Department (including pursuant to 
the provisions in section 2302(b)(8) and (9) of such 
title and the Notification and Federal Employee 
Antidiscrimination and Retaliation Act of 2002).
291
SEC. 884. FEDERAL LAW ENFORCEMENT TRAINING CEN-
TER. 
(a) IN GENERAL.—The transfer of an authority or 
an agency under this Act to the Department of Homeland 
Security does not affect training agreements already en-
tered into with the Federal Law Enforcement Training 
Center with respect to the training of personnel to carry 
out that authority or the duties of that transferred agency. 
(b) CONTINUITY OF OPERATIONS.—All activities of 
the Federal Law Enforcement Training Center trans-
ferred to the Department of Homeland Security under this 
Act shall continue to be carried out at the locations such 
activities were carried out before such transfer. 
SEC. 885. JOINT INTERAGENCY TASK FORCE. 
(a) ESTABLISHMENT.—The Secretary may establish 
and operate a permanent Joint Interagency Homeland Se-
curity Task Force composed of representatives from mili-
tary and civilian agencies of the United States Govern-
ment for the purposes of anticipating terrorist threats 
against the United States and taking appropriate actions 
to prevent harm to the United States. 
(b) STRUCTURE.—It is the sense of Congress that the 
Secretary should model the Joint Interagency Homeland 
Security Task Force on the approach taken by the Joint 
Interagency Task Forces for drug interdiction at Key
292
West, Florida and Alameda, California, to the maximum 
extent feasible and appropriate. 
SEC. 886. SENSE OF CONGRESS REAFFIRMING THE CONTIN-
UED IMPORTANCE AND APPLICABILITY OF 
THE POSSE COMITATUS ACT. 
(a) FINDINGS.—Congress finds the following: 
(1) Section 1385 of title 18, United States 
Code (commonly known as the ‘‘Posse Comitatus 
Act’’), prohibits the use of the Armed Forces as a 
posse comitatus to execute the laws except in cases 
and under circumstances expressly authorized by the 
Constitution or Act of Congress. 
(2) Enacted in 1878, the Posse Comitatus Act 
was expressly intended to prevent United States 
Marshals, on their own initiative, from calling on the 
Army for assistance in enforcing Federal law. 
(3) The Posse Comitatus Act has served the 
Nation well in limiting the use of the Armed Forces 
to enforce the law. 
(4) Nevertheless, by its express terms, the 
Posse Comitatus Act is not a complete barrier to the 
use of the Armed Forces for a range of domestic 
purposes, including law enforcement functions, when 
the use of the Armed Forces is authorized by Act of 
Congress or the President determines that the use of
293
the Armed Forces is required to fulfill the Presi-
dent’s obligations under the Constitution to respond 
promptly in time of war, insurrection, or other seri-
ous emergency. 
(5) Existing laws, including chapter 15 of title 
10, United States Code (commonly known as the 
‘‘Insurrection Act’’), and the Robert T. Stafford 
Disaster Relief and Emergency Assistance Act (42 
U.S.C. 5121 et seq.), grant the President broad 
powers that may be invoked in the event of domestic 
emergencies, including an attack against the Nation 
using weapons of mass destruction, and these laws 
specifically authorize the President to use the Armed 
Forces to help restore public order. 
(b) SENSE OF CONGRESS.—Congress reaffirms the 
continued importance of section 1385 of title 18, United 
States Code, and it is the sense of Congress that nothing 
in this Act should be construed to alter the applicability 
of such section to any use of the Armed Forces as a posse 
comitatus to execute the laws. 
SEC. 887. COORDINATION WITH THE DEPARTMENT OF 
HEALTH AND HUMAN SERVICES UNDER THE 
PUBLIC HEALTH SERVICE ACT. 
(a) IN GENERAL.—The annual Federal response plan 
developed by the Department shall be consistent with sec-
294
tion 319 of the Public Health Service Act (42 U.S.C. 
247d). 
(b) DISCLOSURES AMONG RELEVANT AGENCIES.—
(1) IN GENERAL.—Full disclosure among rel-
evant agencies shall be made in accordance with this 
subsection. 
(2) PUBLIC HEALTH EMERGENCY.—During the 
period in which the Secretary of Health and Human 
Services has declared the existence of a public health 
emergency under section 319(a) of the Public 
Health Service Act (42 U.S.C. 247d(a)), the Sec-
retary of Health and Human Services shall keep rel-
evant agencies, including the Department of Home-
land Security, the Department of Justice, and the 
Federal Bureau of Investigation, fully and currently 
informed. 
(3) 
POTENTIAL
PUBLIC
HEALTH
EMER-
GENCY.—In cases involving, or potentially involving, 
a public health emergency, but in which no deter-
mination of an emergency by the Secretary of 
Health and Human Services under section 319(a) of 
the Public Health Service Act (42 U.S.C. 247d(a)), 
has been made, all relevant agencies, including the 
Department of Homeland Security, the Department 
of Justice, and the Federal Bureau of Investigation,
295
shall keep the Secretary of Health and Human Serv-
ices and the Director of the Centers for Disease 
Control and Prevention fully and currently informed. 
SEC. 888. PRESERVING COAST GUARD MISSION PERFORM-
ANCE. 
(a) DEFINITIONS.—In this section: 
(1) NON-HOMELAND SECURITY MISSIONS.—The 
term ‘‘non-homeland security missions’’ means the 
following missions of the Coast Guard: 
(A) Marine safety. 
(B) Search and rescue. 
(C) Aids to navigation. 
(D) Living marine resources (fisheries law 
enforcement). 
(E) Marine environmental protection. 
(F) Ice operations. 
(2) 
HOMELAND
SECURITY
MISSIONS.—The 
term ‘‘homeland security missions’’ means the fol-
lowing missions of the Coast Guard: 
(A) Ports, waterways and coastal security. 
(B) Drug interdiction. 
(C) Migrant interdiction. 
(D) Defense readiness. 
(E) Other law enforcement.
296
(b) TRANSFER.—There are transferred to the De-
partment the authorities, functions, personnel, and assets 
of the Coast Guard, which shall be maintained as a dis-
tinct entity within the Department, including the authori-
ties and functions of the Secretary of Transportation re-
lating thereto. 
(c) MAINTENANCE OF STATUS OF FUNCTIONS AND 
ASSETS.—Notwithstanding any other provision of this 
Act, the authorities, functions, and capabilities of the 
Coast Guard to perform its missions shall be maintained 
intact and without significant reduction after the transfer 
of the Coast Guard to the Department, except as specified 
in subsequent Acts. 
(d) CERTAIN TRANSFERS PROHIBITED.—No mission, 
function, or asset (including for purposes of this sub-
section any ship, aircraft, or helicopter) of the Coast 
Guard may be diverted to the principal and continuing use 
of any other organization, unit, or entity of the Depart-
ment, except for details or assignments that do not reduce 
the Coast Guard’s capability to perform its missions. 
(e) CHANGES TO MISSIONS.—
(1) PROHIBITION.—The Secretary may not sub-
stantially or significantly reduce the missions of the 
Coast Guard or the Coast Guard’s capability to per-
297
form those missions, except as specified in subse-
quent Acts. 
(2) WAIVER.—The Secretary may waive the re-
strictions under paragraph (1) for a period of not to 
exceed 90 days upon a declaration and certification 
by the Secretary to Congress that a clear, compel-
ling, and immediate need exists for such a waiver. 
A certification under this paragraph shall include a 
detailed justification for the declaration and certifi-
cation, including the reasons and specific informa-
tion that demonstrate that the Nation and the Coast 
Guard cannot respond effectively if the restrictions 
under paragraph (1) are not waived. 
(f) ANNUAL REVIEW.—
(1) IN
GENERAL.—The Inspector General of 
the Department shall conduct an annual review that 
shall assess thoroughly the performance by the 
Coast Guard of all missions of the Coast Guard 
(including non-homeland security missions and 
homeland security missions) with a particular em-
phasis on examining the non-homeland security mis-
sions. 
(2) REPORT.—The report under this paragraph 
shall be submitted to—
298
(A) the Committee on Governmental Af-
fairs of the Senate; 
(B) the Committee on Government Reform 
of the House of Representatives; 
(C) the Committees on Appropriations of 
the Senate and the House of Representatives; 
(D) the Committee on Commerce, Science, 
and Transportation of the Senate; and 
(E) the Committee on Transportation and 
Infrastructure of the House of Representatives. 
(g) DIRECT REPORTING TO SECRETARY.—Upon the 
transfer of the Coast Guard to the Department, the Com-
mandant shall report directly to the Secretary without 
being required to report through any other official of the 
Department. 
