[House Hearing, 107 Congress]
[From the U.S. Government Publishing Office]



                                                          H. Hrg. 107-3
 
          H.R. 5005, THE HOMELAND SECURITY ACT OF 2002, DAY 3

=======================================================================

                                HEARING

                               before the

                 SELECT COMMITTEE ON HOMELAND SECURITY
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED SEVENTH CONGRESS

                             SECOND SESSION

                                   on

          H.R. 5005, THE HOMELAND SECURITY ACT OF 2002, DAY 3

                               ----------                              

                             July 17, 2002

                               ----------                              

                            Serial No. 107-3

                               ----------                              

    Printed for the use of the Select Committee on Homeland Security







          H.R. 5005, THE HOMELAND SECURITY ACT OF 2002, DAY 3

=======================================================================

                                HEARING

                               before the

                          SELECT COMMITTEE ON
                           HOMELAND SECURITY
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED SEVENTH CONGRESS

                             SECOND SESSION

                               __________

                             JULY 17, 2002

                               __________

                            Serial No. 107-3

                               __________

    Printed for the use of the Select Committee on Homeland Security


 Available via the World Wide Web: http://www.access.gpo.gov/congress/
                                 house

                               __________

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                 SELECT COMMITTEE ON HOMELAND SECURITY

                   RICHARD K. ARMEY, Texas, Chairman

TOM DeLAY, Texas                     NANCY PELOSI, California
J. C. WATTS, Jr., Oklahoma           MARTIN FROST, Texas
DEBORAH PRYCE, Ohio                  ROBERT MENENDEZ, New Jersey
ROB PORTMAN, Ohio                    ROSA L. DeLAURO, Connecticut

                                  (ii)




                            C O N T E N T S

                               __________
                                                                   Page

Testimony of:
    The Honorable C.W. Bill Young, Chairman, Committee on 
      Appropriations.............................................     7
    The Honorable David R. Obey, Ranking Minority Member, 
      Committee on Appropriations................................    11
    The Honorable Ike Skelton, Ranking Minority Member, Committee 
      on Armed Services..........................................    45
    The Honorable W.J. (Billy) Tauzin, Chairman, Committee on 
      Energy and Commerce........................................    54
    The Honorable John D. Dingell, Ranking Minority Member, 
      Committee on Energy and Commerce...........................    60
    The Honorable Dan Burton, Chairman, Committee on Government 
      Reform.....................................................    70
    The Honorable Henry A. Waxman, Ranking Minority Member, 
      Committee on Government Reform.............................    75
    The Honorable Porter J. Goss, Chairman, Permanant Select 
      Committee on Intelligence..................................   125
    The Honorable Nancy Pelosi, Ranking Minority Member, 
      Permanant Select Committee on Intelligence.................   130
    The Honorable Henry Hyde, Chairman, Committee on 
      International Relations....................................   116
    The Honorable Tom Lantos, Ranking Minority Member, Committee 
      on International Relations.................................   117
    The Honorable Sherwood L. Boehlert, Chairman, Committee on 
      Science....................................................   141
    The Honorable Ralph M. Hall, Ranking Minority Member, 
      Committee on Science.......................................   145
    The Honorable Don Young, Chairman, Committee on 
      Transportation and Infrastucture...........................   169
    The Honorable James L. Oberstar, Ranking Minority Member, 
      Committee on Transportation and Infrastructure.............   179
    The Honorable William M. Thomas, Chairman, Committee on Ways 
      and Means..................................................   190
    The Honorable David M. Walker, Comptroller General, General 
      Accounting Office..........................................   199
Material Submitted for the Record:
    Opening Statements of Select Committee Members...............     7
    Statement of the Honorable Michael G. Oxley, Chairman, 
      Committee on Financial Services............................   225
Appendix--Recommendations of the Standing Committees:
    Committee on Agriculture.....................................   227
    Committee on Appropriations..................................   239
    Committee on Armed Services..................................   249
    Committee on Energy and Commerce.............................   269
    Committee on Financial Services..............................   297
    Committee on Government Reform...............................   303
    Permanant Select Committee on Intelligence...................   365
    Committee on International Relations.........................   371
    Committee on the Judiciary...................................   378
    Committee on Science.........................................   427
    Committee on Transportation and Infrastructure...............   454
    Committee on Ways and Means..................................   481

                                 (iii)


          H.R. 5005, THE HOMELAND SECURITY ACT OF 2002, DAY 3

                              ----------                              


                        WEDNESDAY, JULY 17, 2002

                     U.S. House of Representatives,
                     Select Committee on Homeland Security,
                                                    Washington, DC.
    The committee met, pursuant to call, at 10:47 a.m., in Room 
345, Cannon House Office Building, Hon. Richard K. Armey 
[chairman of the committee] presiding.
    Present: Representatives Armey, DeLay, Watts, Pryce, 
Portman, Pelosi, Frost, Menendez, and DeLauro.
    Chairman Armey. The select committee will come to order. 
The Chair is advised that Chairman Young is on the way, and the 
Chair believes we can begin proceedings and have him join us in 
time for him to give his statement.
    Mr. Obey, we welcome you here this morning. It is the 
practice of this committee to have two opening statements, one 
on each side, and to have those remaining members on the 
committee place any opening statements they have in the record. 
So, without objection, we will place all the opening statements 
in the record, and the Chair will recognize the gentleman from 
Ohio, Mr. Portman, for a brief opening statement.
    Mr. Portman. Thank you, Mr. Chairman. Mr. Chairman, the 
shock of the September 11 attacks in New York and Pennsylvania 
and here at the Pentagon is still very much with us. In a 
single morning, 19 men bent on terror and destruction killed 
more innocent United States civilians than did all our previous 
foreign enemies combined. The grief of that sudden loss was 
overwhelming, and part of what prevents that national grief 
from healing is the reality that that threat is still very much 
with us.
    We are here today to do whatever we possibly can to counter 
that threat and to avoid more loss of innocent life. Our 
Federal Government and we as Members of Congress have no 
greater responsibility. The major problem I see with our 
current system of homeland security is that it is uncoordinated 
and spread too thin. Everyone is in charge, and no one is in 
charge. There is no accountability in such a system.
    The dangerous threat we all must now acknowledge requires 
new thinking and a new approach. That is laid out clearly in 
the National Strategy on Homeland Security we saw yesterday 
unveiled by the President. The strategy is the culmination of 
lots of work, years of thoughtful study, tracing back well 
before September 11. The Hart-Rudman Commission and other 
studies have helped us think about how government can best 
deploy assets to secure us here at home. The President's 
strategy also reflects the good work of many Members of 
Congress.
    Yesterday we heard from Representatives Mac Thornberry, 
Jane Harman, Ellen Tauscher, and Jim Gibbons, who introduced 
their own legislation to create a new agency. Senator Joe 
Lieberman has taken the lead in the Senate. Two members of our 
own select committee, Mr. Chairman, J.C. Watts and Bob 
Menendez, have both worked hard in this area, mindful of 
unspeakable tragedies that occurred so close to their own homes 
and so deeply affecting so many of their own constituents.
    Building on this good work, the President's National 
Strategy lays out three strategic objectives: prevention of 
attacks, reducing our vulnerabilities, and minimizing damage. 
This strategy provides us with a clear framework to align our 
resources, people, and capital and to align responsibility and 
accountability to the task of homeland security. Of course, Mr. 
Chairman, central to that new alignment is the creation of a 
new department. Putting the responsibility for homeland 
security within a single unified structure will make us more 
efficient and more effective against attacks. It won't make us 
immune from terrorism, but it will make us safer.
    Over the past several weeks this Congress has acted 
quickly, but thoughtfully, to pass legislation needed to create 
this new department. The standing committees of Congress have 
moved with dispatch on a bipartisan basis to mark up provisions 
of this legislation under their jurisdiction, and we will hear 
from them today. The select committee has heard thoughtful 
testimony from nine Cabinet Secretaries, the director of the 
Office of Personnel Management, and several of our colleagues.
    I have been struck by the emphasis in this testimony on the 
importance of creating a lean, agile 21st century agency with 
budget, organizational, and human resource flexibility to meet 
the challenge. We have done this before, including in 1998 when 
I worked with Senator Bob Kerry on reorganizing the Internal 
Revenue Service, a troubled Agency with over 100,000 employees. 
We gave the IRS needed flexibility on personnel and management, 
and they have used it fully to begin to change the culture and 
to improve service and morale.
    This new Department needs to have flexibility, too, for the 
challenge of consolidation and creating a new culture of 
urgency is great and the stakes couldn't be higher. Of course, 
Congress must retain oversight and can and should use it 
aggressively. What we are setting out to do is to create a new 
Agency, not for this administration but for our country, into 
the foreseeable future. And Congress will be absolutely key to 
its successful implementation.
    Today's witnesses bring with them a special expertise in 
the specific affected agencies. They have been the ones 
responsible for their oversight. We need their input and 
ongoing expertise.
    Finally, Mr. Chairman, I want to commend you, Minority Whip 
Pelosi, and my select committee colleagues for the 
extraordinary spirit of nonpartisanship that you have brought 
to these deliberations. We share a passion for fulfilling our 
fundamental responsibility to protect our country, our 
citizens, our families, from this new threat. We must not lose 
sight of that single goal as we work to bring this critical 
legislation forward to our colleagues.
    I look forward to today's testimony and I thank you for the 
time.

  PREPARED STATEMENT OF THE HONORABLE ROB PORTMAN, 2ND DISTIRCT, OHIO

    The shock of the September 11th attacks in New York, Pennsylvania, 
and here at the Pentagon is still very much with us. In a single 
morning, nineteen men bent on terror and destruction killed more 
innocent United States civilians than did all our previous foreign 
enemies combined. The grief of that sudden loss was overwhelming; and 
part of what prevents that national grief from healing is the reality 
that the threat is still very much there. We are here today to do 
whatever we possibly can to counter that threat and avoid more loss of 
innocent lives. Our Federal Government--and we as Members of Congress--
have no greater responsibility.
    The major problem I see with our current system of homeland 
security is that it is uncoordinated and spread too thin--everyone is 
in charge and no one is in charge. There is no accountability in such a 
system. The dangerous threat we all now must acknowledge requires new 
thinking and a new approach.
    That is laid out clearly in the national strategy on homeland 
security unveiled recently by the President. The strategy is not new: 
it is the culmination of years of thoughtful study, tracing back well 
before September 11th. The Hart-Rudman Commission and other studies 
have helped us think about how government can best deploy assets to 
secure us at home from this new insidious threat.
    The President's strategy also reflects the good work of many of our 
colleagues: yesterday we heard from Representatives Mac Thornberry, 
Jane Harmon, Jim Gibbons, and Ellen Tauscher who had introduced their 
own legislation to create a new agency. Senator Joe Lieberman has taken 
the lead in the Senate.
    Two Members of our own Select Committee, J.C. Watts and Robert 
Menendez, have both worked long and hard in this area, mindful of 
unspeakable tragedies that occurred so close to their own homes and 
that so deeply affected so many of their own constituents.
    Building on this good work, the President's National Strategy for 
Homeland Security lays out three clear strategic objectives:
     Prevention of attacks;
     Reducing our vulnerabilities; and
     Minimizing the damage and maximizing the recovery should 
attacks occur.
    This strategy provides us with a clear framework to align our 
resources--people and capital, and align responsibility and 
accountability to the task of homeland security.
    Of course, Mr. Chairman, central to that new alignment is the 
creation of a new Department of Homeland Security. Putting the 
responsibility for our homeland security within a single, unified 
structure will make us more efficient and more effective against 
attacks. It won't make us immune from terrorism, but it will make us 
safer.
    Over the past several weeks, this Congress has acted quickly but 
thoughtfully to pass the legislation needed to create this new 
department. The standing committees of Congress have moved with 
dispatch on a bipartisan basis to mark up the provisions of this 
legislation under their jurisdiction, and we'll hear from them today.
    This Select Committee has heard thoughtful testimony from nine 
Cabinet Secretaries, and several of our colleagues. I have been struck 
by the emphasis in the testimony on the importance of creating a lean, 
agile 21 century agency with both organizational and human resource 
flexibility.
    We have done this before. In 1997 and 1998, I worked with former 
Senator Bob Kerrey on reorganizing the Internal Revenue Service--an 
agency with over 100,000 employees. We gave the I needed flexibility on 
personnel and management--and they have used it fully to improve 
service and morale. This new Department needs to have flexibility too, 
for the challenge of consolidation and creating a new culture of 
urgency is great and the stakes could not be higher.
    Of course, Congress must retain oversight, and can and should use 
it. What we are setting out to do is to create a new agency not for the 
current Administration but for our country into the foreseeable future, 
and Congress will be key to its successful implementation.
    Today's witnesses bring with them a special expertise in the 
specific affected agencies. They have been the ones responsible for 
their oversight, and we need their input and ongoing expertise.
    Finally, Mr. Chairman, I commend you, Minority Whip Pelosi, and my 
Select Committee colleagues for the extraordinary nonpartisan spirit 
you have all brought to these deliberations. We share a passion for 
fulfilling our fundamental responsibility to protect our country, our 
citizens, our families from this new threat. We must not lose sight of 
that single goal as we work to bring this critical legislation forward 
to our colleagues.
    I look forward to today's testimony and thank you for allowing me 
this time.

    Chairman Armey. Thank the gentleman from Ohio. The Chair is 
now pleased to recognize the gentlewoman, Ms. DeLauro.
    Ms. DeLauro. Thank you, Mr. Chairman. Mr. Chairman, since 
the attacks on September 11, Congress and the President have 
come together to ensure our Nation's security, reflecting the 
Nation's renewed unity. Together we have committed to do--.
    Chairman Armey. I wonder if the gentlelady will suspend for 
just a moment and we can invite the Chairman, who has arrived, 
to join Ranking Member Obey at the desk. Mr. Young, you have 
had illness in the family, and we appreciate your effort to be 
here and we want to welcome you to the desk. Ms. DeLauro is 
giving her opening statement, and we will be ready to proceed 
on conclusion of that statement.
    Mr. Young of Florida. Mr. Chairman, thank you very much. 
And I think there are several members of my family here. I 
don't know where they are.
    Chairman Armey. The gentlewoman from Connecticut is giving 
an opening statement and then we will cut to you. Thank you 
again.
    Ms. DeLauro. First of all, it is a pleasure to welcome the 
chairman and the ranking member, Mr. Young and Mr. Obey, here 
this morning.
    Since the attacks on September 11, Congress and the 
President have come together to ensure our Nation's security. 
Reflecting the Nation's renewed unity, together we have 
committed to do what is necessary to win the war on terrorism, 
and now we are prepared to do what is necessary for our 
homeland defense. We have no more solemn responsibility under 
this Constitution.
    I want to sincerely thank all of the chairmen and ranking 
members who will testify before us today for their hard work in 
the past few weeks. You have truly accomplished a Herculean 
task. You are asked to take on the most important issue facing 
our Nation today, protecting our homeland, and to come back in 
just a few weeks with your recommendations on how we should 
address that challenge.
    The committees responded to an historic calling with 
historic bipartisanship, working together to iron out the 
details and make a good idea better. I believe the select 
committee must give the committees' recommendations serious 
consideration as we officially begin to draft this legislation. 
These recommendations carry with them the expertise, the in-
depth knowledge of each of their chairs and ranking members who 
understand perhaps better than anyone how to ensure that we 
successfully marshal our efforts to protect the homeland 
without harming nonsecurity-related duties, responsibilities 
that are equally important.
    As fellow Members, we know how hard you work all year 
round. We know that each of you has an unparalleled level of 
knowledge regarding the agencies in your jurisdictions, and we 
need to take that expertise and knowledge under advisement as 
we prepare to mark up this legislation on Friday.
    As I have said before, I support the creation of the new 
Department to coordinate our homeland security efforts to 
safeguard American citizens. However, I have a number of 
questions and concerns that I hope can be addressed and I 
believe that many of the committees have done so with their 
recommendations.
    I continue to be concerned that transferring the public 
health functions of the Centers for Disease Control and 
biomedical research efforts underway at the National Institutes 
of Health would adversely affect our world-class research 
centers. From a public health standpoint, there is no 
difference between the response to a naturally occurring 
outbreak and one that is deliberately caused. The same labs, 
the same investigators, the same scientific methods, are used 
in either case. Furthermore, the research underway at the NIH 
is the envy of the world, and scientists at the National 
Institutes of Allergy and Infectious Diseases have already 
implemented a strategic plan to guide their bioterrorism 
research. I see no reason to transfer budget control oversight 
or the power to set priorities regarding these responsibilities 
to the new Department. I strongly support the Commerce 
Committee's recommendation to keep those responsibilities where 
they are, while ensuring coordination with the new Department.
    I also have a number of concerns regarding the good 
government provisions in this legislation. We all understand 
the need to safeguard sensitive information relating to our 
national security, but I continue to be concerned about the new 
FOIA exemption which comes despite statements by Ronald L. 
Dick, director of the FBI's National Infrastructure Protection 
Center, that--and I quote--``We believe there are sufficient 
provisions in the FOIA now to protect information that is 
provided to us,'' end quote. If it works for the FBI, the CIA, 
and the Defense Department, why do we need a broader exemption 
for the new Department? Unfortunately, this exemption was 
broadened by the Government Reform Committee, and I hope we are 
given the opportunity to address that problem at a later time.
    The proposal also includes an unnecessary check on the 
Inspector General to investigate and report to Congress on 
issues that might arise. The Defense Department, Justice 
Department, and other agencies already handling sensitive 
information require the Inspector General to report to Congress 
if his or her access to information is impeded. In this 
proposal, the Secretary reports if he or she impedes an 
investigation, a clear conflict of interest. Both the Judiciary 
Committee and the Government Reform Committee have addressed 
this issue, and I am optimistic that we can bring this language 
in line with current Defense Department regulations.
    I pose these questions precisely because we stand firmly 
with the President and the administration on ensuring security. 
We face enemies who leave us no room for error, and we owe the 
American people nothing less. We have a responsibility to get 
this right the first time without compromising the ideals that 
make this country strong.
    I thank the chairman and I thank ranking member Pelosi for 
this opportunity, and I look forward to hearing from our 
colleagues. Thank you, Mr. Chairman.
    Chairman Armey. Thank you.

          PREPARED STATEMENT OF THE HONORABLE ROSA L. DeLAURO

    Thank you, Mr. Chairman. Since the attacks on September 11th, 
Congress and the President have come together to ensure our nation's 
security. Reflecting the nation's renewed unity, together we have 
committed to do what is necessary to win the war on terrorism. And now 
we are prepared to do what is necessary for our homeland defense. We 
have no more solemn responsibility under this Constitution.
    I want to sincerely thank all of the Chairmen and Ranking Members 
who will testify before us today for their hard work in the past few 
weeks. You have truly accomplished a herculean task. You were asked to 
take on the most important issue facing our nation today--protecting 
our homeland--and to come back in just a few weeks with your 
recommendations on how we should address that challenge.
    The Committees responded to a historic calling with historic 
bipartisanship, working together to iron out the details and make a 
good idea better. I believe the Select Committee must give the 
Committees' recommendations serious consideration as we officially 
begin to draft this legislation. These recommendations carry with them 
the expertise and in-depth knowledge of each of their Chairs and 
Ranking Members, who understand perhaps better than anyone how to 
ensure that we successfully marshal our efforts to protect the 
homeland, without harming non-security related duties responsibilities 
that are equally important.
    As fellow Members, we know how hard you work all year round. We 
know that each of you have an unparalleled level of knowledge regarding 
the agencies in your jurisdictions. And I hope that we will take that 
expertise and knowledge under advisement as we prepare to mark up this 
legislation on Friday.
    As I have said before, I support the creation of the new Department 
to coordinate our homeland security efforts to safeguard American 
citizens. However, I have a number of questions and concerns that I 
hope can be addressed, and I believe that many of the committees have 
done so with their recommendations. I continue to be concerned that 
transferring the public health functions of the Centers for Disease 
Control and biomedical research efforts underway at the National 
Institutes of Health would adversely affect our world-class research 
centers. From a public health standpoint, there is no difference 
between the response to a naturally occurring outbreak and one that is 
deliberately caused--the same labs, the same investigators, and the 
same scientific methods are used in either case.
    Furthermore, the research underway at the National Institutes of 
Health is the envy of the world, and scientists at the National 
Institute of Allergy and Infectious Diseases have already implemented a 
strategic plan to guide their bioterrorism research. I see no reason to 
transfer budget control, oversight, or the power to set priorities 
regarding these responsibilities to the new department. I strongly 
support the Commerce Committee's recommendation to keep those 
responsibilities where they are, while ensuring coordination with the 
new department.
    I also have a number of concerns regarding the 'good government' 
provisions in this legislation. We all understand the need to safeguard 
sensitive information relating to national security. But I continue to 
be concerned about the new FOIA exemption, which comes despite 
statements by Ronald L. Dick, director of the FBI's National 
Infrastructure Protection Center, that '[W]e believe there are 
sufficient provisions in the FOIA now to protect information that is 
provided to us.' If it works for the FBI, the CIA, and the Defense 
Department, why do we need a broader exemption for the new department? 
Unfortunately, this exemption was broadened by the Government Reform 
Committee, and I hope we are given the opportunity to address that 
problem at a later time.
    The proposal also includes an unnecessary check on the Inspector 
General to investigate and report to Congress on issues that might 
arise. The Defense Department, Justice Department and other agencies 
already handling sensitive information require the Inspector General to 
report to Congress if his or her access to information is impeded. In 
this proposal, the Secretary reports if he or she impedes an 
investigation--a clear conflict of interest. Both The Judiciary 
Committee and The Government Reform Committee have addressed this 
issue, and I am optimistic that we can bring this language in line with 
current Defense Department regulations.
    I pose these questions precisely because we stand firmly with the 
President and the Administration on ensuring security. We face enemies 
who leave us no room for error, and we owe the American people nothing 
less. We have a responsibility to get this right the first time, 
without compromising the ideals that make this country strong. I thank 
the Chairman and Ranking Member Pelosi for this opportunity, and I look 
forward to hearing from our colleagues.
          STATEMENT FOR THE RECORD OF THE HONORABLE DICK ARMEY
    Today we continue our effort to consider how we can best transform 
our government to address the threats we face in the 21st Century. When 
people wonder how Congress can possibly complete such a large task in a 
short amount of time, they forget the strength that can be found in our 
committee system.
    Each of the committees that we welcome here today-as well as the 
Judiciary Committee from whom we heard yesterday-has met the challenge 
and provided us with their legislative recommendations. They each 
considered portions of the President's proposal that matched their 
jurisdictions and areas of expertise, assuring that the job would be 
done thoroughly.
    That they could also complete this task so swiftly is evidence that 
the Select Committee will likewise be able to finish its work on time.
    Later today we will also extend our welcome David Walker, 
Comptroller General of the United States. As head of the General 
Accounting Office, he will add his experience with the workings of the 
federal government to the detailed presentations we will hear today.
    With so many able speakers, it's obvious that this will be a long, 
but productive, hearing. It is an essential part of our effort to 
provide an open and deliberative process. Every committee of 
jurisdiction will have the opportunity to argue their case and help the 
committee frame its judgments on the key issues at hand.
    This is a common effort against a common enemy--those who hate the 
freedoms and personal liberty that America embodies. As we discuss many 
different points of view on key elements of this proposal, we should 
continue to proceed in the same spirit of cooperation and 
bipartisanship that has made the past several hearings a success.
        STATEMENT FOR THE RECORD OF THE HONORABLE DEBORAH PRYCE
    Thank you Mr. Chairman.
    Today, the Select Committee begins its final day of hearings in 
anticipation of our Friday mark-up of this historic legislation.
    Today's hearing is arguably the most important we have undertaken 
with regard to our ability to produce an effective and mutually 
satisfactory bill for consideration on the House floor. The twelve 
standing committees that reviewed the homeland security legislation 
have given us the benefit of their expertise and long experience with 
the issues under their jurisdictions, and they have done so in a 
bipartisan and collaborative fashion. Today, we will hear directly from 
the committee chairmen and ranking members.
    I am pleased that this select committee has also proceeded in a 
cooperative manner. As Members on both the majority and minority on 
this committee have noted, protecting our nation cuts across party 
lines, and it is a requirement of this process that we work in a 
bipartisan fashion and produce a bill that can gain overwhelming 
support on the floor. Passage of this legislation not only takes us a 
step closer to a vital government reorganization, it sends a message to 
those who would threaten us that we, as a nation, are ready and able to 
rise to this challenge.
    I know that we have all taken great pride in the way that the 
American people have responded following the tragedy of September 11. 
Our government must continue to reflect their spirit and will as we 
undertake difficult tasks to make our nation safe. There are hard 
choices to be made in the times ahead. With regard to this 
reorganization, the committees have already begun tackling these tough 
decisions, and I look forward to learning from their experience, as 
well as from the Comptroller General of the GAO, so that we can perfect 
and create the new Department of Homeland Security.
    Thank you Mr. Chairman.

    Chairman Armey. Gentlemen, let me tell you how pleased we 
are to have the chairman and ranking member of Appropriations 
here this morning. We will, of course, put your written 
statements in the record and we would like to invite you in 
your turns to give your opening statements. We will start with 
you Mr. Young.

 STATEMENT OF THE HON. C.W. BILL YOUNG, CHAIRMAN, COMMITTEE ON 
                         APPROPRIATIONS

    Mr. Young of Florida. Mr. Chairman, thank you very much for 
giving us the opportunity to be here. You all have a tremendous 
and awesome responsibility. Protecting the homeland and the 
people who live in our homeland is a major responsibility, and 
it is probably not going to be easy to get a legislative 
package together that everyone is going to agree on. As you 
prepare the bill, I think you will find that out, but it has to 
be done and I strongly support the President's effort to do 
this.
    I will be brief, Mr. Chairman, because I know you have a 
lot of other witnesses to hear from today, and we also have an 
appropriations bill on the floor which we would like to get 
completed as soon as possible.
    I think Mr. Chairman, this is going to be the largest 
restructuring of our government that most of us can recall, but 
certainly the largest since Pearl Harbor when we reorganized 
the Department of Defense and created the Joint Chiefs and the 
structure that we basically have now in the Executive Branch.
    The Appropriations Committee reported its recommendations 
to the Select Committee last Thursday. We have limited our 
specific recommendations to matters directly affecting the 
jurisdiction of the Appropriations Committee and not to the 
progeam elements of the bill that the President has suggested 
to the House. Namely, we dealt with the transfer authority that 
the Administration is seeking to establish the Department of 
Homeland Security. I hope you have had a chance to review this 
document, because I believe it speaks directly to the 
constitutional authority of the Congress, and not only the 
authority but also the responsibility of the Congress, and the 
separation of powers between the executive and legislative 
branches.
    The Appropriations Committee has been in the forefront of 
strengthening the Nation's capacity to fight terrorism. After 
the attack on September 11, the Appropriations Committee 
brought to the floor a $40 billion supplemental to respond to 
the tragedy that the country was facing. Three days after the 
attack, the bill was passed and it was sent to the President on 
the same day. We worked around the clock to put this 
legislation together. We recognized that there was an immediate 
need and, frankly, we met that need immediately.
    As far as giving flexibility to the President--and I think 
he has done an outstanding job and continues to do so in 
protecting America and fighting the terrorists--I think you all 
recall that the Appropriations Committee recommended giving the 
President $20 billion with no strings attached. The second $20 
billion of that $40 billion bill, did have a requirement to go 
through the appropriations process. I would also suggest to you 
that as of today, according to the budget director of OMB, 46 
percent of that money hasn't been spent or obligated. 
Regardless, the Appropriations Committee did recognize the need 
and we moved quickly and provided the funding necessary to do 
whatever had to be done to meet this tremendous threat: the 
massive recovery effort in New York City, the immediate need to 
increase security both here and abroad, and the war that we 
were about to undertake against the Taliban and al Qaeda.
    The Appropriations Committee is still addressing the needs 
of our country. We are trying to complete the second war 
supplemental to give money to our troops to maintain their 
readiness, to the Intelligence Community, to law enforcement 
and to other agencies for our safety and the security of the 
American people, and for the victims of New York.
    We have tried to provide rescources to promote U.S. Foreign 
policy as we form our coalitions with allies to join together 
in the fight against terrorism. We strongly support efforts to 
improve the management and efficiency of the Nation's homeland 
security activities. In fact, the current administrative 
difficulties troubling a number of key homeland security 
agencies would argue for even more congressional scrutiny and 
oversight. And I can give examples about that if you are 
interested.
    We believe we can accomplish this without sacrificing the 
constitutional process that has served the Nation well for over 
two centuries and the pledge that we all take when we swear our 
oath of office.
    Our recommended amendment to H.R. 5005 is a bipartisan 
proposal. In our view the administration's transfer proposal is 
overly broad and unprecedented and would undermine the 
appropriations that the committee and this Congress carefully 
deliberate every year. H.R. 5005 includes permanent transfer 
authority which would allow the head of the Agency to rewrite 
appropriations bills that were enacted by Congress.
    It is important to support the President in establishing 
this new Department, but we believe this can be accomplished 
under existing law and existing practices.
    Our recommendation does the following: It replaces the 
open-ended transfer authority with a restatement of transfer 
authority that exists in current law, and it provides for 
additional authority, as needed, in subsequent appropriations 
acts.
    We have been told by the administration that they need the 
broad transfer authority to skim enough money off the agencies 
to set up a new departmental entity and to have the flexibility 
to move money around between the agencies in the event of an 
emergency. The committee recommendation relies on existing 
procedures to handle these requirements and would ensure that 
the constitutional prerogatives of the Congress are not 
degraded.
    Our proposal would recommend that we allow the agencies 
which are moved under this new Department to bring with them 
the money and assets we have appropriated to them and the 
reprogramming authority they have been granted.
    It requires the executive to propose and obtain 
congressional approval to increase funding levels or change the 
uses of appropriated funds.
    If money is needed to set up a new department 
superstructure, we can provide transfer authority in any one of 
our 2003 appropriations bills to do just that. We just need to 
have an idea of how much they need for fiscal year 2003.
    If there is an emergency, current law will allow them to 
move money within the agencies and Economy Act reimbursement 
agreements can be executed among the various agencies to cover 
unforeseen requirements.
    This process is very similar to the process used when the 
Department of Energy was created in 1977 and when the 
Department of Education was created in 1979. In both cases, 
legislation establishing the new Departments provided for 
transfer of appropriations balances along with the functions 
being transferred, but only for the purposes for which the 
funds were originally appropriated.
    Mr. Chairman, I don't think we have a major disagreement on 
what we need to accomplish here, but we are concerned about the 
constitutional responsibilities of the Congress in dealing with 
the public funds.
    And I just would read one sentence from Article I of the 
Constitution that says: No money shall be drawn from the 
Treasury but in consequence of appropriations made by law, and 
a regular statement and account of the receipts and 
expenditures of all public money shall be published from time 
to time.
    I think we can work within current law to do what the 
President needs to do, and I certainly intend to strongly 
support the creation of an Agency that would have the 
authority, the ability, and assets to protect our people and to 
fight the war against terrorism wherever it might be.
    And I thank you very much for the opportunity to make these 
comments.
    Chairman Armey. Thank you, Chairman Young.
    [The statement of Mr. Young of Florida follows:]

  PREPARED STATEMENT OF HON. C.W. BILL YOUNG, CHAIRMAN, COMMITTEE ON 
                             APPROPRIATIONS

    Mr. Chairman and Members of the Select Committee on 
Homeland Security, I am pleased to appear before you today 
regarding the recommendations of the Appropriations Committee 
on H.R. 5005, a bill to establish the Department of Homeland 
Security.
    I will make my remarks brief because I know you have a 
number of witnesses to hear from and as you know our Committee 
has a bill on the floor today.
    I would like to start by saying that I believe your 
Committee has a formable task ahead. The creation of the 
Department of Homeland Security will be the largest 
restructuring of government that most of us can recall, but 
certainly the largest reorganization since Pearl Harbor. At 
that time, we reorganized the Department of Defense and created 
the Joint Chiefs.
    Our Committee reported its recommendations to the Select 
Committee last Thursday. We have limited our specific 
recommendations to matters directly affecting the jurisdiction 
of this Committee--namely the transfer authority the 
Administration is seeking to establish the Department of 
Homeland Security. I hope you have had a chance to review this 
document, because I believe it speaks directly to the 
constitutional authority of the Congress and the separation of 
powers between the Executive and Legislative Branches.
    The Appropriations Committee has been in the forefront of 
strengthening the nation's capacity to fight terrorism. Three 
days after September 11, 2001, the Appropriations Committee 
brought to the floor a $40 billion supplemental to respond to 
the tragedy our country was facing. We worked around the clock 
to pull this legislation together, to ensure that all the 
concerns were addressed--the massive recovery effort in New 
York City, the immediate need to beef up security both at home 
and abroad, and the war we were about to undertake. And now, 
the Appropriations Committee is still at the helm of addressing 
the needs of this country. We are trying to complete the second 
War Supplemental to give money to our troops to maintain their 
readiness, to the intelligence community, to law enforcement 
and other agencies for our safety and security, to the victims 
of New York and to promote U.S. foreign policy. And we are in 
the process of working through 13 appropriations bills for FY 
2003, all of which will include substantial funds for homeland 
security and the war.
    We also strongly support efforts to improve the management 
and efficiency of the nation's homeland security activities. In 
fact, the current administrative difficulties troubling a 
number of key homeland security agencies would argue for even 
more intense Congressional scrutiny and oversight. However, we 
believe we can accomplish this without sacrificing the 
constitutional processes that have served the nation well for 
two centuries.
    Our recommended amendment to H.R. 5005 is a bi-partisan 
proposal. In our view, the Administration's transfer proposal 
is overly broad and unprecedented. It would undermine the 
appropriations that our Committee and this Congress carefully 
deliberate each year. H.R. 5005 includes permanent transfer 
authority, which would allow the head of this agency to rewrite 
Congress' enacted appropriations laws.
    It is important to support the President in establishing 
this new Department, but this can be accomplished under 
existing law and practices.
    Our recommendation does the following:
     it replaces the open-ended transfer authority with 
a restatement of transfer authority that exists in current law; 
and
     it provides for additional authority as needed in 
subsequent appropriations acts.We have been told by the 
Administration that they need broad transfer authority for the 
following reasons:
     to skim enough money off the agencies to set up a 
new Departmental entity; and
     to have the flexibility to move money around 
between the agencies in the event of an emergency.The Committee 
recommendation relies on existing procedures to handle these 
requirements and would ensure that our constitutional 
prerogatives are not degraded. Our proposal would allow:
     the agencies which are moved under this new 
department to bring with them, the money and assets we have 
appropriated to them and the reprogramming authority we have 
granted them;
     it requires the executive to propose and obtain 
congressional approval to increase funding levels or change the 
uses of appropriated funds;
     if money is needed to set up a new Department 
superstructure, we can provide transfer authority in any of our 
FY 2003 bills to do that, we just need to have an idea how much 
they need for FY 2003; and
     if there is an emergency, current law will allow 
them to move money within the agencies and Economy Act 
reimbursement agreements can be executed among the various 
agencies to cover unforeseen requirements.
    This process is very similar to the process used when the 
Department of Energy was created in 1977 and when the 
Department of Education was created in 1979. In both cases, 
legislation establishing the new departments provided for 
transfer of appropriations balances along with the functions 
being transferred--but only for the purposes for which the 
funds were originally appropriated. In both cases, further 
transfers were allowed only to the extent specifically 
authorized in appropriations legislation. And as I mentioned 
earlier in my testimony, when we reorganized the Defense 
Department after the attack on Pearl Harbor, Congress did not 
provide such extensive transfer and reprogramming authority. To 
this day, the Secretary of Defense must obtain approval of 
Congress to reprogram funds and he is very limited in his 
ability to transfer appropriations from one appropriation to 
another.
    Our goal is a regular order appropriations process for this 
new Department. We expect that if legislation to set up this 
new Department is enacted this year, the FY 2004 President's 
budget will request funds for the new Department and its 
agencies. The Appropriations Committee will be prepared to 
appropriate funding for this new Department and its agencies in 
whatever form is enacted into law.
    That concludes my testimony, and I will be happy to address 
any questions you may have on our recommendations.

    Chairman Armey. Congressman Obey, we would be happy to hear 
from you.

 STATEMENT OF THE HON. DAVID R. OBEY, RANKING MINORITY MEMBER, 
                  COMMITTEE ON APPROPRIATIONS

    Mr. Obey. Thank you, Mr. Chairman. Mr. Chairman, let me 
congratulate Chairman Young for the statement he has made. I 
agree with virtually every word of it. Secondly, I am sure that 
you all understand that on an issue like this, there will be no 
Democrats, no Republicans, no liberals, no conservatives. We 
are all, I hope, just legislators trying to do our 
constitutionally sworn duty, and in that sense I hope we are 
all constitutionalists.
    I have two sets of concerns: one, the financing of this 
Agency which Chairman Young has just referred to; and secondly, 
the organization itself.
    Let me point out that the Magna Carta--or since the Magna 
Carta was signed in 1215, one of the driving principles that 
has been a key underpinning of Western democratic societies is 
the idea that the power of the purse shall remain outside of 
the hands of the executive and firmly in the hands of the 
legislative body. At the Constitutional Convention, this was 
not even disputed. There was virtually no debate on the issue. 
It was accepted by everyone. And that undiminished authority 
remained intact during the war of 1812 when the U.S. Capitol 
was burned, during two world wars, and I would hope and expect 
it would remain intact now. That is our principal duty in 
putting together alterations to the White House's proposal. And 
the fact is that no member of the executive branch at any time 
in history has ever had the authority to terminate programs, to 
sell assets, or to redirect resources without the prior 
agreement of the Congress. And I hope it will remain so.
    This bill provides four sweeping abdications of the power 
of the purse. Chairman Young has mentioned them. It gives the 
Agency in effect a totally free hand to set up this new 
Department any way they want, without any significant 
congressional financial oversight. Now, if you think that is a 
great idea, then I would urge you to review the history of the 
newly created Transportation Security Administration. They 
created an Agency of over 70,000 people. They proposed an 
average salary in the headquarters office in Washington of 
$90,000. Now, this is not an average salary of the executives. 
This is counting everybody, including the clerks, the 
messengers, everybody, average salary $92,000.
    That is higher than the average salary in the White House, 
it is higher than the average salary in the Supreme Court. They 
recommended an absurd salary structure at local airports that 
started by planning to have guards paid $85,000 a person. That 
information came out from the Agency and one day afterwards, 
when the press laughed it to death, they said oh, you are using 
old information, because by then they had changed their 
recommendations and they had scaled down those salaries. That 
does not suggest to me a quality of analysis that could survive 
even rudimentary scrutiny.
    This is going to be a huge bureaucracy. They are going to 
have 16 Assistant Secretaries, if we listen to these 
recommendations. It is going to be incredibly bloated. It is 
going to have the extraordinary authority to sell assets 
without the approval of the Congress, and instead of putting 
the money from those assets into the Treasury, as is now the 
requirement, they would have the authority to keep those moneys 
themselves and use them for any purpose they wanted.
    That should not be allowed to go forward. We have seen many 
corporations in this country in big trouble because they gutted 
the ability of their boards of directors to provide strong 
oversight over the chief executive officers of the company. We 
should not make that same mistake in the Federal Government. 
The Congress is supposed to be an active, caring, alert, and 
aggressive board of directors and we cannot walk away from that 
responsibility.
    Some other points: It is a spectacular misnomer to call 
this a Homeland Security Agency. If you take a look at 
departments that are supposed to be folded into this Agency 
under the recommendations, they contain 133 agencies and 
offices. Only 22 of them are actually transferred into this 
Agency, leaving 111 still outside the tent.
    I would do three things. I would first of all keep the 
Office of Homeland Security in the White House, and make sure 
that the executive order that created that Agency is converted 
to statute so that it has the prestige and the clout needed to 
coordinate all of these other agencies, along with the 22 that 
are being dumped into this new Agency.
    Secondly, I would elevate the director in prestige to the 
same level at least enjoyed by the drug czar, by the science 
advisor, by the OMB director, by making them confirmed by the 
Senate. That does not damage his position. That strengthens it 
because they are on an equal footing. They have been ratified 
by the entire system, and they would have the necessary clout 
to knock heads together and see that people cooperate.
    Thirdly, I would give that officer the power to decertify 
budget recommendations from OMB if they do not meet the 
standards that were laid out by the Agency in order to assure 
the security of the homeland. I believe that the debate on this 
issue so far has been far more sterile than it should be and 
far less substantive, and I do not believe that is the fault of 
Congress in either party. I think Members of both parties have 
been thoughtful and expressive concerning their terms about 
this product.
    I do believe that the position of the executive branch has 
been far too dominated by OMB whose world view and knowledge 
about security matters is certainly not commensurate with their 
knowledge about domestic budgets, and I think we need to face 
that.
    There are a number of questions I think you ought to ask 
yourself. Whatever you recommend, will it increase the focus on 
antiterrorism or not? A department that has to care about 
earthquake recovery, about dealing with pet stores, about oil 
spills, about protecting wine producers from the glossy wing 
sharpshooter, is spread too widely to really do a decent job of 
focusing on antiterrorism.
    I think we should focus on putting together the agencies 
that have the most to do with providing security at the borders 
and in our ports: the immigration side of INS, the Customs 
Service, the Transportation Security Administration--if we can 
ever get that baby put together right--but should we add AFIS 
in all of its glory with its 8,000 employees? I don't believe 
so.
    And there is one other terrible example. That is the area 
of bioterrorism, and the gentlewoman from Connecticut has 
already mentioned it. Last fall the Nation discovered that we 
have a fantastic asset in the National Institute of Infectious 
Diseases at the National Institutes of Health. That is the 
Agency that does world-class research on AIDS, on agents like 
Ebola, West Nile virus. They are headed by a brilliant 
director, Dr. Tony Fauci, as you all know. Nothing would be 
more destructive or idiotic than to take the dollars that have 
been bestowed upon that Institute by the Congress and instead 
make it a freestanding isolated research program. We need to 
piggy-back on the knowledge and the synergy that exists by 
having that Agency within NIH. We don't need to fragment it in 
any way or give it conflicting lines of authority. In short, we 
don't need to screw it up. It is working terribly well.
    Thirdly, we cannot let new administrative costs eat up 
frontline activities like cargo inspection and the 
identification of illegal entrants into this country. CBO has 
estimated that this is going to cost at least $3 billion in new 
administrative costs. I would personally be flabbergasted if it 
is not at least double that, based on my experience and based 
on the analysis of previous organizations. I would also ask you 
to remember, there was a good reason why the defense 
establishment was organized in 1947 and not 1944; because in 
1944, we were in the middle of a war. We were kind of busy, and 
the last thing we want to do is to so overreach in the 
reorganization we provide that we ignore the fact it is going 
to take an immense amount of time to move into new offices, to 
get new telephone numbers, to get new desks, to get new bosses, 
to understand what your relationship with those new bosses and 
colleagues, and these administrators are going to be tempted to 
sit on their duffs and hold back and take a look at the lay of 
the land for months and months, until they know what they can 
do without getting their heads shot off.
    So I would urge you to recognize there is a fantastic 
potential for disruption which we have a mortal duty not to 
ignore.
    And then there are other problems. We have the gratuitous 
and, in my view, ill-advised exemption from civil service law 
and whistle-blowing protection and freedom of information. 
People will say oh, you can't release information about 
national security. The Freedom of Information Act already has 
exemptions for national security and for critical law 
enforcement material. There is no need to provide the kind of 
blanket authority provided in this legislation. If you do what 
this legislation says, it would be very easy for agencies and 
industries with whom these agencies work to simply launder a 
whole lot of information that the public has a right to know, 
through this Agency, on issues such as public health and 
safety, thereby shielding it from public awareness. We cannot 
let that happen.
    In my view, there are two major problems that we have to 
deal with and that this proposal before us does not address. 
When Bill Young and I and our staffs interviewed every single 
intelligence agency virtually during the 5 days when we were 
locked out of here because of anthrax, we talked to the NSA, we 
talked to the CIA, we talked to the FBI, CDC, HHS, you name it. 
What struck me--and I was thunderstruck by this--is that there 
were literally thousands of pages of raw information on the 
floor, sitting on desks and filing cabinets, unreviewed by 
anybody. And for two reasons: number one, because we do not 
have the systemic ability to separate the wheat from the chaff 
in these agencies. We don't have the technology up to speed, 
and we don't have the organization down. And secondly, we do 
not have the language translation capacity that we need. We 
need at least five times the capacity that we have right now if 
we are going to do a really thorough job of reviewing these 
intercepts.
    And then the second problem is the FBI. Now, this is no 
criticism of the FBI, but it is an analysis. The FBI today is 
structured to focus on thousands of individual acts of 
unrelated crime. That is their job. But by being organized that 
way, as the FBI director has said, you do not have a mindset in 
that Agency or a capacity to analyze over the broad field, 
looking for patterns. And that is what you need to be doing if 
you are trying to uncover potential terrorist activities. So we 
need to focus on reshaping the FBI to be able to do that job, 
and that is I think far more important than any other 
organizational--or recommendations that we have here today.
    In short, I would simply say, as Chairman Young has been 
saying, don't throw away the precious separation of powers 
arrangement just because some hotshots in this town tell you it 
will make it easier to catch bin Laden. It won't. It won't.
    I would just urge you to recognize that corporations are in 
trouble because they decided to run only with the wisdom of 
their CEOs and their close advisers, and they didn't allow 
boards of directors to conduct aggressive activities to review 
their conduct, and I think we have to avoid that. So, in short 
I would ask you, don't salute the first draft that you get from 
downtown. Think about it and then think about it some more, 
because the country you will be protecting is your own and our 
own. Thank you.
    [The statement of Mr. Obey follows:]

  PREPARED STATEMENT OF THE HONORABLE DAVID R. OBEY, RANKING MINORITY 
                  MEMBER, COMMITTEE ON APPROPRIATIONS

    Mr. Chairman and Members of the Committee, I appreciate the 
opportunity to testify before you today. I know you understand 
that on this issue there can be no Democrats and no 
Republicans, no liberals and no conservatives. We are only 
American legislators with the sworn duty to do what is best for 
the country, what is consistent with the Constitution.
    My thoughts on Homeland Security are expressed in the 
recommendations of the Appropriations Committee and in the 
letter that Congressman Waxman and I sent to Governor Ridge 
last week as well as in the testimony that I am about to 
deliver.
    I will divide my remarks today into two segments. First, I 
would like to discuss proposals regarding a new Department of 
Homeland Security that would affect the role of the Congress in 
appropriating money. Secondly, I would like to talk about how 
the government's broad responsibilities with respect to 
homeland security could be better coordinated and structured 
and how the creation of a new Department would fit within that 
restructuring.

   protecting the constitution and our system of checks and balances

    Since King John signed the Magna Carta in 1215, the notion 
that the executive should not have power of the purse has 
become increasingly central to the structure of Western 
Democracies. In the three months of passionate debate, conflict 
and compromise that led to crafting the U.S. Constitution, 
there is no evidence of any debate whatsoever over clause 7 of 
Section 9 of Article I, which states, ``No Money shall be drawn 
from the Treasury, but in Consequence of Appropriations made by 
Law.'' Every one of the thirteen colonies had already adopted 
constitutions that gave their individual legislatures ``the 
power of the purse.'' Providing to the Congress the central 
authority over spending was simply so universally agreed to it 
was not even a topic of discussion.
    Congress was quick to use those powers and to specify in 
great detail how appropriated funds could and could not be 
spent in connection with the establishment of a standing army 
to defend against a possible invasion by France in the late 
1790s. Those powers were undiminished during the War of 1812 
when the nation was attacked and both the Capitol and the White 
House were burned. The Congress' authority over spending 
remained intact through the Civil War and through two World 
Wars. It is therefore surprising and disturbing that the 
administration would choose to revisit a decision so central to 
our Constitutional heritage.
    Simply put, no member of the executive branch at any time 
in the history of this country has ever had the authority to 
terminate programs, sell assets and redirect resources without 
consultation with the Congress that the legislation before this 
Committee would grant the new Secretary of the Department of 
Homeland Security. The proposed legislation provides four basic 
authorities:
    First, Section 803(c ) of H.R. 5005 provides that the 
President may upon enactment and prior to the actual transfer 
of existing agencies and activities to new Department, transfer 
5% of the funds appropriated to those agencies and activities 
for use in setting up the bureaucratic superstructure envisaged 
in the act. What this essentially provides is a totally free 
hand to the Secretary and his staff in structuring the new 
Department without consultation or involvement of the Congress.
    The record of the last six months in setting up new 
homeland security activities should give the Congress and the 
American people serious pause about providing such authority. 
The new Transportation Security Administration has put forth 
plans indicating that it plans to employ more than 70,000 
people simply with respect to the airline safety portion of its 
mission. Many of us were deeply concerned when we learned that 
the agency planned to locate more than 800 of those people here 
in their Washington headquarters. Adding to that concern was 
the fact that they planned an average salary for the employees 
of that huge headquarters of more than $90,000 a year. That is 
not the average for the senior managers but for all employees 
including stock clerks and secretaries. That is a higher 
average salary than is paid by the Executive Office of the 
President within the White House and it is higher than the 
average salary paid at the Supreme Court.
    Those concerns grew further when it was learned that the 
size of the contemplated headquarters of this operation had 
grown from the original 800 employees to more than 1200 even 
after the agency had been criticized for being top heavy. 
Certainly nothing spoke more clearly to the lack of 
administrative and fiscal discipline than the decision by the 
agency to spend more than $400,000 for redecorating the offices 
of the Director and his staff at the same time they were 
claiming to be critically short of funds.
    The broader strategic decisions have also been replete with 
examples of poor judgment. Initial salary schedules would have 
resulted in the guards employed to protect the passenger and 
baggage screening operations being paid more than $85,000 a 
year-more than the airport managers, mayors or police chiefs in 
many of the communities they would be located in. Equipment for 
baggage screening was ordered without any attention to the 
facilities that would have to be constructed to house the 
equipment. Since facilities take longer to construct than it 
takes to manufacture equipment we are almost certain to have 
baggage-screening equipment sitting in warehouses for some 
extended period of time waiting for a decision to be made with 
respect to where it will be installed. Plans also called for, 
and still do call for the hiring of 3500 ``shoe carriers'' to 
collect and scan shoes that set off magnetometers. This is in 
spite of the fact that magnetometers that are sensitive enough 
to screen out the false alarms caused by shoes can be purchased 
for a fraction of the first year's salary of the ``shoe 
carriers.'' And while decisions like this were being made, the 
agency failed to request funds which would allow the full 
strengthening of cockpit doors on schedule or permit sky 
marshals to communicate with their superiors on the ground.
    These are only some examples of the kinds of decisions that 
we have already seen with respect to the organization of 
homeland security activities. We would be naive to expect that 
we have seen the last of these and we would be derelict in our 
duty as a Congress if we did not maintain close vigilance about 
how tax dollars are used in this department. This is 
particularly true given the grandiose nature of the hierarchy 
called for in the Administration's proposed Department. H.R. 
5005 would create a Secretary and Deputy Secretary, 5 Under 
Secretaries, up to 16 Assistant Secretaries, a Director of 
Secret Service, a Commandant, an IG, and a CFO and on and on- 
making it one of the largest sub cabinet operations in 
Washington.
    Even more disturbing is the authority requested in Section 
803(e) of the bill, which states that appropriations balances 
shall be transferred to the Secretary of Homeland Security for 
appropriate allocation ``notwithstanding the provisions of 
section 1531(a)(2) of title 31, United States Code.'' This in 
effect provides the Secretary with the authority to terminate 
any program or activity contained within any agency or office 
transferred to the new Department and to spend the funds on any 
activity within the very broad jurisdiction of this Department 
without regard to law or act of Congress. If he unilaterally 
concludes that headquarters staffing at the Transportation 
Safety Administration is a higher priority than control of boll 
weevils or other agriculture pests those programs could be 
eliminated before the Congress ever had a chance to enter the 
discussion. If he decided that marine safety instruction 
programs or maintenance of right of way programs at the Coast 
Guard would make a good bank for funding his own private 
intelligence operation, we would simply have to accept his 
decisions. We have never done business this way in the past and 
there is no reason to start now.
    Another authority requested is the on going authority to 
transfer funds between accounts even after fiscal 2003. Section 
733(b) permits up to 5% of appropriated funds to be transferred 
between programs within the Department. While there is 
precedent for providing limited transfer authority among 
accounts within a number of agencies and Departments they are 
generally confined to transfers between activities that have 
relatively similar objectives and purposes. This provision 
would permit transfer of funds intended for international 
adoption programs to be used for pet store regulations or funds 
intended for counter narcotics operations to be used for 
hurricane cleanup. Because of the proposed size of this 
Department, the total amounts that could be made available for 
activities that the Congress might find low priority would be 
huge.
    Finally, the Administration requests the extraordinary 
authority to sell assets without prior approval, to withhold 
the proceeds of those sales from the Treasury of the United 
States and to then spend them on priorities which they alone 
would identify and which would require no appropriations from 
Congress. This would include for instance an extensive 
portfolio of Coast Guard properties-some of which are quite 
valuable-that could be sold off and used for any acquisition or 
activity that the Congress for whatever reason had been 
reluctant to provide funding for. This again is aimed at 
weakening the checks and balances that have served this country 
well for more than two centuries. It is akin to the thinking 
that led corporate managers in the United States over the past 
several decades to seek boards of directors that would serve as 
little more than rubber stamps for the decisions of CEOs and 
their appointed minions. It was the wrong direction for 
American business and it is certainly the wrong direction for 
American government.

 maintaining government coordination and creating a department that is 
                      lean, mean and well focused

    While I feel strongly about how this new Department might 
be financed, I feel equally strongly about how it will be 
composed and about how we will structure and coordinate the 
overall war against terrorism and protection of the homeland.
    The first point I want to make-and I think it is an 
extremely important point for every member of this Committee to 
grasp-is that calling this proposed entity the ``Department of 
Homeland Security'' is a total misnomer. Even if we put every 
agency, office and activity that the White House has proposed 
for transfer into the new Department, it would represent a tiny 
fraction of overall government activities with respect to 
``homeland security.''
    If we look at the organization chart prepared by the White 
House when this proposal was originally announced we see that 
there are currently a total of twelve departments of the 
federal government involved in various aspects of protecting 
the homeland. The agencies and offices contained in those 
departments and identified on that chart total 133.
          
        
        
          
    This is our best effort to represent what the government-
wide Homeland Security efforts would look like if a Department 
along the lines proposed by the White House were created.
          
        
        
          
    Of the 133 agencies and offices listed on the first chart, 
22 have been moved to the new department. But 111 are still 
outside the department! Furthermore, the most important 
agencies and offices in protecting the homeland are in most 
instances on the outside. These include the new Northern 
Command, the National Guard, the Federal Bureau of 
Investigation, the Central Intelligence Agency, along with the 
National Security Agency and National Imagery and Mapping 
Agency, the Centers for Disease Control and key elements of the 
Energy Department and the Drug Enforcement Agency.
    This means that no matter what we do with respect to 
creation of a new Department, even if we move every agency and 
activity that has been proposed, the bulk of the government 
activity directed at protecting the homeland will still be 
outside this Department. Therefore, we will continue to need to 
find way of strengthening interdepartmental coordination at the 
level of the White House. In my opinion, this is more important 
than whether or not we create a department.
    I would propose three things to accomplish this. First, I 
would retain the Office of Homeland Security and make the 
executive order that President Bush signed creating that office 
statutory.
    Secondly, I would elevate the director of that office to 
the same level within the White House as the Drug Czar, the 
Science Advisor and most importantly, the Director of OMB. That 
would require that he be subject to Senate confirmation.
    Thirdly, I would give him the authority to decertify OMB 
budget submissions if they were inconsistent with the overall 
homeland security plan. In other words, OMB would not be able 
to go forward with budget submissions to the Congress without 
the signoff of the Director of Homeland Security. If the two 
directors cannot reach agreement, then the argument gets passed 
up to the President. That would place a check on the OMB 
director but it would also ensure that any decision involving a 
tradeoff between the security of the American people and 
additional spending would be decided at the highest level.
    I think that the debate that we have been having in this 
town over how we restructure government and expand our capacity 
to protect ourselves has been far more sterile and far less 
substantive than the nation deserves. That by and large has not 
been the fault of the Congress. I think members of both parties 
have for the most part been very thoughtful and have brought 
good ideas to the table. But I think the position of the 
executive branch has been far too dominated by analysts at OMB 
whose overall worldview and knowledge about security issues is 
not commensurate with their knowledge about budgets. We need 
both perspectives in order to make the right choices and we 
need both perspectives to be considered at both ends of 
Pennsylvania Ave.
    Having said that, I would support the creation of a new 
department to handle some portion of the security problems 
facing the country. If done properly, such a department could 
increase the efficiency and coordination between certain key 
activities needed to protect us against future terrorist 
attack. On the other hand, I would urge the committee to 
carefully weigh the fact that consolidation of disparate 
agencies and activities into single huge department could 
create a bureaucratic morass that not only would waste large 
sums of taxpayer money but also would seriously impede existing 
efforts to protect the American people.
    There are three principles that I think the Congress should 
look to in attempting to decide the size and shape of the new 
department if there is to be one.
    First, does a proposed transfer of an agency or activity to 
the new Department increase the focus and coordination of 
government counter terrorism activities?
    As I already pointed out, H.R. 5005 moves less than two 
dozen of 133 agencies and offices involved in homeland security 
into the new department. The overwhelming majority of such 
agencies and activities are outside the proposed department. 
The question that must be asked is whether the agencies 
proposed for transfer form a good cluster from a management 
perspective. Can the proposed department manage these various 
programs and maintain a strong focus or are they going to have 
to maintain so many unrelated programmatic objectives that no 
one will really understand what is going on inside the 
Department?
    I think any Department that must deal with earthquake 
recovery, licensing pet stores, cleaning up oil spills, 
protecting our wine producers from the Glassy Winged Sharp 
Shooter, international adoption policies, ice breaking and 
collection of tariffs has got too much on its plate before it 
even begins to think about combating terrorists.
    I think there is a need in this government to more tightly 
weave the activities of the various agencies involved with 
security at our borders and at ports of entry. There is a 
portion of the programs proposed for inclusion in this 
Department that is already largely focused on that set of 
issues. The immigration side of the INS, the Customs Service 
and the Transportation Security Administration all fit that 
description.
    Once you get past those three activities you start dealing 
with agencies that are only partially involved in border 
security. They are agencies that have very large and important 
responsibilities that have little or nothing to do with counter 
terrorism. For instance, APHIS has some inspectors in airports, 
but that is only a fraction of the 8,000 employees who are 
attempting to control plant and animal diseases that are 
already here. APHIS needs to work more closely with customs and 
immigration on cross border issues but they also must remain 
close to the farm community and they will probably always spend 
the large majority of their time on diseases that are already 
in the country than those that are on the outside.
    Like APHIS, most of these agencies will have a wide range 
of problems that will inject their own set of nightmares into 
the management of the new department. As a result, inclusion of 
such agencies will likely increase administrative requirements, 
increase overhead expenditures and make it difficult for the 
leadership of the department to maintain a clear focus on 
security issues.
    Finally, there are a number of activities that are slated 
for this Department that will be much more successfully managed 
where they are currently located than they could possibly be 
within this Department.
    Last fall when we started thinking about bioterrorism, we 
realized that we had a huge resource with respect to dealing 
with that threat. That resource is the National Institute for 
Allergy and Infectious Diseases. That is where most of the 
basic work on AIDS research is taking place. That is where our 
work on the fundamental mechanisms of diseases such as Ebola 
and West Nile Virus is being preformed.
    We are much further along in understanding infectious 
disease mechanisms and how the body defends itself against 
them, how we can aid in that defense and what the weaknesses of 
these various viruses and bacteria than we were twenty years 
ago when we were thinking about biological warfare in the 
context of the Cold War. We have one of the most brilliant 
Institute directors in the long and distinguished history of 
NIH, Dr. Tony Faucci, now running that institute. We realized 
that we could piggyback our concerns about bioterrorism on top 
of this wealth of new knowledge. We have the resources there to 
jump-start a program and be years ahead of where we might 
otherwise be in identifying and combating these kinds of 
agents. I can't think of anything that would be more idiotic 
than taking the bioterrorism money that we put into NIAID last 
year and moving it as a free standing research program to a 
newly created Department.
    The second test that a new department should be expected to 
meet is that it can be managed with a reasonable allocation of 
administrative resources. This committee and the Congress 
should ask: Can this amalgamation of programs be managed 
without a massive diversion of resources from front line 
activities such as containerized cargo inspections or the 
identification, apprehension and deportation of illegal 
entrants in order to pay for a sprawling Washington-based 
bureaucracy?
    In the Defense community this question is referred to as 
the relationship between the tooth and the tail (what portion 
of the budget supports real on the ground war fighters and what 
portion is dedicated to the bureaucracy that supports them.) It 
is easily possible to organize government activities in such a 
way that the cost of coordinating the activities becomes more 
expensive than the activities themselves. There is ample reason 
to be concerned that H.R. 5005 could seriously erode resources 
needed to sharpen the tooth.
    This is particularly true if the administration maintains 
its stated intention to fund all activities of the Department 
within the existing budgets for those activities. If that 
policy is followed, it will mean that most of the resources 
necessary to fund the activities of the Secretary, nearly 30 
proposed sub cabinet positions and the staffs for each will 
have to be met through cuts in border inspectors, immigration 
enforcement and local level first responders.
    There will also be costs associated with moving and costs 
associated buying land and constructing new buildings. CBO 
estimates those costs will run at least $3 billion--I would be 
amazed that if in the end they are not double that and all of 
it will be paid out of front line efforts if we are not 
realistic about the price tag from the outset.
    Thirdly, will the reorganization disrupt highly sensitive 
security functions during critical threat periods?
    There is a reason that the Executive Reorganization Act of 
1947 took place in 1947 and not 1944. The consolidation of the 
War Department and the Navy may have created more efficiency 
and better coordination of defense activities in the long term 
but it certainly had significant short-term costs with respect 
to both of these goals. Similar disruptions are inevitable in 
any reorganization.
    The severity of such disruptions and time lost resulting 
from reorganization will vary based on the amount of 
administrative change envisaged for a particular program or 
activity. Simply changing the chain of command involves a 
relatively small loss of work effort. Changing network servers 
and phone systems and phone numbers adds to the loss in terms 
of short-term performance. Relocating facilities, restructuring 
personnel assignments and lines of authority often entail 
dislocations that can take months or even years to fully 
recover from. If there is a clear case for greater focus and 
long term efficiency these costs may be acceptable so long as 
they do not reduce performance during periods of potential 
threat.
    Any reorganization should carefully weigh these factors 
with respect to both the entities to be transferred to the new 
department and the timing of that transfer.

                          other considerations

    In addition to commenting on the structure of the 
department, I would also point out that this proposal contains 
ill-advised exemptions from good government laws, Civil Service 
laws, whistle-blower protection, and procurement rules, and it 
contains an exemption from the Freedom of Information Act. 
There is no reason to do that as the Freedom of Information Act 
already provides exemptions for national security information, 
for sensitive law enforcement information, and for confidential 
business information. Agencies and industries could deny the 
public needed access to basic information about health and 
safety by simply laundering that information through this new 
agency.
    On another front, this bill also deals with the question of 
the organization of our collection and analysis of 
intelligence. I think we clearly have a problem in that area, 
but I am not convinced that setting up another parallel 
organization will solve that problem. I think the problem can 
be best resolved by taking it head on and solving it at its 
core. Our biggest need right now is not a new organization 
table. We have knitted together a group of organizations that 
can meet our needs relatively well if we honestly assess their 
failures and make the appropriate adjustments.
    One adjustment that we need to make as rapidly as possible 
is a much greater language capability than we now possess. 
There are literally thousands of pages of information that we 
have collected that is sitting on floors, in files, and on 
desks throughout the government unread because we lack adequate 
resources to screen the raw material and adequate language 
skills to do the translating. There is also a great deal of 
intelligence which we have only partially exploited or we 
derive inaccurate intelligence from because the language skills 
we have are not good enough to get a really accurate 
translation.
    Another adjustment is to recognize that our most important 
agency in terms of countering threats from within the country, 
the FBI, currently has three serious weaknesses. First, the FBI 
has been more focused on law enforcement than counter-terrorism 
and it does not have the analytical capabilities that you need 
if you are going to put together the massive amounts of 
information that is now flowing through the system. That is not 
a critical need when you are dealing with thousands of largely 
unrelated criminal acts. It is a critical need when combating 
large-scale terrorist networks. The second weakness is the 
totally dysfunctional information technology systems at the 
Bureau. The third is a general lack of skilled investigators, 
particularly in certain areas such as cyber-crime.
    We can't create an organization to do the FBI's job. We 
have to fix the FBI. If we create a parallel organization that 
does domestic threat analysis we may be compounding the 
difficulty of fixing the FBI.
    In closing, I would strongly urge you not to overreach. Do 
what is essential, get our strategy in place first for dealing 
with terrorism, then make whatever additional adjustments are 
needed down the line. Don't grab the first tomato out of the 
box. Reorganization will only improve our capability to protect 
ourselves if it is done well. It can easily damage that 
capability if it is done poorly.
    And don't throw away our separation of powers and our 
system of checks and balances because some hotshot downtown 
says it will help catch Bin Laden. It won't. It is the same old 
prescription that some of these people have offered for one 
problem after another. Leave it all up to the executive branch 
and the problem will get solved. That has not happened with 
respect to transportation security and it won't happen 
elsewhere. Good agencies welcome Congressional interest and 
Congressional input. Good policy comes from open discussion and 
the fusion of different viewpoints.
    Corporations got in trouble because the CEOs, the CFOs, and 
the accountants ran amuck without adequate restraint by 
corporate boards. In government, the President is the CEO, OMB 
and the agencies are the rough equivalent to the CFO and the 
management team. Congress is the board of directors. We need to 
do our duty.
    Don't salute the first draft you get. Think about it then 
think about it some more. Listen to advocates then listen to 
devil's advocates. The country that you will be protecting is 
your own.

    Chairman Armey. I want to thank both gentlemen. It is the 
practice of this committee to question the witnesses under the 
5-minute rule. I should make it clear that the Chair interprets 
the 5-minute rule to apply to both the question and the answer. 
I expect both to be in the 5-minute rule. We are all aware of 
the process here. We know the drill and remind the witnesses 
that you can read the time clock from your side as well as 
ours. If we are all parsimonious in our use of time, I think we 
can make sure that at least every member of the panel gets one 
round of questions of these witnesses.
    And with that, I would recognize the gentleman from Texas, 
Mr. DeLay.
    Mr. DeLay. Thank you, Mr. Chairman. I have no questions. I 
just congratulate both gentlemen on their testimony, and I am 
very impressed with the thought that has been put in both your 
testimonies, and I think this select committee should take it 
to heart and your testimony to heart and make sure that we do 
this right and do it right with the thoughtful recommendations 
that you have made. Thank you.
    Chairman Armey. The gentlelady from California, Ms. Pelosi.
    Ms. Pelosi. Thank you very much, Mr. Chairman. Another 
historic day. I wish to associate myself with the remarks of 
Mr. DeLay. Mr. DeLay?
    Chairman Armey. Mr. DeLay, you have a rare moment here.
    Ms. Pelosi. I want the record to show and I want you to 
acknowledge that I am associating myself with your remarks.
    I do wish to congratulate both of you. It is always 
wonderful to see how you operate on the committee. Masters at 
work, Mr. Chairman, working in a very bipartisan way for our 
country. And it is important for our country for us to maintain 
our separation of powers, our checks and balances, so we don't 
want the terrorists to have any victories in undermining the 
foundation of our own democracy in that respect and in respect 
to privacy and other issues as well.
    Your testimony spoke for itself. It was excellent. I 
believe, Mr. Obey, that those are your charts over there, and I 
wondered if you wanted to shed any light on them, because for 
those of us of a certain age, it looks like a lot of ants 
crawling on a page. And that is quite a statement about what 
this organization would do.
    Mr. Obey. The fact that I forgot to mention them 
demonstrates that I am not used to testifying before 
congressional committees. But what they show is simply this: 
The chart on the left is the administration's description of 
what the existing structure is within the government for all 
the agencies and offices that have anything whatsoever to do 
with homeland security responsibilities.
    The chart on the right is our best efforts to explain how 
that organizational chart would look after the reorganization. 
As you can see, there are more offices, not less. The area in 
red represents the agencies that have been pulled from anywhere 
on the left graph under the new Agency named the Homeland 
Security Agency. But as you can see, there are still a 
tremendous number of agencies and offices involved, not under 
that rubric, not under that umbrella. So this may be a lot of 
things, but it is not a streamlining. It is not a 
simplification.
    Ms. Pelosi. Thank you very much.
    Chairman Young and Ranking Member Obey, you both have 
raised serious concerns about the administration's legislation 
that would undermine the role of Congress in the appropriations 
process, and I was pleased to associate myself with Mr. DeLay 
in commending you for your presentation. We will be writing a 
bill, and you have made suggestions.
    You have an alternative. I wish you would be a little more 
specific in saying what you think the appropriate role is for 
the Appropriations Committee in funding the new Department of 
Homeland Security. Is there any aspect of the new Department 
that should not be subjected to the regular appropriations 
process?
    Mr. Young of Florida. If I could respond to the 
distinguished gentlelady from California, the existing law 
works very well. Our recommendation does not get into the issue 
of the structure of this new Homeland Security Agency. That was 
not our role or our mission when we were assigned this bill.
    But I would like to ask that we submit for the record a 
very long list of transfer authority provisions that are in the 
fiscal year 2002 appropriations bills. The committee and the 
Congress, agreeing with those recommendations, have provided a 
lot of transfer authority but to the Executive Branch agencies 
we have maintained our oversight capability in doing so, and I 
think this works very well.
    And we also, of course, have the reprogramming requests 
which we deal with quickly. There are those occasions when we 
immediately approve a reprogramming. There are other occasions 
we may have a question, and it is amazing how often the agency 
requesting the reprogramming will say, they, I never thought 
about that. We really ought to decide what is the right thing 
to do here.
    Congress playing an oversight role does a good job. If I 
could submit this for the record, I think you will be impressed 
with how the Congress has dealt with transfer authority in the 
past, and I would be happy to give you a copy of the law that 
created the Department of Education as an example of the 
transfer authority we are suggesting in our presentation. So I 
think this type of transfer authority will work.
    If you transferred 10 agencies, 20 agencies, or 30 agencies 
into the new Homeland Security Agency, this transfer authority 
will work.
    Chairman Armey. If I may mention to the gentlelady, the 
record is open for that submission and, without objection, it 
will be accepted.

 Department of Commerce Statutory Transfer Authorities Found in Annual 
                          Appropriations Acts

Departments of Commerce. Justice, and State, the Judiciary, and Related 
                   Agencies Appropriations Act, 2002

    NOAA:
    The Operations, Research and Facilities account receives transfers 
from the Promote and Develop Fishery Products and Research Pertaining 
to American Fisheries (P&D) Account and the Coastal Zone Management 
Fund (CZMF)
    Text:
    P&D
    Provided further, That, in addition, $68,000,Q00 shall be derived 
by transfer from the fund entitled Promote and Develop Fisher Products 
and Research Pertaining to American Fisheries':
    CZMF
    Of amounts collected pursuant to section 308 of the Coastal Zone 
Management Act of 1972 (16 U.S.C. 1456a), not to exceed $3,000,000 
shall be transferred to the `Operations, Research, and Facilities' 
account to offset the cost. Of implementing such Act.
    NIST:

    N1ST is authorized to transfer funding to the NTST Working Capital 
Fund.
    Text: For necessary expenses of the National Institute of Standards 
and Technology, $321, 111,000, to remain available until expended, of 
which not to exceed $282,000 may be transferred to the Working Capital 
Fund'.

    GENERAL PROVISIONS:
    ``Sec. 204. Not to exceed 5 percent of any appropriation made 
available for the current fiscal year for the Department of Commerce in 
this Act may be transferred between such appropriations but no such 
appropriation shall be increased by more than 10 percent by any such 
transfers: Provided, That any transfer to this section shall be treated 
as a reprogramming of funds under section 605 of this Act and shall not 
be available for obligation or expenditure except in compliance with 
the procedures set forth in that section.
    ``Sec. 205. Any costs incurred by a department or agency funded 
under this title resulting from personnel actions taken in response to 
funding reductions included in this title or from actions taken for the 
care and protection of loan collateral or grant proper shall be 
absorbed within the total budgetary resources available to such 
department or agency: Provided, That the authority to transfer funds 
between appropriations accounts as may be necessary to carry out this 
section is provided in addition to authorities included elsewhere in 
this Act: Provided further, That use of funds to carry out this section 
shall be treated as a reprogramming of funds under section 605 of this 
Act and shall not be available for obligation or expenditure except in 
compliance with the procedures set forth in that section.
    Transfer Provisions in fiscal year 2002 Department of Justice 
Appropriations Act

    TITLE I GENERAL PROVISIONS
    ``Sec. 107. Not to exceed 5 percent of any appropriation made 
available for the current fiscal year for the Department of Justice in 
this Act may be transferred between such appropriations but no such 
appropriations, except as otherwise specifically provided, shall be 
increased by more than 10 percent by any such transfers: Provided, That 
any transfer pursuant to this section shall be treated as a 
reprogramming of funds under section 605 of this Act and shall not be 
available for obligation except in compliance with the procedures set 
forth in that section.
    GENERAL ADMINISTRATION
    SALARIES AND EXPENSES
    Provided further, That the Attorney General is authorized to 
transfer, under such terms and conditions as the Attorney General shall 
specify, forfeited real or personal property of limited or marginal 
value, as such value is determined by guidelines established by the 
Attorney General, to a State or local government agency, or its 
designated contractor or transferee, for use to support drug abuse 
treatment, drug and crime prevention and education, housing, job 
skills, and other community-based public health and safety programs: 
Provided further, That any transfer under the preceding proviso shall 
not create or confer any private right of action in any person against 
the United States, and shall be treated as a section 605 of this Act.
    LEGAL ACTIVITIES
    SALARIES AND EXPENSES. GENERAL LEGAL ACTIVITIES
    Provided further, That notwithstanding any other provision of law 
upon a determination by the Attorney General that emergent 
circumstances require additional funding for litigation activities of 
the Civil Division the Attorney General may transfer such amounts to 
``Salaries and Expenses, General Legal Activities'' from available 
appropriations for the current fiscal year for the Department of 
Justice as may be necessary to respond to such circumstances: Provided 
further, That any transfer pursuant to the previous proviso shall be 
treated as a reprogramming under section 605 of this Act and shall not 
be available for obligation or expenditure except in compliance with 
the procedures set forth in that section.
    SALARIES AND EXPENSES, UNITED STATES ATTORNEYS
    Provided further, That notwithstanding any other provision of law, 
the Attorney General shall transfer to the Department of Justice 
Working Capitol Fund unobligated all unexpended funds appropriated by 
the first heading of chapter 2 of title II of division B of Public Law 
l06-246 and by section 202 of division A of appendix H.R. 5666 of 
Public Law l06-554: Provided further, That the fourth proviso under the 
heading 'Salaries and Expenses, United States Attorneys'' in title I of 
H.R. 3421 of the 106th Congress, as enacted by section 1000(a)(1) of 
Public Law 106-111 shall apply to amounts made available under this 
heading for fiscal year 2002.
    SALARIES AND EXPENSES, COMMUNITY RELATIONS SERVICE
    and, in addition, up to $1,000,000 of funds made available to the 
Department of Justice in this Act may be transferred by the Attorney 
General to this account: Provided, That notwithstanding any other 
provision of law, upon a determination by the Attorney General that 
emergent circumstances require additional funding for conflict 
prevention and resolution activities of the Community Relations 
Service, the Attorney General may transfer such amounts to the 
Community Relations Service, from available appropriations for the 
current fiscal year for the Department of Justice, as may be necessary 
to respond to such circumstances: Provided further, That any transfer 
pursuant to the previous proviso shall be treated as a reprogramming 
under section 605 of this Act and shall not be available for 
obligations or expenditures except in compliance with the procedures 
set forth in that section.
    CITIZENSHIP AND BENEFITS, IMMIGRATION SUPPORT AND PROGRAM DIRECTION
    Provided further, That the Attorney General may transfer any funds 
appropriated under this heading and the heading ``Enforcement and 
Border Affairs'' between said appropriations not-withstanding any 
percentage transfer limitations imposed under this appropriations Act 
and may direct such fees as are collected by the Immigrations and 
Naturalization Service to the activities funded under this heading and 
the heading ``Enforcement and Border Affairs'' for performance of the 
functions for which the feed legally may be expired.
    FEDERAL PRISON SYSTEM
    SALARIES AND EXPENSES
    Provided, That the Attorney General may transfer to the Health 
Resources and Services Administration such amounts as may be necessary 
for direct expenditures by that Administration for medical relief for 
inmates of Federal penal and correctional institutions:
    BUILDINGS AND FACILITIES
    Provided further, That not to exceed 10 percent of the funds 
appropriated to ``Buildings and Facilities'' in this or any other Act 
may be transferred to ``Salaries and Expenses'', Federal Prison System, 
upon notification by the Attorney General to the Committees on 
Appropriations of the House of Representatives and the Senate in 
compliance with provisions set forth in section 605 of this Act.
    STATE AND LOCAL LAW ENFORCEMENT ASSISTANCE
    For assistance authorized by the Violent Crime Control and Law 
Enforcement Act of 1994 (Public Law 103-322), as amended (``the 1994 
Act''); the Omnibus Crime Control and Sale Streets Act of 1968 as 
amended (``the 1968 Act''); the Victims of Child Abuse Act of 1990, as 
amended (``the 1990 Act''); and the Victims of Trafficking and Violence 
Protection Act of 2000 (Public Law 106-386); $2,403,354,000 (including 
amounts for administrative costs, which shall be transferred to and 
merged, with the ``Justice Assistance'' account), to remain available 
until expended as follows: . . .
    WEED AND SEED PROGRAM FUND
    For necessary expenses, including salaries and related expenses of 
the Executive Office for Weed and Seed, to implement ``Weed and Seed'' 
program activities, $58,925,000, to remain available until expended, 
for intergovernmental agreements, including grants, cooperative 
agreements, and contracts, with State and local law enforcement 
agencies, non-profit organizations and agencies of local government 
engaged in the investigation and prosecution of violent crimes and drug 
offenses in ``Weed and Seed'' designated communities, and for either 
reimbursements or transfers to appropriation accounts of the Department 
of Justice and other Federal agencies which shall be specified by the 
Attorney General to execute the ``Weed and Seed'' program strategy: 
Provided, That funds designated by Congress through language for other 
Department of Justice appropriation accounts for ``Weed and Seed'' 
program activities shall be managed and executed by the Attorney 
General through the Executive Office for Weed and Seed: Provided 
further; That the Attorney General may direct the use of other 
Department of Justice funds and personnel in support of ``Weed and 
Seed'' program activities only after the Attorney General notifies the 
Committees on Appropriations of the House of Representatives and the 
Senate in accordance with section 605 of this Act.
    COMMUNITY ORIENTED POLICING SERVICES
    Provided further, That all prior year balances derived from the 
Violent Crime Trust Fund for Community Oriented Policing Services may 
be transferred into this appropriation: Provided further, That the 
officer redeployment demonstration described in section 1701(b)(1)(C) 
shall not apply to equipment, technology, support system or overtime 
grants made pursuant to part Q of title I thereof (42 U.S.C. 3796dd et 
seq.)
    JUVENILE JUSTICE PROGRAMS
    For grants, contracts, cooperative agreements, and other assistance 
authorized by the Juvenile Justice and Delinquency Prevention Act of 
1974, as amended (``the Act''), including salaries and expenses in 
connection therewith to be transferred to and merged with the 
appropriations, for Justice Assistance, $286,403,000, to remain 
available until expended,. . .

    TITLE III--THE JUDICIARY
    General Provisions.
    ``Sec. 302. Not to exceed 5 percent of any appropriation made 
available for the current fiscal year for the Judiciary in Act may be 
transferred between such appropriations, but no such appropriation, 
except ``Courts of Appeals, District Courts, and Other Judicial 
Services, Defender Services'' and ``Courts of Appeals, District Courts, 
and Other Judicial Services, Fees of Jurors and Commissioners'', shall 
be increased by more than 10 percent by any such transfers: Provided, 
That any transfer pursuant to this section shall be treated as a 
reprogramming of funds under section 605 of this Act and shall not be 
available for obligation or expenditure except in compliance with the 
procedures set forth in that section.

