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ernment through a personal services contract, shall be re-
quired to pay, prior to the individual’s first day of employ-
ment, the entire amount of the incentive payment. 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 ap-
propriate component of the Department of Homeland Secu-
rity, 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 positions
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 occupations.
SEC. 473. AUTHORITY TO CONDUCT A DEMONSTRATION
PROJECT RELATING TO DISCIPLINARY AC-
TION.
(a) IN GENERAL.—The Attorney General and the Sec-
retary may each, during a period ending not later than
5 years after the date of the enactment of this Act, conduct
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a demonstration project for the purpose of determining
whether one or more changes in the policies or procedures
relating to methods for disciplining employees would result
in improved personnel management.
(b) SCOPE.—A demonstration project under this
section—
(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 re-
view of any action to which section 4303 or sub-
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.—Notwith-
standing any other provision of this section, if, in the case
of any matter described in section 7702(a)(1)(B) of title 5,
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United States Code, there is no judicially reviewable action
under the demonstration project within 120 days after the
filing of an appeal or other formal request for review (re-
ferred 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 in-
cluded within any project under this section if such employ-
ees 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
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 Judiciary
of the Senate periodic reports on any demonstration project
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conducted under this section, such reports to be submitted
after the second and fourth years of its operation. Upon
request, the Attorney General or the Secretary shall furnish
such information as the General Accounting Office may re-
quire 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.
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 Bu-
reau of Border Security and the Bureau of Citizenship and
Immigration Services, including—
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(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 separate
accounts in the Treasury of the United States for appro-
priated 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 Bureau
of Citizenship and Immigration Services and the Bureau
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-
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 trans-
ferred between the Bureau of Citizenship and Immigration
Services and the Bureau of Border Security for purposes
not authorized by section 286 of the Immigration and Na-
tionality Act (8 U.S.C. 1356).
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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 sub-
mit to the Committees on Appropriations and the Judiciary
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, between 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 Judi-
ciary of the House of Representatives and of the Senate a
report on the proposed division of personnel between the Bu-
reau of Citizenship and Immigration Services and the Bu-
reau of Border Security.
(c) IMPLEMENTATION PLAN.—
(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 Appro-
priations and the Judiciary of the House of Rep-
resentatives and of the Senate an implementation
plan to carry out this Act.
(2) 
CONTENTS.—The 
implementation 
plan
should include details concerning the separation of the
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Bureau of Citizenship and Immigration Services and
the Bureau of Border Security, including the fol-
lowing:
(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 removal
proceedings, including expedited removal and
applications for relief from removal.
(F) 
Recommendations 
for 
conforming
amendments to the Immigration and Nationality
Act (8 U.S.C. 1101 et seq.).
(G) Establishment of a transition team.
(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 sup-
port systems for the Bureau of Citizenship and
Immigration Services and the Bureau of Border
Security.
(d) COMPTROLLER
GENERAL
STUDIES
AND
RE-
PORTS.—
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(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 implementa-
tion of this subtitle has been completed, the Comp-
troller General of the United States shall submit to
the Committees on Appropriations and on the Judici-
ary of the House of Representatives and the Senate a
report containing the following:
(A) A determination of whether the trans-
fers of functions made by subtitles D and E have
been completed, and if a transfer of functions has
not taken place, identifying the reasons why the
transfer has not taken place.
(B) If the transfers of functions made by
subtitles D and E have been completed, an iden-
tification 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 functions
specified under section 441 takes effect, the Comp-
troller General of the United States shall submit to
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the Committees on Appropriations and on the Judici-
ary 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.
(iv) Recordkeeping, including informa-
tion management and technology.
(B) A statement of the reasons for the deter-
minations under subparagraph (A).
(C) Any recommendations for further im-
provements to the Bureau of Citizenship and Im-
migration Services and the Bureau of Border Se-
curity.
(3) REPORT ON FEES.—Not later than 1 year
after the date of the enactment of this Act, the Comp-
troller General of the United States shall submit to
the Committees on the Judiciary of the House of Rep-
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resentatives 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 absence of appro-
priated 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 Re-
form of the House of Representatives, and to the Com-
mittees on the Judiciary and Government Affairs of
the Senate, on the impact the transfers made by this
subtitle has had on immigration functions.
(2) MATTER INCLUDED.—The report shall ad-
dress the following with respect to the period covered
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 aggre-
gate number of immigration applications and
petitions filed by an alien (or filed on behalf of
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an alien) and denied, disaggregated by category
of denial and application or petition type.
(C) The quantity of backlogged immigration
applications and petitions that have been proc-
essed, the aggregate number awaiting processing,
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
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 regarding
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 effectively
and efficiently.
(b) SENSE OF CONGRESS REGARDING IMMIGRATION
SERVICES.—It is the sense of Congress that—
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(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 ef-
ficiency of immigration services are addressed after
such effective date.
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 Response.
SEC. 502. RESPONSIBILITIES.
The Secretary, acting through the Under Secretary for
Emergency Preparedness and Response, shall include—
(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 Response
Team (regardless of whether it is operating as an or-
ganizational unit of the Department pursuant to this
title)—
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(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 Agen-
cy, as appropriate, for homeland security plan-
ning, exercises and training, and equipment;
(3) providing the Federal Government’s response
to terrorist attacks and major disasters, including—
(A) managing such response;
(B) directing the Domestic Emergency Sup-
port Team, the Strategic National Stockpile, the
National Disaster Medical System, and (when
operating as an organizational unit of the De-
partment pursuant to this title) the Nuclear In-
cident Response Team;
(C) overseeing the Metropolitan Medical Re-
sponse System; and
(D) coordinating other Federal response re-
sources in the event of a terrorist attack or major
disaster;
(4) aiding the recovery from terrorist attacks
and major disasters;
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(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;
(6) consolidating existing Federal Government
emergency response plans into a single, coordinated
national response plan; and
(7) developing comprehensive programs for devel-
oping interoperative communications technology, and
helping to ensure that emergency response providers
acquire such technology.