(h) OPERATION AS A SERVICE IN THE NAVY.—None 
of the conditions and restrictions in this section shall 
apply when the Coast Guard operates as a service in the 
Navy under section 3 of title 14, United States Code. 
(i) REPORT ON ACCELERATING THE INTEGRATED 
DEEPWATER SYSTEM.—Not later than 90 days after the 
date of enactment of this Act, the Secretary, in consulta-
tion with the Commandant of the Coast Guard, shall sub-
mit a report to the Committee on Commerce, Science, and 
Transportation of the Senate, the Committee on Trans-
299
portation and Infrastructure of the House of Representa-
tives, and the Committees on Appropriations of the Senate 
and the House of Representatives that—
(1) analyzes the feasibility of accelerating the 
rate of procurement in the Coast Guard’s Integrated 
Deepwater System from 20 years to 10 years; 
(2) includes an estimate of additional resources 
required; 
(3) describes the resulting increased capabili-
ties; 
(4) outlines any increases in the Coast Guard’s 
homeland security readiness; 
(5) describes any increases in operational effi-
ciencies; and 
(6) provides a revised asset phase-in time line. 
SEC. 889. HOMELAND SECURITY FUNDING ANALYSIS IN 
PRESIDENT’S BUDGET. 
(a) IN GENERAL.—Section 1105(a) of title 31, 
United States Code, is amended by adding at the end the 
following: 
‘‘(33)(A)(i) a detailed, separate analysis, by 
budget function, by agency, and by initiative area 
(as determined by the administration) for the prior 
fiscal year, the current fiscal year, the fiscal years 
for which the budget is submitted, and the ensuing
300
fiscal year identifying the amounts of gross and net 
appropriations or obligational authority and outlays 
that contribute to homeland security, with separate 
displays for mandatory and discretionary amounts, 
including—
‘‘(I) summaries of the total amount of 
such appropriations or new obligational author-
ity and outlays requested for homeland security; 
‘‘(II) an estimate of the current service lev-
els of homeland security spending; 
‘‘(III) the most recent risk assessment and 
summary of homeland security needs in each 
initiative area (as determined by the adminis-
tration); and 
‘‘(IV) an estimate of user fees collected by 
the Federal Government on behalf of homeland 
security activities; 
‘‘(ii) with respect to subclauses (I) through (IV) 
of clause (i), amounts shall be provided by account 
for each program, project and activity; and 
‘‘(iii) an estimate of expenditures for homeland 
security activities by State and local governments 
and the private sector for the prior fiscal year and 
the current fiscal year.
301
‘‘(B) In this paragraph, consistent with the Of-
fice of Management and Budget’s June 2002 
‘Annual Report to Congress on Combatting Ter-
rorism’, the term ‘homeland security’ refers to those 
activities that detect, deter, protect against, and re-
spond to terrorist attacks occurring within the 
United States and its territories. 
‘‘(C) In implementing this paragraph, including 
determining what Federal activities or accounts con-
stitute homeland security for purposes of budgetary 
classification, the Office of Management and Budget 
is directed to consult periodically, but at least annu-
ally, with the House and Senate Budget Commit-
tees, the House and Senate Appropriations Commit-
tees, and the Congressional Budget Office.’’. 
(b) REPEAL OF DUPLICATIVE REPORTS.—The fol-
lowing sections are repealed: 
(1) Section 1051 of Public Law 105–85. 
(2) Section 1403 of Public Law 105–261. 
(c) EFFECTIVE DATE.—This section and the amend-
ment made by this section shall apply beginning with re-
spect to the fiscal year 2005 budget submission.
302
SEC. 890. AIR TRANSPORTATION SAFETY AND SYSTEM STA-
BILIZATION ACT. 
The Air Transportation Safety and System Stabiliza-
tion Act (49 U.S.C. 40101 note) is amended—
(1) in section 408 by striking the last sentence 
of subsection (c); and 
(2) in section 402 by striking paragraph (1) 
and inserting the following: 
‘‘(1) AIR
CARRIER.—The term ‘air carrier’ 
means a citizen of the United States undertaking by 
any means, directly or indirectly, to provide air 
transportation and includes employees and agents 
(including persons engaged in the business of pro-
viding air transportation security and their affili-
ates) of such citizen. For purposes of the preceding 
sentence, the term ‘agent’, as applied to persons en-
gaged in the business of providing air transportation 
security, shall only include persons that have con-
tracted directly with the Federal Aviation Adminis-
tration on or after and commenced services no later 
than February 17, 2002, to provide such security, 
and had not been or are not debarred for any period 
within 6 months from that date.’’.
303
Subtitle I—Information Sharing 
SEC. 891. SHORT TITLE; FINDINGS; AND SENSE OF CON-
GRESS. 
(a) SHORT TITLE.—This subtitle may be cited as the 
‘‘Homeland Security Information Sharing Act’’. 
(b) FINDINGS.—Congress finds the following: 
(1) The Federal Government is required by the 
Constitution to provide for the common defense, 
which includes terrorist attack. 
(2) The Federal Government relies on State 
and local personnel to protect against terrorist at-
tack. 
(3) The Federal Government collects, creates, 
manages, and protects classified and sensitive but 
unclassified information to enhance homeland secu-
rity. 
(4) Some homeland security information is 
needed by the State and local personnel to prevent 
and prepare for terrorist attack. 
(5) The needs of State and local personnel to 
have access to relevant homeland security informa-
tion to combat terrorism must be reconciled with the 
need to preserve the protected status of such infor-
mation and to protect the sources and methods used 
to acquire such information.
304
(6) Granting security clearances to certain 
State and local personnel is one way to facilitate the 
sharing of information regarding specific terrorist 
threats among Federal, State, and local levels of 
government. 
(7) Methods exist to declassify, redact, or other-
wise adapt classified information so it may be shared 
with State and local personnel without the need for 
granting additional security clearances. 
(8) State and local personnel have capabilities 
and opportunities to gather information on sus-
picious activities and terrorist threats not possessed 
by Federal agencies. 
(9) The Federal Government and State and 
local governments and agencies in other jurisdictions 
may benefit from such information. 
(10) Federal, State, and local governments and 
intelligence, law enforcement, and other emergency 
preparation and response agencies must act in part-
nership to maximize the benefits of information 
gathering and analysis to prevent and respond to 
terrorist attacks. 
(11) Information systems, including the Na-
tional Law Enforcement Telecommunications Sys-
tem and the Terrorist Threat Warning System, have
305
been established for rapid sharing of classified and 
sensitive but unclassified information among Fed-
eral, State, and local entities. 
(12) Increased efforts to share homeland secu-
rity information should avoid duplicating existing in-
formation systems. 
(c) SENSE OF CONGRESS.—It is the sense of Con-
gress that Federal, State, and local entities should share 
homeland security information to the maximum extent 
practicable, with special emphasis on hard-to-reach urban 
and rural communities. 
SEC. 892. FACILITATING HOMELAND SECURITY INFORMA-
TION SHARING PROCEDURES. 
(a) PROCEDURES FOR DETERMINING EXTENT OF 
SHARING OF HOMELAND SECURITY INFORMATION.—
(1) The President shall prescribe and imple-
ment procedures under which relevant Federal agen-
cies—
(A) share relevant and appropriate home-
land security information with other Federal 
agencies, including the Department, and appro-
priate State and local personnel; 
(B) identify and safeguard homeland secu-
rity information that is sensitive but unclassi-
fied; and
306
(C) to the extent such information is in 
classified form, determine whether, how, and to 
what extent to remove classified information, as 
appropriate, and with which such personnel it 
may be shared after such information is re-
moved. 
(2) The President shall ensure that such proce-
dures apply to all agencies of the Federal Govern-
ment. 
(3) Such procedures shall not change the sub-
stantive requirements for the classification and safe-
guarding of classified information. 
(4) Such procedures shall not change the re-
quirements and authorities to protect sources and 
methods. 
(b) PROCEDURES FOR SHARING OF HOMELAND SE-
CURITY INFORMATION.—
(1) Under procedures prescribed by the Presi-
dent, all appropriate agencies, including the intel-
ligence community, shall, through information shar-
ing systems, share homeland security information 
with Federal agencies and appropriate State and 
local personnel to the extent such information may 
be shared, as determined in accordance with sub-
307
section (a), together with assessments of the credi-
bility of such information. 
