Chapter IX: Section 510: of the Homeland Security Act of 2002 was redesignated (2)

(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 subsection (b), or any
subsidiary of such an entity.
(b) Inverted Domestic Corporation.--For purposes 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 before, on, or after the
date of enactment of this Act, the direct or indirect
acquisition of substantially all of the properties held
directly or indirectly by a domestic corporation or
substantially all of the properties constituting a
trade or business of a domestic partnership;
(2) after the acquisition at least 80 percent of
the stock (by vote or value) of the entity is held--
(A) in the case of an acquisition with
respect to a domestic corporation, by former
shareholders of the domestic corporation by
reason of holding stock in the domestic
corporation; or
(B) in the case of an acquisition with
respect to a domestic partnership, by former
partners of the domestic partnership by reason
of holding a capital or profits interest in the
domestic partnership; and
(3) the expanded affiliated group which after the
acquisition includes the entity does not have
substantial business activities in the foreign country
in which or under the law of which the entity is
created or organized when compared to the total
business activities of such expanded affiliated group.
(c) Definitions and Special Rules.--
(1) Rules for application of subsection (b).--In
applying subsection (b) for purposes of subsection (a),
the following rules shall apply:
(A) Certain stock disregarded.--There shall
not be taken into account in determining
ownership for purposes of subsection (b)(2)--
(i) stock held by members of the
expanded affiliated group which
includes the foreign incorporated
entity; or
(ii) stock of such entity which is
sold in a public offering related to
the acquisition 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 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
(including by contribution or distribution)
shall be disregarded if such transfers are part
of a plan a principal purpose of which is to
avoid the purposes of this section.
(D) Special rule for related
partnerships.--For purposes of applying
subsection (b) to the acquisition of a domestic
partnership, except as provided in regulations,
all domestic partnerships which are under
common control (within the meaning of section
482 of the Internal Revenue Code of 1986) shall
be treated as I partnership.
(E) Treatment of certain rights.--The
Secretary shall prescribe such regulations as
may be necessary to--
(i) treat warrants, options,
contracts to acquire stock, convertible
debt 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 appears.
(3) Foreign incorporated entity.--The term
``foreign incorporated entity'' means any entity which
is, or but for subsection (b) would be, treated as a
foreign corporation for purposes of the Internal
Revenue Code of 1986.
(4) Other definitions.--The terms ``person'',
``domestic'', and ``foreign'' have the meanings given
such terms by paragraphs (1), (4), and (5) of section
7701(a) of the Internal Revenue Code of 1986,
respectively.
(d) Waivers.--The Secretary shall waive subsection (a) with
respect to any specific contract if the Secretary determines
that the waiver is required in the interest of national
security.
* * * * * * *

Subtitle E--Human Resources Management

SEC. 841. [6 U.S.C. 411] ESTABLISHMENT OF HUMAN RESOURCES MANAGEMENT
SYSTEM.

(a) Authority.--
(1) Sense of congress.--It is the sense of Congress
that--
(A) it is extremely important that
employees 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
a direct interest in ensuring that their human
resources management system is conducive to
achieving optimal operational efficiencies;
(C) the 21st century human resources
management 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.
* * * * * * *
(b) Effect on Personnel.--
(1) Nonseparation or nonreduction in grade or
compensation of full-time personnel and part-time
personnel holding permanent positions.--Except as
otherwise provided in this Act, the transfer under this
Act of full-time personnel (except special Government
employees) and part-time personnel holding permanent
positions shall not cause any such employee to be
separated or reduced in grade or compensation for 1
year after the date of transfer to the Department.
(2) Positions compensated in accordance with
executive schedule.--Any person who, on the day
preceding such person's date of transfer pursuant to
this Act, held a position compensated in accordance
with the Executive Schedule prescribed in chapter 53 of
title 5, United States Code, and who, without a break
in service, is appointed in the Department to a
position having duties comparable to the duties
performed immediately preceding such appointment shall
continue to be compensated in such new position at not
less than the rate provided for such position, for the
duration of the service of such person in such new
position.
(3) Coordination rule.--Any exercise of authority
under chapter 97 of title 5, United States Code (as
amended by subsection (a)), including under any system
established under such chapter, shall be in conformance
with the requirements of this subsection.