SEC. 503. FUNCTIONS TRANSFERRED.
In accordance with title XV, there shall be transferred
to the Secretary the functions, personnel, assets, and liabil-
ities of the following entities:
(1) The Federal Emergency Management Agency,
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 Administra-
tion, 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.
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(4) The Domestic Emergency Support Teams of
the Department of Justice, including the functions of
the Attorney General relating thereto.
(5) The Office of Emergency Preparedness, the
National Disaster Medical System, and the Metropoli-
tan Medical Response System of the Department of
Health and Human Services, including the functions
of the Secretary of Health and Human Services 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 attack,
major disaster, or other emergency in the United States),
the Nuclear Incident Response Team shall operate 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 Envi-
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ronmental Protection Agency for organizing, training,
equipping, and utilizing their respective entities in the Nu-
clear Incident Response Team, or (subject to the provisions
of this title) from exercising direction, authority, and con-
trol 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, radiological,
and nuclear and other emerging terrorist threats carried out
by the Department of Health and Human Services (includ-
ing the Public Health Service), the Secretary of Health and
Human Services shall set priorities and preparedness goals
and further develop a coordinated strategy for such activi-
ties in collaboration with the Secretary.
(b) EVALUATION OF PROGRESS.—In carrying out sub-
section (a), the Secretary of Health and Human Services
shall collaborate with the Secretary in developing specific
benchmarks and outcome measurements for evaluating
progress toward achieving the priorities and goals described
in such subsection.
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SEC. 506. DEFINITION.
In this title, the term ‘‘Nuclear Incident Response
Team’’ means a resource that includes—
(1) those entities of the Department of Energy
that perform nuclear or radiological emergency sup-
port functions (including accident response, search re-
sponse, advisory, and technical operations functions),
radiation exposure functions at the medical assistance
facility known as the Radiation Emergency Assist-
ance Center/Training Site (REAC/TS), radiological
assistance functions, and related functions; and
(2) those entities of the Environmental Protec-
tion Agency that perform such support functions (in-
cluding radiological emergency response functions)
and related functions.
SEC. 507. ROLE OF FEDERAL EMERGENCY MANAGEMENT
AGENCY.
(a) IN GENERAL.—The functions of the Federal Emer-
gency Management Agency include the following:
(1) All functions and authorities prescribed by
the Robert T. Stafford Disaster Relief and Emergency
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
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comprehensive, risk-based emergency management
program—
(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 po-
sitioning 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 coordinating
efforts relating to mitigation, planning, response,
and recovery.
(b) FEDERAL RESPONSE PLAN.—
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(1) ROLE OF FEMA.—Notwithstanding any other
provision of this Act, the Federal Emergency Manage-
ment Agency shall remain the lead agency for the
Federal Response Plan established under Executive
Order 12148 (44 Fed. Reg. 43239) and Executive
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 Management
Agency shall revise the Federal Response Plan to re-
flect the establishment of and incorporate the Depart-
ment.
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 dis-
asters.
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 extent
possible, use off-the-shelf commercially developed tech-
nologies to ensure that the Department’s information
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technology systems allow the Department to collect,
manage, share, analyze, and disseminate 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 CHAR-
ITABLE 
TRUSTS 
FOR 
MEM-
BERS OF THE ARMED FORCES
OF THE UNITED STATES AND
OTHER GOVERNMENTAL OR-
GANIZATIONS
SEC. 601. TREATMENT OF CHARITABLE TRUSTS FOR MEM-
BERS 
OF 
THE 
ARMED 
FORCES 
OF 
THE
UNITED STATES AND OTHER GOVERNMENTAL
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.
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(3) Personnel of the Central Intelligence Agency
(CIA) charged with the responsibility of covert obser-
vation 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 Agency
have also lost their lives while battling the evils of ter-
rorism 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 September
11, 2001.
(8) Johnny Micheal Spann left behind a wife
and children who are very proud of the heroic actions
of their patriot father.
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(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 operations
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 inequitable and
needs improvement.
(b) DESIGNATION OF JOHNNY MICHEAL SPANN PA-
TRIOT TRUSTS.—Any charitable corporation, fund, founda-
tion, or trust (or separate fund or account thereof) which
otherwise meets all applicable requirements under law with
respect to charitable entities and meets the requirements de-
scribed in subsection (c) shall be eligible to characterize
itself as a ‘‘Johnny Micheal Spann Patriot Trust’’.
(c) REQUIREMENTS FOR THE DESIGNATION OF JOHN-
NY MICHEAL SPANN PATRIOT TRUSTS.—The requirements
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 earn-
ings on the investment of such funds or donations) re-
ceived or collected by any Johnny Micheal Spann Pa-
triot Trust must be distributed to (or, if placed in a
private foundation, held in trust for) surviving
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spouses, children, or dependent parents, grandparents,
or siblings of 1 or more of the following:
(A) members of the Armed Forces of the
United States;
(B) personnel, including contractors, of ele-
ments of the intelligence community, as defined
in section 3(4) of the National Security Act of
1947;
(C) employees of the Federal Bureau of In-
vestigation; and
(D) officers, employees, or contract employ-
ees 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 ef-
forts 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-
nual earnings on funds invested in a private founda-
tion) may be used for administrative purposes.
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(3) No part of the net earnings of any Johnny
Micheal Spann Patriot Trust may inure to the benefit
of any individual based solely on the position of such
individual as a shareholder, an officer or employee 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 Gen-
eral, or the Secretary of Defense relating to the pro-
tection of intelligence sources and methods, sensitive
law enforcement information, or other sensitive na-
tional security information, including methods for
confidentially disbursing funds.