(2) Each information sharing system through 
which information is shared under paragraph (1) 
shall—
(A) have the capability to transmit unclas-
sified or classified information, though the pro-
cedures and recipients for each capability may 
differ; 
(B) have the capability to restrict delivery 
of information to specified subgroups by geo-
graphic location, type of organization, position 
of a recipient within an organization, or a re-
cipient’s need to know such information; 
(C) be configured to allow the efficient and 
effective sharing of information; and 
(D) be accessible to appropriate State and 
local personnel. 
(3) The procedures prescribed under paragraph 
(1) shall establish conditions on the use of informa-
tion shared under paragraph (1)—
(A) to limit the redissemination of such in-
formation to ensure that such information is 
not used for an unauthorized purpose;
308
(B) to ensure the security and confiden-
tiality of such information;
(C) to protect the constitutional and statu-
tory rights of any individuals who are subjects 
of such information; and 
(D) to provide data integrity through the 
timely removal and destruction of obsolete or 
erroneous names and information. 
(4) The procedures prescribed under paragraph 
(1) shall ensure, to the greatest extent practicable, 
that the information sharing system through which 
information is shared under such paragraph include 
existing information sharing systems, including, but 
not limited to, the National Law Enforcement Tele-
communications System, the Regional Information 
Sharing System, and the Terrorist Threat Warning 
System of the Federal Bureau of Investigation. 
(5) Each appropriate Federal agency, as deter-
mined by the President, shall have access to each in-
formation sharing system through which information 
is shared under paragraph (1), and shall therefore 
have access to all information, as appropriate, 
shared under such paragraph. 
(6) The procedures prescribed under paragraph 
(1) shall ensure that appropriate State and local
309
personnel are authorized to use such information 
sharing systems—
(A) to access information shared with such 
personnel; and 
(B) to share, with others who have access 
to such information sharing systems, the home-
land security information of their own jurisdic-
tions, which shall be marked appropriately as 
pertaining to potential terrorist activity. 
(7) Under procedures prescribed jointly by the 
Director of Central Intelligence and the Attorney 
General, each appropriate Federal agency, as deter-
mined by the President, shall review and assess the 
information shared under paragraph (6) and inte-
grate such information with existing intelligence. 
(c) SHARING
OF CLASSIFIED INFORMATION
AND 
SENSITIVE
BUT
UNCLASSIFIED
INFORMATION
WITH 
STATE AND LOCAL PERSONNEL.—
(1) The President shall prescribe procedures 
under which Federal agencies may, to the extent the 
President considers necessary, share with appro-
priate State and local personnel homeland security 
information that remains classified or otherwise pro-
tected after the determinations prescribed under the 
procedures set forth in subsection (a).
310
(2) It is the sense of Congress that such proce-
dures may include 1 or more of the following means: 
(A) Carrying out security clearance inves-
tigations with respect to appropriate State and 
local personnel. 
(B) With respect to information that is 
sensitive but unclassified, entering into non-
disclosure agreements with appropriate State 
and local personnel. 
(C) Increased use of information-sharing 
partnerships that include appropriate State and 
local personnel, such as the Joint Terrorism 
Task Forces of the Federal Bureau of Inves-
tigation, the Anti-Terrorism Task Forces of the 
Department of Justice, and regional Terrorism 
Early Warning Groups. 
(d) RESPONSIBLE OFFICIALS.—For each affected 
Federal agency, the head of such agency shall designate 
an official to administer this Act with respect to such 
agency. 
(e) FEDERAL CONTROL OF INFORMATION.—Under 
procedures prescribed under this section, information ob-
tained by a State or local government from a Federal 
agency under this section shall remain under the control 
of the Federal agency, and a State or local law authorizing
311
or requiring such a government to disclose information 
shall not apply to such information. 
(f) DEFINITIONS.—As used in this section: 
(1) The term ‘‘homeland security information’’ 
means any information possessed by a Federal, 
State, or local agency that—
(A) relates to the threat of terrorist activ-
ity; 
(B) relates to the ability to prevent, inter-
dict, or disrupt terrorist activity; 
(C) would improve the identification or in-
vestigation of a suspected terrorist or terrorist 
organization; or 
(D) would improve the response to a ter-
rorist act. 
(2) The term ‘‘intelligence community’’ has the 
meaning given such term in section 3(4) of the Na-
tional Security Act of 1947 (50 U.S.C. 401a(4)). 
(3) The term ‘‘State and local personnel’’ 
means any of the following persons involved in pre-
vention, preparation, or response for terrorist attack: 
(A) State Governors, mayors, and other lo-
cally elected officials. 
(B) State and local law enforcement per-
sonnel and firefighters.
312
(C) Public health and medical profes-
sionals. 
(D) Regional, State, and local emergency 
management agency personnel, including State 
adjutant generals. 
(E) Other appropriate emergency response 
agency personnel. 
(F) Employees of private-sector entities 
that affect critical infrastructure, cyber, eco-
nomic, or public health security, as designated 
by the Federal government in procedures devel-
oped pursuant to this section. 
(4) The term ‘‘State’’ includes the District of 
Columbia and any commonwealth, territory, or pos-
session of the United States. 
(g) CONSTRUCTION.—Nothing in this Act shall be 
construed as authorizing any department, bureau, agency, 
officer, or employee of the Federal Government to request, 
receive, or transmit to any other Government entity or 
personnel, or transmit to any State or local entity or per-
sonnel otherwise authorized by this Act to receive home-
land security information, any information collected by the 
Federal Government solely for statistical purposes in vio-
lation of any other provision of law relating to the con-
fidentiality of such information.
313
SEC. 893. REPORT. 
(a) REPORT REQUIRED.—Not later than 12 months 
after the date of the enactment of this Act, the President 
shall submit to the congressional committees specified in 
subsection (b) a report on the implementation of section 
892. The report shall include any recommendations for ad-
ditional measures or appropriation requests, beyond the 
requirements of section 892, to increase the effectiveness 
of sharing of information between and among Federal, 
State, and local entities. 
(b) SPECIFIED CONGRESSIONAL COMMITTEES.—The 
congressional committees referred to in subsection (a) are 
the following committees: 
(1) The Permanent Select Committee on Intel-
ligence and the Committee on the Judiciary of the 
House of Representatives. 
(2) The Select Committee on Intelligence and 
the Committee on the Judiciary of the Senate. 
SEC. 894. AUTHORIZATION OF APPROPRIATIONS. 
There are authorized to be appropriated such sums 
as may be necessary to carry out section 892. 
SEC. 895. AUTHORITY TO SHARE GRAND JURY INFORMA-
TION. 
Rule 6(e) of the Federal Rules of Criminal Procedure 
is amended—
314
(1) in paragraph (2), by inserting ‘‘, or of 
guidelines jointly issued by the Attorney General and 
Director of Central Intelligence pursuant to Rule 6,’’ 
after ‘‘Rule 6’’; and 
(2) in paragraph (3)—
(A) in subparagraph (A)(ii), by inserting 
‘‘or of a foreign government’’ after ‘‘(including 
personnel of a state or subdivision of a state’’; 
(B) in subparagraph (C)(i)—
(i) in subclause (I), by inserting be-
fore the semicolon the following: ‘‘or, upon 
a request by an attorney for the govern-
ment, when sought by a foreign court or 
prosecutor for use in an official criminal 
investigation’’; 
(ii) in subclause (IV)—
(I) by inserting ‘‘or foreign’’ 
after ‘‘may disclose a violation of 
State’’; 
(II) by inserting ‘‘or of a foreign 
government’’ after ‘‘to an appropriate 
official of a State or subdivision of a 
State’’; and 
(III) by striking ‘‘or’’ at the end;
315
(iii) by striking the period at the end 
of subclause (V) and inserting ‘‘; or’’; and 
(iv) by adding at the end the fol-
lowing: 
‘‘(VI) when matters involve a threat 
of actual or potential attack or other grave 
hostile acts of a foreign power or an agent 
of a foreign power, domestic or inter-
national sabotage, domestic or inter-
national terrorism, or clandestine intel-
ligence gathering activities by an intel-
ligence service or network of a foreign 
power or by an agent of a foreign power, 
within the United States or elsewhere, to 
any appropriate federal, state, local, or for-
eign government official for the purpose of 
preventing or responding to such a 
threat.’’; and 
(C) in subparagraph (C)(iii)—
(i) by striking ‘‘Federal’’; 
(ii) by inserting ‘‘or clause (i)(VI)’’ 
after ‘‘clause (i)(V)’’; and 
(iii) by adding at the end the fol-
lowing: ‘‘Any state, local, or foreign official 
who receives information pursuant to
316
clause (i)(VI) shall use that information 
only consistent with such guidelines as the 
Attorney General and Director of Central 
Intelligence shall jointly issue.’’. 
