[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6378 Introduced in House (IH)]







109th CONGRESS
  2d Session
                                H. R. 6378

 To amend the Homeland Security Act of 2002 to direct the Secretary of 
Homeland Security to ensure all agencies of the Department of Homeland 
Security that administer Federal assistance develop and maintain proper 
 internal management controls to prevent and detect waste, fraud, and 
                     abuse, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            December 6, 2006

 Mr. Rogers of Alabama (for himself, Mr. Meek of Florida, Mr. King of 
  New York, Mr. Thompson of Mississippi, Mr. Pascrell, Mr. McCaul of 
 Texas, Mr. Pearce, Mr. Souder, Ms. Jackson-Lee of Texas, Mr. Jindal, 
 and Ms. Harris) introduced the following bill; which was referred to 
the Committee on Homeland Security, and in addition to the Committee on 
   Small Business, for a period to be subsequently determined by the 
  Speaker, in each case for consideration of such provisions as fall 
           within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL



 To amend the Homeland Security Act of 2002 to direct the Secretary of 
Homeland Security to ensure all agencies of the Department of Homeland 
Security that administer Federal assistance develop and maintain proper 
 internal management controls to prevent and detect waste, fraud, and 
                     abuse, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``September 11th Lessons Learned in 
Preventing Waste, Fraud, and Abuse Implementation Act of 2006''.

SEC. 2. FINDINGS.

    The Congress finds the following:
            (1) A number of allegations have been raised publicly 
        regarding the waste, fraud, abuse, and lax management of 
        Federal assistance funds provided to help New York City respond 
        to and recover from the terrorist attacks of September 11, 
        2001.
            (2) In order to review these allegations, House of 
        Representatives Committee on Homeland Security Chairman Peter 
        T. King of New York requested an examination by the Homeland 
        Security Subcommittee on Management, Integration, and 
        Oversight.
            (3) Under the leadership of the Homeland Security 
        Subcommittee on Management, Integration, and Oversight Chairman 
        Mike Rogers of Alabama and Ranking Member Kendrick B. Meek of 
        Florida, the Subcommittee conducted a six-month bipartisan 
        review, including a retrospective examination of funding 
        already expended on initial response and recovery, and a 
        prospective review of fraud controls in place for the balance 
        of funding to be used on rebuilding Lower Manhattan's 
        infrastructure.
            (4) As part of its review, the Subcommittee held a series 
        of three hearings focusing on Response, Recovery, and 
        Rebuilding on July 12 through 13, 2006. Committee Members 
        received testimony from senior Federal officials, Inspectors 
        General, State and city development agencies, local 
        investigators, private integrity monitors, Federal and local 
        prosecutors, the American Red Cross, community advocates, and a 
        victims' organization.
            (5) The Subcommittee submitted a report of its findings to 
        the Committee on Homeland Security in August 2006 for official 
        publication.
            (6) This Act reflects the lessons learned through the 
        Subcommittee's examination of the administration of Federal 
        financial assistance to New York to respond to and recover from 
        the terrorist attacks of September 11, 2001.
            (7) This Act includes disaster assistance reforms that will 
        significantly contribute to controlling fraud and saving 
        taxpayers' dollars in the future.

SEC. 3. WASTE, FRAUD, AND ABUSE CONTROLS.

    (a) In General.--Title VII of the Homeland Security Act of 2002 (6 
U.S.C. 341 et seq.) is amended--
            (1) by inserting before section 701 the following:

                ``Subtitle A--General Provisions''; and

            (2) by adding at the end the following:

             ``Subtitle B--Waste, Fraud, and Abuse Controls

``SEC. 721. REQUIREMENT TO ESTABLISH FRAUD CONTROLS.

    ``(a) In General.--The Secretary shall take such actions as are 
necessary to ensure that--
            ``(1) all agencies of the Department administering Federal 
        assistance to respond to acts of terrorism, natural disasters, 
        or other emergencies shall develop and maintain proper internal 
        management controls to detect, prevent, and deter waste, fraud, 
        and abuse;
            ``(2) databases used by the Department to collect 
        information on eligible recipients of such Federal assistance 
        must be integrated with disbursement and payment records; and
            ``(3) such integration is designed to identify ineligible 
        applications.
    ``(b) Audits and Reviews Required.--Not later than one year after 
the date of enactment of this section, the Inspector General of the 
Department shall review each relevant database for Federal assistance 
programs administered by the Department in effect on the date of the 
enactment of this section to assess the implementation of the internal 
controls required under this section. The Inspector General of the 
Department shall immediately report to Congress each recommendation or 
finding under this subsection.
    ``(c) Certification Required.--The Secretary shall certify to 
Congress on a biennial basis that internal controls required under this 
section are in place and operational. The first such certification 
shall be made within 90 days after the date of enactment of this 
section.