(7) Each Johnny Micheal Spann Patriot Trust
that receives annual contributions totaling more than
$1,000,000 must be audited annually by an inde-
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pendent certified public accounting firm. Such audits
shall be filed with the Internal Revenue Service, and
shall be open to public inspection, except that the con-
duct, filing, and availability of the audit shall be con-
sistent 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 formation
of such Trust, and all funds and donations received
and earnings not placed in a private foundation
dedicated to such beneficiaries must be distributed
within 36 months after the end of the fiscal year in
which such funds, donations, and earnings are re-
ceived.
(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 source
compensation that the beneficiary has received or is
entitled to receive as a result of the death of an indi-
vidual described in paragraph (1).
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(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 governments re-
lated to the death of an individual described in para-
graph (1).
(d) TREATMENT OF JOHNNY MICHEAL SPANN PATRIOT
TRUSTS.—Each Johnny Micheal Spann Patriot Trust shall
refrain from conducting the activities described 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 paragraph (1) of sec-
tion 323(e) of such Act will be permissible if such solicita-
tion meets the requirements of paragraph (4)(A) of such sec-
tion.
(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 Secretary
of Defense, the Director of the Federal Bureau of Investiga-
tion, or the Director of Central Intelligence, or their des-
ignees, as applicable, may forward information received
from an executor, administrator, or other legal representa-
tive of the estate of a decedent described in subparagraph
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(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 forward any infor-
mation under this subsection shall create any cause of ac-
tion against any Federal department, agency, 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 Cen-
tral 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, in-
cluding the following:
(1) The budget, appropriations, expenditures of
funds, accounting, and finance.
(2) Procurement.
(3) Human resources and personnel.
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(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 Depart-
ment.
(8) Grants and other assistance management
programs.
(9) The transition and reorganization process, to
ensure an efficient and orderly transfer of functions
and personnel to the Department, including the devel-
opment of a transition plan.
(10) The conduct of internal audits and manage-
ment analyses of the programs and activities of the
Department.
(11) Any other management duties that the Sec-
retary may designate.
(b) IMMIGRATION.—
(1) IN GENERAL.—In addition to the responsibil-
ities described in subsection (a), the Under Secretary
for Management shall be responsible for the following:
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(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 ‘‘Sta-
tistical Yearbook of the Immigration and Natu-
ralization Service’’ prepared by the Immigration
and Naturalization Service (as in effect imme-
diately before the date on which the transfer of
functions specified under section 441 takes ef-
fect), including region-by-region statistics on the
aggregate number of applications and petitions
filed by an alien (or filed on behalf 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.
(2) TRANSFER
OF
FUNCTIONS.—In accordance
with title XV, there shall be transferred to the Under
Secretary for Management all functions performed
immediately before such transfer occurs by the Statis-
tics Branch of the Office of Policy and Planning of
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the Immigration and Naturalization Service with re-
spect 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 ap-
plications.
(I) Adjudications performed at service cen-
ters.
(J) All other adjudications performed by the
Immigration and Naturalization Service.
SEC. 702. CHIEF FINANCIAL OFFICER.
The Chief Financial Officer shall report to the Sec-
retary, or to another official of the Department, as the Sec-
retary 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 Sec-
retary may direct.
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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 remedies
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 Spe-
cial Counsel of the Department’s compliance with sec-
tion 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.
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, tele-
vision, or newspaper advertisements information on
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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
Representatives, and the appropriate committees and
subcommittees of Congress on an annual basis a re-
port on the implementation of this section, including
the use of funds appropriated to carry out this sec-
tion, and detailing any allegations of abuses described
under subsection (a)(1) and any actions taken by the
Department in response to such allegations.
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 agencies
that are transferred to the Department under this Act,
if such officers are located in the same municipality;
and
(2) portions of regional and field offices of other
Federal agencies, to the extent such offices perform
functions that are transferred to the Secretary under
this Act.
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TITLE 
VIII—COORDINATION
WITH 
NON-FEDERAL 
ENTI-
TIES; INSPECTOR GENERAL;
UNITED 
STATES 
SECRET
SERVICE; COAST GUARD; GEN-
ERAL PROVISIONS
Subtitle A—Coordination with Non-
Federal Entities
SEC. 801. OFFICE FOR STATE AND LOCAL GOVERNMENT CO-
ORDINATION.
(a) ESTABLISHMENT.—There is established within the
Office of the Secretary the Office for State and Local Gov-
ernment Coordination, to oversee and coordinate depart-
mental 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 na-
tional strategy for combating terrorism;
(3) provide State and local government with reg-
ular information, research, and technical support to
assist local efforts at securing the homeland; and
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(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, direc-
tion, and control of the Secretary with respect to audits or
investigations, or the issuance of subpoenas, that require ac-
cess to sensitive information concerning—
(1) 
intelligence, 
counterintelligence, 
or
counterterrorism matters;
(2) ongoing criminal investigations or pro-
ceedings;
(3) undercover operations;
(4) the identity of confidential sources, including
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 au-
thorized protection by section 3056 of title 18, United
States Code, section 202 of title 3 of such Code, or
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any provision of the Presidential Protection Assist-
ance 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 car-
rying out or completing any audit or investigation, or from
issuing any subpoena, after such Inspector General has de-
cided to initiate, carry out, or complete such audit or inves-
tigation or to issue such subpoena, if the Secretary deter-
mines that such prohibition is necessary to prevent the dis-
closure of any information described 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 exer-
cises any power under subsection (a) or (b), the Secretary
shall notify the Inspector General of the Department in
writing stating the reasons for such exercise. Within 30
days after receipt of any such notice, the Inspector General
shall transmit a copy of such notice and a written response
thereto that includes—
(1) a statement as to whether the Inspector Gen-
eral agrees or disagrees with such exercise; and
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(2) the reasons for any disagreement, to the
President of the Senate and the Speaker of the House
of Representatives and to appropriate committees and
subcommittees of Congress.