    TITLE IV--DEPARTMENT OF STATE AND RELATED AGENCY DEPARTMENT OF 
STATE
    ADMINISTRATION OF FOREIGN AFFAIRS DIPLOMATIC AND CONSULAR PROGRAMS
    Provided, That, of the amount made available under this heading, 
not to exceed $4,000,000 may be transferred to, and merged with, funds 
in the ``Emergencies in the Diplomatic and Consular Service'' 
appropriations account, to be available only for emergency evacuations 
and terrorism rewards
    EMERGENCIES IN THE DIPLOMATIC AND CONSULAR SERVICE
    For expenses necessary to enable the Secretary of State to meet 
unforeseen emergencies arising in the Diplomatic and Consular Service, 
$6,500,000, to remain available until expended as authorized, of which 
not to exceed $1,000,000 may be transferred to and merged with the 
Repatriation Loans Program Account, subject to the same terms and 
conditions
    REPATRIATION LOANS PROGRAM ACCOUNT
    For the cost of direct loans, $612,000, as authorized: Provided, 
That such costs, including the cost of modifying such loans, shall be 
as defined in section 502 of the Congressional Budget Act of 1974 In 
addition, for administrative expenses necessary to carry out the direct 
loan program,$607,000, which may be transferred to and merged with the 
Diplomatic and Consular Programs account under Administration of 
Foreign Affairs.
    GENERAL PROVISIONS-DEPARTMENT OF STATE AND RELATED AGENCY
        ``Sec. 402. Not to exceed 5 percent of any appropriation made 
available for the current fiscal year for the Department of State in 
this Act may be transferred between such appropriations, but no such 
appropriation, except as otherwise specifically provided, shall be 
increased by more than 10 percent by any such transfers Provided, That 
not to exceed 5 percent of any appropriation made available for the 
current fiscal year for the Broadcasting Board of Governors in this Act 
may be transferred between such appropriations, but no such 
appropriation, except as otherwise specifically provided, shall be 
increased by more than 10 percent by any such transfers Provided 
further, That any transfer pursuant to this section shall be treated as 
a reprogramming of funds under section 605 of this Act and shall not be 
available for obligation or expenditure except in compliance with the 
procedures set forth in that section.
    TRANSFER LANGUAGE INCLUDED IN THE DEFENSE APPROPRIATIONS ACT
    Since at least 1986, the bills appropriating funds for the 
Department of Defense have carried a provision that allows for general 
transfer authority. The provision establishes a total amount that may 
be transferred and sets certain guidelines for these transfers. The 
general transfer authority applies to the transfer of funds for the 
fiscal year in which the provision was enacted. For example, the 
general transfer authority provision included in the Department of 
Defense Appropriations, 2002, is used for transfers only between fiscal 
year 2002 appropriations.
    In addition to the provision on general transfer authority, the 
Defense Appropriations bills contain specific transfer authorities for 
specific purposes. The most common specific transfer authorities are: 
environmental restoration, contingency operations, foreign currency 
fluctuations, and drug interdiction. When specific transfer authority 
is provided, it is provided in addition to other transfer authorities, 
including the general transfer authority, contained in the Act.
    The underlying statute for this transfer authority is contained in 
title 10 U.S.C. Section 2214. In addition, Section 2215 of title 10 
prohibits the transfer of Department of Defense funds to any other 
department or agency without a certification from the Secretary of 
Defense that transferring such funds is in the national security 
interest of the United States.
    Section 8005 of the fiscal year 2003 Department of Defense 
Appropriations Act includes the following transfer of funds language:
    ``Sec. 8005. Upon determination by the Secretary of Defense that 
such action is necessary in the national interest, he may, with the 
approval of the Office of Management and Budget, transfer not to exceed 
$2,500,000,000 of working capital funds of the Department of Defense or 
funds made available in this Act to the Department of Defense for 
military functions (except military construction) between such 
appropriations or funds or any subdivision thereof, to be merged with 
and to be available for the same purposes, and for the same time 
period, as the appropriation or fund to which transferred: Provided, 
That such authority to transfer may not be used unless for higher 
priority items, based on unforeseen military requirements, than those 
for which originally appropriated and in no case where the item for 
which funds are requested has been denied by the Congress: Provided 
further, That the Secretary shall notify the Congress promptly of all 
transfers made pursuant to this authority or any authority in this Act: 
Provided further, That no part of the funds in this Act shall be 
available to prepare or present a report to the Committees on 
Appropriations for reprogramming of funds, unless for higher priority 
items, based on unforeseen military requirements, than those for which 
originally appropriated and in no case where the item for which 
reprogramming is requested has been denied by the Congress: Provided 
further, That a request for multiple reprogrammings of funds using 
authority in this section must be made prior to May 1, 2003.''
    TRANSFER LANGUAGE INCLUDED IN THE FOREIGN OPERATIONS APPROPRIATIONS 
ACT
    The annual appropriations Act for Foreign Operations includes a 
provision, section 509, which reads:
    ``None of the funds made available by this Act may be obligated 
under an appropriation account to which they were not appropriated, 
except for transfers specifically provided for in this Act, unless the 
President, prior to the exercise of any authority contained in the 
Foreign Assistance Act of 1961 to transfer funds, consults with and 
provides a written policy justification to the Committees on 
Appropriations of the House of Representatives and the Senate.''

               TRANSFER AUTHORITIES IN THE INTERIOR BILL

    Appropriations Accounts
    Department of the Interior:
    Bureau of Land Management, Central Hazardous Materials Fund - 
allows transfers to other accounts to pay for clean-ups.
    Bureau of Land Management, Wildland Fire Management - allows 
transfers to repay wildfire suppression transfers from other accounts.
    National Park Service Historic Preservation Fund - allows transfer 
of Save America's Treasures funds to accounts of Federal grant 
recipients.
    National Park Service, Construction - allows transfers to the Army 
Corps of Engineers (related to Everglades water projects).
    Bureau of Indian Affairs, Operation of Indian Programs - allows 
transfer of forestry funds to tribal trust accounts.
    Bureau of Indian Affairs, Construction - allows transfer of Navajo 
Indian Irrigation Project funds to the Bureau of Reclamation.
    Office of Special Trustee for American Indians, Federal Trust 
Programs - allows transfer of trust management improvement funds to the 
Bureau of Indian Affairs and Departmental Management.
    Office of Special Trustee for American Indians, Indian Land 
Consolidation--allows transfer of trust management improvement funds to 
the Bureau of Indian Affairs and Departmental Management.
    Departmental Offices, Natural Resource Damage Assessment and 
Restoration--allows transfers to other accounts to carry out activities 
under the Comprehensive Environmental Response, Compensation, and 
Liability Act (CERCLA).
    Department of Agriculture:
    Forest Service, Wildland Fire Management--allows transfers to repay 
wildfire suppression transfers from other accounts and for State and 
volunteer fire assistance and for forest health management, etc., and 
for reimbursement for Endangered Species Act consultation.
    Administrative Provisions, Forest Service--allows transfers from 
other accounts for to wildland fire management and transfers to other 
agencies for Forest Service activities (work performed by others).
    General Provisions
    Section 101--allows transfers to repair facilities damaged by 
fires, floods, storms, etc.
    Section 102--allows transfers from no-year accounts to respond to 
wildland fires and various other specifically enumerated emergencies.
    Section 113--allows transfer of Bureau of Indian Affairs and Office 
of Special Trustee appropriations for trust management activities 
pursuant to the High Level Implementation Plan.
    Section 116--allows transfers within Tribal Priority Allocation 
funds (Bureau of Indian Affairs) to address funding inequities.

       TRANSFER AUTHORITIES LABOR, HHS AND EDUCATION SUBCOMMITTEE

    DEPARTMENT OF LABOR
    Appropriation Act Transfer Authorities - Discretionary
    Section 102 of the fiscal year 02 Labor, HHS, Education 
Appropriations Act allows the Secretary to transfer up to 1 percent of 
funds between appropriations so long as no account is increased by more 
than 3 percent as the result of the transfer.
    Section 501 of the fiscal year 02 Labor, HHS, Education 
Appropriations Act allows the Secretary to transfer unexpended balances 
of prior appropriations to accounts corresponding to current 
appropriations in the LHE bill for the same purposes and periods of 
time for which they were originally appropriated.

    DEPARTMENT OF HEALTH AND HUMAN SERVICES
    Appropriation Act Transfer Authorities--Discretionary Funds
    Secretary's One (1) Percent Transfer Authority HHS agencies
    General Provisions Title II Section 207: Not to exceed 1 percent of 
any discretionary funds (pursuant to the Balanced Budget and Emergency 
Deficit Control Act of 1985, as amended) which are appropriated for the 
current fiscal year for the Department of Health and Human Services in 
this or any other Act may be transferred between appropriations, but no 
such appropriation shall be increased by more than 3 percent by any 
such transfer: Provided, That an appropriation may be increased by up 
to an additional 2 percent subject to approval of the House and Senate 
Committees on Appropriations: Provided further, That the Appropriations 
Committees of both Houses of Congress are notified at least 15 days in 
advance of any transfer.

    DEPARTMENT OF EDUCATION
    Appropriation Act Transfer Authorities
    Section 304 of the fiscal year 02 Labor, HHS, Education 
Appropriations Act allows the Secretary to transfer up to 1 percent of 
funds between appropriations so long as no account is increased by more 
than 3 percent as the result of the transfer.
    Section 501 of the fiscal year 02 Labor, HHS, Education 
Appropriations Act allows the Secretary to transfer unexpended balances 
of prior appropriations to accounts corresponding to current 
appropriations in the LHE bill for the same purposes and periods of 
time for which they were originally appropriated.
    Authorizing Statute Transfer Authorities
    Section 411 of the Department of Education Organization Act allows 
the Secretary or any officer or employee of the Department to exercise 
any legislative authority (including appropriations Acts) to carry out 
any function transferred from a predecessor agency through the 
Organization Act.
    Section 424 of the Department of Education Organization Act allows 
the Secretary, when authorized in an appropriation Act, to transfer 
funds from one appropriation to another within the Department so long 
as no account is either increased or decreased by more than 5 percent 
or beyond its authorization level as a result of the transfer.
    Section 501 of the Department of Education Organization Act 
provides that all contracts, unexpended balances, allocations and other 
funds connected to programs transferred by the Organization Act shall 
be transferred to the Secretary. It further requires that unexpended 
funds transferred must be used only for the purposes for which they 
were originally authorized and appropriated.

United States Department of Agriculture Statutory Transfer Authority in 
                          Appropriations Acts

----------------------------------------------------------------------------------------------------------------
          STATUTORY CITATION/DESCRIPTION                                     BRIEF TEXT
----------------------------------------------------------------------------------------------------------------
General Miscellaneous Provisions                    ............................................................
----------------------------------------------------------------------------------------------------------------
Ag. Appropriations Act, 2002 (P.L. 107-76, Title    Permits the Secretary to transfer discretionary funds made
 VII, Sec. 704). Transfer of discretionary           available by this Act, as well as other available
 unobligated balances of the Department of           unobligated discretionary balances of the Department, to
 Agriculture to the WCF.                             the WCF for the acquisition of plant and capital equipment,
                                                     with prior approval from the agency administrator.
----------------------------------------------------------------------------------------------------------------
Treasury and General Government Appropriations      Authorizes the head of each Executive department and agency
 Act, 2002 (P.L. 107-67, Title VI, Sec. 629).        to transfer to the Policy and Operations account, GSA, with
 Authorizes the transfer of funds made available     0MB approval, funds made available for fiscal year 2002,
 for fiscal year 2002 to the GSA, including          including rebates from charge cards and other contracts for
 rebates from charge cards and other contracts.      use to support Governmentwide financial, information
                                                     technology, procurement, and other management innovations,
                                                     initiatives and activities, as approved by 0MB. Transfers
                                                     only to be made 15 days following notification of the House
                                                     and Senate Committees on Appropriations by the Director of
                                                     0MB. Total funds transferred shall not exceed $17,000,000.
----------------------------------------------------------------------------------------------------------------
Farm Service Agency--Farm Loans and Other Programs  ............................................................
----------------------------------------------------------------------------------------------------------------
Ag. Appropriations Act, 2002 (P.L. 107-76, Title    ``Provided further, That other funds made available to the
 I, Farm Service Agency, Salaries and Expenses).     Agency for authorized activities may be advanced to and
 Merging of other funds into this account.           merged with this account:''
----------------------------------------------------------------------------------------------------------------
Ag. Appropriations Act, 2001 (P.L. 106-387, Title   ``Provided further, That this amount shall be transferred to
 I, Farm Service Agency, Dairy Indemnity Program).   the Commodity Credit Corporation: Provided further, That
 Transfer to the Commodity Credit Corporation.       the Secretary is authorized to utilize the services,
                                                     facilities, and authorities of the Commodity Credit
                                                     Corporation for the purpose of making dairy indemnity
                                                     disbursements.''
----------------------------------------------------------------------------------------------------------------
Ag. Appropriations Act, 2002 (P.L. 107-76, Title    Provides that, ``for administrative expenses necessary to
 I, Agricultural Credit Insurance Fund). Transfer    carry out the direct and guaranteed loan programs,
 of funds for administrative costs.                  $280,595,000, of which $272,595,000 shall be transferred to
                                                     and merged with the appropriation for ``Farm Service
                                                     Agency, Salaries and Expenses''.'
----------------------------------------------------------------------------------------------------------------
Ag. Appropriations Act, 2002 (P.L. 107-76, Title    Provides that, ``Funds appropriated by this Act to the
 I, Agricultural Credit Insurance Fund). Transfer    Agricultural Credit Insurance Program Account for farm
 of funds among operating and direct loans.          ownership and operating direct loans and guaranteed loans
                                                     may be transferred among these programs: Provided, That the
                                                     Committees on Appropriations of both Houses of Congress are
                                                     notified at least 15 days in advance of any transfer.''
----------------------------------------------------------------------------------------------------------------
P.L. 480                                            ............................................................
----------------------------------------------------------------------------------------------------------------
Ag. Appropriations Act, 2002 (P.L. 107-76, Title    ``In addition, for administrative expenses to carry out the
 V, P1. 480 Title I Program Account). Transfer of    credit program of title I, Public Law 83-480, and the Food
 funds for administrative costs.                     for Progress Act of 1985, to the extent funds appropriated
                                                     for Public Law 83-480 are utilized, $2,005,000, of which
                                                     $1,033,000 may be transferred to and merged with the
                                                     appropriation for ``Foreign Agricultural Service, Salaries
                                                     and Expense'', and of which $972,000 may be transferred to
                                                     and merged with the appropriation for ``Farm Service
                                                     Agency, Salaries and Expenses.'' '
----------------------------------------------------------------------------------------------------------------
Ag. Appropriations Act, 2002 (P.L. 107-76, Title    ``.. Provided, That funds made available for the cost of
 V, P.L 480 Title I Ocean Freight Differential       agreements under title I of the Agricultural Trade
 Grants). Interchange of funds within Title I.       Development and Assistance Act of 1954 and for title I
                                                     ocean freight differential may be used interchangeably
                                                     between the two accounts with prior notice to the
                                                     Committees of Appropriations of both Houses of Congress.''
----------------------------------------------------------------------------------------------------------------
Commodity Credit Corporation                        ............................................................
----------------------------------------------------------------------------------------------------------------
Ag. Appropriations Act, 2002 (P.L. 107-76, Title    Provides that, `.. $3,224,000 may be transferred to and
 V, Commodity Credit Corporation Export Loans        merged with the appropriation for ``Foreign Agricultural
 Program Account). Transfer of funds for             Service, Salaries and Expenses'', and of which $790,000 may
 administrative costs.                               be transferred to and merged with the appropriation for
                                                     ``Farm Service Agency, Salaries and Expenses''.'
----------------------------------------------------------------------------------------------------------------
Rural Development                                   ............................................................
----------------------------------------------------------------------------------------------------------------
Ag. Appropriations Act, 2002 (P.L. 107-76, Title    Provides that oif funds made available for rural utilities
 III, Rural Community Advancement Program [RCAP],    programs under RCAP, ``not to exceed $24,000,000 shall be
 115 STAT. 719). Provides for three transfers.       for water and waster disposal systems for rural and native
                                                     villages in Alaska pursuant to section 306D of such Act,
                                                     with up to 1 percent available to administer the program
                                                     and up to 1 percent available to improve interagency
                                                     coordination may be transferred to and merged with the
                                                     appropriation for ``Rural Development, Salaries and
                                                     Expenses;'' '
                                                    Provides that any prior year balances for high cost energy
                                                     grants authorized by section 19 of the Rural
                                                     Electrification Act of 1936 shall be transferred to and
                                                     merged with the ``Rural Utilities Service, High Energy
                                                     Costs Grants'' account.
                                                    Provides that of the funds appropriated by this Act to RCAP
                                                     for guaranteed business and industry loans, funds may be
                                                     transferred to direct business and industry loans as deemed
                                                     necessary by the Secretary and with prior approval of the
                                                     Committees on Appropriations of both Houses of Congress.
----------------------------------------------------------------------------------------------------------------
Ag. Appropriations Act, 2002 (P.L. 107-76, Title    Provides that any balances available from prior years for
 III, Rural Development Salaries and Expenses, 115   the Rural Utilities Service, Rural Housing Service, and the
 STAT. 721). Provides for prior year balances to     Rural Business-Cooperative Service salaries and expenses
 be transferred.                                     accounts shall be transferred to and merged with this
                                                     appropriation.
----------------------------------------------------------------------------------------------------------------
Ag. Appropriations Act, 2002 (P.L. 107-76, Title    Provides for administrative expenses necessary to carry out
 III, Rural Housing Service, Rural Housing           the direct and guaranteed housing loan programs to be
 Insurance Fund Program Account, 115 STAT. 721).     transferred to and merged with the appropriation for
 Provides for transfer of administrative expenses.   ``Rural Development, Salaries and Expenses.''
----------------------------------------------------------------------------------------------------------------
Ag. Appropriations Act, 2002 (P.L. 107-76, Title    A combined amount is appropriated for these loans and grants
 III, Rural Housing Service, Farm Labor Program      and the Appropriations Act states the funds are ``for
 Account, 115 STAT. 723). Provides funds for loans   direct farm labor housing loans and domestic farm labor
 and grants.                                         housing grants and contracts.'' Use of funds is explained
                                                     at 42 U.S.C. 1806 and it states that loans can be forgiven
                                                     under certain circumstances; thus, loan funds would become
                                                     grant funds.
----------------------------------------------------------------------------------------------------------------
Ag. Appropriations Act, 2002 (P.L. 107-76, Title    Provides for administrative expenses necessary to carry out
 III, Rural Business-Cooperative Service, Rural      the direct Rural Business--Cooperative Service loan
 Development Loan Fund Program Account, 115 STAT.    programs to be transferred to and merged with the
 723). Provides for transfer of administrative       appropriation for ``Rural Development, Salaries and
 expenses.                                           Expenses.''
----------------------------------------------------------------------------------------------------------------
Ag. Appropriations Act, 2002 (P.L. 107-76, Title    Provides for administrative expenses necessary to carry out
 III, Rural Utilities Service, Rural                 the direct and guaranteed electric and telecommunications
 Electrification and Telecommunications Loan         loan programs to be transferred to and merged with the
 Program Account, 115 STAT. 724). Provides for       appropriation for ``Rural Development, Salaries and
 transfer of administrative expenses.                Expenses.''
----------------------------------------------------------------------------------------------------------------
Ag. Appropriations Act, 2002 (P.L. 107-76, Title    Provides for administrative expenses, including audits,
 III, Rural Utilities Service, Rural Telephone       necessary to carry out the loan programs to be transferred
 Bank Program Account, 115 STAT. 725). Provides      to and merged with the appropriation for ``Rural
 for transfer of administrative expenses.            Development, Salaries and Expenses.''
----------------------------------------------------------------------------------------------------------------
Ag. Appropriations Act, 2002 (P.L. 107-76, Title    Provides for administrative expenses necessary to carry out
 III, Rural Utilities Service, Local Television      the guaranteed loan programs to be transferred to and
 Loan Guarantee Program Account, 115 STAT. 725).     merged with the appropriation for ``Rural Development,
 Provides for transfer of administrative expenses.   Salaries and Expenses.''
----------------------------------------------------------------------------------------------------------------
Animal and Plant Health Inspection Service          ............................................................
----------------------------------------------------------------------------------------------------------------
Ag. Appropriations Act, 2002 (P.L. 107--76, Title   Provides that, in emergencies which threaten any segment of
 VII, Sec. 704). Transfer of funds from agencies     the agricultural production industry of this country, the
 or corporations of the Department for use in        Secretary may transfer from other appropriations or funds
 plant and animal disease emergencies                available to the agencies or corporations of the Department
                                                     such sums as may be deemed necessary, to be available only
                                                     in such emergencies for the arrest and eradication of
                                                     contagious or infectious diseases or pests of animals,
                                                     poultry, or plants, and for expenses in accordance with the
                                                     Act of February 28, 1947, and section 102 of the Act of
                                                     September 21, 1944, and any unexpended balances of funds
                                                     transferred for such emergency purposes in the preceding
                                                     fiscal year shall be merged with such transferred amounts.
----------------------------------------------------------------------------------------------------------------
Agriculture. Appropriations Act, 2002 (P.L. 107-    Of the total amount available under this heading in fiscal
 76, Title I). Makes Agricultural Quarantine         year 2002, $84,813,000 shall be derived from user fees
 Inspection user fees available by appropriation.    deposited in the Agricultural Quarantine Inspection User
                                                     Fee Account.
----------------------------------------------------------------------------------------------------------------
Departmental Administration                         ............................................................
----------------------------------------------------------------------------------------------------------------
Ag. Appropriations Act, 2002 (P.L. 107-76, Title    Allows the funds appropriated to the Department for
 I) Transfer of unexpended balances for Hazardous    hazardous materials management to be transferred to
 Materials Management.                               agencies of the Department as required.
----------------------------------------------------------------------------------------------------------------
Ag. Appropriations Act, 2002 (P.L. 107-76, Title    Permits transfers to or from the rental payments account
 I) Transfer of unexpended balances for              based on changing space requirements.
 Agriculture Buildings and Facilities and Rental
 Payments.
----------------------------------------------------------------------------------------------------------------
Office of the Secretary                             ............................................................
----------------------------------------------------------------------------------------------------------------
Ag. Appropriations Act, 2002 (P.L. 107-76, Title    Allows a portion of the funds appropriated to the Office of
 I) Transfer of unexpended balances for the Office   the Assistant Secretary to be transferred to agencies.
 of the Assistant Secretary for Congressional
 Relations.
----------------------------------------------------------------------------------------------------------------
Food and Nutrition Service                          ............................................................
----------------------------------------------------------------------------------------------------------------
Ag. Appropriations Act, 2002 (P.L. 107-76, Title    ``For necessary expenses to carry out the National School
 IV, Child Nutrition Program) Authorizes the         Lunch Act (42 U.S.C. 1751 et seq.), except section 21, and
 transfer of Section 32 Funds to Child Nutrition     the Child Nutrition Act of 1966 (42 U.S.C. 1771 et seq.),
 for Use in School Lunch Programs.                   except sections 17 and 21;'' $10.1 billion ``, to remain
                                                     available through September 30, 2003, of which'' $4.9
                                                     billion ``is hereby appropriated and'' $5.2 billion ``shall
                                                     be derived by transfer from funds available under section
                                                     32 of the Act of August 24, 1935 (7 U.S.C. 612c):''
----------------------------------------------------------------------------------------------------------------


    Ms. Pelosi. I thank the gentleman.
    Mr. Obey. Basically what we are recommending is four 
things: to strike from the bill the provision that overrides 
existing law to allow funds transferred to the new Department 
to be spent for any purpose; to strike the provision that 
allows the President to deduct up to 5 percent of 
appropriations made for agencies scheduled to be moved to that 
Department; to strike the provision that allows the Secretary 
of Homeland Security to sell off real estate and other assets 
without congressional supervision; and to strike the provision 
that grants the Secretary permanent authority to transfer funds 
among accounts within his Department. And instead, as the 
chairman said, we substitute existing procedures, those which 
are very similar to those that were provided when the 
Department of Energy and the Department of Education were 
created.
    Ms. Pelosi. I thank the distinguished chairman, and I thank 
you.
    Chairman Armey. The gentleman from Oklahoma, Mr. Watts.
    Mr. Watts. Mr. Chairman, I am going to be brief. And I want 
to start by echoing what the gentlelady from California said. I 
think you all have put a lot of thought into this and, Mr. 
Obey, based on your charts--and I hope we all would consider 
the massive, massive undertaking that we are taking on in this 
effort, and I think when you talk about the appropriations 
process, you two are probably as knowledgeable about the 
appropriations process as any people in this House.
    And then the transfer authority, I had some questions about 
the transfer authority that you have actually answered based on 
what Ms. Pelosi has asked.
    So I appreciate your being here today, but I will ask one 
question. Chairman Young, you mentioned some other areas that 
the transfer authority applied to. Can you just kind of name 
some of those and give us some background, some reference on 
what you have actually submitted for the record, some things 
that the transfer authority has applied to in the past to kind 
of put the President's request in context?
    Mr. Young of Florida. Let me start on the first page and I 
think it is a very good question.
    The first page has to do with transfer provisions in the 
Fiscal Year 2002 Department of Justice Appropriations Act. 
Under General Administration, salaries, and expenses, we 
provided that the Attorney General is authorized to transfer, 
under such terms and conditions as the Attorney General shall 
specify, forfeited real or personal property of limited or 
marginal value at such value as determined by guidelines 
established by the Attorney General.
    The idea here is that we give the heads of the agencies the 
authority they need, but only after Congress has reviewed the 
requests and determined that they really should have that 
authority.
    Also on the first page, under legal activities, salaries 
and expenses, ther is basically the same provision, but again 
only after Congress reviewed the request and played its 
oversight role.
    There are three other items on that first page. On the 
second page, we provide a similar transfer authority for the 
Federal Prison System buildings and facilities account, also 
for State and local law enforcement assistance, the Weed and 
Seed program, community-oriented policing services, and 
juvenile justice programs. These are all requests that were 
made, the committee recommended favorably on what the agency 
requested, and they became part of the law.
    Mr. Watts. Mr. Chairman, you have adequately answered my 
question, but again I appreciate the thought that you all have 
put into this, and I hope that Congress will continue to 
understand its role in this new Agency, in the oversight role.
    And, Mr. Chairman, I yield back the balance of my time.
    Chairman Armey. Thank you. The gentleman from Texas, Mr. 
Frost.
    Mr. Frost. I thank the gentleman. The testimony by these 
two witnesses is very, very important. And Mr. Young, I would 
like to ask you a question, if I may. Despite the sympathetic 
statements that we heard from Mr. DeLay, if this committee 
ignores your recommendations and does not incorporate them in 
the bill that we report out on Friday, and if the Committee on 
Rules were to deny you a vote on your recommendations on the 
floor when this bill is considered, what would be your posture 
at that point?
    Mr. Young of Florida. Well, sir, that is a hypothetical 
question and I usually prefer not to respond to hypothetical 
questions. However, I can just say to you that I understand the 
awesome responsibility that this select committee has. That is 
why such very distinguished members such as yourselves are on 
this committee and have this responsibility. I am satisfied 
that you are going to recommend a workable bill, one that does 
what you have been charged with doing, and that will provide 
security for our homeland. And I think you would also report a 
bill that would be consistent with our constitutional 
responsibilities.
    The oath of office that we all take, basically is about 
supporting and defending the Constitution of the United States. 
Now, hypothetically, it is my strong desire and my strong hope 
that I am going to be just as excited about your proposal as 
you are going to be. That is my general attitude. Now, when you 
report that bill, I may come back and ask that you consider 
something different.
    My role is to be supportive of what this very select 
committee is going to recommend, but I think that I do not 
fulfill my responsibility, if you are suggesting something that 
I think is very inappropriate, and I don't remind you and give 
you what little advice I might have for you to consider. I 
think that is part of my responsibility, is to review what you 
are doing and suggest, if there is a reason to suggest, that 
maybe you should change something.
    So I will play that role, but think all of you know that I 
will play it in a very cooperative way. You and I have met on 
so many occasions at the Rules Committee, and I have always 
tried to be very direct and honest in answering your questions, 
and I would do the same thing on whatever bill you report.
    Mr. Frost. I would ask Mr. Obey the same question.
    Mr. Obey. Well, we can have reasonable disagreements about 
a lot of these pieces. But if in my view this package guts the 
principal protection that we have against tyranny and 
fundamental mistakes by government, namely the power of the 
purse, I would oppose it.
    Mr. Frost. And I would say to both gentlemen that it is the 
strong preference on our side of the aisle, that there be an 
open procedure, an open amendment procedure on the floor, and 
we hope that will be permitted by the Majority when our bill is 
sent to the Rules Committee.
    Mr. Obey. I will simply say that, like Mr. Young, I cannot 
believe that the top elected leadership of the greatest 
deliberative body in the Western world would in fact abdicate 
our historically long constitutional responsibilities on 
maintaining the control of the power of the purse.
    Mr. Frost. Thank you. One other question. Later today, 
probably much later today, we will hear from the Comptroller 
General of the United States, David Walker. We have a copy of 
his testimony already, and he points out the $3 billion issue 
raised by CBO. And let me just read you his recommendation:
    ``administration has urged that CBO estimates are inflated. 
More important than a precise cost estimate of the transition, 
however, is a recognition that there will be short-term 
transition costs and that these costs need to be made 
transparent. To fully recognize the transition costs, in fact, 
Congress should consider appropriating for them separately.'' .
    Do you agree with his recommendation?
    Mr. Obey. Well, it seems to me we ought to learn from what 
is happening with corporations these days. The market is in 
turmoil because people have lost trust. I think that they ought 
to be able to trust whatever Congress recommends to be honest 
in its accounting. And I am concerned that the reason we have 
these unprecedented and phenomenally dangerous grants of 
spending authority to the agencies is as a substitute for 
facing up to and as a method of hiding the true cost of these 
reorganization efforts.
    I don't think the American people will begrudge the 
President or any of us whatever funds are necessary to 
accomplish an intelligent reorganization of these functions, 
but I think they would be unforgiving if we sandbagged our 
constitutional processes or were not up front and honest with 
them about the actual costs about to be incurred.
    Mr. Frost. Thank you, gentlemen.
    Chairman Armey. The gentlelady from Ohio.
    Ms. Pryce. Thank you, Mr. Chairman.
    Gentlemen, welcome. Thank you for the hard work you have 
put into this. It is extremely important. Your committee is 
very busy this time of year, so we appreciate the efforts you 
put into this and your members as well.
    Mr. Obey. We welcome the relief from the floor activities.
    Ms. Pryce. Let me go in this direction. Your committee, by 
virtue of the process that we use here in the House of 
Representatives, works with every authorizing committee that we 
have. Do you believe that there is any reason that the normal 
authorization and appropriations process that we have used 
through the eons will not work if we put forth this bill? Do 
you think that it will, that it won't, that there are ways that 
we can streamline the process that would make it more efficient 
and come forward with a better product?
    Mr. Young of Florida. Government was intended to be 
inefficient. That is why there is a separation of powers; that 
is why there is a bicameral legislature. While we try for 
efficiency in expediting our business, it does not always work 
because of the way that our government was created.
    I would suggest to the gentlelady, that as a member of the 
Rules Committee she knows that usually the Appropriations or 
the respective subcommittees and the authorizing committees 
have a very good working relationship. We tend to be 
cooperative with each other.
    Now, you are dealing with something here that none of us 
have dealt with before. I was a young kid when Pearl Harbor was 
attacked, but I had no idea what ramifications the government 
went through in order to respond to Pearl Harbor and to fight 
and win one of our contruy's major wars. But I believe that the 
system that we have created does work.
    You have a different responsibility than most of our 
committees have been faced with. You are plowing new ground. I 
suggest that you have probably heard from a number of 
authorizing committee chairmen and ranking members, and if you 
haven't, I suspect that you will. You will probably find a lot 
of different opinions and a lot of different ideas, but that is 
why the brain trust that sits at your table is there, in order 
to filter through these ideas. And hopefully when you develop 
your product, you are going to have the support of the 
authorizing committees as well as the Appropriations Committee.
    Ms. Pryce. But the reason for the transfer authority and I 
think that the reason the administration wants to have it so 
badly is because of the inefficiencies that are built into our 
system that in most instances do protect us. But this is 
emergency-related. It is a fast response and a jolt is very 
important in this instance, so I am just wondering if--Mr. 
Obey, I can see you are eager to comment.
    Mr. Obey. Yes. I would like to comment. We have had a 
serious, serious problem develop in this country because of 
September 11. It is a very serious problem. But in my view, it 
is no more serious than the War of 1812 or World War I or World 
War II when we were in mortal combat to save the valleys of 
Western civilization, especially in World War II, and we did 
not use those dangers as an excuse to give away the main power 
that the Congress has to assure a sensible use of taxpayers' 
money and to protect freedom at the same time.
    When we come to this place the first time, all we have is a 
political license as politicians to become skilled, 
knowledgeable legislators over time. It is our service 
primarily on committees that turns us from politicians into 
politicians and legislators. And if this House does not take 
advantage of the knowledge and experience that the authorizers 
and the appropriators develop in their fields, then this House 
is not using its principal asset, and then we are making 
judgments that turn out to be almost solely political rather 
than substantive.
    So there is a reason that these processes have been 
developed over time. It is because virtually everything has 
been tried and these have been found to work. They are not 
perfect, but the Republic has gotten along pretty well for over 
200 years, and I don't think we have to do anything as drastic 
as gut the ability of Congress to fulfill its principal 
function of this country.
    Mr. Young of Florida. I would like to add that your 
responsibility and the threat that our country is dealing with, 
is different than the War of 1812, different than World War II 
and World War I, because for the first time we are not just 
dealing with an army on a battlefield or soldiers in trenches 
or in tunnels or in jungles, and our military organized as a 
military establishment. That is not what we are dealing with 
today. We are dealing with people who are hiding, cowards who 
come from behind the bush and do not attack a military 
institution or military production facility, but attack women 
and children. And we have watched this happen in Israel for 
many years, and that is the threat that America is facing 
today.
    So you have a challenge that is different than a committee 
like our armed services committees, that was preparing to fight 
a war. Instead you are preparing to fight an enemy, that you 
don't know where he is, but you have to provide the strength. 
This President has shown a strong leadership and we need to be 
as supportive as we can, but we can't do away with the 
Constitution in the process.
    And one other point I'd like to make that doesn't have to 
do with appropriations--you can't create a system that denies 
American people the freedoms that we are fighting to protect. 
If we legislate something that takes away these freedoms, we 
are almost as bad as the guy that takes them away by violent 
acts of terrorism.
    You have a tremendous responsibility, and I want to be 
there in a supporting role, but I still believe that the 
constitutional system works very well when dealing with the 
purse.
    Ms. Pryce. Thank you very much.
    Chairman Armey. I thank the gentleman for your comments, 
and the Chair recognizes the gentleman from New Jersey.
    Mr. Menendez. Thank you, Mr. Chairman. I want to thank Mr. 
Young and Mr. Obey for their insights. First, the committee 
voted out your recommendations on a bipartisan basis.
    Mr. Obey. Without objection.
    Mr. Menendez. Without objection. And from my perspective, I 
agree with that bipartisan decision.
    We have heard a lot from administration witnesses here 
speaking about flexibility, and that flexibility has been 
described in a variety of ways: budgetarily, personnel, and 
other ways.
    First of all, would you describe the provisions of the 
President's proposal on transfer authority and budgetary powers 
as extraordinary?
    Mr. Obey. Yes, and unprecedented.
    Mr. Menendez. Extraordinary and unprecedented. In that 
regard do you see, even though I agree with your position that 
you have stated, do you see anything that needs to be given in 
this regard to the executive branch to give them the 
flexibility they claim that they have, or do you believe that 
our process in and of itself will be able to guarantee the 
responses that may be unforeseen?
    Mr. Obey. The process is not going to guarantee 
flexibility. Maturity will guarantee flexibility. I mean, I 
think the record of this committee--let us take you back to day 
one. When we were hit, the executive branch's first request was 
to give them an unlimited amount of money for an unlimited 
amount of time. ``No Year money'' is what it is called. Both of 
us said, no way, we are not going to write a blank check. But 
by the end of the week, working together, we produced a $40 
billion package which gave the President greater flexibility.
    We are not arguing against flexibility, God knows we need 
it. What we are saying is don't use the argument about 
flexibility in order to throw out our protections and abandon 
our obligations. And we will give plenty of flexibility in the 
individual appropriation bills, flexibility that is appropriate 
to the specific programs. But you have different requirements 
for different kinds of programs. We recognize that it is a 
decentralized operation, but it works.
    Mr. Menendez. And lastly, do you believe that there should 
be some mechanism in this legislation that creates this new 
Department to ensure that nonsecurity missions that are being 
transferred into this Department should be preserved and 
enhanced; and, if so, do you have any suggestions as to how 
that could be accomplished?
    Mr. Obey. I personally don't think nonsecurity issues 
should be transferred into this Department, and I still think 
whatever you do on reorganization, the most important thing you 
can do is to upgrade the prestige and the strength and the 
clout of the White House Adviser on Homeland Security because 
as that chart demonstrates, you can have a Cabinet Secretary 
handling all the boxes in red. You have got to have somebody at 
the White House who has got enough clout and enough authority, 
official authority, so that the Congress and the agencies alike 
will respect his judgment in dealing with that whole universe.
    Mr. Menendez. But if I may just pursue that question, I 
understand your view, Mr. Obey; but, for example, if the Coast 
Guard ultimately gets transferred into this Department, it will 
by its nature have nonsecurity missions such as search and 
rescue, maritime environmental enforcement, navigational 
issues. Do you not think there should be mechanisms to ensure 
that those other missions that, whether voluntary or not, get 
transferred in here are preserved?
    Mr. Obey. Well, I would want them to. I think that is going 
to be very, very hard to do. I would hope that you could. I 
think it would be preferable to leave the Coast Guard in a 
different position than this legislation suggests, but I am 
open on that. But I think it is going to be very hard to do 
what you are talking about. It ought to be done. I doubt it 
will be. That is my concern.
    Mr. Young of Florida. I would like to offer a word of 
caution. You mentioned the responsibilities of the United 
States Coast Guard, and they have a tremendous responsibility. 
A lot of Members really aren't aware of what the Coast Guard 
does and what they are called on to do. Those of us who live in 
areas where the Coast Guard functions every day, understand 
this.
    I think you want to be careful. As you transfer the 
authority or responsibilities of an agency like the Coast 
Guard, you shouldn't disband it. Don't turn the Coast Guard 
into something that it was never intended to be. The Coast 
Guard is a military organization. When America goes to war, the 
Coast Guard goes to war. When we were in Bosnia we had Coast 
Guard port security units in the ports along the coastlines of 
the Baltic States. They are responsible for drug interdiction, 
search and rescue, and environmental issues in our ports. And 
they have been called on now to do a tremendous program of 
interdicting shipping coming into our ports, something we have 
not been able to do in the past because the Coast Guard has not 
had enough assets. But we don't want to divide up the Coast 
Guard so it can't do all of these things, and I wouldn't 
suggest creating a new agency either to do that, because nobody 
does it as well as the United States Coast Guard.
    One more thought. I have always felt that the Department of 
Transportation is not the right home for the Coast Guard. I 
believe they should be in the Department of Defense because 
they are a military organization.
    Chairman Armey. Mr. Chairman, I am afraid I am going to 
have to cut you off. Complete your thought.
    Mr. Young of Florida. Just don't divide up the Coast Guard.
    Chairman Armey. I thought it was a thought well taken, and 
I do appreciate it but I do feel we must get on. We have other 
panels waiting.
    The gentleman from Ohio.
    Mr. Portman. I thank the Chair, and I appreciate the 
testimony this morning from two members who put a lot of 
thought into this and had a lot of experience. I am tempted to 
get off on some of these issues about organization and 
structure, Mr. Obey, that you mentioned and, Chairman Yound, 
you mentioned with the Coast Guard; but I think it is more 
important to try to stay on the issues of your committee's 
appropriations responsibilities. If we have time I would love 
to get into that.
    All these boxes we see on the left and the right must be 
made more efficient, and therefore more effective, if this is 
to work. And the way the new Agency would be structured, 
according to what has been proposed to us, would be that there 
be one Border and Transportation Security Division of the 
Agency, which would include, as you know, Customs, Coast Guard, 
INS and so on. And that notion is consolidation simplification 
and keeping a good organization like the Coast Guard intact.
    A key worry as you know of the new Department is that they 
are going to be different from some other departments. And 
Chairman Young mentioned the agility of our enemy and the 
immoral nature of the threat. They think that the 
unpredictability of their mission will be as great or greater 
than the other department as a percentage of their budget. And 
I think we acknowledge there is a tremendous amount of 
unpredictability because of the nature of the threat.
    They are also worried that they are going to be heavy with 
regular full-time employees, so at the end of the year they are 
not going to have a lot to move around. And that is, primarily 
on the border side which is where most of the employees will 
be, they are not going to have an unobligated balance at the 
end of the year.
    A third concern is that without some transfer authority 
that is fairly substantial, their unanticipated needs may be 
met by moving within the same account, and may have the effect 
that Mr. Menendez just expressed concern about; in other words, 
taking away from nonhomeland security functions. All of those 
are reasons to give them more flexibility.
    I guess my question to you would be: Is there a middle 
ground between what the administration asked for, which was 5 
percent transfer authority, and where we have come out? I look 
at the Department of Energy organization bill, Department of 
Agriculture, what we already give DOD; and the chairman has 
been very good about talking about what actually happens year 
to year, that you do provide more flexibility.
    Mr. Portman. Given the extraordinary nature of the threat, 
is there any flexibility on your part in terms of meeting them 
part way up front and then being--you would be responsive as 
needs come in?
    Mr. Young. Well, first let me apologize to the gentleman 
for getting off on the Coast Guard. A question was asked that 
related to the Coast Guard, and I had the opportunity to say 
what I had to say.
    The proposal that we have recommended allows for the normal 
reprogramming procedures. Now, the way a reprogramming works 
is, the agency with the Administration's approval, sends a 
request to the Congress. We take a look at it, and we may sign 
off on it, an it is done. Or if we have questions, we will ask 
the agency, and as I said earlier, oftentimes they will say, 
that they haven't thought about that or may want to send a 
revised reprogramming that changes the source of funds, for 
example So we have some oversight.
    I have been here with the President since Richard Nixon was 
President, and I can say that they all want to get Congress off 
their back. They all want to be able to do whatever they want 
to do without Congress providing any oversight; and that is 
okay in a different form of government, but ours is a 
constitutional form of government.
    I think with the reprogramming provisions and the transfer 
authority that we have already provided on a regular basis; and 
the fact that we responded to September 11th with a $40 billion 
supplemental appropriation which provided no strings attached 
for the first $20 billion--and I am not sure that was even a 
good idea--but we did it because we wanted the President to be 
able to move quickly anywhere that he had to move, shows.
    I believe, that flexibility is already there in our system, 
but I think we have got to maintain the constitutional 
perogative of the Congress being responsible for the 
appropriation of funds and learning and knowing about how those 
funds are used. That is what I read to you from the 
Constitution earlier.
    Congress appropriates, and Congress will make sure that 
there is accountability for the money that has been spent. That 
is the way the system is supposed to work. It is what the 
Constitution intended, and that is what we are recommending 
here, that we stay within the Constitution.
    Mr. Obey. If I could just make the point, in all of the 33 
years I have been here, no Congress has ever changed any 
President's budget by more than 2.5 percent. That 2.5 percent 
is the difference between a monarchy and a democracy, and as 
the chairman indicated, we have immense flexibility now through 
the processes; and those processes are individualized so that 
different agencies are treated in different ways depending upon 
the nature of control that must remain in legislative hands in 
order to prevent abuse and the needs of the agencies involved. 
That has been worked out over time.
    But if you want an example of what will happen if we don't 
hang on to our constitutional responsibilities, look at that 
Transportation Security Administration. Five months after they 
were created, they still had not sent a budget down to the 
Congress. When they did send one down, it was so outlandishly 
ridiculous, that it became the laughing stock of the country. 
We can't afford that.
    Chairman Armey. I thank the gentleman for his cogent 
observation and thank the gentleman from Ohio, recognizing the 
gentlelady from Connecticut.
    Ms. DeLauro. Thank you very much, Mr. Chairman, and let me 
just use a word of my kids. When I listen to your testimony, it 
is awesome; and I will just say to you, thank you both for 
being skilled and knowledgeable legislators. You do us all 
proud here today as Members of this great institution.
    Let me--Ranking Member Obey, let me ask you a question. The 
issue of cost, that was raised in the letter that you 
coauthored with Representative Waxman, and have you seen any 
evidence to support the administration's contention that the 
cost of the new department, including its administration and 
the new entities that it creates, can be funded from savings 
achieved by, and I quote, ``eliminating redundancies in the 
current structure''?
    Mr. Obey. I have seen absolutely no evidence. In fact, to 
the contrary, people in this town who are the most skilled at 
making those evaluations have said just the opposite, including 
CBO.
    Look it, you have got 170,000 employees. Nobody can 
convince me they are all going to stay in the same buildings 
that they are located in now. Nobody can convince me you are 
not going to have new office buildings built as a result of 
this agency. Nobody can convince me that it isn't going to cost 
a lot of money to put in a whole new phone system, a whole new 
computer system, to move people; and I think it is pretty 
obvious that one of the reasons this added flexibility is being 
requested is simply so that the agencies can use program money 
to pay for those costs that are not being admitted up front.
    That is a classic OMB action; I don't care what 
administration you are talking about. And, to me, that means 
that you run the risk of having fewer port inspections, less 
border protection, less aggressive action in getting illegal 
entrance under control and out of the country.
    In the military, it is called ``tooth to tail,'' the ratio 
of tooth to tail. How much do you have to spend on the tail in 
order to provide a set of teeth up front? And there are 
obviously, in this kind of arrangement, going to be tremendous 
administrative costs. We will damage a lot of the substantive 
activities of these agencies if we don't admit up front what 
the administrative costs are going to be; and the best way to 
keep those costs down is to admit what they are up front and 
appropriate what is necessary and make judgments about whether 
there are unnecessary activities that should be curtailed or 
not.
    But no administrator in the history of this country has 
ever had the kind of authority that is being requested in this 
legislation to disregard existing law, spend money for purposes 
not provided by law. Never done it. No reason to do it now.
    Ms. DeLauro. Mr. Chairman, do you share that view, Mr. 
Obey's view of the--.
    Mr. Young. The question is, do I share that view?
    Ms. DeLauro. Yes.
    Mr. Young. Yes, I do. And if I might.
    Mr. Young. --say one thing that neither one of us has 
mentioned regarding flexibility--the Economy Act provides great 
flexibility. I would recommend that you have your staff review 
the Economy Act and advise all of you on just how much 
flexibility there is for executive branch agencies under the 
Economy Act to get reimbursements for activities that they 
believe need to be done in an emergency situation.
    We could go into a lot of detail about it today, but I 
think your staff could provide you with a review what the 
Economy Act provides for executive branch agencies.
    Ms. DeLauro. Thank you.
    Let me just ask, Mr. Chairman--Mr. Obey, in his comments, 
talked about his thoughts on the issue of CDC and NIH and 
moving out of the funding. I mean, there has been a tradition 
on the Labor-HHS subcommittee. We don't dictate to the NIH 
where they should spend the funds that are given to them. I 
think that that has been a very good practice, and both sides 
of the aisle have agreed that scientists know where these funds 
ought to be spent better than politicians.
    What is your sense--as I say, I have heard from Mr. Obey on 
this issue--about the proposal to allow the DHS Secretary to 
set priorities that affect NIH research?
    Mr. Obey. Me or--.
    Ms. DeLauro. I will ask Chairman Young first, and then I 
will ask Mr. Obey to comment.
    Mr. Young. I didn't hear part of your question.
    Ms. DeLauro. The point of the question is, how do you feel 
about the Secretary of the new department being able to set 
priorities that would affect the NIH research, given what we 
have prided ourselves on in the Appropriations Committee on 
Labor-HHS of not taking on the role of the scientists?
    Mr. Young. Well, let me say this. We have colleagues who 
believe that we should micromanage everything that every agency 
does, including the Department of Defense and NIH. We resist 
that. We resist that in our--and you are a member of our 
committee and you know that we do resist the attempts to 
micromanage. And so I believe that the Secretary of Homeland 
Security, if that is the title that that person is given, 
should be dealing with homeland security and should not be 
disrupting existing agencies that are going about the normal 
business of the Nation.
    But I would also suggest that the Secretary of Homeland 
Security should certainly be able to call on any of the 
agencies, whether they are within the jurisdiction of the new 
agency or not, for aid and assistance in providing security for 
the homeland.
    It is very much like the Central Command, for example, that 
is managing the war in Afghanistan. Central Command does not 
have a huge military organization under the command of Central 
Command, but they have the ability to reach out to other 
military organizations of all of the services for what they 
need as they go about their function.
    And so I would think that the ability to reach out and get 
the assistance certainly should be there for the Secretary of 
Homeland Security, but it should not be disruptive of the 
existing ongoing activities of those agencies.
    Mr. Obey. Why should we take the institution that has more 
credibility than virtually any other in government and screw it 
up?
    Ms. DeLauro. Thank you.
    Thank you, Mr. Chairman.
    Chairman Armey. Gentlemen, the Chair reserves the final 5 
minutes for himself. I am going to use my time to give you a 
few reassurances, and then I will save the remainder of my time 
for you, each of you, to make any final statement you would 
like to make before the committee.
    I would like to thank you for your excellent testimony. It 
is as I expected. But let me say, Mr. Young, I think you will 
see that this committee does understand, has a deep respect for 
our constitutional separation of powers. We are acutely aware 
of how important that is and how important, it be preserved.
    You will also see, I think, Mr. Obey, that this committee 
has not just saluted the first iteration that has come along. 
Indeed, the next two iterations of Homeland Security that you 
all see will be the chairman's mark, which will be completed 
sometime, I would guess, in the wee hours of tomorrow morning; 
and you will see, I think clearly, there that the chairman's 
mark reflects the respectful consideration of that which has 
been brought to us by all our committees of jurisdiction, as 
well as that which was initially introduced by the President.
    The next iteration you will see of the Homeland Security 
Act, following that, will be the report of this committee, and 
I dare say, judging by the people on this committee, you may 
see some difference between that and the chairman's mark as 
well, because there is a process that I think is deeply 
thoughtful and committed, and yet one where there will be 
divergent points of view that will be, I think, in the final 
analysis, worked out through the process of voting in this 
committee. So please take confidence in that as you watch the 
next few days.
    Finally, on the particular jurisdictional concern of your 
committee, the whole question of transfer authority 
flexibility, it is the Chair's understanding and hope that 
there are still ongoing discussions between your committee and 
the White House. If those are not going well, let the Chair 
offer whatever resources we have at the disposal of this 
committee to facilitate further discussion.
    It would be most advantageous, I think, to all concerned if 
indeed this very important committee of jurisdiction and the 
White House could come to some agreement that could be seen as 
satisfactory with respect to the need for flexibility on the 
part of the White House and the clear and certain commitment 
that your committee has to its constitutional mandates. And we 
would like to see that worked out and facilitate that, if at 
all possible.
    If not, then I am afraid both the White House and your 
committee will have to find a way hopefully to accept the 
communal judgment of this committee as we try to find out. It 
is far better that you work it out to your satisfaction first. 
We would like to help with that.
    With those observations, let me just then concede the 
remainder of my 5 minutes to the two gentlemen from the 
Appropriations Committee for your final observations before 
this committee. And I thank you again. Mr. Young.
    Mr. Young. Well, Mr. Chairman, first, thank you for again 
letting us be here to give you our thoughts on some of these 
important issues. And I want to emphasize what you just said, 
Mr. Chairman. It is important that the Congress and the 
President of the United States work together, and the Members 
of both political parties need to work together.
    On September 11th, the Pentagon had Republicans and 
Democrats who lost their lives. On September 11th, nearly 3,000 
people died in the World Trade Center. I would bet that there 
were both Republicans and Democrats in the World Trade Center, 
and I know some of them, because I lost some friends on that 
day.
    The people of America do not want to live in fear of 
terrorism, and they insist that we, the Congress, and the 
administration, work together to protect the people of this 
great country in our homes, in our places of business where we 
work, where we pray, and where we have recreation. I think that 
is essential, and I know that that is exactly what your 
committee is going to do; and our committee is going to do the 
same thing to work together with you and the President to do 
what is right for the people of America.
    Chairman Armey. Thank you. Mr. Obey.
    Mr. Obey. Well, Mr. Chairman, I also want to thank you and 
the committee for the opportunity to testify here today, and I 
would simply have one observation.
    We can all have legitimate arguments about structure, and 
some of those can be very important, and some of them can be 
minor; and we all have to make judgments about that. The one 
thing that is not minor and the one thing that in my view 
should not be compromisable is the willingness of this 
institution to maintain the power of the purse against the 
desires that are routinely expressed by every administration we 
have ever had in this country.
    There has never been a President, there has never been an 
OMB Director who hasn't wanted to use whatever incidents of the 
moment that they could find in order to get out from under the 
nuisance aspects of democracy. But Congress is maintaining the 
integrity of the power of the purse so that we can assure that 
taxpayers' dollars are never spent for any purpose other than 
that for which they were appropriated. That is a core value 
that we cannot compromise away.
    Mr. Young. Mr. Chairman, if I could just take 30 more 
seconds. I will tell you that in a lot of our conversations, 
when we are talking about responsibilities and authorities and 
the Constitution, we are not talking about the Appropriations 
Committee or only those of us who are appropriators. We are 
talking about the Congress of the United States.
    The Constitution doesn't say a darn thing about the 
Appropriations Committee, but it does say a lot about the 
Congress, and that is what we are trying to do--to represent 
the prerogatives and the responsibilities of the United States 
Congress.
    Chairman Armey. Thank you. I thank you again, gentlemen, 
and the witnesses are excused.
    The committee is now very excited and anxious to hear from 
the Armed Services Committee. I see that Ranking Member Skelton 
is here.
    Mr. Skelton--the Chair may introduce Ike Skelton. One of 
the wonderful pleasures we have in Congress is always 
introducing one another to people who already know one another, 
but we all do know Ike Skelton, that you are an acceptable 
spokesman for this committee to Republicans and Democrats 
alike. The collegial relationship and mutual dedication to the 
Nation's defense that you share with the chairman is clearly 
recognized throughout the House, and I believe--I daresay, on 
behalf of the Armed Services Committee and this committee that 
in the absence of Chairman Stump, that Ike Skelton, as ranking 
member, can speak for the entire committee; and we should 
receive your testimony without doubt or reservations.
    So, Mr. Skelton, it is my pleasure to welcome you before 
the committee. Our procedure is to give you, and we would hope 
for, a 5-minute opening statement. Also we would encourage you 
that your recorded statement will be entered in the record, 
your formal statement; proceed to the 5-minute rule, where we 
will anticipate the inclusion of both questions and answers 
within the individual committee member's 5 minutes.
    Mr. Skelton, please proceed.

   STATEMENT OF THE HONORABLE IKE SKELTON, RANKING MINORITY 
              MEMBER, COMMITTEE ON ARMED SERVICES

    Mr. Skelton. Mr. Chairman, Ms. Pelosi, I do thank you for 
this opportunity to make recommendations to the Select 
Committee from the Armed Services Committee on H.R. 5005.
    The members of the Armed Services Committee voted on a 
bipartisan basis to support the President's efforts to create a 
Department of Homeland Security, and I agree with my colleagues 
that establishing this Homeland Security Department is 
appropriate. Let me give this caveat, if I may. I only wish 
that the administration's proposal had been presented in a way 
that put forward a central homeland security strategy first.
    Mr. Chairman, the strategy which was presented only 
yesterday would have been more helpful to the standing 
committees--not just ours, but to the others--had we been given 
the opportunity to review it before making recommendations.
    I am glad that this committee, this Select Committee, will 
have the opportunity to review the strategy document that--
homeland security document that has been set forth, and I urge 
you to review it in light of your very arduous duties. I don't 
envy the work that you have cut out for yourselves.
    The Armed Services Committee was asked to examine those 
areas of this bill within its jurisdiction, mainly the 
functions being transferred from the Department of Defense and 
the national security elements of the Department of Energy, 
actually, two very narrow areas.
    The administration's proposal requests only modest 
transfers, and by and large, we did support those requests. We 
did, however, amend the underlying legislation in places to 
ensure that the capabilities of this new department were 
enhanced while not doing harm to the critical national security 
activities of the Department of Defense, Department of Energy.
    For example, our committee authorized the Under Secretary 
of Homeland Security for Chemical, Biological, Radiological and 
Nuclear Countermeasures to stand up an intelligence 
capability--I think this is very important--within the new 
department, focusing on those particular types of threats.
    The committee strengthened the new department by 
recognizing the importance of a coordinated research and 
development program to achieving our homeland security goals. 
We designated these functions as a core mission for the 
Secretary. The committee also called for the establishment of a 
center to serve as the primary location for carrying out 
research and development, a national security laboratory.
    The committee debated whether or not to put this in the 
statute, the location of this center of this laboratory, and 
although the administration has repeatedly mentioned the 
Lawrence Livermore Laboratories as its preferred site, we left 
the specifics of that selection up to the new Secretary of 
homeland defense.
    This effort to provide a centralized location for research 
and development activities, I think is critical. There are 
superb scientific capabilities throughout our national 
laboratory system, and this new department must be able to 
access the very best of those capabilities to secure the 
American people. The committee recommends that a primary 
research and development location with secondary locations at 
other national laboratories is needed.
    The committee believes these changes strengthen the new 
department while preserving the national security capabilities 
of the Departments of Defense and Energy. All told, the 
transfers from the Defense Department only amount to about 90 
people. It is a good thing, given the disastrous policies the 
Defense Department is now considering--and hear me out on 
this--considering with regard to the size and strength of our 
military forces.
    The Baltimore Sun published an article on July the 10th, 
indicating that the Pentagon is planning in fiscal year 2004 to 
drastically reduce the number of men and women in uniform, 
including 20,000-25,000 Army soldiers, 40,000 airmen, 20,000 
sailors, and 5,000 Marines; in total, over 90,000 servicemen 
and women may be forced to leave the services according to the 
Baltimore Sun. Such a reduction, in my opinion, is totally 
unacceptable, particularly while our Nation is at war.
    Now, I bring this to the Select Committee's attention, 
because these cuts, if undertaken, will do enormous damage to 
American national security. The administration's homeland 
security strategy contemplates the expanded use of military 
forces for homeland security missions.
    This proposal raises serious questions about the existing 
law, including the 1878 Posse Comitatus Act, which would have 
to be carefully considered. But in general terms, the strategy 
underlines the importance of a strong U.S. military to homeland 
security, because what the military does at home or through the 
National Guard, through the civil support teams or abroad, is 
very, very important. If we are successful in Afghanistan and 
other places, then the homeland security is all the better off.
    Beyond the United States, the President has publicly stated 
numerous times that the war on terrorism will continue for some 
time. And yet, while we have people searching for terrorists in 
Afghanistan, helping fight terrorism in the Philippines, 
training military forces in the Republic of Georgia, equipping 
and training government forces in Colombia, aiding the peace 
process throughout the Balkans, the Defense Secretary has 
contemplated reducing our troop strength. My position on this 
Armed Services Committee, in the work that I have done, causes 
me to seriously question that.
    Right now, we have over 85,000 Guard and Reservists doing 
active duty work. You wear these young people out, and yet 
there is--and this will have a direct effect on the legislation 
that you will pass out of your committee.
    Well, I could tell you, and my statement reflects the fact, 
that in recent days the Army Chief of Staff, the Navy Chief of 
Naval Operations, air force chief of staff, and the Commandant 
of the Marine Corps all have recommended additional soldiers, 
Marines, sailors, airmen; and my statement will reflect that. 
That was the reality before September the 11th, and the place 
of operation for our troops has only increased and been 
expanded since then.
    So I hope that that background will give you an idea of how 
a good many of us on the Armed Forces Committee feel with our 
relation to what you do, because all of this has to work 
together. You cannot isolate what you do from what many do in 
uniform, whether it be Guard, Reserve, active duty, aboard 
ship, or whenever it is. The security of the United States and 
the security of the young folks, senior citizens, and those 
that are our neighbors depends upon everybody working together.
    Your work product must dovetail with those in uniform, 
whether they be active duty, Guard, Reserve or the like. Thank 
you for this opportunity.
    [The statement of Mr. Skelton follows:]

   PREPARED STATEMENT OF HON. IKE SKELTON, RANKING MINORITY MEMBER, 
                      COMMITTEE ON ARMED SERVICES

    Thank you, Mr. Chairman and Ms. Pelosi. I appreciate the 
opportunity to explain the recommendations made by the Armed 
Services Committee in its amendments to H.R. 5005.
    The members of the Armed Services Committee voted on a 
bipartisan basis to support the president's efforts to create a 
Department of Homeland Security. I agree with my colleagues 
that establishing a homeland security department may be 
appropriate. I only wish the president's proposal had been 
presented in a way that put forward a central homeland security 
strategy first. The strategy, presented yesterday, would have 
been more helpful if the standing committees had been given the 
opportunity to review it before making their recommendations. I 
am glad that the Select Committee will have that chance.
    The Armed Services Committee was asked to examine those 
areas of H.R. 5005 within its jurisdiction-namely the functions 
being transferred from the Department of Defense and from the 
national security elements of the Department of Energy. The 
administration's proposal requested only modest transfers in 
these areas and the committee, by and large, supported those 
requests.
    The committee did, however, amend the underlying 
legislation in places to ensure that the capabilities of new 
Department were enhanced while not doing harm to the critical 
national security activities of the Departments of Defense and 
Energy. For example, the committee authorized the Under-
Secretary of Homeland Security for Chemical, Biological, 
Radiological, and Nuclear Countermeasures to stand up an 
intelligence capability within the new department focusing on 
these particular types of threats.
    The committee strengthened the new department by 
recognizing the importance of a coordinated research and 
development program to achieving our homeland security goals. 
We designated these functions as a core mission for the 
Secretary. The committee also called for the establishment of a 
center to serve as the primary location for carrying out 
research and development at a national security laboratory of 
the National Nuclear Security Administration. The committee 
debated whether or not to put in statute the location of this 
laboratory, as the administration has repeatedly mentioned 
Lawrence Livermore as its preferred site, but we have left the 
specifics of this selection to the new Secretary.
    The committee believes these changes strengthen the new 
department while preserving the national security capabilities 
of the Departments of Defense and Energy. All told, the 
transfers from the Defense Department only involve about 90 
people. This is a good thing, given the disastrous policies the 
Defense Department is now considering with regard to the size 
and strength of our military forces.The Baltimore Sun published 
an article on July 10 indicating that the Pentagon is planning 
in fiscal year 2004 to drastically reduce the number of men and 
women in uniform-including 20,000 to 25,000 Army soldiers, 
40,000 airmen, 20,000 sailors, and 5,000 Marines. In total over 
90,000 servicemen and women may be forced to leave the 
services. Such a reduction is totally unacceptable, 
particularly while our nation is at war.
    I bring this to the Select Committee's attention because 
these cuts-if undertaken-would do enormous damage to U.S. 
national security. The administration's homeland security 
strategy contemplates the expanded use of military forces for 
homeland security missions. This proposal raises serious 
questions about existing law-including the 1878 Posse Comitatus 
Act-that would have to be carefully considered. But in general 
terms, the strategy underlines the importance of a strong U.S. 
military to homeland security.
    Beyond the United States, President Bush has publicly 
stated numerous times that the war on terrorism will continue 
for some time. Yet, while we still have forces searching for 
terrorists in Afghanistan, helping fight terrorism in the 
Philippines, training military forces in the Republic of 
Georgia, equipping and training government forces in Colombia, 
and aiding the peace process throughout the Balkans, Defense 
Secretary Rumsfeld is contemplating reducing our troop 
strength.
    Such a consideration is more amazing if you consider what 
the chiefs of the military services have been saying for some 
time. In testimony before September 11, Army Chief of Staff, 
General Shinseki, told the Armed Services Committee that the 
Army needed 40,000 additional troops to meet its mission 
requirements. Admiral Clark, Chief of Naval Operations, told us 
he needed 14,000 more sailors. The Chief of the Air Force, 
General Ryan, and the Commandant of the Marine Corps, General 
Jones, testified that their services needed 10,000 more airmen 
and 4,000-5,000 more Marines respectively.
    This was the reality before September 11 and the pace of 
operations for our troops has only increased and expanded since 
then. The Congress must ask Secretary Rumsfeld to reverse this 
trend by increasing, and not dramatically reducing, the number 
of men and women in uniform. This is essential to our ability 
to defend the American people at home and to fight nation's 
wars abroad.
    Thank you for the opportunity to testify, Mr. Chairman. I 
hope the Select Committee is able to support the 
recommendations of the Armed Services Committee.

    Chairman Armey. Thank you. The Chair recognizes the 
gentlelady from Ohio.
    Ms. Pryce. Thank you, Mr. Chairman. I don't really have any 
questions at this point.
    It is a pleasure to have you here, Mr. Skelton. Thank you 
for your committee's hard work on this. It is one of the most 
important things that this Congress will have before it and, 
probably, many of us have looked at in our entire careers. So 
thank you for your assistance with our deliberations.
    Thank you, Mr. Chairman.
    Chairman Armey. The gentlelady--or gentleman from Texas, 
Mr. Frost.
    Mr. Frost. Well, thank you very much, Ike, and I want to 
underscore one thing that you said.
    On the document--in the document the President issued 
yesterday, Homeland Security, National Strategy, on page 48 in 
that document is one paragraph: ``Federal law prohibits 
military personnel from enforcing the law within the United 
States except as expressly authorized by the Constitution or an 
act of Congress. The threat of catastrophic terrorism requires 
a thorough review of the laws permitting the military to act 
within the United States in order to determine whether domestic 
preparedness and response efforts would benefit from greater 
involvement of military personnel, and if so, how.'' .
    This is the posse comitatus that you referred to. When you 
put that statement side by side with the statistics that you 
have included in your statement, quoting from the Baltimore 
Sun, saying that the administration is contemplating reducing 
our active duty force by over 90,000 people in 2004, it is 
ludicrous.
    It is ludicrous to think that we could reduce our standing 
force by 90,000, which is already fairly small and which has 
extraordinary demands being put upon it right now, as you 
indicated in your statement, and at the same time take some of 
that reduced force and have them patrol our borders. I don't 
understand this. I think you are absolutely correct to caution 
us on that point.
    I don't know where we go from here. This committee is not 
being asked at this point--if I understand correctly, there is 
nothing before us on the question of posse comitatus. Perhaps 
we would make a comment on that in any report that we would 
issue, but you are correct to sound the alarm about our 
situation and reducing our active duty forces, particularly if 
the administration is serious about the reports that it may--
and I underscore may--invade Iraq anytime soon.
    Mr. Skelton. Our committee, in the base bill that we passed 
out and passed on the floor, actually increased the end 
strength of each of the services, reflecting testimony that--.
    Mr. Frost. The defense authorization bill?
    Mr. Skelton. Yes.
    Mr. Frost. Not what you sent to this committee, but the--.
    Mr. Skelton. No. Excuse me, our base bill, the 
authorization bill.
    Based upon testimony ranging back over 2 years, including 
testimony that year, where Admiral Blair, CINCPAC in the 
Pacific, Joe Ralston, the commander in chief in Europe, both 
said they didn't have enough personnel to meet their 
commitment, and General Buck down at the Forces Command said 
that the troops are stretched and strained today--and you see 
the active duty challenges that we have are being met by some 
85,000 Guard and Reservists. And the fewer Guard and Reserves 
that are available for the governors or for the civil support 
teams or for national disasters that come along, that are 
outside of any of what we are talking about today, would be a 
detriment to many Americans.
    So we have to consider this, and I raise it with this 
committee, because you should understand all of this works 
together. There is no singular part or parcel, separate from 
the other when you talk about homeland security or the security 
of our Nation.
    Mr. Frost. You are exactly correct, and I--I, as one 
Member, appreciate your bringing this to our attention.
    Chairman Armey. The gentleman from Ohio.
    Mr. Portman. Thank you, Mr. Chairman.
    Mr. Skelton, thank you for being here this morning to give 
us your learned perspective.
    Just a general point: This administration has made it a 
priority, as you know, to increase not just the number of 
people in our military, but also their pay and benefits, 
improve their equipment, improve their training; and I know 
they have worked closely with you and with Chairman Stump in 
that regard.
    As a result, we have a stronger military, and we are a 
flexible military.
    Mr. Skelton. We do.
    Mr. Portman. And I think it was interesting that they 
chose, in putting together this proposal to the Congress, not 
to include the military in the homeland security area. As you 
mentioned, 90 people would be transferred, and it is an office 
that Secretary Rumsfeld supports being moved, because it 
relates directly to homeland security.
    But you are absolutely right, there is a seamless 
relationship between homeland security and our national 
defense, and you see that clearly with the Coast Guard, but 
also with all of the other entities involved in protecting our 
borders and making sure that we have the right information so 
that we can react to this new threat.
    You said in your testimony that you were concerned about 
the strategy. You now have seen the strategy. Are you satisfied 
with the strategy as laid out yesterday by the President?
    Mr. Skelton. I must tell you, from a perusal of it, it is 
positive. To be right honest, receiving it only yesterday, I 
have not had the opportunity to fine-tooth-comb it, but 
basically it is in the right direction.
    I wish I had a better answer for you, but time has not 
allowed me to study it as each of us should.
    Mr. Portman. In our deliberations, we have talked a lot 
about flexibility, and in order to keep costs down and in order 
to be able to better respond to an agile enemy, we all want to 
be sure that there is flexibility and that this is a lean 
department.
    You actually gave the President more flexibility in your 
pro-
posal. Instead of naming Lawrence Livermore Labs as the lead 
agency--.
    Mr. Skelton. No--.
    Mr. Portman. --the President--.
    Mr. Skelton. There is nothing wrong with that. I think we 
did right.
    Mr. Portman. Could you give us a little more background as 
to why you believe that it is not appropriate for the Congress 
and this committee to propose a specific lead, but rather, to 
put that decision at the President's level?
    Mr. Skelton. Well, we think it is important to have a 
central research and development operation, no question about 
that; and it ought to be at one of the laboratories. And I 
don't think you will find a major disagreement on that.
    The administration has recommended Lawrence Livermore as 
the site. However, there will be a serious discussion between 
those areas, the three particular laboratories, as to which one 
is best.
    Why tie the Secretary's hands? Although one is recommended, 
why should we put it into law? So what is wrong with 
flexibility? The end result would be the same, if not better.
    Mr. Portman. And the key is to get the best R&D and to have 
that flexibility?
    Mr. Skelton. The important thing is that you have a central 
system, a central place for research and development, because 
that will be a challenge for the various threats that are out 
there, some we haven't even dreamed of.
    Mr. Portman. Thank you very much, Mr. Skelton.
    Mr. Skelton. Thank you.
    Chairman Armey. The gentleman from New Jersey.
    Mr. Menendez. Thank you, Mr. Chairman.
    Mr. Skelton, thank you for your service to our country. It 
is really one of the exceptional people in the House and 
particularly in the context of our Armed Services and defense 
issues. Really, I think you are a giant in that regard.
    I really don't have a question, except to join with you and 
Mr. Frost in the strategy document that the administration put 
out yesterday. I am concerned about that section.
    I believe that the essence of what we want to ultimately 
achieve in homeland security starts with prevention, which 
means good intelligence, raw materials analyzed in real time, 
shared across the spectrum, so that we can then act when we 
need to in a preventive capacity. And thereby the military of 
the United States is an essential, if not the key, ingredient--
after that, intelligence gathering--to perform that preventive 
function.
    I do not see them providing a role here domestically in, in 
essence, law enforcement functions; and I think that is a 
dangerous proposition for this country. If we were being--if we 
had ships coming up or armies crossing borders, of course that 
would be different, but in essence to suggest that the Defense 
Department would act in what are essentially law enforcement 
obligations, I think is a dangerous proposition.
    I think we need to reserve our capabilities and the risks 
of the challenges that we will face for the preventive aspects 
that we want abroad, and so I want to commend you for raising 
that issue. I know it is not part, physically, of the 
administration's proposal, but since the strategy is ultimately 
going to guide the future actions of the administration, it is 
important to raise our sabers now and start saying kind of what 
we think about this.
    So thank you for doing that, and I appreciate your service 
and your information.
    Mr. Skelton. Thank you for your comments. We should remind 
ourselves that there are, at the present time, some 27 national 
forward civil support teams which would help in the event of a 
disaster. There will be a proposal to establish a total of 51, 
is my understanding.
    Let me mention a concern with you. You mentioned 
intelligence. There are two aspects to intelligence. Number one 
is gathering it, which is sometimes very difficult and you rely 
on everything all the way from electronics on the one hand to 
HUMINT on the other. And the second is that of analyzing it; 
and I am concerned about there being too many layers of 
analysis, and while that happens, something bad comes to pass. 
So put that in the back of your mind so there will not be 
layers of bureaucratic intelligence analysis that would cause 
us to miss the boat in something untoward happening. That 
concerns me.
    I am not just sure how you would write it, or prevent that, 
but just put that in the back of your mind. I think that is a 
potential problem for all of this.
    Mr. Menendez. Well, I appreciate your comment. I am sure 
our distinguished ranking member on this committee and on the 
Intelligence Committee, Ms. Pelosi, is right on top of those 
issues and has been leading in that regard.
    I just want to comment on your part of the National Guard 
in the context of helping us respond. That is much different 
than the law enforcement aspect, and certainly that is one that 
we would embrace.
    Thank you for your comments. I yield back the balance of my 
time.
    Chairman Armey. Gentlelady from Connecticut.
    Ms. DeLauro. Thank you very much, Mr. Chairman. I want to 
thank Ranking Member Skelton for being here and for being a 
continued advocate for our armed services. And I thank you for 
your years of service in this committee and the knowledge that 
you will bring to this.
    I think that there are questions that have to do with the 
relationship between the Department of Defense and the--how the 
Pentagon, which is charged with fighting terrorism abroad, will 
work with the new department that is fighting terrorism here at 
home; and I think one of the crucial areas to take a look at 
is, how do the two departments handle the competing demands of 
Coast Guard and National Guard? And I would love to have your 
views on this and your sense if there is any--what the process 
might be for coordination, and whether or not--get your opinion 
on whether or not the two Guard services will have the 
necessary capabilities to meet both departments' demands.
    Mr. Skelton. I don't think there is a problem regarding the 
National Guard. As you know, their commanders in chief on a 
day-to-day basis are the governors, and they perform many 
domestic duties--disaster, et cetera--on a Federal level, 
unless they are federalized to serve, as we have some 85,000 
Guard and Reservists serving on active duty today. The civil 
support teams, 27 of which exist to date, are the best 
examples, but I don't think that is a problem.
    The question, to which I don't have an answer, is the one 
dealing with the Coast Guard, because you have a bifurcated set 
of duties. One is search and rescue, which they do a phenomenal 
job. The other is drug interdiction, and they are first class 
now.
    On the other hand, you have antiterrorism-type of 
activities. I don't know how you are going to bifurcate that. 
That will be one of the biggest challenges your committee has. 
I don't have a solution for that, unless there is some sharing 
agreement between the Department of Transportation, which owns 
the Coast Guard, and the department head of Homeland Security; 
of maybe bifurcating the duties or certain sections of the 
Coast Guard. There is no easy answer to this.
    Now, I know this may be one of your biggest challenges, and 
I wish I had a good answer for you. There is none.
    Ms. DeLauro. I thank the ranking member.
    Thank you, Mr. Chairman.
    Chairman Armey. Gentlelady from California.
    Ms. Pelosi. Thank you very much, Mr. Chairman. I want to 
join you and our colleagues in commending the distinguished 
ranking member of the Armed Services Committee for his 
wonderful leadership and his very thoughtful statement today, 
which is very valuable to the committee.
    I appreciate the caution you recommend in your statement in 
terms of posse comitatus and the Posse Comitatus Act. Also your 
concerns that you raised, not directly related to our work 
here, but certainly related to the mission that we have, which 
is to protect the American people, to reduce risk to them. And, 
of course, force protection is a very important part of what we 
do on the intelligence side of it. So your insightful comments 
are very helpful.
    I also want to say that while it is not the work of our 
committee today, I look forward to--not now because the time 
does not permit, and it is a much longer discussion--to hearing 
some of your thoughts on transformation of the military, which 
will be very important to protecting the American people. I 
know that you will always be a leader in that regard.
    So I thank you for all that you have done for young men and 
women in the armed services. We are very, very, very proud of 
them, and thank you again for your leadership in helping them 
do their job, to do our constitutional duty to protect and 
defend the American people.
    Thank you very much, Mr. Chairman.
    Mr. Skelton. I appreciate your kind words.
    This intangible thing we call ``transformation of the armed 
services'' is real. It is looking ahead to potential threats 
and challenges so that we will have the Armed Forces prepared 
to face them in the years ahead. Each of the services is 
working on them, and I hope that it is about ongoing challenge, 
that the next several years will find us not only modernizing 
but transforming into the secure force that we need.
    It is a major challenge on our committee, but we appreciate 
your support and your help.
    Ms. Pelosi. Thank you very much, distinguished gentleman.
    Thank you, Mr. Chairman.
    Chairman Armey. Mr. Skelton, does your committee have any 
direct testimony from the Pentagon about the force reduction 
plans reported in the Baltimore Sun?
    Mr. Skelton. No.
    Chairman Armey. It is conceivable then that the Baltimore 
Sun can simply be wrong?
    Mr. Skelton. I don't believe it is.
    Chairman Armey. You do not believe it is. Would you not 
find it unacceptable, patently unacceptable, for the Baltimore 
Sun to have information regarding force strength that your 
committee does not have?
    Mr. Skelton. I don't think it is a good idea, but I do 
believe the reporter is a highly respected reporter, and I 
believe what it said.
    Chairman Armey. How would the Baltimore Sun have 
information about the force strength of the United States armed 
services that the House Armed Services Committee would not 
have? By what basis could a reporter have that information and 
your committee not have it?
    Mr. Skelton. I can only tell you to ask the reporter that.
    Chairman Armey. You know, I thank the gentleman for that 
suggestion. I believe I will ask the Pentagon that.
    Mr. Skelton. Good. I think you will receive an interesting 
answer.
    Chairman Armey. Thank you. Thank you for your testimony. 
And the witness is excused with great appreciation.
    The Chair now looks forward to hearing from the 
distinguished chairman and ranking member of the Energy and 
Commerce Committee. I believe it is--would be accurate for the 
Chair of the Select Committee to observe that both the chairman 
and the distinguished ranking member of the Energy and Commerce 
Committee understand, with a great deal of adeptness, the 
administration of the committee's business under the 5-minute 
rule.
    I think that you are both experienced before this chairman, 
so let me just remind you that it is indeed the practice of 
this committee to take testimony under the 5-minute rule. We 
would ask you to please submit your formal statement for the 
record, and if you could make your independent statements 
within the 5-minute rule, we will try to see to it that the 
committee addresses its questions within the context of that 
rule as well.
    And we do welcome you so much for your testimony here. We 
will begin with Chairman Tauzin.