SEC. 842. [6 U.S.C. 412] 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 coverage 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
investigative work directly related to
terrorism investigation.
(2) Exclusions allowable.--Nothing in paragraph (1)
shall affect the effectiveness of any order to the
extent that such order excludes any 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
determination under subsection (b)(1).
(b) Provisions Relating to Bargaining Units.--
(1) Limitation relating to appropriate units.--Each
unit which is recognized as an appropriate 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
employees.--No position or employee within a unit (or
subdivision of a unit) as to which continued
recognition is given in accordance with paragraph (1)
shall be excluded from such unit (or subdivision), for
purposes of chapter 71 of such title 5, unless the
primary job duty of such position or employee--
(A) materially changes; and
(B) consists of intelligence,
counterintelligence, or investigative work
directly related to terrorism investigation.
In the case of any positions within a unit (or
subdivision) which are first established on or after
the effective date of this Act and any employees first
appointed on or after such date, the preceding sentence
shall be applied disregarding subparagraph (A).
(c) Waiver.--If the President determines that the
application of subsections (a), (b), and (d) would have a
substantial adverse impact on the ability of the 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 reasons for
such determination.
(d) Coordination Rule.--No other provision of this Act or
of any amendment made by this Act may be construed or applied
in a manner so as to limit, supersede, or otherwise affect the
provisions of this section, except to the extent that it does
so by specific reference to this section.
(e) Rule of Construction.--Nothing in section 9701(e) of
title 5, United States Code, shall be considered to apply with
respect to any agency or subdivision of any agency, which is
excluded from the coverage of chapter 71 of title 5, United
States Code, by virtue of an order issued in accordance with
section 7103(b) of such title and the preceding provisions of
this section (as applicable), or to any employees of any such
agency or subdivision or to any individual or entity
representing any such employees or any representatives thereof.

SEC. 843. [6 U.S.C. 413] USE OF COUNTERNARCOTICS ENFORCEMENT ACTIVITIES
IN CERTAIN EMPLOYEE PERFORMANCE APPRAISALS.

(a) In General.--Each subdivision of the Department that is
a National Drug Control Program Agency shall include as one of
the criteria in its performance appraisal system, for each
employee directly or indirectly involved in the enforcement of
Federal, State, or local narcotics laws, the performance of
that employee with respect to the enforcement of Federal,
State, or local narcotics laws, relying to the greatest extent
practicable on objective performance measures, including--
(1) the contribution of that employee to seizures
of narcotics and arrests of violators of Federal,
State, or local narcotics laws; and
(2) the degree to which that employee cooperated
with or contributed to the efforts of other employees,
either within the Department or other Federal, State,
or local agencies, in counternarcotics enforcement.
(b) Definitions.--For purposes of this section--
(1) the term ``National Drug Control Program
Agency'' means--
(A) a National Drug Control Program Agency,
as defined in section 702(7) of the Office of
National Drug Control Policy Reauthorization
Act of 1998 (as last in effect); and
(B) any subdivision of the Department that
has a significant counternarcotics
responsibility, as determined by--
(i) the counternarcotics officer,
appointed under section 878; or
(ii) if applicable, the
counternarcotics officer's successor in
function (as determined by the
Secretary); and
(2) the term ``performance appraisal system'' means
a system under which periodic appraisals of job
performance of employees are made, whether under
chapter 43 of title 5, United States Code, or
otherwise.

SEC. 844. HOMELAND SECURITY ROTATION PROGRAM.

(a) Establishment.--
(1) In general.--Not later than 180 days after the
date of enactment of this section, the Secretary shall
establish the Homeland Security Rotation Program (in
this section referred to as the ``Rotation Program'')
for employees of the Department. The Rotation Program
shall use applicable best practices, including those
from the Chief Human Capital Officers Council.
(2) Goals.--The Rotation Program established by the
Secretary shall--
(A) be established in accordance with the
Human Capital Strategic Plan of the Department;
(B) provide middle and senior level
employees in the Department the opportunity to
broaden their knowledge through exposure to
other components of the Department;
(C) expand the knowledge base of the
Department by providing for rotational
assignments of employees to other components;
(D) build professional relationships and
contacts among the employees in the Department;
(E) invigorate the workforce with exciting
and professionally rewarding opportunities;
(F) incorporate Department human capital
strategic plans and activities, and address
critical human capital deficiencies,
recruitment and retention efforts, and
succession planning within the Federal
workforce of the Department; and
(G) complement and incorporate (but not
replace) rotational programs within the
Department in effect on the date of enactment
of this section.
(3) Administration.--
(A) In general.--The Chief Human Capital
Officer shall administer the Rotation Program.
(B) Responsibilities.--The Chief Human
Capital Officer shall--
(i) provide oversight of the
establishment and implementation of the
Rotation Program;
(ii) establish a framework that
supports the goals of the Rotation
Program and promotes cross-disciplinary
rotational opportunities;
(iii) establish eligibility for
employees to participate in the
Rotation Program and select
participants from employees who apply;
(iv) establish incentives for
employees to participate in the
Rotation Program, including promotions
and employment preferences;
(v) ensure that the Rotation
Program provides professional education
and training;
(vi) ensure that the Rotation
Program develops qualified employees
and future leaders with broad-based
experience throughout the Department;
(vii) provide for greater
interaction among employees in
components of the Department; and
(viii) coordinate with rotational
programs within the Department in
effect on the date of enactment of this
section.
(4) Allowances, privileges, and benefits.--All
allowances, privileges, rights, seniority, and other
benefits of employees participating in the Rotation
Program shall be preserved.
(5) Reporting.--Not later than 180 days after the
date of the establishment of the Rotation Program, the
Secretary shall submit a report on the status of the
Rotation Program, including a description of the
Rotation Program, the number of employees
participating, and how the Rotation Program is used in
succession planning and leadership development to the
appropriate committees of Congress.

SEC. 845. HOMELAND SECURITY EDUCATION PROGRAM.