(d) ACCESS TO INFORMATION BY CONGRESS.—The ex-
ercise of authority by the Secretary described in subsection
(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 Gen-
eral Act of 1978 (5 U.S.C. App.) is amended by inserting
after section 8I the following:
‘‘SPECIAL PROVISIONS CONCERNING THE DEPARTMENT OF
HOMELAND SECURITY
‘‘SEC. 8J. Notwithstanding any other provision of law,
in carrying out the duties and responsibilities specified in
this Act, the Inspector General of the Department of Home-
land Security shall have oversight responsibility for the in-
ternal investigations performed by the Office of Internal Af-
fairs of the United States Customs Service and the Office
of Inspections of the United States Secret Service. The head
of each such office shall promptly report to the Inspector
General the significant activities being carried out by such
office.’’.
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SEC. 812. LAW ENFORCEMENT POWERS OF INSPECTOR GEN-
ERAL 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 provided
by this Act, each Inspector General appointed under section
3, any Assistant Inspector General for Investigations under
such an Inspector General, and any special agent super-
vised by such an Assistant Inspector General may be au-
thorized by the Attorney General to—
‘‘(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 At-
torney General, for any offense against the United
States committed in the presence of such Inspector
General, Assistant Inspector General, or agent, or for
any felony cognizable under the laws of the United
States if such Inspector General, Assistant Inspector
General, or agent has reasonable grounds to believe
that the person to be arrested has committed or is
committing such felony; and
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‘‘(C) seek and execute warrants for arrest, search
of a premises, or seizure of evidence issued under the
authority of the United States upon probable cause to
believe that a violation has been committed.
‘‘(2) The Attorney General may authorize exercise of
the powers under this subsection only upon an initial deter-
mination that—
‘‘(A) the affected Office of Inspector General is
significantly hampered in the performance of respon-
sibilities established by this Act as a result of the lack
of such powers;
‘‘(B) available assistance from other law enforce-
ment 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 En-
ergy, Department of Health and Human Services, Depart-
ment of Homeland Security, Department of Housing and
Urban Development, Department of the Interior, Depart-
ment of Justice, Department of Labor, Department of State,
Department of Transportation, Department of the Treas-
ury, Department of Veterans Affairs, Agency for Inter-
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national Development, Environmental Protection Agency,
Federal Deposit Insurance Corporation, Federal Emergency
Management Agency, General Services Administration, Na-
tional Aeronautics and Space Administration, Nuclear
Regulatory Commission, Office of Personnel Management,
Railroad Retirement Board, Small Business Administra-
tion, Social Security Administration, and the Tennessee
Valley Authority are exempt from the requirement of para-
graph (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 guide-
lines promulgated by the Attorney General under para-
graph (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
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the Attorney General that such individual has not complied
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
Inspector General described under paragraph (3) shall, not
later than 180 days after the date of enactment of this sub-
section, collectively enter into a memorandum of under-
standing to establish an external review process for ensur-
ing that adequate internal safeguards and management
procedures continue to exist within each Office and within
any Office that later receives an authorization under para-
graph (2). The review process shall be established in con-
sultation with the Attorney General, who shall be provided
with a copy of the memorandum of understanding that es-
tablishes the review process. Under the review process, the
exercise of the law enforcement powers by each Office of In-
spector General shall be reviewed periodically by another
Office of Inspector General or by a committee of Inspectors
General. The results of each review shall be communicated
in writing to the applicable Inspector General and to the
Attorney General.
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‘‘(8) No provision of this subsection shall limit the ex-
ercise of law enforcement powers established under any
other statutory authority, including United States Marshals
Service special deputation.’’.
(b) PROMULGATION OF INITIAL GUIDELINES.—
(1) DEFINITION.—In this subsection, the term
‘‘memoranda of understanding’’ means the agreements
between the Department of Justice and the 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 section) that—
(A) are in effect on the date of enactment of
this Act; and
(B) authorize such offices to exercise author-
ity that is the same or similar to the authority
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 Gen-
eral 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 section) applicable
to the Inspector General offices described under sec-
tion 6(e)(3) of that Act.
(3) MINIMUM
REQUIREMENTS.—The guidelines
promulgated under this subsection shall include, at a
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minimum, the operational and training requirements
in the memoranda of understanding.
(4) NO LAPSE OF AUTHORITY.—The memoranda
of understanding in effect on the date of enactment of
this Act shall remain in effect until the guidelines
promulgated under this subsection take effect.
(c) EFFECTIVE DATES.—
(1) IN GENERAL.—Subsection (a) shall take effect
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 transferred
to the Secretary the functions, personnel, assets, and obliga-
tions of the United States Secret Service, which shall be
maintained as a distinct entity within the Department, in-
cluding the functions of the Secretary of the Treasury relat-
ing 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
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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 same
authority (subject to the same limitations and condi-
tions) 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 sub-
sections (b) and (f)), after making a determination
that the use of a contract, grant, or cooperative agree-
ment for such project is not feasible or appropriate.
The annual report required under subsection (b) of
this section, as applied to the Secretary by this para-
graph, shall be submitted to the President of the Sen-
ate and the Speaker of the House of Representatives.
(2) PROTOTYPE PROJECTS.—The Secretary may,
under the authority of paragraph (1), carry out pro-
totype projects in accordance with the requirements
and conditions provided for carrying out prototype
projects under section 845 of the National Defense Au-
thorization 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 re-
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spect to prototype projects under this paragraph, and
the Secretary shall perform the functions of the Sec-
retary of Defense under subsection (d) thereof.