SEC. 896. AUTHORITY TO SHARE ELECTRONIC, WIRE, AND 
ORAL INTERCEPTION INFORMATION. 
Section 2517 of title 18, United States Code, is 
amended by adding at the end the following: 
‘‘(7) Any investigative or law enforcement officer, or 
other Federal official in carrying out official duties as such 
Federal official, who by any means authorized by this 
chapter, has obtained knowledge of the contents of any 
wire, oral, or electronic communication, or evidence de-
rived therefrom, may disclose such contents or derivative 
evidence to a foreign investigative or law enforcement offi-
cer to the extent that such disclosure is appropriate to 
the proper performance of the official duties of the officer 
making or receiving the disclosure, and foreign investiga-
tive or law enforcement officers may use or disclose such 
contents or derivative evidence to the extent such use or 
disclosure is appropriate to the proper performance of 
their official duties. 
‘‘(8) Any investigative or law enforcement officer, or 
other Federal official in carrying out official duties as such 
Federal official, who by any means authorized by this
317
chapter, has obtained knowledge of the contents of any 
wire, oral, or electronic communication, or evidence de-
rived therefrom, may disclose such contents or derivative 
evidence to any appropriate Federal, State, local, or for-
eign government official to the extent that such contents 
or derivative evidence reveals a threat of actual or poten-
tial attack or other grave hostile acts of a foreign power 
or an agent of a foreign power, domestic or international 
sabotage, domestic or international terrorism, or clandes-
tine intelligence gathering activities by an intelligence 
service or network of a foreign power or by an agent of 
a foreign power, within the United States or elsewhere, 
for the purpose of preventing or responding to such a 
threat. Any official who receives information pursuant to 
this provision may use that information only as necessary 
in the conduct of that person’s official duties subject to 
any limitations on the unauthorized disclosure of such in-
formation, and any State, local, or foreign official who re-
ceives information pursuant to this provision may use that 
information only consistent with such guidelines as the At-
torney General and Director of Central Intelligence shall 
jointly issue.’’. 
SEC. 897. FOREIGN INTELLIGENCE INFORMATION. 
(a) 
DISSEMINATION
AUTHORIZED.—Section 
203(d)(1) of the Uniting and Strengthening America by
318
Providing Appropriate Tools Required to Intercept and 
Obstruct Terrorism (USA PATRIOT ACT) Act of 2001 
(Public Law 107–56; 50 U.S.C. 403–5d) is amended by 
adding at the end the following: ‘‘Consistent with the re-
sponsibility of the Director of Central Intelligence to pro-
tect intelligence sources and methods, and the responsi-
bility of the Attorney General to protect sensitive law en-
forcement information, it shall be lawful for information 
revealing a threat of actual or potential attack or other 
grave hostile acts of a foreign power or an agent of a for-
eign power, domestic or international sabotage, domestic 
or international terrorism, or clandestine intelligence gath-
ering activities by an intelligence service or network of a 
foreign power or by an agent of a foreign power, within 
the United States or elsewhere, obtained as part of a 
criminal investigation to be disclosed to any appropriate 
Federal, State, local, or foreign government official for the 
purpose of preventing or responding to such a threat. Any 
official who receives information pursuant to this provision 
may use that information only as necessary in the conduct 
of that person’s official duties subject to any limitations 
on the unauthorized disclosure of such information, and 
any State, local, or foreign official who receives informa-
tion pursuant to this provision may use that information 
only consistent with such guidelines as the Attorney Gen-
319
eral and Director of Central Intelligence shall jointly 
issue.’’. 
(b) CONFORMING AMENDMENTS.—Section 203(c) of 
that Act is amended—
(1) by striking ‘‘section 2517(6)’’ and inserting 
‘‘paragraphs (6) and (8) of section 2517 of title 18, 
United States Code,’’; and 
(2) by inserting ‘‘and (VI)’’ after ‘‘Rule 
6(e)(3)(C)(i)(V)’’. 
SEC. 898. INFORMATION ACQUIRED FROM AN ELECTRONIC 
SURVEILLANCE. 
Section 106(k)(1) of the Foreign Intelligence Surveil-
lance Act of 1978 (50 U.S.C. 1806) is amended by insert-
ing after ‘‘law enforcement officers’’ the following: ‘‘or law 
enforcement personnel of a State or political subdivision
of a State (including the chief executive officer of that 
State or political subdivision who has the authority to ap-
point or direct the chief law enforcement officer of that 
State or political subdivision)’’. 
SEC. 899. INFORMATION ACQUIRED FROM A PHYSICAL 
SEARCH. 
Section 305(k)(1) of the Foreign Intelligence Surveil-
lance Act of 1978 (50 U.S.C. 1825) is amended by insert-
ing after ‘‘law enforcement officers’’ the following: ‘‘or law 
enforcement personnel of a State or political subdivision
320
of a State (including the chief executive officer of that 
State or political subdivision who has the authority to ap-
point or direct the chief law enforcement officer of that 
State or political subdivision)’’. 
TITLE IX—NATIONAL 
HOMELAND SECURITY COUNCIL 
SEC. 901. NATIONAL HOMELAND SECURITY COUNCIL. 
There is established within the Executive Office of 
the President a council to be known as the ‘‘Homeland 
Security Council’’ (in this title referred to as the 
‘‘Council’’). 
SEC. 902. FUNCTION. 
The function of the Council shall be to advise the 
President on homeland security matters. 
SEC. 903. MEMBERSHIP. 
The members of the Council shall be the following: 
(1) The President. 
(2) The Vice President. 
(3) The Secretary of Homeland Security. 
(4) The Attorney General. 
(5) The Secretary of Defense. 
(6) Such other individuals as may be designated 
by the President.
321
SEC. 904. OTHER FUNCTIONS AND ACTIVITIES. 
For the purpose of more effectively coordinating the 
policies and functions of the United States Government 
relating to homeland security, the Council shall—
(1) assess the objectives, commitments, and 
risks of the United States in the interest of home-
land security and to make resulting recommenda-
tions to the President; 
(2) oversee and review homeland security poli-
cies of the Federal Government and to make result-
ing recommendations to the President; and 
(3) perform such other functions as the Presi-
dent may direct. 
SEC. 905. STAFF COMPOSITION. 
The Council shall have a staff, the head of which shall 
be a civilian Executive Secretary, who shall be appointed 
by the President. The President is authorized to fix the 
pay of the Executive Secretary at a rate not to exceed 
the rate of pay payable to the Executive Secretary of the 
National Security Council. 
SEC. 906. RELATION TO THE NATIONAL SECURITY COUN-
CIL. 
The President may convene joint meetings of the 
Homeland Security Council and the National Security 
Council with participation by members of either Council 
or as the President may otherwise direct.
322
TITLE X—INFORMATION 
SECURITY 
SEC. 1001. INFORMATION SECURITY. 
(a) SHORT TITLE.—This title may be cited as the 
‘‘Federal Information Security Management Act of 2002’’. 
(b) INFORMATION SECURITY.—
(1) IN GENERAL.—Subchapter II of chapter 35 
of title 44, United States Code, is amended to read 
as follows:
‘‘SUBCHAPTER II—INFORMATION 
SECURITY 
‘‘§ 3531. Purposes 
‘‘The purposes of this subchapter are to—
‘‘(1) provide a comprehensive framework for en-
suring the effectiveness of information security con-
trols over information resources that support Fed-
eral operations and assets; 
‘‘(2) recognize the highly networked nature of 
the current Federal computing environment and pro-
vide effective governmentwide management and over-
sight of the related information security risks, in-
cluding coordination of information security efforts 
throughout the civilian, national security, and law 
enforcement communities;
323
‘‘(3) provide for development and maintenance 
of minimum controls required to protect Federal in-
formation and information systems; 
‘‘(4) provide a mechanism for improved over-
sight of Federal agency information security pro-
grams; 
‘‘(5) acknowledge that commercially developed 
information security products offer advanced, dy-
namic, robust, and effective information security so-
lutions, 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 secu-
rity solutions should be left to individual agencies 
from among commercially developed products.’’. 
‘‘§ 3532. Definitions 
‘‘(a) IN GENERAL.—Except as provided under sub-
section (b), the definitions under section 3502 shall apply 
to this subchapter. 