(a) Establishment.--The Secretary, acting through the
Administrator, shall establish a graduate-level Homeland
Security Education Program in the National Capital Region to
provide educational opportunities to senior Federal officials
and selected State and local officials with homeland security
and emergency management responsibilities. The Administrator
shall appoint an individual to administer the activities under
this section.
(b) Leveraging of Existing Resources.--To maximize
efficiency and effectiveness in carrying out the Program, the
Administrator shall use existing Department-reviewed Master's
Degree curricula in homeland security, including curricula
pending accreditation, together with associated learning
materials, quality assessment tools, digital libraries,
exercise systems and other educational facilities, including
the National Domestic Preparedness Consortium, the National
Fire Academy, and the Emergency Management Institute. The
Administrator may develop additional educational programs, as
appropriate.
(c) Student Enrollment.--
(1) Sources.--The student body of the Program shall
include officials from Federal, State, local, and
tribal governments, and from other sources designated
by the Administrator.
(2) Enrollment priorities and selection criteria.--
The Administrator shall establish policies governing
student enrollment priorities and selection criteria
that are consistent with the mission of the Program.
(3) Diversity.--The Administrator shall take
reasonable steps to ensure that the student body
represents racial, gender, and ethnic diversity.
(d) Service Commitment.--
(1) In general.--Before any employee selected for
the Program may be assigned to participate in the
program, the employee shall agree in writing--
(A) to continue in the service of the
agency sponsoring the employee during the 2-
year period beginning on the date on which the
employee completes the program, unless the
employee is involuntarily separated from the
service of that agency for reasons other than a
reduction in force; and
(B) to pay to the Government the amount of
the additional expenses incurred by the
Government in connection with the employee's
education if the employee is voluntarily
separated from the service to the agency before
the end of the period described in subparagraph
(A).
(2) Payment of expenses.--
(A) Exemption.--An employee who leaves the
service of the sponsoring agency to enter into
the service of another agency in any branch of
the Government shall not be required to make a
payment under paragraph (1)(B), unless the head
of the agency that sponsored the education of
the employee notifies that employee before the
date on which the employee enters the service
of the other agency that payment is required
under that paragraph.
(B) Amount of payment.--If an employee is
required to make a payment under paragraph
(1)(B), the agency that sponsored the education
of the employee shall determine the amount of
the payment, except that such amount may not
exceed the pro rata share of the expenses
incurred for the time remaining in the 2-year
period.
(3) Recovery of payment.--If an employee who is
required to make a payment under this subsection does
not make the payment, a sum equal to the amount of the
expenses incurred by the Government for the education
of that employee is recoverable by the Government from
the employee or his estate by--
(A) setoff against accrued pay,
compensation, amount of retirement credit, or
other amount due the employee from the
Government; or
(B) such other method as is provided by lay
for the recovery of amounts owing to the
Government.

Subtitle F--Federal Emergency Procurement Flexibility

SEC. 851. [6 U.S.C. 421] 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. [6 U.S.C. 422] PROCUREMENTS FOR DEFENSE AGAINST OR RECOVERY
FROM TERRORISM OR NUCLEAR, BIOLOGICAL, CHEMICAL, OR
RADIOLOGICAL ATTACK.

The authorities provided in this subtitle apply to any procurement of property or services by or for an executive agency that, as determined by the head of the executive agency, are to be used to facilitate defense against or recovery from terrorism or nuclear, biological, chemical, or radiological attack, but only if a solicitation of offers for the procurement is issued during the 1-year period beginning on the date of the enactment of this Act.

SEC. 853. [6 U.S.C. 423] INCREASED SIMPLIFIED ACQUISITION THRESHOLD FOR
PROCUREMENTS IN SUPPORT OF HUMANITARIAN OR
PEACEKEEPING OPERATIONS OR CONTINGENCY OPERATIONS.

(a) Temporary Threshold Amounts.--For a procurement
referred to in section 852 that is carried out in support of a
humanitarian or peacekeeping operation or a contingency
operation, the simplified acquisition threshold 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 Definitions.--In this
section, the term ``simplified acquisition threshold
definitions'' means the following:
(1) Section 4(11) of the Office of Federal
Procurement Policy Act (41 U.S.C. 403(11)).
(2) Section 309(d) of the Federal Property and
Administrative Services Act of 1949 (41 U.S.C. 259(d)).
(3) Section 2302(7) of title 10, United States
Code.
(c) Small Business Reserve.--For a procurement carried out
pursuant to subsection (a), section 15(j) of the Small Business
Act (15 U.S.C. 644(j)) shall be applied as if the maximum
anticipated value identified therein is equal to the amounts
referred to in subsection (a).

SEC. 854. [6 U.S.C. 424] INCREASED MICRO-PURCHASE THRESHOLD FOR CERTAIN
PROCUREMENTS.