(b) REPORT.—Not later than 2 years after the effective
date of this Act, and annually thereafter, the Comptroller
General shall report to the Committee on Government Re-
form 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 there-
of) 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 organizations
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thereof), without regard to the pay limitations of such
section 3109.
(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 orga-
nizations thereof), without regard to the pay limita-
tions 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
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any procurement made during the period beginning
on the effective date of this Act and ending September
30, 2007, if the Secretary determines in writing that
the mission of the Department (as described 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 Depart-
ment 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 Com-
mittee on Government Reform of the House of Rep-
resentatives and the Committee on Governmental Af-
fairs 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 designate
certain employees of the Department to make procure-
ments described in subsection (a) for which in the ad-
ministration of section 32 of the Office of Federal
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Procurement Policy Act (41 U.S.C. 428) the 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 pur-
chases without obtaining competitive quotations,
pursuant to section 32(c) of the Office 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 ter-
rorist targets; and
(C) sufficiently limited to allow for the
careful monitoring of employees designated
under such paragraph.
(3) REVIEW.—Procurements made under the au-
thority of this subsection shall be subject to review by
a designated supervisor on not less than a monthly
basis. The supervisor responsible for the review shall
be responsible for no more than 7 employees making
procurements under this subsection.
(c) SIMPLIFIED ACQUISITION PROCEDURES.—
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(1) IN GENERAL.—With respect to a procurement
described in subsection (a), the Secretary may deem
the simplified acquisition threshold referred to in sec-
tion 4(11) of the Office of Federal Procurement 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 sub-
paragraph (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 Se-
curity Act of 2002.’’.
(d) APPLICATION OF CERTAIN COMMERCIAL ITEMS
AUTHORITIES.—
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(1) IN GENERAL.—With respect to a procurement
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 Ad-
ministrative 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 ex-
pires 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 sec-
tion, 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 of
Representatives a report on the use of the authorities pro-
vided in this section. The report shall contain the following:
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(1) An assessment of the extent to which property
and services acquired using authorities provided
under this section contributed to the capacity of the
Federal workforce to facilitate the mission of the De-
partment 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 De-
partment 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 Regu-
lation shall be revised to include regulations with regard
to unsolicited proposals.
(b) CONTENT OF REGULATIONS.—The regulations pre-
scribed under subsection (a) shall require that before initi-
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ating a comprehensive evaluation, an agency contact point
shall consider, among other factors, that the proposal—
(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 all
of the properties constituting a trade or business of a
domestic partnership;
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(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 requirements of
subsection (b)(2) are met, such actions shall be
treated as pursuant to a plan.
(C) CERTAIN TRANSFERS DISREGARDED.—
The transfer of properties or liabilities (includ-
ing by contribution or distribution) shall be dis-
regarded if such transfers are part of a plan a
principal purpose of which is to avoid the pur-
poses of this section.
(D) SPECIAL RULE FOR RELATED PARTNER-
SHIPS.—For purposes of applying subsection (b)
to the acquisition of a domestic partnership, ex-
cept as provided in regulations, all domestic
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partnerships which are under common control
(within the meaning of section 482 of the Inter-
nal 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 instruments,
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 ap-
pears.
(3) FOREIGN INCORPORATED ENTITY.—The term
‘‘foreign incorporated entity’’ means any entity which
is, or but for subsection (b) would be, treated as a for-
eign corporation for purposes of the Internal Revenue
Code of 1986.
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(4) OTHER DEFINITIONS.—The terms ‘‘person’’,
‘‘domestic’’, and ‘‘foreign’’ have the meanings given
such terms by paragraphs (1), (4), and (5) of section
7701 (a) of the Internal Revenue Code of 1986, re-
spectively.
(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 incurring
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
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
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a direct interest in ensuring that their human
resources management system is conducive to
achieving optimal operational efficiencies;
(C) the 21st century human resources man-
agement system envisioned for the Department
should be one that benefits from the input of its
employees; and
(D) this collaborative effort will help secure
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 provi-
sion of this part, the Secretary of Homeland Security 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.
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‘‘(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, relating
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—
‘‘(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;
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‘‘(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 af-
fect 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 competi-
tive 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
‘‘(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—
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‘‘(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-
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 Man-
agement shall provide for the following:
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‘‘(A) NOTICE OF PROPOSAL.—The Secretary
and the Director shall, with respect to any pro-
posed system or adjustment—
‘‘(i) provide to each employee rep-
resentative representing any employees who
might be affected, a written description of
the proposed system or adjustment (includ-
ing the reasons why it is considered nec-
essary);
‘‘(ii) give each representative 30 cal-
endar days (unless extraordinary cir-
cumstances require earlier action) to review
and make recommendations with respect 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.
‘‘(B) 
PRE-IMPLEMENTATION
CONGRES-
SIONAL NOTIFICATION, CONSULTATION, AND ME-
DIATION.—Following receipt of recommenda-
tions, if any, from employee representatives with
respect to a proposal described in subparagraph
(A), the Secretary and the Director shall accept
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such modifications to the proposal in response to
the recommendations as they determine advisable
and shall, with respect to any parts of the pro-
posal as to which they have not accepted the
recommendations—
‘‘(i) notify Congress of those parts of
the proposal, together with the recommenda-
tions 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 pro-
posal; and
‘‘(iii) at the Secretary’s option, or if
requested by a majority of the employee rep-
resentatives who have made recommenda-
tions, use the services of the Federal Medi-
ation and Conciliation Service during such
meet and confer period to facilitate the
process of attempting to reach agreement.