‘‘(b) ADDITIONAL DEFINITIONS.—As used in this 
subchapter—
324
‘‘(1) the term ‘information security’ means pro-
tecting 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 pre-
serving authorized restrictions on access and 
disclosure, including means for protecting per-
sonal privacy and proprietary information; 
‘‘(C) availability, which means ensuring 
timely and reliable access to and use of infor-
mation; and 
‘‘(D) authentication, which means utilizing 
digital credentials to assure the identity of 
users and validate their access; 
‘‘(2) the term ‘national security system’ means 
any information system (including any telecommuni-
cations system) used or operated by an agency or by 
a contractor of an agency, or other organization on 
behalf of an agency, the function, operation, or use 
of which—
‘‘(A) involves intelligence activities;
325
‘‘(B) involves cryptologic activities related 
to national security; 
‘‘(C) involves command and control of mili-
tary forces; 
‘‘(D) involves equipment that is an integral 
part of a weapon or weapons system; or 
‘‘(E) is critical to the direct fulfillment of 
military or intelligence missions provided that 
this definition does not apply to a system that 
is used for routine administrative and business 
applications (including payroll, finance, logis-
tics, and personnel management applications); 
‘‘(3) the term ‘information technology’ has the 
meaning given that term in section 11101 of title 
40; and 
‘‘(4) the term ‘information system’ means any 
equipment or interconnected system or subsystems 
of equipment that is used in the automatic acquisi-
tion, storage, manipulation, management, movement, 
control, display, switching, interchange, trans-
mission, or reception of data or information, and in-
cludes—
‘‘(A) computers and computer networks; 
‘‘(B) ancillary equipment;
326
‘‘(C) software, firmware, and related proce-
dures; 
‘‘(D) services, including support services; 
and 
‘‘(E) related resources.’’. 
‘‘§ 3533. Authority and functions of the Director 
‘‘(a) The Director shall oversee agency information 
security policies and practices, by—
‘‘(1) promulgating information security stand-
ards under section 11331 of title 40; 
‘‘(2) overseeing the implementation of policies, 
principles, standards, and guidelines on information 
security; 
‘‘(3) requiring agencies, consistent with the 
standards promulgated under such section 11331 
and the requirements of this subchapter, to identify 
and provide information security protections com-
mensurate with the risk and magnitude of the harm 
resulting from the unauthorized access, use, disclo-
sure, 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;
327
‘‘(4) coordinating the development of standards 
and guidelines under section 20 of the National In-
stitute of Standards and Technology Act (15 U.S.C. 
278g–3) with agencies and offices operating or exer-
cising control of national security systems (including 
the National Security Agency) to assure, to the max-
imum extent feasible, that such standards and 
guidelines are complementary with standards and 
guidelines developed for national security systems; 
‘‘(5) overseeing agency compliance with the re-
quirements of this subchapter, including through 
any authorized action under section 11303(b)(5) of 
title 40, to enforce accountability for compliance 
with such requirements; 
‘‘(6) reviewing at least annually, and approving 
or disapproving, agency information security pro-
grams required under section 3534(b); 
‘‘(7) coordinating information security policies 
and procedures with related information resources 
management policies and procedures; and 
‘‘(8) reporting to Congress no later than March 
1 of each year on agency compliance with the re-
quirements of this subchapter, including—
‘‘(A) a summary of the findings of evalua-
tions required by section 3535;
328
‘‘(B) significant deficiencies in agency in-
formation security practices; 
‘‘(C) planned remedial action to address 
such deficiencies; and 
‘‘(D) a summary of, and the views of the 
Director on, the report prepared by the Na-
tional Institute of Standards and Technology 
under section 20(e)(7) of the National Institute 
of Standards and Technology Act (15 U.S.C. 
278g–3). 
‘‘(b) Except for the authorities described in para-
graphs (4) and (7) of subsection (a), the authorities of 
the Director under this section shall not apply to national 
security systems. 
‘‘§ 3534. Federal agency responsibilities 
‘‘(a) The head of each agency shall—
‘‘(1) be responsible for—
‘‘(A) providing information security protec-
tions commensurate with the risk and mag-
nitude of the harm resulting from unauthorized 
access, use, disclosure, disruption, modification, 
or destruction of—
‘‘(i) information collected or main-
tained by or on behalf of the agency; and
329
‘‘(ii) information systems used or op-
erated 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 by the Director under section 
11331 of title 40; and 
‘‘(ii) information security standards 
and guidelines for national security sys-
tems issued in accordance with law and as 
directed by the President; and 
‘‘(C) ensuring that information security 
management processes are integrated with 
agency strategic and operational planning proc-
esses; 
‘‘(2) ensure that senior agency officials provide 
information security for the information and infor-
mation systems that support the operations and as-
sets under their control, including through—
‘‘(A) assessing the risk and magnitude of 
the harm that could result from the unauthor-
ized access, use, disclosure, disruption, modi-
330
fication, 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 in-
formation security controls and techniques to 
ensure that they are effectively implemented; 
‘‘(3) delegate to the agency Chief Information 
Officer established under section 3506 (or com-
parable official in an agency not covered by such 
section) the authority to ensure compliance with the 
requirements imposed on the agency under this sub-
chapter, including—
‘‘(A) designating a senior agency informa-
tion security officer who shall—
‘‘(i) carry out the Chief Information 
Officer’s responsibilities under this section;
332
‘‘(4) ensure that the agency has trained per-
sonnel sufficient to assist the agency in complying 
with the requirements of this subchapter and related 
policies, procedures, standards, and guidelines; and 
‘‘(5) ensure that the agency Chief Information 
Officer, in coordination with other senior agency of-
ficials, reports annually to the agency head on the 
effectiveness of the agency information security pro-
gram, including progress of remedial actions. 
‘‘(b) Each agency shall develop, document, and imple-
ment an agencywide information security program, ap-
proved by the Director under section 3533(a)(5), to pro-
vide information security for the information and informa-
tion 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 mag-
nitude of the harm that could result from the unau-
thorized access, use, disclosure, disruption, modifica-
tion, or destruction of information and information 
systems that support the operations and assets of 
the agency; 
‘‘(2) policies and procedures that—
‘‘(A) are based on the risk assessments re-
quired by paragraph (1);
333
‘‘(B) cost-effectively reduce information se-
curity risks to an acceptable level; 
‘‘(C) ensure that information security is 
addressed throughout the life cycle of each 
agency information system; and 
‘‘(D) ensure compliance with—
‘‘(i) the requirements of this sub-
chapter; 
‘‘(ii) policies and procedures as may 
be prescribed by the Director, and infor-
mation 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 require-
ments, including standards and guidelines 
for national security systems issued in ac-
cordance with law and as directed by the 
President; 
‘‘(3) subordinate plans for providing adequate 
information security for networks, facilities, and sys-
tems or groups of information systems, as appro-
priate;
334
‘‘(4) security awareness training to inform per-
sonnel, including contractors and other users of in-
formation 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 ef-
fectiveness of information security policies, proce-
dures, and practices, to be performed with a fre-
quency depending on risk, but no less than annually, 
of which such testing—
‘‘(A) shall include testing of management, 
operational, and technical controls of every in-
formation system identified in the inventory re-
quired under section 3505(c); and 
‘‘(B) may include testing relied on in a 
evaluation under section 3535; 
‘‘(6) a process for planning, implementing, eval-
uating, and documenting remedial action to address 
any deficiencies in the information security policies, 
procedures, and practices of the agency;
335
‘‘(7) procedures for detecting, reporting, and re-
sponding to security incidents, including—
‘‘(A) mitigating risks associated with such 
incidents before substantial damage is done; 
and 
‘‘(B) notifying and consulting with, as ap-
propriate—
‘‘(i) law enforcement agencies and rel-
evant Offices of Inspector General; 
‘‘(ii) an office designated by the Presi-
dent for any incident involving a national 
security system; and 
‘‘(iii) any other agency or office, in ac-
cordance 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) Each agency shall—
‘‘(1) report annually to the Director, the Com-
mittees on Government Reform and Science of the 
House of Representatives, the Committees on Gov-
ernmental Affairs and Commerce, Science, and 
Transportation of the Senate, the appropriate au-
thorization and appropriations committees of Con-
336
gress, and the Comptroller General on the adequacy 
and effectiveness of information security policies, 
procedures, and practices, and compliance with the 
requirements of this subchapter, including compli-
ance with each requirement of subsection (b); 
‘‘(2) address the adequacy and effectiveness of 
information security policies, procedures, and prac-
tices in plans and reports relating to—
‘‘(A) annual agency budgets; 
‘‘(B) information resources management 
under subchapter 1 of this chapter; 
‘‘(C) information technology management 
under subtitle III of title 40; 
‘‘(D) program performance under sections 
1105 and 1115 through 1119 of title 31, and 
sections 2801 and 2805 of title 39; 
‘‘(E) financial management under chapter 
9 of title 31, and the Chief Financial Officers 
Act of 1990 (31 U.S.C. 501 note; Public Law 
101–576) (and the amendments made by that 
Act); 
‘‘(F) financial management systems under 
the Federal Financial Management Improve-
ment Act (31 U.S.C. 3512 note); and
337
‘‘(G) internal accounting and administra-
tive controls under section 3512 of title 31, 
United States Code, (known as the ‘Federal 
Managers Financial Integrity Act’); and 
‘‘(3) report any significant deficiency in a pol-
icy, procedure, or practice identified under para-
graph (1) or (2)—
‘‘(A) as a material weakness in reporting 
under section 3512 of title 31; and 
‘‘(B) if relating to financial management 
systems, as an instance of a lack of substantial 
compliance under the Federal Financial Man-
agement Improvement Act (31 U.S.C. 3512 
note). 