``SEC. 722. ENHANCED ACCOUNTABILITY FOR FEDERAL ASSISTANCE.

    ``(a) Recipients of Federal Assistance.--Each State, local, tribal, 
and non-profit entity that receives Federal assistance funds in 
response to an act of terrorism, natural disaster, or other emergency 
shall report to the disbursing Federal agency six months after the 
initial disbursement of resources and every six months thereafter 
regarding the expenditure of such funds.
    ``(b) Contents.--The report shall include a description of--
            ``(1) each project or program that received Federal 
        assistance;
            ``(2) the entity administering the program or project; and
            ``(3) the dates and amounts disbursed, allocated, and 
        expended.

``SEC. 723. UTILIZATION OF PRIVATE INTEGRITY MONITORS.

    ``(a) In General.--The Secretary may utilize Private Integrity 
Monitors to monitor and provide greater accountability for Department 
of Homeland Security contracts using Federal funding provided in 
response to a major disaster, act of terrorism, or other emergency, 
including contracts for debris removal and the repair or reconstruction 
of damaged infrastructure.
    ``(b) Reporting.--The Private Integrity Monitor shall submit 
periodic reports to the Secretary and the Inspector General of the 
Department, as determined by the Secretary.
    ``(c) Private Integrity Monitor Defined.--In this section the term 
``Private Integrity Monitor'' means an independent, private sector firm 
with specialized legal, auditing, investigative, and loss prevention 
expertise necessary to ensure compliance with relevant laws and 
regulations to detect, prevent, and deter waste, fraud, and abuse by a 
contractor or subcontractor.

``SEC. 724. FRAUD PREVENTION TRAINING PROGRAM.

    ``(a) Training Program Required.--The Secretary shall develop and 
implement a program to provide training on the detection and prevention 
of waste, fraud, and abuse of Federal assistance funds and services 
during the response to or recovery from acts of terrorism, natural 
disasters, or other emergencies.
    ``(b) Individuals Eligible for Training.--Under the training 
program required under subsection (a), the Secretary shall provide 
training to--
            ``(1) employees and contractors of the Department;
            ``(2) employees, contractors, and volunteers of any State, 
        local, or tribal government entity; and
            ``(3) employees, contractors, and volunteers of non-profit 
        organizations that assist in the administration of Federal 
        assistance funds and services provided in response to acts of 
        terrorism, natural disasters, or other national emergencies.

``SEC. 725. CONFIRMATION OF IDENTITY AND ELIGIBILITY OF APPLICANTS.

    ``(a) In General.--Any Federal, State, local, or tribal agency that 
disburses Federal grants, loans, services, and other assistance in 
response to or for the recovery from acts of terrorism, natural 
disasters, or other emergencies, shall make reasonable efforts to 
confirm the identity and eligibility of the applicant for such 
assistance without placing undue burden on the applicant.
    ``(b) Information Sharing.--Any State, local, or tribal government 
entity or non-profit entity that administers Federal assistance funds 
or services to individuals affected by acts of terrorism, natural 
disasters, or other emergencies shall share information with the 
Department for purposes of making eligibility determinations, 
disseminating benefits, connecting families, locating missing persons, 
and preventing waste, fraud, and abuse, in a manner consistent with 
Federal protections under section 552a of title 5, United States Code, 
popularly known as the Privacy Act of 1974, about any recipient of such 
assistance, as necessary.
    ``(c) Enhanced Information Sharing Between Federal, State, Local, 
Tribal and Nonprofit Organizations in the Disbursement of Federal 
Assistance Funds.--The Secretary shall ease the burden for individuals 
in need of assistance due to acts of terrorism, natural disasters, or 
other Federal emergencies and enhance accountability by initiating a 
single application for assistance that can be shared among agencies 
providing assistance. The single application shall include clear 
language on, and acknowledgment by the applicant of, the penalties for 
providing false statements under section 1001 of title 18, United 
States Code, to ensure veracity of information provided. The Secretary 
shall maintain the information collected in a database to enable data-
matching for eligibility determination and avoidance of duplicative 
payments.