‘‘(C) IMPLEMENTATION.—
‘‘(i) Any part of the proposal as to
which the representatives do not make a rec-
ommendation, or as to which their rec-
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ommendations are accepted by the Secretary
and the Director, may be implemented im-
mediately.
‘‘(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 cal-
endar days have elapsed since the initiation
of the congressional notification, consulta-
tion, and mediation procedures set forth in
subparagraph (B), if the Secretary deter-
mines, 
in 
the 
Secretary’s 
sole 
and
unreviewable discretion, that further con-
sultation and mediation is unlikely to
produce agreement, the Secretary may im-
plement any or all of such parts, including
any modifications made in response to the
recommendations as the Secretary deter-
mines advisable.
‘‘(iii) The Secretary shall promptly no-
tify Congress of the implementation of any
part of the proposal and shall furnish with
such notice an explanation of the proposal,
any changes made to the proposal as a re-
sult of recommendations from employee rep-
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resentatives, and of the reasons why imple-
mentation is appropriate under this sub-
paragraph.
‘‘(D) CONTINUING
COLLABORATION.—If a
proposal described in subparagraph (A) is imple-
mented, 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 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;
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‘‘(B) in the case of any employees who are
not within such a unit, representation by any
appropriate organization which represents a sub-
stantial percentage of those employees or, if none,
in such other manner as may be appropriate,
consistent with the purposes of the subsection;
‘‘(C) the fair and expeditious handling of
the consultation and mediation process described
in subparagraph (B) of paragraph (1), including
procedures by which, if the number of employee
representatives providing recommendations ex-
ceeds 5, such representatives select a committee
or other unified representative with which the
Secretary and Director may meet and confer;
and
‘‘(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 enti-
tled to fair treatment in any appeals that they
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bring in decisions relating to their employment;
and
‘‘(B) in prescribing regulations for any such
appeals procedures, the Secretary and the Direc-
tor of the Office of Personnel Management—
‘‘(i) should ensure that employees of the
Department are afforded the protections 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.
‘‘(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
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‘‘(C) shall modify procedures under chapter
77 only insofar as such modifications are de-
signed to further the fair, efficient, and expedi-
tious resolution of matters involving the employ-
ees of the Department.
‘‘(g) PROVISIONS RELATING TO LABOR-MANAGEMENT
RELATIONS.—Nothing in this section shall be construed as
conferring authority on the Secretary of Homeland Security
to modify any of the provisions of section 842 of the Home-
land Security Act of 2002.
‘‘(h) SUNSET PROVISION.—Effective 5 years after the
conclusion of the transition period defined under section
1501 of the Homeland Security Act of 2002, all authority
to issue regulations under this section (including regula-
tions which would modify, supersede, or terminate any reg-
ulations 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 PERSONNEL
AND
PART-TIME
PERSONNEL
HOLDING
PERMANENT
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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 pur-
suant to this Act, held a position compensated in ac-
cordance with the Executive Schedule prescribed in
chapter 53 of title 5, United States Code, and who,
without a break in service, is appointed in the De-
partment to a position having duties comparable to
the duties performed immediately preceding such ap-
pointment 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.
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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, unless—
(A) the mission and responsibilities of the
agency (or subdivision) materially change; and
(B) a majority of the employees within such
agency (or subdivision) have as their primary
duty intelligence, counterintelligence, or inves-
tigative work directly related to terrorism inves-
tigation.
(2) EXCLUSIONS ALLOWABLE.—Nothing in para-
graph (1) shall affect the effectiveness of any order to
the extent that such order excludes any portion 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.—
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(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 effective
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, continue to
be so recognized for such purposes, unless—
(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 investigative
work directly related to terrorism investigation.
(2) LIMITATION RELATING TO POSITIONS OR EM-
PLOYEES.—No position or employee within a unit (or
subdivision of a unit) as to which continued recogni-
tion is given in accordance with paragraph (1) shall
be excluded from such unit (or subdivision), for pur-
poses 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.
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In the case of any positions within a unit (or sub-
division) which are first established on or after the ef-
fective date of this Act and any employees first ap-
pointed on or after such date, the preceding sentence
shall be applied disregarding subparagraph (A).
(c) WAIVER.—If the President determines that the ap-
plication of subsections (a), (b), and (d) would have a sub-
stantial adverse impact on the ability of the Department
to protect homeland security, the President may waive the
application of such subsections 10 days after the President
has submitted to Congress a written explanation of the rea-
sons for such determination.
(d) COORDINATION RULE.—No other provision of this
Act or of any amendment made by this Act may be con-
strued 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 pre-
ceding provisions of this section (as applicable), or to any
employees of any such agency or subdivision or to any indi-
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vidual or entity representing any such employees or any
representatives thereof.
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, BIO-
LOGICAL, CHEMICAL, OR RADIOLOGICAL AT-
TACK.
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 recov-
ery from terrorism or nuclear, biological, chemical, or radi-
ological attack, but only if a solicitation of offers for the
procurement is issued during the 1-year period beginning
on the date of the enactment of this Act.
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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 or
a contingency operation, the simplified acquisition thresh-
old definitions shall be applied as if the amount determined
under the exception provided for such an operation 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)).
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(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).
SEC. 854. INCREASED MICRO-PURCHASE THRESHOLD FOR
CERTAIN PROCUREMENTS.
In the administration of section 32 of the Office of Fed-
eral Procurement Policy Act (41 U.S.C. 428) with respect
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 section
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:
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(A) Sections 31 and 34 of the Office of Fed-
eral 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)).
(b) INAPPLICABILITY OF LIMITATION ON USE OF SIM-
PLIFIED 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)), section
2304(g)(1)(B) of title 10, United States Code, and
section 303(g)(1)(B) of the Federal Property and Ad-
ministrative Services Act of 1949 (41 U.S.C.