In the administration of section 32 of the Office of Federal Procurement Policy Act (41 U.S.C. 428) with 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. [6 U.S.C. 425] 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:
(A) Sections 31 and 34 of the Office of
Federal Procurement Policy Act (41 U.S.C. 427,
430).
(B) Section 2304(g) of title 10, United
States Code.
(C) Section 303(g) of the Federal Property
and Administrative Services Act of 1949 (41
U.S.C. 253(g)).
(b) Inapplicability of Limitation on Use of Simplified
Acquisition Procedures.--
(1) In general.--The $5,000,000 limitation provided
in section 31(a)(2) of the Office of Federal
Procurement Policy Act (41 U.S.C. 427(a)(2)), section
2304(g)(1)(B) of title 10, United States Code, and
section 303(g)(1)(B) of the Federal Property and
Administrative Services Act of 1949 (41 U.S.C.
253(g)(1)(B)) shall not apply to purchases of property
or services to which any of the provisions of law
referred to in subsection (a) are applied under the
authority of this section.
(2) OMB guidance.--The Director of the Office of
Management and Budget shall issue guidance and
procedures for the use of simplified acquisition
procedures for a purchase of property or services in
excess of $5,000,000 under the authority of this
section.
(c) Continuation of Authority for Simplified Purchase
Procedures.--Authority under a provision of law referred to in
subsection (a)(2) that expires under section 4202(e) of the
Clinger-Cohen Act of 1996 (divisions D and E of Public Law 104-
106; 10 U.S.C. 2304 note) shall, notwithstanding such section,
continue to apply for use by the head of an executive agency as
provided in subsections (a) and (b).

SEC. 856. [6 U.S.C. 426] USE OF STREAMLINED PROCEDURES.

(a) Required Use.--The head of an executive agency shall,
when appropriate, use streamlined acquisition authorities and
procedures authorized by law for a procurement 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
subsection (c) of section 303 (41 U.S.C. 253),
relating to use of procedures other than
competitive procedures under certain
circumstances (subject to subsection (e) of
such section).
(B) Section 303J (41 U.S.C. 253j), relating
to orders under task and delivery order
contracts.
(2) Title 10, united states code.--In chapter 137
of title 10, United States Code:
(A) Paragraphs (1), (2), (6), and (7) of
subsection (c) of section 2304, relating to use
of procedures other than competitive procedures
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 requirement
for procurement notice.
(b) Waiver of Certain Small Business Threshold
Requirements.--Subclause (II) of section 8(a)(1)(D)(i) of the
Small Business Act (15 U.S.C. 637(a)(1)(D)(i)) and clause (ii)
of section 31(b)(2)(A) of such Act (15 U.S.C. 657a(b)(2)(A))
shall not apply in the use of streamlined acquisition
authorities and procedures referred to in paragraphs (1)(A) and
(2)(A) of subsection (a) for a procurement referred to in
section 852.

SEC. 857. [6 U.S.C. 427] REVIEW AND REPORT BY COMPTROLLER GENERAL.

(a) Requirements.--Not later than March 31, 2004, the
Comptroller General shall--
(1) complete a review of the extent to which
procurements of property and services have been made in
accordance with this subtitle; and
(2) submit a report on the results of the review to
the Committee on Governmental Affairs of the Senate and
the Committee on Government Reform of the House of
Representatives.
(b) Content of Report.--The report under subsection (a)(2)
shall include the following matters:
(1) Assessment.--The Comptroller General's
assessment of--
(A) the extent to which property and
services procured in accordance with this title
have contributed to the capacity of the
workforce of Federal Government employees
within each executive agency to carry out the
mission of the executive agency; and
(B) the extent to which Federal Government
employees have been trained on the use of
technology.
(2) Recommendations.--Any recommendations of the
Comptroller General resulting from the assessment
described in paragraph (1).
(c) Consultation.--In preparing for the review under
subsection (a)(1), the Comptroller shall consult with the
Committee on Governmental Affairs of the Senate and the
Committee on Government Reform of the House of Representatives
on the specific issues and topics to be reviewed. The extent of
coverage needed in areas such as technology integration,
employee training, and human capital management, as well as the
data requirements of the study, shall be included as part of
the consultation.

SEC. 858. [6 U.S.C. 428] 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 capabilities, including the capabilities of small businesses and new entrants into Federal contracting, that are available in the marketplace for meeting the requirements of the executive agency in furtherance of defense against or recovery from terrorism or nuclear, biological, chemical, or radiological attack. The head of the executive agency shall, to the maximum extent practicable, take advantage of commercially available market research methods, including use of commercial databases, to carry out the research. * * * * * * *

Subtitle G--Support Anti-terrorism by Fostering Effective Technologies
Act of 2002

SEC. 861. [6 U.S.C. 101 NOTE] SHORT TITLE.

This subtitle may be cited as the ``Support Anti-terrorism by Fostering Effective Technologies Act of 2002'' or the ``SAFETY Act''.