‘‘(d)(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).
338
‘‘(2) The description under paragraph (1) shall be 
based on the risk assessments required under subsection 
(b)(2)(1). 
‘‘(e) Each agency shall provide the public with timely 
notice and opportunities for comment on proposed infor-
mation security policies and procedures to the extent that 
such policies and procedures affect communication with 
the public. 
‘‘§ 3535. Annual independent evaluation 
‘‘(a)(1) Each year each agency shall have performed 
an independent evaluation of the information security pro-
gram and practices of that agency to determine the effec-
tiveness of such program and practices. 
‘‘(2) Each evaluation by an agency under this section 
shall include—
‘‘(A) testing of the effectiveness of information 
security policies, procedures, and practices of a rep-
resentative subset of the agency’s information sys-
tems; 
‘‘(B) an assessment (made on the basis of the 
results of the testing) of compliance with—
‘‘(i) the requirements of this subchapter; 
and 
‘‘(ii) related information security policies, 
procedures, standards, and guidelines; and
339
‘‘(C) separate presentations, as appropriate, re-
garding information security relating to national se-
curity systems. 
‘‘(b) 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 eval-
uation. 
‘‘(c) For each agency operating or exercising control 
of a national security system, that portion of the evalua-
tion 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 infor-
mation security vulnerability in such system com-
mensurate with the risk and in accordance with all 
applicable laws.
340
‘‘(d) The evaluation required by this section—
‘‘(1) shall be performed in accordance with gen-
erally accepted government auditing standards; and 
‘‘(2) may be based in whole or in part on an 
audit, evaluation, or report relating to programs or 
practices of the applicable agency. 
‘‘(e) 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. 
‘‘(f) Agencies and evaluators shall take appropriate 
steps to ensure the protection of information which, if dis-
closed, may adversely affect information security. Such 
protections shall be commensurate with the risk and com-
ply with all applicable laws and regulations. 
‘‘(g)(1) The Director shall summarize the results of 
the evaluations conducted under this section in the report 
to Congress required under section 3533(a)(8). 
‘‘(2) The Director’s report to Congress under this 
subsection shall summarize information regarding infor-
mation security relating to national security systems in 
such a manner as to ensure appropriate protection for in-
formation associated with any information security vulner-
ability in such system commensurate with the risk and in 
accordance with all applicable laws.
341
‘‘(3) Evaluations and any other descriptions of infor-
mation systems under the authority and control of the Di-
rector of Central Intelligence or of National Foreign Intel-
ligence Programs systems under the authority and control 
of the Secretary of Defense shall be made available to Con-
gress only through the appropriate oversight committees 
of Congress, in accordance with applicable laws. 
‘‘(h) 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. 
‘‘§ 3536. 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 guide-
342
lines for national security systems, issued in accord-
ance with law and as directed by the President; and 
‘‘(3) complies with the requirements of this sub-
chapter. 
‘‘§ 3537. Authorization of appropriations 
‘‘There are authorized to be appropriated to carry out 
the provisions of this subchapter such sums as may be 
necessary for each of fiscal years 2003 through 2007. 
‘‘§ 3538. Effect on existing law 
‘‘Nothing in this subchapter, section 11331 of title 
40, or section 20 of the National Standards and Tech-
nology Act (15 U.S.C. 278g–3) may be construed as af-
fecting the authority of the President, the Office of Man-
agement 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 disclo-
sure of information under section 552 of title 5, the man-
agement 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 title, or the dis-
closure of information to Congress or the Comptroller 
General of the United States.’’.
343
(2) CLERICAL AMENDMENT.—The items in the 
table of sections at the beginning of such chapter 35 
under the heading ‘‘SUBCHAPTER II’’ are amend-
ed to read as follows:
‘‘3531. Purposes. 
‘‘3532. Definitions. 
‘‘3533. Authority and functions of the Director. 
‘‘3534. Federal agency responsibilities. 
‘‘3535. Annual independent evaluation. 
‘‘3536. National security systems. 
‘‘3537. Authorization of appropriations. 
‘‘3538. Effect on existing law.’’.
(c) INFORMATION SECURITY RESPONSIBILITIES OF 
CERTAIN AGENCIES.—
(1) NATIONAL SECURITY RESPONSIBILITIES.—
(A) Nothing in this Act (including any amendment 
made by this Act) shall supersede any authority of 
the Secretary of Defense, the Director of Central In-
telligence, or other agency head, as authorized by 
law and as directed by the President, with regard to 
the operation, control, or management of national 
security systems, as defined by section 3532(3) of 
title 44, United States Code. 
(B) Section 2224 of title 10, United States 
Code, is amended—
(i) in subsection 2224(b), by striking ‘‘(b) 
OBJECTIVES AND MINIMUM REQUIREMENTS.—
(1)’’ and inserting ‘‘(b) OBJECTIVES OF THE 
PROGRAM.—’’;
344
(ii) in subsection 2224(b), by striking ‘‘(2) 
the program shall at a minimum meet the re-
quirements of section 3534 and 3535 of title 
44, United States Code.’’; and 
(iii) in subsection 2224(c), by inserting ‘‘, 
including through compliance with subtitle II of 
chapter 35 of title 44’’ after ‘‘infrastructure’’. 
(2) ATOMIC ENERGY ACT OF 1954.—Nothing in 
this Act shall supersede any requirement made by or 
under the Atomic Energy Act of 1954 (42 U.S.C. 
2011 et seq.). Restricted Data or Formerly Re-
stricted Data shall be handled, protected, classified, 
downgraded, and declassified in conformity with the 
Atomic Energy Act of 1954 (42 U.S.C. 2011 et 
seq.). 
SEC. 1002. MANAGEMENT OF INFORMATION TECHNOLOGY. 
(a) IN GENERAL.—Section 11331 of title 40, United 
States Code, is amended to read as follows: 
‘‘§ 11331. Responsibilities for Federal information sys-
tems standards 
‘‘(a) DEFINITION.—In this section, the term 
‘information security’ has the meaning given that term in 
section 3532(b)(1) of title 44. 
‘‘(b) REQUIREMENT TO PRESCRIBE STANDARDS.—
‘‘(1) IN GENERAL.—
345
‘‘(A) REQUIREMENT.—Except as provided 
under paragraph (2), the Director of the Office 
of Management and Budget shall, on the basis 
of proposed standards developed by the Na-
tional Institute of Standards and Technology 
pursuant to paragraphs (2) and (3) of section 
20(a) of the National Institute of Standards 
and Technology Act (15 U.S.C. 278g–3(a)) and 
in consultation with the Secretary of Homeland 
Security, 
promulgate 
information 
security 
standards pertaining to Federal information 
systems. 
‘‘(B) REQUIRED
STANDARDS.—Standards 
promulgated under subparagraph (A) shall in-
clude—
‘‘(i) standards that provide minimum 
information security requirements as deter-
mined under section 20(b) of the National 
Institute of Standards and Technology Act 
(15 U.S.C. 278g–3(b)); and 
‘‘(ii) such standards that are other-
wise necessary to improve the efficiency of 
operation or security of Federal informa-
tion systems.
346
‘‘(C) REQUIRED
STANDARDS
BINDING.—
Information security standards described under 
subparagraph (B) shall be compulsory and 
binding. 
‘‘(2) STANDARDS
AND
GUIDELINES
FOR
NA-
TIONAL SECURITY SYSTEMS.—Standards and guide-
lines for national security systems, as defined under 
section 3532(3) of title 44, shall be developed, pro-
mulgated, enforced, and overseen as otherwise au-
thorized by law and as directed by the President. 