``SEC. 726. OVERSIGHT OF LOAN APPLICANT ELIGIBILITY.

    ``(a) Lender Documentation of Applicant Eligibility.--The 
Administrator of the Small Business Administration, in carrying out any 
loan program of the Administration to help individuals and businesses 
recover from a terrorist attack, natural disaster, or other emergency, 
shall ensure that each lender participating in the program--
            ``(1) collects, verifies, and maintains information 
        regarding the eligibility of each loan applicant; and
            ``(2) produces such information whenever the Administrator 
        so requests.
    ``(b) Oversight Required.--The Administrator, in carrying out the 
loan programs referred to in subsection (a), shall conduct oversight of 
lenders participating in those programs to ensure that each recipient 
of a loan under such a program is in fact eligible for that loan, as 
provided under law and under the regulations and guidelines of the 
Administration. The oversight required by this subsection shall include 
audits and document reviews, and may include any other means that the 
Administrator considers appropriate.

``SEC. 727. DETERMINING `SMALL BUSINESS' FOR ELIGIBILITY PURPOSES.

    ``The head of any Federal agency, in carrying out any program of 
that agency to help individuals and businesses recover from a terrorist 
attack, natural disaster, or other emergency, shall, to the extent the 
purpose of the program is to help small businesses, ensure that the 
determination whether an individual or business is considered a `small 
business' is made under the regulations and guidelines of the Small 
Business Administration.

``SEC. 728. ASSESSMENT OF JUDICIAL NEEDS.

    ``The Secretary shall encourage local communities to assess the 
financial and resource needs of the community to prosecute cases of 
fraud and provide necessary legal services in advance of an act of 
terrorism, natural disaster, or other emergency.

``SEC. 729. STRENGTHENING THE CONTRACT REVIEW PROCESS.

    ``(a) Information Regarding Contract Performance.--Before awarding, 
renewing, or extending a contract, including those awarded to a 
contractor that has previously provided or currently provides goods or 
services to the Department, the Secretary, acting through the 
appropriate contracting officer or officers of the Department, shall 
require the contractor to submit information regarding the contractor's 
past and current performance of Federal, State, and local government 
and private sector contracts. The information shall include--
            ``(1) reviews of the contractor's performance on Federal, 
        State, local, or tribal government contracts during the 3-year 
        period preceding the submission by the contractor of an offer 
        for the contract concerned;
            ``(2) decisions by any procurement entity to terminate a 
        contract with the contractor; and
            ``(3) decisions evincing a refusal during such period to 
        exercise a renewal option with the contractor.
    ``(b) Contact of Relevant Officials.--As part of any review of a 
contractor's past performance conducted under subsection (a), the 
Secretary, acting through an appropriate contracting officer of the 
Department, shall contact the relevant office that administered or 
oversaw any contract performed by that contractor during the 3-year 
period preceding the date on which the review begins.
    ``(c) Consideration of Contractor Past Performance.--In awarding a 
contract to a contractor, the Secretary shall require the past 
performance of that contractor, based on the review conducted under 
subsection (a), be a factor in the decision to award the contract 
concerned.

``SEC. 730. SMALL BUSINESS DATABASE FOR FEDERAL CONTRACTING RELATED TO 
              MAJOR DISASTERS AND EMERGENCY ASSISTANCE ACTIVITIES.