253(g)(1)(B)) shall not apply to purchases of property
or services to which any of the provisions of law re-
ferred to in subsection (a) are applied under the au-
thority of this section.
(2) OMB GUIDANCE.—The Director of the Office
of Management and Budget shall issue guidance and
procedures for the use of simplified acquisition proce-
dures for a purchase of property or services in excess
of $5,000,000 under the authority of this section.
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(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 use by
the head of an executive agency as provided in subsections
(a) and (b).
SEC. 856. USE OF STREAMLINED PROCEDURES.
(a) REQUIRED USE.—The head of an executive agency
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 provisions
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 sub-
section (c) of section 303 (41 U.S.C. 253), relat-
ing to use of procedures other than competitive
procedures under certain circumstances (subject
to subsection (e) of such section).
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(B) Section 303J (41 U.S.C. 253j), relating
to orders under task and delivery order con-
tracts.
(2) TITLE 10, UNITED STATES CODE.—In chapter
137 of title 10, United States Code:
(A) Paragraphs (1), (2), (6), and (7) of sub-
section (c) of section 2304, relating to use of pro-
cedures other than competitive procedures under
certain circumstances (subject to subsection (e) of
such section).
(B) Section 2304c, relating to orders under
task and delivery order contracts.
(3) OFFICE OF FEDERAL PROCUREMENT POLICY
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 inapplicability of a re-
quirement 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.
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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 pro-
curements of property and services have been made in
accordance with this subtitle; and
(2) submit a report on the results of the review
to the Committee on Governmental Affairs of the Sen-
ate 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 exec-
utive agency to carry out the mission of the exec-
utive agency; and
(B) the extent to which Federal Government
employees have been trained on the use of tech-
nology.
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(2) RECOMMENDATIONS.—Any recommendations
of the Comptroller General resulting from the assess-
ment 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 Rep-
resentatives on the specific issues and topics to be reviewed.
The extent of coverage needed in areas such as technology
integration, employee training, and human capital man-
agement, 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 market
research on an ongoing basis to identify effectively the capa-
bilities, including the capabilities of small businesses and
new entrants into Federal contracting, that are available
in the marketplace for meeting the requirements of the exec-
utive agency in furtherance of defense against or recovery
from terrorism or nuclear, biological, chemical, or radio-
logical attack. The head of the executive agency shall, to
the maximum extent practicable, take advantage of com-
mercially available market research methods, including use
of commercial databases, to carry out the research.
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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’’.
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 ac-
cordance with criteria that shall include, but not be limited
to, the following:
(1) Prior United States government use or dem-
onstrated substantial utility and effectiveness.
(2) Availability of the technology for immediate
deployment in public and private settings.
(3) Existence of extraordinarily large or extraor-
dinarily unquantifiable potential third party liability
risk exposure to the Seller or other provider of such
anti-terrorism technology.
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(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 capability
of the technology to substantially reduce risks of
harm.
(7) Anti-terrorism technology that would be effec-
tive 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 reg-
ulations, after notice and comment in accordance with sec-
tion 553 of title 5, United States, Code, as may be necessary
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
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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 in-
juries that are proximately caused by sellers that pro-
vide qualified anti-terrorism technology to Federal
and non-Federal government customers.
(2) JURISDICTION.—Such appropriate district
court of the United States shall have original and ex-
clusive 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 terrorism
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 plaintiff
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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 non-
economic damages unless the plaintiff suffered
physical harm.
(B) DEFINITION.—For purposes of subpara-
graph (A), the term ‘‘noneconomic damages’’
means damages for losses for physical and emo-
tional pain, suffering, inconvenience, physical
impairment, mental anguish, disfigurement, loss
of enjoyment of life, loss of society and compan-
ionship, loss of consortium, hedonic damages, in-
jury to reputation, and any other nonpecuniary
losses.
(c) COLLATERAL SOURCES.—Any recovery by a plain-
tiff 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.
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(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 such claims
result or may result in loss to the Seller, there shall
be a rebuttable presumption that the government con-
tractor defense applies in such lawsuit. This presump-
tion shall only be overcome by evidence showing that
the Seller acted fraudulently or with willful mis-
conduct in submitting information to the Secretary
during the course of the Secretary’s consideration of
such technology under this subsection. This presump-
tion of the government contractor defense shall apply
regardless of whether the claim against the Seller
arises from a sale of the product to Federal Govern-
ment or non-Federal Government customers.
(2) EXCLUSIVE RESPONSIBILITY.—The Secretary
will be exclusively responsible for the review and ap-
proval of anti-terrorism technology for purposes of es-
tablishing a government contractor defense in any
product liability lawsuit for claims arising out of, re-
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lating to, or resulting from an act of terrorism when
qualified anti-terrorism technologies approved by the
Secretary, as provided in this paragraph and para-
graph (3), 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. Upon the
Seller’s submission to the Secretary for approval of
anti-terrorism technology, the Secretary will conduct
a comprehensive review of the design of such tech-
nology and determine whether it will perform as in-
tended, 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 sup-
ply 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,
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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.—
(1) LIABILITY INSURANCE REQUIRED.—Any per-
son or entity that sells or otherwise provides a quali-
fied 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 otherwise
compensable third-party claims arising out of, relat-
ing to, or resulting from an act of terrorism when
qualified anti-terrorism technologies have been de-
ployed in defense against or response or recovery from
such act.
(2) MAXIMUM AMOUNT.—For the total claims re-
lated to 1 such act of terrorism, the Seller is not re-
quired to obtain liability insurance of more than the
maximum amount of liability insurance reasonably
available from private sources on the world market at
prices and terms that will not unreasonably distort
the sales price of Seller’s anti-terrorism technologies.