‘‘(c) APPLICATION
OF MORE STRINGENT STAND-
ARDS.—The head of an agency may employ standards for 
the cost-effective information security for all operations 
and assets within or under the supervision of that agency 
that are more stringent than the standards promulgated 
by the Director under this section, if such standards—
‘‘(1) contain, at a minimum, the provisions of 
those applicable standards made compulsory and 
binding by the Director; and 
‘‘(2) are otherwise consistent with policies and 
guidelines issued under section 3533 of title 44. 
‘‘(d) REQUIREMENTS REGARDING DECISIONS BY DI-
RECTOR.—
‘‘(1) DEADLINE.—The decision regarding the 
promulgation of any standard by the Director under
347
subsection (b) shall occur not later than 6 months 
after the submission of the proposed standard to the 
Director by the National Institute of Standards and 
Technology, as provided under section 20 of the Na-
tional Institute of Standards and Technology Act 
(15 U.S.C. 278g–3). 
‘‘(2) NOTICE
AND
COMMENT.—A decision by 
the Director to significantly modify, or not promul-
gate, a proposed standard submitted to the Director 
by the National Institute of Standards and Tech-
nology, as provided under section 20 of the National 
Institute of Standards and Technology Act (15 
U.S.C. 278g–3), shall be made after the public is 
given an opportunity to comment on the Director’s 
proposed decision.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
at the beginning of chapter 113 of title 40, United States 
Code, is amended by striking the item relating to section 
11331 and inserting the following:
‘‘11331. Responsibilities for Federal information systems standards.’’.
SEC. 1003. NATIONAL INSTITUTE OF STANDARDS AND 
TECHNOLOGY. 
Section 20 of the National Institute of Standards and 
Technology Act (15 U.S.C. 278g–3), is amended by strik-
ing the text and inserting the following: 
‘‘(a) The Institute shall—
348
‘‘(1) have the mission of developing standards, 
guidelines, and associated methods and techniques 
for information systems; 
‘‘(2) develop standards and guidelines, includ-
ing minimum requirements, for information systems 
used or operated by an agency or by a contractor of 
an agency or other organization on behalf of an 
agency, other than national security systems (as de-
fined in section 3532(b)(2) of title 44, United States 
Code); 
‘‘(3) develop standards and guidelines, includ-
ing minimum requirements, for providing adequate 
information security for all agency operations and 
assets, but such standards and guidelines shall not 
apply to national security systems; and 
‘‘(4) carry out the responsibilities described in 
paragraph (3) through the Computer Security Divi-
sion. 
‘‘(b) The standards and guidelines required by sub-
section (a) shall include, at a minimum—
‘‘(1)(A) standards to be used by all agencies to 
categorize all information and information systems 
collected or maintained by or on behalf of each agen-
cy based on the objectives of providing appropriate
349
levels of information security according to a range of 
risk levels; 
‘‘(B) guidelines recommending the types of in-
formation and information systems to be included in 
each such category; and 
‘‘(C) minimum information security require-
ments for information and information systems in 
each such category; 
‘‘(2) a definition of and guidelines concerning 
detection and handling of information security inci-
dents; and 
‘‘(3) guidelines developed in coordination with 
the National Security Agency for identifying an in-
formation system as a national security system con-
sistent with applicable requirements for national se-
curity systems, issued in accordance with law and as 
directed by the President. 
‘‘(c) In developing standards and guidelines required 
by subsections (a) and (b), the Institute shall—
‘‘(1) consult with other agencies and offices 
(including, but not limited to, the Director of the 
Office of Management and Budget, the Departments 
of Defense and Energy, the National Security Agen-
cy, the General Accounting Office, and the Secretary 
of Homeland Security) to assure—
350
‘‘(A) use of appropriate information secu-
rity policies, procedures, and techniques, in 
order to improve information security and avoid 
unnecessary and costly duplication of effort; 
and 
‘‘(B) that such standards and guidelines 
are complementary with standards and guide-
lines employed for the protection of national se-
curity systems and information contained in 
such systems; 
‘‘(2) provide the public with an opportunity to 
comment on proposed standards and guidelines; 
‘‘(3) submit to the Director of the Office of 
Management and Budget for promulgation under 
section 11331 of title 40, United States Code—
‘‘(A) standards, as required under sub-
section (b)(1)(A), no later than 12 months after 
the date of the enactment of this section; and 
‘‘(B) minimum information security re-
quirements for each category, as required under 
subsection (b)(1)(C), no later than 36 months 
after the date of the enactment of this section;
‘‘(4) issue guidelines as required under sub-
section (b)(1)(B), no later than 18 months after the 
date of the enactment of this Act;
351
‘‘(5) ensure that such standards and guidelines 
do not require specific technological solutions or 
products, including any specific hardware or soft-
ware security solutions; 
‘‘(6) ensure that such standards and guidelines 
provide for sufficient flexibility to permit alternative 
solutions to provide equivalent levels of protection 
for identified information security risks; and 
‘‘(7) use flexible, performance-based standards 
and guidelines that, to the greatest extent possible, 
permit the use of off-the-shelf commercially devel-
oped information security products. 
‘‘(d) The Institute shall—
‘‘(1) submit standards developed pursuant to 
subsection (a), along with recommendations as to 
the extent to which these should be made compul-
sory and binding, to the Director of the Office of 
Management and Budget for promulgation under 
section 11331 of title 40, United States Code; 
‘‘(2) provide assistance to agencies regarding—
‘‘(A) compliance with the standards and 
guidelines developed under subsection (a); 
‘‘(B) detecting and handling information 
security incidents; and
352
‘‘(C) information security policies, proce-
dures, and practices; 
‘‘(3) conduct research, as needed, to determine 
the nature and extent of information security 
vulnerabilities and techniques for providing cost-ef-
fective information security; 
‘‘(4) develop and periodically revise performance 
indicators and measures for agency information se-
curity policies and practices; 
‘‘(5) evaluate private sector information secu-
rity policies and practices and commercially available 
information technologies to assess potential applica-
tion by agencies to strengthen information security; 
‘‘(6) evaluate security policies and practices de-
veloped for national security systems to assess po-
tential application by agencies to strengthen infor-
mation security; 
‘‘(7) periodically assess the effectiveness of 
standards and guidelines developed under this sec-
tion and undertake revisions as appropriate; 
‘‘(8) solicit and consider the recommendations 
of the Information Security and Privacy Advisory 
Board, established by section 21, regarding stand-
ards and guidelines developed under subsection (a) 
and submit such recommendations to the Director of
353
the Office of Management and Budget with such 
standards submitted to the Director; and 
‘‘(9) prepare an annual public report on activi-
ties undertaken in the previous year, and planned 
for the coming year, to carry out responsibilities 
under this section. 
‘‘(e) As used in this section—
‘‘(1) the term ‘agency’ has the same meaning as 
provided in section 3502(1) of title 44, United 
States Code; 
‘‘(2) the term ‘information security’ has the 
same meaning as provided in section 3532(1) of 
such title; 
‘‘(3) the term ‘information system’ has the 
same meaning as provided in section 3502(8) of 
such title; 
‘‘(4) the term ‘information technology’ has the 
same meaning as provided in section 11101 of title 
40, United States Code; and 
‘‘(5) the term ‘national security system’ has the 
same meaning as provided in section 3532(b)(2) of 
such title.’’.
354
SEC. 1004. INFORMATION SECURITY AND PRIVACY ADVI-
SORY BOARD. 
Section 21 of the National Institute of Standards and 
Technology Act (15 U.S.C. 278g–4), is amended—
(1) in subsection (a), by striking ‘‘Computer 
System Security and Privacy Advisory Board’’ and 
inserting ‘‘Information Security and Privacy Advi-
sory Board’’; 
(2) in subsection (a)(1), by striking ‘‘computer 
or telecommunications’’ and inserting ‘‘information 
technology’’; 
(3) in subsection (a)(2)—
(A) by striking ‘‘computer or telecommuni-
cations technology’’ and inserting ‘‘information 
technology’’; and
(B) by striking ‘‘computer or telecommuni-
cations equipment’’ and inserting ‘‘information 
technology’’; 
(4) in subsection (a)(3)—
(A) by striking ‘‘computer systems’’ and 
inserting ‘‘information system’’; and 
(B) by striking ‘‘computer systems secu-
rity’’ and inserting ‘‘information security’’; 
(5) in subsection (b)(1) by striking ‘‘computer 
systems security’’ and inserting ‘‘information secu-
rity’’;
355
(6) in subsection (b) by striking paragraph (2) 
and inserting the following: 
‘‘(2) to advise the Institute and the Director of 
the Office of Management and Budget on informa-
tion security and privacy issues pertaining to Fed-
eral Government information systems, including 
through review of proposed standards and guidelines 
developed under section 20; and’’; 
(7) in subsection (b)(3) by inserting ‘‘annually’’ 
after ‘‘report’’; 
(8) by inserting after subsection (e) the fol-
lowing new subsection: 
‘‘(f) The Board shall hold meetings at such locations 
and at such time and place as determined by a majority 
of the Board.’’; 
(9) by redesignating subsections (f) and (g) as 
subsections (g) and (h), respectively; and 
(10) by striking subsection (h), as redesignated 
by paragraph (9), and inserting the following: 
‘‘(h) As used in this section, the terms ‘‘information 
system’’ and ‘‘information technology’’ have the meanings 
given in section 20.’’. 