   STATEMENT OF THE HONORABLE W.J. (BILLY) TAUZIN, CHAIRMAN, 
                COMMITTEE ON ENERGY AND COMMERCE

    Mr. Tauzin. Thank you, Mr. Chairman. First, let me indicate 
that we have had two days of full committee hearings, in which 
we heard from 40 different witnesses from Federal, State, 
local, academia, professors, all sorts of research communities, 
et cetera.
    We should also point out that after those 2 days of 
hearings, the work we presented to you was approved unanimously 
by our committee. It was constructed in a bipartisan fashion, 
just as was the bioterrorism preparedness bill, the sweeping 
$4.6 billion bill that our committee shepherded through 
Congress most recently, and was done in a true bipartisan 
fashion.
    I want to thank Ranking Member Dingell for that great 
effort that allows us to bring to you a bipartisan set of 
recommendations in regard to our committee's jurisdictional 
areas in this critical area of homeland security.
    There are four specific areas we want to address. First, 
with respect to biomedical research and emergency preparedness 
of the Department of Health and Human Services, in our 
committee we literally recognize the role of the department and 
actually enhance its capacity beyond that which the President 
originally proposed. But we want to make it clear that HHS 
would still maintain primary responsibility over human health-
related research. Most of which is currently being conducted by 
the CDC and by the NIH. We understand the administration 
supports this clarification and does not wish to duplicate the 
research capabilities of NIH and CDC.
    We also understand from Governor Ridge's testimony that it 
was not the administration's intent to give a new Secretary the 
unilateral authority to direct these HHS programs or their 
priorities, but rather simply to ensure collaboration between 
the two agencies; and I think we concur in the need for that.
    However, we do not believe the new department should have 
primary authority, including budgetary authority, over 
bioterrorism programs that remain at HHS. Substantively, we 
don't believe the new Secretary should have primary control 
over the $1.9 billion in NIH grants relating to pathogens and 
countermeasures, or the $1.5 billion in public health emergency 
grants to State and local public health departments.
    We simply want to point out that this money spent by these 
agencies is spent not just to prepare the country for the 
possibility of bioterrorism, but it is for building up the 
infrastructure, such as surveillance, communications systems, 
our improved responses for all sorts of human health 
emergencies, whether they are naturally occurring or 
intentionally caused by some threat. We want to hopefully make 
sure that those programs don't get crippled by a new complex 
bureaucratic model.
    The administration recognized as much by leaving these 
programs at HHS, but the model that is put up, one that would 
put the programs in HHS. But subject it to the authority of 
Homeland Security, raises some real problems. For example, 
language that suggests the new Secretary could direct or manage 
public health emergency activities raises some very difficult 
questions.
    For example, who would declare the public health emergency? 
Who would issue quarantines? That is normally done through the 
authority of these agencies.
    Administratively, we believe it would be unnecessarily 
cumbersome and bureaucratic for the funds to first go to the 
Homeland Security Department and then be appropriated through 
these agencies for these ordinary, ongoing public health 
purposes.
    Last, with respect to HHS, the committee recommends 
retaining at HHS the Assistant Secretary of Public Health 
Emergency Preparedness. This is the office we created in the 
bioterrorism bill. Now, we support the transfer of several of 
its responsibilities, the operation of the Office of Emergency 
Preparedness, The National Disaster Medical System, and the 
Metropolitan Medical Response System, but we want to note 
something for you.
    If FEMA goes to the new department, then it makes sense to 
move these three functions over. But if you make a decision not 
to move FEMA, then we would question the appropriateness of 
even moving these three functions because they are more closely 
associated with the work of FEMA.
    Second, with respect to critical, physical, and cyber 
infrastructures, such as those that run telecommunications and 
electric power systems, we think the President's efforts on 
consolidation and increased coordination are right on the mark; 
but we have some concerns. The original language could have 
been construed to give the new Secretary regulatory authority 
over the security of critical infrastructures that are 
currently regulated by the Federal Government, or that are now 
regulated by other Federal agencies.
    We make it clear in our print to you that the creation of 
this new department does not include new regulatory powers for 
the Secretary to directly compel security improvements through 
regulations or mandates. Rather, you would work with the State, 
Federal and other agencies who have jurisdiction to enhance 
security and to work directly with the private sector in the 
collaborative fashion designed in the President's report.
    We also recommend the emphasis on cyber security within the 
new department be greatly enhanced. What we have done over the 
last 4 years, Mr. Chairman, is an extensive review of the 
vulnerability of America's agency cyber security weaknesses. I 
have to tell you, every system we looked at we used the GAO red 
teams to come in and challenge those systems and every single 
one demonstrated pervasive weaknesses.
    So we recommend to you the creation of the Federal computer 
security red teams in the new department to, in fact, test 
these systems out and provide information and recommendations 
to strengthen them. We think this needs to be a high priority 
of the new department.
    Third, in the area of research and development, we believe 
that the committee concurs in the need expressed by many of 
those in Congress to have this new department play a critical 
role in coordinating, accelerating and improving the focus on 
research and development in the new technologies that are going 
to be used to fight terrorism. For example, the things that are 
going to be included in our reports to detect the possibility 
of radiological material coming in.
    To address these needs, we recommend the new department 
serve as a focal point for technological research and 
development activities, and that it establish a Federal 
technology clearinghouse. Not to design the technology, but 
simply to go through the recommended technology improvements 
and recommend which ones work and which ones don't work for all 
the agents of government who may in fact use this technology to 
better protect our ports in our country.
    We think the current bill makes it unclear as to whether 
the new department could directly contract with the national 
laboratories. We make it clear they can't. They can directly 
task the national laboratories to do work for them in this 
regard.
    Fourth, with respect to the control of dangerous pathogens 
and select agents, in the bioterrorism bill, we set up the 
within CDC a department that has the capacity to track not only 
who has these agents, but when they transferred it, for what 
reason they transferred, and the license of the section and 
transfer of these agents. It is a critical component of that 
bioterrorism bill.
    We also set up something similar within the Department of 
Agriculture for pathogens and agents that might affect animal 
health; that has some relation to the section in CDC.
    If the CDC section is going to be transferred to this new 
agency, we would obviously be concerned that the section in 
Agriculture would similarly go with it. If the second doesn't, 
then we question whether the first should go. Otherwise, it is 
going to create some real problems in coordinating between 
pathogens that affect animals and may similarly affect human 
health in terms of bioterrorism threats.
    In closing, I want to again thank you for allowing us to 
come and make these recommendations and to thank my colleague, 
John Dingell, who has been an extraordinary partner in our 
committee's work in making these recommendations to you.
    Thank you, Mr. Chairman.
    [The statement of Mr. Tauzin follows:]

PREPARED STATEMENT OF HON. W.J. (BILLY) TAUZIN, CHAIRMAN, COMMITTEE ON 
                          ENERGY AND COMMERCE

    Thank you, Mr. Chairman. I am pleased to join you and the 
ranking Member, Congresswoman Pelosi, to provide testimony 
regarding President Bush's historic proposal to create a new 
Department of Homeland Security. I believe the President's 
proposal reflects a sound framework for Congressional 
consideration, and I fully support creating a Cabinet-level 
department with an empowered Secretary to get this critical job 
done.
    I am here today to testify on behalf of the Members of the 
Committee on Energy and Commerce who convened last week and 
voted, without opposition, to support a Committee Print that 
preserves the President's key priorities in the areas within 
our Committee's jurisdiction. We did so while clarifying the 
new Department's powers and authorities, enhancing the 
functions and focus of the new Department, and improving the 
workability of the interface between the new Department and the 
Departments of Health and Human Services and Energy.
    Over the past three weeks, the Committee has given serious 
deliberation to the President's proposal. We held two days of 
hearings at which over forty witnesses from Federal, State, and 
local governments, the private sector, academia, and the 
scientific and research communities shared their views on the 
President's proposal. In addition, over the last year, the 
Members of the Committee helped to shepherd through Congress a 
sweeping $4.6 billion bioterrorism preparedness bill that the 
President recently signed into law. In both of these efforts, 
we were able to work in a bipartisan fashion to address 
homeland security, and I want to thank and praise the 
Committee's Ranking Member, John Dingell, for working with us 
to get this done.
    The Committee's recommendations to the Select Committee 
fall into four specific areas, which I will address in turn. 
First, with respect to the biomedical research and emergency 
preparedness activities of the Department of Health and Human 
Services, the President's proposal rightly recognizes what our 
Committee's oversight has revealed--that the Federal 
government's bioterrorism-related programs have been cumbersome 
to navigate and have been poorly coordinated in the past, 
leaving critical gaps unattended while being duplicative in 
other aspects. We agree with the President that the new 
Department should play an important role in changing that. In 
particular, given that the new Department will have important 
intelligence, threat, and vulnerability-related information 
necessary for the identification of program priorities, the new 
Department should develop our national strategic plan for 
bioterrorism activities and identify our most urgent national 
priorities, including priorities for programs at HHS. Our 
Committee Print not only recognizes this role of the new 
Department, but enhances it beyond what the President initially 
proposed.
    The Committee Print also makes clear that HHS will maintain 
primary responsibility over human-health related research, most 
of which is currently being conducted by CDC and the National 
Institutes of Health (NIH), and that this new Department will 
not engage in such R&D efforts. We understand that the 
Administration supports this clarification, and does not wish 
to duplicate the research capabilities of NIH and CDC at the 
new Department. We also understand, based on Governor Ridge's 
testimony before our Committee, that it was not the 
Administration's intent to give the new Secretary the 
unilateral authority to direct these HHS programs or their 
priorities, but rather simply to ensure collaboration between 
the two agencies. We concur with the need for such 
collaboration and our Committee Print adds an explicit 
requirement that the Secretary of HHS must collaborate with the 
Secretary of Homeland Security on setting the HHS research 
priorities related to countermeasures for terrorist attacks.
    However, we do not believe that the new Department should 
have primary authority--including budgetary authority--over 
bioterrorism programs that remain at HHS. Substantively, we do 
not believe that the new Secretary should have primary control 
over the $1.9 billion in NIH research grants relating to 
pathogens and countermeasures, or the $1.5 billion in public 
health emergency grants to state and local public health 
departments included in our recently enacted bioterrorism 
legislation. As GAO experts emphasized in testimony before the 
Committee, much of the terrorism-related research currently 
being performed through NIH and CDC is dual-purpose in nature--
serving the priorities and needs of both counter terrorism and 
traditional public health. Similarly, the grants to state and 
local public health departments and hospitals are not just to 
prepare for the possibility of bioterrorism, but for building 
up basic infrastructures such as surveillance and communication 
systems to improve response to all sorts of public health 
emergencies, whether intentionally caused or naturally 
occurring. Unlike more conventional acts of terrorism or those 
involving radiological or chemical elements, a bioterrorist 
attack will look, at the beginning, just like a naturally 
occurring disease outbreak. The people, resources, and skills 
necessary to respond to bioterrorism will not likely be 
different than those necessary to respond to naturally 
occurring outbreaks of diseases. We cannot and should not 
separate either of these dual-purpose activities, or have them 
be under the under the control of two different departments.
    The Administration recognized as much by leaving these 
programs within HHS. But its model--one in which the programs 
remain in HHS but are subject to the authority of the Homeland 
Security Department--potentially creates more problems than it 
would solve. The Committee does not believe it is feasible to 
separate authority from responsibility, or to separate the 
officials charged with administering those responsibilities 
from the personnel required to do so. Moreover, any language 
suggesting that the new Secretary could direct or manage the 
public health emergency activities of HHS raises many difficult 
questions, such as who can declare public health emergencies or 
issue quarantines under the Public Health Service Act. The 
Committee believes that these activities are properly 
authorized and administered under the Public Health Service 
Act. Neither a wholesale transfer of these responsibilities, 
nor some unusual splitting of responsibilities, is warranted.
    Administratively, we believe it would be unnecessarily 
cumbersome and bureaucratic for the funds for such activities 
to be appropriated in the first instance to the new Department, 
only to be ``contracted'' back to HHS for further distribution 
to NIH, CDC, and the hundreds of grant recipients conducting 
such research and preparedness activities. The Committee 
supports the need to improve the coordination of funding on 
such activities across the Federal government, but we believe 
that such coordination can occur without the control of HHS 
funds. Under the Administration proposal, the new Secretary 
would not receive control over the substantial research funds 
of other agencies that conduct research activities similar to 
those of HHS, including the Departments of Defense, Veterans' 
Affairs, and Agriculture, the Central Intelligence Agency, and 
others. Given that fact, the Committee does not believe that 
budgetary control is necessary with respect to HHS research 
dollars to ensure such coordination.
    The type of budgetary maneuvering described in the 
Administration's proposal could also result in delays, 
hampering our efforts to get the money out the door and into 
productive use as quickly as possible. These grant programs are 
already in place at HHS and appear to working quite well. We do 
not believe it makes sense to potentially disrupt these 
programs now by routing them through the new Department, only 
to have the new Department contract back with HHS to manage 
them.
    Last with respect to HHS, the Committee Print recommends 
retaining at HHS the Assistant Secretary for Public Health 
Emergency Preparedness created by the recent bioterrorism 
response act, in order to coordinate remaining HHS emergency 
preparedness functions and to serve as a liaison to the 
Homeland Security Department. But we support the transfer of 
several of his responsibilities, including the operation of the 
Office of Emergency Preparedness, the National Disaster Medical 
System, and the Metropolitan Medical Response System. These are 
operations that currently work closely with the Federal 
Emergency Management Agency (FEMA). We note that if the Select 
Committee chooses not to transfer FEMA or its response 
functions to the new Department, it would no longer make any 
sense to transfer these emergency response activities of HHS to 
Homeland Security either. If FEMA is not transferred, I believe 
that most of Title V of the Administration's proposal would no 
longer be appropriate, including the transfer of the National 
Strategic Stockpile of vaccines and drugs run by HHS.
    Second, with respect to the protection of our Nation's 
critical physical and cyber infrastructures--such as those that 
run our telecommunications and electric power systems--the 
President's efforts at consolidation and increased coordination 
are right on the mark. The key to success in this area is to 
recognize that many of the most important critical 
infrastructures are privately owned and operated, and may not 
be subject to Federal security mandates or requirements. Thus, 
the only way to succeed in ensuring their protection is through 
a strong and effective public-private partnership for national 
security.
    The original language of H.R. 5005 could have been 
construed to give this new Secretary regulatory authority over 
the security of critical infrastructures that are not currently 
regulated by the Federal government, or that are regulated now 
by other Federal agencies. Based on testimony before our 
Committee by Governor Ridge, it is clear that such an 
interpretation was not intended by the Administration. Thus, 
the Committee Print makes an important clarification to ensure 
that the new Secretary's authority to assess vulnerabilities 
and support protective measures with respect to private sector 
critical infrastructures does not include new regulatory powers 
for the Secretary to directly compel security improvements 
through regulations or mandates. Rather, the Secretary will 
work with the other Federal, State or local agencies that have 
jurisdiction over such sectors to enhance security, and would 
work directly with the private sector in a collaborative 
fashion.
    The Committee Print also recommends that the emphasis on 
cyber security within the new Department be greatly enhanced. 
Over the past four years, our Committee has conducted extensive 
oversight of the cyber security practices of many of the 
agencies within our jurisdiction, including the Departments of 
Health and Human Services, Commerce, and Energy, as well as the 
Environmental Protection Agency. With the help of expert 
computer teams, sometimes known as ``red teams,'' from the 
General Accounting Office, we found that, without exception, 
the computer systems of these agencies were riddled with 
pervasive weaknesses. Our homeland security depends on building 
improved defenses to cyber attacks, which are occurring every 
day. As a result, our Committee Print proposes the 
establishment of a Federal cyber security program that will 
provide computer security expertise to other Federal civilian 
agencies to help improve protection of their critical 
information systems. This program will include a Federal 
computer security ``red team'' to test, and provide 
recommendations on, the security of key Federal information 
systems. It also will promote R&D on security enhancements for 
critical information systems, particularly the command and 
control systems that our Nation's critical infrastructures 
depend upon--called SCADAs ('ska-duhs'). The vulnerability of 
SCADA systems--such as those that control our electricity 
networks or the operation of our large dams and drinking water 
systems--needs to be a high priority for the new 
Department.Third, in the area of research and development, it 
is important for us to remember that new and improved 
technologies and American ingenuity and innovation are among 
the greatest advantages we have in fighting terrorism. Thus, 
the Committee concurs with the need expressed by many others 
within and outside of Congress for this new Department to play 
a critical role in coordinating, accelerating, and improving 
the focus of research, development, and implementation of new 
technologies in our fight against terrorism.
    Our country's top scientists are working through existing 
programs at our national laboratories to develop new methods 
for detecting and preventing terrorists attacks--such as 
improved sensors to detect radiological devices, and new 
scanners to screen luggage and cargo. But our oversight of 
these programs has shown that they are not well-coordinated. As 
a result, our Nation's current ability to detect radiological 
or nuclear materials that may be entering our ports or other 
border entry locations is woefully inadequate, and I strongly 
believe that the Federal government must improve both our 
research in these areas, as well as the speed of deployment of 
viable technologies to prevent illegal radiological devices 
from entering our country. We have heard from those on the 
front lines that they need guidance from the Federal government 
as to what types of technologies are available, what they 
should be looking for in such technologies, and how best to 
implement them. Yet today there is no single Federal agency 
they can turn to for help.
    To address these needs, the Committee Print recommends that 
the new Department serve as the focal point for such technology 
research and development activities within the Federal 
government, and that it establish a Federal technology 
clearinghouse to assist other Federal agencies, State and local 
governments, and the private sector in evaluating, 
implementing, and disseminating information about key homeland 
security technologies, such as radiation and bio-weapon 
detectors. We do not intend to create mandatory Federal 
standards for such technologies, or a Federally-approved list 
of technologies. Rather, the goal is to provide assistance and 
guidance to those on the front lines as they seek to evaluate 
and implement the use of such technologies, so as to accelerate 
deployment of useful technologies and better protect the 
American people from weapons of mass destruction.
    In addition, H.R. 5005 is unclear as to whether the new 
Department could directly contract with our national 
laboratories with respect to the transferred DOE functions and 
programs, or whether it would have to negotiate with DOE over 
such work through the traditional ``work for others'' program. 
The Committee Print ensures that direct tasking of the 
laboratories by the new Department would be permitted, and 
would indeed be the anticipated method. Such an approach will 
ensure that the new Department can carry out these important 
R&D responsibilities in the most direct and effective manner, 
and avoid the bureaucracy and extra costs involved in the 
current DOE ``work for others'' program.Fourth, with respect to 
the control of dangerous biological agents and toxins known as 
``select agents,'' the Committee Members recently helped to 
enact a sweeping new registration, tracking, and security 
structure--both for those select agents regulated by the 
Centers for Disease Control and Prevention because of their 
potential human health threat, and for those agents regulated 
by the Department of Agriculture because of their potential 
threat to livestock and crops. While the Administration's 
proposal clearly transfers the CDC select agent program to the 
new Department, it is less clear with respect to the companion 
USDA program.
    The Committee recognizes that there are certain 
disadvantages to transferring the CDC select agent program. But 
if both the CDC and USDA programs are transferred to a single 
department, it will enhance the joint registration and 
regulatory system that is a key component of our recently-
passed bioterrorism act. These are companion programs designed 
to serve as one national registration and regulatory system for 
tracking the possession and use of the most dangerous 
biological agents. If the agricultural select agent program 
remains at USDA, then the Committee views the transfer of the 
CDC program as only exacerbating existing coordination 
problems. We simply do not think it makes sense to transfer 
half of this program to the new Department, while leaving the 
other half at another Federal agency.
    In closing, I ask you to take into consideration and lend 
support to the recommendations of the Committee on Energy and 
Commerce when you mark up the President's homeland security 
proposal. We will be pleased to work closely with the Select 
Committee on the matters within our jurisdiction and ask that 
you continue to provide opportunities to do so. Thank you for 
inviting me to testify today, I would be happy to respond to 
any questions.

    Mr. DeLay. [Presiding.] Thank you, Mr. Chairman.
    Mr. Dingell, you are recognized for any statement that you 
want to make.

 STATEMENT OF THE HONORABLE JOHN D. DINGELL, RANKING MINORITY 
            MEMBER, COMMITTEE ON ENERGY AND COMMERCE

    Mr. Dingell. Mr. Chairman, thank you for the privilege of 
being here. I join Chairman Tauzin in bringing the amendments, 
adopted unanimously by the Committee on Energy and Commerce. 
The committee functioned bipartisanly with both staff and 
members working together.
    I think this committee knows my grave doubts of the wisdom 
of much of the President's proposal. Quite frankly, I think it 
is a fine opportunity for confusion, for waste, for overlap, 
for duplication, and quite frankly, for a splendid amount of 
delay.
    Having said that, our committee has done its duty, and we 
have thought to bring you a sensible and workable way in which 
to address matters within our charge. I ask you to respect the 
expertise, experience and hard work that the committee has 
given to this matter when you consider what to recommend to the 
House.
    I want to praise my chairman and my colleagues on both 
sides of the aisle for the work that they have done, and done 
in a bipartisan fashion.
    Perhaps the most important element of our work is the 
protection of the important public health and biomedical 
research programs from potential inadvertent harm. We make it 
clear in title III that the Department of Health and Human 
Services will continue to control funds and priorities in human 
health-based research in collaboration with the new department.
    We also make it clear in title V that HHS will retain the 
primary responsibility for carrying out public health 
preparedness activities at the Federal, State and local levels, 
again in consultation with Homeland Security.
    Essentially, the Department of Energy--rather, the 
Committee on Energy and Commerce has responded to the concerns 
of the public health community, which overwhelmingly supports 
our recommendations to you. The General Accounting Office, 
bioterrorism experts and others have also supported what we 
have done, and we have tried, in consultation with them, to 
strike an appropriate balance.
    Another important element of our proposed amendment is a 
twofold savings clause. Absent specific authorities transferred 
to the legislation, the new Secretary will be given no new 
regulatory responsibility; and the legislation does not change 
or allow the new Secretary to override the regulatory authority 
of the existing agencies. This clause found in section 737 
ensures that we will not sacrifice regulatory certainty, slow 
down ongoing efforts to assess vulnerabilities for critical 
infrastructures, or jeopardize other vital programs if this new 
department is to be created.
    The committee's process goes into many more issues, and I 
know the staff on both sides of the aisle have been working 
closely with the staff of the individual members of this 
committee and of the committee.
    We are also doing our best to be constructive under a 
process that I find both objectionable and unduly constraining. 
I believe the haste shown here is counterproductive to the 
shared goal that we all have of improving this Nation's 
homeland security. I urge this committee not to make matters 
worse by ignoring or undoing the many improvements that have 
been developed, again on a bipartisan basis, in the Committee 
on Energy and Commerce.
    [The statement of Mr. Dingell follows:]

 PREPARED STATEMENT OF HON. JOHN D. DINGELL, RANKING MINORITY MEMBER, 
                    COMMITTEE ON ENERGY AND COMMERCE

    I join Chairman Tauzin in presenting the amendments adopted 
unanimously by the Committee on Energy and Commerce. All of you 
know of my grave doubts about the wisdom of much of the 
President's proposal. And you have probably figured out that I 
am not a fan of this rushed and truncated process for 
addressing an issue of this magnitude. But our Committee has 
done its duty, and has brought to you a sensible and workable 
way to address the matters within our charge. I urge you to 
respect the Committee's expertise, experience, and hard work as 
you consider what to recommend to the House.
    Perhaps the most important element of our work is the 
protection of important public health and biomedical research 
programs from potential inadvertent harm. We make it clear, in 
Title III, that the Department of Health and Human Services 
(HHS) will continue to control the funds and set priorities in 
human-health related research in collaboration with the new 
Department. We also make it clear, in Title V, that HHS will 
retain the primary responsibility for carrying out public 
health preparedness activities at the federal, state, and local 
level--again in consultation with Homeland Security. 
Essentially, the Committee on Energy and Commerce has responded 
to the concerns of the public health community, the General 
Accounting Office, bioterrorism experts and others by striking 
an appropriate balance.Another important element of our 
proposed amendments is a two-fold savings clause. Absent the 
specific authorities transferred in the legislation, the new 
Secretary is given no new regulatory responsibility, and the 
legislation does not change, or allow the new Secretary to 
override, the regulatory authority of existing agencies. This 
clause, found in Section 737, ensures we will not sacrifice 
regulatory certainty, slow down ongoing efforts to assess 
vulnerabilities for critical infrastructures, or jeopardize 
other vital programs, if this new department is to be created.
    Our Committee's product goes into many more issues, and I 
know staff on both sides of the aisle have been working closely 
with the Select Committee Members' staff to explain what we 
have done and why. We are doing our best to be constructive 
under a process that I find objectionable. This haste likely 
will be counterproductive to the shared goal of improving this 
Nation's homeland security. I urge the Select Committee not to 
make matters worse by ignoring or undoing the many improvements 
developed on a bipartisan basis in the Committee on Energy and 
Commerce.

    Chairman Armey. [Presiding.] Thank you, gentlemen, for your 
statements, and we are going to operate under the 5-minute 
rule.
    We will begin with questions of the gentleman from Texas, 
Mr. Delay.
    Mr. DeLay. I thank you for your statements. I just have one 
quick question.
    One of the main objectives of the administration's bill was 
to get technology expedited into the hands of the first 
responders, the emergency responders, at the State and local 
levels.
    Do you have any ideas based upon your testimony that we 
could accomplish that?
    Mr. Tauzin. I have no doubt we can. The whole concept of 
setting up the technology clearinghouse within this department 
is designed to do that. What we have learned is that port 
authorities don't know whether or not to call to find out what 
kinds of equipment would really do the job of testing to see 
whether or not someone is trying to bring in something harmful 
to this country.
    One of our ports in Virginia has volunteered on their own 
and they spent a great deal of money installing equipment in 
some of their cranes to do that. But we had to rush in and give 
them advice because they had no one to turn to.
    This department needs to be tasked with the job of actually 
clearing what technologies work, what should be the standards 
to have a quality enough product out there so that it really 
does give us a measure of security; and then, hopefully, assist 
in the State and local grants that we provide in the 
bioterrorism bill to make sure that those technologies are 
deployed properly.
    Mr. DeLay. But I think the key word of my question is 
``expedited.'' how do we get past what is the normal 
bureaucracy that takes sometimes more than a year to approve 
technology?
    We are in the process right now of--in the Transportation 
Security Administration, on baggage screeners, and it seems 
they want to buy old technology when new technology is almost 
ready, yet they want to go spend all this money for old 
technology and don't want to wait for the new technology.
    Mr. Tauzin. We include in here measures recommended by 
Heather Wilson that would actually invite those in the 
community who are inventing and improving technology to bring 
it to the Department so that it can be quickly reviewed for 
effectiveness, and then recommendations are issued from that.
    In other words, the Department would not actually tell 
anyone, you have to install this or that particular technology, 
but it could test quickly whether or not the manufacturer or 
the inventors' suggestions about the quality of his product are 
true or valid, and then make recommendations to folks in the 
private sector and in some public agencies on whether or not 
that technology might meet their needs.
    Expediting it obviously is going to be the role of the new 
Secretary and making sure this happens very quickly.
    Mr. DeLay. Mr. Dingell, do you have any comments on that?
    Mr. Dingell. I have nothing to add to what my chairman 
said.
    Mr. DeLay. Thank you and thank you for your testimonies.
    Chairman Armey. The gentlelady from California.
    Ms. Pelosi. I would like to follow up on Mr. DeLay's 
question.
    First, I want to welcome both of you and thank you for your 
excellent presentations and the hard work that went into 
developing your product today.
    On the intelligence side, we have needs and leads. We know, 
you know, what we need technologically and we try to go find 
that; or people come in with leads which are excellent. I spoke 
to a technology group a couple of weeks ago, and I said we had 
approximately 7,500 suggestions coming forward, and that 
morning they said, no, it is now up to 10,000. That was a few 
weeks ago.
    So this new department, as well as other agencies of 
government, are going to have to be very resourceful and agile 
in how we can accommodate what will help us technologically.
    I would have hoped that this department would have been 
more of a reflection of the advances in technology and used 
technology for coordination rather than attempting to establish 
a gigantic department, which I think is an old-fashioned way of 
approaching it, especially heeding the distinguished ranking 
member's caution about acting in haste, that we are going very 
fast.
    But hopefully, with all of the collective wisdom of our 
Chairs and ranking members and the receptiveness of our 
distinguished chairman to heed the recommendations, we will be 
able to produce something that will reduce risk to the American 
people and manage our resources judiciously, as the President 
spells out in his strategy.
    My question was one that you addressed, Mr. Dingell, in 
your comments, and that was an important part of your 
legislation, and that is section 337 relating to the regulatory 
authority of existing agencies.
    I asked some of the Cabinet Secretaries yesterday if they 
thought that any regulatory authority of an existing agency 
that was not spelled out to be given to Homeland Security, in 
their view, resided where it was to begin with, in the existing 
agency. They all said, yes.
    Would you spend a moment to tell the committee the basis of 
your putting forth this as a priority and why, therefore, it is 
important?
    Mr. Dingell. Thank you.
    This was a matter of very special concern in the committee 
to us. When you reorganize, you have to be sure that you know 
what you transfer and what you do not transfer. The best way of 
being sure that you transfer what you want, you don't create 
confusion and disorder later, is by being exquisitely precise. 
The functions of section 737 are to assure that.
    The section achieves two important results. First, it makes 
it clear that except for regulatory authority that comes with 
specific functions being transferred to the new department, no 
new regulatory authority is being created by the provisions of 
section 201 or other parts of the bill. That is H.R. 5005.
    I want to make it clear, we limit this to the sections 
within the jurisdiction of our committee, and I have sought to 
do nothing about the responsibilities of other committees. Oh, 
I think this committee, in its wisdom, may very well want to 
consider whether you want to apply something like section 737 
to the work of other committees, but I leave that to your 
wisdom and your discussion with those committees.
    Second, the rule of construction ensures that existing 
regulatory authorities of agencies, our part of agencies that 
are not being transferred to the new department are not changed 
or diminished in any other matter. For example, the Nuclear 
Regulatory Commission, the Environmental Protection Agency and 
other agencies have authority and responsibilities to assess 
vulnerabilities of critical infrastructures in their areas of 
expertise.
    This provision is important to ensure that those agencies 
can continue to exercise their authorities to protect the 
American people. And I want to make it very clear, if you 
transfer authorities from the existing agencies, Food and Drug, 
and NRC, EPA, the Department of Energy, you may very well find 
that you leave yourself in a situation where you have all of a 
sudden moved important public health or other concerns like 
that to an agency that really doesn't concern itself with those 
questions and is concerned with security.
    I would beg you to be exquisitely careful of that because 
there is great opportunity for mischief here.
    Ms. Pelosi. Thank you.
    Mr. Chairman, would you like to comment?
    Mr. Tauzin. Let me second Mr. Dingell's comments. Not only 
did we spend more time on section 737, which is a rule of 
construction that is going to be critical for agencies and 
courts to decide whether this new department has new authority 
to regulate, or whether it is taking authority from someone 
else who had it in our government structure.
    This rule of construction has been very carefully vetted 
with our counsel, and many of us who helped write it, to do two 
things. One is to protect against an inadvertent transfer of 
authority, or complications or confusions about that particular 
subject matter. And secondly, to make it clear, however, in our 
savings clause that is we don't mean by this reservation not to 
require the collaboration and the coordination of the 
Secretary, the roles he is given in respect to other sections 
of the bill.
    One final thought. Again, we cannot, obviously, recommend 
to you what you might do with sections not under our 
jurisdictional control. But if this works for the sections 
under our jurisdictional control, we urge you to seriously 
think about whether or not it might work for other areas not 
covered in our report to you.
    Ms. Pelosi. Once again, thank you very much for your very 
valuable contribution and for your leadership.
    Thank you, Mr. Chairman.
    Chairman Armey. The gentlelady from Ohio.
    Ms. Pryce. Thank you very much, Mr. Chairman. And Chairman 
Tauzin, I am very sorry, I missed your presentation. But I have 
a question about your committee's work in terms of changing the 
Department, the proposal the Department has to make the 
Division of Chemical, Biological, Radiological and Nuclear 
Countermeasures into a division focused primarily on research 
and technology. And I am sure you addressed that in your 
remarks.
    But many have criticized the administration's effort, up to 
now, of being too broad already. And broadening this aspect of 
it, I would like your thoughts about how this could, or perhaps 
may not, detract from the division's mission to prevent these 
chemical and nuclear, biological attacks on American soil.
    And do you think that broadening this part of the plan is a 
good idea in terms of how large it is already?
    Mr. Tauzin. Well, first of all, there is no question that 
in our hearings, as I say, we had 40 witnesses that came 
forward. We learned two things. One is that much of this work 
is already being conducted on very important areas of research 
and development. That is critical in the various authorities 
that currently exist in those departments, and we don't want to 
interfere with that.
    On the other hand, this department should have the right, 
for example, to specifically direct the laboratory to examine 
an issue that may affect the security of our homeland. So we 
have made it clear they have that power to specifically direct 
some laboratory research that may be necessary. But, as I said, 
we very much object to the notion that they ought to control 
the funding that eventually goes to these departments to do 
these kinds of things that currently are being done in research 
and development at NIH and CDC, that generally affect the 
public health or agricultural health of our country, when that 
work is customarily performed for nonterrorist activities. So 
we have tried to balance it very carefully.
    In structuring the bill, our recommendations has a 
requirement for collaboration and consultation in giving the 
new Secretary actual authority to direct research when he or 
she may need it for protection of our homeland, but 
nevertheless respecting the current role of these agencies who 
every day protect us from infectious diseases and outbreaks and 
who every day are working on cures for cancer and all the other 
things that are critically important to our country without a 
terrorist threat.
    Ms. Pryce. Does your committee's proposal put this under 
the new department?
    Mr. Tauzin. We leave to the HHS, as the President has 
recommended, these functions, but we give to the new department 
the right, in fact the obligation, to consult with, collaborate 
with these agencies in setting priorities that might affect 
homeland security. And we give them, as I said, specific 
authority to direct research at our labs when it is clear that 
research will yield some benefit to homeland security.
    Ms. Pryce. Thank you, Mr. Chairman. I yield back.
    Chairman Armey. The gentleman from New Jersey.
    Mr. Menendez. Thank you, Mr. Chairman. I want to thank both 
the chairman and the ranking Democrat on the work that they 
have done.
    I raised a series of questions with Secretary Thompson, 
Governor Ridge and others when they were here, based upon 
statements made by a variety of people on the whole question of 
our public health and research, and I think that you have 
addressed it; but I want to raise them again and have you tell 
me whether what you did in committee responds to these 
concerns.
    Dr. Margaret Hamburg of the Nuclear Threat Initiative said 
that if these programs, referring to public health research and 
work of the CDC, are carved out of their current habitats and 
moved into the new proposed department that the likely outcome 
would be to weaken and fragment our Nation's capacity to 
respond to infectious disease, whether occurring naturally or 
caused intentionally. Dr. Tara O'Toole of the Center for 
Civilian Biodefense at Johns Hopkins said that if this takes 
place, the country will be forced to create parallel work 
forces, one in Homeland Security for bioterrorism preparedness 
and another in HHS for normal public health functions. And the 
GAO found that the structure, as proposed, does not ensure both 
the goals of homeland security and public health will be met or 
how priorities for basic public health capacities currently 
being funded to the dual CDC programs will be maintained.
    Do you believe what you did in the committee--particularly, 
I saw your comments, Mr. Dingell, on title III. Do you believe 
that that responds to those concerns, as well as you, Chairman 
Tauzin?
    Mr. Tauzin. We think they do. We make it very clear, and we 
understand the administration supports us in this 
clarification. Those programs remain with the agencies that are 
conducting that research and development. Research and 
development does not move to the new department. The new 
Secretary does not have the power to set the priorities.
    Mr. Menendez. That is different than the administration's 
mark.
    Mr. Tauzin. That is a little different. We clarified it, I 
suppose is a better way to put it.
    What we made clear is that the new Secretary nevertheless 
has the right to collaborate with those agencies in defining 
priorities. So, in fact, the President and new Secretary 
determine that the work of these agencies can best be 
prioritized in an area that is critical to a new element 
affecting homeland security. Collaboration is then required to 
determine that new priority.
    Mr. Menendez. We would want all of our departments to 
collaborate in terms of suggesting what is the best course for 
public health in the Nation, including within a security 
context, but your committee made it very clear that HHS retains 
the power to make that decision at the end of the day.
    Mr. Tauzin. That is correct. Obviously, who controls the 
money has a lot to do with that. That is why our committee 
strongly recommends that the new Secretary not have primary 
control over the $1.9 billion that goes into NIH grants or the 
$1.5 billion that goes into public health emergency grants. We 
think that money needs to go to those agencies, so that they 
maintain their primary role in setting the priorities of those 
research and development projects, always giving the Secretary 
and the President the capacity to collaborate those agencies 
and reassessing priorities, if that is necessary.
    But controlling the money obviously does shift and lever 
the decisions and priorities; and we think not only would that 
be wrong, but that would be a much more cumbersome way in which 
to make the money flow expeditiously to the purposes intended.
    Mr. Menendez. Mr. Dingell, would you agree with that?
    Mr. Dingell. I agree absolutely.
    Mr. Menendez. And that vote that took place was bipartisan 
in your--.
    Mr. Tauzin. Yes.
    Mr. Menendez. Also, one thing: I want to commend you, Mr. 
Tauzin. Something we have not touched upon in this committee or 
looked at in the context of this department, but it is cyber 
security, and you make the point in your written statement that 
the vulnerability of some of these systems that control our 
electricity networks or the operation of large dams or drinking 
water systems is incredibly important and subject to attack. In 
the committee's mark, could you describe where within the new 
department you see such functions taking place?
    Mr. Tauzin. We actually recommend a special department 
within the new department. Those will be focused on cyber 
security. And the reason we recommend that is because our 4-
year hearing process into this matter has quite disturbed us.
    We have had red teams from GAO come in and demonstrate in 
front of our committee members the ease with which they have 
been able to hack into sensitive government material, sometimes 
not into a government agency, but a government agency that is a 
link to a government agency. They have been able to compromise 
the security systems, and been able to take control of our 
microphones, they have been able to take control of the video 
cameras on top of computers in some of these agencies.
    And to see them do that in our committee, I think 
heightened all of our awareness. This new threat to our Nation, 
which we understand now from the Intelligence Committee 
information gathered and presented to us, very much includes 
cyber attack capabilities. It needs to be a high priority, a 
special unit within the new department focusing on 
strengthening and improving the security systems of our 
Nation's sensitive infrastructures, not just those that are 
public, but very importantly, as you point out, the private 
water systems or electric systems or utility systems that are 
critical to our Nation's health and economy.
    Mr. Menendez. Thank you.
    Chairman Armey. We can't help but observe how much more 
active these hackers will be when they all have broadband.
    Mr. Tauzin. Absolutely. But again you make a good point. 
With the slow-speed dial-up systems that currently exist, it is 
one thing to protect them, but when you get into digital 
broadband high-speed systems, we had better have a special 
department within this new department on top of these new 
systems because they are going to be extraordinarily 
vulnerable. And the technology has changed so rapidly that 
unless somebody is on it constantly, and as Mr. DeLay pointed 
out a minute ago, unless somebody is finding new technology, 
not the old technology, we are going to be in a lot of trouble.
    Chairman Armey. Thank you.
    Mr. Portman. Thank you, Mr. Chairman. I appreciate the 
testimony on Energy and Commerce. I appreciate the seriousness 
with which the Committee, on a bipartisan basis, has looked at 
its areas of jurisdiction and notwithstanding--so Mr. Dingell's 
larger concerns have given us some constructive changes. The 
big one is, I think, the funding issue.
    Secretary Thompson, as you know, testified before this 
committee that he believed that the administration's proposal 
is the proper way to go; in other words, taking some of these 
funding decisions of public health away from him and, instead, 
putting them in Homeland Security.
    You talk about a consultation process where the Secretary 
of HHS will continue to have that budget authority, but he 
would consult with the Homeland Security Department and that 
Secretary. Is there a way to strengthen that?
    In other words, can you see a way where, perhaps not a 
veto, but there would be more than simply consultation on 
behalf of the Homeland Security agency to be sure they are 
getting the public health information they need?
    Mr. Tauzin. Mr. Portman, I think we have literally tried to 
strike that balance. The original language required 
consultation. We went a great deal forward when we talked about 
collaboration to actually make the decisions together when it 
comes to homeland security priorities. But again I don't have 
to tell you, it is one thing to leave the program at HHS, CDC, 
or NIH and then have a new Secretary control the funding.
    How can you not agree with the man who has the money to 
decide whether or not you spend it?
    Mr. Portman. You are aligning responsibility and authority.
    The second question--and Mr. Dingell feel free to chime in 
here on these--there are in your draft section 503 changes with 
regard to the Secretary of Homeland Security and his ability to 
be able to respond to a threat of a nuclear incident. Your 
language, as I read it, says he must wait for an actual threat 
to occur before he can take charge of a nuclear incident 
response team. Is that accurate?
    Mr. Dingell. I don't think that is what we said, and I 
don't think that is what we have intended. I think we expect a 
certain amount--I think the language of this proposal 
indicates--an expectation is that the Department of Homeland 
Security will do the things it has to do on a participatory 
basis to provide the necessary security protection of the 
public interest here.
    We face a very major problem. A huge problem this country 
confronts is addressing problems of health, of biology, of 
risks from diseases and things of that sort. We have a 
wonderful mechanism set up to address that. If you make 
changes, you are liable to significantly adversely affect that 
capacity. We don't want that to be hurt any more than it has to 
be by the changes we are engaging in here.
    We are trying, at the same time, to see to it that the new 
agency gets the authorities it needs to address the concerns it 
confronts. Those will occur less frequently, but they will 
require considerable participation at the right time and 
fashion.
    We want to see both occur, but we don't want to lose what 
has been very valuable in this country, and that has been the 
ability to move forward on diseases and public health risks 
which are very severe, and we didn't want to see the shift of 
emphasis from public health to simply addressing the problem of 
a momentary exercise, which involved essentially addressing 
some kind of a terrorist act.
    It is a difficult balancing, but you have to understand you 
have to protect both capabilities.
    Mr. Tauzin. The staff indicates to me, Mr. Portman, that we 
didn't make any significant changes.
    Mr. Portman. So section 503 in terms of the nuclear 
incidents is pretty much the way the administration proposed 
it?
    Mr. Tauzin. Yes. My staff indicates to me that we have not 
materially affected the print that was offered in the bill.
    Mr. Portman. I do appreciate the fact that your committee 
has seen some inadequacies in our response to bioterrorism and 
taking advantage of this opportunity to try to streamline that 
approach, so that next time we are faced with such a threat, we 
can be better prepared; and I want to commend you for that. And 
I think, again, you have given the Select Committee some 
constructive suggestions along these lines over and above what 
the administration had proposed.
    One final quick question, Mr. Dingell: You were here when 
the Department of Energy was created. You were integral to 
that. What lessons did you learn from the creation of the 
Department of Energy that we could--.
    Mr. Dingell. Lessons? Well, the following--.
    Mr. Tauzin. Restrain yourself, John.
    Mr. Dingell. One, be very careful. Two, it is full of 
surprises. Three, you are liable to create enormous confusion 
and mess you can't anticipate. And last I would say be careful 
what you ask for because you are just liable to get it and you 
may be sorry.
    Mr. Tauzin. I will be more specific with you, Mr. Portman.
    The Department of Energy was, in many cases, an agency 
cobbled together with a lot of different things that were 
happening in our government. Many of those areas cobbled 
together not only don't get along, but are antagonistic to one 
another in many cases. It is an agency riddled with fiefdoms, 
and I believe one of the most unfortunate, badly cobbled 
together agencies of the Federal Government.
    And Mr. Dingell's advice to the President at the very 
beginning of this process, to look at what happened in the 
Energy Department when it was created.
    Mr. Portman. To be sure there was a clear mission, clear 
strategy--.
    Mr. Tauzin. And to make sure we don't repeat those mistakes 
has been a good message.
    Mr. Dingell. One of the things I learned--and I handled the 
legislation on the House side as the chairman of the 
subcommittee of jurisdiction--is that through a remarkable 
effort of cooperation, coordination, and so forth, led by a 
wonderful gentleman by the name of Frank Zarb for both 
President Ford and President Nixon, we were able to meet the 
serious character of the energy threat that we confronted.
    We did it without setting up a new department. We did it as 
a Nation by having the President fully behind the power, the 
prestige and capability of Mr. Zarp to address this; and he did 
it with an extraordinary level of understanding and 
cooperation, which he engendered among all who were concerned, 
including the private companies which were absolutely vital to 
the accomplishment of these goals.
    I didn't understand it at the time, but looking back in 
history, I can tell you, I do now understand what he did. I can 
telling you that when you have a crisis, you don't just 
manufacture a department to deal with it. You begin to bring in 
all the people that you have to bring in to do the work, and 
you get them to cooperate in America--public, private, ordinary 
citizens, all of them who will work together on this.
    I can tell you, you put them in a department, and then the 
warfare and the trouble starts. And I can just tell you that 
you should anticipate you are going to have a vast period of 
confusion when you set this agency up. It is going to be 
counterproductive.
    Mr. Tauzin. We are going to have to oversee every part.
    Chairman Armey. Let me thank both our witnesses and the 
gentleman from Ohio.
    The gentlelady from California.
    Ms. Pelosi. I have already had my questions. I want to join 
in thanking our distinguished witnesses for their excellent 
testimony, and I know you have the last word.
    Chairman Armey. I believe I heard the Chair--I heard the 
chairman have the last word, and I believe it is a good word 
for us, ``oversight.'' the agency and the Federal Government 
must be subjected, as all of our Federal Government must, to 
congressional oversight. I have no doubt that your mark is 
instructive on that as it is on other matters.
    I want to thank both of you gentlemen and your committee 
for a good mark. It is quite constructive to me as I prepare my 
chairman's mark. Thank you for your testimony, and we may 
excuse our witnesses with great appreciation.
    Without objection, the Select Committee will stand in 
recess until 2 o'clock.
    [Recess.][2:05 p.m.]
    Chairman Armey. The committee will come to order.
    The committee is delighted to hear from the Government 
Reform Committee. Gentlemen, we try to work with a 5-minute 
rule here. We will, without objection, place your written 
statements in the record, and we will ask you each in your 
turn, so far as you are able, to summarize your opening 
statements within the 5-minute rule; and then we will proceed 
from there to questioning under the 5-minute rule.
    With those admonitions, we will begin with Chairman Burton.

 STATEMENT OF THE HONORABLE DAN BURTON, CHAIRMAN, COMMITTEE ON 
                       GOVERNMENT REFORM

    Mr. Burton. Thank you, Mr. Chairman. I would like to say at 
the outset that I probably will go a little bit over the 5 
minutes, and that is because we had the whole bill, not just 
parts of it, and there were 40-some amendments that we dealt 
with. So I will try to be as brief as possible.
    First of all, I would like to say how proud I am of what 
the committee did on this bill. We marked it up last Thursday. 
We started working at 10:00 in the morning and finished close 
to 2:00 the next morning, a 16-hour marathon. We had almost 40 
amendments, and when we were through, even though we had a lot 
of discussions and disagreements, the bill was passed by a vote 
of 30 to 1.
    At the beginning of the meeting, I said that I wanted this 
to be bipartisan. And I have to say to my colleague, Mr. 
Waxman, who is here, it was bipartisan; and we had 
disagreements and long debates, but I think things were handled 
in a pretty fair way, and we all worked together.
    I am especially proud of the fact that we voted together to 
keep the main building blocks of the President's plan, as some 
of the other committee's did not. And I am a strong supporter 
of President Bush's plan. We voted to keep the Coast Guard in 
the bill. We voted to keep the INS in the bill. We voted to 
keep the Secret Service and FEMA in the bill, and those are 
very important votes.
    Without those agencies, the Department of Homeland Security 
simply won't work. You cannot have a department that focuses on 
border security without the Coast Guard. You cannot have a 
permanent department that focuses on recovery from terrorist 
attacks without FEMA.
    The fact remains that we weren't prepared to prevent what 
happened on September 11, and we weren't prepared to recover 
from a terrorist attack of that magnitude. We need to have 
these agencies working together in a coordinated way to prevent 
the next terrorist attack. By creating this new department, we 
think we are going to improve upon that coordination.
    Let me say a few words about management flexibility. 
Putting together this department is going to be a huge 
undertaking. They are going to need some flexibility to get the 
job done. We did not give the administration everything that 
they asked for; however, we put together proposals on 
procurement and property and personnel that I think are 
balanced and fair. I think these provisions are sound, but at 
the same time, we are open to further discussions. People may 
have ideas that will improve on what we have done, and 
obviously what you decide will be the final decision.
    I want to emphasize two specific personnel issues, first, 
the Morella amendment. I have a lot of respect for Connie 
Morella. We worked together on a number of issues, but I 
disagree with her on this amendment. Her amendment would limit 
the President's authority to restrict collective bargaining at 
the Homeland Security Department on national security grounds. 
I think this would be a very big mistake.
    First of all, there is no evidence of a problem here. This 
is a power that has been used sparingly by Republican 
Presidents and Democratic Presidents, so I don't understand 
what problem we are trying to fix.
    Secondly, we are in a war. The Homeland Security Department 
is a central part of our strategy to win that war. Why would we 
want to give the President less authority over Homeland 
Security, in that department, than he has over any other 
department?
    This was probably the most controversial issue we dealt 
with last week, and by the way, we had members of the committee 
who are strong supporters of Federal employees speak against 
this amendment as well. It was approved by only one vote.
    I think it is a mistake to limit the President's national 
security authorities right now, since we are in a war; and I 
would ask the Select Committee to reconsider that issue.
    The second issue I want to raise in this area is pay 
ceilings. At one time or another, almost every Federal agency 
has come to our committee and asked that they have these pay 
ceilings lifted for the senior executives. I think that is a 
mistake. We have had agencies come to us and ask that they be 
allowed to pay their managers more than the head of an agency. 
That does not make sense from a management standpoint and 
doesn't make sense from a fiscal standpoint either. When you 
look at those agencies that have been given exemptions from the 
pay ceilings, I think you will find that their costs have gone 
up and that their management has not necessarily improved.
    So I would ask that you would follow our example and not 
remove the pay ceiling.
    Now, regarding indemnification, the indemnification 
provisions that we added to the bill are very important. There 
are high tech companies across the country that are developing 
cutting-edge technology to help prevent terrorist attacks, but 
in some cases, they cannot sell them to the government because 
they can't get enough insurance. The risks of liability from 
major terrorist attacks are so great that insurance companies 
cannot, or will not, afford to insure these products.
    We need these new technologies to protect the country and 
critical infrastructures. Right now we are vulnerable.
    We put together a very responsible proposal to deal with 
this problem. It would allow the Federal agencies to indemnify 
contractors for antiterrorist technology after they purchased 
as much private insurance that they can get. In other words, if 
they buy insurance up to a certain level that is the maximum 
level they can get, they are worried about their exposure, the 
government will be able to provide a hold harmless clause above 
that.
    The Secretary of Homeland Security could also indemnify 
contractors on behalf of State and local governments on the 
same terms. The Director of OMB would have a very strong role 
to play in the process to protect the interests of the 
taxpayers.
    This proposal has bipartisan support, and I hope you will 
include this in the bill you send to the floor.
    Finally, I would like to make a few brief comments on the 
issue of visas. I believe very strongly that the authority for 
issuing visas belongs at the Homeland Security Department. I 
think this is part of our first line of defense against 
terrorists trying to get into this country. The State 
Department has never taken security concerns very seriously in 
this area. Many of my colleagues agree with me, including the 
chairman of the Judiciary Committee, Mr. Sensenbrenner. 
Unfortunately, we did not prevail last week and I want to give 
you a couple of examples.
    Charles Parish worked in Beijing. He granted visas to 
people because of sexual favors and money. He took the Fifth 
Amendment before my committee. After he took the Fifth 
Amendment, he got four separate raises, was promoted, and they 
put him in charge of checking out visas for Iran and Iraq in 
the Middle East; and here is a guy who sold visas for sex and 
money. Now, I just can't understand how the State Department 
could allow that.
    We had visa fraud in Qatar. Just last week it was reported 
that an employee there was selling visas for $10,000 or more 
apiece. He sold one visa to a person who was involved or linked 
to the September 11 tragedy.
    We had fraud cases in other countries. In Guyana, a fellow 
got 21 years in prison for selling 800 visas for over $10,000 
apiece and 26 of the individuals he sold visas to committed 
crimes in the U.S. including gang rape and other crimes. In 
Juarez, Mexico, a consular officer was recently arrested for 
selling visas. Also, a DEA embassy staffer was recently 
convicted for bribery for helping Nigerians obtain fraudulent 
visas.
    This has to be tightened up, and I don't see the State 
Department tightening it up.
    Now, they also failed to investigate the September 11 
tragedy. This is something most people don't know. We learned 
that GAO interviewed a number of the consular officers over in 
Riyadh, Saudi Arabia, and when they asked the consular officers 
about the visas they were dealing with before the tragedy on 
September 11, they said the people from GAO were the first 
people to ask them about that. And this was just recently; 
nobody from the investigative arm of the State Department ever 
went over and checked that out, and you would have thought that 
would have been the first thing they would have done.
    They also had a process over there called Visa Express 
where you could go get a visa from a travel agent, and it was 
just rubber-stamped at the embassy. Three of the hijackers 
received their visas through the Visa Express program; and that 
should be eliminated right now. And the State Department still 
has that ongoing, even though that is a tragedy.
    Let me just end up by saying I am disappointed that we had 
a compromise on that. We did work with our colleagues on the 
Democrat side. In particular, we worked with Representative 
Lantos on this. We did come up with a compromise where there 
would be a person from Homeland Security in each embassy to 
oversee that. That is a giant step in the right direction, but 
I still feel personally, and I think many of my colleagues do, 
that we ought to take the visa situation completely out of 
State and put it under Homeland Security. That is the first 
line of defense.
    And finally let me just say once again that I think the 
committee did an outstanding job. I compliment my colleague, 
Mr. Waxman, and his colleagues for their cooperation; and I 
hope that you will look favorably on almost everything we did.
    [The statement of Mr. Burton follows:]

   PREPARED STATEMENT OF THE HON. DAN BURTON, CHAIRMAN, COMMITTEE ON 
                           GOVERNMENT REFORM

    Good afternoon. Thank you for inviting me to testify before 
you today.
    Before I talk about the substance of the bill, I want to 
say a few words about the Government Reform Committee. I'm very 
proud of the work that our Committee did on this bill. We 
marked it up last Thursday. We started working at 10:00 in the 
morning, and we went straight through until 1:00 the next 
morning. We voted on nearly 40 amendments. At the end of that 
process, we approved that bill by a vote of 30 to 1.
    At the beginning of our meeting, I said that I wanted us to 
have a bipartisan process--and it was. We had some 
disagreements. We had some long debates. But we handled every 
issue in a fair and open way. At the end of the day, we wound 
up with a good bill that Republicans and Democrats voted for.

                      keeping the structure intact

    I'm especially proud of the fact that we voted to keep 
together the main building blocks of the President's plan. I'm 
a strong supporter of this plan.
     We voted to keep the Coast Guard in this bill.
     We voted to keep the INS in this bill.
     We voted to keep the Secret Service and FEMA in 
this bill.
    Those were very important votes. Without these agencies, 
the Department of Homeland Security won't work. You cannot have 
a department that focuses on border security without the Coast 
Guard. You cannot have a department that focuses on recovery 
from terrorist attacks without FEMA.
    The fact remains that we weren't prepared to prevent what 
happened on September 11. And we weren't prepared to recover 
from a terrorist attack of that magnitude. We need to have 
these agencies working together in a coordinated way to prevent 
the next terrorist attack. By creating this new department, 
we're going to improve that coordination.

                         management flexibility

    Let me say a few words about management flexibility. 
Putting this department together is going to be a huge 
undertaking. They're going to need some flexibility to get the 
job done. We didn't give the Administration everything they 
asked for. However, we've put together proposals on procurement 
and property and personnel that I think are balanced and fair. 
I think these provisions are sound, but at the same time, I'm 
open to further discussions if people have ideas that will 
improve what we've done.
    I want to emphasize two specific personnel issues. First--
the Morella Amendment. I have a lot of respect for Mrs. 
Morella. We've worked together on a number of issues. But I 
disagree with her on this amendment. Her amendment would limit 
the President's authority to restrict collective bargaining at 
the Homeland Security Department on national security grounds. 
I think this would be a mistake.
    First of all, there's no evidence of a problem here. This 
is a power that's been used very sparingly, by Republican 
Presidents and Democratic Presidents. So I don't understand 
what problem we're trying to fix. Secondly, we're in a war. The 
Homeland Security Department is a central part of our strategy 
to win that war. Why would we want to give the President less 
authority over the Homeland Security Department than he has 
over any other Department?
    This was probably the most controversial issue we dealt 
with last week. And by the way, we had Members of the Committee 
who are strong supporters of Federal employees speak against 
this amendment. It was approved by only one vote. I think it's 
a mistake to limit the President's national security 
authorities right now, and I would ask the Select Committee to 
reconsider this issue.
    The second issue I want to raise in this area is pay 
ceilings. At one time or another, almost every Federal agency 
has come to my Committee and asked to have the pay ceilings 
lifted for their senior executives. I think this is a mistake. 
We've had agencies come to us and ask that they be allowed to 
pay their managers more than the head of the agency. That 
doesn't make sense from a management standpoint. And it doesn't 
make sense from a fiscal standpoint. When you look at those 
agencies that have been given exemptions from the pay ceilings, 
I think you'll find that their costs have gone up, but that 
their management hasn't necessarily improved. So I would ask 
you to follow our example and not remove the pay ceiling.

                            indemnification

    The indemnification provisions that we added to the bill 
are very important. There are high-tech companies across the 
country that are developing cutting-edge technology to help 
prevent terrorist attacks. But in some cases, they can't sell 
them because they can't get enough insurance. The risks of 
liability from a major terrorist attack are so great that 
insurance companies can't afford to insure these products.
    We need these new technologies to protect critical 
infrastructures. Right now, we're vulnerable. We've put 
together a very responsible proposal to deal with this problem. 
It would allow Federal agencies to indemnify contractors for 
anti-terrorist technology after they've purchased as much 
private insurance as they can get. The Secretary of Homeland 
Security could also indemnify contractors on behalf of state 
and local governments on the same terms. The Director of OMB 
would have a very strong role to play in the process to protect 
the interests of the taxpayers. This proposal has bipartisan 
support, and I hope you'll include this in the bill you send to 
the floor.

                          authority over visas

    Finally, I'd like to make a few brief comments on the issue 
of visas. I believe very strongly that the authority for 
issuing visas belongs at the Homeland Security Department. I 
think this is part of our first line of defense against 
terrorists trying to get into this country. The State 
Department has never taken security concerns very seriously. 
Many of my colleagues agree with me, including the Chairman of 
the Judiciary Committee. Unfortunately, we didn't prevail last 
week.
    I'm disappointed in that, but I do think that the 
compromise we've arrived at is better than the Administration's 
proposal. It would give the Homeland Security Department the 
authority to have employees on site at every consulate to 
monitor visa activity. And it would clarify that the final 
authority to reject a visa application rests with the Secretary 
of Homeland Security. I hope the Select Committee will adopt 
this language. I also hope that you'll adopt an additional 
amendment that we approved that would terminate the Visa 
Express program in Saudi Arabia. Fifteen of the 19 September 11 
hijackers came from Saudi Arabia. Three of them got their visas 
through the Visa Express program. Given those facts, I can't 
imagine why we would have a program in that country that let's 
people apply for their visas through a travel agent. It doesn't 
make any sense. The fact that the State Department continues to 
defend it speaks volumes about why this responsibility belongs 
at Homeland Security.
    Thank you again for allowing me to testify. That concludes 
my statement. I'd be happy to take any questions.

    Chairman Armey. Thank you. Mr. Waxman.

 STATEMENT OF THE HONORABLE HENRY A. WAXMAN, RANKING MINORITY 
             MEMBER, COMMITTEE ON GOVERNMENT REFORM

    Mr. Waxman. Members of the Select Committee, thank you for 
inviting me to testify today.
    It is clear we need homeland security legislation. Federal 
departments are not working together as they should to protect 
our Nation. Unfortunately, the bill proposed by the President 
has serious flaws; in fact, I think it may well cause more 
problems than it solves.
    Last week, I joined with Representative David Obey, the 
ranking member of the Appropriations Committee, in sending a 
letter to Governor Ridge outlining a number of serious concerns 
with this bill; and I ask that that letter be part of the 
record.
    Chairman Armey. Yes. The record is open, and without 
objection, it will be in.
    [The information follows:]
                                                      July 9, 2002.
    Dear Governor Ridge: Congress is considering the President's 
proposal to create a new Department of Homeland Security on an 
accelerated schedule. But now that Congress has received the 
legislative language that would implement the President's plan. Many 
issues have arisen about the details of the proposal. We are writing in 
the hope that you will be able to provide expeditious responses to 
these concerns.
    The issues fall into ten main areas. First, the new Department will 
inherit a vast array of responsibilities that have nothing to do with 
homeland security. These include administering the National Flood 
insurance Program, cleaning up oil spills at sea, and eradicating pests 
like the boll weevil. Giving the new Department dozens of 
responsibilities unrelated to homeland security risks bloating the size 
of the bureaucracy and diluting the new Department's counterterrorism 
mission.
    Second, the legislation lacks an effective mechanism to coordinate 
the activities of the many federal agencies that have major homeland 
security functions. The President's submission to Congress listed 153 
different agencies, departments, and offices involved with homeland 
security.\1\ After the creation of the proposed new Department, this 
number actually will increase to 160 agencies, departments, or offices 
with security roles. But the draft bill does not include a mechanism 
for developing and implementing a unified homeland security strategy 
across the entire government.
---------------------------------------------------------------------------
    \1\ President George W. Bush, The Department of Homeland Security 
(June 2002) (hereinafter ``White House Briefing Document'') (on line at 
http://www.whitehouse.gov/deptofhomeland/).
---------------------------------------------------------------------------
    Third, there are inefficiencies and coordination problems that will 
arise when parts of agencies are removed from their existing 
departments and moved to the new Department. The goal of the 
legislation is to make government more efficient, but some of the 
proposed changes could have exactly the opposite effect. For example, 
GAO has testified that programs transferred from the Department of 
Health and Human Services include ``essential public health functions 
that, while important for Homeland Security, are critical to basic 
public health core capacities.'' \2\
---------------------------------------------------------------------------
    \2\ General Accounting Office. Homeland Security: New Department 
Could Improve Coordination but May Complicate Public Health Priority 
Setting, 6 (June 25, 2002) (GAO-02-883T).
---------------------------------------------------------------------------
    Fourth, despite prior assurances that the Administration supported 
reforms of the Immigration and Naturalization Service (INS) that were 
passed by the House, The President's proposal would import the INS into 
the new Department of Homeland Security wholly intact and without these 
needed internal reforms.
    Fifth, the legislation includes broad exemptions from our nation's 
most basic ``good government'' laws. The legislative language would 
allow the new Secretary, in conjunction with the Office of Personnel 
Management, to waive all provisions of our civil service laws. These 
laws have evolved over many decades to ensure that our government has a 
professional civil service hired on the basis of merit rather than 
political favoritism. Yet the proposed legislation would allow the new 
Department to waive all of these protections, including those that 
prohibit patronage, protect whistle blowers, provide for collective 
bargaining rights, and ensure health and retirement benefits.
    A similar approach has been taken with procurement and the 
management of real property. Under the proposal, the Secretary does not 
have to comply with cornerstone procurement principles, such as open 
and competitive bidding. Moreover, basic government in sunshine laws, 
such as the Freedom of Information Act and the Federal Advisory 
Committee Act, have been limited in their application to the new 
Department.
    Sixth, the President's proposal would give the new Department 
extraordinary powers to avoid meaningful congressional oversight. Not 
only would the new Department be able to exempt itself from civil 
service, procurement, and property laws, it would also be able to 
rearrange functions, eliminate offices, and transfer large amounts of 
appropriated funds without having to seek prior Congressional approval.
    Seventh, the proposal does not address the potential for disruption 
in the nation's war against terrorism. According to David Walker, the 
Comptroller General of GAO:
        [R]eorganizations of government agencies frequently encounter 
        start up problems and unanticipated consequences that result 
        from the consolidations, are unlikely to fully overcome 
        obstacles and challenges, and may require additional 
        modifications in the future to effectively achieve our 
        collective goals for defending the country a terrorism.\3\
---------------------------------------------------------------------------
    \3\ U.S. General Accounting Office. Homeland Security: Proposal for 
Cabinet Agency Has Merit, But Implementation Will Be Pivotal to 
Success, 5 (June 25, 2002) (GAO-02-886T).
---------------------------------------------------------------------------
Although Administration officials have compared this restructuring to 
the formation of the Department of Defense in the 1940s, that 
reorganization was not attempted until after the war was over, and even 
then it caused confusion and inefficiencies for decades.
    Eighth, there is no comprehensive national strategy for combating 
terrorism to guide the new Department. Logically, a major bureaucratic 
reorganization like this should be proposed as part of a comprehensive 
national strategy for providing homeland security. But in this case, 
the reorganization is occurring in a vacuum. There is no national 
strategy that identifies the major threats the nation faces and 
explains how the new Department will meet them. Nor is there a 
comprehensive threat and risk assessment that identifies and 
prioritizes threats in a coherent manner.
    Ninth, the costs of this proposal have not been identified. 
Although the Administration has stated that the creation of this new 
Department ``would not 'grow' government,'' \4\ this is not credible. 
According to the nonpartisan Congressional Budget Office, even the less 
ambitious reorganization proposed by Senator Lieberman will cost 
taxpayers over $I billion over the next five years.\5\ Costs for the 
Administration's plan inevitably will be higher.
---------------------------------------------------------------------------
    \4\ House Briefing Document, supra note I, at 17.
    \5\ Congressional Budget Office, Cost Estimate: S. 2452, National 
Homeland Security and Combating Terrorism Act of 2002, 1 (June 17, 
2002).
---------------------------------------------------------------------------
    Finally, the Administration's proposal was developed in secret by a 
small group of White House advisors, without substantive input from the 
agencies that handle homeland security. It is being rushed through 
Congress on an accelerated schedule. This is not normally an approach 
that produces sound policy. The potential for making grave mistakes as 
a result of this truncated process should be a serious concern for all 
Americans.
    We need to work together to address the concerns raised in this 
letter and to make improvements in the legislation. Your response to 
the issues and questions raised in the body of this letter will be an 
important step in this process. For this reason--and given the short 
time frame Congress has for consideration of the legislation--we urge 
you to respond by July 15, 2002.

    I. TRANSFER OF FUNCTIONS NOT RELATED TO HOMELAND SECURITY
    According to the White House briefing document issued on June 7, 
2002, the Department of Homeland Security ``must be an agile, fast and 
responsive organization.'' \6\ Transferring functions that do not 
involve homeland security to the new Department, however, interferes 
with this goal. Giving the new Department unnecessary responsibilities 
inevitably will expand the size of its bureaucracy and dilute its 
counterterrorism mission.
---------------------------------------------------------------------------
    \6\ White House Briefing Document, supra note 1, at 16.
---------------------------------------------------------------------------
    At the same time, giving vital but unrelated government 
responsibilities to the Department creates the risk that these 
responsibilities will be neglected and performed poorly. As GAO has 
concluded, many of the unrelated functions being given to the new 
Department ``represent extremely important functions executed by the 
federal government that absent sufficient attention, could have serious 
implications for their effective delivery and consequences for sectors 
of our economy, health and safer research programs and other 
significant government functions.'' \7\ Despite these risks, many 
important government functions that are not related to homeland 
security are being transferred to the new Department. In fact, the new 
Department will have to carry out over three dozen completely unrelated 
missions under the President's proposal.
---------------------------------------------------------------------------
    \7\ GAO-02-886T, supra note 3, at 19.
---------------------------------------------------------------------------
    Section 402(3) of the President's proposal would transfer the 
Animal Plant Health inspection Service (APHIS), which is now currently 
part of the Department of Agriculture, into the new Department. APHIS 
has nearly 8,000 full-time employees (FTEs), but few have 
responsibility for inspecting plants and animal products at the border. 
The other APHIS employees perform functions that are critical to 
various sectors of the economy, but are not related to homeland 
security. For example, APHIS is responsible for:
     Eradicating pests, such as the boll weevil, the citrus 
canker, the gypsy moth, and various noxious weeds through detection and 
control strategies throughout the United States;
     Approving animal drugs that are made from biological 
materials, such as animal vaccines;
     Approving field trials of genetically modified crops; and
     Maintaining the missing pet network at www.missingpet.net.
    Section 502(1) of the President's proposal would transfer the 
Federal Emergency Management Agency (FEMA) into the new Department. To 
date, however, FEMA has had a limited role in counterterrorism. 
According to former FEMA director James Lee Witt, ``[o]ver the last 
decade FEMA has responded to more than 500 emergency and major disaster 
events. Two of those were related to terrorism (Oklahoma City and New 
York City).'' \8\ In Mr. Witt's view, ``[f]olding FEMA into a homeland 
or national security agency will seriously compromise the nation's 
previously effective response to natural hazards.'' \9\ Major FEMA 
responsibilities that are unrelated to homeland security include:
---------------------------------------------------------------------------
    \8\ James Lee Witt and Associates, Department of Homeland Security 
and FEMA (white paper) (June 19, 2002).
    \9\ Id.
---------------------------------------------------------------------------
     Providing flood insurance and mitigation services 
(including pie-disaster mitigation, the Hazard Mitigation Grant 
Program, and flood mapping);
     Conducting various programs to mitigate the effects of 
natural disasters, such as programs to assist states in preparing for 
hurricanes and the National Earthquake Hazards Reduction Program;
     Providing temporary housing and food for homeless people; 
and
     Operating the National Fire Data Center and the National 
Fire incident Reporting System to reduce the loss of life from fire-
related incidents.
    Section 402(4) of the President's proposal would transfer the 
United States Coast Guard out of the Department of Transportation and 
into the new Department. The Coast Guard describes itself as a ``multi-
mission, military, maritime'' agency. Although it performs some 
security-related functions, it also conducts many others unrelated to 
homeland security. For example, Coast Guard responsibilities include:
     Providing navigational tools to ensure that vessels can 
navigate the nation's waterways;
     Promulgating and enforcing boating regulations to ensure 
that oceangoing vessels are safe;
     Protecting the nation's fishery resources, as well as its 
endangered species, by enforcing prohibitions against illegal and 
excess fishing;
     Protecting the maritime environment by preventing oil 
spills in the nation's waters and ensuring that spills are cleaned up 
expeditiously if they happen: and
     Maintaining a fleet of ships that is capable of breaking 
ice in order to maintain maritime mobility and monitors the movement of 
glaciers.
    These Coast Guard functions are essential, but they could be 
jeopardized by the transfer to a new Department focused on homeland 
security. Indeed, the effects of the shift in the Administration's 
priorities are already being felt. According to the Administration's 
homeland security budget justification for fiscal year 2003, ``[a]fter 
September 11, the Coast Guard's port security mission grew from 
approximately 1-2 percent of daily operations to between 50-60 percent 
today.\10\ Without a sustained commitment to its core marine and 
fishery functions, the Coast Guard's ability to protect boaters and the 
marine environment will be jeopardized.
---------------------------------------------------------------------------
    \10\ President George W. Bush, Securing the Homeland; Strengthening 
the Nation, 18 (undated) (hereinafter ``fiscal year 2003 Budget 
Justification') (on line at http://www.whitehouse.gov/homeland/
homeland--security--book.html).
---------------------------------------------------------------------------
    There are many other examples of unrelated functions being 
transferred to the new Department. The transfer of the Environmental 
Measurements Laboratory from the Department of Energy (DOE), for 
example, will make the new Department responsible for maintaining the 
Human Subjects Research Database, which contains descriptions of all 
projects involving human subjects that are funded by the DOE, as well 
as the program that assesses the quality of 149 private laboratories 
that measure radiation levels. Radiation measurement quality control 
undoubtedly will seem like a small item to the new Department of 
Homeland Security, but assuring that the laboratories make accurate 
measurements is important, as mistakes potentially could affect public 
health and cause large unnecessary public expenditures at DOE 
facilities.
    Appendix A contains a list of 40 unrelated functions that would be 
transferred to the new Department by the President's proposal. While it 
may be impossible to create a new Department without transferring some 
unrelated functions, there would seem to be serious dangers inherent in 
the wholesale transfer of unrelated functions as contemplated in the 
Administration's proposal.

    II. LACK OF EFFECTIVE COORDINATING MECHANSMS
    At the same lime that the Administration's proposal transfers 
numerous unrelated functions to the new Department, the proposal also 
fails to include provisions that would ensure the coordination of the 
more than 100 federal entities that will continue to have significant 
homeland security functions.
    According to the Administration, ``responsibilities for homeland 
security are dispersed among more than 100 different governmental 
organizations.'' \11\ Indeed, an organizational chart provided by the 
White House listed 153 different agencies, departments, and offices 
with a role in homeland security (see Figure 1). The White House argues 
that the President's proposal would solve this problem by 
``transforming and realigning the current confusing patchwork of 
government activities into a single department.'' \12\
---------------------------------------------------------------------------
    \11\ House Briefing Document, supra note 1, at I (emphasis in 
original).
    \12\ Id.
---------------------------------------------------------------------------
    IMAGE HERE (Should see if same scan as prior image (put it in 
again).
    In fact, however, the President's proposal will not simplify this 
patchwork and may even make it worse. Even after all of the changes 
proposed in the President's legislative language, the federal 
government would continue to have well over 100 agencies, departments, 
and offices involved in homeland security. According to an analysis by 
the minority staff of the Appropriations Committee, the total number of 
departments, agencies, and offices with a role in homeland security 
actually will grow under the President's proposal, from 153 to 160 (see 
Figure 2) \13\ 
---------------------------------------------------------------------------
    \13\ A post-transfer organizational chart provided by the White 
House Office of Management and Budget shows the number of federal 
agencies, departments, and offices dropping to 134. The While House 
chart, however, lists the new Department of Homeland Security as having 
only six offices involved in homeland security. The White House chart 
omits major components of the new Department that will have homeland 
security functions, including the Coast Guard, the Office of Threat 
Analysis, and the office responsible for stale, local, and private 
sector coordination.
---------------------------------------------------------------------------
    IMAGE HERE (See if same as prior image)
    One example of the continued need for coordination across agencies 
involves providing emergency response. According to the Administration:
    Currently, if a chemical or biological attack were to occur, 
Americans could receive warnings and health care information from a 
long list of government organizations, including HHS, FEMA, EPA, GSA, 
DOJ, OSHA, OPM, USPS, DOD, USAMRIID, and the Surgeon General - not to 
mention a cacophony of local agencies.\14\
---------------------------------------------------------------------------
    \14\ White House Briefing Document, supra note 1, at 5.
---------------------------------------------------------------------------
    But under the President's proposal, all but one of these 11 federal 
agencies (FEMA) would continue to exist, and this one agency would be 
replaced by the new Department. The potential for confusion--and the 
need for effective coordination--remains as great after the creation of 
the new Department as before.
    In fact, in some cases, the reorganization will actually create 
confusion. Currently, three separate federal agencies are in charge of 
protecting the food supply: the Food and Drug Administration (FDA), 
which prevents adulteration of fruits, vegetables, processed foods, and 
seafood; the Environmental Protection Agency (EPA), which regulates 
environmental contaminants, such as pesticides; and the Department of 
Agriculture, which regulates the safety of meat and poultry for human 
consumption, as well as the spread of plant and animal pests through 
food products. Leading experts, such as the National Academy of 
Sciences, have called for consolidating these diffuse authorities into 
a single agency.\15\
---------------------------------------------------------------------------
    \15\ National Research Council. Ensuring Safe Food from Production 
to Consumption, National Academy Press (1 998) (recommending a major 
overhaul of food safety laws and appointment of a single federal 
official to oversee food safety). See also U.S. General Accounting 
Office, Food Safety and Security : Fundamental Changes Needed to Ensure 
Safe Food (Oct. 10, 2001) (GAO-02-47T) (recommending a single food 
safety agency).
---------------------------------------------------------------------------
    The Administration's proposal, however, would further fragment 
regulation of the food supply by transferring some of Agriculture's 
responsibilities to the new Department, creating a fourth food safety 
agency. APHIS, which is charged with inspecting imports to ensure that 
pests and bugs that could harm crops or livestock do not enter the 
United States, would become part of the new Department. But the Food 
Safety inspection Service of the Department of Agriculture, which 
inspects domestic and imported meat and poultry for threats to human 
health, would remain at Agriculture. The nonsensical result, as GAO has 
observed, is that ``the focus appears to be on enhancing protection of 
livestock and crops from terrorist acts, rather than on protecting the 
food supply as a whole.'' \16\
---------------------------------------------------------------------------
    \16\ GAO-02-886T, supra note 3, at 18.
---------------------------------------------------------------------------
    One area in which coordination is urgently needed is among law 
enforcement and intelligence agencies, in particular the Federal Bureau 
of Investigation (FBI) and the Central Intelligence Agency (CIA). How 
the new Department would relate to these agencies is not clear, 
however. One of the primary missions of the new Department is to 
``[p]revent terrorist attacks within the United States.'' \17\ The 
Administration says that a new department with this mission is needed 
because ``[t]oday no one single government agency has homeland security 
as its primary mission.'' \18\ But the FBI has also just undergone a 
major reorganization. Now, it's primary mission is also ``[p]rotecting 
the United States from terrorist attack'' \19\--identical to that of 
the new Department of Homeland Security. As a result, rather than 
having no single federal agency with homeland security as its mission, 
the Administration seems to be proposing two.
---------------------------------------------------------------------------
    \17\ White House Briefing Document, supra note 1, at 8.
    \18\ Id. at 1.
    \19\ Statement of Robert S. Mueller, III, before the Senate 
Committee on the Judiciary (June 6, 2002) (on line at http://
judiciary.senate.gov/testimony.cfm?id=279&wit--id=608).
---------------------------------------------------------------------------
    Under the Administration's proposal for a new Department of 
Homeland Security, there will be a new office for intelligence and 
threat analysis. This office will assist in ``pulling together 
information and intelligence from a variety of sources.'' \20\ 
Similarly, under FBI Director Mueller's reorganization proposal, there 
will be a new office in the FBI called the Office of Intelligence that 
will also assist in ``pulling together bits and pieces of information 
that often come from separate sources.'' \21\ The Department of 
Homeland Security's intelligence office would ``have the ability to 
view the dangers facing the homeland comprehensively, ensure that the 
President is briefed on relevant information, and take necessary 
protective action.'' \22\ Similarly, the FBI's intelligence office will 
be charged with ``providing analytic products to policy makers and 
investigators that will allow us to prevent terrorist acts.'' \23\ This 
does not appear to be a recipe for a unified approach.
---------------------------------------------------------------------------
    \20\ House Briefing Document, supra note 1, at 14.
    \21\ Mueller Statement, supra note 19.
    \22\ White House Briefing Document, supra note 1, at 14.
    \23\ Mueller Statement. supra note 19.
---------------------------------------------------------------------------
    The investigation of the September 11 attacks has already revealed 
serious lapses in the analysis and sharing of intelligence information. 
In July 2001, an FBI special agent in Phoenix reported to his 
supervisors that followers of Osama bin Laden might be training at U.S. 
aviation schools and suggested a nationwide canvass of the schools.\24\ 
But this warning was apparently ignored. As early as January 2001), the 
CIA obtained information that two of the September 11 assailants--Nawaz 
al Hazmi and Khalid al-Midhar--met with al-Qaeda agents in Malaysia. 
But this information was not provided to the INS until August 2001, by 
which lime al-Hamzi and al-Midhar had already entered the United 
States.\25\
---------------------------------------------------------------------------
    \24\ FBI Whistle-Blower Assails Bloated Bureaucracy, Washington 
Post (June 7, 2002).
    \25\ Terrorism ``Watch List'' Was No Match for Hijackers, 
Washington Post (Sept. 23, 2001); Can We Stop the Next Attack?, 
Time.com (March 3. 2002). The CIA has claimed that it provided 
information on al-Midhar as early as January 2001, but the FBI has 
asserted that the information provided contained little detail. 
Sources: CIA Warned FBI About Hijacker, CNN.com (June 4, 2001); FBI and 
CIA Fight It Out Over Who Was to Blame for September 11 Blunders, The 
Guardian (June 5, 2002).
---------------------------------------------------------------------------
    The Administration's proposed bill, however, does not adequately 
address these problems. Although the bill gives the Secretary of 
Homeland Security rights of access to reports, assessments, and 
analytical information from other agencies that relate to threats and 
vulnerabilities, the Department remains primarily a ``consumer'' of 
intelligence information collected by agencies outside its control 
after that information is already processed by those agencies. This 
passive role will not ensure that the new Department obtains access to 
information that the collecting agencies deem insignificant, such as 
the warning from the FBI agent about flight schools. Although the 
Administration's bill allows for the transmittal of ``raw'' 
intelligence from outside agencies to the Department of Homeland 
Security, the Department is not given the resources to cope with the 
volume and complexity of this information.\26\ Moreover, the new 
Department has no ``tasking'' authority to direct what intelligence is 
collected, making it difficult for the new Department to ensure that 
possible threats it identifies are properly pursued.
---------------------------------------------------------------------------
    \26\ Of the 1,000 people slated to staff the new Information 
Analysis and Infrastructure Protection Division, 800 reportedly will 
come from the FBI's National Infrastructure Protection Center(NIPC). 
These individuals, however, are already fully occupied with their 
current responsibilities, which involve protecting critical 
infrastructure, particularly with respect to computer and information 
technology. If given the new role of processing all raw intelligence 
information from the FBI, CIA, and other intelligence agencies, the 
existing NIPC staff would be both overwhelmed and diverted from its 
current tasks.
---------------------------------------------------------------------------
    Another concern is the potential for confusion and interference in 
the actual response to bioterrorist incidents. The FBI will bring a law 
enforcement focus to the scene of a bioterrorist event, while the new 
Department will be concerned with the emergency response. Under the 
President's proposal, it is unclear which will prevail. Under 
Presidential Decision Directive 62, which was signed during the 
previous Administration, the FBI was designated as the lead agency for 
``crisis management,'' which included efforts to anticipate, prevent, 
and resolve terrorist attacks. FEMA was designated the lead agency for 
``consequence management,'' which included broader measures to protect 
public health and safety. The President's proposal seeks to ``clarify'' 
these responsibilities by ``eliminating the artificial distinction 
between `crisis management' and `consequence management.' '' \27\ But 
it does not describe how the new Department and the FBI will handle the 
scene of a bioterrorist attack if they both arrive at the same time 
with fundamentally conflicting interests and goals.
---------------------------------------------------------------------------
    \27\ White House Briefing Document, supra note 1, at 12.
---------------------------------------------------------------------------
    There are many other instances of coordination problems that the 
President's proposal does not address. It is unclear in the President's 
proposal, for instance, how the Department of Homeland Security would 
organize and coordinate the various different police forces that exist 
among federal agencies. The Administration's proposal would transfer 
some of those forces (the Federal Protective Service, which protects 
buildings belonging to the General Services Administration (GSA)), but 
not others (the security forces protecting Department of Energy, 
Veterans, and judicial buildings). Moreover, removing the Federal 
Protective Service from GSA creates its own problems because, as GAO 
has observed, ``security needs to be integrated into the decisions 
about location, design and operation of federal facilities.'' \28\
---------------------------------------------------------------------------
    \28\ GAO-02-886T, supra note 3, at 18.
---------------------------------------------------------------------------
    What is urgently needed is an effective entity at the While House 
level that can unify the disparate federal agencies with homeland 
security functions behind a comprehensive national strategy. This is 
supposed to be the mission of the White House Office of Homeland 
Security, which President Bush created in October 2001, and which you 
head. But the proposal does nothing to give the head of the office the 
kinds of authority needed to succeed.