    ``(a) Establishment of Database.--The Secretary shall establish and 
maintain a database that contains information about small business 
entities for purposes of Federal contracting related to assistance 
activities conducted in response to and recovery from acts of 
terrorism, natural disasters, and other emergencies.
    ``(b) Included Information.--The database under subsection (a) 
shall include the following information about each small business 
entity included in the database:
            ``(1) The name of the small business entity.
            ``(2) The location of the small business entity.
            ``(3) The area served by the small business entity.
            ``(4) The type of good or service provided by the small 
        business entity.
            ``(5) Whether the small business entity is--
                    ``(A) a small business entity owned and controlled 
                by socially and economically disadvantaged individuals;
                    ``(B) a small business entity owned and controlled 
                by women; or
                    ``(C) a small business entity owned and controlled 
                by service-disabled veterans.
    ``(c) Source of Information.--
            ``(1) Submission.--The database may only contain such 
        information about a small business entity as is submitted by 
        the small business entity or added by the Department.
            ``(2) Attestation.--Each small business entity submitting 
        information to the database shall submit--
                    ``(A) an attestation that the information submitted 
                is true; and
                    ``(B) documentation supporting such attestation.
            ``(3) Verification.--The Secretary shall verify only that 
        the documentation submitted by each small business entity 
        supports the information submitted by that small business 
        entity.
    ``(d) Availability of Database.--The Secretary shall make the 
database generally available on the Internet website of the Department.
    ``(e) Consultation of Database.--Before awarding a Federal contract 
for a disaster-related activity, a component of the Department shall 
consult the database established under this section.
    ``(f) Database Integration.--The Secretary shall integrate the 
database established under this section into any other procurement-
related database maintained by the Secretary.
    ``(g) Definitions.--For purposes of this section, the terms `small 
business entity', `small business entity owned and controlled by 
socially and economically disadvantaged individuals', `small business 
entity owned and controlled by women', and `small business entity owned 
and controlled by service-disabled veterans' shall have the meanings 
given the terms `small business concern', `small business concern owned 
and controlled by socially and economically disadvantaged individuals', 
`small business concern owned and controlled by women', and `small 
business concern owned and controlled by service-disabled veterans', 
respectively, under the Small Business Act (15 U.S.C. 631 et seq.).

``SEC. 731. MAINTAINING FEDERAL PROPRIETARY RIGHTS.

    ``The Secretary shall ensure that contracts awarded by the 
Department, as appropriate, include a clause maintaining proprietary 
rights to materials produced using Federal funding, including contracts 
for videos and photographs related to acts of terrorism, natural 
disasters, or other emergencies.''.
    (b) Clerical Amendment.--The table of contents in section 1(b) of 
such Act is amended--
            (1) by inserting before the item relating to section 701 
        the following:

                ``Subtitle A--General Provisions''; and

            (2) by adding at the end of the items relating to title VII 
        the following:

             ``Subtitle B--Waste, Fraud, and Abuse Controls

``Sec. 721. Requirement to establish fraud controls.
``Sec. 722. Enhanced accountability for Federal assistance.
``Sec. 723. Utilization of Private Integrity Monitors.
``Sec. 724. Fraud prevention training program.
``Sec. 725. Confirmation of identity and eligibility of applicants.
``Sec. 726. Oversight of loan applicant eligibility.
``Sec. 727. Determining `small business' for eligibility purposes.
``Sec. 728. Assessment of judicial needs.
``Sec. 729. Strengthening the contract review process.
``Sec. 730. Small business database for Federal contracting related to 
                            major disasters and emergency assistance 
                            activities.
``Sec. 731. Maintaining Federal proprietary rights.''.

SEC. 4. DEPUTY INSPECTOR GENERAL FOR RESPONSE AND RECOVERY.

    (a) In General.--Subtitle B of title VIII of the Homeland Security 
Act of 2002 is amended by adding at the end the following:

``SEC. 813 DEPUTY INSPECTOR GENERAL FOR RESPONSE AND RECOVERY.