SEC. 862. [6 U.S.C. 441] 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-terrorism technologies that
qualify for protection under the system of risk management set
forth in this subtitle in accordance with criteria that shall
include, but not be limited to, the following:
(1) Prior United States Government use or
demonstrated substantial utility and effectiveness.
(2) Availability of the technology for immediate
deployment in public and private settings.
(3) Existence of extraordinarily large or
extraordinarily unquantifiable potential third party
liability risk exposure to the Seller or other provider
of such anti-terrorism technology.
(4) Substantial likelihood that such anti-terrorism
technology will not be deployed unless protections
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
effective in facilitating the defense against acts of
terrorism, including technologies that prevent, defeat
or respond to such acts.
(c) Regulations.--The Secretary may issue such regulations,
after notice and comment in accordance with section 553 of
title 5, United States Code, as may be necessary to carry out
this subtitle.

SEC. 863. [6 U.S.C. 442] 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 defense
against or response or recovery from such act and such
claims result or may result in loss to the Seller. The
substantive law for decision in any such action shall
be derived from the law, including choice of law
principles, of the State in which such acts of
terrorism occurred, unless such law is inconsistent
with or preempted by Federal law. Such Federal cause of
action shall be brought only for claims for injuries
that are proximately caused by sellers that provide
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 exclusive
jurisdiction over all actions for any claim for loss of
property, personal injury, or death arising out of,
relating to, or resulting from an act of 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 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
noneconomic damages unless the plaintiff
suffered physical harm.
(B) Definition.--For purposes of
subparagraph (A), the term ``noneconomic
damages'' means damages for losses for physical
and emotional pain, suffering, inconvenience,
physical impairment, mental anguish,
disfigurement, loss of enjoyment of life, loss
of society and companionship, loss of
consortium, hedonic damages, injury to
reputation, and any other nonpecuniary losses.
(c) Collateral Sources.--Any recovery by a plaintiff in an
action under this section shall be reduced by the amount of
collateral source compensation, if any, that the plaintiff has
received or is entitled to receive as a result of such acts of
terrorism that result or may result in loss to the Seller.
(d) Government Contractor Defense.--
(1) In general.--Should a product liability or
other lawsuit be filed for claims arising out of,
relating 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
contractor defense applies in such lawsuit. This
presumption shall only be overcome by evidence showing
that the Seller acted fraudulently or with willful
misconduct in submitting information to the Secretary
during the course of the Secretary's consideration of
such technology under this subsection. This presumption
of the government contractor defense shall apply
regardless of whether the claim against the Seller
arises from a sale of the product to Federal Government
or non-Federal Government customers.
(2) Exclusive responsibility.--The Secretary will
be exclusively responsible for the review and approval
of anti-terrorism technology for purposes of
establishing a government contractor defense in any
product liability lawsuit for claims arising out of,
relating to, or resulting from an act of terrorism when
qualified anti-terrorism technologies approved by the
Secretary, as provided in this paragraph and paragraph
(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 technology
and determine whether it will perform as intended,
conforms to the Seller's specifications, and is safe
for use as intended. The Seller will conduct safety and
hazard analyses on such technology and will supply the
Secretary with all such information.
(3) Certificate.--For anti-terrorism technology
reviewed and approved by the Secretary, the Secretary
will issue a certificate of conformance to the Seller
and place the anti-terrorism technology on an Approved
Product List for Homeland Security.
(e) Exclusion.--Nothing in this section shall in any way
limit the ability of any person to seek any form of recovery
from any person, government, or other entity that--
(1) attempts to commit, knowingly participates in,
aids and abets, or commits any act of terrorism, or any
criminal act related to or resulting from such act of
terrorism; or
(2) participates in a conspiracy to commit any such
act of terrorism or any such criminal act.

SEC. 864. [6 U.S.C. 443] RISK MANAGEMENT.

(a) In General.--
(1) Liability insurance required.--Any person or
entity that sells or otherwise provides a qualified
anti-terrorism technology to Federal and non-Federal
Government customers (``Seller'') shall obtain
liability insurance of such types and in such amounts
as shall be required in accordance with this section
and certified by the Secretary to satisfy otherwise
compensable third-party claims arising out of, relating
to, or resulting from an act of terrorism when
qualified anti-terrorism technologies have been
deployed in defense against or response or recovery
from such act.
(2) Maximum amount.--For the total claims related
to 1 such act of terrorism, the Seller is not required
to obtain liability insurance of more than the maximum
amount of liability insurance 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.
(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
manufacture, qualification, sale, use, or operation of
qualified anti-terrorism technologies deployed in
defense against or response or recovery from an act of
terrorism:
(A) Contractors, subcontractors, suppliers,
vendors and customers of the Seller.
(B) Contractors, subcontractors, suppliers,
and vendors of the customer.
(4) Third party claims.--Such liability insurance
under this section shall provide coverage against third
party claims arising out of, relating to, or resulting
from the sale or use of anti-terrorism technologies.
(b) Reciprocal Waiver of Claims.--The Seller shall enter
into a reciprocal waiver of claims with its contractors,
subcontractors, suppliers, vendors and customers, and
contractors and subcontractors of the customers, involved in
the manufacture, sale, use or operation of qualified anti-
terrorism technologies, under which each party to the waiver
agrees to be responsible for losses, including business
interruption losses, that it sustains, or for losses sustained
by its own employees resulting from an activity resulting from
an act of terrorism when qualified anti-terrorism technologies
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 required to be
maintained by the Seller under this section.