    III. PROBLEMS WJTB EXTRACTING CERTAIN AGENCIES
    The sections above have raised concerns with transferring functions 
unrelated to homeland security and the lack of coordinating mechanisms 
regardless of whether agencies are inside or outside the structure of 
the new Department. Also of concern are the potential effects of 
removing certain functions from their home agencies.
    This is a particular problem for the functions being transferred 
from the Department of Health and Human Services (HHS). Section 502(5) 
of the President's proposal would move the Office of the Assistant 
Secretary for Public Health Emergency Preparedness and ``the functions 
of the Secretary of Health and Human Services related thereto'' to the 
new Department of Homeland Security. This provision makes little sense. 
In the Public Health Security and Bioterrorism Preparedness and 
Response Act of 2002, Congress created the Office of the Assistant 
Secretary for Public Health Emergency Preparedness in recognition of 
the need to have a central office in HHS to coordinate how the various 
agencies within the Department respond to public health 
emergencies.\29\ Moving this office to another department will not 
eliminate the need for a coordinating office within HHS. It will simply 
recreate the same problems within HHS that Congress was attempting to 
fix.
---------------------------------------------------------------------------
    \29\ According to the Public Health Security and Bioterrorism 
Preparedness and Response Act of 2002 (Pub. Law 107-588), the Assistant 
Secretary coordinates all agency interfaces on emergency preparedness 
between HHS and ``other departments, agencies and offices of the United 
States.'' This person also ``[i]nterfaces between the Department and 
State and local entities with responsibility for emergency 
preparedness.'' As part of this person's duties, he or she also 
``coordinate the efforts of the Department to bolster State and local 
emergency preparedness for a bioterrorist attack or other public health 
emergency.''
---------------------------------------------------------------------------
    Richard Falkenrath, director of policy at the White House Office of 
Homeland Security, was asked about this problem during a briefing for 
staff on July 1,2002. He answered that the challenge of coordinating 
emergency preparedness and response activities within HHS could be 
handled by ``a couple of people'' in the Secretary's office. Obviously, 
this cavalier attitude is seriously misinformed.
    Section 505 is also problematic. It transfers control over HHS 
programs to provide assistance for state and local preparedness from 
HHS to the new Department. These funds, which total over $1 billion, 
allow states and localities to enhance their surveillance, 
communication, and laboratory abilities, all of which are essential for 
responding to numerous public health threats, including threats that 
are not related to terrorism. As GAO has stated, these programs 
``include essential public health functions that, while important for 
homeland security, are critical to basic public health core 
capacities.'' \30\ As a result, GAO made the following conclusions:
---------------------------------------------------------------------------
    \30\ GAO-02-883T, supra note 2, at 6.
---------------------------------------------------------------------------
    We are concerned that this approach may disrupt the synergy that 
exists in these dual-purpose programs. We are also concerned that the 
separation of control over the programs from their operations could 
lead to difficulty in balancing priorities. Although the HHS programs 
are important for homeland security, they are just as important to the 
day-to-day needs of public health agencies and hospitals, such as 
reporting on disease outbreaks and providing alerts to the medical 
community. The current proposal does not clearly provide a structure 
that ensures that both the goals of homeland security and public health 
will be met.\31\
---------------------------------------------------------------------------
    \31\ Id. At 8.
---------------------------------------------------------------------------
    Section 403 also creates uncertainties by transferring to the new 
Department vague authorities over visa processing. Currently, approving 
and denying visas is an important activity of the State Department, 
which processes about 400,000 immigrant visas and over six million non-
immigrant visas annually. To perform this function, the State 
Department employs thousands of foreign service officers skilled in 
hundreds of languages. Section 403(1) transfers to the Secretary of 
Homeland Security ``exclusive authority'' over this function, but this 
authority would be exercised ``through'' the Secretary of State. As a 
result, it is unclear whether the State Department must concur in 
policy decisions, or whether this is merely an administrative function. 
Additional statements by the Administration have not clarified this 
provision. The Administration has stated that consular officers will 
remain employed by the State Department, but that the new Secretary of 
Homeland Security will delegate back to the Secretary of State some 
visa functions unrelated to security.
    Similar problems affect the provisions transferring portions of the 
Department of Energy. The provisions in the bill are ambiguous and 
potentially very broad. For example, section 302(2)(G) of the 
President's proposal would transfer ``the advanced scientific computing 
research program and activities'' at Lawrence Livermore Laboratory to 
the new Department. Although the exact scope of this provision is 
unclear, it appears to encompass parts of the Lawrence Livermore 
Laboratory's Computation Directorate, which supports other programs at 
the laboratory by providing computing capacity and capability, as well 
as research, advanced development, and operations and support related 
to computing, computer science, and information technologies. Such a 
transfer could harm the laboratory's ability to support its key 
mission--safeguarding the stockpile of nuclear weapons--as well as 
other core laboratory activities.
    Section 302(2)(E) gives the President authority to transfer from 
DOE to the new Department any life science activity within the 
biological and environmental research program that is related to 
microbial pathogens. The result would be that ongoing DNA sequencing of 
harmful microbes could be transferred to the new Department, while 
virtually identical work on microbes with beneficial uses (such as 
microbes that break down pollution) would stay at DOE. Splitting this 
highly specialized work risks weakening the effectiveness of both.

    IV. LACK OF RECOGNITION OF DISPARATE IMMIGRATION FUNCTIONS
    In April, the House passed legislation (H.R. 3231) recognizing the 
two distinct functions of the INS: an immigration services function and 
an enforcement function. As part of this reform effort, the bill would 
split the INS into a Bureau of Citizenship and Immigration Services and 
a Bureau of Immigration Enforcement, both under the supervision of an 
Associate Attorney General for Immigration Affairs within the 
Department of Justice. The legislation aimed to correct longstanding 
and widely- recognized systemic problems within the INS by separating 
out its distinct and often conflicting service and enforcement 
functions.
    When the House immigration bill was being considered, the 
Administration expressed its support. In addition, when the White House 
issued its briefing document regarding the new Department of Homeland 
Security, that support was reiterated. The briefing document stated the 
following:
    The new Department of Homeland Security would include the INS and 
would, consistent with the President's long-standing position, separate 
immigration services from immigration law enforcement.\32\
---------------------------------------------------------------------------
    \32\ White House Briefing Document, supra note 1, at 10.)
---------------------------------------------------------------------------
    Despite these assurances, however, the legislative language 
proposed by the President would import the INS into the new Department 
of Homeland Security intact and unreformed. There are no details 
whatsoever regarding the structure of the INS after it is transferred 
to the new Department. As a result, the Administration's proposal fails 
to address internal structural and coordination problems that hamper 
the effectiveness of the INS.

    V. EXEMPTION FROM ``GOOD GOVERNMENT'' LAWS
    The Administration's proposal would create broad exemptions to the 
nation's ``good government'' laws. It would make the civil service, 
procurement, and property acquisition and disposal laws essentially 
optional for the new Department. In addition, the President's proposal 
would weaken valuable sunshine laws, such as the Freedom of Information 
Act and the Federal Advisory Committee Act. The bill would also create 
a weak management and oversight structure by not fully applying the 
Chief Financial Officers Act, the law governing Chief information 
Officers, and the Inspector General Act.

    A. Exemptions from Civil Service Protections
    The nation's civil service laws have evolved over many decades to 
ensure that the government has a professional civil service hired on 
the basis of merit rather than political favoritism. Section 730 of the 
President's proposal, however, would give the Secretary the authority 
to create an alternative personnel system. The only limitation in the 
statute is that the system should be ``flexible, contemporary, and 
grounded in the public employment principles of merit and fitness.''
    Under the President's proposal, employees of the new Department 
could be exempted from essential provisions of title 5 of the United 
States Code. No rationale has been offered to explain why affording 
these basic protections for federal workers and their families would 
undermine the mission of the new Department The civil service 
provisions that become optional include the following:
     The prohibition on discrimination r employees on the basis 
of political affiliation and on coercing political activity (anti-
patronage protection);
     The prohibition on hiring or promoting a relative (anti-
nepotism protection);
     The prohibition on reprisal against employees for the 
lawful disclosure of information about illegal and wasteful government 
activity (whistleblower protection);
     The preferences for veterans in hiring and in reductions-
in-force;
     The protection from arbitrary dismissal or demotion 
through due process appeal rights to the Merit Systems Protection 
Board;
     The right to organize, join unions, and bargain 
collectively with management over working conditions;
     Sick and annual leave for federal employees and family and 
medical leave;
     Retirement benefits, such as the Civil Service Retirement 
System and the Federal Employees' Retirement System; and
     Health insurance through the Federal Employees' Health 
Benefits Program.
    Moreover, important programs for ensuring diversity in the federal 
workforce, such as the requirement to recruit minorities, would also 
become optional under the proposed legislation.
    Another potential threat to the civil service laws is section 
732(b), which allows the Secretary to hire an unlimited number of 
employees through ``personal service'' contracts rather than through 
the civil service system. Although the rationale for this provision 
seems to be to allow the new Department to obtain certain specialized 
services in an emergency, there do not appear to be any limits on its 
use. For example, current law requires these types of contracts to be 
temporary (no longer than one year) and subject to salary caps (no 
higher than the GS-l5 level). The President's proposal would allow 
these contracts to go on indefinitelv and at any rate. In effect, the 
section provides an alternative vehicle for bypassing the protections 
and requirements of the civil service system.

    B. Exemption from Procurement Rules
    Under section 732(c) of the President's proposal, the new Secretary 
could waive any and all procurement statutes and regulations, and the 
Secretary would not be required to comply with the cornerstone 
procurement principles of open and competitive bidding. In a section-
by-section analysis provided by the White House, the Administration 
asserts that ``normal procurement operations would be subject to 
current government-wide procurement statutes and regulations.'' \33\ To 
the contrary, however, the legislative language would add the new 
Department to the list of entities listed in 40 U.S.C. 474, such as the 
Postal Service, which would exempt entirely the Department from the 
federal government's normal acquisition laws.
---------------------------------------------------------------------------
    \33\ The White House, Analysis for the Homeland Security Act of 
2002, 11 (undated).
---------------------------------------------------------------------------
    As a result, there is no guarantee that the new Department would be 
getting the lowest prices, the best quality, or the best deals. 
Fundamental principles of federal procurement such as the following 
would not apply:
     The requirement that acquisitions be publicly advertised;
     The requirement that sufficient notice be given to allow 
companies to respond;
     The requirement that all responsible bidders be given the 
chance to compete for a given acquisition; and
     The requirement that all contractors be rated on the same 
criteria when competing for a given contract.
    These bedrock principles have helped to maintain competition in 
federal contracting, which history has proven to be the best way to 
ensure the best quality at the lowest prices while maintaining a system 
free of favoritism or abuse. In addition, long-standing preferences for 
small- and minority- owned businesses designed to encourage their 
development and access to federal contracts would no longer be 
guaranteed.
    Section 732(a) of the President's proposal would explicitly grant 
the new Department so-called ``other transactions authority'' for 
research and development contracts. This authority was given to the 
Defense Department to eliminate the open and competitive bidding 
process in order to attract nontraditional contractors. In fact, 
however, it has been used mainly by traditional contractors to 
negotiate contracts that waive the federal government's rights to 
review financial management and cost information, as well as its rights 
to use new inventions discovered through research funded by the federal 
taxpayer.\34\ In reviewing the use of this authority by the Defense 
Department, the inspector General found that these that types of 
contracts ``do not provide the government a number of significant 
protections, ensure the prudent expenditure of taxpayer dollars, or 
prevent fraud.'' \35\ .
---------------------------------------------------------------------------
    \34\ In general, for intellectual property developed with federal 
funding, the government normally retains a nonexclusive, 
nontransferable, irrevocable, and paid-up (royalty-free) license to use 
the intellectual property.
    \35\ Inspector General, Department of Defense, Comments on the 
Service Acquisition Reform Act (H.R. 3832), 11(Mar. 12, 2002) 
(concluding that ``other transactions have not attracted a significant 
number of nontraditional Defense contractors`` and that ``traditional 
protections for the public trust do not exist, for the most part, for 
other transactions'').

    C. Exemption from Property Rules
    The new Department will acquire a considerable inventor of federal 
property, particularly through the Coast Guard, which owns valuable 
real estate across the country. Sections 732(d) and (f) of the 
President's proposal, however, would give the new Department broad 
authority to acquire and dispose of both real and personal property. 
Specifically, the Department could acquire replacement real property 
through exchange or transfer with other agencies or through the sale or 
long-term lease to the private sector, in addition, the Department 
would be authorized to retain the proceeds of such transactions.
    Currently, under the 1949 Property Act, federal agencies must 
determine whether they own ``excess'' property they no longer need. GSA 
then screens this excess property for other federal uses. If there are 
no federal uses for the property, GSA declares the property ``surplus'' 
and screens it for ``homeless'' or ``public benefit'' uses, such as for 
schools, correctional institutions, airports, and other entities. If no 
beneficial public use is found for the property. GSA may sell the 
property through negotiated sales at fair market value without 
restrictions on use. The property may also be sold to the public 
through a bidding process if a negotiated sale does not occur. Under 
the Administration's proposal, however, none of these procedures will 
apply.
    The Government Reform Committee reported a comprehensive reform of 
federal property laws earlier this year (H.R. 3947). This reform gave 
agencies more flexibility to manage their property, but it also 
included safeguards to ensure that agencies respond to community input, 
consider local zoning laws, and receive fair market value. None of 
these safeguards are incorporated into the Administration's proposal.

    D. Exemption from Freedom of Information Act
    Section 204 of the President's proposal would exempt the new 
Department from complying fully with the Freedom of information Act 
(FOIA). If nonfederal entities or individuals provide information 
voluntarily to the new Department that relates to infrastructure 
vulnerabilities or other vulnerabilities to terrorism, that information 
would not be subject to FO1A. This exemption would apply to information 
that ``is or has been in the possession of the Department.''
    FOIA was designed to preserve openness and accountability in 
government. In order to protect sensitive information, FOIA already 
contains sufficient exemptions from disclosure. These exemptions cover 
critical infrastructure information. FO1.A does not require the 
disclosure of national security information (exemption 1), sensitive 
law enforcement information (exemption 7), or confidential business 
information (exemption 4). Therefore, new exemptions to its provisions 
do not appear necessary.
    The danger in creating new exemptions to FOIA is that important 
information about health and safety issues could be withheld from the 
public. In fact, the provision is drafted so broadly that it could be 
used to ``launder'' embarrassing information through the new Department 
and thereby prevent public disclosure.
    One particular target of the new FOIA exemption appears to be the 
``Risk Management Plans'' that chemical plants are required to file 
under the Clean Air Act. These plans inform communities about the 
dangers they would face in the event of an explosion or chemical 
accident in a nearby plant. Chemical industry officials argued that 
Congress should restrict public access to this information because the 
information could be used by terrorists to target facilities.
    Congress addressed this issue by carefully balancing the goal of 
informing emergency responders and the public about potential risks of 
chemical accidents with the goal of keeping sensitive information away 
from terrorists. In the Chemical Safer Information Site Security Act of 
1999, Congress concluded that information about potential ``worst 
case'' scenarios should remain available to the public, but with 
certain restrictions to prevent a searchable database from being 
readily posted on the internet. Congress ensured public access to basic 
information about the risk management plans, preserving the right of 
Americans to know about chemical accidents that could impact their 
families and communities. Under the President's proposal, however, 
chemical companies could now prevent the disclosure of all Risk 
Management Plans under FOIA simply by sending them to the new 
Department.

    E. Exemption from Federal Advisory Committee Act
    Section 731 of the President's proposal would exempt advisory 
committees established by the Secretary of the new Department from the 
Federal Advisory Committee Act (FACA). FACA requires that any committee 
formed to provide advice to the federal government, and which consists 
of members who are not federal employees, must follow certain rules in 
order to promote good-government values such as openness, 
accountability, and a balance of viewpoints. Generally, FACA requires 
that such committees announce their meetings, hold their meetings in 
public, take minutes of the meetings, and provide the opportunity for 
divergent viewpoints to be represented.
    To protect sensitive information, FACA includes exemptions for 
information that relates to national security issues or information 
that is classified. As a result, many agencies with homeland security 
missions, such as the Department of Justice, The Federal Bureau of 
investigation, and the Department of Defense, currently operate under 
FACA without difficulty. The President's proposal contains no 
explanation why the new Department could not also comply with FACA. In 
fact, the only two agencies that are exempt from FACA are the Central 
Intelligence Agency and the Federal Reserve.
    At least 27 advisory committees that currently exist would be 
transferred to the new Department under the President's proposal. These 
existing advisory committees, which are currently subject to FACA, 
include the Navigational Safety Advisory Committee at the Coast Guard, 
the Advisory Committee of the National Urban Search and Rescue System 
at FEMA, the Advisory Committee on International Child Labor 
Enforcement at the Customs Service, and the Advisory Committee on 
Foreign Animal and Poultry Diseases at APHIS. When rechartered under 
the Homeland Security Department, none of these advisory committees 
will be subject to the FACA requirement on balance and openness.
    In addition, the President's proposal waives important conflict of 
interest laws that apply to individuals serving on advisory committees. 
Under section 731, if an individual serves on an advisory committee, 
the individual will be exempt from the provisions of sections 203, 205, 
or 207 of Title 18. United States Code. These sections contain 
important protections. Section 207, for example, provides that a person 
who serves on a committee that is advising an agency on a specific 
matter cannot lobby the agency about the same matter after leaving the 
advisory committee. No rationale is provided for exempting members of 
advisory committees from these protections against conflicts of 
interest.

    F. Exemption from Chief Financial Officer Act
    Section 103(d)(4) of the President's proposal would authorize the 
President to appoint the Department's Chief Financial Officer (CFO) 
without Senate confirmation. Current law requires that a CFO of a 
cabinet department either be: (1) appointed by the President with 
Senate confirmation; or (2) designated by the President from among 
agency officials who are Senate-confirmed.\36\ In either case, current 
law requires that CFOs be Senate-confirmed.
---------------------------------------------------------------------------
    \36\ 31 U.S.C. Sec. 901(a)(l).
---------------------------------------------------------------------------
    In addition, the President's proposal contains no language making 
the CFO Act applicable to the new Department. The CEO Act contains core 
financial management, accountability, and reporting requirements that 
are at least as important for the new Department as they are for other 
covered agencies, which include all existing cabinet departments. 
Moreover, section 602 of the President's proposal provides that the CEO 
shall report to the Secretary or to another official of the Department 
as the Secretary may direct. This section is inconsistent with the CFO 
Act, which requires that the CEO report directly to the agency head 
regarding financial management matters.\37\
---------------------------------------------------------------------------
    \37\ 31 U.S.C. Sec. 902(a)(1).
---------------------------------------------------------------------------
    These exemptions from financial management requirements make little 
sense. According to GAO, ``[i]t is important to re-emphasize that the 
department should be brought under the Chief Financial Officers (CEO) 
Act and related financial management statutes.'' \38\
---------------------------------------------------------------------------
    \38\ GAO-02-886R, supra note 3, at 33.

    G. Exemption from Chief Information Officer Legislation
    The proposal does not appear to give the Chief information Officer 
(CIO) of the new Department the same status and responsibilities as 
ClOs at other agencies. Section 603 of the President's proposal 
provides that the ClO shall report to the Secretary or to another 
official of the Department as the Secretary may direct. The Clinger-
Cohen Act, however, requires that the ClO report directly to the agency 
head.\39\
---------------------------------------------------------------------------
    \39\ 44 U.S.C. Sec. 3506(a)(2)(A).
---------------------------------------------------------------------------
    In addition, the Clinger-Cohen Act specifies numerous 
responsibilities for ClOs. These include developing an accounting, 
financial, and asset management system that is reliable, consistent, 
and timely; developing and maintaining information systems; and 
assessing and reporting on progress made in developing information 
technology systems. The President's legislative language, however, does 
not specify any responsibilities for the ClO. In fact, the bill would 
assign responsibility for information technology systems to an Under 
Secretary for Management at the new Department, a responsibility 
assigned to the CI0 under the Clinger-Cohen Act.

    H. Limits on Access to Information by Inspector General
    Section 710 of the President's proposal would subject the inspector 
General (IG) of the new Department to the Secretary's control and would 
authorize the Secretarv to prevent the IG from doing work in areas 
involving certain information. These areas are quite broad and extend 
to information concerning any ``matters the disclosure of which would, 
in the Secretary's judgment, constitute a serious threat to national 
security.'' Under the President's proposal, the Secretary could 
prohibit the IG from doing work ``if the Secret determines that such 
prohibition is necessary. . . to preserve the national security or to 
prevent a significant impairment to the interests of the United 
States.''
    IGs at certain other agencies (such as the Defense Department and 
the Justice Department) have similar limitations on access. But in 
those cases, the IGs are directed to report to Congress if the relevant 
Secretary impedes their access 10 necessary information. In the case of 
the IG for the new Department, this important check on Secretarial 
interference has been eliminated. Instead, the proposal would give the 
responsibility of reporting interference with an IG investigation to 
the Secretary, who would have an obvious conflict of interest in full 
reporting.

    VI. EXEMPTION FROM CONGRESSIONAL OVERSIGHT
    In addition to creating exemptions to many of the nation's good 
government laws, the President's proposal would substantially undercut 
Congress' ability to conduct oversight of the new Department. Through 
several broad and sweeping provisions in the President's proposal, the 
Secretary of the new Department would have new powers to rewrite 
enacted legislation and override budgetary decisions made by Congress.
    The President's proposal would give the Secretary of the new 
Department the equivalent of a lump-sum appropriation of more than 530 
billion, in transferring the various existing agencies to the new 
Department. Several provisions of the President's proposal allow the 
Secretary to transfer agency balances to the new Department. Section 
803(e) of the President's proposal allows the new Secretary to allocate 
those funds as the Secretary sees fit, and it expressly overrides the 
provision of permanent Jaw that requires funds transferred to be used 
only for the purposes for which they were originally appropriated. 
Taken together, these provisions allow the new Secretary to rewrite 
appropriations relating to both homeland security and all other 
functions conducted by the new Department.
    Section 733(b) creates for the new Secretary a permanent blanket 
grant of authority to transfer between appropriations accounts up to 5% 
of the appropriations made each year for agencies within the new 
Department, so long as the Appropriations Committees are given 15 days 
notice. This provision could allow the Secretary to transfer $2 billion 
or more per year rather than addressing potential funding 
misallocations through the annual congressional appropriations process.
    In addition, section 733(a) allows the Secretary to ``establish, 
consolidate, alter, or discontinue'' any organizational unit in the new 
Department, including those established by statute, upon 90 days notice 
to Congress. Although the Coast Guard and the Secret Service are exempt 
from this provision, all other agencies transferred to the new 
Department could be abolished entirely with no input from Congress.

    VII. POTENTIAL FOR SERIOUS DISRUPTION IN THE WAR ON TERROR
    The Administration asserts that the ``current components of our 
homeland security structure will continue to function as normal and 
there will be no gaps in protection as planning for the new Department 
moves forward.'' \40\ Unfortunately, this is a difficult goal to 
achieve, and the proposal submitted to Congress contains no 
implementation plan that shows how disruptions will be avoided.
---------------------------------------------------------------------------
    \40\ White House Briefing Document, Supra note 1, at 4.
---------------------------------------------------------------------------
    In fact, the history of corporate and government reorganizations is 
not encouraging. As a management professor from Columbia University 
recently remarked. ``[t]o think that a structural solution can bring 
about a major improvement in performance is a major mistake.'' \41\ In 
the corporate world, more mergers fail than succeed.\42\ According to 
one expert, ``[p]rivate-sector data show that productivity usually 
drops by 50 percent in the first four to eight months following the 
initial announcement of a merger, largely because employees are 
preoccupied with their now uncertain future.'' \43\
---------------------------------------------------------------------------
    \41\ The Experiment Begins, National Journal (June 1 5. 2002).
    \42\ See e.g., Breaking Up is Hard, Merging is Harder, New York 
Times Week in Review (June 23,2002) (``Indeed, business history is 
littered with failed attempts to unite far-flung enterprises that would 
prosper through sheer scale''); and Stressed Out: Can Workplace Stress 
Get Worse?, Wall Street Journal (Jan. 16, 2001) (``75% of those deals, 
by several experts' estimates, will fail to achieve expected 
results'').
    \43\ Max Stier, Homeland Security: Mega Merger. Washington Post 
(June 25. 2002).
---------------------------------------------------------------------------
    The model most often cited by the Administration is the creation of 
the Department of Defense in 1947. But that reorganization was not 
undertaken until after World War II was over. Moreover, the newly 
created Defense Department was riven with strife for decades after its 
creation. As recently as 1983, when President Reagan ordered the 
invasion of Grenada, the Army and the Marines had to split the island 
in half because they could not figure out how to cooperate.\44\ The 
original 1947 reorganization required four different amendments, the 
last being the Goldwater-Nichols Act of 1986, before the problems 
created by the 1 947 reorganization were finally addressed.
---------------------------------------------------------------------------
    \44\ Repeating the Past, National Journal (June 15, 2002).
---------------------------------------------------------------------------
    GAO has closely tracked the history of government reorganizations. 
According to David Walker, the Comptroller General of GAO:
        Often it has taken years for the consolidated functions in new 
        departments to effectively build on their combined strengths, 
        and it is not uncommon for these structures to remain as 
        management challenges for decades . . . [R]eorganizations of 
        government agencies frequently encounter start up problems and 
        unanticipated consequences that result from the consolidations, 
        are unlikely to fully overcome obstacles and challenges, and 
        may require additional modifications in the future to 
        effectively achieve our collective goals for defending the 
        country against terrorism.\45\
---------------------------------------------------------------------------
    \45\ GAO-02-886T, supra note 3, at 5.
---------------------------------------------------------------------------
    Given this history, the burden should be on the Administration to 
show how this bureaucratic reorganization can be accomplished 
successfully. But virtually no detail has been provided to Congress 
that addresses these serious implementation issues.

    VIII. LACK OF NATIONAL STRATEGY
    Most experts recommend three concrete steps for developing an 
approach to homeland security: First, evaluate the threats posed to the 
country: second, develop a plan for dealing with those threats; and 
third, implement that plan through whatever reorganization and 
realignment of resources is necessary. It appears, however, that the 
Administration has taken exactly the opposite approach: White House 
officials proposed the reorganization first; they will come out with a 
strategy second; and they may eventually do a comprehensive assessment 
of the threats facing the country.
    Experts have consistently criticized the United States for failing 
to have a comprehensive national strategy for fighting terrorism. GAO 
has made this finding repeatedly.\46\ The U.S. Commission on National 
Security, the bipartisan group headed by former Senators Warren Rudman 
and Gary Hart, found that ``no overarching strategic framework guides 
U.S. national security policymaking or resource allocations.'' \47\ 
Likewise, the independent panel headed by Governor James Gilmore 
concluded that ``the United States has no coherent functional national 
strategy for combating terrorism.'' \48\
---------------------------------------------------------------------------
    \46\ See U.S. General Accounting Office. Combating Terrorism: 
Selected challenges and Related Recommendations (September 2001) (GAO-
01-822); U.S. General Accounting Office, Combating Terrorism: Need for 
Comprehensive Threat and Risk Assessments of chemical and Biological 
Attacks (September 1999) (GAO/NSLAD-99-163); and U.S. General 
Accounting Office Combating Terrorism. Threat and Risk Assessments Can 
Help Prioritize and Target Program Investments (April 1998) (GAO/NSIAD-
98-74).
    \47\ The United States Commission for National Security/21st 
Century, Road Map for National Security: Imperative for Change (Mar. 
15, 2001).
    \48\ Advisory Panel to Assess Domestic Response Capabilities for 
Terrorism Involving Weapons of Mass Destruction. Toward a National 
Strategy for Combating Terrorism (Second Annual Report) (Dec. 15, 
2000).
---------------------------------------------------------------------------
    Nine months ago, in October 2001, the White House agreed with this 
assessment. In the executive order creating the White House Office of 
Homeland Security, President Bush recognized that developing a national 
strategy was essential in the fight against terrorism. The executive 
order establishing the Office provided that:
        The mission of the Office shall be to develop and implement the 
        coordination of a comprehensive national strategy to secure the 
        United States from terrorist threats or attacks.\49\
---------------------------------------------------------------------------
    \49\ Executive Order 13228)
---------------------------------------------------------------------------
    When you assumed your position, you also recognized that developing 
this strategy was your top assignment, calling it your ``main mission'' 
\50\ and your ``very first mission.'' \51\ In a speech in April, you 
said, ``I take every word of that executive order seriously,'' and you 
promised that the strategy would be ``guided by an overarching 
philosophy: risk management: focusing our resources where they will do 
the most good, and achieve the maximum protection of lives and 
property.'' \52\
---------------------------------------------------------------------------
    \50\ Ridge Says Focus is on Expanding Homeland Security Resources, 
Speech at Homeland Security Conference, U.S. Department of State 
(Washington, DC) (on line at http://usinfo.state.gov).
    \51\ Tom Ridge Speaks to the Associated Press Annual Luncheon, 
Office of the White House Press Secretary (Apr. 29. 2002) (on line at 
http://www.whitehouse.gov/news/releases/2002/04/20020429-3.html).
    \52\ Id.
---------------------------------------------------------------------------
    Since that time, the national strategy has been promised 
repeatedly. In the budget justification for fiscal year 2003, the 
Administration made this statement:
        The United States has never had a national blueprint for 
        securing itself from the threat of terrorism. This year with 
        the publication of the National Strategy for Homeland Security, 
        it will.\53\
---------------------------------------------------------------------------
    \53\ Fiscal Year 2003 Budget Justification. supra note 10, at 6. 
The Administration continued: ``The Budget for 2003 is a down payment 
on a larger set of homeland security initiatives that will be described 
in the national strategy and reflected in the 2004 and later budgets.'' 
Id. at 7.
---------------------------------------------------------------------------
    Unfortunately, this strategy has not been developed.\54\ As a 
result, Congress still does not have a list of priorities set forth in 
a clear way and cannot gauge whether your reorganization proposal best 
serves the nation's security goals. Moreover, the new Department will 
have no clear strategy to implement after it is created. As John R. 
Brinkerhoff, civil defense director at FEMA under President Reagan, has 
stated: ``The Bush Administration is doing the wrong thing for the 
wrong reasons. What worries me the most is that we've put the cart 
before the horse: We're organizing, and then we're going to figure out 
what to do.'' \55\
---------------------------------------------------------------------------
    \54\ In testimony before the Government Reform Committee on June 
20, 2002, you stated that the principles of the national strategy have 
been evident ``ever since the President sent up his 2003 budget 
initiative.'' House Committee on Government Reform, ``Hearing on The 
Hearing of Homeland Security: An Overview of the President's Proposal 
(June 20, 2002) (stenographic record). This statement is misleading at 
best. The budget justification for fiscal year 2003 included absolutely 
no information about the newly proposed Department of Homeland 
Security, which the Administration now says is the cornerstone of the 
national strategy. Moreover, the Administration's budget justification 
for fiscal year 2003 makes clear that no national strategy existed when 
the budget justification was submitted to Congress. Fiscal Year 2003 
Budget Justification. supra note 10. at 6.
    \55\ Bush's Homeland Gambit, National Journal (June 15, 2002)

    IX. COST
    The Administration has stated that the creation of this new 
Department ``would not `grow' government.'' \56\ According to the 
Administration: ``The cost of the new elements (such as the threat 
analysis unit and the state, local, and private sector coordination 
functions), as well as the wide management and administration units, 
can be funded from savings achieved by eliminating redundancies 
inherent in the current structure.'' \57\
---------------------------------------------------------------------------
    \56\ White House Briefing Document, supra note 1, at 17.
    \57\ Id.
---------------------------------------------------------------------------
    This is not a credible statement. CBO has examined the costs of the 
reorganization proposal put forth by Senator Lieberman (S. 2452). 
According to CBO, the Lieberman bill ``would cost about $1.1 billion 
over the 2O03-2007 period.'' \58\ CBO writes A] new cabinet-level 
department would require additional resources to perform certain 
administrative functions, including new positions to staff the offices 
of the Inspector General, general counsel, budget, and Congressional 
affairs for the new department.'' \59\ In addition. CBO states that the 
new Department would require additional funding for ``centralized 
leadership, coordination, and support services,'' and that ``new 
departmental staff would be hired over the first two years following 
enactment of the legislation.'' \60\
---------------------------------------------------------------------------
    \58\ CBO Cost Estimate, supra note 5 (specifically excluding the 
costs of obtaining a new or leased building and centralizing staff and 
resources there).
    \59\ Id.
    \60\ Id.
---------------------------------------------------------------------------
    The Administration's proposal is significantly more ambitious and 
costly than Senator Lieberman's. It includes more agencies, such as the 
Transportation Security Administration with over 40,000 employees. 
Moreover, it requires the new Department to take on a host of new 
functions, including:
        A new office for ``Intelligence and Threat Analysis'' to ``fuse 
        and analyze intelligence and other information pertaining to 
        threats to the homeland from multiple sources,'' \61\ including 
        a new ``system for conveying actionable intelligence and other 
        information'' \62\ and a new system to ``consolidate the 
        federal government's lines of communication with stale and 
        local public safety agencies and with the private sector''; 
        \63\
---------------------------------------------------------------------------
    \61\ White House Briefing Document, supra note 1, at 3.
    \62\ Id. At 14-15.
    \63\ Id. At 14.
---------------------------------------------------------------------------
     A new ``state-of-the-art visa system, one in which 
visitors are identified by biometric information''; \64\
---------------------------------------------------------------------------
    \64\ Id. At 10.
---------------------------------------------------------------------------
     A new ``automated entry-exit system that would verify 
compliance with entry conditions, student status such as work 
limitations and duration of stay, for all categories of visas''; \65\
---------------------------------------------------------------------------
    \65\ Id..
---------------------------------------------------------------------------
     New ``interoperable communications,'' including 
``equipment and systems'' for the ``hundreds of offices from across the 
government and the country'' that make up the ``emergency response 
community'' (this would be a ``top priority'' of the new Department); 
\66\ and
---------------------------------------------------------------------------
    \66\ Id. At 12.
---------------------------------------------------------------------------
     A new ``national system for detecting the use of 
biological agents within the United States,'' including a new 
``national public health data surveillance system,'' and a new ``sensor 
network to detect and report the release of bioterrorist pathogens in 
densely populated areas.'' \67\
---------------------------------------------------------------------------
    \67\ Id. at 13.
---------------------------------------------------------------------------
    In addition to these new functions, the President's proposal would 
establish an entirely new bureaucracy, complete with a management 
hierarchy and accompanying staff. According to the President's 
legislative language, the new Department would have up to 22 Deputy, 
Under, and Assistant Secretaries. This is more than the number of 
Deputv, Under, and Assistant Secretaries at the Department of Health 
and Human Services, which administers a budget about ten times the 
proposed budget of the new Department of Homeland Security.
    Like CBO, GAO has also concluded that the new Department will 
impose costs on the taxpayer. According to GAO, ``[n]umerous 
complicated issues will need to be resolved in the short term, 
including a harmonization of information technologv systems, human 
capital systems, the physical location of people and other assets, and 
many other factors.'' \68\ As a result, GAO concludes that the 
President's reorganization proposal ``will take additional resources to 
make it fully effective.'' \69\
---------------------------------------------------------------------------
    \68\ GAO-02-886T, supra note 3, at 2.
    \69\ Id.
---------------------------------------------------------------------------
    Mark Everson. Controller at the Office of Federal Financial 
Management within the White House Office of Management and Budget, was 
asked about these costs at a staff briefing on July 1, 2002. He said 
that the Administration had no estimate of the transition costs of 
creating the new Department and no estimate of the level of savings to 
be achieved by combining agencies. The only thing he said he knew was 
that these unknown costs would equal these unknown savings.
    Obviously. Congress needs more concrete information about budget 
costs before it can legislate intelligently.

    X. PROCESS
    When the President made his nationally televised address on June 6, 
2002. announcing his proposal for a new Department of Homeland 
Security, it came as a surprise not only to Congress and the American 
people, but also to the agencies. departments, and offices affected by 
the proposal. The plan was put together with so much secrecy that 
``[n]o Cabinet secretary was directly consulted about a plan that would 
strip 170,000 employees and $37 billion in funding from existing 
departments.'' \70\ In fact, there was so little communication between 
the White House and the agencies that at least one major agency had to 
call the minority staff of the Committee on Government Reform to learn 
whether it was affected by the reorganization plan.
---------------------------------------------------------------------------
    \70\ Bush Plan's Underground Architects; In Silence and Stealth, 
Group Drafted Huge Security Overhaul, Washington Post (June 9, 2002).
---------------------------------------------------------------------------
    This closed process utilized by the Administration is ill-suited to 
ensuring that all potential problems are identified and addressed 
beforehand. Moreover, the risk of making policy mistakes is compounded 
by the rushed process being used in Congress to consider the 
legislation. Ii is not clear how in this process the time and 
opportunity will be found to make sure the legislation is done 
correctly.

    XI. CONCLUSION
    The issues raised in this letter exemplify the serious questions 
that should be resolved before Congress completes work on this 
legislation. For this reason, we urge you to respond in detail and in 
writing to the concerns raised in this letter by July 15, before the 
House select committee starts its consideration of this bill.
    Sincerely,
                                   Henry A. Waxman,
                                   Ranking Minority Member,
                             Committee on Government Reform

                                      David R. Obey
                                   Ranking Minority Member,
                                Committee on Appropriations

                               APPENDIX A

         Transferred Functions Not Related to Homeland Security

    Animal Plant Health Inspection Service

    Animal Welfare Act: APHIS enforces the Animal Welfare Act, the act 
that regulates the exhibition of animals in zoos and circuses and the 
Transportation of animals on commercial airlines.
    Bioiechnology Regulatory Policy: APHIS regulates the movement, 
importation, and field testing of geneticallv engineered plants and 
microorganisms.
    Canadian Geese: APHIS works with state wildlife agencies and local 
governments to address problems with non-migratory, resident Canadian 
geese.
    Disease and Pest Detection and Eradication: APHIS is responsible 
for the detection and eradication of pests and diseases that affect 
crops and livestock For example, on September 20, 2001, APHIS 
implemented the accelerated National Scrapie Eradication Program. A few 
of the other pests and diseases APHIS monitors for and eradicates 
include: the boll weevil; the fruit fly; rabies; the Asian Longhorned 
Beetle; the cirrus canker program; and the plum pox virus.
    Horse Protection Act: APHIS enforces the Horse Protection Act, the 
act which prohibits horses subjected to a process called soring from 
participating in exhibitions, sales, shows, or auctions.
    Missing Pets: APHIS maintains the missing pets network at 
www.missingpet.net
    National Poultry Improvement Plan: This is an industry/state/
federal program that establishes standards for evaluating poultry 
breeding stock and hatchery products to ensure they are free from 
hatchery-disseminated and egg-transmitted diseases.
    Noxious weeds: APHIS cooperates with federal, state, and private 
organizations to detect and respond to infestations of invasive plants, 
such as branched broomrape and small broomrape.
    Screwworm: APHIS is working to ensure that screwworm is not 
reintroduced into the United States. This eradication program is close 
to its goal of establishing a permanent sterile screwworm barrier in 
the eastern third of Panama.
    Trade Issue Resolution and Management: APHIS monitors emerging 
foreign pest and disease threats at their origin before they have an 
opportunity to reach U.S. ports. APHIS also participates in trade 
agreements.
    Veterinary Biologics: AIPHIS regulates veterinary biologics 
including vaccines and diagnostic kits.

    Coast Guard
    International Ice Patrol: The Coast Guard has a fleet of ships 
designed to break ice in cold regions to ensure that boats are able to 
navigate the waterways.
    Marine Safety: The Coast Guard enforces regulations to ensure that 
boats and other marine equipment meet safety standards.
    Maritime Drug Interdiction: The Coast Guard interdicts drugs 
illegally brought into this country on the waterways.
    Maritime Law Enforcement: The Coast Guard enforces the laws of the 
waterways.
    Maritime Mobility Missions: The Coast Guard provides aids to 
navigation and bridge administration to ensure that vessels are able to 
navigate our waterways.
    Oil Spill Cleanup: The Coast Guard helps to prevent oil spills in 
the nation's waters and assists in their cleanup when they occur.
    Protection of Natural Resources: The Coast Guard protects our 
domestic fishery resources and marine environment.
    Search and Rescue: The Coast Guard, as one of its primary missions, 
rescues troubled vessels and people on the nation's waterways.

    Customs
    Border Drug Interdiction: The Customs Service fights against drug 
smuggling at the United States border.
    Copyright Protection: The Customs Service helps to enforce the 
Copyright Acts.
    Enforcement of Health and Safety Laws: The Customs Service checks 
imports to ensure that they comply with health and safety laws.
    Fostering of Trade: The Customs Service works with the trade 
community and identifies and confronts trade issues facing the country.
    Child Pornography Prevention: The Customs Service enforces laws 
protecting against child pornography.
    Fair Trade Protection: The Customs Service enforces a variety of 
fair trade laws such as the Lanham Trade-Mark Act and the Trade Act of 
1974.
    Protection of Species at Risk: The Customs Service enforces laws 
protecting threatened species such as the Bald Eagle Protection Act and 
the African Elephant Conservation Act as well as the Endangered Species 
Act of 1973.
    Revenue Collection: The Customs Service provides the nation with 
its second largest source of revenue.
    Stolen Antiquities and Art: The Art Recovery Team works to recover 
stolen pieces of art and antiquities.
    Tariff Enforcement: The Customs Service ensures that U.S. tariff 
laws are enforced.
    Department of Energy
    Energy Emergency Support: The DOE Office of Energy Assurance 
assesses the potential effects of natural disasters such as 
earthquakes, hurricanes, tornados, and floods on energy infrastructure 
and provides energy emergency support in the case of such disasters.
    Human Subjects Research Database: The DOE Environmental 
Measurements Laboratory (EML) maintains the Human Subjects Research 
Database, which contains descriptions of all projects involving human 
subjects that are funded by the DOE, performed by DOE staff, or 
conducted at DOE facilities. EML also provides direct assistance to the 
manager of the DOE Protecting Human Subjects Program, such as assisting 
with production of educational and guidance materials.
    A Quality Assessment Program for Contractor Labs: EML also runs a 
quality assessment program for DOE contractor laboratories that measure 
radiation. The program tests the quality of 149 private Laboratories' 
environmental radiological measurements.

    Mr. Waxman. One major problem is that the President's 
proposal would transfer to the new department a vast array of 
responsibilities that have nothing to do with homeland 
security, such as administering the national flood insurance 
program, cleaning up oil spills at sea, and eradicating pests 
like the boll weevil. Giving the new department dozens of 
unrelated responsibilities will bloat the size of the 
bureaucracy and dilute the new department's counterterrorism 
mission.
    The President's proposal also lacks an effective mechanism 
to coordinate the activities of the many Federal agencies with 
major homeland security functions. According to the 
administration, there are 153 different agencies, departments, 
and offices now involved with homeland security. After the 
creation of the new department, this number actually will 
increase. There will be a 160 agencies, departments or offices 
with security roles.
    Another serious problem with the bill is its cost. The 
administration has asserted that the creation of this new 
department would not grow government. They have stated that any 
costs that may be incurred will be paid for by eliminating 
redundancies inherent in the current structure.
    Since the administration provided no information on cost, 
Chairman Burton and I asked the nonpartisan Congressional 
Budget Office to provide their analysis. They concluded that 
implementing the President's reorganization proposal will cost 
the American taxpayers an astounding sum, $3 billion. If this 
money were used at the front lines of fighting terrorism 
instead of paying for a new bureaucracy, think how much better 
off we might be.
    Our job in the Committee on Government Reform was to make 
the flawed proposal from the administration better, and I 
believe we made some significant progress. The President's 
original proposal included broad exemptions from our Nation's 
most basic good government laws. The legislation allowed the 
new Secretary to waive all provisions of our civil service 
laws, including those that prohibit patronage, protect whistle-
blowers, provide for collective bargaining rights and ensure 
health and retirement benefits. A similar approach was taken 
with procurement and the management of real property.
    Also, basic government in the sunshine laws, such as the 
Freedom of Information Act and the Federal Advisory Committee 
Act, were limited in their application to the new department. 
Moreover, the Chief Financial Officer Act, the Clinger-Cohen 
Act dealing with chief information officers, and the Inspector 
General Act did not fully apply.
    The Committee on Government Reform reported a bill that 
limits many of these exemptions. The civil service protections 
for Federal worker were restored while allowing for pay 
flexibility with in the agency. Under our bill, Federal 
employees who are transferred to the new agency will not have 
their rate of basic pay reduced. The committee bill also allows 
the Secretary to lift the salary cap on personal services 
contracts, but only for an urgent homeland security need; and 
those contracts still cannot exceed a year.
    Finally, the savings clause ensures that theTransportation 
Security agency rules cannot be expanded beyond TSA. Federal 
employees would be further protected by a provision in the 
committee print ensuring that the employees who were in 
collective bargaining units prior to being transferred to the 
new department would retain their bargaining rights.
    Finally included in the committee's legislation is the 
right to sue against any person, organization, or employer who 
retaliates against a whistle-blower. The bill we reported 
removed the original provision that would have exempted the new 
department from the Federal Advisory Committee Act. We were 
also able to fix other provisions to ensure that the Chief 
Financial Officers Act and the Clinger-Cohen Act apply to the 
new department. Although I would have preferred stronger 
language, the IG language on reporting was also strengthened.
    Also, the new department will have to manage its real 
property in accordance with the bipartisan property bill 
adopted by the committee earlier this year. Moreover, the new 
department would have a privacy officer, an office of civil 
rights and a citizenship and immigration service ombudsman.
    Our committee print also takes a very different approach to 
procurement than the administration's proposal. Although I 
still question the need to deviate from current procurement 
law, the committee print is an improvement from the 
administration's proposal because it includes safeguards 
against fraud and abuse.
    There were a few provisions in our committee print that may 
be considered a step backward for good government. For example, 
I would have liked the committee to eliminate, not expand, the 
FIOA loophole in the bill. In addition, I was disappointed that 
indemnification provisions were included in our committee's 
mark. This language could subject the Federal Government to 
unlimited liabilities incurred from its contractors. In 
addition, it is inappropriate for the Federal Government to 
indemnify contractors if they fail to exercise sufficient 
diligence and would impose an undue burden on the taxpayer.
    The procurement provisions also expanded the use of credit 
cards for the purchase of items up to $5,000. This very morning 
in our committee we heard testimony, how these cards are being 
used at strip clubs and to buy clothing from Victoria's Secret 
at taxpayers' expense. As Representative Schakowksy and I wrote 
Secretary Rumsfeld, we should be curbing this abuse, not 
expanding it; and I ask that this letter also be made part of 
the record.
    Chairman Armey. Without objection.
    [The information follows:]
                          House of Representatives,
                             Committee on Government Reform
                                     Washington, DC, July 17, 2002.
Hon. Donald Rumsfeld
Secretary of Defense, The Pentagon, Washington, D.C.

    Dear Secretary Rumsfeld: Revelations about corporate misdeeds and 
accounting irregularities at companies such as Enron and WorldCom are 
causing enormous public concern. Increasingly, this concern is 
spreading to how the federal government manages the taxpayers' money. 
We in government have an obligation to ensure that the government's 
accounts are honest and the taxpayers' money is not squandered.
    For this reason. we are writing you to bring to your attention 
serious financial mismanagement within the Department of Defense. 
Today, testimony and a report are being released by the General 
Accounting Office that find widespread problems in the use of travel 
and purchase cards at the Defense Department. A copy of the testimony 
and report are enclosed.
    Travel cards are special credit cards given to employees by the 
Defense Department that are intended to be used to pay for travel on 
official business. But GAO investigators found that these cards are 
regularly being used for nonofficial business. According to the 
testimony of Gregory Kutz, the Director of Financial Management and 
Assurance for Defense at GAO, 15% to 45% of the charges on the travel 
cards that GAO reviewed were for personal--not government--use.
    For example, GAO investigators found that the travel cards were 
frequently used by Army personnel to obtain cash at strip clubs. GAO 
found that Army personnel would present the cards at a strip club and 
ask for cash. The strip club would then commonly charge a 10 percent 
fee for the cash and record it as a ``restaurant'' transaction. GAO 
also found that these travel cards were being used to pay for 
everything from dating and escort services to casino and internet 
gambling to cruises.
    GAO's investigation of purchase cards is similarly disturbing. 
These purchase cards are designed to provide a convenient method to 
purchase supplies that are not available through the General Services 
Administration (GSA) or would take too long to purchase through GSA. 
Although use of the cards is strictly limited to purchases for official 
business, GAO's report finds that these cards are regularly being used 
to purchase personal goods.
    According to the GAO report, the personal goods bought with 
taxpayer dollars on these purchase cards include jewelry, cosmetics, 
and computer equipment. The purchases reviewed by GAO included:
     An estimated $30,000 spent on items such as rings, purses, 
and clothing, including purchases from Victoria's Secret;
     Over $10,000 spent on a trip to Las Vegas, personal 
clothing, and paying personal bills;
     An estimated $100,000 for a variety of items including a 
computer game station, digital camera, and a surround sound system; and
     $630 for escort services.

    According to GAO, this abuse can be traced to the poor financial 
management practiced by the Department of Defense. Proper use of these 
cards requires that someone independently verifies that the goods were 
received by the government and that the purchase was for a government 
use. GAO found rampant failures to provide these safeguards. In fact, 
GAO found that ``none of the installations. . . audited had a 
comprehensive or effective program of oversight and monitoring.'' \1\
---------------------------------------------------------------------------
    \1\ U.S. General Accounting Office. Purchase Cards: Control 
Weaknesses Leave Army Vulnerable to Fraud Waste, and Abuse. 17 (June 
2002).
---------------------------------------------------------------------------
    These new GAO findings are unfortunately not isolated examples of 
financial mismanagement at your Department. Last year, GAO found that 
Navy personnel were similarly using government purchase cards to 
acquire personal items.\2\ And the Inspector General found that in 
fiscal year 2000 alone, ``$1.2 trillion in department-level accounting 
entries . . . were unsupported because of documentation problems or 
improper because the entries were illogical or did not follow generally 
accepted accounting principles.'' \3\
---------------------------------------------------------------------------
    \2\ U.S. General Accounting Office, Purchase Cards: Control 
Weaknesses Leave Two Navy Units Vulnerable to Fraud and Abuse (July 
30.2001).
    \3\ Office of the Inspector General, Department of Defense, 
Independent Auditor's Report on the Department of Defense Fiscal Year 
2001 Agency-Wide Financial Statements (Feb. 26, 2002) (D-2002-055).
---------------------------------------------------------------------------
    Earlier this year, the Department convened a task force to examine 
the issue of travel and purchase cards and, just two weeks ago, the 
task force issued recommendations on how to address this problem. While 
we commend your efforts in convening the task force, its 
recommendations are clearly inadequate. For example, the 
recommendations do not address how the use of these cards at strip 
clubs can be avoided. Furthermore, the task force report does not lay 
out a specific plan for implementing management changes.
    We urge you to take immediate and decisive action to address the 
problems of financial mismanagement at your Department. The Defense 
Department should institute sound and effective oversight of these 
cards, as recommended by GAO.
    We also urge you to speak out against efforts by Republican leaders 
in Congress to expand the use of these cards without proper oversight. 
Just last week, Rep. Tom Davis, the chair of the Subcommittee on 
Technology Procurement Policy, and Rep. Dan Burton, the chair of the 
Government Reform Committee, inserted language in the homeland security 
bill that raised the threshold for transactions using purchase cards 
from $2,500 to $5,000. Due to the efforts of Rep. Jim Turner, the 
ranking member of the Subcommittee on Technology and Procurement 
Policy, the proposed increase in the threshold was reduced from $15,000 
to $5,000. But even this increase is too much without proper financial 
management.
    At the same time as the federal budget is deteriorating rapidly, 
our nation is fighting a new and expensive war on terrorism. We can not 
afford to allow financial mismanagement to continue: The American 
people need to be sure that every dollar is well spent. The Department 
of Defense spent over $6.1 billion with purchase cards in fiscal year 
2001. With the increase in the threshold for the cards and the 
increases in appropriations for the Department, that number is sure to 
rise. As it does, it is your responsibility to ensure that this money 
is not wasted.
    We respectfully request that you inform us of your plans to rectify 
this financial mismanagement no later than September 4. 2002.

        Sincerely.
                                 Jan D. Schakowsky,
                                    Ranking Minority Member
                                   Henry A. Waxman,
                                    Ranking Minority Member

    Mr. Waxman. With regard to the structure of the department, 
I would have liked the Government Reform Committee to limit the 
size of the department. For example, an amendment to strike the 
Secret Service from the department failed on a vote of 16 to 
17, but not all members were in attendance. An amendment to 
strike the Coast Guard from the department also failed on a 
vote of 16 to 17.
    Now, there were some close votes in our committee, but I 
must say that our committee worked in a bipartisan basis; and 
the decision to keep the civil service rules, for example, were 
the unanimous decision on a bipartisan basis of our committee. 
The Morella amendment was the only part of that that engendered 
some controversy and was decided by a close vote.
    I was pleased that the committee did not transfer the 
Bureau of Consular Affairs of the State Department to the 
Department of Homeland Security. In addition, I was pleased 
that the entire Animal and Plant Health Inspection Service 
would not be moved to the department under the Government 
Reform bill, only certain aspects of the service.
    Members of the Select Committee, I know you have a lot on 
your plate to consider, and I look forward to working with you 
as a homeland security bill moves through the legislative 
process. Many committees reviewed this bill. Our committee has 
the primary jurisdiction over government organization and 
reorganization. I think that as the Select Committee acts, you 
ought to respect the decisions of the committees that reviewed 
the bill and allow our work product to be reflected in what you 
recommend to the full House.
    Mr. Burton and I don't agree on every decision we make. He 
lost one close vote; I lost a couple of close votes. In those 
cases, I know he wants you to reverse the decision he didn't 
approve of; and I want you to reverse the decision where we 
lost. But on those things where we were together, I think we 
ought to recognize those are issues we ought to put aside; and 
fight over those matters that were controversial in the 
committees and not put everything up as if you never had any 
committees of the Congress with expertise review of these 
matters.

 PREPARED STATEMENT OF HON. HENRY A. WAXMAN, RANKING MINORITY MEMBER, 
                     COMMITTEE ON GOVERNMENT REFORM

    Members of the Select Committee. thank you for inviting me to 
testify today. It is clear, we need homeland security legislation. 
Federal departments are not working together as they should to protect 
our nation.
    Unfortunately, the bill proposed by the President has serious 
flaws. In fact, I think it may well cause more problems than it solves.
    Last week, I joined with Rep. David Obey, the Ranking Member of the 
Appropriations Committee, in sending a letter to Governor Ridge 
outlining a number of serious concerns with the bill. I ask that that 
letter become part of the record.
    One major problem is that the President's proposal would transfer 
to the new Department a vast array of responsibilities that have 
nothing to do with homeland security, such as administering The 
National Flood Insurance Program. cleaning up oil spills at sea, and 
eradicating pests like the boll weevil. Giving the new Department 
dozens of unrelated responsibilities will bloat the size of the 
bureaucracy and dilute the new Department's counterterrorism mission.
    The President's proposal also lacks an effective mechanism to 
coordinate the activities of the many federal agencies with major 
homeland security functions. According to the Administration, there are 
153 different agencies. departments, and offices now involved with 
homeland security. After the creation of the new Department, this 
number actually will increase there will be 160 agencies. departments. 
or offices with security roles.
    Another serious problem with the bill is its cost. The 
Administration has asserted that the creation of this new Department 
``would not `grow' government.'' They have stated that any costs that 
may be incurred will be paid for by ``eliminating redundancies inherent 
in the current structure.''
    Since the Administration provided no information on cost. Chairman 
Burton and I asked the nonpartisan Congressional Budget Office to 
provide an analysis. They concluded that implementing the Presidents 
reorganization proposal will cost the American taxpayers an astounding 
sum: $3 billion.
    If this money were used at the front lines of fighting terrorism--
instead of paving for a new bureaucracy--think how much better off we 
might be.
    Our job on the Committee of Government Reform was to make the 
flawed proposal from the Administration better. I believe we made some 
significant progress.
    The President's original proposal included broad exemptions from 
our nation most basic ``good government'' laws. The legislation allowed 
the new Secretary to waive all provisions of our civil service laws, 
including those that prohibit patronage protect whistleblowers. provide 
for collective bargaining rights, and ensure health and retirement 
benefits.
    A similar approach was taken with procurement and the management of 
real property. Also, basic government in sunshine laws, such as the 
Freedom of Information Act and the Federal Advisor Committee Act, were 
limited in their application to the new Department. Moreover, the Chief 
Financial Officer Act, the Clinger-Cohen Act dealing with Chief 
Information Officers, and the Inspector General did not apply fully.
    The Committee on Government Reform reported a bill that eliminates 
many of these exemptions. The civil service protections for federal 
workers were restored while allowing for pay flexibility within the 
agency. Under our bill, federal employees who are transferred to the 
new agency will not have their rate of basic pay reduced. The Committee 
bill also allows the Secretary to lift the salary cap on ``personal 
services'' contracts, but only for a urgent homeland security needs and 
those contracts still cannot exceed a year. Finally, the savings clause 
ensures that the Transportation Security Agency (TSA) rules cannot be 
expanded beyond TSA.
    Federal employees would be further protected by a provision in the 
Committee print ensuring that employees who were in collective 
bargaining units prior to being transferred to the new Department would 
retain their bargaining rights. Finally, included in the Committee's 
legislation is the right to sue against an person organization or 
employer who retaliates against a whistleblower.
    The bill we reported removed the original provision that would have 
exempted the new Department from the Federal Advisory Committee Act. We 
were also able to fix other provisions to ensure that the Chief 
Financial Officers Act and the Clinger-Cohen Act apply to the new 
Department. Although I would have preferred stronger language, the IG 
language on reporting was also strengthened.
    Also, the new Department will have to manage its real property in 
accordance with the bipartisan properly bill adopted by the Committee 
earlier this year. Moreover, the new Department would have a Privacy 
Officer, an Office of Civil Rights, and a Citizenship and Immigration 
Service Ombudsman.
    Our Committee print also takes a very different approach to 
procurement than the Administration's proposal. Although I still 
question the need to deviate from current procurement law. the 
Committee print is an improvement from the Administration's proposal 
because it includes safeguards against fraud and abuse.
    There were a few provisions in our Committee print that may be 
considered a step backwards for ``good government.'' For example, I 
would have liked the Committee to eliminate--not expand--the FOIA 
loophole in the bill.
    In addition. I was disappointed that indemnification provisions 
were included in our Committee's mark This language could subject the 
federal go to unlimited liabilities incurred from its contractors. In 
addition, it is inappropriate for the federal government to indemnify 
contractors if they fail to exercise sufficient diligence and would 
impose an undue burden on the taxpayer.
    The procurement provisions also expanded the use of credit cards 
for purchases of items up to $5,000. This very morning in our 
Committee, we heard testimony how these cards are being used at strip 
clubs and to buy clothing from Victoria's Secret at taxpayer expense. 
As Rep. Schakowsky and I wrote Secretary Rumsfeld, we should be curbing 
this abuse, not expanding it. I ask that this letter also be made part 
of the record.
    With regard to the structure of the Department, I would have liked 
the Government Reform Committee to limit the size of the Department. 
For example, an amendment to strike the Secret Service from the 
Department failed on a vote of 16-17. but not all members were in 
attendance. An amendment to strike the Coast Guard from the Department 
also failed on a vote of 16-17.
    I was pleased that the Committee did not transfer the Bureau of 
Consular Affairs of the State Department to the Department of Homeland 
Security. In addition, I was pleased that the entire Animal Pant Health 
Inspection Service would not be moved to the Department under the 
Government Reform bill, only certain aspects of the Service.
    Members of the Select Committee. I know you have a lot on your 
plate to consider, and I look forward to working with you as a homeland 
security bill moves through the legislative process.