    ``(a) Establishment.--There is established the position of Deputy 
Inspector General for Response and Recovery within the Office of the 
Inspector General of the Department.
    ``(b) Appointment.--The Deputy Inspector General for Response and 
Recovery shall be appointed--
            ``(1) by the Inspector General of the Department; and
            ``(2) solely on the basis of integrity and demonstrated 
        ability in auditing, financial analysis, law, management 
        analysis, public administration, or investigations.
    ``(c) Reporting and Status as SES Position.--The Deputy Inspector 
General for Response and Recovery--
            ``(1) shall report to, and be under the direct authority 
        and supervision of, the Inspector General; and
            ``(2) shall serve as a career member of the Senior 
        Executive Service.
    ``(d) Duties.--
            ``(1) Audits and investigations.--The Deputy Inspector 
        General for Response and Recovery shall, in coordination with 
        Inspectors General of other Federal departments, as 
        appropriate, conduct, supervise, and coordinate audits and 
        investigations of the treatment, handling, and expenditure of 
        amounts appropriated or otherwise made available for response 
        to and recovery from an act of terrorism, natural disaster, or 
        other emergency by the Federal Government, and of the programs, 
        operations, and contracts carried out utilizing such funds, 
        including--
                    ``(A) the oversight and accounting of obligations 
                and expenditures;
                    ``(B) the monitoring and review of reconstruction 
                activities;
                    ``(C) the monitoring and review of contracts and 
                grants;
                    ``(D) the monitoring and review of the transfer of 
                such funds and associated information sharing between 
                and among departments, agencies, and entities of the 
                United States, and private nongovernmental entities; 
                and
                    ``(E) the maintenance of records on the use of such 
                funds to facilitate future audits and investigations.
            ``(2) Audits of federal disaster assistance funds.--The 
        Deputy Inspector General for Response and Recovery shall 
        conduct regular audits, not less than every six months, of 
        departmental entities administering Federal disaster assistance 
        funds and their disbursements of such funds until the entire 
        amount appropriated to the agency has been disbursed or until 
        the project is completed, whichever is later.
            ``(3) Establishment of a fraud task force.--The Deputy 
        Inspector General for Response and Recovery shall establish, as 
        appropriate, a Fraud Task Force to detect, prevent, and deter 
        waste, fraud, and abuse with respect to Federal disaster 
        assistance provided to respond to an act of terrorism, natural 
        disaster, or other emergency. The Deputy Inspector General for 
        Response and Recovery shall coordinate with the Department of 
        Justice, and with other Federal, State, local, and tribal 
        entities, as appropriate, regarding representation on the Fraud 
        Task Force.
            ``(4) Fraud tip line.--The Inspector General of the 
        Department shall maintain the Fraud Tip Line of the Department 
        to facilitate the collection of allegations of waste, fraud, 
        and abuse of Federal assistance funds. Immediately after an act 
        of terrorism, natural disaster, or other emergency the 
        Inspector General shall take reasonable steps to expand and 
        publicize the Fraud Tip Line.
            ``(5) Avoidance of duplication.--The Inspector General of 
        the Department shall ensure, to the greatest extent possible, 
        that the activities of the Deputy Inspector General for 
        Response and Recovery do not duplicate audits and 
        investigations of Inspectors General and other auditors of 
        Federal departments and agencies, and State and local 
        government entities.
    ``(e) Financial Management Matters.--In order to assist the Deputy 
Inspector General for Response and Recovery in carrying out this 
section, the heads of all departmental entities receiving or 
distributing Federal funds to respond to acts of terrorism, natural 
disasters, or other emergencies shall establish and maintain budgetary 
procedures to distinguish funds related to response and relief efforts 
from other agency funds.
    ``(f) Funding.--
            ``(1) Authorization of appropriations.--There is authorized 
        to be appropriated for operations of the Office of the Deputy 
        Inspector General for Response and Recovery $15,000,000 for 
        each fiscal year.
            ``(2) Transfers of funds.--In addition to amounts 
        authorized by paragraph (1), there shall be transferred to the 
        Inspector General not less than 0.005 percent of the first 
        $5,000,000,000 of the amount appropriated for response to or 
        recovery from an act of terrorism, natural disaster, or other 
        emergency, in order to carry out the duties of the Inspector 
        General to audit and execute oversight of such funds, as 
        appropriate. Amounts transferred under this paragraph shall 
        remain available until expended.
            ``(3) Authorization of additional appropriations.--If more 
        than $5,000,000,000 is appropriated for response to or recovery 
        from an act of terrorism, natural disaster, or other emergency, 
        there are authorized to be appropriated to the Inspector 
        General such additional sums as may be appropriate to audit and 
        execute oversight of such funds.''.
    (b) Clerical Amendment.--The table of contents in section 1(b) of 
such Act is further amended by inserting after the item related to 
section 812 the following:

``Sec. 813. Deputy Inspector General for Response and Recovery.''.
    (c) Deadline for Appointment.--The Inspector General of the 
Department of Homeland Security shall appoint the Deputy Inspector 
General for Response and Recovery under this section not later than 90 
days after the date of enactment of this Act.
                                 <all>