SEC. 865. [6 U.S.C. 444] 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
technology (including information technology) designed,
developed, modified, or procured for the specific
purpose of preventing, detecting, identifying, or
deterring acts of terrorism or limiting the harm such
acts 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 determines
meets the requirements under subparagraph (B), as such
requirements are further defined and specified by the
Secretary.
(B) Requirements.--An act meets the requirements of
this subparagraph if the act--
(i) is unlawful;
(ii) causes harm to a person, property, or
entity, in the United States, or in the case of
a domestic United States air carrier or a
United States-flag vessel (or a vessel based
principally in the United States on which
United States income tax is paid and whose
insurance coverage is subject to regulation in
the United States), in or outside the United
States; and
(iii) uses or attempts to use
instrumentalities, weapons or other methods
designed or intended 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,
order, firm, company, mutual, partnership, individual
aggregation of individuals, or any other legal entity
that provides commercial property and casualty
insurance. Such term includes any affiliates of a
commercial insurance carrier.
(4) Liability insurance.--
(A) In general.--The term ``liability
insurance'' means insurance for legal
liabilities incurred by the insured resulting
from--
(i) loss of or damage to property
of others;
(ii) ensuing loss of income or
extra expense incurred because of loss
of or damage to property of others;
(iii) bodily injury (including) to
persons 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 instrumentality of
the United States Government with authority under
Public Law 85-804 to provide for indemnification under
certain circumstances for third-party claims against
its contractors, including but not limited to State and
local authorities and commercial entities.

Subtitle H--Miscellaneous Provisions

SEC. 871. [6 U.S.C. 451] ADVISORY COMMITTEES.

(a) In General.--The Secretary may establish, appoint members of, and use the services of, advisory committees, 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 Secretary shall publish notice in the Federal Register announcing the establishment of such a committee and identifying its purpose and membership. Notwithstanding the preceding sentence, members of an advisory committee that is exempted by the Secretary under the preceding sentence who are special Government employees (as that term is defined in section 202 of title 18, United States Code) shall be eligible for certifications under subsection (b)(3) of section 208 of title 18, United States Code, for official actions taken as a member of such advisory committee. (b) Termination.--Any advisory committee established by the Secretary shall terminate 2 years after the date of its establishment, unless the Secretary makes a written determination to extend the advisory committee to a specified date, which shall not be more than 2 years after the date on which such determination is made. The Secretary may make any number of subsequent extensions consistent with this subsection.

SEC. 872. [6 U.S.C. 452] REORGANIZATION.

(a) Reorganization.--The Secretary may allocate or
reallocate functions among the officers of the Department, and
may establish, consolidate, alter, or discontinue
organizational units within the Department, but only--
(1) pursuant to section 1502(b); or
(2) after the expiration of 60 days after providing
notice of such action to the appropriate congressional
committees, which shall include an explanation 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 established
or required to be maintained by this Act.
(2) Abolitions.--Authority under subsection (a)(2)
does not extend to the abolition of any agency, entity,
organizational unit, program, or function established
or required to be maintained by statute.

SEC. 873. [6 U.S.C. 453] USE OF APPROPRIATED FUNDS.

(a) Disposal of Property.-- (1) Strict compliance.--If specifically authorized 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.--Except as authorized by section 2601 of title 10, United States Code, and by section 93 of title 14, United States Code, gifts \1\ or donations of services or property of or for the Department may not be accepted, used, or disposed of unless specifically permitted in advance in an appropriations Act and only under the conditions and for the purposes specified in such appropriations Act. --------------------------------------------------------------------------- \1\ Section 103(3) of Public Law 108-7 (117 Stat. 529) amends subsection (b) by inserting ``Except as authorized by section 2601 of title 10, United States Code, and by section 93 of title 14, United States Code,'' before the word ``Gifts'' in the second place it appears and by striking the letter ``G'' and inserting in lieu thereof ``g'' in the word ``Gifts'' in the second place it appears. The word ``Gifts'' appears once in the text, however, the amendments have been executed to reflect the probable intent of Congress. --------------------------------------------------------------------------- (c) Budget Request.--Under section 1105 of title 31, United States Code, the President shall submit to Congress a detailed budget request for the Department for fiscal year 2004, and for each subsequent fiscal year.

SEC. 874. [6 U.S.C. 454] FUTURE YEAR HOMELAND SECURITY PROGRAM.

(a) In General.--Each budget request submitted to Congress
for the Department under section 1105 of title 31, United
States Code, shall, at or about the same time, be accompanied
by a Future Years Homeland Security Program.
(b) Contents.--The Future Years Homeland Security Program
under subsection (a) shall--
(1) include the same type of information,
organizational structure, and level of detail as the
future years defense program submitted to Congress by
the Secretary of Defense under section 221 of title 10,
United States Code;
(2) set forth the homeland security strategy of the
Department, which shall be developed and updated as
appropriate annually by the Secretary, that was used to
develop program planning guidance for the Future Years
Homeland Security Program; and
(3) include an explanation of how the resource
allocations included in the Future Years Homeland
Security Program correlate to the homeland security
strategy set forth under paragraph (2).
(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. [6 U.S.C. 455] MISCELLANEOUS AUTHORITIES.