    Chairman Armey. Thank you for your testimony. We will now 
proceed under the 5-minute rule, somewhat racing the clock on 
the expectation of votes on the floor pending quickly.
    I now recognize the gentlelady from California, Ms. Pelosi.
    Ms. Pelosi. I defer to Mr. Menendez of New Jersey.
    Mr. Menendez. Thank you.
    Thank you both for your testimony. One of the focuses I 
would like to pursue with you which has been, and I think will 
be, one of the major contentious issues, possibly, in the 
markup that will take place here on Friday and as we proceed to 
the floor is what I said, that homeland security should not 
mean public employee insecurity; and in that context I want to 
jump off, Mr. Waxman, from the comment you--and Chairman Burton 
is shaking his head, yes--that in fact putting aside the 
Morella amendment for a moment, which some suggest expands 
certain protections, that those fundamental protections that we 
have described as good government in the first instance and 
which we have pursued over a long period of time to ensure the 
quality and the freedom from patronage and partisan influence 
which have inured to a civil service that is probably amongst 
the most exceptional in the world is protected under the 
committee's mark. There has been much between the Cabinet 
Secretaries that have come here to testify, and comments by 
members of the committee made, of the need for flexibility.
    Do you see any merit in those arguments that would rise to 
the point that what the committee did should be undone, that 
the protections for civil servants should be undone? I mean, I 
am concerned that certain sections of title V speak to issues 
and give powers--for example, section 7103 allows the President 
to issue an executive order taking away title V labor 
management rights, including the right to be in a union for 
agencies or subdivisions for national security reasons. The 
President used his authority last January to take away 
collective bargaining rights for approximately 500 Justice 
Department workers, most of whom were clerical employees that 
have been unionized for decades. I look at other possibilities.
    Could you speak to that because that clearly is something 
your committee spent a lot of time on, came to a bipartisan 
conclusion on, and is going to be one of the major subject 
matters of debate.
    Mr. Waxman. Mr. Menendez, Mr. Burton is allowing me to 
answer this first.
    Our committee has jurisdiction over so many of those issues 
that we have developed an expertise over the years, and for 
that reason, by unanimous vote of our committee under the 
manager's amendment offered by Mr. Burton and supported by all 
the members of our committee, we decided that what the 
President originally proposed was not sound policy. We didn't 
think it was necessary to throw out all the civil service 
protections that protect employees, and also protect the 
government, because otherwise you could have patronage, you 
could have employees that wouldn't have health benefits, 
employees that wouldn't have the same kind of standing as other 
Federal employees. We didn't think that was a good idea, so we 
all agreed to put in the bill the existing law regarding civil 
service protections.
    So the Morella amendment was the only issue where we had a 
division, and our side prevailed by a narrow vote. It would not 
have expanded anything at all. It simply would have allowed 
those employees who had collective bargaining rights to 
continue those collective bargaining rights if they were 
transferred over to the new department. And the majority 
supported the Morella--.
    Mr. Menendez. Let us me just pursue that one more step 
because my time is midway gone here.
    We have had Cabinet Secretary after Cabinet Secretary say 
we are not undoing any of those things, we are not undoing 
union rights, we are preserving whistle-blower protections. We 
had OPM here saying, well, we are preserving all those things. 
But as I read your statement on what the committee did, that 
certainly was not the mark--the President's submission did not 
provide for those protections.
    Mr. Waxman. I don't want to be critical of the President's 
original provision. The Administration had a lot to do in 
developing the plan. But in that regard, if the Cabnet 
secretaries thought they were trying to accomplish what you 
just said they said, they were inaccurate. And what we did, 
unanimously, is make sure all these those protections were 
still written in the law and couldn't be waived.
    Mr. Burton. If I may follow up, I think Mr. Waxman is 
correct. We clarified that. We put in language that we thought 
was easily understood, and we believe that the protections are 
there for all the employees that were transferred, and that is 
as it should be.
    I would like to comment briefly, though, since we are 
talking about the Morella amendment, because I think this is 
very important, the Morella amendment which passed by one vote 
weakens the President's authority to prohibit collective 
bargaining for Federal employees due to national security 
reasons and that is the main reason why I thought the Morella 
amendment should not pass.
    There are current threats to homeland security that are too 
serious, and we should not be weakening the President's hand. 
He should maintain the authority to limit collective bargaining 
for national security reasons. That is an authority that has 
been in effect since the Carter administration, and both 
Democrat and Republican Presidents have never abused that. 
Since 1979 Presidents Carter, Reagan, Bush, Bill Clinton and 
George W. Bush used this authority sparingly, only 11 times in 
23 years. It has never been misused.
    In response to the 9-11 attacks, President Bush excluded 
from collective bargaining five departments, the Department of 
Justice offices vital to national security--the U.S. Attorney's 
Office, the Criminal Division, Interpol, the National Drug 
Intelligence Center and the Office of Intelligence Policy 
Review; and especially since September 11 no steps--and I feel 
strongly about this--no steps should be taken to limit this 
Presidential authority. I think it would be a terrible mistake, 
especially since we are in a war, and this amendment really 
reduces the President's authority further in this new 
department more than in any other department of government.
    So I know this will be a contentious issue, but I hope you 
will look very closely at the Morella amendment.
    Chairman Armey. Thank you. As you noticed, the bells are 
ringing--I guess for me and my gal; I don't know. I think we 
have time for at least one more question prior to our having to 
recess, and we will do it as far as we can, but the Chair will 
ask the witnesses if you would return at end of our short 
recess. Because your committee's jurisdiction is so large and 
your work has been so important, this committee is going to 
want to review it thoroughly.
    With that observation, let me call upon the gentlewoman 
from Ohio.
    Mr. Portman. I thank the chairman. I was not expected--.
    Chairman Armey. Excuse me. I said the gentlewoman from 
Ohio.
    Mr. Portman. I am sorry. That makes more sense, Mr. 
Chairman.
    Ms. Pryce. I don't know if I am up or not, but I will go.
    Gentlemen, thank you very much. Your committee has had the 
toughest part of all of this because you touch it all; and we 
are very, very grateful for your hard work, for deferring to 
the others to kind of wait until they got up and passed, so we 
had a little bit of a semblance of order with all this. Truly, 
it is some of the most important work that any of us will ever 
do; and so we really appreciate your participation last week 
and this week and all the way through.
    Chairman Burton, there was a lot of discussion, and your 
ears might have been burning a day or two ago as we discussed 
the Morella amendment and what transpired at the committee; and 
there was a lot of reference to the Burton amendment as perhaps 
a compromise to that issue, and I wasn't certain if that was 
something you had offered in committee or it was just an idea 
that had been floated. But can you give this group any sense of 
what the Burton amendment was, how you feel about it now, and 
if you see it as a true place to compromise.
    Mr. Burton. Obviously, I believe it was the right thing to 
do. It was in the manager's mark. We had a substitute amendment 
that we worked with instead of the original bill that was sent 
up to our committee.
    But what it did, which I think is better than the approach 
taken by the Morella amendment, is, the Secretary of Homeland 
Security, jointly with the Director of Office of Personnel 
Management, would be authorized to adjust compensation levels 
to remedy any pay disparities that exist between employees of 
the department who perform similar jobs; and that means it 
probably would raise them up to the level that the highest one 
had, and I don't think there is anything wrong with that. 
However, no employee can be compensated above the Cabinet 
level, and we think that is important, too, for management 
considerations.
    To develop a disciplinary system based on existing law that 
enables the Secretary to expeditiously suspend or remove 
employees in the interest of national or homeland security. The 
system shall include a process for employees to appeal a 
suspension or removal decision, but it allows him to get rid of 
them right away in case there is a security problem; to develop 
and submit to Congress for approval a proposal for a 
demonstration project for a human resources management system 
that makes it easier to recruit and maintain talented 
individuals, and that would ensure that the veterans 
preferences whistleblower protection and collective bargaining 
rights were retained, and authorized a performance appraisal 
system for managers or supervisors--and that would give him 5 
years to get that perfected--and finally, to exercise the human 
resource management authorities under this section in 
accordance with the merit principles contained in title V of 
the U.S. Code.
    The Morella amendment, as I said before, goes just too far, 
and at this particular time I cannot for the life of me see why 
you would go that far when it does not go that far in any other 
agency.
    Ms. Pryce. Clearly, this is probably the most contentious 
issue that the House will deal with, at least from the 
experience of this committee, and if there is a middle ground 
and if this could possibly be it, it is great that you provided 
us a place to go.
    And, Mr. Waxman, I don't know if you care to comment.
    Mr. Burton. I believe this is a middle ground, a fair 
ground and I hope the committee will look with favor on that.
    Ms. Pryce. Thank you.
    Mr. Waxman. If you would permit me to comment, Mr. Burton--
I told you what we all agreed to; it was his manager's 
amendment. It was worked out on a bipartisan basis, and it was 
adopted unanimously. And this manager's amendment said that we 
would ensure that veterans' preferences, whistle-blower 
protection and collective bargaining rights were retained. That 
was all agreed to.
    The Morella amendment dealt with a narrow situation, those 
people who were transferred from another department into the 
Department of Homeland Security and who had collective 
bargaining rights. It regarded whether or not they would retain 
collective bargaining rights; it was pretty limited in scope.
    Now, a majority of the committee,-although the chairman 
didn't support it, did go along with Mrs. Morella. It was 
bipartisan.
    So that area was controversial, but ensuring civil service 
protections was not controversal. I hear people talking about 
civil service laws all being thrown out. That was in the 
original proposal. I will give the administration the benefit 
of the doubt that maybe it misdrafted the civil section. What 
we did was protect veterans' preferences, whistle-blower, 
collective bargaining rights, and almost all of the civil 
service laws; we kept those intact. It was only that narrow 
area where there was controversy.
    Ms. Pryce. Thank you, gentlemen.
    Chairman Armey. The Chair will recognize the gentlelady 
from California, Ms. Pelosi, and following the conclusion of 
response to her, we will recess for such time as 5 minutes 
following the close of the last vote in the series.
    Ms. Pelosi. Thank you, Mr. Chairman. And I thank the 
distinguished chairman and the ranking member for their fine 
testimony and hard work on this issue.
    As a former member of Government Reform--it was called Gov 
Ops in those days, in the olden days, and in the olden days--we 
might have fashioned an old-fashioned department that looks 
like the one being proposed. I know from the perspective of 
your committee, which has the vast array, the total array, of 
government operations as your brief and as one who sits on 
Appropriations, another place where we see the total view, that 
I have a tremendous respect for the perspective that you bring.
    I have said many times here that I had hoped to see us do 
something very special going forward with Homeland Security. We 
want to do what the President calls upon us to do, to do what 
is best to protect the American people.
    In his strategy, he talked--in his strategy, he talks about 
using our resources judiciously as we reduce risk for the 
American people. We all share that goal, and we intend to do 
that.
    I would have hoped, and I would like your view from your 
perspective, that we could have ended up with a very strong--
and I hope it could be still be included in our bill--very 
strong Office of Homeland Security in the White House. An 
office which really does coordinate the activities of many more 
agencies, even those that are not--including these, but many 
more beyond these agencies included in this Homeland Security 
Department. And to have well as a lean Department of Homeland 
Security that would address, coordinate technologically, use 
the benefits of technology in a lean operation where the 
Secretary would not be bogged down with administrative and 
management responsibilities, but could, instead, have the value 
added of this department, the freedom from all of that, and the 
ability to coordinate rather than manage and organize a 
department.
    Could you express some views on that proposal?
    Mr. Burton. I understand the approach that many of my 
Democrat colleagues have advocated--.
    Ms. Pelosi. If I just may interject, in my conversations 
with Republicans, it is not a Republican view to have a huge 
bureaucracy.
    Mr. Burton. I understand. I think the predominant view on 
the other side, the Democrat side, was that view, but there are 
Republicans who agree with you.
    My personal view is, the President is on track. There has 
to be coordination that can only be handled by a department 
head and secretaries working for him to make sure that all 
those functions work together very rapidly to defend the 
homeland, and when you have these in different agencies I think 
it becomes more cumbersome, and it is very difficult for those 
immediate decisions to be made that will protect us.
    For that reason, I think the President was justified in 
suggesting a new Homeland Cabinet position and agency. I know 
we might differ on what ought to be included in that--.
    Ms. Pelosi. That is our only difference. We all agree there 
should be a department.
    Mr. Burton. That is right. But I think the approach he 
suggested, and advocated and our committee voted for, is the 
right approach.
    Mr. Waxman. I support the idea of a coordinating body, 
Cabinet-level position on Homeland Security. It is sort of 
ironic that the Republicans would want to push a bill that 
takes the bureaucracy, moves it around, bloats it up and spends 
billions of dollars.
    It is not going to make us any more secure if it's wasted, 
and I fear, in moving these agencies into one department they 
won't quite know what to do. It will take a long time before 
they figure out how they fit in, and during that time, I think 
our country could be in danger.
    Let me give you this example to keep in mind. AOL and Time 
Warner merged. People thought this was brilliant. Well, this 
merger into this Homeland Security agency is far greater than 
that simple merger, and they haven't quite figured out how AOL 
and Time Magazine and Warner Studios and all the other things 
that go into that huge enterprise and that huge corporation 
should work together. So they are struggling.
    But I just worry about what happens in this country if you 
set up this agency with all the bureaucratic pieces being moved 
around without, coordination. Yes, give the Secretary of 
Homeland Security power to insist that certain things be done; 
but to transfer everything over to one department from others 
just seems to me quite radical, quite bureaucratic, very 
expensive, and may in the long run be very self-defeating.
    Mr. Burton. I know we have to vote and I will just take a 
moment.
    I understand Mr. Waxman's position. There is no question in 
my mind there are going to be some problems in transferring 
these agencies into Homeland Security, but during that process, 
I think the President will be very close to the situation and 
make sure it works smoothly. That is number one.
    Number two, we are looking at the long term. This terrorist 
threat is not going to go away tomorrow. It may be with us 
through our generation, our kids and long into the future. So I 
think we need a Homeland Security just like we need a 
Department of Defense that really deals with the problem of 
securing this Nation.
    Ms. Pelosi. I appreciate and respect both of your opinions. 
I want to say one thing and then I am going to be gaveled down.
    The Brookings Institution has said that the 170,000 is more 
like 200,000-plus when you factor in everything that goes into 
the department that is not accounted for yet. There are 85,000 
jurisdictions in the United States. Only 125 of them have more 
people than this department will have.
    Salt Lake City, Utah--I am talking about the cities 
themselves--Salt Lake City, Utah; Providence, Rhode Island; 
Portland, Maine; Reno, Nevada. The list goes on and on of 
cities that have less people than the Department of Homeland 
Security will have. So I think we can all put our best thoughts 
together as we go forward, how to manage that.
    Mr. Waxman. It took over a decade before the Department of 
Defense was fully coordinated. We need this department to be on 
guard for the American people immediately, not in the long term 
of 10 years from now.
    Ms. Pelosi. Thank you both.
    Chairman Armey. The Chair would appreciate if the two 
gentlemen would return. There will be much questioning on the 
subjects of your jurisdiction. Without objection, the committee 
stands adjourned until 5 minutes following the close of the 
last vote in this series of votes on the floor of the House.
    [Recess.]
    Chairman Armey. The committee will come to order. Let the 
Chair open by thanking Congressmen Burton and Waxman for your 
willingness to come back for a second round. I am sure our 
committee members will be drifting up but as it stands, we have 
the gentlewoman from Connecticut, Ms. DeLauro, and myself here. 
So Ms. DeLauro, the Chair recognizes you for your questioning 
under the 5-minute rule.
    Ms. DeLauro. Thank you very much, Mr. Chairman. Let me 
thank my colleagues for your testimony and thank you for your 
years of service to the institution and the knowledge that you 
bring to this effort. It really is--I have characterized the 
hearings to some of our other colleagues, and I have said that 
sometimes we just don't get to listen to and talk with our 
colleagues the way that we should to understand the depth of 
knowledge that they have on these issues.
    Let me just ask Mr. Waxman, if I might, and I asked Mr. 
Obey about this as well earlier today. There is one section of 
your letter, of the Waxman-Obey letter which I also had put 
into the record. I might add if I could just say, Mr. Chairman, 
that it was on the McLaughlin show that John McLaughlin said 
that this was one of the best pieces of analysis that he had 
ever seen of this effort. So I just mention that in passing.
    One section of the letter outlines a number of concerns 
which have to do with the good government provisions. Talk to 
me a little bit about how the Government Reform Committee's 
recommendation improve on these provisions. Well, let me just 
leave it at that.
    Mr. Waxman. Well, the Burton substitute, which was 
supported unanimously, did a number of important things that 
are basically good government kinds of provisions. It said that 
employees' rights would be protected. Whistleblowers would be 
protected. The right to collective bargaining would be 
protected. Those things were agreed to by everyone. The Morella 
amendment, as I mentioned earlier, and I will go into more 
detail if the committee chooses, dealt with a very narrow area.
    Now, there were other provisions in the Government Reform 
bill that I want to flag that I did not support. The Freedom of 
Information Act provisions I thought did not meet good 
government standards. The President's bill was very broad and 
exempted all information voluntarily provided to the Department 
about infrastructure vulnerabilities. from the Freedom of 
Information Act.
    Now, we adopted a Tom Davis amendment that added over 10 
additional departments to be exempted from the Freedom of 
Information Act--and the amendment defined ``critical 
infrastructure'' very broad. Lots of information about chemical 
plants, electric utilities, water systems could be exempted. 
Freedom of Information Act is working well, and I don't believe 
it should have been changed.
    The indemnity provisions we adopted give the taxpayer 
potentially unlimited liability. I think that is a mistake, 
because we ought to indemnify people only if they exercise due 
care. If they have been negligent, close to bordering on gross 
negligence, I don't think we ought to indemnify them.
    But let me just underscore again, the Burton substitute 
restored basic civil service laws. It wasn't a compromise. It 
was something that everybody thought made sense. It was a good 
government provision, and an important part of the work of our 
committee.
    Ms. DeLauro. I just might add here that with regard to 
FOIA, there was a statement made by Ronald Dick, Director of 
the FBI's National Infrastructure Protection Center, that, and 
I quote, we believe that there are sufficient provisions in the 
FOIA now to protect information that is provided to us, and a 
question with regard to that that I had had is if it works for 
the FBI, the CIA, if it works for the Defense Department, then 
why do we need a broader exemption for the new department?
    Mr. Waxman, you appear to concur with that.
    Mr. Waxman. I absolutely do.
    Ms. DeLauro. Mr. Burton, do you concur with that statement 
by the FBI Director?
    Mr. Burton. Well, I think the thing that concerned us and 
Mr. Davis and the White House is that you have new technologies 
coming online and a lot of businesses have limits of liability 
that say stop at 10 million or 20 million or 200 million, 
whatever it happens to be, and they are very concerned--no.
    Ms. DeLauro. That is a different issue.
    Mr. Burton. Pardon me. I was thinking about two things at 
once. I think that Mr. Davis and myself and the President and 
others felt like that a lot of information would deal with 
national security would be filtering through the homeland 
agency, and other agencies as well that involved new 
technologies, and if the people who are producing this new 
technology or who were trying to protect things like nuclear 
power plants felt like that there was going to be some leaks, 
they wouldn't let that technology go to the agency that we are 
talking about, Homeland Security, and for that very reason, 
they felt like we ought to have more exceptions to the Freedom 
of Information Act.
    I have always been very strongly in favor of freedom of 
information. In fact, I have taken on this administration as 
well as the previous administration when they tried to block us 
from getting vital information. However, we are in a war right 
now, and I think there should be some exceptions and that is 
why I think this particular clause is important.
    Ms. DeLauro. I would just commend to you, and I know my 
time is up, that the comments of the FBI, the Infrastructure 
Protection Center and Director talking about that, he felt that 
there were a number of protections within the law now and that 
there were the exemptions that were necessary to take care of 
this, and I just would mention that to take a look at in light 
of--.
    Mr. Burton. Well, I would presume, and I don't know this 
for sure, that in the drafting of the original bill that came 
from the White House and in the discussions we have had, the 
heads of our CIA and FBI and DIA and other intelligence 
agencies were involved in the process, and I find it difficult 
to understand why the FBI Director would take a position 
different than the President on this. So I will have to talk to 
him about that.
    Ms. DeLauro. Okay. Thank you very much. Thank you, Mr. 
Chairman.
    Chairman Armey. The Chair now recognizes the gentleman from 
Texas, Mr. Delay.
    Mr. DeLay. I appreciate both of you coming to testify. Your 
testimony is probably the most important testimony that we will 
hear today amongst all of the committees. Obviously your 
jurisdiction is far reaching and your expertise as a committee 
are vitally important to what we do here in trying to bring it 
all together.
    Having said that, my first knee-jerk reaction about this 
proposal when I first heard about it was oh, no, another 
department, another secretary, bigger government, but I have 
come to realize that many are looking at this as just a 
reorganization, and therefore that is why I think it is 
important and it is an opportunity to provide reorganization.
    Having said that, there have been suggestions that during 
these hearings from everything to, oh, just have an office 
over--just make the present Office of Homeland Security a 
confirmable office and move on to expanded bureaucracy to 
some--to a model sort of after the Drug Czar with no authority, 
no manpower, no direction and expect it to do great things, and 
so we are going to have to rely on you. Could either one of you 
give me a bigger picture understanding of where you think we 
ought to be heading in the bigger picture as far as what this 
department may look like under your vision, if you could? And 
please keep it short, because I have got a real important 
second question.
    Mr. Burton. I will go quick. Henry and I have a little 
different opinion on this, and he can speak for himself. I 
believe that there will be some problems in the transition, and 
I believe there may be some times when we will have to be very 
careful, because terrorists might take advantage of the 
transformation and transfer of authority. However, in the long 
run, I think it is absolutely essential that you have one 
person in charge of homeland security; i.e., Department of 
Defense for the United States of America, who can make sure 
that he can coordinate all of these different agencies that are 
spread all over the place right now, and I don't think he or 
she can do that if they have to go to the Department of 
Transportation for one thing or the intelligence department or 
CIA for another one, and for that reason I think it is 
extremely important that we put as many of these agencies or 
parts of these agencies that are going to be dealing with 
homeland security under one roof with one leader, and I think 
the President has got his thumb right on the pulse. I think his 
advisers were right on line, and I think that is why the 
majority of our committee voted to give him that authority.
    Mr. Waxman. If I could give you my view of it, I think your 
initial judgment was probably correct. Think about it, this is 
the homeland security department, but we are not putting the 
FBI and the CIA into this new agency, but we are putting the 
Animal Plant Health Information Services. We are putting the 
Coast Guard, where they do marine safety, maritime law 
enforcement, oil spill cleanups. We are taking Customs, where 
they ore doing border drug interdictions and copyright 
protection and putting that into the new department. And for 
the Department of Energy, we take human subjects research 
database, quality assessment program for contractor labs. These 
are a lot of things that have nothing really to do with 
homeland security. So either put everything in this Department 
or figure out some way for the head of this new department to 
be able to coordinate with these other groups such as with the 
FBI and CIA in the most efficient manner, without so much 
disruption that you end up creating another huge bureaucracy 
falling all over itself, spending a lot of money and waiting 
for all the kinks to be worked out.
    So I am troubled by it. I think what the President is 
trying to do is the right thing, but I don't think the 
administration has thought it through. In fact, from my 
understanding from the news reports, it was put together very 
quickly. It was put together even before the strategy which we 
recieved yesterday, was drafted. I think once the 
Administration, I have seen this over the years--announces it 
wants to do something, it goes forward without rethinking 
whether the idea makes a lot of sense.
    So I would give a strong coordinating function and 
authority over the FBI and the CIA and other agencies of 
government that relate to homeland security, but not move all 
these things over to this new department that we have.
    Mr. DeLay. I am running out of time. I want to give you an 
opportunity, because there is a disagreement between the 
Judiciary Committee and you on INS. Could you make--briefly 
make your case for your position on the INS versus the 
Judiciary's case?
    Mr. Burton. Well, I will go first, I guess. I would just 
like to follow up on one of the things that Henry said on the 
last issue real quickly. I know you are out of time but I know 
you want us to get this question. And that is he didn't mention 
all of the functions of those agencies. Many of the functions 
that he did not mention fit very well into homeland security. 
Some will not, but they will do those functions anyhow. But 
what we are talking about right now is declaring war on the 
enemy and protecting America, and the best way to do that is to 
have these agencies consolidated under Homeland Security.
    Now, regarding the INS, it is one of the major building 
blocks of the department. If we remove it or if we remove just, 
say, half of it, we are going to be weakening the President's 
plan very seriously, and that is why the committee voted to 
keep it in this new department. Like FEMA and a number of other 
agencies included in the new department, the INS performs a 
variety of functions beyond homeland security. And I just 
mentioned that. It facilitates legal immigration and enforces 
immigration laws. Its security and processing functions are 
closely related and should therefore both be included in the 
new department. The INS also works closely with other agencies 
like Customs Service that has a presence at our borders and 
will become part of the new department. These two agencies have 
overlapping functions in both enforcement and processing. 
Carving out a portion of the INS would jeopardize the Secretary 
of Homeland Security's ability to develop a cohesive Border 
Patrol strategy. I think on its face the INS has to be one of 
the first lines of defense against terrorists getting into the 
country and keeping them out. So I think it is logical to have 
that under that Homeland Security Department.
    Mr. Waxman. Mr. Delay, just as our committee has expertise 
because of our jurisdiction on civil service and procurement 
laws and all of that, the Judiciary Committee has had a long 
history with the Immigration and Naturalization Service. They 
have just reorganized the INS after a lot of problems with it, 
and their judgment that they have recommended is to separate 
the service part from the enforcement part, and the enforcement 
part they would move over to the Homeland Security Department. 
The service part they would leave alone. I think that makes 
sense. I would defer to their judgment, but it does seem to me 
to make sense, because the enforcement issues are the ones that 
relate to homeland security.
    Mr. Burton. I just might follow up by saying when you 
bifurcate or split up an agency like that, I think it takes a 
lot of time and effort, and I think what we are trying to do is 
expedite this as quickly as possible so the functions that are 
very germane to homeland security are there as quickly as 
possible.
    Mr. DeLay. Thank you, Mr. Chairman.
    Chairman Armey. Thank you. The gentleman from Texas.
    The Chair would like to announce that absent another 
minority member or Democrat member joining the committee, it 
would be my attention to recognize the gentleman from Ohio and 
then I would ask the members on your side to get your heads 
together and see which of you might seek recognition to 
represent your side, and then we will conclude with the 
chairman. So with that intention noted, let me recognize the 
gentleman from Ohio.
    Mr. Portman. Thank you, Mr. Chairman, and appreciate the 
testimony from both of my colleagues today, both of whom I 
served with at one time on the committee. I am one of the alums 
up here on the panel, and I worked with you on various 
projects. You do have the largest single jurisdiction and you 
have given us a lot of good things for us to work with in 
coming up with a mark that we can take to the floor.
    I just want to quickly ask about the final vote in 
committee. Mr. Chairman, what was the final vote in the 
committee, because we have heard different discussion about how 
the committee reacted to different proposals?
    Mr. Burton. The Morella amendment passed by one vote. It 
was very controversial. What were the other ones?
    Mr. Portman. How about final passage on the--.
    Mr. Burton. Final passage on the bill was 30 to 1.
    Mr. Portman. So it was 30 votes in favor of the 
restructuring, making the new agency--.
    Mr. Burton. Right.
    Mr. Portman. Consolidating all these various departments 
and agencies?
    Mr. Burton. Right.
    Mr. Portman. I have listened to my friend Mr. Waxman talk 
about the bloated bureaucracy, and I must say somehow it hasn't 
been properly explained to you or you haven't understood at 
least what the President was trying to do, because there is no 
sense this would be a larger bureaucracy. Indeed the whole 
notion here is to consolidate and I think Mr. Burton said it 
well earlier, which is right now we have so many different 
offices and departments. You have said over 150, that the right 
hand doesn't know what the left hand is doing, and often there 
are so many masters, there is no master and therefore no one in 
charge. And therefore it is a matter of accountability, and the 
notion would not be to leave those bureaucracies as they are 
but rather to make them work better together and to consolidate 
them. The bureaucracies are going to be there. If we don't do 
anything, if we simply put an office in the White House, like 
the Drug Czar's office, it doesn't do anything to reduce the 
bloated bureaucracy.
    So that is the concept. There will be of course challenges 
as we do this, as we have seen with every organization, but it 
is certainly not the intention to bloat the bureaucracy. 
Rather, it is to streamline it and that is the whole point.
    Mr. Waxman. Mr. Portman, I would hope you take a look at 
the letter that Mr.--.
    Mr. Portman. I have seen your letter.
    Mr. Waxman. And I hope you would also look at what the 
Congressional Budget Office estimated.
    Mr. Portman. And I have and that has been misrepresented a 
number of times.
    Mr. Waxman. This is estimated to create 21 Assistant 
Secretary positions. It is incredibly large. I voted for final 
passage, as did many other Members.
    Mr. Portman. I realize that.
    Mr. Waxman. I did vote for it, although I did not think it 
was a good bill as it stood. I voted for it and I think others 
did as well, to send it on to continue to work on the 
legislation. If this were the final bill before us in the 
House, I am not sure that I could still vote for it, or 
certainly if it came out of conference I expected I would vote 
against it.
    Mr. Portman. Hopefully we can address some of your 
concerns, and one of the concerns that you have raised 
repeatedly is this notion there will be other nonsecurity 
functions in the department. The answer to that is clearly that 
we think some of these entities work quite well together now.
    The Coast Guard for instance. You mentioned oil spill a few 
times. The oil spill function of the Coast Guard is related in 
an integral way to what they do to protect our borders. So we 
want to keep that, it works well. It is a good agency.
    The Customs Service, which is under the jurisdiction of 
Ways and Means, where I serve, same thing. You mentioned the 
Customs Service. You don't want to pull those agencies--.
    Mr. Waxman. No. But I don't know if you have served on the 
Transportation and Infrastructure Committee. They have a large 
expertise on this, and Chairman Young doesn't agree.
    Mr. Portman. I understand they have some jurisdiction 
issues with moving it over at all, but that is not what you are 
saying. You are saying maybe the border functions should go but 
not the other functions. He would object to that, because he 
would say, no, if you are going to move it, you need to do it 
in full.
    I will continue to talk to him on the record in a little 
while.
    Mr. Chairman.
    Mr. Burton. Let me just say that if you move--let us say 
there is a person or an agency that does two functions. One is 
a homeland security function as we perceive it. The other is 
maybe not a homeland security function. If you split that up, 
what you are talking about is splitting the agency, and you may 
be talking about more employees, because you are going to have 
to leave some here and some there, and people who have the 
expertise in both areas, you are going to have to have two 
instead of one, and so I think the consolidation process we are 
talking about, even though you are bringing in some functions 
that are not germane necessarily to homeland security but some 
that are, I think is going to make sure that we minimize the 
amount of new employment that is going to be necessary. Whereas 
if you split up agencies, I think you run the risk of saying we 
have got to have people that do this function as well as this 
function instead of one person or one agency.
    Mr. Portman. In some agencies--and Customs is a good 
example for me because it is in our jurisdiction--but people 
have multitasks. Coast Guard obviously is another great example 
of that.
    I would say, too, with regard to the alternative, which is 
to put something in the White House, I have lived through the 
Drug Czar, and I know you have lived through CEQ and I know how 
you view that, and maybe you can speak to that, but with no 
budget authority, no people or ability to move these agencies 
and departments, it is very difficult to do what we are trying 
to do here, which is to change a mindset, to make the primary 
function homeland security, and I would just suggest that if 
there is going to be an office in the White House, that does 
not have budget authority, it really is not going to have the 
strength to be able to perform, even if it is statutory, even 
if it has a confirmed director within the White House as is the 
case with CEQ or the Council of Economic Advisers or the Office 
of Drug Control Policy. They just don't have the ability to do 
what we need to do to get done here.
    Chairman Armey. I am afraid I might have to call time on 
the gentleman from Ohio and we come to a conclusion and--.
    Ms. DeLauro. We are going to have it both ways, Mr. 
Chairman. I will ask a brief question and then yield to Mr. 
Menendez.
    Chairman Armey. The gentlelady is recognized.
    Ms. DeLauro. Thank you very much. Following up on the cost 
issue, have you seen any evidence to support the 
administration's contention that the cost of the new 
department, including its administration and new entities that 
it creates, can be funded from savings achieved by eliminating 
redundancies in the current structure?
    Mr. Waxman. I can only respond that we asked the 
Congressional Budget Office to evaluate that idea, that 
premise, and they came back with an estimated $3 billion 
expenditure, just for this department. That to me is an 
incredible amount of money and could be used far more 
effectively for our national security, internal security in 
other ways than moving all of the bureaucracy around and moving 
all these pieces and ending up with 21 Assistant Secretaries.
    Mr. Burton. My view is that there will be initial 
additional costs. Long term, there will probably be some 
savings, but I am a realist. I think there will probably be 
additional expenses, but what we are talking about here, and I 
hope nobody loses sight of this fact, we are talking about in 
effect a Department of Defense for America. We have maybe 
thousands of terrorists, maybe more than that, in the United 
States who want to do us ill, and we have to do whatever is 
necessary, not only to protect the infrastructure but every 
American citizen as much as possible. And we must realize that 
it may very well cost more money than we anticipate, but what 
is the alternative? To do less, you run the risk of a real 
tragedy like we saw on September 11th. And so I don't know what 
the additional costs might be or if there will be ultimately an 
additional cost. All I am saying is that we have to do what we 
have to do to protect this country.
    Ms. DeLauro. I will just say, and I am going to yield to my 
colleague, but it would be good at the outset to lay out the 
fact that it is going to cost more money instead of trying to 
indicate that it probably won't cost more money.
    With that I yield to my colleague from New Jersey.
    Mr. Menendez. I thank the gentlelady for yielding. Let me 
go to the INS issue for a moment. The Hispanic Caucus today 
puts out a statement of principles on this saying they would 
really like to see it stay in the Justice Department, but if it 
is going to be transferred, that they would like to see an 
Under Secretary for all of those immigration functions within 
the Department of Homeland Security, because we don't want to 
get to the point that we treat immigration as terrorism.
    Is that something that you would be supportive of?
    Mr. Burton. Yes. I think it is very important that those 
who are coming here to seek freedom and justice and the 
American way of life not be hampered from getting to the United 
States, and I think we ought to do whatever is necessary in the 
Department of Immigration to make sure that those people do 
have the ability to come to America if they follow the rules 
and regulations to get here.
    But we also believe that it is very important that along 
with the visa provisions we were talking about earlier, that 
there be very close scrutiny of people coming into the country 
to make sure that we don't have terrorists slipping through the 
cracks.
    So I agree with you that we ought to make sure that we 
still have immigration according to our immigration laws, but 
at the same time there is going to be a dual purpose there, and 
that is probably why we made need an additional secretary to 
deal with that.
    Mr. Menendez. Mr. Waxman, let me ask you a question. To the 
extent that agencies propose to be transferred to this new 
department end up being transferred to this department, which 
agencies have multiple missions beyond security? Do you believe 
that there should be language here for a mechanism of some sort 
to try to guarantee the other managers of those departments 
that they are held in their work, in their--.
    Mr. Waxman. Well, I think that is part of the tricky 
difficulties we have with this legislation, because, for 
example, the FEMA agency deals with natural disasters and has a 
traditional function. We are going to continue to need that 
agency to deal with those kinds of problems. So I would hate to 
see that agency disrupted, similarly I would hate disruptions 
at the Coast Guard and the INS and other agencies as well. That 
is why we have to be mindful that we are not creating redundant 
bureaucracies. If we are going to leave them where they are now 
with some functions and move other functions, we have to figure 
out how to do that in a careful enough way. Otherwise it seems 
to me we are going to have a real mess on our hands.
    Mr. Menendez. But my concern is while we presume and assume 
that they will continue those functions unless their budgets 
are somehow preserved, unless their statements as to those 
missions are being preserved in the context of a security focus 
that has been the advocacy for those, there are no guarantees 
that those missions are preserved in a way in which they can 
succeed at, and that is of grave concern to us.
    Mr. Burton. If I might comment on that, Mr. Menendez. Our 
bill expanded the mission statement of this new department to 
highlight the importance of nonterrorist functions and the need 
for the department to respond to such things as national 
disasters, in addition to terrorist attacks. FEMA is a central 
agency for carrying out that mission. Therefore, it is critical 
that they be included. And also we are going to have a number 
of Assistant Secretaries. Many people differ on how many there 
should be, but I suggest that at least one or two of those 
Secretaries should be designated to deal with nonterrorist 
functions to make sure that those are not overlooked or short-
changed. It is extremely important that if we transfer an 
agency in there that can deal with terrorism, will deal with 
terrorism but has other functions, that those are not 
neglected.
    Mr. Menendez. I thank you, Mr. Chairman.
    Chairman Armey. So much of what has come from your 
committee, I recognize another good looking suggestion. We will 
look into that.
    Just to update the committee, we now have two members that 
have joined the committee who have not had the opportunity to 
question this panel. The Chair's intention is to recognize the 
gentleman from Oklahoma on my right, the gentleman from Texas 
on my left, and then conclude our work with this panel with 
myself. The gentleman from Oklahoma.
    Mr. Watts. Mr. Chairman, I will try and be brief. Yesterday 
we heard testimony from the Director of Office of Personnel 
Management and she was talking about making the bureaucracy 
work for us, and we have heard the--Ms. Pelosi talked about the 
same thing, having a lean, streamlined department in the 
Homeland Security Department, and I know that one of the ways 
we can do that is by way of technology and different management 
features, and so forth. And I was pleased to see that you all 
included in your markup the Federal Information Security 
Management Act, FISMA, and formerly H.R. 4629, which encourages 
and supports carrying out innovative proposals to enhance 
homeland security.
    Can either you, Chairman Burton or Mr. Waxman, one or the 
other or both, I would just like for you to kind of share how 
you think each of these will help in securing America's 
homeland.
    Mr. Burton. Well, first of all, we differed a little bit 
with the administration on this. We expanded the language that 
they had in the original bill. We did that because we wanted to 
make sure that we kept the brightest and the best in these 
positions and that there wasn't a lot of problems with such 
things as pay disparities and the like.
    Let me just go through the kind of language we had further 
in there to deal with this, and I hope that answers your 
question. The Secretary of Homeland Security, along with the 
head of OPM, will be authorized to adjust compensation levels 
to remedy any pay disparities that exist between employees who 
come into the department from various areas who are going to 
perform similar jobs. Obviously if you bring somebody in from 
one department that is going to do a job and somebody from 
another department that is going to do a job and there is a pay 
disparity, you have got to make sure you work that out. And I 
presume that they would probably raise the pay so that it was 
comparable.
    To develop a disciplinary--however, no employee can be 
compensated above the Cabinet level, and there was some that 
wanted to take it to the degree that it would go up to the 
President's salary and above Cabinet level salaries. We thought 
that was going to be difficult for management purposes.
    To develop a disciplinary system based on existing law that 
enables the Secretary to suspend or expeditiously suspend or 
remove an employee in case of national or homeland security: 
Now, there is a process that we are talking about that would be 
followed which would guarantee their rights, review of what 
happened, but they can get them out of that position very 
quickly if it was a security risk, to develop and submit to 
Congress for approval a proposal for a demonstration project 
for a human resources management system that makes it easier to 
recruit and retain talented individuals. And that would ensure 
that veterans' preferences, whistleblower protection and 
collective bargaining rights would be retained and authorized 
performance appraisal system for managers or supervisors, and 
finally to exercise the human resource management authorities 
under this section in accordance with the merit principles 
contained in title 5, of the U.S. Code.
    I don't know--does that answer your question?
    Mr. Watts. Well, I think all of those things are good. The 
two issues that I addressed or spoke to were the technical 
innovations in using private sector innovations and technology 
to manage and to enhance defense of America's homeland. I think 
what you just shared with us I think does overlap into the 
question that I asked.
    Mr. Burton. I am sorry. I must have been thinking and 
missed part of your question. There are provisions in the bill 
which provide for mechanisms to make sure we get the best 
technology, the best minds from the outside to make sure that 
we have the ability and the technology to defend against any 
kind of terrorist threat or terrorist attack. One of the 
problems we had in getting the technology, for instance, is 
some of those companies--and you weren't here when we talked 
about this previously. Some of those companies have a limit of 
liability in their insurance, which would--they are afraid that 
if they were sued, if there was a national tragedy, it would go 
above their limit of liability. And so we provided a hold 
harmless provision in there so that the Director of Homeland 
Security and OPM agreed that we need to provide this protection 
for that company above their limit of liability. They get the 
most insurance they could, but above that limit of liability so 
we could get that technology, and we would go ahead and do it.
    Mr. Waxman. Before I address your point on FISMA, I want to 
make a comment on FOIA. I have a concern that we are going to 
keep a lot of this information from the public, when it is 
really not a matter of homeland or national security. So I have 
some misgivings, and I think we ought to continue to look at 
these new exemptions from FOIA.
    There was an issue I will bring to your attention that came 
up in the committee. In our bill based on an amendment by Mr. 
Davis, we allow the lowering of standards for computer security 
in order to make sure that more than one company could compete. 
That didn't make sense to me. We ought to keep the best 
standard and tell all the companies they should come up to that 
standard. I had a sense that we were doing this because some 
companies didn't have a good enough system to compete, and they 
wanted the standard lower so they could also come in and see if 
they could get government contracts. I didn't think that was 
the right course for us to take, and you might look at that 
provision again as well. My staff would certainly be available 
to help you examine that and rethink whether we want to lower 
standards for computer security simply to make some companies 
more commercially viable rather than make our security standard 
what we wanted out of the whole exercise.
    Mr. Burton. If I might follow up real quickly--.
    Chairman Armey. If I may ask you to do so.
    Mr. Burton. I missed part of your question, and you asked 
about three questions in one. I understand the committee 
adopted an amendment that would improve information security in 
the Federal Government. Currently information in the possession 
of Federal agencies is vulnerable because of a lack of 
coordinated uniform management. Resolving this problem is an 
important aspect of homeland security because of our reliance 
on information technology and the advancement of electronic 
government, and that Mr. Davis provided we put in the bill.
    Chairman Armey. Thank you.
    Mr. Waxman. And I just want to add most of that we agreed 
to. I raise just one point where we had a disagreement.
    Mr. Watts. But I think that is beneficial for this effort, 
and I was delighted to see you insert that.
    Chairman Armey. Thank you again, and the Chair recognizes 
the gentleman from Texas, Mr. Frost.
    Mr. Frost. I just would like to nail something down so 
there is no possibility of misunderstanding, and let me preface 
by saying I am not asking you about the Morella amendment. Just 
disregard that for a moment. I am asking you about section 730 
in the bill in H.R. 5005, as introduced, and section 730, as 
reported by your committee. Section 730 as reported--.
    Mr. Burton. Okay. You want us to start off with what was in 
the bill submitted to us by the White House?
    Mr. Frost. Yes. Starting with that, and then I am asking 
you about section 730 as reported by your committee.
    Mr. Burton. Okay. Well, as reported by our committee--.
    Mr. Frost. Let me ask the question, if I may. My question 
is are you asking this committee to substitute the language 
for--in section 730 as reported by your committee for the 
language as appears in the bill as filed, H.R. 5005?
    Mr. Burton. You know, that is a tough question to answer, 
because I am a very strong supporter of the President and all 
the work they put in this bill, but I believe, being realistic, 
the language that the committee came up with is superior, will 
work better and will solve the problems that are inherent in 
this kind of a transfer.
    Mr. Frost. So you are asking that we use your language?
    Mr. Burton. I believe that would be preferable. Do you 
agree with that, Henry?
    Mr. Waxman. I do.
    Mr. Frost. Mr. Burton, in the event that this committee 
does not use your language for some reason, uses the language 
as introduced rather than your language, will you want the 
opportunity on the floor when this is considered to offer your 
language as an amendment?
    Mr. Burton. Well, I would have to discuss with the 
leadership, people on this committee the reasons why they 
preferred the other language to our language and make a 
determination at that point. You know, I am not omnipotent, 
although sometimes I might think I am, and there may be reasons 
that I missed for the language that was sent to us in the first 
place being used rather than ours. However, at the present 
time, I believe what we put in the bill is the right approach, 
and unless convinced otherwise, I would support that.
    Mr. Frost. And Mr. Waxman, would you want the opportunity 
to offer that as an amendment on the floor if this committee 
chose not to put it in the bill?
    Mr. Waxman. I certainly think the Members should have the 
opportunity to vote on the provisions that were unanimously 
adopted by the Government Reform Committee as it relates to 
government employees.
    Mr. Frost. I agree with you, and I hope that this committee 
will see the wisdom on a bipartisan basis in using the language 
that was reported unanimously out of your committee, and if 
this committee does not on a bipartisan basis choose to use the 
language reported out of your committee unanimously, then as a 
member of the Rules Committee, I will certainly seek to have 
that made in order as a floor amendment so that it can be 
offered--considered on the floor of the House.
    Mr. Burton. One real quick follow-up, and that is you said 
putting the Connie Morella--.
    Mr. Frost. I am not asking about that.
    Mr. Burton. That is a very important amendment, a very 
important issue, and I sincerely hope the committee will take a 
hard look at that. I think that should be reversed.
    Mr. Frost. But I wasn't asking on that question.
    Mr. Waxman. But I also think that Mrs. Morella or some 
other Member ought to be able to offer her provision which was 
adopted by our committee, because I think it was a worthwhile 
provision, and it is important to have it debated and Members 
should be informed and make a decision about it.
    Mr. Frost. I understand. I didn't want to confuse the two 
issues, though, Mr. Waxman, because I wanted to make it clear 
that as base text, it was the position of your committee, and 
the chairman has just reiterated that, that the base text 
adopted by your committee is superior to the base text in the 
bill as filed with us.
    Mr. Waxman. Well, the text adopted by our committee 
includes the Morella amendment.
    Mr. Frost. I understand. I am just asking about section 
730, though.
    Mr. Waxman. The Morella amendment was a closer vote, the 
other parts of it were unanimous, but it was nevertheless the 
recommendations of our committee.
    Mr. Frost. Well, that I understand, but I was asking about 
section 730 only. Although there are people--Mr. Waxman, there 
are people who agree with you and people on our side who agree 
with you on that, but there really are two separate questions, 
and it is my concern that this committee, our Select Committee, 
may ignore the very good work done by your committee in 
redrafting section 730, and I think that would be a mistake and 
I think it would be a step backwards in the effort to achieve 
bipartisanship.
    I have no further questions.
    Mr. Waxman. I agree with you.
    Chairman Armey. Gentlemen, let me thank you for being here. 
The chairman of this committee does have some questions he 
could direct to our panel, but the Chair remains confident that 
in that event he would still remain more satisfied with his own 
conclusions than the conclusions of the witnesses. So we will 
spare you the difficulty of responding to my questions.
    Mr. Burton. May I make one final request, and that is if 
you or any member of the committee requires any information 
from our staff or ourselves as far as why we did certain 
things, we will be very happy to provide those for the 
committee, and I would like to end up by saying these people 
behind me and I am sure behind Henry worked their tails off. 
They worked over the weekend. They worked hours and hours on 
end and they are the unsung heros on this bill, and I just 
really appreciate all the hard work they did.
    Chairman Armey. Let me just say, and that is good of you to 
mention that, we have already--our staffs from this committee 
have already had the privilege of working with your committee. 
We do feel very well-informed about the background thinking, 
the chapter and verse discussions you had. I myself sat up 
until 1:30 in the morning and watched your markup. I found it 
scintillating. I don't imagine what I was thinking in my life 
that I would have preferred to watch till 1:30 in the morning. 
But it has been a very important exercise, what you have done 
in your committee.
    We will take you up on that offer, and we do so much 
appreciate the time you have been willing to share with this 
committee, and thank you so much for your hard work.
    The Chair recognizes that we are now being joined by the 
chairman and the distinguished ranking member of the 
International Relations Committee, and the Chair would like to 
invite Chairman Hyde and Ranking Member Lantos to the dais.
    Gentlemen, as you approach, let me just explain that it is 
our procedure here to by unanimous consent put your formal 
statement in the record and then ask you if you could to 
summarize your statement to us under the 5-minute rule, each in 
your turn, and then following that, we will proceed to try to 
stay on a fairly rigorous schedule by exercising our own 
questions under the 5-minute rule.
    So with that, let me just say thank you for being here. We 
welcome you. We appreciate your hard work, and Chairman Hyde, 
we will begin with you.

 STATEMENT OF THE HONORABLE HENRY J. HYDE, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF ILLINOIS

    Mr. Hyde. Thank you very much, Mr. Chairman and ladies and 
gentlemen of this very important and consequential committee. 
We will be brief.
    Mr. Lantos and I have worked together on this problem, and 
we are in total accord, as we are on many issues before our 
committee. The subject of the issuance of visas is a 
controversial one. There are about 12 million applications for 
visas every year. The ministerial administration of those 12 
million applications for visas is a considerable task.
    Some people wanted to take the whole function of issuing 
visas and transplant it to the Homeland Security Agency or 
Department, doing away with the State Department's function in 
this process. We felt that was doing no favor to homeland 
security, that much of this work, the overwhelming bulk of this 
work is not connected to homeland security. We felt continuing 
to use State Department personnel in the consular offices to do 
the routine work would work, and we would put the Secretary of 
Homeland Security in charge of policy, of training, of 
discipline, of regulatory activity and have the power and 
authority to send people out to these consular offices anywhere 
in the world should the need arise.
    This is the best of both worlds. It utilizes what are 
already in place in the State Department, consular personnel 
and at the same time hands over the authority to regulate, to 
oversee, to train these personnel and to make policy to the 
Secretary of Homeland Security, and so that amendment was 
comfortably passed in International Relations. I am happy to 
say that it passed in the Judiciary Committee comfortably, and 
I am advised it also passed in Government Operations.
    So that is what I am presenting to you today, plus one more 
issue. I was somewhat startled to learn that in Washington, 
D.C. there are 41 police agencies; that is, agencies who have 
the right to arrest people and to carry weapons, 41 of them. I 
have the list here, and neither the left hand knows what the 
right hand is doing times 41, and so it seemed to me 
appropriate that in this important subject of homeland 
security, we advise the Secretary of Homeland Security of this 
plethora, this proliferation of police agencies and suggest 
some regulatory language to have them communicate with each 
other.
    It seems to me that having this firepower and not talking 
to each other is wasteful and counterproductive. So we don't 
provide how that should happen, but we suggest and require the 
Secretary of Homeland Security to look at that and to make 
regulations that will stimulate interfacing communication 
between these police agencies. And I am now pleased to yield to 
my colleague, Tom Lantos.
    [The statement of Mr. Hyde follows:]

     PREPARED STATEMENT OF HON. HENRY HYDE, CHAIRMAN, COMMITTEE ON 
                        INTERNATIONAL RELATIONS

    First, Mr. Chairman, I would like to thank you for 
permitting me to explain the compromise provision on visa 
processing in our Embassies and consulates abroad, which was 
worked out last week among a bipartisan coalition of members 
representing the three House committees with jurisdiction over 
this vital issue.
    The President's proposed legislation creating the 
Department of Homeland Security included important changes in 
the way in which the U.S. government processes the 10 to 12 
million visa applications that stream each year into more than 
200 U.S. embassies worldwide. The vast majority of these visa 
applications are from people who are visiting relatives, 
touring the country, or doing business in the United States.
    The President's plan transfered ultimate authority over 
visa issuance and refusal to the Secretary of Homeland 
Security, while continuing to rely on U.S. foreign service 
officers to perform the day-to-day work of reviewing 
applications and conducting interviews.
    Some expressed concern that the President's plan did not go 
far enough to ensure that security would come first in the visa 
adjudication process. In our examination of H.R. 5005 as 
introduced, we determined that these concerns arose primarily 
from ambiguity or uncertainty in the language of the 
legislation. We were able to draft an amendment to clarify and 
fortify this language, and our amendment was adopted (with 
minor variations) by three separate Committees during their 
markups last week.
    The amendment which my colleagues--Tom Lantos, Ileana Ros-
Lehtinen, and Howard Berman--and I proposed, included several 
important new provisions:
    First, our amendment makes clear that ultimate authority 
rests with the Department of Homeland Security. No visa will be 
issued over the objections of the new Department.
    Second, our amendment makes clear that the new Department 
has authority to place homeland security officers in our 
embassies not only to review individual visa applications, but 
also to oversee consular activities, train and advise consular 
officers on homeland security issues, and conduct 
investigations relevant to these issues.
    Finally, our amendment includes a very important provision 
clarifying that a decision denying a visa is not subject to 
judicial or administrative review.
    Other members proposed more radical changes to the 
President's plan. While eliminating any role for the State 
Department in the visa process might be satisfying to those who 
seek to punish the Department for past failures, over the long 
run this approach could weaken, not strengthen, our efforts to 
protect the American homeland. In my judgment, we would not be 
doing Homeland Security any favors by requiring it to assemble 
a new overseas bureaucracy to adjudicate 10 to 12 million 
applications a year, the overwhelming majority of which present 
no homeland security issues. Our compromise proposal will allow 
Homeland Security officers to spend more time--as long as it 
takes--on identifying and dealing with those applications that 
do present risks to the security of the United States.
    The Hyde-Lantos-Berman-Ros-Lehtinen compromise is endorsed 
by the Bush Administration and by the three Committees of 
jurisdiction. It will preserve the essence of the 
Administration's proposal--the sensible division of labor under 
which homeland security officers will be allowed to concentrate 
on homeland security functions--while helping to ensure that 
security concerns will be central to key decisions made abroad.
    We would like to thank the Select Committee for its time, 
and we hope our recommendations will be helpful in its drafting 
of the final proposal.

    Chairman Armey. Thank you, Chairman Hyde. Tom Lantos, it is 
my pleasure, my friend, to have you here.

  STATEMENT OF THE HONORABLE TOM LANTOS, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. Lantos. Thank you very much, Mr. Chairman, Ranking 
Member Pelosi, ladies and gentlemen. Let me first say that one 
of the great joys of my 22 years of service in Congress has 
been to work with Henry Hyde on the International Relations 
Committee. I think I can say without any possibility of 
contradiction that under Henry's leadership, this has been by 
far the most bipartisan committee of the House of 
Representatives and probably of either Chamber and that, as 
Henry stated, we in the International Relations Committee, Mr. 
Chairman, adopted the Hyde-Lantos proposal unanimously which 
enjoys the full support of the administration.
    I do not serve on the Judiciary Committee, but the 
Judiciary Committee adopted essentially the same proposal. I do 
serve on Government Reform, and in Government Reform again 
overwhelmingly, with Republican and Democratic votes, we 
accepted this proposal.
    So I can only echo Henry's statement, but I would like to 
take a minute, because I know how precious your time is, to 
spend a little time on the culture of the Foreign Service as it 
relates to this issue, because I think this is a very important 
item. When you are 24 years old and take the Foreign Service 
examination, at the end of your personal rainbow, Mr. Chairman, 
there is not the item of issuing visas to Turkish housewives. 
That is not what you are aiming at. You are aiming at becoming 
an ambassador 25 years from now and to participate if not in 
the formulation, at least in the implementation of U.S. foreign 
policy.
    And what we have today is really a 2, 3, 4-year bootcamp 
for bright young people who do their kitchen police duty in the 
State Department issuing visas, and they can hardly wait to get 
a good grade on that so they can move on to other things.
    Now, the notion of hiring a whole new bureaucracy of people 
whose lifetime occupation will be the issuing of visas is an 
absurdity. The State Department has been issuing visas for over 
200 years, and we clearly, following September 11th, need to 
readjust our priorities and our focus. So the Hyde-Lantos 
amendment to the administration's proposal recognizes the 
primacy of the Homeland Security Secretary in all aspects of 
this process, but handling the issuing of the visas via the 
State Department. The Homeland Security Secretary will have the 
opportunity of assigning as many of his people as necessary who 
will have full authority over the issuance of every single visa 
that is issued, but it would be absurd to have this whole new 
department take over a function which on the whole is very well 
performed. I am fully cognizant of the horrendous failures that 
have occurred in recent years, the security lapses, and that is 
why the placement of homeland security people trained for that 
job in whatever embassy or consular office the Secretary of 
Homeland Security determines will be done.
    There is only one exception in our scheme to the primacy of 
homeland security, and I think we as members of Congress will 
appreciate it. If the State Department official rejects a visa 
application, then Homeland Security cannot overrule him. If the 
State Department wants to issue a visa, then Homeland Security 
has full authority to review it, and this I think in more ways 
than one protects us as Members of Congress, because 
constituents come to us and say an individual was rejected for 
a visa, can you use some pressure to get that visa done? If the 
State Department says no, that is the end of the rope.
    I personally believe that our proposal, which has the 
approval of three committees and the administration, should be 
probably the easiest provision for your distinguished committee 
to approve.
    Thank you, Mr. Chairman.
    [The statement of Mr. Lantos follows:]

    PREPARED STATEMENT OF HON. TOM LANTOS, RANKING MINORITY MEMBER, 
                  COMMITTEE ON INTERNATIONAL RELATIONS

    Mr. Chairman, I would like to thank you, Ranking Democratic 
Member Pelosi and other members of the Committee for receiving 
our testimony here today on this critical endeavor, 
establishing a Department of Homeland Security. I have an 
extensive written statement, and I ask unanimous consent that 
it be made part of the record.
    Mr. Chairman, nothing this House will do this session is 
more important than to move forward successfully this 
gargantuan undertaking, and I believe we must do it in the most 
expeditious and bipartisan manner possible. It was in this 
spirit, Mr. Chairman, that Chairman Hyde and I worked together 
on a bipartisan basis with other members of the Committee to 
craft a sensible proposal relating to the division of labor 
between the Secretary of State and the Secretary of Homeland 
Security with respect to the visa function. I am very pleased 
that the White House has announced its support for this 
proposal, and that last week it was adopted by all three House 
committees that considered it. Moreover, I understand that 
Governor Ridge confirmed the Administration's support for the 
Hyde-Lantos Amendment in testimony before your Committee 
earlier this week.
    Under our proposal, which builds on the President's 
proposal in H.R. 5005, the Secretary of Homeland Security would 
have all authorities relating to issuing regulations, enforcing 
and administering the laws on processing visas at United States 
diplomatic and consular posts abroad. The Secretary would also 
have the authority to confer this authority on other officials 
and employees of the U.S. Government. Absent such delegation, 
however, these authorities would be exercised through the 
Secretary of State and his highly trained cadre of consular 
officers. The Secretary of Homeland Security can overturn 
decisions of consular officers to grant a visa, alter visa 
procedures now in place, and can develop programs of training 
for consular officers.
    In addition, in the spirit of a bipartisan compromise with 
those who would like to move the entire visa function to the 
new Department, the Hyde-Lantos amendment explicitly authorized 
the assignment of Homeland Security employees in U.S. 
diplomatic and consular posts abroad. Consular officers would 
continue to have the primary responsibility for reviewing visa 
applications. Rather than assume all visa processing functions, 
Homeland security employees would concentrate on identifying 
and reviewing cases that present homeland security issues. 
Homeland Security officers will provide expert advice and 
training for consular officers, investigate threats and ensure 
that these officers have access to all the homeland security 
information necessary to perform their function.
    I want to stress again the bipartisan nature of this 
amendment and its wide-ranging support. It was unanimously 
adopted by voice vote in the International Relations Committee. 
Chairman Hyde and Congressman Berman sponsored it in the 
Judiciary Committee, where it prevailed on a combination of 
Republican and Democratic votes. And Congresswoman Ros-Lehtinen 
and I sponsored the amendment in the Government Reform 
Committee, where it prevailed by an overwhelming voice vote. 
Late in the Government Reform Committee markup, Congressman 
Weldon, who had opposed the Ros-Lehtinen-Lantos Amendment, 
slipped in a further amendment that was inconsistent with some 
key provisions of the Ros-Lehtinen-Lantos Amendment. I 
understand that the Administration opposes this amendment. 
Thus, while I agree with the intent of the provision, that 
there be more interviews and careful scrutiny of visa 
applicants from Saudi Arabia, I think the Select Committee 
either make substantive revisions to the amendment or consider 
not including it in its mark.
    Mr. Chairman and Ranking Member Pelosi, I want to take a 
brief moment to tell you why I feel so strongly about this 
amendment. The Department of State has some of our Government's 
finest civil servants, trained in over 60 languages with 
decades of experience in dealing with foreign cultures. Their 
continuation in the Foreign Service is predicated on carrying 
out their responsibilities successfully if they don't, they 
will not get promoted and will be forced out of government 
service altogether.
    I believe that the current system can be improved, 
particularly through additional resources for the State 
Department to allow more detailed interviews of visa 
applicants. But I do not agree with those who suggest that the 
answer is moving the entire visa function to the Homeland 
Security Department. I do not believe that standing up a whole 
new bureaucracy, with little experience in foreign languages, 
cultures, or conditions, and with little opportunity for 
advancement to higher level posts, will draw the kind of 
quality people needed to advance our national security.
    Even more important, the proposal transferring the entire 
visa function to Homeland Security would risk overwhelming 
Homeland Security personnel with non-homeland security 
functions and thereby make it difficult or impossible for them 
to perform their central mission. With all the new agencies 
that the Secretary of Homeland Security will have to integrate, 
the last thing this Department should be focused on is creating 
a whole new system for adjudicating over 11 million visas, at a 
huge and unknown cost.
    In addition, the Hyde-Lantos-Ros-Lehtinen-Berman proposal 
also included an authority for the Secretary of State to refuse 
visas if to do so was in the foreign policy or security 
interests of the United States. This was somewhat of a 
narrowing of the Administration's proposal, but was consistent 
with the Administration's goal of retaining the Secretary of 
State's authority to deny visas on foreign policy grounds and 
has been endorsed by the Administration. In addition, the 
amendment makes clear that there are certain authorities that 
are vested by law in the Secretary of State that should not be 
affected by this proposal. These authorities include 
determinations regarding the issuance of diplomatic visas, 
exclusion and deportation on foreign policy grounds, and 
implementing Presidential proclamations regarding the 
admissibility of classes of aliens. Other authorities included 
authorities that are specifically related to narrow foreign 
policy concerns, such as the exclusion of certain Haitian human 
rights abusers and persons who were beneficiaries of U.S. 
property expropriated by the Cuban Government. While the 
Committee listed some of the most important provisions in this 
regard, the list included in the Hyde-Lantos-Ros-Lehtinen-
Berman amendment is not meant to be exhaustive, and we expect 
that the Secretary of State and the Secretary of Homeland 
Security will reach an understanding through an interagency 
agreement on the exact division of responsibilities between 
them.
    Finally, Mr. Chairman, the amendment provides that nothing 
in the amendment shall be construed as creating a private right 
of action. We did not intend to extinguish any existing cause 
of action, but wanted to ensure that the reorganization of 
functions embodied by the amendment did not affect the doctrine 
of consular non-reviewability or create a new cause of action 
not otherwise contemplated by law.
    Mr. Chairman, Ranking Democratic Member Pelosi, other 
members of the Committee, I respectfully request that in your 
markup of H.R. 5005, you adopt the Hyde-Lantos-Ros-Lehtinen-
Berman proposal, which is supported by the Administration and 
was adopted by all three relevant committees. If you do so, I 
believe the House of Representatives should consider this issue 
closed, with no need to address it as the legislation moves to 
the House floor. However, to the extent this issue is 
considered by the full House, I further request that it is done 
so in a way that will allow an up or down vote on this 
particular issue, as opposed to it being buried in the middle 
of some large-scale immigration reorganization amendment.
    Thank you, and I stand ready to answer any of your 
questions.

    Mr. Hyde. If I could just say one thing. The perception 
among some of our more conservative Republicans is the State 
Department is a little squishy, and we ought to straighten them 
out by turning over this vital function to the Homeland 
Security. I am suggesting that the Homeland Security will be in 
the driver's seat. It will direct, supervise, oversee, 
discipline.
    Mr. Lantos. Overrule.
    Mr. Hyde. Overrule. It will be a robust supervisor, and so 
we have still the ability to utilize people that are in place 
and superimpose on it a robust directorship that should meet 
the worst fears of people who are concerned that the State 
Department still exists.
    Chairman Armey. Thank you. Thank you gentlemen, both, for 
your opening statement. The Chair now recognizes the gentleman 
from Texas, Tom DeLay, for his 5 minutes.
    Mr. DeLay. I thank you, Mr. Chairman, for being here and 
Ranking Member Lantos. It is great to have your testimony. 
Quite frankly, you have done such a thorough job in your 
committee that I have no questions. It is amazing how you have 
done this in a bipartisan way but also gotten approval of the 
administration and anybody and everybody else that may deal 
with this issue. So I just congratulate you on the job that you 
have done.
    Mr. Lantos. It helps to be a team of septuagenarians, Mr. 
Delay.
    Chairman Armey. I agree with you. I concur fully on the 
white hair. And the Chair recognizes the gentlelady from 
California, Ms. Pelosi.
    Ms. Pelosi. And I am not going into the white hair bit at 
all. I want to join you, Mr. Chairman, and our distinguished 
whip from Texas in commending the gentlemen, the distinguished 
witnesses, for their fine work. I too want to acknowledge, 
though, their great leadership on promoting democratic values, 
which is a pillar of our foreign policy. They have both been 
champions for promoting human rights. Mr. Lantos has chaired 
the Human Rights Caucus, and over the years Mr. Hyde in his 
various capacities in Judiciary and in the International 
Relations Committee. They bring to the table a value that is 
central to what we are talking about here, protecting freedom 
now in our own country, and doing so in a way that values the 
work of the people who have been issuing these visas but 
recognizing the concern about protecting the American people. 
Here the other day the Secretary of State, General Powell 
testified that he supported the product of the International 
Relations Committee.
    So your work is done. You worked in a bipartisan way and a 
thoughtful way with balance. That was recognized by the 
administration. So for your part, you have made our work 
easier, and I commend you for that. Thank you for your valuable 
service today and for all time. Thanks, Mr. Chairman. I yield 
back the balance of my time.
    Chairman Armey. Thank you. Thank the gentlelady. The 
gentleman from Oklahoma.
    Mr. Watts. I have no questions.
    Chairman Armey. Gentleman from Texas.
    Mr. Frost. I would just like to add to the other comments 
and thank you for what you have done. Oh, that the other 
committees had been able to reach agreement with the 
administration as effectively as you have.
    Thank you.
    Chairman Armey. The gentlelady from Ohio.
    Ms. Pryce. Thank you, Mr. Chairman. We can tell it is late 
in the afternoon. The questions are getting fewer and fewer and 
far between. So I will just add my congratulations to the 
gentleman and hope that the spirit of bipartisan cooperation 
that you found in your committee's work will transfer all the 
way through this process. It is very important that it does, 
and so thank you for getting us started.
    Mr. Lantos. Thank you.
    Chairman Armey. The gentleman from New Jersey.
    Mr. Menendez. Thank you, Mr. Chairman. As someone who sits 
on the committee, I witness firsthand the great work of both 
the chairman and the ranking Democrat, and I am very pleased 
with both their work, their leadership and their effort. I just 
want to take the opportunity, however, to say that I hope--you 
know, it still sends somewhat of a shiver down my spine when I 
think that the Secretary of Homeland Security can overturn 
decisions of consular offices to issue a visa, can alter visa 
procedures now in place, can develop, in essence--and I know 
that is what we did, but I am concerned that there are those 
who will look at immigration as terrorism, and as it is, a 
consular officer right now has virtually unfettered discretion 
to make a determination as to whether or not they issue a visa.
    Mr. Menendez. Add to that this power of this new Homeland 
Security Secretary to go ahead and send in--deny someone based 
on what criteria; we are going to have to be looking at that in 
the future. I certainly hope that we will continue our 
oversight of how this unfolds as the committee--as the new 
Department is created, because I think there are many United 
States citizens who seek to be reunified with their family who 
will be facing--their family member will be facing a consular 
officer somewhere in the world. And there is enormous impact 
upon the economy of this country in terms of tourism, 
legitimate tourism of people from across the world that come 
here that would have a significant consequence to our national 
economy and to communities across this country for which 
tourism is a big part. And probably one of the greatest aspects 
of our democracy is how we permit students to come here from 
across the world and learn what is so unique about America and 
hopefully plant those seeds back where they go.
    So I certainly commend the work of the two gentlemen and 
the committee which I am privileged to serve on, but I hope we 
will continue to be vigilant as this unfolds to make sure that 
we are stopping those that wish harm to this country, but not 
stopping those which would both enrich us and for which 
provides part of our foreign policy and foreign objectives 
abroad. Thank you, Mr. Chairman.
    Chairman Armey. The gentlewoman from Connecticut.
    Ms. DeLauro. Thank you very much, Mr. Chairman. And I want 
to say thank you to Chairman Hyde and Ranking Member Lantos for 
their testimony and for their good work.
    I would associate myself with the remarks of my colleague, 
Mr. Menendez. As the daughter of an immigrant family, I think 
that we are always nervous about whether or not we are going to 
treat immigration with other than the good spirit in which it 
has provided great strength and energy to this great Nation.
    And I would just say that we are relying on your knowledge, 
your sensitivity, and your good judgment, as you have 
demonstrated in the work that you put forth here today. So I 
commend you for what you are doing, and I think we all need to 
be vigilant to safeguard that very, very, very special quality 
of this Nation in its immigrants, you know, past, present, and 
in its future. Thank you.
    Mr. Lantos. Mr. Chairman, if I may just make a one-sentence 
comment, I fully concur with the statements of my colleagues, 
Mr. Menendez and Ms. DeLauro. Although my ancestors came on the 
Mayflower, I try to be sensitive to these concerns to the very 
best of my ability.
    Chairman Armey. Thank you. The Chair now recognizes 
himself, which is no small matter at my age.
    Let me begin, Mr. Hyde. Mr. Lantos says about the Weldon 
amendment--and by the way, let me just say that this chairman 
observed with great interest the manner in which you won your 
point indeed in three committees: one where you chaired, two 
where you served, two where you serve. But there is a 
difference, I believe, that is drawn between the language of 
your own committee, IR, and the language of Government Reform. 
And that difference is the Weldon language. And I have Mr. 
Lantos' statement which, Mr. Hyde, I will just read. And he 
says: I think the select committee either makes substantive 
revisions to the amendment or consider not including it in his 
mark the Weldon amendment.
    Mr. Hyde do you concur with that?
    Mr. Hyde. Frankly, I am not familiar with the Weldon 
amendment. I understand Mr. Weldon did not, in my opinion, did 
not understand our amendment and was critical of it. But I did 
have a talk with him but I am not sure what his amendment did.
    Chairman Armey. Maybe I can--since Mr. Lantos is on both 
committees. Mr. Lantos, is it possible that this Chair's 
writing his own mark, looking at these two iterations, is it 
possible that my staff might prevail upon your staff for advice 
on, one, the question should it be dropped all together; or, 
two, are there revisions that will make this a good service to 
the American people?
    Mr. Lantos. Mr. Chairman, as I understand the Weldon 
amendment, it relates to Saudi Arabia, and properly so.
    Chairman Armey. Yes.
    Mr. Lantos. It was my view that since the Department of 
Homeland Security has total authority over the issuance of 
visas, it merely delegates the ministerial functions to the 
Department of State. Should the Secretary of Homeland Security 
choose to enunciate a policy according to which all visas in 
Saudi Arabia must be reviewed by homeland security officials, 
this would be possible under the original Hyde-Lantos proposal.
    My understanding is further, Mr. Chairman, that the 
administration may want to offer additional refinements, I 
believe.
    Chairman Armey. If I may, I do not mean to cut you off, but 
I think you made the point that indeed under your language, 
that designation with respect to Saudi Arabia is perfectly 
within the power.
    Mr. Lantos. It is perfectly within the power of the 
Homeland Security Department.
    Chairman Armey. I do not mean to cut you off, but I have a 
couple of other points I want to cover. A few days ago we had 
the privilege of seeing the Secretary of State here in the 
committee, and he displayed for us, actually held up for us, 
got a picture in The New York Times, the new visa, and talked 
about some of the reforms that they have put in place in State. 
And I gather, Mr. Hyde, from your comments that you see this as 
substantive reform, recognizing some of the problems in State 
that have troubled us and something that we in this committee 
should acknowledge and appreciate on the part of the Secretary 
of State. Is that a correct observation?
    Mr. Hyde. Absolutely; yes, sir.
    Chairman Armey. Thank you. Now, Mr. Lantos, I have admired 
you for a great many reasons.
    Mr. Lantos. Your judgment has always been flawed, Mr. 
Chairman.
    Ms. Pelosi. Or flawless.
    Chairman Armey. But I seem to recall, I thought I recalled 
correctly, that you were one of the few naturalized citizens to 
be elected to the United States House of Representatives. Is 
that not the case?
    Mr. Lantos. That is correct, sir.
    Chairman Armey. Are there others? I am thinking perhaps 
Aliena Ros-Lehtinen, Mr. Diaz-Balart. But I feel like this 
gives you an interesting perspective on a subject that I am 
fascinated by. America probably today may stand alone as the 
only Nation in the world that does not differentiate between 
its own citizens and other persons within its borders with 
respect to the rights protected for these persons. It is, I 
think, a fairly unique American experience, one that in fact 
some nations describe as naive on our part, but I cherish it as 
a rather special thing.
    Is the threat that we face now that prompts us to create 
this division so great that this Nation should forsake its 
time-honored tradition of protecting the rights of persons 
without regard to citizenship?
    Mr. Lantos. I believe, Mr. Chairman, the historic tradition 
is well worth preserving. I believe we are able to take care of 
our security concerns by other means, not through restricting 
rights.
    Chairman Armey. Mr. Hyde.
    Mr. Hyde. If I could revert back to the Weldon amendment, 
my staff has handed me a note that says the Weldon amendment 
says no visa may be issued to a Saudi Arabian without an 
interview by a Homeland Security officer. So it would undo the 
compromise Mr. Lantos and I have put together, because our 
language would allow the Secretary to require such interviews 
but not force them on every applicant.
    Chairman Armey. I appreciate that. And that was what I 
grasped. But because you are such an international statesman 
and such a jurist, I would appreciate your comment on my other 
question. Do we face such a serious threat from international 
terrorism that we should forsake what I think has been the 
special American tradition of making no differentiations in the 
rights of persons based upon whether they are or are not 
citizens of the United States?
    Mr. Hyde. I would say we should make no differentiation.
    Chairman Armey. In the rights persons as protected in this 
country on the basis of whether they are or are not citizens?
    Mr. Hyde. I think the Constitution applies to everybody in 
America, whether you are a citizen or not.
    Chairman Armey. Thank you. Thank you both.
    Do you seek recognition? Very quickly, we will recognize 
the gentleman from Oklahoma.
    Mr. Watts. I just want to say, Mr. Lantos mentioned at the 
outset how bipartisan this committee was. And having gotten to 
know Henry Hyde and Tom Lantos over the last 8 years, I would 
have been highly surprised if it would have been anything other 
than bipartisanship and total cooperation. And I just want to 
say to the both of you, you honor us by being before our 
committee this afternoon. And I cannot imagine any two other 
people in all of Congress that work together that have been 
anymore gracious than you gentlemen have been, and I think a 
real example for all of us.
    And I want to say to you what my papa told me once when I 
reminded him of how white his hair was getting. He said, 
``White and gray hair, when you see that,'' he said, ``that 
means wisdom. And so it would have been fascinating for me to 
be in one of your meetings, your deliberations from time to 
time, and listen to all the wisdom that that white hair has 
given you both. So I thank you both for how gracious both of 
you have been.
    Mr. Hyde. Mr. Watts, I hate to inform you of this, and Mr. 
Armey, but both of you are retiring and it takes unanimous 
consent to do that, and I object.
    Chairman Armey. Thank you so much. I do see our next panel 
is here. Thank you.
    I should mention as we are changing panels to the very 
important Intelligence panel, it is with a flurry of activities 
going on around us; we have prevailed upon so many committees 
to testify before this committee. It is the intention of this 
chairman to stay with the process until we complete our 
hearings. I know some may have to come and go, and some may 
even switch sides on us for a moment. But I should say we do 
intend to proceed.
    We want to recognize the chairman and ranking member of the 
Intelligence Committee, Mr. Goss. It is our purpose here to, by 
unanimous consent, put your prepared statement in the record, 
except under the 5-minute rule, the points you would like to 
make before the committee. Ms. Pelosi knows the routine quite 
well. And we will, after your statements, proceed under the 5-
minute rule, and we appreciate you being with us today.
    So we will recognize Mr. Goss to proceed.

STATEMENT OF THE HONORABLE PORTER J. GOSS, CHAIRMAN, PERMANANT 
                SELECT COMMITTEE ON INTELLIGENCE

    Mr. Goss. Thank you, Mr. Chairman. I appreciate the 
opportunity to come before you and share the work product of 
the House Permanent Select Committee on Intelligence on this 
matter. The establishment of the Department of Homeland 
Security is recognition that the Federal Government understands 
the types of threats that terrorism brings to our homeland and 
that these threats call for a different expanded approach to 
protecting our national security that was what we needed during 
World War II and ensuing years.
    Mr. Chairman, our Ranking Member Mrs. Pelosi and I have 
submitted to the committee a recommended amendment to title II 
of H.R. 5005 that covers the area of information analysis and 
infrastructure protection. I am pleased to report that the 
Intelligence Committee passed this amendment out by a vote of 
17 to 1 after a lot of hard work and discussion.
    The committee also held two hearings on H.R. 5005 with the 
Director of Central Intelligence, Mr. George Tenet; the 
Director of the FBI, Robert Mueller; and Governor Ridge. Since 
HPSCI's markup of 5005 last Thursday, committee staff have 
discussed our recommendations in some detail with relevant 
White House staff and others in the administration. We found 
the administration to be generally supportive of our analysis 
and information sharing proposals, but there are some areas 
that they want to have further discussion and we will try and 
make the benefit of those discussions available to you on a 
timely basis.
    Moreover, there is a unique quality to the analytical 
portion of the new Department in that this is the only point 
where all the disparate pieces of information come together. By 
that I mean that this is where presumably foreign intelligence, 
Federal law enforcement, and State and local information all 
come together to be analyzed collectively in order to best 
understand threats specifically to our homeland and to properly 
evaluate the weakness in our defenses.
    The HPSCI recommendations for the select committee provides 
for the establishment of an all-source collaborative 
Intelligence Analysis Center that will fuse intelligence and 
information from the Intelligence Community as well as from 
Federal, State, and local law enforcement agencies and the 
private sector with respect to threats of terrorist acts 
against the United States. This is something that we do not 
have right now.
    An equally important duty of the DHS Intelligence Analysis 
Center will be to integrate intelligence and other information 
to produce and disseminate strategic and tactical vulnerability 
assessments with respect to terrorist threats. Committee 
members were concerned that DHS not simply be a department of 
counterterrorism. Protecting the Nation's infrastructure will 
require a much broader focus.
    For example, vulnerability assessments developed by DHS 
will not address the insider threat to steal secrets or other 
information on national resources or infrastructure, for 
example, nor as the administration's bill specifically 
addressed, the cyberthreat, terrorist-related or otherwise. 
Additionally, terrorists' involvement in proliferation of 
weapons of mass destruction, the financing of terrorist 
operations themselves, the relationship between narco-
trafficking and terrorism, all are missing in the 
administration's bill and we feel should be dealt with.
    The committee's proposal to establish an all-source 
intelligence fusion center within DHS seeks to fill these 
national threat and vulnerability analysis gaps. The Center 
would be charged with developing a comprehensive national plan 
to provide for the security of key national resources and 
critical infrastructures. The Intelligence Analysis Center 
would review and recommend improvements in law, policy, and 
procedure for sharing intelligence and other information within 
the Federal Government and between Federal, State, and local 
governments, an area that needs a lot of work.
    The Intelligence Analysis Center is designed to not only 
support the new Department's intelligence requirements. As 
important, the Center will establish requirements for the 
collection and coordination of information and intelligence 
relating to threats of terrorism against the United States.
    The committee believes the proposed Intelligence Analysis 
Center should be made an element of the Intelligence Community 
and be a funded program within the national foreign 
intelligence program in accordance with the National Security 
Act of 47. Making the center an NFIP element like this will 
ensure that the Secretary of DHS has full and timely access, 
which is critical, to all the relevant intelligence pertaining 
to terrorist threats against the United States, as well to 
ensure proper coordination between DHS and the Federal 
intelligence and the law enforcement agencies of our country.
    And rather than transferring Intelligence Community 
agencies to DHS, the committee has recommended that some 
intelligence analysts from the civilian and Defense Department 
components of the Intelligence Community be detailed on a 
reimbursable basis to the Intelligence Analysis Center for up 
to 2 years. The specific number of detailees will be determined 
through cooperative agreements between the DHS Secretary and 
the Director of CIA, the Secretary of Defense, Attorney 
General, Secretary of State, and other related agencies.
    During the testimony before HPSCI on 5005, Governor Ridge, 
Director Tenet, and Director Mueller each offered their 
personal commitments that the new Department would have access 
to intelligence pertaining to terrorist threats against the 
United States. And although their stated willingness to share 
intelligence is appreciated, and I believe they will because of 
the chemistry that exists between those people, the committee 
felt so strongly about the issue of the DHS's access to 
intelligence that it included mandatory language to ensure the 
immediate provision to the DHS Secretary of all intelligence or 
other information that is collected by any U.S. Government 
agency relating to terrorism and infrastructure vulnerability.
    The HPSCI language creates a mechanism whereby the 
President can resolve any disputes between DHS and the 
Intelligence Community concerning timely access to 
intelligence. These are very important gaps to fill.
    And finally in closing, the Intelligence Committee's 
proposal envisions an Intelligence Analysis Center that is 
actual in terms of personnel and infrastructure; appropriately 
flexible in terms of its authorities and its capacity to 
address rapidly changing threats to the United States and the 
nature of terrorism; is unique to our government in that it 
incorporates the best analytical practices and capabilities 
that are found both in government and the private sector to 
defend our country and our people. That is using all of our 
assets and talents and skills to the best we can bring them 
together and I think is a timely and important suggestion.
    Thank you, Mr. Chairman.
    Mr. DeLay. [Presiding.] Thank you, Mr. Chairman.
    [The statement of Mr. Goss follows:]

 PREPARED STATEMENT OF HON. PORTER J. GOSS, CHAIRMAN, HOUSE PERMANANT 
                    SELECT COMMITTEE ON INTELLIGENCE

    Mr. Chairman, thank you for this opportunity to address this 
distinguished committee on an area of great importance to our national 
security. The establishment of the Department of Homeland Security is 
recognition that the Federal Government understands the types of 
threats that terrorism brings to our homeland, and that these threats 
call for a different, expanded approach to protecting our national 
security than what was needed during and since World War II. It is 
indeed unfortunate and ironic that it took a World War II type event, 
once again, to make the country understand that the world contains 
individuals who would attack our way of life--our values, our 
livelihood and our principles--in ways that are anathema to civilized 
society.
    In fact, Mr. Chairman, I believe that the world hasn't changed that 
much since September 11th. What has changed is the audience. And it is 
this same audience, the American people, which appears to be supportive 
of making such a significant change to our government's structure. But 
with that support, is the requirement to make sure that we do this 
right; that national security is enhanced at the end of the day and 
that we are positioned to reduce the risks to our security--to our way 
of life--as best as possible. It is with that charge that I am honored 
to appear before you Today to discuss those portions of the bill that 
relate to the jurisdictional responsibilities of the House Permanent 
Select Committee on Intelligence.
    Mr. Chairman, our Ranking member, Ms. Pelosi, and I have submitted 
to the Committee a recommended amendment to Title II of H.R. 5005, that 
covers the area of Information Analysis and Infrastructure Protection. 
I am pleased to report that the Intelligence Committee passed this 
amendment by a vote of 17 to 1, with the one dissenting vote being cast 
in relationship to the overall process of Congress' proceedings on the 
establishment of this new department rather than on any substantive 
differences with the Intelligence Committee's product. This amendment 
is the result of a significant amount of work by our very experienced 
and professional staff and our members who have been very significantly 
involved in these issues through our normal oversight process and as 
they participate in the bicameral inquiry into September 11th. The 
Committee also held two hearings on H.R. 5005, with the Director of 
Central Intelligence, George Tenet, the Director of the FBI, Robert 
Mueller, and with Governor Ridge. Since HPSCI's mark-up of HR. 5005 
last Thursday, Committee staff have discussed our recommendations in 
some detail with relevant White House staff and have found the 
Administration to be generally supportive of our intelligence analysis 
and information sharing proposals for the new Department. There are one 
or two areas where we will have further discussions, and it is possible 
that we may offer additional thoughts in the very near future.
    Before I summarize the Amendment, let me first give you an idea of 
why the Committee took such actions. Mr. Chairman, if you look at the 
overall structure of the new department, you will notice that the vast 
majority of the organization has to do with planning, implementation, 
protection and response to terrorist threats and actions. The 
successful integration and operation of this portion of the department 
is very important to strengthening our borders, our infrastructure, and 
our security. This is a critical step in ensuring that federal, state, 
and local entities are coordinated and effective. What we also know, 
however, is that combating terrorism relies very much on information 
and intelligence. We have seen this time and again both in combating 
the threats posed during the Millennium and during our operations in 
Afghanistan, the Philippines, and other areas where we are fighting 
this war. This makes the analysis and proper handling of information 
and intelligence related to the threats critical to the success of any 
other actions we may take. I would submit that if the analytical 
portion of the department doesn't work, the rest of the department's 
operations and functions are somewhat academic. Moreover, there is 
unique quality to the analytical portion of the new department in that 
this is the only point where all the disparate pieces of information 
come together. By that I mean that this is where, presumably, foreign 
intelligence, federal law enforcement, and state and local information 
will all come together to be analyzed collectively in order to best 
understand threats, specifically to our homeland, and to properly 
evaluate the weaknesses in our defenses.
    This, again, makes having the right analytical approach critical. 
Such resources must be a priority from the beginning and must be robust 
and dynamic, and this where I will begin my summary of the HPSCI 
actions. The Administration's proposed legislation lacks a provision 
for establishing a robust analytic cadre to do terrorism threat 
analysis. Without an all-source analytic capability to validate and 
make sense of threat information, the Secretary will have to rely only 
on Intelligence Community analysis that may be fractious, 
contradictory, parochial and incomplete, and will have to make critical 
analytical judgments in a vacuum.
    Information sharing is also an issue of concern for the 
Intelligence Committee. The Administration's proposal leaves unclear 
the circumstances under which ``raw'' intelligence will be made 
available to the Department. Given that the Secretary doesn't know what 
he doesn't know, decisions on what DHS needs to know will be entirely 
left to the various agency heads at CIA and FBI, with the risk that key 
information will not always be shared, or not shared promptly or with 
enough detail. And under the Administration's current information 
analysis construct, it is unclear whether intelligence and law 
enforcement sources and methods will be adequately protected and 
whether certain information can be shared with the department.
    It is also not clear how or whether DHS will task the Intelligence 
Community with collection requirements, and how conflicting 
requirements will be adjudicated or otherwise prioritized. Given that 
DHS will be the first US Government entity to do vulnerability 
assessments of infrastructure, there will necessarily be both analytic 
and collection gaps from the outset. And during a 9-11 type of national 
crisis, DHS will presumably play a key role, but, as currently 
envisioned, without the benefit of a mechanism to input knowledge and 
requirements into the intelligence and law enforcement communities' 
systems.
    The HPSCI recommendations to the Select Committee provide for the 
establishment of an all-source, collaborative Intelligence Analysis 
Center that will fuse intelligence and information from the 
Intelligence Community as well as federal, state, and local law 
enforcement agencies and the private sector with respect to threats of 
terrorist acts against the United States.
    An equally important duty of the DHS Intelligence Analysis Center 
will be to integrate intelligence and other information to produce and 
disseminate strategic and tactical vulnerability assessments with 
respect to terrorist threats. Committee Members were concerned that DHS 
not simply be a Department of Counterterrorism--protecting the nation's 
infrastructure will require a much broader focus. For example, 
vulnerability assessments developed by DHS will not address the insider 
threat to steal secrets or other sensitive information on national 
resources or infrastructure. Nor has the Administration's bill 
specifically addressed the cyber-threat, terrorist-related or 
otherwise. Terrorist involvement in the proliferation of weapons of 
mass destruction, the financing of terrorist operations, and the 
relationship between narcotics trafficking and terrorism are also 
missing in the Administration's bill. The Committee's proposal to 
establish an all-source intelligence fusion center within the DHS seeks 
to fill these national threat and vulnerability analysis gaps.
    The Intelligence Analysis Center would be charged with developing a 
comprehensive national plan to provide for the security of key national 
resources and critical infrastructures. The Intelligence Analysis 
Center would review and recommend improvements in law, policy, and 
procedure for sharing intelligence and other information within the 
federal government and between the federal, state, and local 
governments. The Intelligence Analysis Center is designed to not only 
support the new Department's intelligence requirements. As important, 
the Intelligence Analysis Center will establish requirements for the 
collection and coordination of information and intelligence relating to 
threats of terrorism against the United States.
    The Committee strongly believes that the proposed Intelligence 
Analysis Center should be made an element of the Intelligence Community 
and be a funded program within the National Foreign Intelligence 
Program in accordance with the National Security Act of 1947. Making 
the Intelligence Analysis Center an NFIP element will ensure that the 
Secretary of DHS has full and timely access to all relevant 
intelligence pertaining to terrorist threats against the United States, 
well as to ensure proper coordination between DHS and federal 
intelligence and law enforcement agencies. Rather than transferring 
Intelligence Community agencies to DHS, the Committee has recommended 
that some intelligence analysts from the civilian and Defense 
Department components of the IC be detailed, on a reimbursable basis, 
to the Intelligence Analysis Center for up to two years. The specific 
number of detailees will be determined through cooperative agreements 
between the DHS Secretary and the Director of Central Intelligence, the 
Secretary of Defense, the Attorney General, and the Secretary of State.
    During testimony before HPSCI on H.R. 5005, Governor Ridge, DCI 
Tenet and Director Mueller each offered their personal commitments that 
the new Department would have access to intelligence pertaining to 
terrorist threats against the United States. Although their stated 
willingness to share intelligence is appreciated, the Committee felt so 
strongly about the issue of DHS's access to intelligence that it 
included mandatory language to ensure the immediate provision to the 
DHS Secretary of all intelligence or other information that is 
collected by any U.S. Government agency relating to terrorism and 
infrastructure vulnerabilities. The HPSCI language creates a mechanism 
whereby the President can resolve any disputes between DHS andthe 
intelligence and law enforcement communities concerning timely access 
to intelligence.
    The Intelligence Committee's proposal envisions an Intelligence 
Analysis Center that is agile in terms of personnel and infrastructure, 
appropriately flexible in terms of its authorities and its capacity to 
address rapidly changing threats to the United States, and unique to 
our government in that it incorporates the best analytical practices 
and capabilities found in both the government and the private sector to 
defend our country and our people. Our proposal integrates the 
traditional mission of intelligence analysis with new sources of 
information and sophisticated information tools. As important, our 
proposal views information and intelligence sharing as a two-way 
street--with data moving up from localities and the private sector to 
states and then torelevant federal authorities as well as national data 
flowing down to states, localities and, when necessary, to the American 
public.
    In closing, I think that we all agree that developing effective 
information analysis and dissemination functions within DHS is a very 
complex and nuanced requirement. It is critical that timely 
intelligence informs our homeland security strategy and its 
implementation. But establishing this new department, and the 
analytical center within it, will not completely solve our problem or 
reduce the risks. The missing component is the implementation of 
Intelligence Community reforms as well. I want to assure the Select 
Committee that the Intelligence Committee is equally focused on this 
urgent need to reform the civilian and defense elements of the 
Intelligence Community and we are in active discussions with the White 
House on such issues.
    I appreciate the Select Committee's interest in the HPSCI's 
recommendations and I look forward to responding to any questions that 
panel members may have.

    Mr. DeLay. Ms. Pelosi.

   STATEMENT OF THE HONORABLE NANCY PELOSI, RANKING MINORITY 
       MEMBER, PERMANANT SELECT COMMITTEE ON INTELLIGENCE

    Ms. Pelosi. Thank you very much, Mr. Chairman. I am very 
pleased to join my distinguished chairman in our presentation 
to the select committee to develop legislation for a Homeland 
Security Department. I wanted to say at the outset that our 
committee always works in a bipartisan way. Particularly I want 
to commend Mr. Goss for the bipartisan leadership. He is always 
open to our suggestions.
    We worked hard for our presentation to you today because 
there were so many different suggestions and proposals and 
because, frankly, we are walking on sacred ground now. This 
hearing takes place in the context of a joint inquiry that we 
are having in our Committee on Intelligence with the Senate. We 
will have some hearings tomorrow, we had some yesterday, and 
that are concurrent with these hearings.
    We have a common purpose in having the product of our work 
give some comfort to the families who were affected on 
September 11th: to reduce risk to the American people and to 
protect our civil liberties as we protect the American people.
    We began our deliberations in our joint inquiry with a 
moment of silence in recognition of the suffering of those 
families but also the gravity of the responsibility that we 
have there. We also in the select committee have a tremendous 
responsibility.
    Our chairman has presented some of the provisions of our 
amendment which we believe improves the legislation 
significantly. We should have a good suggestion. We have worked 
on these issues for many years. I would only like to add a 
couple of points, more than a couple, but some points as we go 
along.
    As you know, our committee focused on title II of the bill, 
which is the relevant section, and we set forth the 
responsibility for the Under Secretary for Information Analysis 
and Infrastructure Protection, the functions transferred to 
this Department in this area, and the Secretary's access to 
information, the note on which the Chairman ended his remarks, 
especially intelligence information. The title also describes 
the protection to be afforded information, including protection 
from unauthorized disclosure and an exception from the Freedom 
of Information Act for information infrastructure information 
provided on a voluntary basis by the private sector.
    I have some disagreement on that provision, but more on 
that later.
    After wide-ranging discussion of several options, the 
committee voted 17 to 1 to recommend a substitute for title II. 
The substitute contains many of the provisions proposed by the 
President, but also establishes a distinct entity within the 
Department of Homeland Security to produce all-source 
collaborative intelligence analysis and threat assessments. The 
committee recommends that the entity be called the Intelligence 
Analysis Center, that it be an element of the Intelligence 
Community, and that for budget purposes it be included in the 
National Foreign Intelligence Program.
    Importantly, the Center is intended to provide intelligence 
support for all of the mission areas of the Department, whether 
these are the prevention of terrorism, protection of 
infrastructure, or the functions of the various entities 
transferred to the Department. Thus the committee 
recommendation calls for the intelligence elements of the Coast 
Guard, the Customs Service, the Immigration and Naturalization 
Service, the Federal Protective Service, and the El Paso 
Intelligence Center of the Drug Enforcement Administration to 
be transferred to the Intelligence Analysis Center, as well as 
the infrastructure protection entities specified in section 202 
in the President's bill.
    I would note that a member of our committee had concern 
over whether there will be sufficient analytic strength within 
the Department of Homeland Security as originally proposed. We 
recognized that this Department is to have a responsibility to 
a new kind of strategic analysis that will build on but be 
different from the analysis going on elsewhere in the Federal 
Government. Our recommendation provides a viable framework for 
the creation of a new analysis entity.
    Questions remain, however, beyond the scope of the 
Intelligence Committee's review, over whether there will be 
sufficient resources provided to the Department to make this 
Center viable and meld its various analytic entities together, 
to provide training for the analysts, and to make its computer 
systems and databases compatible. The Intelligence Committee 
did not accept the proposition that a new domestic intelligence 
service along the lines of the British or Canadian model should 
be created. Far-reaching proposals outside the U.S. tradition 
should be subjected to considerable study, and the committee 
and the Senate Select Committee on Intelligence embarked on an 
investigation of September 11th.
    I believe Congress should await the findings of the joint 
inquiry and we shouldn't try to include significant 
organizational changes, for example, FBI and CIA for the 
Intelligence Community, in legislation establishing the 
Department of Homeland Security.
    Finally, I have my reservations which I expressed at the 
Intelligence Committee meeting about the provisions in the 
committee's recommendation that would exempt from the Freedom 
of Information Act information provided voluntarily by non-
Federal entities or individuals related directly to the duties 
of the Under Secretary for Information Analysis and 
Infrastructure Protection. I fear this provision may be too 
broad in its scope and beyond what is necessary to satisfy the 
concerns of the private sector with respect to proprietary 
information about infrastructure vulnerabilities.
    I believe the select committee should ensure that whatever 
is done in this area is narrowly targeted and precisely 
constructed. I say this with complete respect for the concerns 
that we have about private sector information that is given to 
us for our national security purposes, but I think we should 
define it carefully.
    As I always say, I love the freedom of a tightly-knit idea. 
I think we can achieve our national security goals, we can 
respect the legitimate concerns of the private sector and, of 
course, continue the FOIA protection to the American people 
that is important to us.
    With that, Mr. Chairman, I again hope that the committee 
will accept the recommendation of our committee. We worked very 
hard on it. We had nearly unanimous support, certainly 
overwhelming bipartisan support for the proposal, and it was 
not without competition of many ideas to be presented here 
today.
    Thank you for your attention, Mr. Chairman, and members of 
the committee.
    Chairman Armey. Thank you both.
    [The statement of Ms. Pelosi follows:]

   PREPARED STATEMENT OF HON. NANCY PELOSI, RANKING MINORITY MEMBER, 
               PERMANANT SELECT COMMITTEE ON INTELLIGENCE

    Mr. Chairman, members of the Select Committee, I appear before you 
today as the Ranking Democrat on the Permanent Select Committee on 
Intelligence to describe the Committee's recommendations to the Select 
Committee with respect to the Homeland Security Act of 2002.
    Our committee focused on Title II of the bill. Title II sets forth 
the responsibilities of the Under Secretary for Information Analysis 
and Infrastructure Protection; the functions transferred to the 
Department in this area; and the Secretary's access to information, 
especially intelligence information. The title also describes the 
protection to be afforded information, including protection from 
unauthorized disclosure and an exception from the Freedom of 
Information Act for infrastructure information provided on a voluntary 
basis by the private sector.
    After a wide-ranging discussion of several options, the Committee 
decided by a vote of 17 to 1 to recommend a substitute for Title II. 
This substitute contains many of the provisions proposed by the 
President, but also establishes a distinct entity within the Department 
of Homeland Security to produce all-source collaborative intelligence 
analysis and threat assessments. The Committee recommends that the 
entity be called the Intelligence Analysis Center, that it be an 
element of the intelligence community and that for budget purposes it 
be included in the National Foreign Intelligence Program.
    Importantly, the Center is intended to provide intelligence support 
for all of the mission areas of the Department, whether these are the 
prevention of terrorism, protection of infrastructure or the functions 
of the various entities transferred to the Department. Thus, the 
Committee recommendation calls for the intelligence elements of the 
Coast Guard, the Customs Service, the Immigration and Naturalization 
Service, the Federal Protective Service and the El Paso Intelligence 
Center of the Drug Enforcement Administration to be transferred to the 
Intelligence Analysis Center, as well as the infrastructure-protection 
entities specified in section 202 of the President's proposal.
    I should note that members of our Committee had considerable 
concern over whether there would be sufficient analytic strength within 
the Department of Homeland Security as originally proposed. We 
recognized that this Department is to have a responsibility to do a new 
kind of strategic analysis that will build on, but be different from, 
the analysis going on elsewhere in the federal government. Our 
recommendation provides a viable framework for the creation of a new 
intelligence analysis entity. Questions remain, however, beyond the 
scope of the Intelligence Committee's review over whether there will be 
sufficient resources provided to the Department to make this Center 
viable and meld its various analytic entities together, to provide 
training for its analysts, and to make its computer systems and 
databases compatible.
    The Intelligence Committee did not accept the proposition that a 
new domestic intelligence service along the lines of the British or 
Canadian model should be created. Far-reaching proposals outside the 
U.S. tradition should be subject to considerable study. The Committee 
and the Senate Select Committee on Intelligence are embarked on an 
investigation of the intelligence community before and after September 
11 that may result in recommendations for change in the community's 
organizational structure. I believe the Congress should await the 
findings of the joint inquiry and not try to include significant 
organizational change for the intelligence community in legislation 
establishing the Department of Homeland Security.
    Finally, I have my reservations, which I expressed at the 
Intelligence Committee meeting, about the provision in the Committee's 
recommendations that would exempt from the Freedom of Information Act 
information provided voluntarily by non-Federal entities or individuals 
related directly to the duties of the Under Secretary for Information 
Analysis and Infrastructure Protection. I fear this provision may be 
too broad in its scope and beyond what is necessary to satisfy the 
concerns of the private sector with respect to proprietary information 
about infrastructure vulnerabilities, I believe the Select Committee 
should ensure that whatever is done in this area is narrowly targeted 
and precisely constructed.