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(3) SCOPE OF COVERAGE.—Liability insurance
obtained pursuant to this subsection shall, in addition
to the Seller, protect the following, to the extent of
their potential liability for involvement in the manu-
facture, qualification, sale, use, or operation of quali-
fied anti-terrorism technologies deployed in defense
against or response or recovery from an act of ter-
rorism:
(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 insur-
ance under this section shall provide coverage against
third party claims arising out of, relating to, or re-
sulting from the sale or use of anti-terrorism tech-
nologies.
(b) RECIPROCAL WAIVER OF CLAIMS.—The Seller shall
enter into a reciprocal waiver of claims with its contractors,
subcontractors, suppliers, vendors and customers, and con-
tractors and subcontractors of the customers, involved in the
manufacture, sale, use or operation of qualified anti-ter-
rorism technologies, under which each party to the waiver
agrees to be responsible for losses, including business inter-
ruption losses, that it sustains, or for losses sustained by
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its own employees resulting from an activity resulting from
an act of terrorism when qualified anti-terrorism tech-
nologies have been deployed in defense against or response
or recovery from such act.
(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 recovery
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 re-
quired 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 TECHNOLOGY.—
For purposes of this subtitle, the term ‘‘qualified anti-
terrorism technology’’ means any product, equipment,
service (including support services), device, or tech-
nology (including information technology) designed,
developed, modified, or procured for the specific pur-
pose of preventing, detecting, identifying, or deterring
acts of terrorism or limiting the harm such acts
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might otherwise cause, that is designated as such by
the Secretary.
(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 require-
ments 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 in-
come tax is paid and whose insurance 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, association, society,
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order, firm, company, mutual, partnership, indi-
vidual aggregation of individuals, or any other legal
entity that provides commercial property and cas-
ualty insurance. Such term includes any affiliates of
a commercial insurance carrier.
(4) LIABILITY INSURANCE.—
(A) IN GENERAL.—The term ‘‘liability in-
surance’’ means insurance for legal liabilities in-
curred 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 damage
to property of others;
(iii) bodily injury (including) to per-
sons other than the insured or its employees;
or
(iv) loss resulting from debt or default
of another.
(5) LOSS.—The term ‘‘loss’’ means death, bodily
injury, or loss of or damage to property, including
business interruption loss.
(6) NON-FEDERAL GOVERNMENT CUSTOMERS.—
The term ‘‘non-Federal Government customers’’ means
any customer of a Seller that is not an agency or in-
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strumentality of the United States Government with
authority under Public Law 85-804 to provide for in-
demnification under certain circumstances for third-
party claims against its contractors, including but
not limited to State and local authorities and com-
mercial 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 commit-
tees, as the Secretary may deem necessary. An advisory
committee established under this section may be exempted
by the Secretary from Public Law 92–463, but the Sec-
retary shall publish notice in the Federal Register announc-
ing the establishment of such a committee and identifying
its purpose and membership. Notwithstanding the pre-
ceding 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 eligi-
ble 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 committee.
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(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 writ-
ten 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 Sec-
retary may make any number of subsequent extensions con-
sistent with this subsection.
SEC. 872. REORGANIZATION.
(a) REORGANIZATION.—The Secretary may allocate or
reallocate functions among the officers of the Department,
and may establish, consolidate, alter, or discontinue organi-
zational 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 agency,
entity, organizational unit, program, or function es-
tablished or required to be maintained by this Act.
(2) ABOLITIONS.—Authority under subsection
(a)(2) does not extend to the abolition of any agency,
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entity, organizational unit, program, or function es-
tablished or required to be maintained by statute.
SEC. 873. USE OF APPROPRIATED FUNDS.
(a) DISPOSAL OF PROPERTY.—
(1) STRICT COMPLIANCE.—If specifically author-
ized 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 dis-
posed of unless specifically permitted in advance in an ap-
propriations 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 Con-
gress a detailed budget request for the Department for fiscal
year 2004, and for each subsequent fiscal year.
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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 Pro-
gram.
(b) CONTENTS.—The Future Years Homeland Security
Program under subsection (a) shall be structured, and in-
clude the same type of information and level of detail, as
the Future Years Defense Program submitted to Congress
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 fiscal
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 Trans-
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portation has with respect to the Department of Transpor-
tation under section 324 of title 49, United States Code.
(c) REDELEGATION OF FUNCTIONS.—Unless otherwise
provided in the delegation or by law, any function delegated
under this Act may be redelegated to any subordinate.
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 1706(b), this Act
vests no new regulatory authority in the Secretary or any
other Federal official, and transfers to the Secretary or an-
other Federal official only such regulatory authority as ex-
ists on the date of enactment of this Act within any agency,
program, or function transferred to the Department pursu-
ant to this Act, or that on such date of enactment is exer-
cised by another official of the executive branch with respect
to such agency, program, or function. Any such transferred
authority may not be exercised by an official from whom
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it is transferred upon transfer of such agency, program, or
function to the Secretary or another Federal official pursu-
ant to this Act. This Act may not be construed as altering
or diminishing the regulatory authority of any other execu-
tive agency, except to the extent that this Act transfers such
authority from the agency.
(b) PREEMPTION OF STATE OR LOCAL LAW.—Except
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 offi-
cial.
SEC. 878. COUNTERNARCOTICS OFFICER.
The Secretary shall appoint a senior official in the De-
partment 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 illegal
drugs into the United States, and tracking and severing
connections between illegal drug trafficking and terrorism.
Such official shall—
(1) ensure the adequacy of resources within the
Department for illicit drug interdiction; and
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tification under this paragraph shall include a de-
tailed justification for the declaration and certifi-
cation, including the reasons and specific information
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 emphasis on examining
the non-homeland security missions.
(2) REPORT.—The report under this paragraph
shall be submitted to—
(A) the Committee on Governmental Affairs
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