(a) Seal.--The Department shall have a seal, whose design is subject to the approval of the President. (b) Participation of Members of the Armed Forces.--With respect to the Department, the Secretary shall have the same authorities that the Secretary of Transportation has with respect to the Department of Transportation 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. [6 U.S.C. 456] MILITARY ACTIVITIES.

Nothing in this Act shall confer upon the Secretary any authority to engage in warfighting, the military defense 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. [6 U.S.C. 457] 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 another Federal official only such regulatory authority as exists on the date of enactment of this Act within any agency, program, or function transferred to the Department pursuant to this Act, or that on such date of enactment is exercised 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 it is transferred upon transfer of such agency, program, or function to the Secretary or another Federal official pursuant to this Act. This Act may not be construed as altering or diminishing the regulatory authority of any other executive agency, except to the 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 official.

SEC. 878. [6 U.S.C. 458] OFFICE OF COUNTERNARCOTICS ENFORCEMENT.

(a) Office.--There is established in the Department an
Office of Counternarcotics Enforcement, which shall be headed
by a Director appointed by the President, by and with the
advice and consent of the Senate.
(b) Assignment of Personnel.--
(1) In general.--The Secretary shall assign
permanent staff to the Office, consistent with
effective management of Department resources.
(2) Liaisons.--The Secretary shall designate senior
employees from each appropriate subdivision of the
Department that has significant counternarcotics
responsibilities to act as a liaison between that
subdivision and the Office of Counternarcotics
Enforcement.
(c) Limitation on Concurrent Employment.--The Director of
the Office of Counternarcotics Enforcement shall not be
employed by, assigned to, or serve as the head of, any other
branch of the Federal Government, any State or local
government, or any subdivision of the Department other than the
Office of Counternarcotics Enforcement.
(d) Responsibilities.--The Secretary shall direct the
Director of the Office of Counternarcotics Enforcement--
(1) to coordinate policy and operations within the
Department, between the Department and other Federal
departments and agencies, and between the Department
and State and local agencies with respect to stopping
the entry of illegal drugs into the United States;
(2) to ensure the adequacy of resources within the
Department for stopping the entry of illegal drugs into
the United States;
(3) to recommend the appropriate financial and
personnel resources necessary to help the Department
better fulfill its responsibility to stop the entry of
illegal drugs into the United States;
(4) within the Joint Terrorism Task Force construct
to track and sever connections between illegal drug
trafficking and terrorism; and
(5) to be a representative of the Department on all
task forces, committees, or other entities whose
purpose is to coordinate the counternarcotics
enforcement activities of the Department and other
Federal, State or local agencies.
(e) Savings Clause.--Nothing in this section shall be
construed to authorize direct control of the operations
conducted by the Directorate of Border and Transportation
Security, the Coast Guard, or joint terrorism task forces.
(f) Reports to Congress.--
(1) Annual budget review.--The Director of the
Office of Counternarcotics Enforcement shall, not later
than 30 days after the submission by the President to
Congress of any request for expenditures for the
Department, submit to the Committees on Appropriations
and the authorizing committees of jurisdiction of the
House of Representatives and the Senate a review and
evaluation of such request. The review and evaluation
shall--
(A) identify any request or subpart of any
request that affects or may affect the
counternarcotics activities of the Department
or any of its subdivisions, or that affects the
ability of the Department or any subdivision of
the Department to meet its responsibility to
stop the entry of illegal drugs into the United
States;
(B) describe with particularity how such
requested funds would be or could be expended
in furtherance of counternarcotics activities;
and
(C) compare such requests with requests for
expenditures and amounts appropriated by
Congress in the previous fiscal year.
(2) Evaluation of counternarcotics activities.--The
Director of the Office of Counternarcotics Enforcement
shall, not later than February 1 of each year, submit
to the Committees on Appropriations and the authorizing
committees of jurisdiction of the House of
Representatives and the Senate a review and evaluation
of the counternarcotics activities of the Department
for the previous fiscal year. The review and evaluation
shall--
(A) describe the counternarcotics
activities of the Department and each
subdivision of the Department (whether
individually or in cooperation with other
subdivisions of the Department, or in
cooperation with other branches of the Federal
Government or with State or local agencies),
including the methods, procedures, and systems
(including computer systems) for collecting,
analyzing, sharing, and disseminating
information concerning narcotics activity
within the Department and between the
Department and other Federal, State, and local
agencies;
(B) describe the results of those
activities, using quantifiable data whenever
possible;
(C) state whether those activities were
sufficient to meet the responsibility of the
Department to stop the entry of illegal drugs
into the United States, including a description
of the performance measures of effectiveness
that were used in making that determination;
and
(D) recommend, where appropriate, changes
to those activities to improve the performance
of the Department in meeting its responsibility
to stop the entry of illegal drugs into the
United States.
(3) Classified or law enforcement sensitive
information.--Any content of a review and evaluation
described in the reports required in this subsection
that involves information classified under criteria
established by an Executive order, or whose public
disclosure, as determined by the Secretary, would be
detrimental to the law enforcement or national security
activities of the Department or any other Federal,
State, or local agency, shall be presented to Congress
separately from the rest of the review and evaluation.