    Chairman Armey. The Chair recognizes the gentleman from 
Texas, Mr. Delay.
    Mr. DeLay. I did read both your statements and I must say 
you did an excellent job in making an excellent presentation 
covering many issues that, frankly, are giving a lot of Members 
on both sides of the aisle, liberal to Republican--I mean 
liberal to conservative--very high concerns about this 
particular office and the Intelligence Analysis Center.
    Could you explain to me--I just I worry, because we seem to 
be breaking down that high wall that we have built to make sure 
that the CIA was not involved in our private lives, and now you 
are proposing that we take detailees from other existing 
agencies, including the CIA and FBI and NSA--and I would assume 
even maybe DIA? Is that also suggested?
    Mr. Goss. Yes, sure.
    Mr. DeLay. Is there a possibility that the Center would 
perform--could you make us feel better that there are enough 
protections in your proposal that individuals's privacy rights 
and civil liberties cannot be violated?
    Mr. Goss. I think I can try and give you some satisfaction 
on that. We are talking about an Analysis Center, and the 
Center itself is going to be a place where information comes in 
from outside, and where requests for information are going to 
emanate to the outside. What you are looking for is the 
safeguards on how that information is collected outside.
    Presently in our form of government, we have excellent 
safeguards over our foreign intelligence collection system. 
Basically that is why we call it the National Foreign 
Intelligence Program. We do not spy on Americans.
    There is a secondary part which we are wrestling with, and 
there is a great debate--which is not part of our 
presentation--we are talking about analysis, not what the 
analysts analyze, but the analysis capability, and that is the 
debate about how do we go ahead in our country and safeguard 
that democracy and freedom that we all care very much about, 
which is our hallmark; and how do we nevertheless get 
information that might be relevant through law enforcement 
personnel who are working in this country to prevent something 
of a terrorist nature from happening before it happens?
    That is a very tricky and difficult question and probably 
more appropriately addressed to the Judiciary people than it is 
to the Intelligence people.
    The Intelligence people are going to operate by the law.Now 
you are suggesting that perhaps that by having Intelligence 
Community analysts at work in homeland security, that we would 
somehow be breaking down freedoms. Let me assure you that we 
have Intelligence Community analysts working now in a number of 
agencies that deal with a number of problems, domestic and 
foreign in the United States. That is not uncommon. It is a 
question of the operation against an American citizen or 
American spying on an American. That safeguard is still there. 
But if you are the object of a law enforcement search, or you 
have broken a law and have attracted the attention of law 
enforcement authorities, those are the areas where your 
question goes, and I think that we do not try and address that 
in our bill.
    Ms. Pelosi. If I may, Mr. DeLay, your question is music to 
my ears, because I think this is the challenge that we have. We 
all take an oath, every single one of us in public office, to 
protect and defend the Constitution. Again, as we protect and 
defend the American people, we have to protect and defend the 
Constitution. So we have a higher calling than other countries 
might have. Some had suggested an MI-5, which is a British 
model, which collects on the British people. We rejected even 
the beginnings of something like that in our deliberation. 
There are some who advocate for that, no one that I know of in 
the administration. So we have bipartisan interest in not 
collecting on the American people. And most us involved in this 
would fight to the death on that issue.
    I have said over and over, because there are shortcomings 
in other aspects of our intelligence gathering analysis and 
dissemination, we should not say the answer is to spy more on 
the American people. The answer is to improve our collection 
abroad, to improve our analysis across the board, and to 
improve our dissemination so people know what it is that we 
have.
    So I look forward to working with you to make sure that 
we--the Attorney General has rejected that, others in the 
administration, I don't know if I am at liberty to say because 
it was in our hearings upstairs but who have rejected that, and 
it is not a part of our proposal here today.
    Mr. DeLay. I appreciate your answers. Thank you.
    Chairman Armey. The Chair recognizes the gentleman from 
Texas, Mr. Frost.
    Mr. Frost. Well, you both have talked about this some, but 
I wish you could elaborate if you would, briefly, n the factors 
that the committee took into account in not bringing more of 
the Central Intelligence Agency and Federal Bureau of 
Investigation into the Department of Homeland Security. I 
assume you did look at this carefully, and if you could 
indicate the reasons why you did not recommend more of a 
consolidation of these functions.
    Ms. Pelosi. We will take turns going first, I guess. First 
of all, we were addressing the homeland security legislation 
and the section that applied to intelligence. I think the 
administration, rightly so, did not go down a path in the 
homeland security bill that talked about incorporating CIA, 
FBI, broadly in the bill.
    We are, as I mentioned, we are in the middle of our joint 
inquiry. Before September 11th even, we were in the process of 
restructuring of the Intelligence Community. And in our bill 
last year, we said this will be the last bill that looks like 
this because with the restructuring next year, our bill will 
look different. Little did we know that September 11th, God 
forbid, would intervene.
    The point is that when we come out of the joint inquiry, 
lessons learned there, there is a Scowcroft Report to the 
President on Restructuring that addresses some issues about the 
Intelligence Community. At that time, we will be better 
equipped to make some determinations.
    I do not, just speaking myself, I do not see any situation 
under which we will be including the CIA and the FBI under the 
Homeland Security Department. But we certainly will be 
restructuring the Intelligence Community, improving selection 
analysis and dissemination of information.
    Mr. Goss. I certainly associate with those remarks, and I 
come to the same conclusion. I cannot foresee a time when we 
would be putting a whole agency into the Department of Homeland 
Security. There are actually some, I guess 14, depending on how 
you count agencies that have an intelligence component, some 
are 100 percent, some are a lot less than that, to make up our 
foreign Intelligence Community.
    The CIA has a great deal more responsibility and function 
than just terrorism. Terrorism is obviously top of the list. 
That is where the war is now, that is what we are focused on 
now. It is highest priority. But there is a whole bunch of 
other stuff that is critically important to us, too; just 
defending our communications at the government level, those 
kinds of things, those kinds of chores that are routinely taken 
up by people that are a lot harder than you would think.
    So when you take a look at the total work that needs to be 
done and the way the Foreign Intelligence Service works for us, 
it seems very appropriate that it stay outside of this Homeland 
Security piece, to give the reassurance that we are not spying 
on Americans in part, but also to take advantage of the full 
range of capabilities that the foreign intelligence collection 
and analytical capability that we have can be brought to bear 
on the homeland security, and still do all the rest that it is 
assigned to do, which is a very large amount of work on a 
global basis, as you know.
    With regard to the FBI, I think I have just received 12 
pages of reforms that are going on in the FBI. I haven't even 
had a chance to digest them superficially, but I believe it is 
fair to say as our chief Federal law enforcement agency in the 
country, it also has a very full menu that goes beyond 
prevention of terrorism. And I think it is appropriate that we 
not subsume all of the other activities to terrorism, but we 
provide that terrorism has the priority. It is the first among 
equals of the law enforcement challenges right now. I think 
that was the reasoning. And we will be looking at the 
architecture of the Intelligence Community once we get through 
with the immediate task at hand.
    Ms. Pelosi. If I may add to that, Mr. Frost. Force 
protection--one of the primary responsibilities of the 
Intelligence Community writ large, not just the CIA but 
Intelligence, is force protection of our young men and women in 
uniform around the country. So there is such--the scope of the 
responsibilities is so broad and go well beyond homeland 
security, as central as that is to us in this hearing today.
    Mr. Frost. Mr. Goss, if I could, there has been a lot of 
discussion in the press that the FBI is very good at catching 
people after the fact but that it has not been always very good 
at prevention. And I would hope that your recommendations, both 
as a part of this and then your later recommendations, will 
address that.
    Mr. Goss. Indeed, Mr. Frost, they do. And we are well aware 
of that, and it is not a criticism of the FBI. That was their 
mission. Their mission has changed and it has been reinforced. 
The understanding of that mission change is very clear to them. 
And I think they are doing their best to adapt to it. And I am 
satisfied that they are trying.
    Mr. Frost. Thank you. Thank you.
    Chairman Armey. The gentleman from Oklahoma.
    Mr. Watts. Thank you, Mr. Chairman. In this new 
Intelligence Analysis Center, Congressman DeLay mentioned civil 
liberties, which I think we all are concerned about. And I 
think not only do we have to be concerned about that, but we 
have to be concerned about duplication as well. And in this new 
Agency, given that the Center would take detailees from other 
agencies like CIA, FBI, NSA, is there any possibility that the 
Center would perform functions that duplicate some of the 
activities of the existing agencies?
    Mr. Goss. I think that the idea is to bring into focus the 
terrorist target and terrorist threat and the vulnerability and 
bring them all together and fuse them all together in one 
place. We have counterterrorist centers, as you know, in other 
agencies--without going too far into details in a public 
hearing.
    And, yes, I think there is a possibility that information 
will come in and get analyzed in one area and then say oh, my 
gosh, this would be of interest to the Homeland Security 
people, let's channel that right down to them now. So I think 
you will see more than one pair of hands handling some of this. 
But I think that is of necessity, because I don't think anybody 
is suggesting that Homeland Security should be running 
intelligence operations overseas.
    So inevitably as information comes in, goes through the 
analytical process, I would believe that it would get a value 
added from the Intelligence Community. But as a customer, it 
would be receiving a good piece of information that would be of 
particular interest to it; because people will know that if you 
have got something that involves terrorism or counterterrorism 
or the terrorist threat or the vulnerability of our 
infrastructure here, the customer that is interested, in 
addition to the President of the United States, are these folks 
in the Department of Homeland Security.
    Our Intelligence Community is actually pretty good at 
understanding who their customers are and getting information 
timely, whether it is the Defense Department or State 
Department or whomever.
    Ms. Pelosi. I would only add that some of us, post-
September 11th, wanted to assess the performance of every 
agency that had any responsibility for preventing a act. And 
some of these agencies are well beyond what you would say--the 
CIA, the FBI and that. You have INS, FAA, and the rest of that. 
And the Office of Homeland Security and the White House, of 
course, will be the ultimate place which will see all. But some 
of this information that you are talking about and the analysis 
that would go on at the Department of Homeland Security that is 
different from at the FBI and the CIA, is that the Secretary 
would be seeing it within a larger context of the other 
agencies under his purview. And, of course, the director at the 
White House, if that is the title, advisor to the President, 
whatever the title is, would be seeing it even in a broader 
context, which I think would be valuable to the American--
protecting the American people.
    Mr. Watts. I yield back the balance of my time.
    Chairman Armey. The gentleman from New Jersey.
    Mr. Menendez. Thank you, Mr. Chairman. And thank you both 
for your work and your testimony.
    I just want to focus on one element of this which I think 
is so crucial, and that is information sharing. And in that 
regard, you know, I think there is a difference--which is part 
of what I have tried to bring out over the various witnesses we 
have--between providing for information sharing and having 
mechanisms that guarantee information sharing.
    And I would just ask, Mr. Goss, I read your statement as 
well as what you verbalized, and you expressed what the 
committee was concerned about in terms of the President's 
proposal, leaving unclear what raw intelligence would be made 
to the new Department. And I think the line that I like here 
the most is, ``Given that the Secretary does not know what he 
does not know,`` you know, it is very telling.
    Could you and Ms. Pelosi address, do you think that what 
the Intelligence Committee has done provides--goes beyond 
providing for information sharing and gives us some mechanisms 
or guarantees of information sharing and at what levels?
    Mr. Goss. Well, we certainly tried to take what we felt was 
an uncovered part in the President's proposal and reinforce it 
with a mandate that information will be shared; because without 
getting into other work that we are doing too much, we have 
found that information sharing--no secret to anybody--has not 
been our brightest success story as we have gone along.
    And breaking down what in the lingo they call the 
``stovepipes,'' so that one agency really wants to get a piece 
of information and polish it and guard it jealously and take it 
up to the top and say, see what we at this agency have 
contributed, which quite often you get a better product for 
timely if you are coordinating horizontally at lower levels--
that is what we have tried to do.
    So the answer to your question I hope is that we have 
mandated sharing, but we hope in that mandate we have 
encouraged the opportunity for, at the working level, people to 
use the common sense to know that this is not about promoting 
our agency and sticking our logo on a piece of paper that says 
this is our product and you cannot have it until we get our 
logo on it; that people will be protective in sharing 
information.
    Part of our problem, honestly--you have hit on a very 
important point--is that there has not been a lot of reward for 
that kind of initiative among the working people. It is high 
risk. You get caught doing something like that, and you risk 
the ire of your bosses. We have had some cases where we saw 
some what you will call commonsense initiatives taken by some 
people saying, I know a guy at another desk in another agency 
who ought to know this right now, and they have gotten 
themselves in some difficulty.
    We have to change that culture that everything has to go 
all the way up before it can go out. And I hope that we have 
tried to get some forward progress on that. But I cannot tell 
you that any amendment that we do or anybody else, any words 
that you write on a paper, is going to make that happen. That 
is a cultural change that is going to take leadership to make 
that happen. That is my view, anyway. But I think we are 
pushing the right way. Do you agree?
    Ms. Pelosi. I agree with what the chairman has said. I 
also--stop me--I think that it is okay to talk about what the 
current law is?
    Mr. Goss. Sure.
    Ms. Pelosi. The current situation is now--and perhaps one 
of these times we should sit down in a closed session to talk 
about some of this as well--but right now the President of the 
United States retains the power to give, for example, the 
Secretary of Homeland Security, when that person is sworn into 
office and is confirmed, raw data. Raw data.
    The committee will be receiving reports, the committee--I 
mean the Department will be receiving reports. The committee 
will be doing its own analysis. And so the question is, can the 
committee task back out to say I need more information about 
this, I want you to pursue this further? Or I want the raw data 
that supports what this report, this finished report says?
    Right now, it is the President who makes the determination. 
The President is obviously a busy person. I think that what we 
suggested strengthens the hand of the Secretary of the 
department who has the responsibility, who is accountable, to 
get access to more raw data, as is his due, rather than having 
to make a strong case on why he or she should have it.
    Mr. Menendez. In this regard, while we have often talked 
about the FBI and the CIA, I assume we are also talking about 
Defense Intelligence, NSA, the whole litany of different 
elements of the Federal Government that have intelligence 
procuring abilities? This would be part of your information 
sharing?
    Mr. Goss. Very much so. We have tried to create enough 
flexibility so that anything that is relevant to what the DHS 
mission is, is available to them.
    Mr. Menendez. And very, very briefly, Mr. Chairman, are 
there any penalties, is there--you talked about incentivizing 
and changing the culture so that people share. Are there 
consequences if you do not share?
    Mr. Goss. Yes. The World Trade Towers.
    Mr. Menendez. I understand that. In the legislation, are 
there consequences so that people understand, hey, if I do not 
share this, there is some form--.
    Mr. Goss. Not in our legislation. We have not gone that 
far.
    Mr. Menendez. Do you consider that something of value?
    Mr. Goss. I think you need to provide an incentive, you 
know, whether you should provide a stick. Nobody wants to 
suggest, in my view, that we are creating a penalty for trying 
to do an honest job. But I think that there are ways to, 
already on the books, that if you are malfeasant or misfeasant 
in your job that there is a penalty for that.
    So I suggest what we do is set the guidelines for the 
positive and let the normal guidelines or the normal standards 
that we have for malfeasance or misfeasance pertain. But we did 
not focus on that, to my knowledge.
    Chairman Armey. The gentlewoman from Connecticut.
    Ms. DeLauro. Thank you very much, Mr. Chairman. And thank 
you both very much again. Your years of experience at this 
important function are really demonstrated here today.
    Let me just pick up a quick follow-on question to my 
colleague from New Jersey. Can the Secretary of DHS request 
that there be a particular kind of intelligence gathered? Or 
can it work in the opposite way? In other words, they are not 
collecting the raw data, they have access to raw data, as I 
understand it. But can they request FBI, CIA, to move in 
directions to gather intelligence in particular areas that may 
seem relevant to looking at national security issues?
    Mr. Goss. The answer is, under our proposals they can do 
that. There are obviously management controls involved in that. 
But the answer is, yes, we specifically do provide that the DHS 
can task the Intelligence Community.
    Now, tasking the Intelligence Community again, without 
getting too far into this, the Intelligence Community is asked 
to provide a lot more than it can possibly do. There are lots 
of customers that are always asking it to do things. So DHS 
would become a customer. But DHS would become a specialized 
unique customer in the area of terrorism and terrorist threats. 
So my answer is yes, they would have tasking capability to the 
community, but that would be weighed against the other tasking 
requirements that the community has to deal with.
    For example, if we happen to be in a war at the time, a 
shooting war, or there happened to be a need for a national 
technical means for certain other higher priorities that the 
administration felt--then it might be that their task wouldn't 
be handled immediately or would be put on a shelf or would be 
watered down or something else. But they have the right to get 
into the tasking competition. And if there is a problem there 
is a referee provided for.
    Ms. DeLauro. They are a unique customer. But if we are 
talking about the uniqueness of the issue and a Department of 
Homeland Security, probably the single biggest issue that 
potentially has prompted a Department of Homeland Security is 
the issue of intelligence and intelligence gathering, sharing 
what we know when we know it, when can you respond? I am not 
clear about what the lines are in terms of if you were in a 
shooting war, is there the potential for there to be a 
terrorist attack accompany that kind of thing?
    So I don't know ,among equals, how do these lines of 
management, these management controls work? What is the thought 
process of all of that? Help me; this is very new.
    Mr. Goss. What I am trying to tell you is that the DHS will 
have the unique requirement under this proposal to task the 
community to get more information about something of interest 
to them that they think is critically important. They will have 
that capacity.
    Ms. DeLauro. Not out of frivolous interest, but this is 
about whether or not--.
    Mr. Goss. No, let us say that John Doe comes into their 
sights. They get a report that says, ``John Doe was seen in an 
airport in country X. We would like to know more about John 
Doe. Was he carrying a bag? What can you tell us about John 
Doe? Go back to the agency that provided the report or the 
information and say, can you tell us more?'' .
    Now in order to get that information, you have to go into 
the operational side of things. And the people who run those 
operations are besieged with requests from lots of people. I 
would say normally if it is the subject of terrorism, you are 
going to get pretty good response.
    Ms. DeLauro. That would be a priority, I would think.
    Mr. Goss. I would think so. But just because it is coming 
from DHS, everything else does not stop because that is not 
necessarily true.
    Ms. Pelosi. The chairman gave you a straightforward answer, 
the reality. But I think that reality will be changed, just as 
Mr. Menendez questioned what is the penalty for not sharing 
information. I think the accountability factors will weigh in 
very high in responding to the Secretary of Homeland Security 
at his tasking request or at the sharing of information level. 
Because the stakes are high, the expectation is too. And there 
is a whole different attitude now in all of this. But the 
chairman was giving you the honest answer.
    Mr. Goss. The reason we wanted to put the Under Secretary 
for Intelligence Analysis in the National Foreign Intelligence 
Program is so that they have a seat at the table. They are a 
member of the club. And that way they will be able to 
coordinate more efficiently with more transparency, and they 
will be able to get quicker and better answers. As far as I am 
concerned, I think it is the right way to do it.
    Ms. DeLauro. Thank you very much.
    Chairman Armey. This chairman has the extraordinary 
privilege of being able to discuss these matters in more 
private settings with both the chairman and the ranking member, 
and I find my discussions with you on these matters always 
enlightening, and look forward to perhaps a few more very 
important ones before I do my drafting work throughout the 
night.
    So I will not trouble you with questions now in this more 
public setting. But I do want to take a moment to thank you 
both for your service on this very important Intelligence 
Committee.
    And, Ms. Pelosi, while I want to thank you generously, I am 
sure you would concur with me that this body, indeed this 
Nation, should pay Porter Goss a special tribute of 
appreciation.
    Ms. Pelosi. This is true.
    Mr. Goss. Thank you, Mr. Chairman.
    Chairman Armey. Nobody in this body can be said to have 
been willing, and to have demonstrated his willingness by 
action, to make a larger sacrifice for his Nation than Porter 
Goss when he decided to stay on the job. And, Porter, my 
compliments and my appreciation.
    Mr. Goss. Thank you very much, Mr. Chairman. I appreciate 
that.
    Ms. Pelosi. Mr. Chairman, as I said at the beginning of my 
remarks, I commended him for the bipartisan manner in which he 
conducted--we are point and counterpoint, as you can imagine, 
on the intelligence issues. And while we may not always agree, 
we frequently do. But we always work together to hammer out a 
solution that is in the best interest of our country and is a 
service to the Congress. And he has been a tremendous leader. I 
associate myself with the remarks you made.
    I do also say it is a tribute to him and his leadership on 
the committee that we were able to present to you a model of 
what we think this Department should look like. We have an 
agile proposal that is easily absorbed by the new Department, 
something that can be on line immediately in the important work 
of intelligence as far as protecting the American people are 
concerned.
    So I hope that beyond the substance of our proposal, you 
will see it as a model for how the Department should look in 
its various aspects. With that, I thank the committee. And I 
also as a member of the committee thank the distinguished 
chairman.
    Mr. Goss. You caught me and made me speechless, Mr. 
Chairman, which is uncommon for me. But it is a pleasure 
working with Mrs. Pelosi. She is an extremely valuable ranking 
member, to put it mildly, and we have a marvelous working 
relationship. It is great to understand national security tops 
everything else when we get down to business, and Mrs. Pelosi 
handles it extremely, extremely well and always brings a good 
contribution, to put it mildly, to the table from a perspective 
I usually hadn't thought of, which is very helpful.
    And, Mr. Chairman, I want to tell you that the work you are 
doing in your committee here is extremely important to this 
Nation, and I wish you well. And we stand by, ready to help you 
in any way we can. And I return the compliments that you have 
been a great leader as well, and we will miss you.
    Chairman Armey. The practice of this committee is that I as 
chairman get in the final word. In this instance the final word 
should come from my grandfather: You are, sir, a gentleman, a 
scholar, and a poor judge of good whiskey.
    We thank you.
    The Chair now recognizes the chairman and ranking member of 
the Science Committee. And we would invite you to come to the 
dais. While you are approaching, let me just say that it is a 
practice of this Committee to put your formal statement in the 
record and to invite you each in your turn, under the 5-minute 
rule, to make your statement before the Committee after which 
the committee will conduct its questioning again under the 5-
minute rule. With that understanding, Chairman Boehlert, it is 
a pleasure to see you here and we would welcome you to open 
with your statement.

    STATEMENT OF THE HONORABLE SHERWOOD BOEHLERT, CHAIRMAN, 
                      COMMITTEE ON SCIENCE

    Mr. Boehlert. Thank you, Mr. Chairman, and members of the 
committee. It is a pleasure to appear here today. I think all 
of us in the Congress are impressed with the way the Select 
Committee is going about its very important business, and in 
particular, Mr. Chairman, I wish to thank you and your staff 
for being so open and cooperative with ours.
    Writing this bill has been a true collaborative effort, as 
it should be. That collaboration was part of the Science 
Committee's deliberations as well. The Science Committee's 
amendment to H.R. 5005 reflects work on both sides of the aisle 
and it was approved by a voice vote. I am pleased we were able 
to develop such a broadly supportive approach in a very short 
time. The Committee on Science amendment has three main 
components: strengthening research and development; improving 
cyber security; and helping firefighting. Let me discuss each 
briefly in turn.
    The Committee on Science felt, as did several other 
committees, that H.R. 5005 did not pay adequate attention to 
research and development. The bill did not spell out the R&D 
responsibilities or activities of the new department, did not 
give them a central focus and did not designate a senior 
official who would be accountable for, or for that matter, have 
the background to run the department's research and development 
program. We thought that that was a recipe for failure, and we 
can't afford failures in this area.
    As I have said before, like the Cold War, the war on 
terrorism will be won as much in the laboratory as on the 
battlefield. So following the recommendations of the National 
Academy of Sciences, among others, we created an Under 
Secretary for Science and Technology and gave that person clear 
responsibilities for R&D across the department. You know, 
Governor Ridge endorsed that approach when he appeared before 
you on Monday. Let me be clear, the bottom line for us is that 
there must be an Under Secretary for Science and Technology 
with clear research and development responsibilities, but we do 
not necessarily believe that this has to be an additional under 
secretary as was proposed in our bill.
    If the Select Committee wanted to meld our approach with 
that of some other committees, and it is a daunting task I 
know, and rename and reorient the under secretary created in 
title III of H.R. 5005, that would fully accomplish our goals, 
assuming the appropriate language was used.
    I don't have time now, nor do you, to outline all of the 
aspects of our R&D provisions that we consider important, but 
let me name a few: We believe the Congress should have a clear 
sense of how any transferred national labs will operate before 
those labs are actually transferred; we are skeptical of the 
need for other transactions authority; we think there needs to 
be an office that can act as a single point of entry for 
scientists and entrepreneurs with ideas to contribute to 
improve homeland security; and we support the creation of a 
homeland security institute.
    We also have changed the organic statute for two agencies 
under our jurisdiction: the White House Office of Science and 
Technology Policy, and the National Institute of Standards and 
Technology, to add homeland security as one of their principal 
duties. Both already contribute to homeland security, and I 
think that these are noncontroversial but necessary changes.
    Moving to cyber security, we also focused on gaps in H.R. 
5005 that drew the attention of several committees. The basic 
problem is that while cyber security is one of our Nation's 
greatest vulnerabilities, the bill never deals with it 
explicitly, so we added a new section, 205, to make the title 
II under secretary's cyber security duties explicit, and those 
include improving the security of Federal computers and working 
with private, state and local officials to improve the security 
of their systems.
    We also created a volunteer corps to respond if and when 
security fails. For Federal computers, we drew on the approach 
in current law and in Ms. Morella's H.R. 1259, which the House 
has already passed. Under this approach the National Institute 
of Standards and Technology, or NIST, a Federal laboratory that 
is trusted by industry as an honest broker, will develop 
standards for Federal computers, which the new department will 
then promulgate and oversee. This is a sensible division of 
labor endorsed strongly by the high tech community. With that 
division of labor in mind, the Committee on Science rejected 
the proposal in H.R. 5005 to move NIST's computer security 
division to the new department.
    We believe the move would be counterproductive in two ways. 
First, the move would sever the very useful links between the 
computer security division and the rest of NIST researchers on 
whose work the division depends. Second, the move would 
undermine the division's relationship with the private sector, 
which trusts NIST as a neutral scientific agency with no direct 
regulatory authority or national security responsibilities.
    I know that a group of House members, like Mr. Goodlatte 
and high tech industry specialists are in the process of 
sending letters to the Committee, if you haven't already 
received them, backing the Committee on Science position on 
this matter.
    Finally, let me say a brief word about the fire provisions. 
Our Committee believes that the U.S. Fire Administration, a 
unit of FEMA, needs to remain a distinct entity and have its 
programs maintain their separate identity to ensure that 
firefighters, truly the first of first responders, do not get 
lost in the shuffle within the new department.
    Mr. Chairman, I believe the Committee on Science has taken 
a thoughtful, balanced, targeted, bipartisan approach to build 
on and strengthen the very useful foundation that has been 
built by the administration, and I will be happy to answer any 
questions you might have. Thank you, Mr. Chairman.
    Chairman Armey. Thank you, Mr. Chairman.
    [The statement of Mr. Boehlert follows:]

 PREPARED STATEMENT OF HON. SHERWOOD BOEHLERT, CHAIRMAN, COMMITTEE ON 
                                SCIENCE

    Mr. Chairman and Members of the Committee:
    Thank you for the opportunity to appear today. I think all of us in 
Congress are impressed with the way the Select Committee is going about 
its business, and, in particular, I want to thank your staff for being 
so open and cooperative with ours. Writing this bill has been a true, 
collaborative effort--as it should be.
    That collaboration was a part of the Science Committee 
deliberations, as well. The Science Committee's amendment to H.R. 5005 
reflects work on both sides of the aisle, and it was approved by voice 
vote. I'm pleased that we were able to develop such a broadly supported 
approach in a very short time.
    The Science Committee amendment has three main components--
strengthening research and development (R&D); improving cybersecurity; 
and helping firefighting. Let me discuss each in turn.
    The Science Committee felt, as did several other Committees, that 
H.R. 5005 did not pay adequate attention to R&D. The bill did not spell 
out the R&D responsibilities or activities of the new Department, did 
not give them a central focus, and did not designate a senior official 
who would be accountable for--or for that matter, have the background 
to run--the Department's R&D programs. We thought that was a recipe for 
failure, and we can't afford failure in this area. As I've said before, 
like the Cold War, the war on terrorism will be won as much in the 
laboratory as on the battlefield.
    So, following the recommendations of the National Academy of 
Sciences, among others, we created an Under Secretary for Science and 
Technology and gave that person clear responsibilities for R&D across 
the Department. As you know, Governor Ridge endorsed that approach when 
he appeared before you on Monday.
    Now, let me be clear, the bottom line for us is that there must be 
an Under Secretary for Science and Technology with clear R&D 
responsibilities, but we do not believe this has to be an additional 
Under Secretary as we have proposed. If the Select Committee wanted to 
meld our approach with that of some other Committees, and rename and 
reorient the Under Secretary created in Title III of H.R. 5005, that 
would fully accomplish our goals--assuming the appropriate language was 
used.
    I don't have time now to outline all the aspects of our R&D 
provisions that we consider important, but let me list just a few--we 
believe the Congress should have a clearer sense of how any transferred 
national labs will operate before those labs are actually transferred; 
we are skeptical of the need for ``Other Transactions Authority;'' we 
think there needs to be an officethat can act as a single point of 
entry for scientists and entrepreneurs with ideas to contribute to 
improve homeland security; and we support the creation of a Homeland 
Security Institute.
    We also have changed the organic statutes for two agencies under 
our jurisdiction, the White House Office of Science and Technology 
Policy, and the National Institute of Standards and Technology, to add 
homeland security as one of their explicit duties. Both already 
contribute to homeland security, and I think these are non-
controversial changes.
    Moving to cybersecurity, we also focused on gaps in H.R. 5005 that 
drew the attention of several committees. The basic problem is that 
while cybersecurity is one of our nation's greatest vulnerabilities, 
H.R. 5005 never deals with it explicitly. So we added a new section 205 
to make the Title II under secretary's cyber duties explicit, and those 
include improving the security of federal computers and working with 
private, state and local officials to improve the security of their 
systems. We also create a volunteer corps to respond if and when 
security fails.
    For federal computers, we drew on the approach in current law and 
in Mrs. Morella's H.R. 1259, which the House has already passed. Under 
this approach, the National Institute of Standards and Technology, or 
NIST, a federal laboratory that is trusted by industry as an honest 
broker, will develop standards for federal computers, which the new 
Department will then promulgate and oversee. This is a sensible 
division of labor, endorsed by the high tech community.
    With that division of labor in mind, the Science Committee rejected 
the proposal in H.R. 5005 to move NIST's Computer Security Division to 
the new Department. We believe the move would be counter-productive in 
two ways. First, the move would sever the very useful links between the 
Computer Security Division and the rest of NIST's researchers, on whose 
work the Division depends. Second, the move would undermine the 
Division's relationships with the private sector, which trusts NIST as 
a neutral, scientific agency with no direct regulatory authority or 
national security responsibilities.
    I know that both a group of House Members led by Mr. Goodlatte and 
high tech industry are in the process of sending letters to the 
Committee--if they haven't arrived already--backing the Science 
Committee position on this matter.
    Finally, let me say a brief word about our fire provisions. Our 
Committee believes that the U.S. Fire Administration, a unit of FEMA, 
needs to remain a distinct entity and have its programs maintain their 
separate identity, to ensure that firefighters--truly the first of 
first responders--donot get lost in the shuffle within the new 
Department.
    Mr. Chairman, I believe the Science Committee has taken a 
thoughtful, balanced, targeted, bipartisan approach to build on and 
strengthen the very useful foundation that has been built by the 
Administration. I would be happy to answer any questions. Thank you.

    Chairman Armey. Mr. Hall, there is a great country western 
song in Texas that goes around Texas that says it is a Texas 
loving night, and your presence makes this that for me and I 
want to welcome you tonight

  STATEMENT OF THE HONORABLE RALPH M. HALL, RANKING MINORITY 
                  MEMBER, COMMITTEE ON SCIENCE

    Mr. Hall. Mr. Chairman, members of the board, I thank you. 
I will remember you as a chairman. I respect you as a chairman 
finally, and you have come a long way since that day over at 
Homestead Hotel in Hot Springs when I introduced you as a new 
member. I think I said you were so naive you didn't know that 
you couldn't close some military bases.
    Chairman Armey. I recall that word of encouragement from 
you at the time.
    Mr. Hall. And as the new chairman you are going to need a 
new portrait, and a lot of us from Texas would like to be here 
to hang it when it takes place.
    Seriously, Mr. Chairman, and members of the Select 
Committee, I am honored to testify before you today. Chairman 
Boehlert ran a very good bipartisan and constructive process in 
our committee. Recommendations that we present to you today 
comprise a consensus product that I think greatly enhances the 
bill and I am pleased to be present at the creation of the 
Department of Homeland Security. I think the President deserves 
a lot of credit for stepping up and accepting the idea that a 
new department is called for at this time, and I am 
particularly pleased that the Science Committee can present to 
you an amendment that places a clear focus in the new 
Department on Science and Technology.
    The single most important recommendation, I think, and I 
think the chairman agrees with me, was the creation of an Under 
Secretary for Science and Technology, a recommendation that was 
supported by both sides of the aisle and unanimously was 
approved in our markup just last week. I would also note that 
the President's counterterrorism strategy published just 
yesterday cites Science and Technology as one of the homeland 
securit's strategic four foundations. And Science and 
Technology are, of course, too important to be left to chance 
in the new department. They need to be planned, coordinated and 
directed under a strong Under Secretary.
    Lynn Woolsey and Mike Honda successfully offered--I want to 
highlight some of these changes for the Select Committee. I 
think Chairman Boehlert has covered them very adequately, so I 
will touch base on them a little bit. I quickly want to 
highlight Lynn Woolsey and Mike Honda, who successfully offered 
an amendment to create a Homeland Security Institute. The 
institute would be a nonprofit organization, assisting the 
Secretary much in the same way that the Rand Corporation and 
the MITRE Corporation assist the Secretary of Defense in 
analyzing proposals, establishing test beds, assessing defense 
vulnerabilities and strengths and so forth.
    Also, one that the Chairman did not mention, an amendment 
that Representative Joe Barton offered, an amendment that would 
establish university-based centers to help meet the science and 
technology needs of the new Department of Homeland Security. 
The Chairman and I have probably a different approach to that 
and take different positions on that, and it was a hotly 
contested amendment, but I think America's leading research 
universities represent a great resource to enhance our Nation's 
homeland security. It creates four university regional centers, 
and I encourage the select panel to retain this provision as it 
works its way through the legislation.
    Another, Brian Baird feels it is important to include 
funding for research on how people cope with terrorist attacks 
and provide tools to help repair the psychological impact to 
our citizens as part of any international homeland defense 
strategy. Congressman Baird is a clinical psychologist. I think 
he gave good testimony and advice to the committee, and I think 
it is essential that we help him as we want to help our 
survivors to reduce the potentially paralyzing symptoms of 
terror trauma and provide mental health professionals the tools 
to provide effective treatment. We think that was a very good 
amendment.
    Zoe Lofgren and Vern Ehlers led the charge in blocking the 
transfer of NIST Computer Division to the new department. A lot 
of high tech organizations have warned that this transfer could 
actually hurt national security by choking off productive 
interactions between the government and the private sector on 
computer security issues.
    Eddie Bernice Johnson and Steve Israel successfully offered 
an amendment to create an advisory committee to review and make 
recommendations on general policy issues for the Under 
Secretary for Science and Technology, and Lynn Rivers and David 
Wu offered an amendment strengthening the channels through 
which creative American inventors who otherwise might not have 
access, could propose their ideas and technologies to 
appropriate government officials.
    Mr. Chairman, these are just some of the reason we need to 
move this bill as quickly as possible, and I thank you for your 
time and effort on this, and I will be pleased to answer any 
questions.
    Chairman Armey. Thank you. Thank you gentlemen.
    [The statement of Mr. Hall follows:]

  PREPARED STATEMENT OF HON. RALPH M. HALL, RANKING MINORITY MEMBER, 
                          COMMITTEE ON SCIENCE

    Mr. Chairman and members of the Select Committee, I am honored to 
testify before you today with my Chairman and friend, Sherry Boehlert. 
Chairman Boehlert ran a very bipartisian and constructive process and 
the recommendations we present to you today comprise a consensus 
product that I think greatly enhances the bill.
    I am pleased to be present at the creation of the Department of 
Homeland Security. The President deserves a lot of credit for stepping 
up and accepting the idea that a new department is called for at this 
time.
    I am particularly pleased that the Science Committee can present to 
you an amendment that places a clear focus in the new Department on 
science and technology--two of our most important tools in fighting 
terrorism. The single most important recommendation that we made was 
the creation of an Under Secretary for Science and Technology, a 
recommendation that was supported bi-partisanly and unanimously in our 
markup last week. I would also note that the President's counter-
terrorism strategy, published just yesterday, cites science and 
technology as one of the homeland security strategy's ``four 
foundations--unique American strengths that cut across all of the 
mission areas, across all levels of government, and across all sectors 
of society''. Science and technology are too important to be left to 
chance in the new Department--they need to be planned, coordinated, and 
directed under a strong Under Secretariat.
    Our Committee made over a dozen constructive changes to the 
President's proposal in our markup last week. I will quickly highlight 
four of these changes for the Select Committee:
     Lynn Woolsey and Mike Honda successfully offered an 
amendment to create a Homeland Security Institute. The Institute would 
be a non-profit organization assisting the Secretary in much the same 
way that the RAND Corporation and the MITRE Corporation assist the 
Secretary of Defense in analyzing proposals, establishing test-beds, 
assessing defense vulnerabilities and strengths, and so forth. The 
creation of this Institute was the major recommendation of last month's 
National Research Council report on terrorism R&D.
     Zoe Lofgren and Vern Ehlers led the charge in blocking the 
transfer of NIST's Computer Security Division to the new Department. 
This Division develops information security standards, testing, and 
evaluation tools for use in federal agencies and in the private sector. 
Many high-tech organizations have warned that this transfer could 
actually hurt national security by choking off productive interactions 
between the government and the private sector on computer security 
issues. Reps. Goodlatte and Boucher (and a number of other Members) 
have sent the Select Committee letters on the importance of this 
matter.
     Eddie Bernice Johnson and Steve Israel successfully 
offered an amendment to create an advisory committee to review and make 
recommendations on general policy issues for the Under Secretary for 
Science and Technology. Most importantly, the Committee will include 
representatives of the users of the Department's research activities--
emergency responders--and of citizen groups.
     Lynn Rivers and David Wu successfully offered an amendment 
strengthening the channels through which creative American inventors 
can propose their ideas and technologies to appropriate government 
officials.
    Mr. Chairman, we need to move this bill as quickly as possible. 
Homeland security is too important a task to let politics, turf, 
jurisdictional concerns, or struggles over credit get in our way.
    Thank you for your time and efforts on this matter. I would be 
pleased to answer any of your questions.

    Chairman Armey. Ms. Pelosi, the chairman is tempted to 
continue with his Texas theme by recognizing Mr. Frost from 
Texas.
    Mr. Frost. I appreciate that because actually I have a 
Texas question.
    Ralph, I didn't have the privilege of serving in the Texas 
legislature. Of course, you did with great distinction, and in 
the Texas legislature there is a practice called Bracket law, 
in which you write a law that applies to only one entity or to 
one city. It is a city no larger than a million 115 people, no 
smaller than--you understand what I am talking about. And it 
appears that the Barton law is a classic example of Bracket 
law. It only applies to one school in the state of Texas.
    Mr. Hall. That is the University of Texas at Arlington, I 
think.
    Mr. Frost. No, it does not apply to the University of 
Texas. It only applies to Texas A&M where Mr. Barton went to 
school.
    Mr. Hall. I was joking with you.
    Mr. Frost. But it applies to Texas A&M only. Here is my 
question. As you know, Texas has many world class research 
universities; yet the amendment adopted by your Committee 
authored by my colleague from Texas, Joe Barton, would, for all 
practical purposes, exclude all of those universities, except 
for one, from eligibility to compete for those centers 
designated. Can you comment on the Barton amendment and the 17 
criteria it sets forth to establish eligibility requirements? 
Is there a need to, in this legislation, exclude many 
universities from this competition including the University of 
Texas which is excluded from this competition?
    Mr. Hall. Yes. I would be glad to. Initially the bill was 
drawn and many thought it alluded only to Texas A&M University, 
perhaps because Barton was the author of it, and his having 
been a graduate of there. We discussed that and Congressman 
Barton agreed that it should be regional and that all 
universities should have a shot at it. He even offered to take 
those 17 criteria away, and I think this committee could do 
that if they wanted to. We want to pick the finest 
universities, the greatest universities.
    I mentioned Stanford, Johns Hopkins. I mentioned a lot of 
others in our debate there. I think it could be any of those. I 
think they are great universities. I think we ought to avail 
ourselves of them.
    Mr. Frost. I have the Barton amendment in front of me, and 
I would like to read you several of these 17 criteria. Number 
6, strong affiliations with animal and plant diagnostic 
laboratories; number 7, demonstrated expertise in food safety; 
number 8, affiliation with Department of Agriculture 
laboratories or training centers. That appears to be bracket 
law applying only to Texas A&M. I have family that went to 
Texas A&M. It is a fine institution. But I think that the other 
institutions in our State should have the opportunity to 
compete and I think if this Committee were to include the 
Barton amendment I would hope that we would eliminate the 17 
criteria which seemed to tailor this for only one institution 
in our home State.
    Mr. Hall. I think Tarleton State University lacked that 
provision. I think there are probably ten other institutions 
that would have lacked it. But I think Congressman Barton is 
willing to set-aside those 17.
    Mr. Frost. Where I went to school at University of 
Missouri, if the University of Missouri were applying for this, 
it would probably be eligible because Missouri does not have an 
A&M school. The Agriculture Department is right there on the 
main campus in Columbia, but I would say that the majority of 
the States in this country do have a separate A&M school. They 
may not call it A&M, but it is an agriculturally-based school, 
so that they would have the opportunity to compete, but in our 
State, this would exclude an awful lot of our institutions, and 
I hope we would not adopt it in its current form.
    Mr. Hall. I understand that, and as I said, I think they 
are willing to forego the criteria they set there; however, 
there are other institutions in our State that I think 
certainly would be under consideration, including the ones you 
represent. I would be very pleased if it were Texas A&M or the 
University of Texas or my alma mater, SMU. I think they all 
ought to be considered and set the criteria aside. I am willing 
to do that.
    Mr. Frost. I agree with that. They ought to all be 
considered. And I hope if we adopt this amendment, we will do 
it in a way so that they can all compete, even including the 
University, where our distinguished chairman taught prior to 
being in Congress, the University of North Texas. They should 
be able to compete.
    Mr. Boehlert. Mr. Frost, may I respond that too? As you 
probably know, if you check the record for the Committee, I did 
not favor that particular amendment. I did so with sound 
reasoning, I think, on my part, and I thank you for the very 
perceptive question.
    We avoided specificity in terms of designating specific 
types of research, and Dr. Baird's contribution was very 
significant but when you start outlining the number of research 
areas that should be considered, the list is endless. We want 
to leave it up to the experts in the new Department of Homeland 
Security. And secondly, in terms of the number of centers, 
while the initial proposal by Mr. Barton zeroed in on one 
center, he expanded that to include four. I am not sure if they 
were within a radius of so many miles of Texas A&M. That is 
another question for another day, but the fact of the matter is 
we think the bill very adequately directs research to 
universities and we would let the experts determine where those 
centers should be and what disciplines they should focus on.
    Chairman Armey. The Chair just observes that the Chair 
withhold judgment, until he determines whether or not a winning 
football team is one of the criteria. The gentleman from Texas 
and the gentleman from New York, the Chair will be looking at 
that provision.
    Mr. Boehlert. Knowing the Chair's fondness for music 
comparisons, I would point out that the committee on both sides 
of the aisle worked very well together, and some people would 
say it constitutes amazing grace.
    Chairman Armey. Thank you.
    Mr. Hall. Mr. Chairman, our chairman, Mr. Boehlert, was on 
top of the table with us. He was opposed to the centers and 
took that position and it was a 17-to-15 vote. It was a close 
vote, and I think the very fact that he allowed some amendments 
and that some of the amendments that were sent up from the 
Democratic side of the aisle passed evidences the fairness he 
exhibits as a chairman and I appreciate that as we all do.
    Chairman Armey. I appreciate both of you and recognize the 
gentleman from Ohio, Mr. Portman.
    Mr. Portman. Mr. Chairman I will be brief, first of all, to 
thank our colleagues for being here and giving us the wisdom on 
this. The Science and Technology piece of this is extremely 
important, and one thing we have learned over the last few 
weeks as we have looked at this, is there is probably nothing 
more important than being sure this works, both in terms of the 
private sector and the government sector.
    I noticed you changed some of the language of the bill to 
strengthen the Science and Technology provisions. Particularly 
you changed the director, who would have been giving assistance 
to all the other under and assistant secretaries to an under 
secretary role. Maybe you, Chairman Boehlert and Mr. Hall, 
could address that issue, and why you think that is important 
structurally.
    Mr. Boehlert. I think it's very important. It gives 
responsibilities with a research and development focus, it 
gives it accountability, it gives it intellectual heft. It 
makes it possible to attract the best and the brightest from 
wherever we can attract that individual to fill that important 
slot. And I would like to report that while this was not in the 
initial presentation from the administration, we worked very 
closely with Dr. Marberger, the President's science advisor. We 
worked very closely with Governor Ridge, and I am pleased to 
report that Governor Ridge, on Monday in the statement before 
this committee, embraced the concept of creating an under 
secretary for research and development. That puts the emphasis 
where we need to.
    I am absolutely convinced, Mr. Portman, that this war on 
terrorism is going to be won more in the laboratory than on any 
battlefield. That is a very, very important aspect of modern 
warfare and modern defense mechanisms, so we want the best 
researchers in the Nation working on this very important 
subject. We want to have one person in charge working with the 
other under secretaries and Cabinet-level officers to put focus 
to this very important mission.
    Mr. Portman. Thank you. Mr. Hall.
    Mr. Hall. It is supported by both of us, it's supported by 
Governor Ridge, and I think that science is at the top of the 
list and without an under secretary--if that is what your 
question was, there wouldn't be anyone there with the primary 
mission to coordinate the science and technology functions 
necessary to guarantee our security. I know that there are some 
who have some problem with another group here in D.C. They want 
them out in the field and there is something to be said for 
that. But I think if you take the recommendation of another 
committee to eliminate an under secretary, you are back to 
four. I think this is the heart of our recommendation that if 
the Department is not focused on discovering, and not really 
focused on developing the tools necessary to defend the 
homeland, and all the other missions of the secretary are going 
to be greatly compromised. Science has to be at the top of the 
list.
    Mr. Boehlert. Let me ask, Mr. Chairman, if it's permissible 
to submit for the record a letter from the National Academies--
National Academy of Sciences, National Academy of Engineering, 
and The Institute of Medicine strongly endorsing this proposal.
    Chairman Armey. The record is open. Without objection, it 
will be accepted. Thank you.
                       National Academy of Sciences
                                     The National Academies
                             Washington, D.C. 20418, July 12, 2002.
Hon. Richard K. Armey
Chairman, House Select Committee on Homeland Security, The 
        Capitol, Washington, D.C. 20515
Hon. Nancy Pelosi
Ranking Member
    Dear Chairman Armey and Chairman Pelosi:
    We are writing endorse strongly the recommendation for an 
Undersecretary for Science and Technology in the new Department 
of Homeland Security. This recommendation was made in the 
recent National Academies report Making the Nation Safer: The 
Role of Science and Technology in Countering Terrorism, which 
is enclosed.
    As your committee and the administration move forward in 
planning for the new department, we believe that you have an 
important opportunity to create a structure and a culture to 
harness America's strength in science and technology for 
counterterrorism. In particular, an Undersecretary for Science 
and Technology would provide a focal point for guiding key 
research and technology development programs within the new 
department and, very importantly, for building collaborative 
partnerships with the major science, engineering, and medical 
science departments and agencies (such as the National Science 
Foundation, the National Institutes of Health, the Department 
of Energy, the Department of Defense, the Department of Health 
and Human Services, and the National Aeronautics and Space 
Administration) that will remain outside the department. This 
undersecretary would work closely with the Office of Science 
and Technology Policy on coordinating multiagency projects and 
their linkages to related programs throughout the government. 
This person would have responsibility not only for developing 
homeland security-related technology, but also for all 
technical elements of the agencies that are located within the 
department.
    Thank you for your consideration Of this input from the 
National Academies and of our report.
    Please let us know if we can be of further assistance to 
you.
        Sincerely,
                                     Bruce Alberts,
                    President, National Academy of Sciences
                                       Wm. A. Wulf,
                 President, National Academy of Engineering
                                Harvey V. Fineberg,
                           President, Institute of Medicine

    Mr. Portman. I appreciate the work that you all put in, and 
I know going forward, your oversight will be extremely 
important to make sure we can meet the promise of more 
technology, more science. As Mr. Boehlert says, this will be as 
important to this battle as anything that happens on the 
battlefield itself. Thank you very much.
    Chairman Armey. The Chair recognizes the gentleman from New 
Jersey.
    Mr. Menendez. Thank you, Mr. Chairman. And I want to thank 
both of you for your work and your testimony here. I want to 
get a sense --I asked this most of the Chairs that come before 
us where there have been changes made to the President's 
proposal. Were there different elements of your changes--were 
they bipartisan in terms of the votes--.
    Mr. Boehlert. Without any question, bipartisan, every 
member's fingerprints are all over this product. We are proud 
of it.
    Mr. Menendez. Very good. And I know that one of those 
important amendments that Mr. Hall referred to, and I certainly 
am very concerned about, and I hope that the committee will 
adopt it as its own--as a matter of fact, I hope the Committee 
will adopt a lot of what you did in the committee in our mark 
here, but certainly the NIST issue, I think we choke off 
potentially the advances we can make with the private sector 
and we hurt ourselves in the context of some of what we can 
capture, and I am glad to see that the committee acted as it 
did, and I hope we will preserve it here as well.
    Mr. Boehlert. Thank you very much. We came to the same 
conclusion after the same thoughtful deliberation, and I would 
like to submit for the record some more statements from our 
colleagues and the co-chairs of the high tech caucus, Mr. 
Boucher and Mr. Goodlatte, and also letters from the whole 
bunch of groups, the Business Software Alliance, American 
Association for the Advancement of Science, all addressing this 
very important issue. I think the computer security division of 
NIST performs exceptionally well. It's a small staff, less than 
50 people. A modest budget, five to $10 million, doing an 
extremely important work and it has credibility in the world 
outside of Washington. It is trusted, it is respected, and we 
don't want to lose that trust and respect.
    Mr. Menendez. I agree and I thank you for the work. Yield 
back.
    Chairman Armey. Without objection, we will receive those 
these letters as well. The gentlelady from Connecticut.
                          House of Representatives,
                                House Committee on Science,
                                      Washington, DC, July 9, 2002.
Hon. Sherwood Boehlert
Chairman, House Committee on Science, Rayburn House Office Building, 
        Washington, D.C. 20515
    Dear Chairman Boehlert: As members who are concerned about 
technology Issues, we are writing regarding the Administration's 
proposal to move the Computer Security Division (CSD) of the National 
Institute of Standards and Technology (NIST) from the Department of 
Commerce to theproposed new Department of Homeland Security.
    While we support the Administration's efforts to make our country 
more secure in the face of terrorist threats, we are concerned that 
this provision, found in Section 202 of the President's proposal, would 
unravel years of collaboration between the CSD and the private sector 
to enhance the level of confidence in computer security practices. We 
are concerned that this reduced collaboration would be 
counterproductive to the Administration's goals by reducing confidence 
in American-made IT systems thereby making our critical Infrastructure 
more vulnerable to terrorist attack.
    The credibility and success of NIST's CSD depends on effective 
independence from and appropriate collaboration with law enforcement 
and national security agencies in the U.S. and abroad. We believe that 
this independence could not be maintained in the new Department of 
Homeland Security. In the past, it has proven to be a challenge for the 
CSD to strike this balance. We have been frustrated by past indications 
of inappropriate influence of law enforcement and national security in 
the development of standards for ``sensitive, unclassified'' 
information, which delayed the development of computer security 
standards. Too often, the CSD deferred to military and intelligence 
agency needs to the exclusion of other vital national interests.
    In one example, the CSD'S lack of responsiveness to the IT 
community led to a proposed encryption standard that was overbroad and 
unduly burdensome to American companies and completely unworkable. 
There is a strong national interest in ensuring that strong encryption 
software is available to protect our critical infrastructure from 
attack. The widespread use of encryption promotes our national security 
and prevents crime by ensuring the security, confidentiality and 
authenticity of electronic networks, information and users. We were 
pleased to finally see the announcement late last year of the new much 
Improved Advanced Encryption Standard--the result of 4 long years of 
public-private partnership with the CSD, the private sector, and 
national security agencies.
    We have serious concerns that transferring the CSD from the 
Commerce Department would upset the balance that we have attempted to 
achieve in protecting our sensitive information and critical 
infrastructure in a way that doesn't disadvantage American industry or 
limit the availability of strong encryption. Based on the demonstrated 
ability of NIST to work effectively with the private sector, while 
ensuring effective collaboration with other governmental agencies, we 
urge that the new Department focus on continued interagency 
coordination with NIST's CSD rather than taking the inevitably 
counterproductive step of moving this vital office into the Department 
of Homeland Security.
        Sincerely,
                                     Bob Goodlatte,
                                  Co-Chair, Internet Caucus
                                      Rick Boucher,
                                  Co-Chair, Internet Caucus
[GRAPHIC] [TIFF OMITTED] T3173.009


          ENVIRONMENT, TECHNOLOGY, AND STANDARDS SUBCOMMITTEE

                          House of Representatives,
        Environment, Technology, and Standards Subcommittee
                                     Washington, DC, July 16, 2002.
Hon. Richard K. Armey
Chairman, Select Committee on Homeland Security, The Capitol, 
        Washington, D.C. 20515
Hon. Nancy Pelosi
Ranking Member
    Dear Chairman Armey and Chairman Pelosi: We are writing to ask that 
give careful consideration to the amendments offered by the Committee 
on Science, particularly the provision that strikes Section 202, 
paragraph (4) from H.R. 5005. Under this paragraph, the Computer 
Security Division of the National Institute of Standards and Technology 
(NIST) would be transferred to the Department of Homeland Security. We 
strongly oppose the proposed transfer of the Computer Security Division 
and request that you retain the Science Committee's position during the 
Select Committee's deliberations.
    As Members of the Environment, Technology, and Standards 
Subcommittee, which has jurisdiction over NIST, we gave careful 
scrutiny to the provision in H.R. 5005 that would transfer the Computer 
Security Division to the Department of Homeland Security. Based on 
information gathered from meetings with the Administration and from the 
two hearings on homeland security held by the Committee on Science, we 
concluded that the Computer Security Division could more effectively 
support the development and adoption of stronger information security 
standards, and thereby the mission of homeland security, if it remained 
in NIST.
    We do not reach this conclusion as a matter of protecting the 
Committee's jurisdiction, as we have carefully reviewed other proposed 
transfers and have not objected to them. Our interest lies in improving 
information security, avoiding duplication of effort, and preserving 
functions that have worked very well within the Federal Government. 
While the President's proposal does have many important aspects 
protecting homeland security, the proposal to move this division would 
undermine a successful partnership in improving information security 
standards that the Federal government has developed with the private 
sector.
    One reason that Computer Security Division has been successful in 
developing information security standards that are widely accepted in 
the information technology community is because of NIST's close 
connection to its industrial customers. This relationship works two 
ways: technical experts from the private sector are involved at every 
step of NIST's standards development process, and the trust developed 
between NIST and the private sector facilitates adoption of the NIST 
standards.
    Most of the nation's critical information infrastructure is 
privately owned and operated, and that which is government owned and 
operated relies on commercial off-the-shelf hardware and software. In 
short, in order to establish strong information security standards, 
government must work closely with the private sector. The information 
technology industry has been unanimous in their deep reservations about 
the proposed transfer of the Computer Security Division to the 
Department of Homeland Security. They do not believe that the 
relationship of trust and cooperation that they enjoy with NIST will 
survive the transfer of the division into the new Department. We share 
their reservations.
    We also oppose this transfer because it will harm work done by both 
the Computer Security Division and NIST as a whole. This Division is 
deeply integrated within the Information Technology Lab at NIST. 
Cleaving it from the lab and moving it to the new Department would 
leave a gaping hole within the IT lab. Clearly, NIST would have to 
recreate this division if it were to carry out its mission, because 
computer security is integrated in NIST's information technology 
mission as a whole. It makes no sense to transfer this activity to the 
new Department, only to have NIST scramble for funding in order to 
recreate an integral part of the Information Technology lab. If 
adopted, Congress would be left funding both the Computer Security 
Division at the new Department, as well as its replacement at NIST.
    In addition, when developing information security standards and 
carrying out computer security research, the Computer Security Division 
draws upon the technical expertise of many other NIST laboratories. For 
example, research on advanced encryption standards benefited from Nobel 
prize-winning research conducted by scientists in the Physics 
Laboratory at NIST. NIST's worldwide reputation for scientific 
excellence has an enormously positive impact on the work of the 
individual scientists who work there. If we sever or substantially 
alter this relationship, we may be ultimately undermining our goal of 
improving computer security within the Federal Government.
    We ask that you leave the Computer Security Division at NIST. We 
believe the interests of homeland security, particularly those aspects 
that relate to information security, will be best served by leaving the 
division at NIST.
    We wish you all the best in your important endeavor.
        Sincerely,
                                   Vernon J. Ehlers
                                       James Barcia
                                       Gil Gutnecht
                                        Lynn Rivers

                              ------------

        American Association for the Advancement of Science
                                                       July 8, 2002
Hon. Nancy Pelosi
Ranking Member, Select Committee on Homeland Security, The Capitol, 
        Washington, D.C. 20515
    Dear Ranking Member Pelosi: The American Association for the 
Advancement of Science (AAAS) has been following the current debate 
over the establishment of a new Department of Homeland Security with 
great interest. We are particularly concerned about the role and 
structure of counterterrorism research and development (R&D) in the new 
department.
    As Congress begins the process of defining and shaping this 
department, we hope that careful consideration will be given to this 
issue. We agree strongly with House Science Committee Chairman Sherwood 
Boehlert that a ``clear focus on-and locus for--research'' will allow a 
new Department of Homeland Security to coordinate the many diverse 
scientific and technological areas essential to its functions. This 
focus would be sharpened by providing for the appointment of a single 
official--for example, an under secretary - with responsibility for 
coordination of R&D across the entire department and with other 
relevant agencies.
    This idea is underlined by the recent National Academies report 
which observed that the complexity and interdisciplinary nature of the 
science and technology involved in fighting terrorism requires more 
than just parallel investments in various areas of R&D. It calls for a 
well--orchestrated and coordinated endeavor among the 26 agencies that 
currently contribute to ournation's R&D enterprise.
    AAAS is the world's largest general scientific society, with over 
130,000 individual members and 272 affiliated societies, representing 
10 million individuals in all fields of science and engineering. 
Founded in 1848, AAAS is also the publisher of the journal Science, and 
has long been a leader in promoting science to meet our national goals.
    These comments are respectfully submitted as a means for enhancing 
the dialogue between the executive and legislative branches on this 
vital issue. AAAS supports a balanced approach to protecting our 
national security and promoting scientific and technological 
advancement and stands ready to assist you in the future.
        Sincerely,
                                    Alan I. Leshner

                              ------------

                                 Business Software Allaince
                                                      July 16, 2002
Hon. Richard K. Armey
Chairman, Select Committee on Homeland Security, The Capitol, 
        Washington, D.C. 20515
    Dear Chairman Armey: The Business Software Alliance \1\ (BSA) 
appreciates the opportunity to share with the Select Committee on 
Homeland Security our recommendations with regard to the committee-
passed cyber security provisions of H.R. 5005 that we believe should be 
included in a final, consolidated Select Committee mark.
---------------------------------------------------------------------------
    \1\ BSA members include Adobe, Apple, Autodesk, Bentley Systems, 
Borland, CNC Software/Mastercam, Dell, Entrust, Hewlett-Packard, IBM, 
Intel, Intuit, Macromedia, Microsoft, Network Associates, Novell, 
Sybase, Symantec and Unigraphics Solutions (an EDS company).
---------------------------------------------------------------------------
    We commend the House of Representatives for the excellent work 
undertaken by numerous committees in recent days to ensure that the 
Department of Homeland Security is well equipped to protect and advance 
our nation's cyber security. In examining the recommendations of these 
committees as reported in their versions of H.R. 5005, several 
provisions stand out as critical to America's ability to ensure the 
cyber security of its citizenry, and we ask that you include these 
provisions in the consolidated legislation that the House will 
consider.

These provisions are as follows:
1. Federal Government Computer Security

        H.R. 5005 should include the Federal Information Security 
        Management Act, as amended

         The Committee on Government Reform adopted provisions 
        to require binding minimum Federal information security 
        standards and guidelines for government departments and 
        agencies. These provisions (based on H.R. 3844, the Federal 
        Information Security Management Act, introduced by Rep. Tom 
        Davis) will substantially strengthen what are currently 
        unacceptably low levels of computer security within the Federal 
        Government. Importantly, the bill adopted by the Committee on 
        Government Reform states that these security standards and 
        guidelines must be technology neutral and performance-based, 
        and that they must not mandate the use of any specific hardware 
        or software security solutions. Such flexibility is critical to 
        the ability ofFederal agencies to respond to fast-changing 
        computer security threats.

        HR 5005 should create a team of public and private sector 
        experts to provide technical expertise on agency security.

         The Committee on Energy and Commerce mark calls for 
        the creation of a Federal Information System Security Team to 
        assist Federal agencies in hardening their systems against 
        cyber attack. Team members would include both public and 
        private sector technical experts, including auditors, computer 
        scientists, and computer forensics analysts, who would analyze 
        Federal security systems and report their findings to the 
        Secretary and Inspector General of each Department. Strong 
        public-private partnerships of this nature are critical in the 
        field of cyber security, where the private sector owns and 
        operates over 90 percent of the critical infrastructure 
        networks in question.

2. Structure of the Department of Homeland Security

        H.R. 5005 should create a specific cyber security program 
        within the Department of Homeland Security.

         The Committee on Energy and Commerce included 
        provisions to create a Cyber Security Program within the 
        Department of Homeland Security's Office of Information 
        Assessment and Critical Infrastructure. In so doing, the 
        Committee seeks to ensure that cyber security functions receive 
        sustained attention and concerted resources within the context 
        of the Department's overall critical infrastructure protection 
        mission. Strengthening cyber security requires analytical and 
        technological capabilities that are related to, but also 
        distinct from, traditional intelligence gathering and physical 
        security functions, and we believe that these are best handled 
        through a dedicated office or program within DHS. Further, we 
        believe that the Department's ClO and Under Secretary for 
        Management should advance existing efforts in key Department 
        agencies to fund, implement and maintain the enhanced 
        information security necessary for sensitive data and 
        communications to be securely stored, transmitted, and 
        disseminated within the Department.

        H.R. 5005 should create the position of Undersecretary for 
        Science and Technology.

         The Committee on Science mark creates the function of 
        Undersecretary of Science and Technology within the Department 
        of Homeland Security. Given the Department's wide 
        responsibilities in this area, and the importance of sustained, 
        focused R&D to our nation's ability to develop leading security 
        technologies, the creation of this function is highly merited. 
        We believe that this function should be tasked with explicitly 
        establishing priorities for directing, funding and conducting 
        R&D to improve cyber security, and that all such research 
        should also be done in conjunction with private sector business 
        partners (examining existing models of such partnerships) in 
        order to maximize its effectiveness.

        H.R. 5005 should maintain NIST's Computer Security Division 
        within NIST.

         The Committee on Science included a provision to 
        maintain NIST's Computer Security Division (CSD) within NIST, 
        instead of moving its functions to the Department of Homeland 
        Security, as has been proposed. We strongly support the 
        Committee's decision in this regard. While we wholeheartedly 
        endorse the Administration's efforts to create the greatest 
        possible cohesion among security-related offices within the 
        Federal Government, we believe that the CSD--a standards-
        setting entity--is integral to NIST's overall standards-setting 
        mission and that its work in this area can best be achieved in 
        the context of the Institutes itself. Further, we are concerned 
        that moving CSD to the Department of Homeland Security--an 
        agency that will focus primarily on law enforcement-related 
        issues--could result in CSD failing to adequately recognize the 
        technological and cost feasibility issues associated with cyber 
        security topics under the Department's jurisdiction. Moreover, 
        since the Administration has repeatedly stated that it does not 
        desire or envision imposing cyber security technological 
        mandates on the private sector, we do not see the need to 
        incorporate NIST's CSD within the Department.

3. Information Sharing

        HR. 5005 should encourage increased information sharing about 
        cyber security threats--The Committee on Government Reform has 
        included provisions that would greatly facilitate the voluntary 
        sharing of information with the government and within industry. 
        This provision protects against the disclosure of such 
        information through the FOIA process and ensures that the 
        information cannot be used against those providing the 
        information in a civil suit. The measure was adopted on a 
        bipartisan basis by the Committee and we urge its inclusion in 
        H.R, 5005.

                                   *

        We believe that the provisions outlined above will form the 
        basis of a strong and effective cyber security strategy by the 
        Department of Homeland Security and the Federal Government 
        overall. We urge the inclusion of these provisions in the 
        consolidated legislation that will be considered by the full 
        House of Representatives, and we thank you for your 
        consideration of our views in this area.

        Sincerely,
                                  Robert Holleyman,
                                          President and CEO

                              ------------

                Public and Scientific Affairs Board
                          American Society for Microbiology
                                     Washington, DC, July 19, 2002.
Hon. Ralph Hall
Ranking Minority Member, Committee on Science, The Capitol Washington, 
        D.C. 20515
    Dear Ranking Member Hall: The American Society for Microbiology 
(ASM) is writing concerning issues related to the proposed Department 
of Homeland Security (DHS) and the policy implications for the civilian 
biodefense and infectious disease research programs. The ASM has 
reviewed the Administration's Bill to establish a Department of 
Homeland Security and S.2452 to establish a Department of Homeland 
Security and a National Office for Combating Terrorism, introduced by 
Senator Lieberman.
    The ASM is the largest life science society with over 40,000 
members and its principal goal is the promotion of scientific knowledge 
of microbiology for the benefit of human welfare. The ASM has worked 
with the Administration, the Congress and federal agencies on measures 
to protect against biological weapons and bioterrorism. Most recently, 
ASM provided expert advice on provisions to expand the Biological 
Weapons Statute in the USA Patriot Act and on Title II of the Public 
Health Security and Bioterrorism Preparedness and Response Act of 2002, 
which expands controls on certain dangerous biological agents and 
toxins. ASM members are involved in research and public health 
initiatives aimed at eradicating the scourge of infectious diseases, 
which daily end the lives of thousands of Americans and tens of 
thousands around the world. Infectious diseases remain the major cause 
of death in the world for those under the age of 45 and particularly 
for children. They are the third leading cause of death in the United 
States.
    The terrorist events of September 11 and the anthrax biocrime 
reveal the need and complexity of homeland defense. The ASM, therefore, 
supports efforts to establish a Department of Homeland Security that 
can provide oversight, coordination and leadership for biodefense 
activities. Given that science and technology will play vital role in 
the biodefense of the nation, the ASM supports the establishment of an 
Office of Science and Technology as proposed in S 2452. This office 
will provide the necessary linkage between the Secretary of Homeland 
Security and all the numerous mission agencies charged with science and 
technology development.
    It is critical that the proposed DHS build upon existing science 
and technology programs that hold promise in the defense against 
bioterrorism and in the effort against deadly infectious diseases. The 
ASM would like to submit the following comments to assist Congress as 
it deliberates how best to achieve this goal.
    Biodefense research is part of the continuum of biomedical research 
aimed at protecting the nation and the world against infectious 
diseases. The capability to develop countermeasures and interventions 
is directly related to information generated by biomedical research on 
pathogenic microbes and the host response to these microbes. Therefore, 
it is critical that federal research efforts related to civilian human 
health-related biological, biomedical, and infectious diseases should 
be prioritized and conducted by, and at the direction of the Department 
of Health and Human Services (HHS). It is important to distinguish 
between oversight functions such as policy and planning guidance and 
coordination, which would well be served by an Office of Science and 
Tecimology within a Department of Homeland Security, and the 
responsibility and authority for the direction, control and conduct of 
scientific research. ASM recommends that HHS, a public health and 
biomedical research agency of unparalleled success, should continue to 
be responsible for the conduct and direction of scientific research.
    The Administration's Bill recognizes the necessity that HHS conduct 
the research and development programs related to infectious diseases. 
Section 303(a)(1) of the Bill provides that the Secretary shall carry 
out responsibilities related to civilian human health-related 
biological, biomedical, and infectious diseases through HHS and the 
Public Health Service ``under agreements with the Secretary of Health 
and Human Services, and may transfer funds to him in connection with 
such agreements.'' Section 30 1(2) of the Administration's Bill, 
however, gives DHS primary authority and responsibility for the conduct 
of national scientific research including ``directing, funding, and 
conducting research and development'' related to biological threats. 
Additionally, at Section 303(a)(2), the Bill provides that DHS, in 
consultation with HHS, ``shall have authority to establish the research 
and development program, including the setting of priorities''.
    The ASM understands the role envisioned for DHS is to integrate 
threat analysis and vulnerability assessments and identify priorities 
for preventive and protective steps to be taken by other federal 
agencies to protect the American public. The HHS, however, is best 
qualified to establish biomedical research and development programs and 
identify scientific opportunities and the research approaches for 
ensuring that biodefense needs are met in the best way possible. The 
NIAID is best able to bring together all aspects of biomedical research 
and the full capability of science to ensure breakthroughs and advances 
of high quality for biodefense. The proposed restructuring of program 
authorities in the Administration's bill will create unpredictability 
for research programs, will divert monies from research and will not be 
the best approach to achieving the goal of civilian biodefense, which 
requires the involvement of the best scientific minds and the support 
of excellent science based on merit review.
    We have already seen the ability of HHS to respond to bioterrorism. 
In the months since September 11, 2001, the National Institute of 
Allergy and Infectious Diseases (NIAID) within the National Institutes 
of Health (NIH) has rapidly accelerated work to protect the nation 
against the threat of bioterrorism. This acceleration has occurred 
across the spectrum of scientific activities from basic research in 
microbial biology to the development of vaccines and therapeutics to 
research related to diagnostic systems. It is critical that this work 
continue to develop rapidly and efficiently without delay, disruption 
or loss of momentum.
    ASM agrees that DHS should have an important role in developing the 
nation's defenses against, and responses to biological threats. The DHS 
can and should coordinate, review, and evaluate scientific and 
teclmical programs related to human, animal, and plant life. However, a 
scientific health agency, HHS, rather than the nonscientific, nonpublic 
health DHS should have the principal authority for developing and 
prioritizing scientific and health related programs.
    Essentially, therefore, the ASM suggests reversing the 
responsibilities identified in Section 303(a)(2) of the 
Administration's Bill. HHS, in consultation and coordination with DHS, 
should retain responsibility for accelerated research and development 
programs, including prioritizing such projects.
    The ASM is also concerned that we not create a separate public 
health system for biodefense. Therefore, the ASM would leave primary 
responsibility for planning for public health emergencies arising from 
biological causes with the Centers for Disease Control and Prevention. 
At the earliest possible moment after the outbreak of a contagion, it 
is critical to determine the nature of the organism and to distinguish 
between a bioterrorism attack and a natural event. Then, public 
authorities must respond rapidly and appropriately to the health threat 
that either one would present.
    The ASM believes CDC should be charged with these tasks. Section 
505(a)(2) of the Administration's Bill requires DHS to carry out these 
functions under agreement with HHS. Again, the ASM believes the 
important and appropriate role for DHS is to coordinate planning and 
development of programs and to lend technical assistance to the 
responsible agency. It is entirely appropriate for HHS to coordinate 
and consult with DHS. As with the direction and control of research, 
however, the primary duty and authority should remain with the 
scientific agency with the existing knowledge, experience, and 
expertise to fulfill the critical mission.
    Because agriculture, the food supply, and the environment along 
with humans are potential targets of bioterrorism, it is important to 
integrate and coordinate programs related to human, animal, and plant 
agents. Section 302(a) of the Administration Bill transfers to DHS the 
select agent registration and enforcement programs of HHS. However, it 
does not transfer the select agent registration and enforcement 
programs of the Department of Agriculture to the DHS. Subtitle C of the 
Public Health Security and Bioterrorism Preparedness Act of 2002 
mandated coordination of activities of HHS and the Secretary of 
Agriculture regarding ``overlap agents''--that is, agents that appear 
on the separate lists prepared by HHS and Agriculture. Without doubt, 
such coordination must occur. Bioterrorism research extends and applies 
infectious disease and select agent research. The ASM believes that 
integration of the select agent registration program inevitably will 
assist in the creation of an efficient registration process thereby 
expediting registration.
    The proper administration of the select agent program is key to the 
development of the nation's biodefense capability and response and must 
balance the concerns for public safety with the need to not unduly 
encumber legitimate scientific research and laboratory diagnostic 
testing. The ASM continues to believe that HHS has the scientific and 
institutional knowledge and expertise related to dangerous biological 
agents, biosafety, and biosecurity in microbiological and biomedical 
laboratories and that it is best qualified to achieve the goal of 
protecting the public health and safety without interfering with 
research, and clinical and diagnostic laboratory medicine. Transferring 
this program to DHS, a nonregulatory, nonscientific department, raises 
many questions with regard to the administration of this program which 
must be carefully considered by Congress, which recently enacted new 
legislation and additional requirements for select agents. The ASM, 
therefore, requests that a review be done by an interagency group with 
the involvement of scientific societies to assess the advisability of 
removing the select agent program from HHS authority.
    Some additional specific measures in the Administration Bill 
require further consideration and comment by the ASM. The ASM continues 
to study the Administration Bill to evaluate the best approach to 
achieving expedited research that advances the defense against 
bioterrorism but does not dilute the continuing, critical battle 
against naturally occurring infectious diseases. The ASM suggests 
expeditious review of the appropriateness of each transfer of a 
facility or responsibility related to biological organisms from an 
existing agency.
    For example, as noted above, the defense against bioterrorism must 
be fully integrated into the nations public health system that is led 
by the Centers for Disease Control and Prevention. Currently, CDC would 
use the national pharmaceutical stockpile in response to infectious 
diseaseoutbreaks--both natural and intentional. Sections 501(3)(B) and 
502(6) would transfer the Strategic National Stockpile to DHS. Such 
transfer should be reviewed carefully during further consideration of 
the Bill. HHS should be responsible for developing the materials in the 
stockpile. Therefore, it seems appropriate for HHS to continue 
management of the stockpile. The ASM, however, understands the 
coordination and oversight function envisioned for DHS, and the final 
resolution of the management of the stockpile ultimately must depend 
upon the resolution of the scope and role of DHS responsibilities and 
activities.
    Similarly, transfer provisions relating to programs and activities 
of the Department of Energy's microbial genome research appear to be 
proposed although ASM cannot readily discern from the Bill the portions 
of the genome program that would be transferred under Section 302(2)(A) 
of the Bill.
    In closing, we reaffirm ASM's commitment to work with the 
Administration and Congress to achieve the most efficient and effective 
system in the world for research, control, and response to the threat 
posed by biological agents.