SEC. 1005. TECHNICAL AND CONFORMING AMENDMENTS. 
(a) FEDERAL COMPUTER SYSTEM SECURITY TRAIN-
ING AND PLAN.—
356
(1) REPEAL.—Section 11332 of title 40, United 
States Code, is repealed. 
(2) CLERICAL AMENDMENT.—The table of sec-
tions at the beginning of chapter 113 of title 40, 
United States Code, as amended by striking the item 
relating to section 11332. 
(b) FLOYD D. SPENCE NATIONAL DEFENSE AU-
THORIZATION ACT FOR FISCAL YEAR 2001.—The Floyd 
D. Spence National Defense Authorization Act for Fiscal 
Year 2001 (Public Law 106–398) is amended by striking 
subtitle G of title X (44 U.S.C. 3531 note). 
(c) PAPERWORK
REDUCTION
ACT.—(1) Section 
3504(g) of title 44, United States Code, is amended—
(A) by adding ‘‘and’’ at the end of paragraph 
(1); 
(B) in paragraph (2)—
(i) by striking ‘‘sections 11331 and 
11332(b) and (c) of title 40’’ and inserting 
‘‘section 11331 of title 40 and subchapter II of 
this title’’; and 
(ii) by striking the semicolon and inserting 
a period; and 
(C) by striking paragraph (3). 
(2) Section 3505 of such title is amended by adding 
at the end the following:
357
‘‘(c) INVENTORY OF INFORMATION SYSTEMS.—(1) 
The head of each agency shall develop and maintain an 
inventory of the information systems (including national 
security systems) operated by or under the control of such 
agency; 
‘‘(2) The identification of information systems in an 
inventory under this subsection shall include an identifica-
tion of the interfaces between each such system and all 
other systems or networks, including those not operated 
by or under the control of the agency; 
‘‘(3) Such inventory shall be—
‘‘(A) updated at least annually; 
‘‘(B) made available to the Comptroller Gen-
eral; and 
‘‘(C) used to support information resources 
management, including—
‘‘(i) preparation and maintenance of the 
inventory of information resources under sec-
tion 3506(b)(4); 
‘‘(ii) 
information 
technology 
planning, 
budgeting, acquisition, and management under 
section 3506(h), subtitle III of title 40, and re-
lated laws and guidance;
358
‘‘(iii) monitoring, testing, and evaluation of 
information security controls under subchapter 
II; 
‘‘(iv) preparation of the index of major in-
formation systems required under section 
552(g) of title 5, United States Code; and 
‘‘(v) preparation of information system in-
ventories required for records management 
under chapters 21, 29, 31, and 33. 
‘‘(4) The Director shall issue guidance for and over-
see the implementation of the requirements of this sub-
section.’’. 
(3) Section 3506(g) of such title is amended—
(A) by adding ‘‘and’’ at the end of paragraph 
(1); 
(B) in paragraph (2)—
(i) by striking ‘‘section 11332 of title 40’’ 
and inserting ‘‘subchapter II of this chapter’’; 
and 
(ii) by striking ‘‘; and’’ and inserting a pe-
riod; and 
(C) by striking paragraph (3). 
SEC. 1006. CONSTRUCTION. 
Nothing in this Act, or the amendments made by this 
Act, affects the authority of the National Institute of
359
Standards and Technology or the Department of Com-
merce relating to the development and promulgation of 
standards or guidelines under paragraphs (1) and (2) of 
section 20(a) of the National Institute of Standards and 
Technology Act (15 U.S.C. 278g–3(a)). 
TITLE XI—DEPARTMENT OF 
JUSTICE DIVISIONS 
Subtitle A—Executive Office for 
Immigration Review 
SEC. 1101. LEGAL STATUS OF EOIR. 
(a) EXISTENCE OF EOIR.—There is in the Depart-
ment of Justice the Executive Office for Immigration Re-
view, which shall be subject to the direction and regulation 
of the Attorney General under section 103(g) of the Immi-
gration and Nationality Act, as added by section 1102. 
SEC. 1102. AUTHORITIES OF THE ATTORNEY GENERAL. 
Section 103 of the Immigration and Nationality Act 
(8 U.S.C. 1103) as amended by this Act, is further 
amended by—
(1) amending the heading to read as follows: 
‘‘POWERS AND DUTIES OF THE SECRETARY, THE UNDER 
SECRETARY, AND THE ATTORNEY GENERAL’’; 
(2) in subsection (a)—
(A) by inserting ‘‘Attorney General,’’ after 
‘‘President,’’; and
360
(B) by redesignating paragraphs (8), (9), 
(8) (as added by section 372 of Public Law 
104–208), and (9) (as added by section 372 of 
Public Law 104–208) as paragraphs (8), (9), 
(10), and (11), respectively; and 
(3) by adding at the end the following new sub-
section: 
‘‘(g) ATTORNEY GENERAL.—
‘‘(1) IN GENERAL.—The Attorney General shall 
have such authorities and functions under this Act 
and all other laws relating to the immigration and 
naturalization of aliens as were exercised by the Ex-
ecutive Office for Immigration Review, or by the At-
torney General with respect to the Executive Office 
for Immigration Review, on the day before the effec-
tive date of the Immigration Reform, Accountability 
and Security Enhancement Act of 2002. 
‘‘(2) POWERS.—The Attorney General shall es-
tablish such regulations, prescribe such forms of 
bond, reports, entries, and other papers, issue such 
instructions, review such administrative determina-
tions in immigration proceedings, delegate such au-
thority, and perform such other acts as the Attorney 
General determines to be necessary for carrying out 
this section.’’.
361
SEC. 1103. STATUTORY CONSTRUCTION. 
Nothing in this Act, any amendment made by this 
Act, or in section 103 of the Immigration and Nationality 
Act, as amended by section 1102, shall be construed to 
limit judicial deference to regulations, adjudications, inter-
pretations, orders, decisions, judgments, or any other ac-
tions of the Secretary of Homeland Security or the Attor-
ney General.
Subtitle B—Transfer of the Bureau 
of Alcohol, Tobacco and Fire-
arms to the Department of Jus-
tice 
SEC. 1111. BUREAU OF ALCOHOL, TOBACCO, FIREARMS, 
AND EXPLOSIVES. 
(a) ESTABLISHMENT.—
(1) IN GENERAL.—There is established within 
the Department of Justice under the general author-
ity of the Attorney General the Bureau of Alcohol, 
Tobacco, Firearms, and Explosives (in this section 
referred to as the ‘‘Bureau’’). 
(2) DIRECTOR.—There shall be at the head of 
the Bureau a Director, Bureau of Alcohol, Tobacco, 
Firearms, and Explosives (in this subtitle referred to 
as the ‘‘Director’’). The Director shall be appointed 
by the Attorney General and shall perform such 
functions as the Attorney General shall direct. The
362
Director shall receive compensation at the rate pre-
scribed by law under section 5314 of title V, United 
States Code, for positions at level III of the Execu-
tive Schedule. 
(3) COORDINATION.—The Attorney General, 
acting through the Director and such other officials 
of the Department of Justice as the Attorney Gen-
eral may designate, shall provide for the coordina-
tion of all firearms, explosives, tobacco enforcement, 
and arson enforcement functions vested in the Attor-
ney General so as to assure maximum cooperation 
between and among any officer, employee, or agency 
of the Department of Justice involved in the per-
formance of these and related functions. 
(4) PERFORMANCE
OF
TRANSFERRED
FUNC-
TIONS.—The Attorney General may make such pro-
visions as the Attorney General determines appro-
priate to authorize the performance by any officer, 
employee, or agency of the Department of Justice of 
any function transferred to the Attorney General 
under this section. 
(b) RESPONSIBILITIES.—Subject to the direction of 
the Attorney General, the Bureau shall be responsible for 
investigating—