SEC. 879. [6 U.S.C. 459] OFFICE OF INTERNATIONAL AFFAIRS.

(a) Establishment.--There is established within the Office
of the Secretary an Office of International Affairs. The Office
shall be headed by a Director, who shall be a senior official
appointed by the Secretary.
(b) Duties of the Director.--The Director shall have the
following duties:
(1) To promote information and education exchange
with nations friendly to the United States in order to
promote sharing of best practices and technologies
relating to homeland security. Such exchange shall
include the following:
(A) Exchange of information on research and
development on homeland security technologies.
(B) Joint training exercises of first
responders.
(C) Exchange of expertise on terrorism
prevention, response, and crisis management.
(2) To identify areas for homeland security
information and training exchange where the United
States has a demonstrated weakness and another friendly
nation or nations have a demonstrated expertise.
(3) To plan and undertake international
conferences, exchange programs, and training
activities.
(4) To manage international activities within the
Department in coordination with other Federal officials
with responsibility for counter-terrorism matters.

SEC. 880. [6 U.S.C. 460] PROHIBITION OF THE TERRORISM INFORMATION AND
PREVENTION SYSTEM.

Any and all activities of the Federal Government to implement the proposed component program of the Citizen Corps known as Operation TIPS (Terrorism Information and Prevention System) are hereby prohibited.

SEC. 881. [6 U.S.C. 461] REVIEW OF PAY AND BENEFIT PLANS.

Notwithstanding any other provision of this Act, the Secretary shall, in consultation with the Director of the Office of Personnel Management, review the pay and benefit plans of each agency whose functions are transferred under this Act to the Department and, within 90 days after the date of enactment, submit a plan to the President of the Senate and the Speaker of the House of Representatives and the appropriate committees and subcommittees of Congress, for ensuring, to the maximum extent practicable, the elimination of disparities in pay and benefits throughout the Department, especially among law enforcement personnel, that are inconsistent with merit system principles set forth in section 2301 of title 5, United States Code.

SEC. 882. [6 U.S.C. 462] OFFICE FOR NATIONAL CAPITAL REGION
COORDINATION.

(a) Establishment.--
(1) In general.--There is established within the
Office of the Secretary the Office of National Capital
Region Coordination, to oversee and coordinate Federal
programs for and relationships with State, local, and
regional authorities in the National Capital Region, as
defined under section 2674(f)(2) of title 10, United
States Code.
(2) Director.--The Office established under
paragraph (1) shall be headed by a Director, who shall
be appointed by the Secretary.
(3) Cooperation.--The Secretary shall cooperate
with the Mayor of the District of Columbia, the
Governors of Maryland and Virginia, and other State,
local, and regional officers in the National Capital
Region to integrate the District of Columbia, Maryland,
and Virginia into the planning, coordination, and
execution of the activities of the Federal Government
for the enhancement of domestic preparedness against
the consequences of terrorist attacks.
(b) Responsibilities.--The Office established under
subsection (a)(1) shall--
(1) coordinate the activities of the Department
relating to the National Capital Region, including
cooperation with the Office for State and Local
Government Coordination;
(2) assess, and advocate for, the resources needed
by State, local, and regional authorities in the
National Capital Region to implement efforts to secure
the homeland;
(3) provide State, local, and regional authorities
in the National Capital Region with regular
information, research, and technical support to assist
the efforts of State, local, and regional authorities
in the National Capital Region in securing the
homeland;
(4) develop a process for receiving meaningful
input from State, local, and regional authorities and
the private sector in the National Capital Region to
assist in the development of the homeland security
plans and activities of the Federal Government;
(5) coordinate with Federal agencies in the
National Capital Region on terrorism preparedness, to
ensure adequate planning, information sharing,
training, and execution of the Federal role in domestic
preparedness activities;
(6) coordinate with Federal, State, local, and
regional agencies, and the private sector in the
National Capital Region on terrorism preparedness to
ensure adequate planning, information sharing,
training, and execution of domestic preparedness
activities among these agencies and entities; and
(7) serve as a liaison between the Federal
Government and State, local, and regional authorities,
and private sector entities in the National Capital
Region to facilitate access to Federal grants and other
programs.
(c) Annual Report.--The Office established under subsection
(a) shall submit an annual report to Congress that includes--
(1) the identification of the resources required to
fully implement homeland security efforts in the
National Capital Region;
(2) an assessment of the progress made by the
National Capital Region in implementing homeland
security efforts; and
(3) recommendations to Congress regarding the
additional resources needed to fully implement homeland
security efforts in the National Capital Region.
(d) Limitation.--Nothing contained in this section shall be
construed as limiting the power of State and local governments.

SEC. 883. [6 U.S.C. 463] REQUIREMENT TO COMPLY WITH LAWS PROTECTING
EQUAL EMPLOYMENT OPPORTUNITY AND PROVIDING
WHISTLEBLOWER PROTECTIONS.