        Sincerely,
                            Abigail Salyers, Ph.D.,
                                             President, ASM

                            Ronald M. Atlas, Ph.D.,
                                       President Elect, ASM

                                Gail Cassell, Ph.D.
                 Chair, Public and Scientific Affairs Board

                        Kenneth Berns, M.D., Ph. D.
         Co-Chair, Task Force on Biological Weapons Control

                              ------------

             Computer & Communications Industry Association
                                                       July 8, 2002
Hon. Sherwood Boehlert
Chairman, House Committee on Science, Rayburn House Office Building, 
        Washington, D.C. 20515
    Dear Chariman Boehlert: Congress and the Administration have 
reacted swiftly and decisively to the challenge of terror in the past 
year. As befits Americans in times of crisis, we have joined together 
to fight a commonenemy. Thanks to our collective efforts, those who 
would destroy our society are in disarray, and our nation--for now, at 
least--is secure.
    Yet, for all the good we have accomplished since September 11, 
fundamental liberties will be at risk if we are too zealous in our 
pursuit of wrongdoers. We must avoid departmental incentives that 
compromise core agency missions or, worse traditional democratic 
values. We believe the proposed transfer of the Computer Security 
Division from the National Institute of Standards and Technology (NIST) 
to the proposed Department of Homeland Security is one such action, and 
one we strongly urge you to oppose. Such a transfer would transform 
NIST from a civilian agency known for assisting the private sector into 
one in which law-enforcement and national security concerns are 
dominant.
    NIST has distinguished itself through its expertise in cryptography 
the creation of codes crucial to safeguarding business, government and 
personal assets from unauthorized access. NIST technicians have 
performed yeoman's work in establishing government security procedures, 
in developing cryptographic toolkits for the public and private sectors 
and, most recently, in sponsoring development of the Advanced 
Encryption Standard. The AES competition, which drew on the efforts of 
cryptographers around the world, is already the unchallenged benchmark 
for civilian code-making excellence. Likewise, NIST's Common Criteria 
computer-security initiative has won enthusiastic cooperation from the 
private sector. All of this has taken place under the auspices of the 
Computer Security Act of 1987, which assures that NEST will work with 
business and civilian agencies alone to achieve its goals.
    Not everyone agrees with the Computer Security Act, however, The 
National Security Agency and the FBI, for instance compromised NEST's 
traditional role during the 1990s. Despite clear requirements that NEST 
serve only civilian interests, NIST succumbed to pressure from these 
agencies and began promoting a series of flawed ``security'' 
initiatives. One such initiative, known as the Clipper Chip, would have 
given national security and law enforcement guaranteed access--a back 
door--to the encoded, confidential communications of US citizens as 
needed.
    The Clipper Chip proposal was both controversial arid 
technologically flawed. lied it been implemented, the nation's 
infrastructure would have been irreparably harmed, and our networks 
rendered highly vulnerable to attack.
    Subsequent iterations of the plan known as ``key recovery''; and 
``message recovery'' only raised more questions. Those questions, in 
turn, led to lengthy and critical reports from the National Academies 
of Science (http://book.nap.edu/books/03090544753/html/1.html) as well 
as a panel the world's most prominent cryptographers (http://cdt.org/
crypto/riks98/).
    Both groups concluded that key recovery weakened overall security. 
But those assertions only doubled the resolve of law enforcement. At 
one point, the FBI pushed hard to outlaw all cryptography that did not 
have such security-weakening back doors already built in.
    Controversy swirled for nearly a decade over this and similar 
initiatives. The fight pitted business and civil-liberties groups 
across the political spectrum against the NSA and FBI. The topic soon 
became so politically sensitive that one White House Clipper Chip 
proponent declared it the--``Bosnia of technology policy.'' The last 
administration ultimately abandoned its encryption-control policy more 
than two years ago.
    Clearly, law enforcement and national-security sectors have a 
checkered past with regard to NIST and computer security, Their 
interference in NIST's mission has repeatedly compromised the private 
sector's confidence in the Institute and seems certain to do so in the 
future if repeated. We believe the last thing our nation needs now is a 
reprise of debates that were long ago settled.
    As always, we remain eager to work with you and the Committee to 
help address any concerns you may have about computer security and the 
Department of Homeland Security.
                                           Ed Black
                                         President and CEO,
             Computer & Communications Industry Association

                              ------------

       Information Technology Association of America (ITAA)
                                                      July 1, 2002.
Hon. Sherwood Boehlert
Chairman, House Committee on Science, Rayburn House Office Building, 
        Washington, D.C. 20515
    Dear Chariman Boehlert: On behalf of the 500 members of the 
Information Technology Association of America (ITAA), I would like to 
commend you for your ongoing efforts to protect our nation's critical 
infrastructure. Your work to bring more resources to bear to improve 
government information security is vitally important. The creation of 
the Department of Homeland Security can foster additional progress in 
this area, but it needs to be structured in the right way to accomplish 
that goal.
    As the Committee reviews the Homeland Security Act of 2002 and 
considers possible changes to the bill, ITAA strongly encourages you 
and other Members of Congress to work with the Bush Administration to 
highlight information security in the new Department.
    Towards this end, ITAA recommends creating a separate Bureau of 
Cyber Security headed by an Assistant Secretary for Cyber Security. 
Under the current proposal, the components that would be merged into 
DHS from other departments and agencies that focus on cyber security 
(e.g. NIPC, NCS, CIAO, and Cybercorps) would be included with those 
that focus on physical security. This melding would be a mistake. The 
challenges in the cyber world are sufficiently different from those in 
the physical world to merit a separate, focused entity headed by a 
Senate-confirmed public official.
    ITAA also supports specific new authorization/appropriations for 
funds that facilitate the sharing of data across the new Department's 
myriad of organizational units. If new funds are not made available, 
then funding for the IT needed to share information will not be 
forthcoming as each organizational unit will strive to hold onto its 
existing appropriations for other priorities.
    ITAA endorses four additional changes to the Homeland Security Act 
of 2002:
     Substitute existing language in Title II of the Act in 
Section 204 with current language from the ``Critical Infrastructure 
Information Act,'' that U.S. Representatives Tom Davis and Jim Moran 
and U.S. Senator Bob Bennett and others have been working on to 
eliminate legal barriers to information sharing between government and 
industry.
     Add the Federal Information and Security Management Act 
(FISMA) or H.R. 3844 to the Act. FISMA strengthens, renews, and extends 
the Government Information Security Reform Act (GISRA), and requires 
all Federal agencies to implement a risk-based management approach to 
developing and implementing information security measures for all 
information and information systems.
     Increase emphasis on Research and Development issues in 
the new Department structure. We believe that the Department's research 
and development functions relating to information security should be 
the responsibility of the new Assistant Secretary in the cyber security 
bureau.
     While the Department of Homeland Security may well wish to 
develop its own capabilities similar to those of the Computer Security 
Division of the National Institute of Standards and Technology (NIST), 
we recommend leaving the Computer Security Division in NIST, where it 
is integrated with other functions of NIST's computer research 
operations.
    We appreciate your considering our recommendations.
        Sincerely yours,
                                  Harris N. Miller,
                                                  President

                              ------------

       Information Technology Association of America (ITAA)
                                                       July 9, 2003
Hon. Sherwood Boehlert
Chairman, House Committee on Science, Rayburn House Office Building, 
        Washington, D.C. 20515

           RE: Comments Regarding ``Amendments to H.R. 5005''

    Dear Chariman Boehlert: On behalf of the 500 members of the 
Information Technology Association of America (ITAA), I would like to 
commend you for your ongoing efforts to protect our nation's critical 
infrastructure. Let me express our appreciation for the opportunity to 
comment on a circulation by Science Committee staff of ``Amendments to 
ER. 5005 Offered by Mr. Boehlert.'' Our comments in this letter are 
limited to the provisions identified as ``Sec. 205. Information 
Security,'' although we may have some additional comments about ``Sec. 
206 NETGUARD'' later this week.
    As you know from earlier correspondence, while the Department of 
Homeland Security may well wish to develop its own capabilities similar 
to those of the Computer Security Division of the National Institute of 
Standards and Technology (NIST), we strongly recommend leaving the 
Computer Security Division in NIST, where it is integrated with other 
functions of NIST's computer research operations. Our comments on Sec. 
205 proceed from this assumption.
    As a general matter, we fully support the role NIST plays in 
developing security and authentication guidelines for the Federal 
Sector, its role in developing quality assessment measures, and its 
consultative role with other Federal agencies in the field of computer 
security. Many of our members, however, have serious concerns with 
proposals for NIST to engage in conformance testing of commercial 
products and certification of private sector labs to test commercially 
available security products for their use in the Federal sector. First, 
widely available commercial security standards already exist without 
the necessity of reinventing a Federal wheel. Second, the applicability 
of these provisions to virtually ALL products with security features 
would mean a vast effort to create testing protocols and lab 
certifications for minor features and a substantial cost for testing 
with correspondingly little return in terms of the benefit to the 
government. These provisions simply put represent overkill that will 
not have the intended effect of benefiting the efficient and effective 
deployment of security solutions in Federal agencies. They will only 
add unnecessarily to the cost of government procurement of needed 
security solutions.
    Our members continue to study these amendments arid other 
provisions of this important legislation and I look forward to 
continuing our dialogue in the coming days and weeks. Again, we deeply 
appreciate your commitment to leadership in the field of information 
security and stand ready to assist in whatever way we can with the 
creation of an effective, efficient and successful Department of 
Homeland Security.
        Very truly yours,
                                 Joseph Tasker, Jr.
 General Counsel & Senior Vice President Government Affairs

                              ------------

              Software and Information Industry Association
                                                      June 27, 2002
Hon. Sherwood Boehlert
Chairman, House Committee on Science, Rayburn House Office Building, 
        Washington, D.C. 20515

RE: Transfer of NIST's Computer Security Division to the new Department 
                          of Homeland Security

    Dear Chariman Boehlert: On behalf of the Software & Information 
Industry Association (SIIA), the principal trade association of the 
software code and electronic content industry, I am writing regarding 
the Administration's proposal to move the Computer Security Division 
(CSD) of the National Institute of Standards and Technology (NIST) out 
of the Department of Commerce and merge it into the proposed new 
Department of Homeland Security. SIIA 800 member high-tech companies 
develop and market software and electronic content for consumers, 
business, education, entertainment and the Internet.
    While our Association has supported and continues to support the 
Administration's efforts to make our country more secure in the face of 
terrorist threats, the particular provision found in Section 202 would, 
in our view, be counterproductive to the Administration's goals and 
undermine the long-standing work of NIST, its Information Technology 
Laboratory and the CSD in working with industry in a non-regulatory 
environment to assure greater confidence in IT systems in both the 
public and private sectors. In short, moving the Computer Security 
Division into the new Department will, in all likelihood, reduce the 
ability of NIST to continue its important role and provide technical 
expertise to promote more confidence in IT security.
    NIST's CSD has played an meaningful role in working with the 
private sector (both for-profit and not-for-profit) in a non-law 
enforcement, non-regulatory setting with direct benefits for enhancing 
the level of confidence in computer security practices that have 
benefited both government and commercial IT systems. Hundreds of 
companies have utilized CSD's world-class testing modules and voluntary 
standards and protocols, and we were pleased to see the announcement 
late last year of the new Advanced Encryption Standard (AES)--the 
result of 4 long years of public-private partnership.
    The inclusion of NIST's CSD in the Administration's proposal comes 
as some surprise, as it was not included in the White Paper, ``The 
Department of Homeland Security'', released earlier this month. As 
Section 202 requires the transfer of functions, personnel, assets, and 
liabilities of the following entities [including]... ``(4) the Computer 
Security Division of the National Institute of Standards and 
Technology, including the functions of the Secretary of Commerce 
relating thereto,'' we are concerned that no analysis has been provided 
of how the transfer of the CSD our of NIST fits into and supports the 
operational role that is inherent to the new Department. The work of 
this one unit of NIST's Information Technology Laboratory (ITL) depends 
on and is integral to NIST's on-going collaboration with the private 
sector based on science, research and innovation in promoting U.S. IT 
in global markets.
    The credibility and success of NIST's CSD has depended on effective 
independence from and appropriate collaboration with law enforcement 
and national security agencies in the U.S. and abroad. This 
effectiveness has not come without substantial effort over the last 10 
years. In the 1980's and early 1990's, there were indications of 
inappropriate influence of law enforcement and national security in the 
development of standards for ``sensitive, unclassified'' information, 
and this delayed the development of computer security standards.\1\ In 
fact, in creating NIST's responsibilities for developing federal 
computer systems security standards and guidelines for sensitive but 
unclassified information, the Congress recognized that absent specific 
directions, these activities could favor military and intelligence 
agency needs to the exclusion of other vital national interests.\2\ 
This independence could not be maintained in the new Department of 
Homeland Security.
---------------------------------------------------------------------------
    \1\ Whitfield Diffie and Susan Landau, Cryptography's Role in 
Protecting the Information Society, National Research Council Press, 
1996, P. 139.
    \2\ See Conference Report, ``Computer Security Act of 1987'' P.L. 
100-235 at p. 26.)
---------------------------------------------------------------------------
    With its $10.2 million budget--just 0.027 percent of the proposed 
Department's $37.45 billion in expenditures--the CSD would simply be 
emasculated by the larger agencies and missions that will become part 
of the new Department of Homeland Security. In this context, the CSD 
would simply become a secondary concern--which is not the situation in 
its current status at the Department of Commerce.
    As the Administration indicated in its blueprint released earlier 
this month, ``Homeland security will continue to require interagency 
coordination.'' \3\ We completely agree with this conclusion. Based on 
the demonstrated ability of NIST to work effectively with the private 
sector, while ensuring effective collaboration with other governmental 
agencies, we urge that the new Department focus on continued 
interagency coordination with NIST's CSD rather than taking the 
inevitably counterproductive step of folding this small, but vital, 
office into a new government agency.
---------------------------------------------------------------------------
    \3\ White House Office of Homeland Security, ``The Department of 
Homeland Security'', June 2002, p. 8. Found at http://
www.whitehouse.gov/deptofhomeland/book.pdf.
---------------------------------------------------------------------------
    We appreciate the opportunity to convey our views on this proposal. 
Please do not hesitate to contact me if I can provide additional 
information or answer any questions.

    Sincerely,
                                         Ken Wasch,
                                                  President

    Ms. DeLauro. Thank you, Mr. Chairman, and thank both of you 
for your testimony and for your great work. I have two 
questions. The first question is, and help me with this, are we 
talking about transferring all the labs, Energy, Commerce, Ag, 
Defense, to a new entity?
    Mr. Boehlert. There is not going to be a transferring of 
all labs. There is going to be a transferring of some portion 
of Lawrence Livermore and some portion of the DOE labs, but we 
specify in our proposal that there be a 60-day advance 
notification of any plan to transfer and outline in specific 
terms of who is going to do what under what circumstances, what 
is going to happen to the infrastructure, what is going to 
happen to the employees. In other words, we are not opposed to 
the transfer of laboratory responsibilities to the new 
Department of Homeland Security, but we want a well thought-out 
plan.
    The administration plan is a little bit sketchy on that. I 
am confident that it will be well thought-out once it is 
presented, but we think we should have some advance 
notification of that so we could have an opportunity 
collectively--.
    Ms. DeLauro. But there are different procurement system in 
various places and to meld all of that is seemingly--.
    Mr. Boehlert. It is a challenge and a half, but so is this 
very daunting assignment.
    Ms. DeLauro. Let me just ask, because I think the way you 
proceeded is the right way to proceed, with strong emphasis on 
science and technology--. This is really again, like we have 
talked about, the NIH and the CDC and those pieces of our 
health infrastructure, the whole effort in science and 
technology, this is truly part of our existing infrastructure 
and we shouldn't dissipate the ability that we currently have 
or give it less of an opportunity to play the role that it 
should play. Now, you have recommended that there be an under 
secretary to handle this area. Also the National Research 
Council, I was reading their materials, has said there ought to 
be an under secretary.
    Let me just ask you whether or not in the final product 
here if a decision would be not to have a new under secretary 
to handle this information? What do you think is the result for 
Science and Technology for the future and where would that 
leave both of you in term of this overall proposal on the 
Department of homeland security?
    Mr. Boehlert. My view is it would send exactly the wrong 
signal to the Congress and the American people. The American 
public is very sophisticated. They know the great advances that 
have been made possible by the proper Federal investment and in 
many instances a partnership with the private sector and the 
university-based research centers. The great wave of the past 
10 years, a decade of unprecedented growth in our economy was 
largely made possible by our investments in research and 
development.
    So if we downplay rather than focus proper attention on 
research and development, I think a lot of people will question 
the seriousness of our intent. Bottom line, we want to 
demonstrate to the American people that above everything else, 
homeland security is number one, and the greatest weapon we 
have in our arsenal to advance our cause is research and 
development properly directed.
    Ms. DeLauro. Mr. Hall.
    Mr. Hall. I think that was well said. That was the opinion 
of almost everyone. I think that was a voice vote--.
    Mr. Boehlert. We didn't have any opposition to that because 
we thought it through and, once again, our committee, and I can 
only speak for our committee, but we spent a lot of time in 
preliminary work and discussions before we got to the actual 
sessions.
    So Mr. Hall and every single Democrat on the committee felt 
they had every opportunity to present their point of view, and 
the Chair was not arbitrary. I lost a couple of amendments, the 
Barton amendment referred to by Mr. Frost, by a very narrow 
vote. The Chair has a lot of advantages in a hearing like this, 
and I don't think we are dealing with all equals. The Chair is 
the first among equals. I accepted that loss. I didn't agree 
with it, and I am appealing to the wisdom of this committee to 
reexamine that and not be so specific in its direction to this 
new department that we say this is a specific type of research 
you have to fund, this is a specific center, and here is the 
location of that center. I think we are making a big mistake if 
we interpose our views on this new department. I think we have 
got to be very supportive and give them the resources they need 
and the flexibility to do the job.
    Ms. DeLauro. I will ask a question that Mr. Frost would 
usually ask in these hearings, that if the final product does 
not have a new under secretary, would you be offering an 
amendment on the floor--.
    Mr. Boehlert. We will have to know the rules of engagement 
as we get to the floor, but let me tell you the final product 
doesn't have to represent what I agree with 100 percent or what 
Mr. Hall agrees with 100 percent. The final product has to give 
some assurance to the American people that we are serious in 
this effort, we are putting our best minds to the task and we 
have come up with something that we are probably identifying 
with every single member of this Congress. And the final 
product will not have 100 percent of what any one of us want. 
But it will demonstrate to the American people the seriousness 
of our purpose.
    Ms. DeLauro. Thank you very much to both of you and for 
your great work.
    Chairman Armey. Thank you. The Chair now recognizes the 
gentlelady from California, Ms. Pelosi.
    Ms. Pelosi. Thank you, Mr. Chairman. I want to join you in 
thanking our distinguished witnesses for their excellent 
testimony and great work in approving the product that is this 
bill, and I hope our chairman will be receptive in his mark to 
your suggestions. I want to ask one question on the subject of 
NIST--the committee's removal of the proposed transfer of the 
computer science division of NIST has been discussed. Is it 
correct to understand that your manager's amendment containing 
this provision passed unanimously?
    Mr. Boehlert. That is correct.
    Ms. Pelosi. So it was unanimous opinion of the Science 
Committee that this be removed?
    Mr. Boehlert. It is.
    Ms. Pelosi. I appreciate that. As you know, Congresswoman 
Lofgren has been our advocate--.
    Mr. Boehlert. She provided leadership on this area and I 
provided followership because she had a good idea and it 
deserves support.
    Ms. Pelosi. I think your comment just now is indicative of 
the testimony of both you and Mr. Hall. You have been very 
generous in acknowledging the work of the members of your 
committee. No wonder you have been so successful in putting 
this together. Thank you, Mr. Hall.
    Chairman Armey. Gentlemen, let me say, first of all, that 
one of the actions taken by your committee I would like to 
applaud is the treatment of NIST. I think it is exactly the 
correct understanding, and I am pleased to see that it was 
unanimous understanding in your committee. I find that very 
encouraging. I have found in all my academic areas that 
international students, international scholars have always been 
a great asset to all of our universities. There is clearly now, 
in America today, an incentive to be, should I say, more 
rigorous in scrutinizing people. I can't resist pointing out 
Einstein came to this country as a refugee from foreign 
despotism. So many of our great scholars have come to this 
Nation seeking freedom.
    Have you addressed this question of how do we manage to 
maintain the security of our great research institutions, while 
at the same time, retain the access to the world intellect that 
this Nation has so thoroughly well enjoyed throughout all of 
its existence? Have you addressed that at all in your bill? Is 
there some provision I should look at or is there something you 
might want to see me include in our mark?
    Mr. Boehlert. Quite frankly we have met with Dr. Marburger, 
the President's White House science advisor and director of The 
Office of Science and Technology Policy, because he is chairing 
an effort on the part of the administration to address this 
very subject. Let me just say that I think this Nation has been 
greatly enriched by those who have come here from abroad, but 
under the current circumstances, we are oftentimes challenged; 
so that is an assignment outside the jurisdiction of our 
committee. We have got to be very rigorous in examining very 
carefully those who seek to come to the United States, but we 
would be making the biggest mistake ever if we denied the 
intellectual capital that so many of these people bring to the 
research and development enterprise. We have noted in our 
report that we think as much of the research as possible should 
be unclassified, but we are very sensitive, and as a member of 
the House Permanent Select Committee on Intelligence, I am very 
mindful of national security needs and those should not be 
ignored.
    But the fact of the matter is I think we have got the right 
approach to this.
    Chairman Armey. Thank you.
    Mr. Hall. I think, Mr. Chairman, that the Woolsey amendment 
in creation of the Homeland Security Institute that gives some 
flexibility to us on matters of importance that perhaps no one 
with the Homeland Security could quite fathom themselves. It 
creates a flexible organization that can tap experts as they 
are needed to give advice on that very subject. That is one of 
many that they can give and it relieves the department from 
having full-time people, expensive people, people that really 
would be more needed in some other thrust and specialized 
fields that might be needed for only a short time, and the 
Woolsey amendment gives us that benefit. It is kind of a think 
tank to advise the under secretary in specific matters, such as 
the one you inquired about.
    Chairman Armey. Thank you. I will make it a point to look 
at that tonight. I want to thank both of you. We will, for the 
next 30 days or so, perhaps be in touch with you for matters of 
the official record, but in the meantime, thank you for your 
good work in your committee. Thank you for your testimony.
    Mr. Boehlert. Thank you, Mr. Chairman. I want to thank this 
Committee for taking on this important assignment. It is very 
demanding and time consuming, but it is very necessary.
    Chairman Armey. The Chair recognizes both the chairman and 
the ranking member of the Transportation Committee, and the 
Chair would invite you both to come to the dais. You don't want 
to. I might mention as you make your way to the table that it 
is the practice of this committee to put your formal statements 
in the record and to invite you each to in your turn give your 
opening statement and then we would proceed by asking 
questions. The Chair cannot help but recognize that Chairman 
Young is always the contrarian, has rearranged the seating 
order. And the Chair recognizes Chairman Young.

 STATEMENT OF THE HONORABLE DON YOUNG, CHAIRMAN, COMMITTEE ON 
               TRANSPORTATION AND INFRASTRUCTURE

    Mr. Young of Alaska. Thank you, Mr. Chairman and Madam 
Chairman. I can tell you, I am to the right and my good ranking 
member is to the left, but we are in this together and I want 
everybody to understand that on the committee. On July 11, as 
directed by leadership we passed out of the committee by 
unanimous vote our recommendations to this committee. We did 
recommend that we transfer TSA, and I believe the government 
buildings to the new homeland security. We did not recommend, 
however, we transfer the Coast Guard and FEMA. We sent you a 
lengthy report. I hope you had time and will have time, your 
staff has time, to read it, for the reasons stated, we did not 
believe that is a wise thing to do and we very frankly think 
that you have great responsibility. We also have a 
responsibility.
    I have spoken to you personally, Mr. Armey about the time 
schedule, what we want to get done, can we do it and should we 
do it right. I think we should do it right and can we do it in 
that short period of time? That is yet to be seen. I am 
concerned in my own way, about especially the Coast Guard and 
FEMA as I mentioned, and what will happen to them if they are 
transferred over to a new department. What will be their 
direction? So consequently, what we recommended to you because 
these two agencies are actually the only two agencies to 
interface with constituencies, yours and mine, 365 days of the 
year, 24 hours a day.
    More so than the Army, the Navy, the Air Force or Marine 
Corps or the FBI, the CIA or anything else, these two agencies 
are there on demand, on call every hour of the day. Be it an 
earthquake, a flood, forest fire, some other catastrophe, even 
a terrorist attack. That is FEMA. It is the Coast Guard, it is 
search and rescue, a lost sailor, fisherman, boater, child, 
wife, husband and uncle, grandma and grandpa. They are on 
demand there immediately.
    Maybe it is interceding with foreign fleets that invade our 
waters and take our fish and destroy our environment. They are 
there immediately. Maybe it is navigational aids that make our 
ships avoid the catastrophe that happened in my State in an oil 
spill. They are there immediately putting those navigational 
aids in. Maybe they are there to not only prevent the oil spill 
but to clean it up. They have the responsibility to do that 
today.
    Maybe it is the smuggling of drugs that enter the coast of 
California, Florida, Texas, Alaska or any other State that has 
oceans on it's shores, or maybe it just might be interdiction 
of those refugees that are coming in illegally, but they are 
there all the time. They are there all the time and they have 
done that job outstandingly without the money that we should 
have been giving them.
    And I will give the President credit. This is the first 
year that the Coast Guard has been funded adequately, even 
before 9-11, and we saw the response in the New York Harbor. As 
I told the President, and you were there Mr. Armey, and I will 
tell the public, I believe that the responsibility of the Coast 
Guard should be maintained as a unit. That if they continue 
those missions which we have drafted in this legislation as we 
proposed to you, and in the report, we still give the President 
the flexibility financially. You have a chart in front of you, 
I think you have it, but for the major missions we, in fact, 
keep the funding at that level. Yet 50 percent of the money he 
can redirect, do what he wants to do, because 22 percent of 
that 50 percent is already in port security. So what I am 
asking this committee as you structure your bill is, to 
consider the words I have given you about FEMA and about the 
Coast Guard and about the immediate interfacing.
    I understand why the President has been asked to do this 
and what you have been charged to do, and that is to try to 
make this run more efficiently. And I hope that will be the 
result. If I can sound a little bit of a warning, Mr. Oberstar 
and I passed TSA with great intentions, and we had some 
estimates and thoughts, and every time you turn around, it gets 
bigger and bigger and less efficient and less efficient, and 
that concerns me a great deal. We don't want that to happen in 
Homeland Security.
    But if we do create this agency, if we do have a 
department, a cabinet member, a secretary, if we do, and I 
think it is correct if we do have to, and I don't recommend it 
in my legislation, to transfer either one of the agencies of 
Coast Guard or FEMA, that their mission is left intact and is 
not diminished in any way, shape or form.
    That is what I am asking this committee to do. If you don't 
do it, then we have some long discussions ahead of us, because 
I believe I am absolutely on target for what I have just said, 
not because of me, but because the action that has taken place 
in my State by both of these agencies and what they do and how 
they do it, the professionalism, the results they give us. All 
I ask you to do as you listen carefully as you meditate and 
draw this bill together, heed some of the words I have just 
given you. Thank you very much.
    [The statement of Mr. Young follows:]

     PREPARED STATEMENT OF HON. DON YOUNG, CHAIRMAN, COMMITTEE ON 
                   TRANSPORTATION AND INFRASTRUCTURE

    On July 11, 2002, the Committee on Transportation and 
Infrastructure met to consider H.R. 5005, the Homeland Security Act. 
The Committee by voice vote adopted a bipartisan amendment that 
recommends the transfer of the Transportation Security Administration 
(TSA) and the Federal Protective Service to the Homeland Security 
Department. Both of these transfers were requested by the President and 
we have honored that request.
    However, the Committee recommended against transferring the Coast 
Guard and the Federal Emergency Management Agency (FEAM). The Committee 
has sent to you a lengthy report to accompany their legislative 
recommendation which details the very good reasons for our 
recommendation.
    There is no doubt that after the events of September 11th, the 
President must be given the resources to protect this country from all 
attacks, whether terrorist or otherwise. However, my committee has 
expressed its collective view that the bill as introduced simply goes 
too far and covers too many agencies.
    There is a tremendous concern that the bill as introduced will 
create a great deal of bureaucratic chaos and inaction. There is also 
some concern that the bill gives the Secretary of Homeland Security 
unprecedented power with few checks and balances.
    I want to make it clear that we do not object to the creation of a 
Department of Homeland Security however, the bill as introduced raises 
many concerns which this Congress has a responsibility to address.
    The Transportation Committee agrees that it is appropriate to 
transfer the TSA and the Federal Protective Services to the Department 
of Homeland Security because both of those agencies have as their 
primary mission securing against acts of terrorism or violence. They 
are both security agencies. However, both the Coast Guard and FEMA 
provide a broad array of services to average citizens and have had 
limited responsibility in the area of security. While maritime security 
is an extremely important function of the Coast Guard which should 
never be minimized, they have other functions which are also vital to 
the wellbeing of the American people.
    The Coast Guard also provides for search and rescue of boaters, 
they keep our waterways open to navigation through their ice breaking 
efforts and they maintain critical aids to navigation. They protect our 
environment and fisheries resources, they keep passengers safe on 
commercial vessels of all types, and interdict both drugs and illegal 
immigrants.
    We've given the Coast Guard a great deal of work to do and they 
have always carried out their duties with distinction.
    The same can be said of FEMA which responds to both natural and man 
made disasters. FEAM has many other responsibilities as well. They are 
important not only in responding to disasters but in preventing and 
preparing for disasters of all types. They play a key role in training 
fire fighters. They prepare flood plain maps and operate the flood 
insurance program.
    If the Secretary of Homeland Security wants to commit his entire 
effort to preventing terrorist attacks, under the bill as introduced, 
he can reduce the resources of the Coast Guard and FEMA for these other 
missions and direct those resources entirely to security.
    I have grave concerns about giving the secretary that kind of 
power. If the Select Committee overrules our 75 member committee, I 
would strongly recommend that at a minimum, the missions of the Coast 
Guard and FEMA be mandated to insure they are funded and carried out 
consistent with the will of Congress.
    Our Committee also made recommendations with regard to the manner 
in which the new department will acquire land and office space. We 
believe that the GSA is the proper agency to act on behalf of the 
department to acquire and manage any space needed for offices. It will 
be a massive job to develop the headquarters space and office space for 
all the many agencies affected by this bill.
    The Agencies identified by the Administration to be consolidated in 
the new department occupy roughly 4.9 million square feet of GSA 
assigned space in either leased or owned buildings. If the new 
Department of Homeland Security were consolidated in the Washington, DC 
area, it would require a building almost the size of The Pentagon, 
which is at least 5 million square feet of space.
    GSA has the experience and expertise to serve the new department's 
real estate needs. We have included provisions in the bill to expedite 
the acquisition of a new headquarters for the DHS.
    Our committee worked on a bipartisan basis to develop our 
recommendations. We believe they are the best recommendations we can 
make within such a short time period.
    I would urge you to give great deference to the committee that has 
the longest history of dealing with these issues and understands the 
impacts of transferring these agencies.
    When this bill is signed into law by the president, I hope that we 
can all be sure that the Department of Homeland Security can indeed 
keep our country secure from terrorist attacks, while preserving all 
the important missions that these many agencies carry out each day.
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    Chairman Armey. Mr. Oberstar.

STATEMENT OF THE HONORABLE JAMES L. OBERSTAR, A REPRESENTATIVE 
            IN CONGRESS FROM THE STATE OF MINNESOTA

    Mr. Oberstar. Thank you, Mr. Chairman. Chairman Young has 
stated the case on the Coast Guard with great feeling and 
passion, and I hope persuasiveness, certainly persuasive to me 
and to the 73 other members of our Committee on Transportation 
and Infrastructure. We come to you with more than a half 
century of experience in transportation between the two of us, 
and for myself, I would say I have served this body both as a 
member and previously as a staff member for my predecessor John 
Blatnik, who chaired the subcommittee that created the 
Department of Transportation. I participated in that staff work 
from January 24, 1966, until its enactment, its signature into 
law, by President Johnson on October 15 of that same year. We 
spent ten months working in very close cooperation with the 
White House, the White House staff, weekly meetings and 
sometimes daily meetings, with total cooperation between the 
executive branch and the legislative branch, which has not been 
the case with this proposal for Homeland Security.
    As Chairman Young suggested, look carefully at our 
committee report on the agencies under the responsibility of 
our committee or the jurisdiction of our committee. We have 
authority over 56 percent of the personnel and nearly an equal 
amount of the budget that will be the basis of this new 
Homeland Security Department. Coast Guard, Federal Emergency 
Management Administration, FEMA, the Transportation Security 
Administration, and the Federal Protective Service. This is a 
huge undertaking that you are charged with and that the 
President has set forth--22 agencies, 169,000 staffing, and 
some $38 billion in funding. But our objective, as we proceeded 
to undertake our role in this, was not to look at shifting 
boxes, but to look at achieving the mission, and as the 
chairman said, we want to get that mission right. We want to 
get those issues of transportation security right.
    And I want to address the matter of the Transportation 
Security Administration. That was the major concern of this 
entire country, of the President and of this Congress 
immediately after the attack on September 11. First was to make 
New York whole and address the other needs of security in this 
country with an immediate appropriation. The next was to 
strengthen aviation security and security in other modes of 
transportation might be vulnerable. I was the author in 1990 of 
the first Aviation Security Act in the aftermath of Pan Am 103. 
It was at the request of then President Bush that I crafted the 
legislation to establish a commission, the President's 
Commission on Aviation Security and Terrorism, and I served on 
that Commission along with John Paul Hammerschmidt from the 
House, and Senators D'Amato and Lautenberg in the other body 
and three public members.
    We spent ten months inquiring into the tragedy of Pan Am 
103, and we set forth recommendations that were crafted into 
legislation, signed into the law by the President, but 
regrettably not fully implemented. Airlines resisted, airports 
resisted, other forces resisted the full implementation of 
those provisions. Now we have a law that goes even further 
than, the Aviation Security Act of 1990, with tough deadlines, 
strong provisions, and I don't want to see any of those 
undermined.
    Never again do I want to stand at an abyss as we did in 
Lockerbee and look into a hole that was 14 feet deep, 150 feet 
long, a trench filled with water where an apartment building 
had stood and where the fuselage of Pan Am 103 exploded and 
incinerated people. We vowed that never again will this happen. 
But it did happen because we weren't vigilant enough because 
the patience of the public wore thin; because the forces who 
lobbied against criminal background checks for airport security 
screeners prevailed rather than the provisions of law. I don't 
want to see that happen with the Transportation Security 
Administration that we have crafted and that the Congress 
passed by an overwhelming vote once again.
    We have said in this legislation that the Transportation 
Security Administration may well indeed be transferred to the 
new department of homeland security provided certain steps are 
taken first, that the key positions are filled. The Secretary, 
the Secretary for Homeland Security, the Under Secretary for 
Border and Transportation Security, the Assistant Secretaries 
for Transportation Security are filled, that the Secretary of 
Transportation has certified that explosive detection systems 
are deployed at all U.S. Airports as we provided for in this 
law and that these systems are, in fact, operating to screen 
all checked luggage, that the Secretary of Transportation has 
certified that there are a sufficient number of Federal 
screeners, security managers, security personnel, and law 
enforcement officers deployed at all airports where screening 
is required under the law.
    If you don't do that, if, in fact, this agency is 
transferred to the new Department and is then subject to the 
endless bureaucratic wrangling and tangling that will happen, 
and believe me it will happen, I know, I've seen it, then we 
will have undermined the very cornerstone of aviation security 
and of transportation security.
    So leave it as it is. Secretary Mineta said we will meet 
all those deadlines. He said we are going to meet all those 
deadlines. What we are offering you in this bill that we have 
reported from Committee is an insurance policy against the 
failure of the transfers and of the deadlines to be met. And 
those deadlines were not afterthoughts. They were not slipped 
into the bill undercover of darkness. They were openly debated 
in committee, on the floor, in conference. The American public 
said we want this done, we want it done yesterday. People 
weren't boarding airplanes because the fares were too high. 
They weren't boarding airplanes because their anxiety level was 
too high and they wanted these tougher measures of security.
    We have provided it. This Department of Transportation 
under Secretary Mineta and Deputy Secretary Jackson and Under 
Secretary Magaw couldn't work hard, couldn't be working faster 
to achieve those goals. Norm Mineta is putting 17 hours a day 
and Michael Jackson is putting in 18-hour days, 7 days a week, 
but those deadlines have to be met and if you do anything to 
disrupt it and something happens, that would be terrible.
    We have, for example, asked now the administration for 
information. We couldn't get it. We got no responses to our 
requests from both sides of the aisle together for basic 
factual information, are explosive detection systems being 
purchased with facilities and equipment funding, from airport 
and airways trust fund, or from what other fund? Is the civil 
penalty authority of DOT going to be transferred to the new 
department, or will it remain with the existing Department of 
Transportation?
    Will Homeland Security agencies that are now in leased or 
government-owned space going to be transferred in those same 
conditions or will they be government-owned space? What will be 
the condition? We couldn't get answers to those simple factual 
questions. So we moved ahead with legislation.
    There is also wrangling over deadlines and I have heard 
that there may be a measure to stretch out the deadline for 
compliance with the security provisions of the Transportation 
Security Act. I urge you not to put any such extraneous 
language in this Homeland Security Department. Stick with the 
law. There is flexibility in the law to meet those deadlines, 
but don't try to undermine the law.
    Chairman Armey. Thank you.
    [The statement of Mr. Oberstar follows:]

PREPARED STATEMENT OF HON. JAMES L. OBERSTAR, RANKING MINORITY MEMBER, 
             COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

    Mr. Chairman, Congresswoman Pelosi, and Members of the 
Committee, thank you for the opportunity to testify before the 
Select Committee on the bipartisan homeland security 
recommendations of the Transportation and Infrastructure 
Committee. Our Committee has worked on transportation security 
and safety issues for decades and, between us, Chairman Young 
and I come to you with more than a half-century of experience 
in transportation issues. As you develop your recommendations, 
I urge you to consider our Committee's expertise in determining 
how the Coast Guard, the Federal Emergency Management Agency, 
the Transportation Security Administration (TSA), and the 
Federal Protective Service best fit within a plan for homeland 
security and how they can best contribute to the welfare of 
this Nation.
    As we consider this issue, we all must appreciate the 
magnitude of what we are considering--a proposal that, as Norm 
Ornstein points out, is arguably the largest governmental 
reorganization in history. The President's proposal envisions 
consolidating parts of 22 different agencies--including more 
than 100 governmental entities with more than 169,000 employees 
that are employed in 4.8 million square feet of space all 
across this Nation--with many different missions, cultures, and 
histories. As we create a Department of Homeland Security, we 
cannot focus on shifting boxes; we must focus on achieving the 
mission--to prevent terrorist attacks, reduce vulnerabilities, 
and, in the tragic event of an attack, to minimize damage and 
begin the process of recovery. Moreover, we must ensure that we 
get it right!
    Today, I would like to focus on our Committee's bipartisan 
recommendation to getting transportation security right. Like 
the Administration's bill, the Committee-reported bill 
authorizes the transfer of the TSA to the Department of 
Homeland Security but, unlike the Administration's bill, the 
Committee makes clear that the transfer will not jeopardize 
TSA's security mandate. Under the Committee-reported bill, no 
transfer will occur until:
     key positions are filled, including the Secretary 
of Homeland Security, as well as the Under Secretary for Border 
and Transportation Security, and the Assistant Secretary for 
Transportation Security;
     the Secretary of Transportation certifies that 
explosive detection systems are deployed at all U.S. airports 
required under the Aviation and Transportation Security Act and 
that these systems are screening all checked baggage; and
     the Secretary of Transportation has certified that 
a sufficient number of federal screeners, security managers, 
security personnel and law enforcement officers have been 
deployed at all airports where screening is required under the 
Aviation and Transportation Security Act.
    Achieving these security mandates prior to transferring TSA 
is essential because, again, the purpose of this legislation is 
to prevent terrorist attacks, not move agencies. TSA must not 
be distracted by the uncertainties of an organization change 
while it is fully occupied with the demanding tasks of hiring 
tens of thousands of employees, and purchasing and installing 
several thousand pieces of explosive detection equipment. 
Moreover, at yesterday's Select Committee hearing, Secretary of 
Transportation Norm Mineta made crystal clear that the 
Administration will meet all statutorily mandated deadlines 
included in the Aviation Security Act. Given the 
Administration's commitment, the President will be able to 
transfer TSA on January 1, 2003, as his proposal provides. Our 
provision is a simple insurance policy.
    I would also like to comment on the aviation security 
deadlines imposed by Congress last November in the Aviation 
Security Act, which the House adopted by a vote of 410-9. 
During our Committee consideration of the Homeland Security 
bill, Congressman Mica offered and withdrew an amendment to 
extend the December 31, 2002 deadline for airports to deploy 
explosive detection systems and ensure that these airports are 
screening all checked baggage. There have been press reports 
that there will be efforts to include an extension in the bill 
you are considering. I, and many of my colleagues, would 
strongly oppose an extension at this time. Yesterday, in 
testimony before you, the Administration made very clear that 
it will meet the deadline. It would be wholly inappropriate for 
Congress to weaken this requirement when the Administration has 
made clear that the mandate is within reach. Moreover, the idea 
that the ``Homeland Security'' bill would include a provision 
that would enable a terrorist to more easily get a bomb on a 
plane is directly contrary to everything we are trying to do 
here today.
    Finally, I would like to express my sincere hope that 
Congress will develop a bipartisan homeland security proposal, 
working hand-in-hand with the Administration. To date, I have 
been deeply disappointed in the appalling lack of cooperation 
from the Administration on this legislation. The White House 
has muzzled the agencies and insisted that all contact with 
Congress be cleared through it. As a result, our Committee did 
not receive responses to bipartisan requests for basic, factual 
information--such as whether explosive detection systems are 
purchased with Facilities and Equipment funding from the 
Airport and Airways Trust Fund; whether the DOT's civil penalty 
authority transferred to the new department; or whether the 
proposed Department of Homeland Security agencies are currently 
located in leased or government-owned space--until after the 
Committee reported the bill. I am hopeful that as we move 
forward the Administration will stop stonewalling and expecting 
a rubber stamp, and begin to work with us to try to create the 
Department that best achieves our common goal.
    Mr. Chairman, I am also hopeful that the House Republican 
Leadership will bring this bill to the Floor under an open 
rule. These issues of homeland security, and protecting our 
constituents, are too important to each and every Member of 
this Body to limit an opportunity for a free and open debate of 
these issues. Let the ``House of the People'' work its will.

    Chairman Armey. The Chair will advise you I am being 
advised that we may expect votes on the floor within the next 
15 minutes. So with that in mind, and out of respect for this 
panel's patience getting to the dais, let us try to proceed 
with dispatch, and the Chair recognizes the gentleman from 
Ohio.
    Mr. Portman. I thank the Chair and I want to thank my 
colleagues for their testimony, but more important, for the 
work they put into this, not just over the last couple of weeks 
but over the last several years. And you are right, you have 
got about 56 percent of the people and about 56 percent of the 
budget of the proposed transfer, and obviously your continued 
oversight is going to be critical if this is ever going to 
work, the issue provided for the Transportation Security 
Administration.
    I have a couple of questions. One is with regard to the 
Coast Guard, and Chairman Young, I know you feel very strongly 
about this agency and have worked closely with them over the 
years. My question is if--and you may not want to answer 
hypotheticals--but if the Coast Guard were to have its so-
called homeland security functions transferred over to this new 
Homeland Security Department, and the other functions were to 
be left behind, would that be preferable to you as opposed to 
keeping the Coast Guard intact and moving it over to the 
Department of Homeland Security?
    Mr. Young of Alaska. No. In my testimony, Mr. Portman, I 
believe I said that the Coast Guard has to remain intact, and I 
will stress. It is my preference it stays where it is at, but 
if it has to be moved, it has to be moved intact. I would also 
like to suggest, and I say this as a constructive suggestion, 
(It is not in my testimony). I was deeply concerned about the 
flow chart the President sent to us. No way will I support the 
Coast Guard reporting to the Under Secretary of Border Patrol. 
I don't know where that came from. If anything, they cannot be 
diminished. They have right now the right and the duty to 
report to the Secretary straight on, the commandant does, and 
at the least that has to occur. And I would also suggest that 
as I have said, and I will say again, what we have done in this 
legislation is to write the mission, and that is really what, 
and my ranking member I hope will agree with me, has to be a 
crucial part of your legislation.
    Again, if you will look at this chart I gave you, the 
funding aspect of it is just for the operating part, not for 
capital improvement. We retain search and rescue, which is 12 
percent of the budget and Marine safety which is 5 percent. We 
retain drug interdiction, which is huge. We retain living 
marine resources and make migrant interception and marine 
environmental protection. Search and rescue as I mentioned. But 
we also leave ports, waterways and coastal security, which is 
part of their job and we leave defense readiness which is part 
of their job. So if we move something, it has to be moved 
intact. I am a realist. I have said before I think it is wrong, 
but if you decide to do so, at least recognize what I am 
asking--mission definition written by myself and other people 
that know the Coast Guard and then making sure that the 
missions they are historically involved in are fully funded and 
they can still interface with their constituency and my 
constituency.
    Mr. Portman. I appreciate that. You indicated earlier that 
you take some comfort in the fact that this President has 
increased funding for the Coast Guard. For the first time in a 
long time, the Coast Guard is getting the kind of resources it 
needs. I am sure you would like to see them get even more, but 
there is a substantial increase in funding, and I think 
everything we are hearing from the White House is that they 
understand the importance of this role.
    Mr. Menendez and others have talked a lot about the 
maintenance of existing nonhomeland security functions, and I 
think having that mission laid out is extremely important to 
being sure that in this legislation we aren't giving short 
shrift to any of the existing functions, whether it is cleaning 
up oil spills or search and rescue efforts.
    So I appreciate the time you have put into this and the 
help you have given us to be able to get to a point where this 
can work well together with other border and port authorities.
    Mr. Oberstar on TSA, I know you have spent an enormous 
amount of time on this, you have laid out your strong view that 
we ought to be sure these deadlines are met first before we 
move so we don't have any disruption in what is already a very 
difficult process. Some have argued that maybe we should, in 
this legislation, alter some of these deadlines. They have 
said, for instance, that the technology coming on board to be 
able to screen baggage that would be in the belly of a plane is 
going to improve in the next couple of years: and many 
airports, in any case, even if we had better technology, can't 
meet the deadlines.
    You testified this afternoon that you believe that is 
inaccurate, that we need to keep their feet to the fire, keep 
these deadlines in place. Can you expand on that a little bit 
in response, specifically to the suggestion that perhaps if we 
did postpone some of these deadlines, new technology will 
become available, smaller and more accurate machines, for 
instance, can be installed--.
    Chairman Armey. May I encourage Mr.Oberstar to do so 
succinctly because we have others who would like to get the 
questions in before we must vote.
    Mr. Oberstar. I would like to, first of all, support 
Chairman Young's statement about the position of Under 
Secretary for the Coast Guard, that is this critically 
important to the operation and communication. Secondly, on 
deadlines, there is authority in existing law for alternative 
means to be used if explosive detection systems cannot be 
deployed in time to meet the December 31, 2002, deadline or in 
the event that explosive trace detection systems cannot be 
certified to meet the standard of detecting all types of 
explosives.
    Furthermore, as to the question of extending deadlines to 
wait for new technology, let me just give you my experience as 
Chair of the Aviation Subcommittee, when we were proposing that 
the FAA by rule adopt the TCAS, the collision avoidance systems 
for aircraft aloft, the FAA resisted, the airlines resisted, 
wait for TCAS II, wait for TCAS III, it is a better system. 
TCAS II will give you only vertical authority, TCAS III will 
give you information to move laterally in response to an 
aircraft entering your five hundred foot space.
    Mr. Oberstar. They waited and they delayed and, you know, 
three mid-air collisions resulted, killing hundreds of people. 
This Congress enacted legislation requiring the establishment 
of a rule to adopt TCAS II, with authority to move on and adopt 
better technology as it comes along. But let us not let the 
perfect be the enemy of the good.
    Mr. Portman. Thank you.
    Chairman Armey. Thank you, gentlemen.
    The gentlelady from California. We have just about adopted 
you to our home State in Texas.
    Ms. Pelosi. Well, three grandchildren I have in Texas. 
Thank the chairman.
    I thank the distinguished witnesses for their wonderful 
testimony, their great leadership for our country and their 
wonderful proposal to this committee which I know in your mark 
you will take under great consideration. I am now speaking for 
him, right?
    Anyway, here is what I would like to say, because I know 
the hour is late and you have been patient in waiting and you 
have made such a comprehensive presentation. I did want to just 
call to the attention of the committee a document that Mr. 
Oberstar related to me in our joint inquiry, and that is the 
report on the Aviation Commission in relationship to the 
Aviation Act of 1989, and I think if the members read that they 
would see how prescient it was. It really laid out the steps 
that we should take to protect our aviation system and our 
airports specifically in relationship to terrorism.
    Of course, I have been lobbying for strengthening the 
Office of Homeland Security in the White House to making it 
statutory instead of just existing under executive order; and I 
would hope that that adviser to the President would have the 
FAA strongly under his or her--in the jurisdiction that that 
person coordinates in the interest of fighting terrorism.
    I will share my copy, but if you have more, Mr. Oberstar, I 
think it would be very instructive as we go into the markup to 
see some of the documentation that you provide. It was useful 
to me in the joint inquiry. I thank you for it.
    Mr. Young, I thank you for your always convincing and 
spoken-with-conviction testimony, and thank you both.
    I have no questions. Thank you, Mr. Chairman.
    Mr. Oberstar. I will be happy to provide that section of 
the report for all of the members. It relates to a 
recommendation the Commission made that there be established 
within the intelligence community of the United States a single 
unit whose role would be to gather information from all U.S. 
and foreign intelligence sources and to be prospective, to 
enter into the mind of the terrorist, to think ahead rather 
than simply react to the last terrorist action. It was strong 
recommendation by all of the members of the President's 
commission that such a unit be established within the 
intelligence community of the United States to be anticipatory 
rather than reactive. That was never done.
    Ms. Pelosi. If I may, Mr. Chairman, just to continue on 
that, and we didn't go into that in our comments here, but you 
have hit the nail on the head. Plans and intentions, we can do 
all of the mitigation and protecting all the rest that we want, 
and that is very important to reduce risk, but until we can get 
into the minds of and understand the plans and intentions, we 
cannot give any guarantees to the American people. Thank you 
for making that point.
    Chairman Armey. Thank you.
    The gentleman from New Jersey.
    Mr. Menendez. Thank you, Mr. Chairman.
    As a member of the Transportation Committee, it has been 
privilege to work with both of these gentlemen and, 
notwithstanding Mr. Young's wild Alaskan wilderness reputation, 
it has really been a pleasure. The committee has continued to 
act in its tradition with what I consider our treasure trove of 
transportation information, Mr. Oberstar, in a bipartisan way, 
and I want to salute them.
    Just as I have asked every other Chair and ranking 
Democrat, the votes that were taken in the committee were 
bipartisan on what you reported out?
    Mr. Oberstar. A voice vote.
    Mr. Young. Voice vote. No discussion. No dissent. It was 
well done.
    Mr. Menendez. In reference to the Coast Guard, the 
Commandant appeared and said that about 80-some-odd percent of 
the Coast Guard's missions were nonsecurity related. Secretary 
Mineta came here and said it was about 60 percent. In either 
case, it is well over 50 percent of their missions are 
nonsecurity related.
    Chairman Young, how do you see--if this committee does put 
the Coast Guard as an entity into Homeland Security, how do you 
see the nonsecurity missions that you so eloquently spoke about 
being preserved?
    Mr. Young. I would like to have, with your cooperation, the 
chairman, the committee-- a role in writing the mission and 
have it in the law so there is no question about what the 
mission is. I mention in the chart, again, they are involved in 
a great deal of security already. I believe it is about--you 
know, I would say nonhome security is closer to 85 percent, but 
we even cut the slack in the sense, because the White House 
requested it, that we took care of those nonsecurity missions 
and tried to make them whole.
    I would like to suggest that what this committee should do 
also--and it doesn't deter from the home security aspect of it. 
In fact, it probably will add to it. It gives them some 
flexibility, but it will not take away from those things that 
are so crucial to our commerce and to our people. And I know 
people have told me this--we will do. In all due respect, my 
friends, I would prefer it in the law so there is no question 
that what they will be able to do in the past, they will be 
able to do in the future, and they will be funded for it.
    Mr. Oberstar. And that latter point is absolutely critical. 
Over the last 20 years, the Congress has designated 19 new 
missions for the U.S. Coast Guard to carry out but has never 
provided adequate funding for those new missions. So the Coast 
Guard has continued from the time I was elected to Congress in 
1974 with 39,000 personnel, and there are only a thousand or 
two above that today.
    They have added--we have added all these missions, kept 
them at the same level. Their budget has not increased. In 
fact, the Coast Guard interdicts drugs whose street value is 
greater than the budget of the Coast Guard.
    So if you are going to ignore the recommendation of our 
committee, then be sure in transferring that you increase the 
personnel to handle whatever the homeland security role is 
envisioned to be for the Coast Guard and recommend an increased 
budget to handle that additional role as well. If they are 
going to board merchant vessels 24 hours before they arrive at 
the U.S. port because they are vessels of concern, that they 
need additional people to do that, because the Coast Guard 
shifted about a third of it people from search and rescue where 
they save 3,000 lives a year to boarding vessels and monitoring 
vessels of concern.
    Mr. Menendez. I think, Mr. Oberstar, you and the chairman 
give us some insights into the concerns of the committee. This 
is not about turf that some would like to suggest that it is. 
This is about some very serious missions that already have 
suffered because of the nature of the obligations the Coast 
Guard has now more significantly undertaken.
    Secretary Mineta sat here before us. I asked him a yes-or-
no question. Has the Coast Guard been doing a bad job of 
securing the United States in the territorial war? He said, no. 
I said has he been doing a good job? He said, yes.
    So it is been doing the job, but it is clearly diminished 
in terms of its capacity, considering all of the functions. I 
think that is what the committee's significant concern is 
about.
    Lastly, before my time runs out, Mr. Oberstar, TSA, as I 
understand the committee's amendment, it basically says we are 
not stopping the transfer of TSA. We are trying to ensure that 
TSA, as an infant agency, will succeed by making sure that the 
senior leadership of this new homeland department exists in 
place, that in fact screeners are deployed and, lastly, that 
the detection devices are employed.
    I asked Secretary Mineta, well, why would the 
administration not accept that, because it--and he said they 
are going to meet all the deadlines, period, was his point. 
Without reservation. If that is true, can you see any reason 
why this committee should not accept the amendment of the 
Transportation Committee as it relates to the transfer of TSA?
    Mr. Oberstar. You have understood the legislation of our 
committee brilliantly.
    Chairman Armey. The chairman must call the gentleman from 
New Jersey and--.
    Mr. Young. If I could make one comment, Mr. Menendez.
    Chairman Armey. One short comment.
    Mr. Young. One of the other things I mentioned in my 
statement, I still suggest under the President's chart to make 
sure that those missions can be accomplished, that the 
Commandant reports directly to the new Secretary if it is to be 
transferred and not to the Under Secretary of Border Patrol.
    Chairman Armey. Thank you.
    The gentlelady from Connecticut.
    Ms. DeLauro. Thank you very much, Mr. Chairman.
    Let me say thank you to my colleagues for your vast 
knowledge in this area and your thoughtful process in going 
through this. Mr. Oberstar, your historical perspective is 
always awesome; and, Mr. Young, I have had the opportunity just 
recently, as you know, to visit the wildlands of Alaska and 
your state is truly beautiful.
    Let me ask a question with regard to FEMA. You have 
recommended keeping FEMA as a separate agency but it would 
coordinate with DHS in the event of a terrorist attack. How do 
you think that moving FEMA into the Department of Homeland 
Security would affect our ability to respond to hurricanes, and 
other natural disasters, and how do you envision the FEMA-DHS 
coordination being carried out?
    Mr. Young. Well, it is our opinion FEMA is very parallel to 
the Coast Guard. They have a lot of characteristics as far as 
their mission, and if the mission is properly spelled out in 
law, I don't think there will be that much difficulty and I do 
think they will cooperate. FEMA has responded immensely well in 
the last 8 months to floods and actually the World Trade 
Towers, et cetera.
    I just worry again about them being absorbed into a new 
agency and being swallowed in and redirected into supposedly 
what is the mission of the homeland security and not what we 
originally intended them to do. I do think they can coordinate. 
I do think they will cooperate, and I still think they could be 
able to respond immediately to the disasters that occur every 
day. If they are not able to do that and they are redirected 
over here to watch out for bole weevils coming out of some 
other country close by that has been imported by a terrorist, 
then I think we have got some problems.
    Mr. Oberstar. If I might supplement the chairman's splendid 
response, FEMA started out as the Civil Defense Agency and then 
moved into--as the Cold War wound down, assuming a broader 
responsibility as our Nation's premiere disaster assistance and 
response agency. To move it into this new Department of 
Homeland Security without a clearly defined homeland security 
role is, in my judgment, a mistake.
    We have not seen a delineation of what is homeland security 
compared to response to floods, hurricane, blizzards, 
earthquakes, tornados. You know, when your home is under water 
up to the eaves, are you going to wonder, where is FEMA? Are 
they on some mission looking for terrorists, or are they going 
to be on a mission looking for your lost children and rescuing 
you from the rooftop of your home?
    Ms. DeLauro. Let me ask two very quick questions. With 
regard to TSA, if they did meet all of their deadlines, are you 
confident that moving TSA to the new Department will enhance 
our homeland security?
    Last question is, if your recommendations are not included 
in the bill that is reported out, would you expect to have the 
opportunity to amend this legislation on the floor?
    Mr. Young. I am hoping that this committee does what I 
think is correct and listen to every chairman and draw a bill 
that we can all possibly support. I have told people publicly 
and privately that if what we suggest is not in the bill, then 
we expect to be able to offer amendments to make that part of--
and I would suggest respectfully my leadership knows this, that 
I do not take this task lightly, nor do you. We are going to 
try to do what I think is right for homeland security but also 
make sure that we are able to be involved all of the way 
through the construction of this legislation, especially in the 
definitions and writing of the mission.
    Mr. Chairman, before I finish, I would like to suggest one 
other thing. In my written testimony, please remember about the 
purchasing of property and setting up property for this agency. 
Under our recommendation, GSA, we believe, is the proper agency 
to do so, but it is transferred over to Homeland Security. But 
right now you don't have a place to put this agency. There is a 
recommendation Mr. Oberstar has. I believe it is St. Elizabeth 
property there. But don't let this get bogged down, and if this 
becomes a reality--it was a part of the testimony I didn't--.
    Mr. Oberstar. I concur with the chairman. We ought to be 
able to offer an amendment. The amendment should be made in 
order under the rule if you do not concur in our committee's 
recommendations to offer an amendment on the floor to propose 
and let the House work its will on our proposal.
    Secondly, you do have to have a place for these agencies. 
You can't have them under a tent on the mall somewhere, and 
one-third of the cost of establishing a new department is the 
land cost. The government already owns the St. Elizabeth's land 
which already has the appropriate setbacks, 131 acres, and you 
can easily establish the new facility right there.
    Ms. DeLauro. If it meets the deadline for TSA.
    Mr. Oberstar. And it is already in Federal ownership, in 
GSA's ownership.
    Ms. DeLauro. The last part of my question was, if TSA meets 
all of its deadlines, should--in your view, will moving that 
agency to the new Department enhance our security?
    Mr. Oberstar. Well, I don't know if it is going to enhance 
security. Let us hope it won't--.
    Ms. DeLauro. Suppose if the corporations can plead the 
fifth--.
    Chairman Armey. Let me recognize myself, and let me just 
advise the committee we will soon complete our work with this 
panel, and the committee will recess until 5 minutes following 
the close of the last vote in a series of votes. It is the hope 
and the intention of the chairman that we would complete our 
work with all of our witnesses invited for this day before we 
conclude tonight. So we will come back and hope to drive to a 
conclusion.
    Now, having made that point, let us, gentlemen, see if 
there are a few things we have, I believe, universal agreement 
on.
    Irrespective of whether the Coast Guard stays where it is 
or is moved, we all agree that Coast Guard should not be broken 
up. There is no question in anybody's mind. All of the 
functions carried out by the Coast Guard are carried out by 
personnel and materiel specifically trained and designed for 
the versatility that is required for it to fulfill all its 
missions, oftentimes by just moving smoothly and seamlessly 
from one assignment to another as the need arises, and we all 
agree on that.
    I think we have fairly clear agreement that we should 
respect the enormous opportunity, especially where real 
property is concerned, to use the services, the expertise of 
the GSA. I think there is universal agreement.
    The other points that I would make would be points that 
relate to a debate between us regarding our differences, and I 
am confident there will be ample time to have that debate, a 
better opportunity for that debate. So why don't I just defer 
now and look forward to that greater opportunity to debate 
these fine points where we can all display our rhetorical and 
debate skills at a time when indeed it makes the difference.
    Mr. Young. I thank the chairman, Madam Chairman.
    Chairman Armey. The committee stands adjourned until 5 
minutes following the close of the last vote in a series of 
votes on the floor. Without objection.
    [Recess.]
    Chairman Armey. The committee will come to order.
    The chairman sees the distinguished chairman of Ways and 
Means, and I have been advised that the ranking member, Mr. 
Rangel, will be unable to be here today. So, Mr. Chairman, 
without objection, Mr. Rangel's statement will be included in 
the record.
    Chairman Armey. We will open with your statement. We will 
put your formal statement in the record, and whatever comments 
you would like to make before the committee, and then we will 
follow that with questioning under the 5-minute rule.

STATEMENT OF THE HONORABLE WILLIAM THOMAS, CHAIRMAN, COMMITTEE 
                       ON WAYS AND MEANS

    Mr. Thomas. I thank you very much, Mr. Chairman.
    It is true the change in the homeland security provision 
that is in the jurisdiction of the Ways and Means Committee 
passed the committee 34 to 3; and given the lateness of the 
hour and the other commitments, Mr. Rangel indicated to me that 
he was perfectly satisfied with me representing the committee 
on this question.
    One of the things that the Ways and Means Committee 
attempted to do in looking at those provisions of homeland 
security under our jurisdiction is to take note of the fact 
that only the Ways and Means Committee has the initiating 
capability on the question of revenue; and to underscore how 
long the Ways and Means has been dealing with Customs, we had 
before us presented by the Library of Congress the fifth bill 
ever passed by the first Congress. That was to create the 
Customs Bureau. The fifth bill creating the Customs Bureau 
implemented the first bill ever passed by the United States 
Congress, the Tariff Bill of 1789. Since that time, the line of 
control and jurisdiction has been in the Treasury Department to 
the Committee on Ways and Means.
    Oftentimes people are not aware of the level of activity 
and the relationship between the Ways and Means Committee and 
Customs. In the 107th Congress, for example, up to this time 
more than 578 bills dealing with Customs have been introduced.
    We understand the importance of creating a seamless 
presentation at the border, one of the fundamental goals of the 
homeland security approach. We understand the difficulty with 
the myriad jobs associated with the border.
    My previous committee assignment when I first came to 
Congress was on the Agriculture Committee. As a member from 
California, I spent a great deal of time working with the 
Animal Plant Health Inspection Service, It is a monumental 
task.
    The Ways and Means Committee does not want to be an 
obstacle in making sure that to the best of our ability we can 
create a seamless organization. We do, however, feel very 
strongly about not moving the entire Customs structure--because 
we are willing to move the entire Customs structure, and 
should, into Homeland Security--but for that portion which is 
about 25 percent of the current total number in Customs who 
deal directly with trade and revenue, a very specialized niche, 
if you will, we would very much like to see those, as our 
legislation indicates, still tied to the Treasury Department.
    That the Commissioner of Customs be Senate approved, but, 
understanding the difficulty in dealing with that, we did in 
the legislation say that Treasury could delegate to Homeland 
Security the coordination of that, about 25 percent of the 
staff, to create that larger seamless structure.
    So what we did was say, yes, the entire Customs Service can 
be transferred. We identified those only very narrowly dealing 
with trade and revenue, the jurisdictional scope of the Ways 
and Means Committee, to maintain that traditional tie through 
Treasury, but we did say that Treasury could delegate 
significant work-related or other aspects to Homeland Security.
    And that one final provision, since we are down the road in 
a long and difficult process of creating a computerized system 
that will maximize our commercial commerce capabilities, a 
computer system called ACE, in which the Customs merchandising 
and processing fee would be directed to paying for that system.
    I understand the difficulty in creating a system which 
blends all of the Homeland Security Departments in place, but 
this has been a project that is very near completion. It is a 
quality program. It has been paid for by private sector 
dollars, and we believe in a bipartisan way it would be a shame 
try to move in a different direction. So that was one area we 
wanted to see a completion of the funding process over; and in 
testimony not in front of the committee but in discussions with 
Governor Ridge on a bipartisan basis, they indicated that it 
was likely that the cornerstone of the new Department's 
architecture on computers would, in fact, be the ACE system.
    That is the sum and substance of the modifications we 
propose to make, maintain a historical and important 
relationship in the area of trade and revenue.
    Chairman Armey. I want to thank the chairman.
    [The statement of Mr. Thomas follows:]

PREPARED STATEMENT OF HON. BILL THOMAS, CHAIRMAN, COMMITTEE ON WAYS AND 
                                 MEANS

    Mr. Chairman, thank you for the opportunity to testify before you 
and the Select Committee today. Let me begin by recognizing the work of 
President Bush and the importance of this legislation to the safety of 
the American public.
    For more than 200 years, the U.S. Customs Service has been on the 
frontline supporting and defending our nation. The requirement to 
generate revenue for this country through Customs duties, which was the 
very first Act of Congress, was the primary reason Customs was 
established in the fifth Act of Congress as the first Federal agency of 
the new Republic. This function is still important today as 
demonstrated by the fact that Customs collects over $20 billion of 
revenue.
    Today, under the authority of the Department of the Treasury, 
Customs enforces well over 400 provisions of law for at least 40 
agencies. In addition to collecting revenue, Customs safeguards 
American agriculture, business, public health, and consumer safety and 
ensures that all imports and exports comply with U.S. laws and 
regulations. Unlike other agencies that are being transferred, the 
Customs Service has several unique characteristics:
        1. The Customs Service is a revenue-collecting agency with 
        significant trade facilitation functions--the only revenue 
        collector proposed by the Administration to be moved to the new 
        Department.
        2. A significant portion of the Customs Service's budget is 
        funded from user fees paid by importers that by domestic and 
        international law must be used only for specific commercial 
        operations.
        3. Substantial portions of the Customs Service's trade work are 
        very technical. The work requires professionals with legal and 
        regulatory skills that are unlike border security skills.
    For these reasons, the Ways and Means Committee, by a strong 
bipartisan vote of 34-3, recommends that the Select Committee on 
Homeland Security recognize the unique mission of the Customs Service 
and adopt its amendment to H,R, 5005. The Ways and Means Committee 
agrees with the fundamental basis of the President's proposal to 
transfer Customs assets and personnel in their entirety to the new 
Department and rejects the option of carving up the Customs Service 
into commercial and non-commercial elements. Instead the Committee 
seeks to identify and prevent further reorganization or reductions in a 
closely defined core group that performs trade facilitation and 
revenue-collection functions. The overarching goal of the Committee is 
to give the new Department the tools it needs to protect our borders 
while at the same time ensure that revenue continues to be collected 
and that goods keep moving across the border with little delay. The 
Ways and Means Committee is confident that the proposed changes do not 
interfere with the new Department's missions but will enhance its 
effectiveness, Our bipartisan amendment:
        1. Transfers the Customs Service in its entirety to the 
        Department of Homeland Security Division for Border and 
        Transportation Security.
        2. Identifies revenue-related offices and functions within 
        Customs (about 25% of the agency) and prohibits reorganization 
        or decrease in their funding or staff or reductions to Title V 
        pay and benefits levels.
        3. Requires that adequate staffing of customs revenue services 
        be maintained, and requires notice to Congress of actions that 
        would reduce such service.
        4. Maintains the Commissioner of Customs as Senate-confirmed.
        5. Transfers all authority exercised by Customs to Homeland 
        Security with the exception of revenue collecting authority, 
        which would remain at the Treasury Department. Treasury may 
        delegate this authority to Homeland Security.
        6. Specifies that a portion of the Customs Merchandise 
        Processing Fee must go to build the new Customs computer, which 
        Governor Ridge has told us will likely be the cornerstone of 
        the new Department's architecture.

    Chairman Armey. At this time, the Chair recognizes the 
gentleman from Ohio.
    Mr. Portman. Thank you, Mr. Chairman.
    It is like deja view all over again since we have been 
through this already in a very thoughtful and I think 
appropriate process through the Ways and Means Committee where 
we brought the Customs Service in, brought Treasury in, and 
talked to people from the outside.
    I appreciate, Mr. Chairman, working with David Kavanaugh, 
who has been great, and your other staff to come up with what I 
think is a good way to combine these two needs. One is to 
assure that we have the most effective border security possible 
which must, in my view, include the Customs Service working 
seamlessly with these other agencies we have talked about 
earlier today, but, second, respecting and acknowledging the 
unique function of Customs to collect revenue and to ensure 
that we have efficient trade flow which is important to our 
economy.
    So I think the solution works, and I would really not have 
any questions for the chairman, except to commend him for 
working through this and spending the time necessary to come up 
with what I think is a good solution.
    Mr. Thomas. I thank the gentleman.
    Chairman Armey. The gentlelady from Connecticut.
    Ms. DeLauro. Thank you very much, Mr. Chairman.
    Thank you very much, Mr. Thomas and Mr. Chairman, for being 
here.
    My understanding is that what the committee has agreed to 
is to take Customs to the new Department. Treasury would retain 
a statutory authority over collecting revenue and Trade Act 
enforcement. Also my understanding--and correct me if I am 
wrong--currently, Customs is only able to screen than 2 to 3 
percent of the large cargo containers that enter the United 
States, and that leaves us vulnerable to the importation of a 
number of threats from abroad.
    Is it your view that moving Customs into the new Department 
will improve performance, and do you think that Customs has 
adequate resources to inspect products coming into the United 
States? And, if not, what further recommendations would you 
make to help Customs execute their mission?
    Mr. Thomas. There is always a question of do you have 
adequate resources to do the job. The problem is that over the 
years in defining these various jobs, because they have been in 
separate areas, there is a significant degree of duplication.
    If I told you there were Customs officers in airplanes 
flying over Peru for interdiction of drugs, you would say, wait 
a minute, that is not Customs. But in fact there are folk who 
do that, so I do think there is this synergy that is very 
positive by pulling together in this new agency all of these 
border activities.
    As we said, 75 percent of the employees aren't directly 
involved in the narrow area that we are most concerned about. 
Our hope is that, as we preserve the hours and wages, title V 
aspects of these particular individuals and we get the computer 
up and running, we can be far more productive in what we have 
been doing, but that it will always be a fight, frankly, to get 
adequate revenue to do a good job at our ports.
    It is one of those areas I am sure the gentlewoman from 
Connecticut is familiar with, in which as long as nothing 
happens they are invisible, and the only time they really get 
publicized is when there is a mistake.
    It is hard to keep attention on how important that trade 
aspect is. For example, on September 11th, very few people 
realized the volume of, quote, unquote, just-in-time automobile 
parts that come from Canada to the United States until they 
shut the bridge down. And our concern is that those trade and 
revenue functions are maintained harmoniously with the 
security, and that if you place security over those, security 
would trump trade every time.
    We always need more resources. We are continuing to fight, 
but one of the ways you can get more with the same amount or 
slightly more is to integrate, be more productive. That is what 
we are really advocating. Move it over there, but give them the 
modern computerized capability of not slogging through 
paperwork but by structuring it in a way that we can use modern 
computers to do more.
    Ms. DeLauro. Let me just quote, if I might, Mr. Chairman, 
Protecting the American Homeland. This was a recent study that 
was done by the Brookings Institution.
    They are concerned with the high-risk containers and the 
Customs inability to screen more than 2 to 3 percent of large 
cargo containers, and they took the threats seriously enough to 
warn--and this is a quote--``a doomsday scenario attack on the 
maritime industry using nuclear devices concealed in a shipping 
container could cause damage and destruction costing the 
economy as much as $1 trillion.''
    Let me just get your, impressions of that and your response 
to that effort.
    Mr. Thomas. One of the things we can do by integrating 
certain portions of Customs with Homeland Security is to focus 
on security. Now here I have just--sounds like I am 
contradicting myself, so let me finish the statement.
    By focusing on security, you would be able to get money 
that you wouldn't be able to get if you were focusing on trade 
only. But what we have, for example, new devices coming along 
which allow us on these large cargo containers, trucks and 
others to take an x-ray--not just an old-fashioned x-ray but a 
very detailed x-ray in which, for example, some of the models 
that I saw showed that behind the cargo, when you opened the 
back of the doors, it looked like cargo. Up front there was a 
stolen car. But not only from this quick scanning could you see 
there was a car. You could see what was in the trunk of the 
car, which was additional stolen items that had been loaded 
conveniently in the car.
    The capability of screening these rapidly for security 
reasons allows us also to facilitate much more effectively the 
trade aspect. So, in that area, we want full utilization. But, 
as I said, 578 bills in this Congress alone dealing with 
tariffs, trade and that narrow group who have the expertise to 
assess, in our opinion, really does need to have that continued 
tie to Treasury, notwithstanding the delegation at the border.
    So those of us who have been fighting to get some money for 
Customs and others actually like the idea that we are now using 
security, because people will lay a dollar on the table to 
create an x-ray machine for security purposes they would never 
do for trade. So I do think there is some positive synergy by 
putting these together. We are only asking that you do it in a 
thoughtful and understanding way for that small group of 
specialists who do hang onto the trade and revenue function.
    Ms. DeLauro. Thank you very much, Mr. Chairman.
    Chairman Armey. Thank you.
    The chairman is taking great pleasure in realizing, having 
had an earlier Texas moment for the committee, we should now 
have a California moment by recognizing Ms. Pelosi.
    Ms. Pelosi. Thank you very much, Mr. Chairman.
    Thank you, Mr. Chairman, for being here and for your 
testimony.
    When the Secretary of the Treasury was here and we were 
talking about the cost of establishing this Department, he 
thought it didn't have to cost too much. He said, for example, 
in terms of the Customs, there is no reason I could not still 
be Custom's landlord and just change the sign on the door, or 
words to that effect. Do you agree with that? Do you think that 
that is sufficient in terms of bringing Customs under the 
jurisdiction of the committee?
    Mr. Thomas. I do, and let me say that I do enjoy this 
California moment. Given the makeup of the Select Committee, we 
can only do it very seldom, as opposed to how many times you 
can share a Texas moment.
    Ms. Pelosi. Oh. I am surrounded with Mr. DeLay, Mr. Frost, 
and then we have Mr. Hall.
    Mr. Thomas. Because we are only talking about roughly 
currently one-quarter of the personnel who are involved in what 
we believe to be these critical areas, we have asked that the 
pay and the work conditions that we have outlined under title V 
be carried with these folk. There is no reason to jerk them 
around on the pay scale structure or anything else.
    It is the core function of Customs, but because so much has 
been expanded, it in part even is ignored under the current 
structure.
    Another thing is our desire to have the Customs 
Commissioner approved by the Senate. That gives them some 
ability when there is this inevitable decision between security 
and trade to have standing to be able to make the argument that 
there should be doubt.
    Since they are already doing it anyway and we are moving 
all of those other functions over to Homeland Security and they 
would be assigned under the Homeland Security, all they are 
doing is changing dotted lines on a flowchart; and whatever 
that cost is, basically, what it is that we would be doing, 
because we do retain that authority that has been there since 
the beginning of the Republic in 1789.
    So I agree completely with the Secretary. There shouldn't 
be any real costs involved. There may be some physical moving 
costs, but those go on all the time.
    Ms. Pelosi. Since you brought up the subject, I want to 
pursue your distinction between the 25 percent of the Customs 
workers and others.
    When the Secretary was here, he couldn't stay very long, so 
we had to submit some questions for the record. One of the ones 
that I did was to say that you all, the Ways and Means 
Committee, reported out a bill that protected the pay and 
benefits of a select group of Customs employees--revenue 
experts, attorneys, et cetera. These employees represent about 
25 percent--I assume it is the 25 percent you are talking 
about--of Customs workers. But the select Customs employees' 
benefits still do not enjoy assurances that their title V 
rights and protections--the right to bargain collectively, 
whistle-blower, anti-discrimination, pensions--will continue. 
Can you clarify on that, Mr. Chairman? Are they included 
under--.
    Mr. Thomas. What we tried to do on the Ways and Means 
Committee was stay within the committee's jurisdiction. We 
found that we are very pleased with our jurisdiction, and if 
everybody stays within their jurisdiction, we will stay 
pleased. If we try to go outside our jurisdiction, others then 
will try to go outside their jurisdiction. And although we were 
borderline in getting outside of our jurisdiction on the pay 
conditions that we outlined that are under title V, had we gone 
on and added collective bargaining and all of those other 
areas, not to say that we didn't kind of by implication say 
that maybe they should be left alone, but we clearly would have 
been outside our jurisdiction, and we could have been called 
down by other committees quite properly.
    So what we tried to do was to convey the idea that the 25 
percent that we think ties to trade and revenue should be 
retained, and not just the personnel but the working conditions 
and the environment that they find themselves in today should 
be retained as well. But had we--repeat myself. Had we moved to 
the title V point by point, we clearly would have exceeded our 
jurisdiction.
    One of the things that I think gave us a 34 to 3 vote in 
the committee was basically that we decided to be very prudent, 
very cautious and deal with solving our problem and not 
throwing ourselves around and saying this is as good as 
anything and it should be moved over wholesale. If all the 
committees did that, what you would have would be a 
compartmentalized new Department that would never provide the 
kinds of seamless structure we are looking for. But we felt 
strongly enough in this particular area.
    Ms. Pelosi. Well, I appreciate your doing that in your 
bill; and your testimony here today then is to infer from your 
remarks, that the conditions and climate in which they worked 
would have included title V benefits.
    Mr. Thomas. Well, we included those that we thought were 
appropriate, and obviously the committee is going to make that 
decision. It seems to me if we want to keep these people 
preserved as much as possible that we should leave them as they 
are as much as possible.
    Ms. Pelosi. Further, the remaining 75 percent of Customs 
employees do not have any assurances that their pay benefits, 
rights and protections that they currently enjoy will remain 
with them. Can you speak to that point?
    Mr. Thomas. Had we done that, what we would have been 
saying was, okay, you can move Customs from Treasury to 
Homeland, but you can't rearrange, restructure or do anything 
with them. And that really then I think defeats the purpose of 
what we are trying to do, because there are many of those 
Customs officials--I don't know if you were here when I 
responded, that there are people who do jobs you would never 
guess they are in Customs.
    Ms. Pelosi. I was.
    Mr. Thomas. Based on the core of what we do and for us to 
say that those people can't reasonably be integrated into a new 
structure I believe, one, it is not true because I think they 
can, given the jobs they are doing; and then, two, if we said 
you can't touch them in any way on any reorganization, we are 
defeating the purpose of what we are trying to do.
    So to strengthen the committee's ability--and we had this 
discussion in committee, and I think the 34 to 3 vote--you need 
to know that nothing has ever passed unanimously out of Ways 
and Means. So I keep emphasizing 34 to 3, and people say, gee, 
there were three dissents. That is very, very good for us.
    The point that I am making is, to maximize the chance to do 
what we think was most essential, we had to narrow the scope of 
the kind of dictatorial legislation that we would send to this 
committee.
    Now, if you ask me, do I think they are hard-working people 
who ought to retain their current privileges? Yes, I think they 
should. But as you create this new structure, other people are 
coming from other areas of the government who have a lot of 
those title V or all of the title V protections as well, and 
you are going to get a restructuring for those employees. It 
isn't that we want to dump all that out. We just didn't think 
in dictating that we would have made a stronger message about 
how important we believe it is to keep those core functions 
together.
    Ms. Pelosi. I appreciate that. My time has expired. I will 
just say that we are talking here not about their job 
responsibilities but their pay, benefits, rights and 
protections and--.
    Mr. Thomas. I agree with you that all of that should be 
looked at, but were we to make those statements about those 
people we didn't include as the core, I think we would have 
been making a statement that would have been less defensible 
than the one I am making to you now.
    Ms. Pelosi. Thank you very much, Mr. Chairman.
    Thank you, Mr. Chairman.
    Chairman Armey. I thank the gentlelady.
    The Chair recognizes--I guess the Chair recognizes himself. 
The gentlelady from Ohio was here a minute ago.
    Mr. Chairman, it is my understanding that you and the 
Secretary of Treasury, working in consultation with the White 
House, have come to a fairly complete agreement on this and 
that that agreement was pretty much endorsed by your committee, 
as you said, with a near unanimous vote.
    Mr. Thomas. There are some areas where the administration 
would prefer that we approach our solution differently. We 
continue to work with them.
    For example, they don't believe that the Customs 
Commissioner should retain Senate approval. If they simply 
become a line officer, notwithstanding the tie to Treasury, 
they don't have the ability to point out the ability--the 
reasonableness of treating trade equally with security in 
particular areas. We think that is important.
    In other areas, for example, we currently have a 
requirement where changes are made that we retain oversight. If 
you are going to have the ability, you need oversight.
    They want to shrink the 180 days to 30 days and only deal 
with permanent changes. If in fact you have nonpermanent and 
permanent, you know as well as I do that there will be no 
permanent changes. There will only be nonpermanent changes. And 
if they shrink the review period to 30 days, all we are doing 
is being told what changes are being made.
    If you are serious in trying to retain this 200-plus-year 
relationship, you need to have the oversight capability. We 
want to retain the 180 days on not permanent and permanent so 
we can carry out our oversight function.
    Those are the kinds of discussions that we continue to 
have. It seems to me those are on the margin, and they become, 
to a certain extent, stylistic. If the core structure is agreed 
to, i.e., trade and revenue retaining its relationship with 
Treasury, we feel quite strongly on a bipartisan basis.
    Just let me say one area that also would be complicated if 
you didn't do that, it has to do with committee jurisdiction. 
It wasn't the reason we did it, but it could cause real 
problems if you simply moved it over. It is hard enough with 
one committee having the revenue jurisdiction. If you create 
two or three committees that now believe they have a pot that 
they can legislate in for revenue purposes, that is something 
that will be very hard to put back in the bottle.
    Chairman Armey. I appreciate the gentleman's point there 
and the tradition, the constitutional requirements regarding 
revenues raised--and origin of such measures in the House is 
something that this House protects, and this committee will 
honor that need to protect that constitutional requirement.
    Mr. Thomas. In the House, it is the Ways and Means 
Committee that has had it for 200-plus years, and we would just 
kind of like you to continue the comment of continuing the--.
    Chairman Armey. The--.
    Ms. Pelosi. Will the gentleman yield?
    Chairman Armey. Oh, sure, be happy to.
    Ms. Pelosi. I am reminded of a question. Chairman Tauzin 
and Ranking Member Dingell spent a good deal of their time on a 
regulatory provision that they recommended that they had in 
their committee report to us, and basically I think of it as 
sort of like Amendment 10 of the Constitution in terms of any 
regulatory functions that are not specifically moved with their 
encompassing duties to the Homeland Security Department are 
retained by the original Department. Is that something--.
    Mr. Thomas. I don't feel as strongly about that as perhaps 
they did. Because in our careful analysis of how we would deal 
with what were the core functions of Customs, we feel fairly 
comfortable that in the bipartisan analysis, the way we have 
structured it, we are content with moving everything else. If 
we retain the structure that we have asked for--now if you 
alter that structure, we would have to go back and reexamine, 
but we are looking only at the narrow technical trade and 
revenue tie, keep it to Treasury.
    Treasury can delegate to Homeland Security where there 
seems to be a potential conflict--the Customs Commissioner 
approved by the Senate--and that that tie is through Treasury 
to the Ways and Means Committee.
    The other 75 percent can very easily be merged with clearly 
their rights and responsibilities as employees under the 
Federal Government into a much better, seamless structure and 
not cost that much more, if any at all, in the benefits gained 
by doing that.
    Ms. Pelosi. I am sure the chairman will be pleased to know 
that they only made this recommendation for those agencies 
under the jurisdiction of their committee but said we might 
suggest it for others, but they were only speaking to those 
under their jurisdiction.
    Mr. Thomas. I appreciate the gentlewoman, but that means 
there is, without fully understanding it, some commitment of a 
vestigial tie that you are not quite clear of, that when you 
try and do something it comes up and bites you, because 
somebody says, remember the reserve clause, and that is, if we 
didn't mention it specifically, it is prohibited. I think 
oftentimes in these kinds of line-item relationships, we 
shouldn't use the constitutional model. That is, if it isn't 
mentioned, it isn't covered. I prefer the other one, that if 
you don't mention it, it is covered the other way, because 
otherwise you have an endless list that you have to make sure 
you find. So to make a choice, I prefer the Ways and Means 
model.
    Ms. Pelosi. That was not their analogy. That was mine. So 
don't let me mischaracterize the thrust of that. I will take 
that admonition as my own and not theirs.
    Thank you, Mr. Chairman.
    Thank you, Mr. Chairman.
    Chairman Armey. Mr. Chairman, we want to thank you again. 
Thank your committee for your good work. Outstanding as usual 
for your committee.
    And this committee is happy to dismiss the witness.
    Mr. Thomas. Thank you very much, and all we ask is that, if 
you look at what we offered, we believe it was appropriate, 
reasonably circumscribed and that it in fact does enhance the 
overall ability of the new agency to function without 
diminishing the historical and important ties that we have in 
this area.
    Chairman Armey. Thank you. Very well put.
    Mr. Thomas. Thank you very much.
    Chairman Armey. The Chair recognizes the Comptroller, Mr. 
David Walker, Comptroller General.
    Mr. Walker, without any objection by the committee, we 
would put your written statement in the record. We would invite 
you, Mr. Walker, to give your statement to the committee; and 
then we would proceed to questions under the 5-minute rule.
    I might just say, Mr. Walker, every good team knows that it 
saves its best hitter for cleanup; and we are here to welcome 
you here tonight as our cleanup hitter.

STATEMENT OF THE HONORABLE DAVID WALKER, COMPTROLLER GENERAL OF 
          THE UNITED STATES, GENERAL ACCOUNTING OFFICE

    Mr. Walker. Mr. Chairman, Ranking Member Pelosi, Mr. 
Portman and other members of the committee, thank you for the 
opportunity. I realize that I am the cleanup hitter, and I am 
probably standing between you and dinner, so I am going to try 
to summarize this in about 5 minutes and then open it up for Q 
and A, if that is all right.
    It really is a pleasure to be here to talk about this 
incredibly important topic at this time in our country. We at 
GAO believe that in creating any new department, special 
attention needs to be given to the strategy, criteria and 
priorities that are critical to this Nation's efforts to defend 
and protect against terrorism.
    As you know, Mr. Chairman, the President's national 
homeland security strategy does provide for a proposed 
definition of homeland security, which should help the 
government to more effectively administer, fund and coordinate 
activities both inside and outside the new Department and to 
assure that all parties are focused on the same goals and 
objectives. We believe it is critically important that the 
Congress and the administration, reach agreement on an 
appropriate definition for homeland security, because that is 
fundamental to everything else that will have to be done in 
this area.
    Congress may want to provide also a statutory basis for the 
Office of Homeland Security in order to effectively coordinate 
activities beyond the scope of the proposed Department of 
Homeland Security and to assure that reasonable congressional 
oversight can be conducted.
    Often, as it has in prior years when the government has 
consolidated a number of areas, it has taken years to 
ultimately achieve the objective. As you know, Mr. Chairman, 
when the Defense Department was created in 1947, the Congress 
subsequently in 1949, 1953, 1958 and 1986 made a number of 
adjustments to that statute in order to make necessary 
improvements over time.
    At the same point in time, we all recognize when you are 
creating a department of this size, you try to get it as good 
as you can coming out but it won't be perfect. You may have to 
make adjustments down the road, but it is going to be a major 
undertaking and it may take years to effectively achieve. In 
fact, over 50 years after the Department of Defense was 
created, DOD has 8 of 24 high-risk areas on GAO's high-risk 
list.
    So we believe it is important for you to try to balance, 
which I know you are trying to do, the urge to do it quickly 
and the related sense of urgency with the need to do it right.
    In that regard, GAO has developed a framework that 
hopefully will help this committee and the Congress to be able 
to make the decisions about what should be in, what should be 
out, but, more importantly, whatever you decide to be part of 
this new Department of Homeland Security, how to effectively 
implement it. The key to success will be the leadership and 
effective implementation.
    On Page 7 of my statement we outline the major criteria and 
I am not going to cover them here, Mr. Chairman. The ultimate 
effectiveness of the new Department will be dependent upon 
successfully addressing a range of key implementation and 
transition issues. Clearly, the right leadership will be key, 
and it is not only leadership from a policy standpoint. It is 
operational and management leadership as well. The 
transformation and transition challenges associated with this 
new Department will be huge, and we cannot ignore, the key 
management challenges.
    My experience in the public and private sector, Mr. 
Chairman, has shown, that to effectuate a major merger, 
transition and transformation will take, on average, to make it 
work and to get it to stick, 5 to 10 years. Therefore, we 
believe it is critically important that Congress consider 
creating a Deputy for Management, a chief operating officer who 
would have the primary responsibility for focusing on those 
critical transition and transformation efforts that are 
important irrespective of who the President is, irrespective of 
who the Secretary is, and irrespective of who the other key 
policymakers are.
    I note that the Government Reform Committee has suggested 
the elevation of what the administration proposed as an Under 
Secretary of Management to the Deputy Secretary for Management. 
In other words, there would be two deputies. We would 
respectfully suggest that, in addition to that, the Congress 
would want to consider making that position a term appointment 
for 5 to 7 years because of this need for continuity and 
consistency; and, in addition, you may want to consider 
subjecting that individual to a performance contract to try to 
achieve specific results. This is a concept that has been used 
in other countries such as New Zealand with some success, and 
we think it may have particular application here.
    We also suggest Congress may want to make sure that the new 
department is subject to the basic management reforms, such as 
the Government Performance and Results Act, and the CFO Act. I 
know, Mr. Chairman, you championed a number of these acts; and 
I think it is important that the new department be subject to 
these as a baseline of accountability and transparency for the 
Congress and for the American people.
    The President's proposal does include a set of human 
capital and management flexibilities for the new Department. 
GAO does believe that it is reasonable for certain flexibility 
to be granted to the new Department in such areas as human 
capital, provided that they are accompanied by adequate 
transparency and accountability mechanisms to safeguard against 
abuse.
    In that regard, Congress in some cases may not decide to 
provide all of the flexibilities that the administration seeks. 
We believe that some are appropriate, but if Congress decides 
not for some reason to provide some of these flexibilities, 
Congress may want to consider a mechanism by which it would 
give expedited consideration to flexibilities that the 
administration may seek in the future if you don't provide them 
up front.
    The administration has suggested that it needs a special 
grant of budget flexibility for the Department of Homeland 
Security. GAO believes the Congress should be careful to 
distinguish between those flexibilities that will solely 
enhance the operations of DHS versus those that might 
simultaneously raise other concerns, including concerns about 
constitutional responsibilities and prerogatives of the 
legislative branch.
    The creation of this Department will clearly be the largest 
reorganization that has been undertaken in over 50 years. A 
comprehensive transition plan is critical. We need a plan of 
action to be able to guide this. That is critically important; 
and we need to be able to use that as a basis for Congress to 
engage in periodic oversight, because Congress will have a 
critically important role to play in order to help to assure 
the success and the successful implementation of this effort.
    Clearly, there will be some increased cost that we believe 
will be incurred as a result of this transition and 
transformation. As Secretary O'Neil has testified, over time I 
think it is clearly reasonable to expect that there will be 
economies, efficiencies and effectiveness enhancements that 
will and should be achieved through this merger, through this 
consolidation, through this transformation. But, realistically, 
that is going to take time; and there will be incremental costs 
and risks that will be incurred in order to make this a 
reality.
    In summary, Mr. Chairman, as I discussed, this is a major 
undertaking of critical importance to our country. The single 
most important element for successful reorganization is the 
sustained commitment of top leaders at the top and to make sure 
that we focus on the people strategy. People are the key to 
successful transformation. We need to have modern, effective, 
and credible human capital strategies, reasonable flexibilities 
with the appropriate safeguards. That will make the difference 
between success and failure, because, in the end, it is 
implementation that counts.
    Thank you, Mr. Chairman.
    Chairman Armey. Thank you, Mr. Comptroller general.
    [The statement of Mr. Walker follows:]

PREPARED STATEMENT OF HON. DAVID A. WALKER, COMPTROLLER GENERAL OF THE 
                UNITED STATES, GENERAL ACCOUNTING OFFICE

    Mr. Chairman and Members of the Select Committee:
    Thank you for the opportunity to appear before this Select 
Committee today to discuss one of the most important issues of our 
time, the reorganization of government agencies and the reorientation 
of their missions to improve our nation's ability to better protect our 
homeland. It is important to recognize that this transition to a more 
effective homeland security approach is part of a larger transformation 
effort that our government must make to address emerging security, 
economic, demographic, scientific, technological, fiscal and other 
challenges of the 21st century and to meet the expectations of the 
American people for timely, quality and cost-effective public services.
    In the months since the horrible events of September 11th, the 
President and the Congress have responded with important and aggressive 
actions to protect the nation, including creating an Office of Homeland 
Security (OHS), passing new laws such as the USA Patriot Act and an 
initial emergency supplemental spending bill, establishing a new agency 
to improve transportation security, and working with unprecedented 
collaboration with federal, state, and local governments, private 
sector entities, non-governmental organizations, and other countries to 
prevent future terrorist acts and to bring to justice those individuals 
responsible for such terrible acts.
    More recently, the Congress and the President have sought to remedy 
long-standing issues and concerns in the government's homeland security 
functions by proposing greater consolidation and coordination of 
various agencies and activities. On June 6th, the President announced a 
proposal to establish a Department of Homeland Security (DHS) and on 
June 18th he transmitted draft legislation to the Congress for its 
consideration. Both the House and the Senate have worked diligently on 
these issues and this Select Committee is now deliberating on a variety 
of proposals and issues raised by House committees and subcommittees.
    In my testimony today, I will focus on two major issues that we 
believe the Congress should consider in its deliberations on creating a 
new cabinet department principally dedicated to homeland security: (1) 
the national strategy and criteria needed to guide any reorganization 
of homeland security activities and to help evaluate which agencies and 
missions should be included in or left out of the new DHS; and (2) key 
issues related to the successful implementation of, and transition to, 
a new department, including leadership, cost and phasing, and other 
management challenges. Our testimony is based largely on our previous 
and ongoing work on national preparedness issues\1\, as well as a 
review of the proposed legislation.
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    \1\ See ``Related GAO Products'' at the end of this testimony.
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    In response to global challenges the government faces in the coming 
years, we have a unique opportunity to create an extremely effective 
and performance-based organization that can strengthen the nation's 
ability to protect its borders and citizens against terrorism. There is 
likely to be considerable benefit over time from restructuring some of 
the homeland security functions, including reducing risk and improving 
the economy, efficiency, and effectiveness of these consolidated 
agencies and programs. Sorting out those programs and agencies that 
would most benefit from consolidation versus those in which dual 
missions must be balanced in order to achieve a more effective fit in 
DHS is a difficult but critical task. Moreover, the magnitude of the 
challenges that the new department faces will clearly require 
substantial time and effort, and will take institutional continuity and 
additional resources to make it fully effective. Numerous complicated 
issues will need to be resolved in the short term, including a 
harmonization of the communication systems, information technology 
systems, human capital systems, the physical location of people and 
other assets, and many other factors. Implementation of the new 
department will be an extremely complex task and will ultimately take 
years to achieve. Given the magnitude of the endeavor, not everything 
can be achieved at the same time and a deliberate phasing of some 
operations will be necessary. As a result, it will be important for the 
new department to focus on: articulating a clear overarching mission 
and core values; establishing a short list of initial critical 
priorities; assuring effective communication and information systems; 
and developing an overall implementation plan for the new national 
strategy and related reorganization. Further, effective performance and 
risk management systems must be established, and work must be completed 
on threat and vulnerability assessments.
        homeland security strategy, criteria and reorganization
    Congress, in its deliberations on creating a new department, should 
pay special attention to strategy, criteria and priorities for 
reorganization critical to the nation's efforts to protect the nation 
from terrorism.
Homeland Security Strategy
    In recent testimony before the Congress, GAO urged that the 
proposal for establishing DHS should not be considered a substitute 
for, nor should it supplant, the timely issuance of a national homeland 
security strategy.\2\ Based on our prior work, GAO believes that the 
consolidation of some homeland security functions makes sense and will, 
if properly organized and implemented, over time lead to more 
efficient, effective, and coordinated programs; better intelligence 
sharing; and a more robust protection of our people, borders, and 
critical infrastructure. At the same time, the proposed cabinet 
department, even with its multiple missions, will still be just one of 
many players with important roles and responsibilities for ensuring 
homeland security. At the federal level, homeland security missions 
will require the involvement of the Central Intelligence Agency (CIA), 
Federal Bureau of Investigation (FBI), the U.S. Marshals Service, the 
Department of Defense (DOD), and a myriad of other agencies. In 
addition, state and local governments, including law enforcement and 
first responder personnel, and the private sector also have critical 
roles to play.
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    \2\ U.S. General Accounting Office, Homeland Security: Proposal for 
Cabinet Agency Has Merit, But Implementation Will Be Pivotal to 
Success, GAO-02-886T (Washington, D.C.: June 25, 2002).
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    If anything, the multiplicity of players only reinforces the 
recommendations that GAO has made in the past regarding the urgent need 
for a comprehensive threat, risk, and vulnerability assessment and a 
national homeland security strategy that can provide direction and 
utility at all levels of government and across all sectors of the 
country.\3\
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    \3\ U.S. General Accounting Office, Combating Terrorism: Selected 
Challenges and Recommendations, GAO-01-822 (Washington, D.C.: 
Septemeber 20, 2001).
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    We are pleased that the Administration has just released the 
national homeland security strategy and GAO stands ready to work with 
the Congress and the Administration to ensure that a sound and strong 
strategy can be effectively implemented to protect the country against 
terrorism. Although GAO has not had time to thoroughly analyze the 
strategy yet, we previously suggested that certain key elements be 
incorporated in the homeland security strategy.\4\ We have indicated 
that a national homeland security strategy should: 1) clearly define 
and establish the need for homeland security and its operational 
components, 2) clarify the appropriate roles and responsibilities of 
federal, state, and local entities and build a framework for 
partnerships for coordination, communication, and collaboration, and 3) 
create specific expectations for performance and accountability, 
including establishing goals and performance indicators. In addition, 
GAO has said the national strategy development and implementation 
should include 1) a regular update of a national-level threat and risk 
assessment effort, 2) formulate realistic budget and resource plans to 
eliminate gaps, avoid duplicate effort, avoid ``hitchhiker'' spending, 
and protect against federal funds being used to substitute for funding 
that would have occurred anyway, 3) coordinate the strategy for 
combating terrorism with efforts to prevent, detect, and respond to 
computer-based attacks, 4) coordinate agency implementation by 
reviewing agency and interagency programs to accomplish the national 
strategy, and 5) carefully choose the most appropriate policy tools of 
government to best implement the national strategy and achieve national 
goals.
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    \4\ GAO-02-886T
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    Based on our preliminary review, some of these elements have been 
addressed in the national strategy. In the past, the absence of a 
broad-based homeland security definition or the ad hoc creation of a 
definition by individual government departments suggest that a 
consistent and transparent definition be applied to help create a more 
integrated approach and unified purpose. The President's national 
homeland security strategy does provide for a proposed definition of 
homeland security, which should help the government to more effectively 
administer, fund and coordinate activities both inside and outside a 
new department and to ensure that all parties are focused on the same 
goals and objectives, results and outcomes. It is critically important 
that the Congress and the Administration agree on a definition since it 
serves as the foundation for a number of key organizational, 
operational and funding decisions. Finally, I would also note that, in 
the past, we have suggested that a central focal point such as OHS be 
established statutorily in order to coordinate and oversee homeland 
security policy within a national framework.\5\ Today, we re-emphasize 
the need for OHS to be established statutorily in order to effectively 
coordinate activities beyond the scope of the proposed DHS and to 
assure reasonable congressional oversight.
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    \5\ U.S. General Accounting Office, Homeland Security: 
Responsibility and Accountability For Achieving National Goals, GAO-02-
627T (Washington, D.C.: April 11, 2002).
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Need for Criteria and Reorganization
    Often it has taken years for the consolidated functions in new 
departments to effectively build on their combined strengths, and it is 
not uncommon for these structures to remain as management challenges 
for decades. It is instructive to note that the 1947 legislation 
creating DOD was further changed by the Congress in 1949, 1953, 1958, 
and 1986. Despite these and other changes made by DOD, GAO has 
consistently reported over the years that the department--more than 50 
years after the reorganization--continues to face a number of serious 
management challenges. In fact, DOD has 8 of 23 high-risk areas based 
on GAO's latest list.\6\ This note of caution is not intended to 
dissuade the Congress from seeking logical and important consolidations 
in government agencies and programs in order to improve homeland 
security missions. Rather, it is meant to suggest that reorganizations 
of government agencies frequently encounter start-up problems and 
unanticipated consequences that result from the consolidations are 
unlikely to fully overcome obstacles and challenges, and may require 
additional modifications in the future to effectively achieve our 
collective goals for defending the country against terrorism.\7\
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    \6\ U.S. General Accounting Office, High-Risk Series: An Update, 
GAO-01-263 (Washington, D.C.: January 2001).
    \7\ U.S. General Accounting Office, Implementation: The Missing 
Link In Planning Reorganizations, GGD-81-57 (Washington, D.C.: March 
20, 1981).
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    The Congress faces a challenging and complex job in its 
consideration of DHS. On the one hand, there exists a certain urgency 
to move rapidly in order to remedy known problems relating to 
intelligence and information sharing and leveraging like activities 
that have in the past and even today prevent the United States from 
exercising as strong a homeland defense as emerging and potential 
threats warrant. Simultaneously, that same urgency of purpose would 
suggest that the Congress be extremely careful and deliberate in how it 
creates a new department for defending the country against terrorism. 
The urge to ``do it quickly'' must be balanced by an equal need to ``do 
it right.'' This is necessary to ensure a consensus on identified 
problems and needs, and to be sure that the solutions our government 
legislates and implements can effectively remedy the problems we face 
in a timely manner. It is clear that fixing the wrong problems, or even 
worse, fixing the right problems poorly, could cause more harm than 
good in our efforts to defend our country against terrorism.
    GAO has previously suggested that reorganizations should emphasize 
an integrated approach; that reorganization plans should be designed to 
achieve specific, identifiable goals; and that careful attention to 
fundamental public sector management practices and principles, such as 
strong financial, technology, and human capital management, are 
critical to the successful implementation of government 
reorganizations.\8\ Similarly, GAO has also suggested that 
reorganizations may be warranted based on the significance of the 
problems requiring resolution, as well as the extent and level of 
coordination and interaction necessary with other entities in order to 
resolve problems or achieve overall objectives.\9\
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    \8\ U.S. General Accounting Office, Government Reorganization: 
Issues and Principles, GAO/T-GGD/AIMD-95-166 (Washington, D.C.: May 17, 
1995).
    \9\ U.S. General Accounting Office, Environmental Protection: 
Observations on Elevating the Environmental Protection Agency to 
Cabinet Status, GAO-02-552T (Washington, D.C.: March 21, 2002).
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    GAO, based on its own work as well as a review of other applicable 
studies of approaches to the organization and structure of entities, 
has concluded that the Congress should consider utilizing specific 
criteria as a guide to creating and implementing the new department. 
Specifically, GAO has developed a framework that will help the Congress 
and the Administration create and implement a strong and effective new 
cabinet department by establishing criteria to be considered for 
constructing the department itself, determining which agencies should 
be included and excluded, and leveraging numerous key management and 
policy elements that, after completion of the revised organizational 
structure, will be critical to the department's success. Figure 1 
depicts the proposed framework:

          
        [GRAPHIC] [TIFF OMITTED] T3173.008
        
          
    With respect to criteria that the Congress should consider for 
constructing the department itself, the following questions about the 
overall purpose and structure of the organization should be evaluated:
     Definition: Is there a clear and consistently applied 
definition of homeland security that will be used as a basis for 
organizing and managing the new department?
     Statutory Basis: Are the authorities of the new department 
clear and complete in how they articulate roles and responsibilities 
and do they sufficiently describe the department's relationship with 
other parties?
     Clear Mission: What will the primary missions of the new 
DHS be and how will it define success?
     Performance-based Organization: Does the new department 
have the structure (e.g., Chief Operating Officer (COO), etc.) and 
statutory authorities (e.g., human capital, sourcing) necessary to meet 
performance expectations, be held accountable for results, and leverage 
effective management approaches for achieving its mission on a national 
basis?
    Congress should also consider several very specific criteria in its 
evaluation of whether individual agencies or programs should be 
included or excluded from the proposed department. Those criteria 
include the following:
     Mission Relevancy: Is homeland security a major part of 
the agency or program mission? Is it the primary mission of the agency 
or program?
     Similar Goals and Objectives: Does the agency or program 
being considered for the new department share primary goals and 
objectives with the other agencies or programs being consolidated?
     Leverage Effectiveness: Does the agency or program being 
considered for the new department create synergy and help to leverage 
the effectiveness of other agencies and programs or the new department 
as a whole? In other words, is the whole greater than the sum of the 
parts?
     Gains Through Consolidation: Does the agency or program 
being considered for the new department improve the efficiency and 
effectiveness of homeland security missions through eliminating 
duplications and overlaps, closing gaps, and aligning or merging common 
roles and responsibilities?
     Integrated Information Sharing/Coordination: Does the 
agency or program being considered for the new department contribute to 
or leverage the ability of the new department to enhance the sharing of 
critical information or otherwise improve the coordination of missions 
and activities related to homeland security?
     Compatible Cultures: Can the organizational culture of the 
agency or program being considered for the new department effectively 
meld with the other entities that will be consolidated? Field 
structures and approaches to achieving missions vary considerably 
between agencies.
     Impact on Excluded Agencies: What is the impact on 
departments losing components to DHS? What is the impact on agencies 
with homeland security missions left out of DHS?
    In addition to the above criteria that the Congress should consider 
when evaluating what to include and exclude from the proposed DHS, 
there are certain critical success factors the new department should 
emphasize in its initial implementation phase. Over the years, GAO has 
made observations and recommendations about many of these success 
factors, based on effective management of people, technology, 
financial, and other issues, especially in its biannual Performance and 
Accountability Series on major government departments.\10\ These 
factors include the following:
---------------------------------------------------------------------------
    \10\ U.S. General Accounting Office, Major Management Challenges 
and Program Risks: A Governmentwide Perspective, GAO-01-241 
(Washington, D.C.: January 2001).
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     Strategic Planning: Leading results-oriented organizations 
focus on the process of strategic planning that includes involvement of 
stakeholders, assessment of internal and external environments, and an 
alignment of activities, core processes and resources to support 
mission-related outcomes.
     Organizational Alignment: The organization of the new 
department should be aligned to be consistent with the goals and 
objectives established in the strategic plan.
     Communication: Effective communication strategies are key 
to any major consolidation or transformation effort.
     Building Partnerships: One of the key challenges of this 
new department will be the development and maintenance of homeland 
security partners at all levels of the government and the private 
sector, both in the United States and overseas.
     Performance Management: An effective performance 
management system fosters institutional, unit and individual 
accountability.
     Human Capital Strategy: The new department must ensure 
that its homeland security missions are not adversely impacted by the 
government's pending human capital crisis, and that it can recruit, 
retain, and reward a talented and motivated workforce, which has 
required core competencies, to achieve its mission and objectives. The 
people factor is a critical element in any major consolidation or 
transformation.
     Information Management and Technology: The new department 
should leverage state-of-the art enabling technology to enhance its 
ability to transform capabilities and capacities to share and act upon 
timely, quality information about terrorist threats.
     Knowledge Management: The new department must ensure it 
makes maximum use of the collective body of knowledge that will be 
brought together in the consolidation.
     Financial Management: The new department has a stewardship 
obligation to prevent fraud, waste and abuse; to use tax dollars 
appropriately; and to ensure financial accountability to the President, 
the Congress, and the American people.
     Acquisition Management: Anticipated as one of the largest 
federal departments, the proposed DHS will potentially have some of the 
most extensive acquisition government needs. Early attention to strong 
systems and controls for acquisition and related business processes 
will be critical both to ensuring success and maintaining integrity and 
accountability.
     Risk Management: The new department must be able to 
maintain and enhance current states of homeland security readiness 
while transitioning and transforming itself into a more effective and 
efficient structural unit. The proposed DHS will also need to 
immediately improve the government's overall ability to perform risk 
management activities that can help to prevent, defend against, and 
respond to terrorist acts.
     Change Management: Assembling a new organization out of 
separate pieces and reorienting all of its processes and assets to 
deliver the desired results while managing related risks will take an 
organized, systematic approach to change. The new department will 
require both an executive and operational capability to encourage and 
manage change.
Homeland Security Reorganization and Missions
    The President's proposal for the new department indicates that DHS, 
in addition to its homeland security responsibilities, will also be 
responsible for carrying out all other functions of the agencies and 
programs that are transferred to it. In fact, quite a number of the 
agencies proposed to be transferred to DHS have multiple functions. 
Agencies or programs that balance multiple missions present the 
Congress with significant issues that must be evaluated in order to 
determine how best to achieve all of the goals and objectives for which 
the entity was created. While we have not found any missions that would 
appear to be in fundamental conflict with the department's primary 
mission of homeland security, as presented in the President's proposal, 
the Congress will need to consider whether many of the non-homeland 
security missions of those agencies transferred to DHS will receive 
adequate funding, attention, visibility, and support when subsumed into 
a department that will be under tremendous pressure to succeed in its 
primary mission. As important and vital as the homeland security 
mission is to our nation's future, the other non-homeland security 
missions transferred to DHS for the most part are not small or trivial 
responsibilities. Rather, they represent extremely important functions 
executed by the federal government that, absent sufficient attention, 
could have serious implications for their effective delivery and 
consequences for sectors of our economy, health and safety, research 
programs and other significant government functions. Some of these 
responsibilities include:
     maritime safety and drug interdiction by the Coast Guard,
     collection of commercial tariffs by the Customs Service,
     public health research by the Department of Health and 
Human Services,
     advanced energy and environmental research by the Lawrence 
Livermore and Environmental Measurements labs,
     responding to floods and other natural disasters by the 
Federal Emergency Management Agency (FEMA), and
     authority over processing visas by the State Department's 
consular officers.
    These examples reveal that many non-homeland security missions 
could be integrated into a cabinet department overwhelmingly dedicated 
to protecting the nation from terrorism. Congress may wish to consider 
whether the new department, as proposed, will dedicate sufficient 
management capacity and accountability to ensure the execution of non-
homeland security missions, as well as consider potential alternatives 
to the current framework for handling these important functions. One 
alternative might be to create a special accountability track that 
ensures that non-homeland security functions are well supported and 
executed in DHS, including milestones for monitoring performance. 
Conversely, the Congress might separate out some of these functions. In 
doing so, the Congress will still need to hold agencies accountable for 
the homeland security missions that are not incorporated in the new 
department. In making these decisions, Congress should consider the 
criteria presented earlier in my testimony, especially those related to 
agency transitions, such as mission relevancy, similar goals and 
objectives, leveraging effectiveness, and creating gains through 
consolidation. There are clearly advantages and disadvantages to all of 
the decisions about placing agencies or programs with multiple missions 
in DHS and Congress must carefully weigh numerous important factors 
related to performance and accountability in crafting the legislation.
    For example, we have indicated in recent testimony that DHS could 
serve to improve biomedical research and development coordination 
because of the current fragmented state of disparate activities. Yet, 
we remain concerned that the proposed transfer of control and priority 
setting for research from the organizations where the research would be 
conducted could be disruptive to dual-purpose programs, which have 
important synergies for public health programs that need to be 
maintained.\11\ Similarly, we have testified that the President's 
proposal, in tasking the new department with developing national policy 
for and coordinating the federal government's research and development 
efforts for responding to chemical, biological, radiological, and 
nuclear weapons threats, also transfers some of the civilian research 
programs of the Department of Energy.\12\ Again, there may be 
implications for research synergy.
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    \11\ U.S. General Accounting Office, Homeland Security: New 
Department Could Improve Biomedical R&D Coordination but May Disrupt 
Dual-Purpose Efforts, GAO-02-924T (Washington, D.C.: July 9, 2002).
    \12\ U.S. General Accounting Office, Homeland Security: Title III 
of the Homeland Security Act of 2002, GAO-02-927T (Washington, D.C.: 
July 9, 2002).
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    Congress may also craft compromises that strengthen homeland 
security while reducing concerns of program disruption or unanticipated 
consequences. One such example is seen in recent deliberations about 
the appropriate location for visa processing. Congressional debate has 
focused on two of our criteria, mission relevancy and gains through 
consolidation. The visa function attempts to facilitate legitimate 
travel while at the same time denying entry to the United States of 
certain individuals, including potential terrorists. Some have argued 
that the mission of the visa function is primarily related to homeland 
security and that therefore the function should be located within the 
proposed department. Others have advocated that the Department of State 
(State) should retain the visa function because they believe that there 
would be no gains from consolidation. They point out that State has an 
established field structure and that it may be impractical to create a 
similar field structure in the proposed department. The compromise 
position of several committees has been to transfer responsibility for 
visa policy to the proposed department, while retaining the cadre of 
overseas visa officers within State.
    As part of these deliberations, the Congress should consider not 
only the mission and role that agencies fulfill today, but the mission 
and role that they should fulfill in the coming years. Thus, while it 
may be accurate that large portions of the missions engaged in by the 
Coast Guard or FEMA today do not relate primarily to homeland security, 
it is wholly appropriate for Congress to determine whether the future 
missions of such agencies should focus principally on homeland 
security. Such decisions, of course, would require the Congress to 
determine the best approach for carrying out a range of the 
government's missions and operations, in order to see that non-homeland 
security activities of these departments are still achieved. In fact, 
given the key trends identified in GAO's recent strategic plan for 
supporting the Congress and our long range fiscal challenges, it is 
appropriate to ask three key questions: (1) what should the federal 
government do in the 21st century? (2) how should the federal 
government do business in the 21st century? and (3) who should do the 
federal government's business in the 21st century? These questions are 
relevant for DHS and every other federal agency and activity.
    As the proposal to create DHS demonstrates, the terrorist events of 
last fall have provided an impetus for the government to look at the 
larger picture of how it provides homeland security and how it can best 
accomplish associated missions. Yet, even for those agencies that are 
not being integrated into DHS, there remains a very real need and 
possibly a unique opportunity to rethink approaches and priorities to 
enable them to better target their resources to address our most urgent 
needs. In some cases, the new emphasis on homeland security has 
prompted attention to long-standing problems that have suddenly become 
more pressing. For example, we've mentioned in previous testimony the 
overlapping and duplicative food safety programs in the federal 
government.\13\ While such overlap and duplication has been responsible 
for poor coordination and inefficient allocation of resources, these 
issues assume a new, and potentially more foreboding, meaning after 
September 11th given the threat from bio-terrorism. In another example, 
we have recommended combining the Department of Justice's Office For 
Domestic Preparedness with FEMA to improve coordination.\14\ A 
consolidated approach to many of these issues can facilitate a 
concerted and effective response to new threats and mission 
performance.
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    \13\ U.S. General Accounting Office, Food Safety and Security: 
Fundamental Changes Needed to Ensure Safe Food, GAO-02-47T (Washington, 
D.C.: October 10, 2001).
    \14\ GAO-01-822.
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    Similarly, we have conducted a number of reviews of State's visa 
function over the years and, based on our work, we believe that there 
are a number of areas in which the visa function can be strengthened. 
For example, the U.S. government needs to ensure that there are 
sufficient staff at overseas posts with the right training and 
experience to make good decisions about who should and who should not 
receive a visa. In addition, we are currently looking at ways that the 
visa function can be strengthened as a screen against potential 
terrorists and we expect to make recommendations later this fiscal 
year. These recommendations will apply regardless of decisions about 
the respective roles of the State Department and the proposed 
Department of Homeland Security regarding visa functions.
         homeland security implementation and transition issues
    The ultimate effectiveness of the new department will be dependent 
on successfully addressing implementation and transition issues. 
Picking the right leadership for these critical positions in the new 
department will be crucial to its success. If you don't have the right 
leadership team in key policy, operational and management positions, 
the department will be at risk. In addition providing the new 
department with some reasoned and reasonable, human capital, management 
and budget flexibilities combined with appropriate safeguards to 
protect the Congress' constitutional authorities and to prevent abuse 
can also help contribute to a successful transition. Both the Congress 
and the Executive Branch have critical roles to play in achieving 
desired outcomes for the American people.
Key Success Factors, Leadership and Accountability
    Among the most important elements for effectively implementing the 
new cabinet department will be close adherence to the key success 
factors. Strategic planning, building partnerships, human capital 
strategies, financial management and other critical factors will make 
the difference between a department that can quickly rise to the 
challenge of its mission and one that might otherwise become mired in 
major problems and obstacles that hamper efforts to protect the nation 
from terrorism.
    The quality and continuity of the new department's leadership is 
critical to building and sustaining the long-term effectiveness of DHS 
and homeland security goals and objectives. The experiences of 
organizations that have undertaken transformational change efforts 
along the lines that will be necessary for the new department to be 
fully effective suggest that this process can take up to 5 to 10 years 
to provide meaningful and sustainable results. Given the scope and 
nature of challenges facing the new department, the critical question 
is how can we ensure that the essential transformation and management 
issues receive the sustained, top-level attention that they require. 
The nation can ill-afford to have the secretary or deputy secretary 
being side-tracked by administrative and operational details--the 
mission of the department requires their undivided attention.
    As a result, it is important for the Congress to give serious 
consideration to creating a deputy secretary for management/chief 
operating officer (COO) position within the department to provide the 
sustained management attention essential for addressing key 
infrastructure and stewardship issues while helping to facilitate the 
transition and transformation process. Recent legislative language 
adopted by the House Committee on Government Reform suggests elevating 
the undersecretary for management to a deputy secretary, equivalent to 
the deputy position provided for in the Administration's proposal. We 
believe that is an important first step to ensuring that transformation 
and management issues receive the top-level attention they require. 
Raising the organizational profile of transformation and management 
issues is important to ensure that the individual has the authority 
needed to successfully lead department-wide initiatives. We are not 
convinced that an under secretary for management, on par with the other 
under secretaries, would necessarily have sufficient authority.
    To provide further leadership and accountability for management, 
Congress may wish to consider several points:
     First, Congress should consider making the deputy 
secretary for management/COO a term appointment of up to 7 years, 
subject to Senate confirmation. A term appointment would provide 
continuity that spans the tenure of the political leadership and 
thereby help to ensure that long-term stewardship issues are addressed 
and change management initiatives are successfully completed.
     Second, to further clarify accountability, the COO should 
be subject to a clearly defined, results-oriented performance contract 
with appropriate incentive, reward and accountability mechanisms. The 
COO would be selected without regard to political affiliation based on 
(1) demonstrated leadership skills in managing large and complex 
organizations, and (2) experience achieving results in connection with 
``good government'' responsibilities and initiatives. Requiring that 
both the performance contract and the subsequent performance evaluation 
be made available to the Congress would provide additional 
accountability and transparency.
    In addition to providing top-level leadership and accountability, 
the department will need to develop employee performance management 
systems that can serve as a key tool for aligning institutional, unit, 
and employee performance; achieving results; accelerating change; 
managing the organization on a day-to-day basis; and facilitating 
communication throughout the year so that discussions about individual 
and organizational performance are integrated and ongoing.\15\ A 
cascading set of results-oriented performance agreements is one 
mechanism in a performance management system that creates a ``line of 
sight'' showing how individual employees can contribute to overall 
organizational goals.\16\
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    \15\ U.S. General Accounting Office, Human Capital: Key Principles 
From Nine Private Sector Organizations, GAO/GGD-00-28 (Washington, 
D.C.: Jan. 31, 2000).
    \16\ U.S. General Accounting Office, Managing for Results: Emerging 
Benefits From Selected Agencies' Use of Performance Agreements, GAO-01-
115 (Washington, D.C.: Oct. 30, 2000).
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    Further accountability can be achieved by ensuring that all 
relevant management laws are applied to the new department (e.g, 
Government Performance and Results Act (GPRA), Chief Financial Officers 
Act, Clinger-Cohen Act, etc.). These laws provide a foundation for the 
management structure of the new department and a basis for ensuring 
appropriate transparency and accountability.
Request for Increased Human Capital and Management Flexibilities
    The President's proposal includes a set of human capital and 
management flexibilities for the new department. GAO believes that it 
is reasonable for certain flexibilities to be granted to the new 
department in such areas as human capital, provided that they are 
accompanied by adequate transparency and accountability safeguards 
designed to prevent abuse. Human capital and management flexibility 
will help the new department to reorganize, realign and transform 
itself to achieve its important missions. Appropriate safeguards can 
help to prevent abuse of federal employees and provide adequate 
monitoring mechanisms to gauge performance. For instance, the Congress 
may wish to provide the new department with ``early out'' and ``buy 
out'' authority in order to help quickly realign the component entities 
and provide for future flexibility. DHS might consider new scientific 
and technical personnel tracks to encourage recruitment, retention and 
rewarding of individuals with critical knowledge, or Congress may wish 
to provide the new department with some limited term appointment 
authority. These and other suggested flexibilities for DHS should be 
viewed in the context of how similar flexibilities have been exercised 
by other agencies with similar missions, such as the Transportation 
Security Administration (TSA), the DOD, the FBI, and the CIA. Congress 
should also note that, as GAO has indicated in the past, agencies are 
already accorded in law significant flexibilities, especially with 
respect to human capital issues, but for a variety of reasons they do 
not always take advantage of them.\17\ DHS should use these existing 
flexibilities and be given others in areas where Congress has done so 
with other agencies (e.g., TSA, Internal Revenue Service, DOD).
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    \17\ U.S. General Accounting Office, Managing For Results: Using 
Strategic Human Capital Management to Drive Transformational Change, 
GAO-02-940T (Washington, D.C.: July 15, 2002).
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    In requesting human capital flexibilities, questions have been 
raised about whether they would result in eroding merit principles, 
veterans' preferences, whistleblower protections, collective bargaining 
and other basic civil service provisions. Recent testimony to the 
Congress by Governor Ridge has clarified the Administration's 
commitment to these provisions.\18\ The final legislation should 
clearly reflect the applicability of these tenets to the new 
department.
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    \18\ Statement of Governor Tom Ridge on the Department of Homeland 
Security to the House Select Committee on Homeland Security, July 15, 
2002.
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    Other flexibilities, such as ones for acquisitions and contracting, 
are included in the President's proposal. Careful analysis is needed to 
determine the need for additional flexibilities. Congress may want to 
consider not expressly providing certain flexibilities in the initial 
legislation, but rather providing a mechanism for expedited 
consideration of flexibilities should the new department request them 
in the future. For example, the Congress might wish to agree on rules 
specifying procedures for consideration of proposed changes, time 
limits on debate, or requirements that any amendments to future 
legislation be strictly related to DHS. This would not be the blanket 
grant of authority envisioned in the original Freedom to Manage 
proposal, but it would permit both the executive branch and the 
Congress to feel confident that proposed changes would receive timely 
consideration.
Request for Increased Budget Flexibility
    The Administration has suggested that it needs a special grant of 
budget flexibility for the Department of Homeland Security. GAO 
believes that Congress should be careful to distinguish between those 
flexibilities that will solely enhance the operations of DHS and those 
that might simultaneously raise other concerns, including concerns 
about the constitutional responsibilities and prerogatives of the 
legislative branch. For instance, the President's proposal permits the 
Secretary to allocate funds as he sees fit, without regard to the 
original purpose of the appropriations. Moreover, there must be a 
system to identify homeland security funds across the wide range of 
existing budget accounts and program activities. This is necessary not 
only for the budget resolution and appropriations process, but also for 
tracking budget execution and for accountability to Congress. The 
Congress, through its appropriations subcommittees, has proven quite 
adept at creating and granting the kind of flexibility it sees as 
appropriate to any given agency. Congress gives agencies flexibility 
over the timing of spending by varying the period of fund availability: 
agencies may receive one-year, multi-year and no-year [permanent] 
funds. Congress has granted agencies varying degrees of transfer or 
reprogramming authority. These flexibilities are generally provided as 
part of the appropriations process and consider the balance between 
accountability and flexibility to ensure that Congress is a partner in 
the spending of taxpayer funds.
    Over the longer term the creation of the new Department may also be 
an opportune time to review the account structure of the Department's 
component entities. Should the orientation of budget accounts be 
shifted toward the strategic goals defined in plans? Such a 
reorientation might facilitate the process of linking resource 
allocation to results consistent with GPRA. Efforts designed to 
rationalize the number of budget accounts within the new department can 
serve to provide flexibility while ensuring accountability.
DHS Transition Issues
    The creation of the Department of Homeland Security will be one of 
the largest reorganizations ever undertaken and the difficulty of this 
task should not be underestimated. Under the President's proposal, 22 
existing agencies and programs and 170,000 people would be integrated 
into the new department in order to strengthen the country's defense 
against terrorism. With an estimated budget authority of the component 
parts of the new department of $37.45 billion, successfully 
transitioning the government in an endeavor of this scale will take 
considerable time and money.\19\ Careful and thorough planning will be 
critical to the successful creation of the new department. While 
national needs suggest a rapid reorganization of homeland security 
functions, the transition of agencies and programs into the new 
department is likely to take time to achieve. At the same time, the 
need for speed to get the new department up and running must be 
balanced with the need to maintain readiness for new and existing 
threats during the transition period. Moreover, the organizational 
transition of the various components will simply be the starting 
point--as implementation challenges beyond the first year should be 
expected in building a fully integrated department. As I stated 
earlier, it could take 5 to 10 years to fully implement this 
reorganization in an effective and sustainable manner.
---------------------------------------------------------------------------
    \19\ The President's proposal entitled The Department of Homeland 
Security, President George W. Bush, June 2002.
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    A comprehensive transition plan needs to be developed. The 
transition plan should establish a time table for the orderly migration 
of each component agency or program to the new department, identify key 
objectives to be achieved during the first year following the transfer, 
and describe the strategy for achieving an orderly transition and 
sustaining mission performance. More detailed implementation plans also 
will be necessary to address business system, processes, and resource 
issues. The President has taken an important first step by establishing 
a transition office within the Office of Management and Budget.
    Congress has an important oversight role to play in helping to 
ensure the effective implementation of the new department. In addition 
to the transition plans, Congress should consider requiring DHS to 
submit regular progress reports on implementation from the department 
and should also conduct periodic oversight hearings to assess progress 
and performance. In this regard, GAO stands ready to assist the 
Congress in conducting its oversight role.
    Increased cost must also be considered with regard to the 
President's proposal. It is likely that over time consolidation of 
functions within DHS may reduce costs below what otherwise would have 
been the case if these functions continued to operate separately. This, 
however, is unlikely to happen quickly. Moreover, we should expect that 
any reorganization would incur start up costs as well as require some 
funding for redundant activities to maintain continuity of effort 
during the transition period. The Congressional Budget Office (CBO) has 
estimated that the costs of implementing the new department would be 
about $3 billion over the next five years with an annual estimate of 
$150 million in FY2003 and $225 million thereafter. However, there are 
other transition costs that CBO acknowledges are not included in their 
estimates beyond the cost to hire, house, and equip key personnel. The 
CBO estimate assumes continuation of the existing multi-pay and 
retirement systems--however unlikely-- and does not address the 
potential need to cross-train existing personnel. Although the purchase 
of new computer equipment, supplies and compatible information 
management systems are included, no estimates are provided for the cost 
to correct existing computer system deficiencies nor the resources to 
support some system redundancy for a period of time. Finally, CBO did 
not attempt to price the relocation of personnel to a central location.
    The Administration has argued that CBO's estimates are inflated. In 
fact, CBO estimates that 1 percent of the total annual spending will be 
for administrative costs, but that a proportionate share of the costs 
to currently administer these agencies will be transferred. Depending 
on the decision to co-locate personnel and the flexibilities ultimately 
provided to the Administration in legislation--in particular a broad 
grant of transfer authority and the ability to staff through non-
reimbursable agreements with other agencies-- these estimates may well 
change. More important than a precise cost estimate of the transition, 
however, is the recognition that there will be short-term transition 
costs and that these costs need to be made transparent. To fully 
recognize the transition costs, in fact, Congress should consider 
appropriating for them separately.
    In summary, I have discussed the reorganization of homeland 
security functions and some critical factors for success. However, the 
single most important element of a successful reorganization is the 
sustained commitment of top leaders to modern, effective and credible 
human capital strategies and to setting clear goals and appropriate 
accountability mechanisms. Top leadership involvement and clear lines 
of accountability for making management improvements are critical to 
overcoming an organization's natural resistance to change, marshalling 
the resources needed to improve management, and building and 
maintaining organization-wide commitment to new ways of doing business. 
Organizational cultures will not be transformed, and new visions and 
ways of doing business will not take root without strong and sustained 
leadership. Strong and visionary leadership will be vital to creating a 
unified, focused organization, as opposed to a group of separate units 
under a single roof. Modern human capital strategies, including 
implementing a credible, effective and equitable performance management 
system that links institutional, unit, team and individual performance 
measurement and reward systems to the department's strategic plan, core 
values and desired outcomes will be critical to success.
    Mr. Chairman, this concludes my written testimony. I would be 
pleased to respond to any questions that you or members of the Select 
Committee may have at this time.
                          Related GAO Products
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    Chairman Armey. Let me just say, the quality of your 
presentation is an object lesson in the points you have just 
made.
    I want to compliment the GAO on the outstanding work that 
they have done. Now we have had the pleasure of working 
together on so many occasions, and I have always found the 
quality of the work good. I now see the reason why, and I want 
to thank you for that.
    Mr. Walker. Thank you, Mr. Chairman. We have outstanding 
people, and a lot of them are with me today. Thank you.
    Chairman Armey. But at this point I would like to recognize 
the gentlelady from Ohio.
    Ms. Pryce. Thank you very much, Mr. Chairman; and thank 
you, Mr. Walker. Your testimony is very enlightening and very 
helpful as well.
    The GAO has said in its reports all along that utilization 
of grants and tax incentives can help strengthen this whole 
homeland security endeavor by encouraging certain types of 
behavior and activities. That has already intrigued me, and I 
wonder if you can give us some examples of how that might work. 
What types of things were they referring to?
    Mr. Walker. Well, there are a number of areas where 
potentially they could have application. Obviously, to the 
extent you are dealing with homeland security, it is clearly 
not just a Federal responsibility. It is a national endeavor, 
and therefore you need to engage the cooperation of State and 
local government agencies. There would be opportunities and 
appropriate mechanisms to consider grants in that regard.
    Over 70 percent of the critical infrastructure in this 
Nation is owned by the private sector. Obviously, we are not 
going to typically give grants to the private sector, but you 
could provide certain types of incentives potentially for them 
to be able to take certain actions, in addition to possibly 
mandating that they have to take certain types of actions that 
are in the best interest of the public.
    So those would be a couple of examples that I would give.
    Ms. Pryce. Thank you very much. I will yield back.
    Chairman Armey. Thank you.
    Let me recognize the gentleman from New Jersey.
    Mr. Menendez. Well, thank you, Mr. Chairman; and thank you, 
Mr. Walker. I have been reading throughout the day your 
testimony. So I was not here for your oral presentation. I have 
been reading this. Let me ask you some questions.
    The comments you make on page 2 of your written submission 
are I think of great importance, where you said, toward the end 
of that page, it will be important for the new Department to 
focus on: articulating a clear overarching mission and core 
values; establishing a short list of initial critical 
priorities; assuring effective communication and information 
systems; developing an overall implementation plan for the new 
national strategy.
    In that regard, I had hoped that the President's strategy 
document would have been available earlier in this process. 
Because it would seem to me to be the process by which we 
dictate how do we respond to that strategy which is, in 
essence, what this committee is doing in part through the 
creation of this Department.
    Have you had an opportunity to look at that strategy 
document and reflect upon it as it relates to your observations 
here how the Department will have to focus? Do you think that 
it provides the right risk assessment and then response?
    Mr. Walker. We are still in the process of reviewing the 
strategy, as you might imagine, as it was just issued 
yesterday. I agree ideally it would have been nice to have that 
first and then the proposal afterwards.
    I will note and my testimony contains some information that 
we had made a number of recommendations to the White House on 
elements that should be considered as part of a strategy. We 
are in the process of looking to determine whether and to what 
extent they adopted those recommendations. Based upon our 
preliminary review, it appears as if they did adopt a number of 
them, but, again, we are in the early stages; and I will be 
happy when we are completed with that review to provide it to 
you and this committee.
    Mr. Menendez. Have you, during the course of the committees 
of jurisdictions' work, had your people review what they have 
done? Do you have any sense of that at all?
    Mr. Walker. Review--.
    Mr. Menendez. The committee reviews that made amendments to 
the President's proposal, have you had an opportunity to look 
at those?
    Mr. Walker. I am familiar with some of them, and we have 
reviewed some of them, yes.
    Mr. Menendez. Do you have any conclusions as it relates to 
any of those amendments made by those committees?
    Mr. Walker. As you might imagine, Mr. Menendez, I have no 
hesitation to be able to be specific and to make 
recommendations when you are dealing with operational issues, 
but many of these recommendations deal with inherently policy 
issues that I think only elected officials can--address.
    Mr. Menendez. Well, let me deal with one of the operational 
issues, then; and that is, how do you guarantee in a newly 
created department that has agencies transferred to it with 
multiple functions, some of which are not security related, 
that those other functions will be preserved and enhanced?
    Mr. Walker. I think there are several ways that the 
Congress historically has looked at that. One of the ways that 
the Congress has looked at it is to try to make sure that, in 
critically important areas, that you might have a presidential 
appointee with Senate confirmation responsible for the 
function, who you can call up to testify before the House and 
the Senate.
    In addition to that, from time to time there can be things 
done through the appropriations process whereby there is some 
kind of guidance that is given to make sure that at least a 
certain amount of funds are spent for certain types of 
activities.
    So there are ways the Congress historically has been able 
to do that.
    I also believe that it is can be done through making this 
new Department subject to the Government Performance and 
Results Act, through making sure that it has a strategic plan, 
that it has performance goals, that it is reporting annually on 
its results that these reports are is made available to the 
Congress and the American people. It is something that is 
important to make sure they are doing what they should be 
doing.
    I would strongly recommend that you consider using GAO to 
periodically review the implementation efforts and to assess 
whether or not this is having an adverse effect on any 
particular missions that the Congress is concerned about.
    So I think there are a lot of ways where you can--.
    Mr. Menendez. So you believe that we can have some 
mechanisms--do you believe that some mechanisms should be 
established in the legislation to try to ensure that those 
functions that are nonsecurity continue to be preserved?
    Mr. Walker. I think one of the ways to do that is to make 
sure that they are subject to the basic management provisions 
such as the Government Performance and Results Act. I think 
another way to do that is to make sure that GAO conducts a 
periodic review and reports back to the Congress with regard to 
this implementation plan and particular areas where Congress 
may have a concern to make sure that there is not an 
inappropriate diminution of emphasis or activities. I think 
those types of approaches might help--.
    Mr. Menendez. Lastly, in your--at the same time, on Page 3, 
you say, at the same time that this Department is created, even 
with its multiple missions, it will still be just one of many 
players with important roles. In that context, do you not 
believe it is important to have a White House structure that is 
still coordinating all of these functions? And if so, do you 
have any opinion on how the nature of that structure should 
take place?
    Mr. Walker. As you probably recall, the GAO recommended the 
establishment of the Office of Homeland Security and, in fact, 
consideration of a Department of Homeland Security before 
September 11th of last year; and the President acted on it very 
quickly in the case of the Office of Homeland Security. 
Clearly, you are going to need to have something there. There 
are over a hundred departments and agencies involved in, quote, 
unquote, homeland security. The President is proposing to 
consolidate about 22. That leaves a number which will require, 
coordination and planning.
    There is going to be a need and the President recognizes 
there is going to be a need for an overall coordinator. We 
think the Congress needs to consider whether or not that 
overall coordinator is provided on a statutory basis in order 
to make sure that you have the ability to conduct reasonable 
oversight in areas that aren't going to be included within the 
Department of Homeland Security.
    Mr. Menendez. Thank you, Mr. Chairman.
    Chairman Armey. The Chair would like to advise the 
committee and our witness that I anticipate being called to the 
floor for final votes of the evening within the next 5 minutes. 
So, that being the case, we would have approximately 15 to 20 
minutes to complete our work, if we were to complete and not 
have to return. So I would just advise you and hope that we can 
meet that deadline so we could all go to dinner after these 
votes.
    In that regard, I believe, Mr. Portman, the Chair 
recognizes you.
    Mr. Portman. I think Nancy and I can do this in 20 minutes.
    I did wish we had that much time, because this is a very 
important part of the overall project here, and that is making 
sure that we have the performance measurements in place and the 
21st century kind of approach to government ought to include 
that. You have been great in working with us on the Internal 
Revenue Service and on other management challenges that we have 
had, Mr. Walker, and your team at GAO; and we appreciate that.
    You are going to be needed in terms of follow-up. No matter 
what happens out of this process in Congress, there will need 
to be oversight by Congress; and your reports and, frankly, the 
pressure that GAO applies by going through the analysis helps 
to keep it on track.
    I do have a couple of questions for you. One is on page 10 
of your written statement. You talk about the people factor 
being so critical, and you restated that in your oral testimony 
too, being sure that it can recruit, retrain and reward a 
talented and motivated work force which has the core 
confidences required to achieve the mission. I think that is 
our biggest single challenge, and this is why I believe 
strongly in some flexibility.
    Can you talk a little more about what you mean by 
flexibility? Are you talking about pay banding so that you 
could have some sort of performance pay or are you talking 
about specific performance bonuses that are tied to a 
performance measurement of some kind? We obviously need to 
provide again in this new modern agency some kind of 
flexibility to be able to attract and reattract and retain the 
best people.
    Mr. Walker. Several ideas, Mr. Portman. First, I know the 
Congress has already provided certain flexibility to various 
departments and agencies in the past, whether it be the 
Internal Revenue Service, whether it be the new Transportation 
Security Administration or whether it be the GAO, and so this 
is not something that the Congress has not done before. Areas 
that you may want to consider would be areas such as the 
ability to hire a certain number of people for term 
appointments without having to go through the competitive 
process, again term appointments, a limited number, having a 
specialist and scientific career track, having broad banding 
authority, not only for classification but pay. Having 
realignment authority, having the ability to offer voluntary 
early outs and voluntary buyouts side in order to be able to 
realign the work force rather than to downsize the work force. 
Moving towards a structure whereby individuals are getting 
compensated more based upon their skills, knowledge and 
performance rather than the passage of time and rate of 
inflation.
    These would be a few examples that I would give.
    Mr. Portman. I think it is very important and we have 
talked a lot with Kay James, the Office of Personal Management 
Director who was here yesterday, about some of these issues and 
the administration proposed initially some very general 
language, basically asking us to allow them to put together a 
personnel policy which would provide for some of that 
flexibility, and I think we have gotten to the point where 
probably that language is too general and we need to specify 
further and if you could work with us in the next 24 hours to 
help with that it would be helpful because I think some members 
on both sides of the aisle are interested in being sure that 
this is again a 21st century approach to personnel management, 
but that we retain some of the basic civil service protections. 
I think, I know we can do both. I know we must if we are going 
to achieve the results we all want.
    Why is it not subject to GPRA anyway? You mentioned it 
should be subject to Government Performance Results Act. I 
assume that GPRA would cover--.
    Mr. Walker. I think it needs to be express. It wasn't 
express in the President's proposal. I am not aware he was 
trying to circumvent that. It just wasn't express. But clearly 
this is going to be one of the top five agencies in government. 
I believe third in number of personnel and fourth or fifth in 
budget dollars.
    Chairman Armey. If I might interject, it is difficult for 
me to imagine that the chairman of this committee would forget 
that.
    Mr. Walker. I think it would be.
    Mr. Portman. I think it would be covered anyway because the 
chairman will be sure it is covered. As for a second Deputy 
Secretary, I understand what you are getting at. We need to 
focus on management and some of these, too, but I have a 
concern because I think it is to have that the Deputy 
Secretary, provided, in the proposal and I think the Committee 
on Government Reform also suggested a Deputy Secretary should 
have that function; in other words, rather than having a 
Secretary and a Deputy Secretary who functions more on the 
program side and not on management, it seems to me that deputy 
from management might be left out of some of the crucial 
decisions and rather you want it to be aligned with the 
leadership of the department. How do you feel about that?
    Mr. Walker. I think this is critically important. I have 
run three agencies in the Federal Government, two in the 
executive branch, one in the legislative branch, and in every 
agency I have run I have found that having a triumvirate at the 
top was critically important and I got it done on my own. It 
wasn't a statutory requirement. I got it done on my own and 
basically what I found was you have the agency head, which is 
the CEO and therefore is focused more externally, more on 
policy, more on trying to do what the President wants, and 
obviously they have their own agenda consistent with the 
President's. You have the Deputy Secretary, the traditional 
Deputy Secretary who tends to be more policy oriented, who 
tends to serve more as the alter ego of the Secretary, who 
tends to be focused appropriately on getting the President's 
agenda adopted, typically more policy and operational mission 
oriented, and getting the Secretary's agenda adopted. The 
problem is that many of the Deputy Secretaries don't 
necessarily have a management background, they are not 
necessarily familiar with a lot of these important issues that 
are the key between success and failure.
    The other thing is that when you are dealing with strategic 
planning, financial management, information technology, human 
capital strategy, knowledge management, change management, 
those are inherently good government issues, they are not 
partisan issues, they take years to get it right and they are 
critical parts of a department's basic infrastructure that you 
have to get done. My experience has been those don't get 
handled adequately, and the result of that is it inures to the 
detriment of achieving success and inures to the detriment of 
every administration, Republican or Democrat, because of 
failure to adequately address those issues.
    Mr. Portman. My time has expired and I appreciate the 
indulgence, Mr. Chairman. I would hope that the Deputy would 
focus on that. This is a relatively less political agency and 
if we could in our legislation, I think, express that, I think 
it would be appropriate just to say that we would hope the 
Deputy would be someone who would focus on change management 
and information technology and managing the operation, and with 
that I yield back.
    Mr. Walker. One last thing, I would just respectfully 
suggest that given the huge undertaking this is going to take, 
you are going to need a deputy for policy/operations and a 
deputy for management. I really believe that. This is a huge 
undertaking, and I believe if you don't have both you will 
significantly increase the risk.
    Chairman Armey. Thank you for that point. The gentlelady 
from California.
    Ms. Pelosi. Thank you very much, Mr. Chairman, I have many 
questions for you, Mr. Walker, so we are going to whip right 
through them. I am referencing many of the things you have said 
in your presentation, and I agree with the chairman, you 
managed your presentation very well and it was very clear and 
it raised some questions.
    You talked in here--you spoke about the importance of 
congressional oversight to this new department and all and I 
have found, and maybe it is from my perspective as an 
appropriator, that one of the most eloquent forms of oversight 
is from the standpoint of the purse strings. One of the 
concerns we have here, expressed very well by the chairman and 
the ranking member of the Appropriations Committee this 
morning, was that there was an abdication of the congressional 
purse string weighing in in this legislation that the President 
presented to the point of upsetting the balance of power and 
separation, checks and balances and separation of power that 
our Founding Fathers intended. That it was indeed, to quote the 
chairman of the committee--I don't know if I have it right 
here, but he said if we were to diminish, he talked about two 
things, if we were to take away our constitutional balance we 
are almost as bad as those who would take them away by 
terrorism. That was Chairman Young, a slight paraphrase but 
almost an exact quote. Could you comment on that briefly?
    Mr. Walker. First, make it very clear I am in the 
legislative branch so I come down on Congress' side on 
separation of powers. Secondly, I do think that you need to 
make sure you don't do anything that undercuts your 
constitutional prerogatives. I think there are opportunities to 
work through the appropriations process, and Congress has done 
that, to determine what is the nature of the accounts that you 
ought to have, what are the number of accounts you ought to 
have, to what extent you want to provide no year money, to what 
extent might you want to consider other things. That has been 
done and I think some flexibility ought to be provided, but I 
think you ought to be careful not to undercut your 
constitutional prerogatives.
    Ms. Pelosi. I appreciate that and that was similar to what 
the distinguished chairman had documented for us earlier today. 
I was concerned about some of the references you made about 
some of the laws that would apply here that our distinguished 
chairman had participated in supporting.
    For example, Clinger-Cohen Act, the President's bill 
creates a CIO but does not apply the Clinger-Cohen Act, so none 
of the information management requirements of that law such as 
assuring the security of information system would apply.
    Similarly, the President's bill creates a Chief Financial 
Officer but does not apply the provisions of the Chief 
Financial Officer Act. As a result, the CFO would not be Senate 
confirmed and none of the financial management requirements of 
that law such as annual independent audits would apply to the 
new department. Section 904 of the committee print applies the 
CFO act. That is a recommendation. Can you--.
    Mr. Walker. I would hope that was an unintended omission 
because I think it is important that these major acts do apply 
to this department. It will be the third largest department in 
terms of personnel and top five in terms of budget dollars.
    Ms. Pelosi. Well, I hope that you are right and that they 
are unintended omissions that our distinguished chairman would 
intentionally include back into the legislation. I appreciate 
your discussion of how the increased cost for this was going to 
evolve in and your admonition against moving too quickly rather 
than doing it right, and we hope we are not acting with haste 
as we try to act with speed because this is an emergency. We 
have to reduce risk. It is not like any other consolidation of 
government before in the 5 to 10 years--is almost scary to hear 
you say that but you are the voice of reality and I appreciate 
what you are saying. But for those reasons I would have liked 
to have seen a much leaner--my colleagues are tired of hearing 
me say this--a very strong Office in the White House of 
Homeland Security with statutory authority rather than just by 
executive order, a much leaner operation here because it's 
going to take 5 to 10 years to implement our goal to reduce 
risk, to protect the American people best is not served by 
something that is effective 10 years down the road. So leaner 
to start and then let it grow if we decide that it needs to 
grow. It will take its own direction.
    Could you comment on that?
    Mr. Walker. I think you need to pursue a phased 
implementation. You need to decide which entities need to be in 
this. The separate issue is, is it all or part of them? In what 
order do you end up implementing them? So when I talk about the 
5 to 10 years, what I mean is by the time you get all the parts 
together, by the time you end up harmonizing the many different 
systems that you have to harmonize, the financial management 
systems, the human capital systems, the information technology 
systems, the communication systems, and the performance 
management systems, by the time you design it, implement it, to 
get it to the point where it will stick beyond whoever the 
current leader is, that takes 5 to 10 years. It is hard work.
    Ms. Pelosi. If the chairman would indulge me, therefore I 
am hoping that the distinguished chairman will include in his 
mark a strong Office of Homeland Security in the White House, 
which I think is necessary anyway, but certainly to tide us 
over, an office that oversees all of the agencies of 
government, not only those addressed in this department, and to 
give it statutory basis rather than just its existence 
springing from an executive order.
    Thank you, Mr. Chairman. Thank you, Mr. Walker.
    Chairman Armey. Thank you, Mr. Walker, and thank the 
committee. If I may make a couple of observations. First of 
all, I want to thank the committee and the committee's staff 
for a very long, hard day. I want to thank the witness and the 
witnesses' staff for your patience and again, as I have come to 
expect, the thoroughness and quality of your work and your 
presentation was outstanding.
    If I might make the observation, we will work and produce a 
chairman's mark on this legislation. It will be distributed to 
the members of this committee by, as early as possible, perhaps 
I can say with some certainty no later than the beginning of 
business tomorrow morning, earlier if possible, and we will of 
course be marking that on Friday. Now, between Friday and next 
Wednesday we will be going to the floor.
    Ms. Pelosi. Chairman, may I seek clarification? Could you 
repeat that timetable because I think it is a little different 
from my understanding? Perhaps I misunderstood.
    Chairman Armey. What I have been saying is as soon as 
possible at the conclusion of these hearings, but certainly by 
8 o'clock in the morning.
    Ms. Pelosi. So there is no need to wait around this evening 
for a mark.
    Chairman Armey. I would have your staff check with my 
staff. The best way for us is to continue to stay in touch.
    Ms. Pelosi. Then when we would meet again?
    Chairman Armey. We want to get it in your hands as quickly 
as we can.
    Ms. Pelosi. Would we just meet 9:30 the next morning or--.
    Chairman Armey. We might get a chance to talk together 
tomorrow evening.
    This of course is committee business, Mr. Walker. You don't 
necessarily need to be here, but Mr. Walker--.
    Mr. Walker. I don't need to make a point. I would just say 
that I am more than willing to provide whatever assistance GAO 
canthat could be of help to this committee.
    Chairman Armey. If I may complete my thought, Mr. Walker, 
clearly by Wednesday of next week insofar as we as the 
committee find errors or omissions, things that we cannot 
correct in our own markup on Friday, we would have an 
opportunity, I would presume, under the rule for a manager's 
amendment and I should just like to advise you that this 
committee would probably feel very comforted to know that we 
could draw on you for any assistance we might have, especially 
with respect to some of these very important aspects such as 
the performance results statement and things of this nature for 
technical drafting assistance.
    Ms. Pelosi. I just want to thank you, Mr. Chairman. We look 
forward to receiving the mark and getting down to work and--.
    Mr. Menendez. If I may, I thought--.
    Chairman Armey. If I may, we can certainly give Mr. Walker 
his leave. But go ahead.
    Mr. Menendez. Inquiry as to the process for Friday. The 
chairman has said that at some point early tomorrow he will 
have this mark. What is the chairman's intention as to process 
on Friday in terms of the markup itself? Are amendments going 
to be in order by title? Is the bill going to be open as a 
whole? Are we going to proceed under the 5-minute rule for 
amendments that are offered? I am just trying to get a sense 
of--.
    Chairman Armey. I appreciate that. Let me just say it is 
the chairman's intention to follow such procedure that will be 
as inviting and as inclusive as is possible for members from 
both sides of the aisle. We are caught between the constraint 
of not wanting to start putting final details and completeness 
to the mark until we have had the benefit of today's hearings, 
which I think were well worth our time with respect to all the 
hearings of the day, and the desire to have it in our hands as 
members of committee in time to massage it with respect to our 
desire to amend it. So the chairman will be in no hurry on 
Friday to rush us through our day's work, will invite full 
participation. I believe I would intend to follow the 5-minute 
rule as closely as we can so that we have the opportunity to 
fully discuss amendments that would be presented and to see to 
it that every member has a chance to have every opportunity for 
amendment.
    Mr. Menendez. I thank the chairman for his response, and I 
would just hope tomorrow in addition to--and I know this is the 
chairman's intent to proceed in such a fashion as he has 
proceeded in these hearings, and I want to commend him in that 
regard, that whatever process you finalize in your mind the 
sooner we know so that we can be prepared. If you are going to 
do it by title I want to be here--I intend to be here for all 
of it, but I want to make sure I have a title here that is open 
to amendment and if it is going to be open as a whole that is 
fine, but whatever your process you decide we would like to 
know it as soon as possible.
    Chairman Armey. Let me say to the gentleman your point is 
well taken. I will be sorting through that tonight. My guiding 
interest in determining the process that I will recommend we 
follow would be the two points, as inviting and as inclusive as 
possible. We will all be wanting Friday to finish our work with 
whatever dispatch we can, but we will not sacrifice 
thoroughness and respect for one another to that end.
    Ms. Pelosi. If the chairman would yield, I believe there is 
a good deal of interest on the part of the chairs and the 
ranking members, as they suggested today, that if the mark did 
not contain what they had that they sort of have at it again to 
see if they could have their moment. Obviously the amendment 
process through the committee is the way to do that, but I 
think that as soon as we get that mark tomorrow morning, 8 
o'clock, there is going to be a great deal of interest in it 
beyond the nine of us.
    Chairman Armey. Again, it is my desire to get it to you as 
soon as I can, but I don't want to over promise.
    The gentlelady from Connecticut.
    Ms. DeLauro. I have one question. May I ask one question?
    Chairman Armey. Of the witness.
    Ms. DeLauro. Of the witness.
    Chairman Armey. The witness has made himself available--.
    Ms. DeLauro. I will be brief and I apologize to my--.
    Chairman Armey. And I promised to unchain, and then I 
promise to unchain you from your desk again. Go ahead, the 
gentlelady from Connecticut.
    Ms. DeLauro. This is about the transfer of the CDC's public 
health activities. Your testimony at GAO where there was 
concern expressed that the transferring of these programs, and 
I will quote, ``had the potential to disrupt some programs that 
are critical to basic public health responsibilities.'' let me 
just say that your concern is shared at the local level.
    Dr. Bob England, Director of the Milford, Connecticut 
Public Health Department, he wrote to me saying, quote, ``The 
system needed to identify a bioterrorist attack is the very, 
very same one already employed by the public health system.''.
    My question, couldn't we get the job done simply by 
strengthening the tools we already have in place in our public 
health system and by ensuring coordination between DHS, the 
Department of Homeland Security, and CDC ?
    Mr. Walker. I assume you are referring to a report or 
testimony?
    Ms. DeLauro. Right, the GAO report on this issue and on 
health and about--.
    Mr. Walker. I will be honest to tell you I am not 
personally familiar with that report, but I will tell you this: 
Whatever we said in that report you can take it to the bank, we 
stand behind it.
    Ms. DeLauro. This is, by the way, and quite honestly if 
there is somebody--.
    Mr. Walker. It is the testimony from Jan Heinrich, and one 
of the things we talked about was our concern about a potential 
loss of synergy that could be associated with splitting these 
entities. Now, there are ways to address that, some that we 
have laid out, but we do think it needs to be addressed in 
order to make sure that it does not have an unintended 
consequence, which I think is what Mr. Menendez was talking 
about when he was talking about certain functions, how are they 
going to be handled if they are transferred out.
    Ms. DeLauro. If there is any further information on that or 
Jan Heinrich has any information, obviously immediately we need 
to move on it. That would be helpful.
    Thank you, Mr. Chairman. Thank you, my colleagues.
    Chairman Armey. Thank you again, Mr. Walker, and your staff 
for their patience. Thank you, ladies and gentlemen. This 
committee is now adjourned.
    [The following material was submitted for the record:]

  STATEMENT OF THE HONORABLE MICHAEL G. OXLEY, CHAIRMAN, COMMITTEE ON 
                           FINANCIAL SERVICES

    Chairman Armey, Ranking Member Pelosi and Members of the 
Select Committee on Homeland Security, thank you for the 
opportunity to testify before this panel on the President's 
Homeland Security proposal. I am a co-sponsor of this 
legislation and believe that it is critical that Congress work 
quickly to ensure that the President has the tools necessary to 
protect our citizens from the evil acts perpetrated by 
terrorist who hate our free and open society. While the 
Financial Services Committee waived its referral of H.R. 5005, 
I believe that it is important to highlight for the Members the 
critical role this Committee has played and will continue to 
play in the war against terrorism.
    Within one month of the terrorist attacks in New York, 
Washington and Pennsylvania, the Financial Services Committee 
reported three bills critical to the protection of our homeland 
and the stability of our capital markets. The Financial Anti-
Terrorism Act of 2001, H.R. 3004, the Terrorist Risk Protection 
Act, H.R. 3210, and the Emergency Securities Response Act, H.R. 
3060 were the first comprehensive legislative actions taken by 
this Congress to combat the threat of terrorism.
    The Financial Anti-Terrorism Act provided banks, businesses 
and federal law enforcement agencies with sweeping powers to 
detect and disrupt terrorist funding and combat financial 
crimes. This provision was eventually incorporated into the USA 
PATRIOT Act and was signed into law by President Bush in 
October of 2001. The Committee plans to closely monitor the 
enforcement of this legislation in hearings over the next 
several months.
    The Committee also crafted and approved the Terrorist Risk 
Protection Act, H.R. 3210, in mid October of last year. This 
measure, which was passed by the House, provides a federal 
backstop in order to guarantee that commercial terrorism 
insurance is available to individuals and businesses in the 
event of a terrorist attack, while at the same time ensuring 
that the U.S. taxpayers are not left with the bill. It is 
critical that insurance against terrorist attacks be available 
in order to maintain economic stability and promote 
development. I hope that the House and Senate will resolve 
their differences over this legislation soon so that we can 
protect the property of millions of Americans from and future 
catastrophic losses.
    The Emergency Securities Response Act, the Committee 
empowered the Securities and Exchange Commission to extend some 
emergency orders for up to 90 days and widened the scope of 
emergency relief to all federal securities laws. This provision 
granted the markets the ability to recover quickly from the 
attacks on the U.S. financial infrastructure.
    The President's proposal to create a Department of Homeland 
Security is a logical and necessary one. As you know, there are 
over 100 different federal agencies which are charged with 
protection of our borders. It makes sense to consolidate them 
into one agency in order to eliminate duplication of efforts 
and conserve resources.
    The Financial Services Committee has jurisdiction over 
three programs within the Federal Emergency Management Agency 
that would become the responsibility of the new department. 
These programs are: the National Flood Insurance Programs, the 
Defense Production Act and the Emergency Food and Shelter 
Program. FEMA's mission is to prevent, prepare for, respond to, 
and recover from disasters of all types. The Committee believes 
that FEMA's expertise in consequence management is critical to 
the function of the proposed Office of Homeland Security and 
that all of these programs should remain within FEMA at this 
time.
    The Federal Insurance and Mitigation Administration within 
FEMA manages the National Flood Insurance Program and has 
expertise in risk assessment, mitigation and insurance. Efforts 
such as resident education and flood mapping enable FEMA to 
reach out to residents in flood prone regions and protect 
against preventable losses. These services work in conjunction 
with the National Flood Insurance Program and have proven 
successful in building relationships and resources in areas 
where floods are a threat to property and lives. In order to 
ensure smooth operation of the National Flood Insurance 
Program, the Committee believes that it should remain within 
FEMA at this time.
    The Defense Production Act was established to ensure that 
the United States has the ability to mobilize industrial and 
civilian resources when there is a threat to national security. 
The DPA allows the government to employ economic tools to 
provide uninterrupted supplies of industrial resources in times 
of military crisis and civil emergency. These functions are 
critical to maintaining civil emergency preparedness and 
military readiness for the protection of the United States. The 
DPA will be a valuable resource within the new department of 
Homeland Security.
    It can be argued that FEMA's Emergency Food and Shelter 
Program has little to do with the protection of the United 
States from terrorist activities. However, it is a critical in 
supplying food and shelter to needy people in emergency 
situations. In order to ensure that this program continues to 
be effective and functional, the Committee recommends that it 
remain within FEMA at this time. In the future this program 
could be moved to another federal agency in order to ensure 
effective allocation of Federal resources to aid those in need. 
The Committee may examine the viability of such a move in the 
future.
    Finally, I commend the President for his proposal to move 
the United States Secret Service to the new Department and 
maintain it as a ``distinct entity'' outside the four major 
jurisdictional cylinders established under the new Secretary. 
The long dual-role history of the Service--investigative and 
protective--combined with its more recently developed expertise 
in preventing and investigating cyber crimes and its core 
mission of protecting the financial system of the United 
States, make the Secret Service uniquely suited to draw from 
and augment the work of the other component agencies of the new 
Department.
    I would like to thank the Members of the Committee for the 
opportunity to testify today. The creation of this new 
department will be reflected in the history of our nation as 
occurring at a time when Americans joined together in a unified 
fight against terrorism and against those who seek to suppress 
freedom. While the Financial Services Committee waives its 
referral of H.R. 5005, its Members stand ready to assist in the 
structuring of the envisioned Department of Homeland Security 
if such assistance is requested. Thank you very much.

    [Whereupon, at 8:38 p.m., the committee was adjourned.]


          APPENDIX: RECOMMENDATIONS OF THE STANDING COMMITTEES

                              ----------                              


                        COMMITTEE ON AGRICULTURE

                          House of Representatives,
                                  Committee on Agriculture,
                                     Washington, DC, July 11, 2002.
Hon. Richard K. Armey
Chairman, House Select Committee on Homeland Security, The 
        Capitol, Washington, D.C.
    Dear Mr. Chairman: I am transmitting herewith the results 
of the Committee on Agriculutre's consideration recommendations 
with respect to H.R. 5005, the ``Homeland Security Act of 
2002''.
    The instructions to this Committee contained in H.Res. 449, 
as passed by the House of Representatives on June 19, 2002 
related to changes in laws within the Committee on 
Agriculture's jurisdiction that dealt largely with moving the 
Animal Plant and Health Inspection Service (APHIS) to the new 
Department of Homeland Security.
    The enclosed recommendations adopted by this Committee in a 
business meeting on this date, in the presence of a majority 
quorum, comply with those instructions. Also submitted for 
inclusion are additional views by Members of this Committee.
        Sincerely,
                                     Larry Combest,
                                                  Chairman.
                                ------                                


          [Committee on Agriculture Recommendations Regarding

                               H.R. 5005]

                      (As Adopted July, 11, 2002)

    Strike section 302(4), relating to the Plum Island Animal Disease 
Center.

    At the end of title III, insert the following new section:

SEC. 3__. TRANSFER OF PLUM ISLAND ANIMAL DISEASE CENTER, DEPARTMENT OF 
                    AGRICULTURE.

    (a) Transfer Required.--In accordance with title VIII, the 
Secretary of Agriculture shall transfer to the Secretary of Homeland 
Security the Plum Island Animal Disease Center of the Department of 
Agriculture, including the assets and liabilities of the Center.
    (b) Continued Department of Agriculture Access.--Upon the transfer 
of the Plum Island Animal Disease Center, the Secretary of Homeland 
Security and the Secretary of Agriculture shall enter into an agreement 
to ensure Department of Agriculture access to the center for research, 
diagnostic, and other activities of the Department of Agriculture.

    In section 401, relating to the Under Secretary for Border and 
Transportation Security, redesignate paragraph (5) as paragraph (6) and 
insert before such paragraph the following new paragraph:

            (5) conducting the inspection and related administrative 
        functions of the Department of Agriculture transferred to the 
        Secretary of Homeland Security under section 4__.

    Strike section 402(3), relating to the Animal and Plant Health 
Inspection Service.

    At the end of title IV, insert the following new section:

SEC. 4__. TRANSFER OF CERTAIN AGRICULTURAL INSPECTION FUNCTIONS OF THE 
                    DEPARTMENT OF AGRICULTURE.

    (a) Transfer of Agricultural Import and Entry Inspection 
Functions.--There shall be transferred to the Secretary of Homeland 
Security the functions of the Secretary of Agriculture relating to 
agricultural import and entry inspection activities under the laws 
specified in subsection (b).
    (b) Covered Animal and Plant Protection Laws.--The laws referred to 
in subsection (a) are the following:
            (1) The Act commonly known as the Virus-Serum-Toxin Act 
        (the eighth paragraph under the heading ``Bureau of Animal 
        Industry'' in the Act of March 4, 1913; 21 U.S.C. 151 et seq.).
            (2) Section 1 of the Act of August 31, 1922 (commonly known 
        as the Honeybee Act; 7 U.S.C. 281).
            (3) Title III of the Federal Seed Act (7 U.S.C. 1581 et 
        seq.).
            (4) The Plant Protection Act (7 U.S.C. 7701 et seq.).
            (5) The Animal Protection Act (subtitle E of title X of 
        Public Law 107-171; 7 U.S.C. 8301 et seq.).
            (6) The Lacey Act Amendments of 1981 (16 U.S.C. 3371 et 
        seq.).
            (7) Section 11 of the Endangered Species Act of 1973 (16 
        U.S.C. 1540).
    (c) Exclusion of Quarantine Activities.--For purposes of this 
section, the term ``functions'' does not include any quarantine 
activities carried out under the laws specified in subsection (b).
    (d) Effect of Transfer.--
            (1) Compliance with department of agriculture 
        regulations.--The authority transferred pursuant to subsection 
        (a) shall be exercised by the Secretary of Homeland Security in 
        accordance with the regulations, policies, and procedures 
        issued by the Secretary of Agriculture regarding the 
        administration of the laws specified in subsection (b).
            (2) Rulemaking coordination.--The Secretary of Agriculture 
        shall coordinate with the Secretary of Homeland Security 
        whenever the Secretary of Agriculture prescribes regulations, 
        policies, or procedures for administering the laws specified in 
        subsection (b) at the locations referred to in subsection (a).
            (3) Effective administration.--The Secretary of Homeland 
        Security, in consultation with the Secretary of Agriculture, 
        may issue such directives and guidelines as are necessary to 
        ensure the effective use of personnel of the Department of 
        Homeland Security to carry out the functions transferred 
        pursuant to subsection (a).
    (e) Transfer Agreement.--
            (1) Agreement required; revision.--Before the end of the 
        transition period, as defined in section 801(2), the Secretary 
        of Agriculture and the Secretary of Homeland Security shall 
        enter into an agreement to effectuate the transfer of functions 
        required by subsection (a). The Secretary of Agriculture and 
        the Secretary of Homeland Security may jointly revise the 
        agreement as necessary thereafter.
            (2) Required Terms.--The agreement required by this 
        subsection shall specifically address the following:
                    (A) The supervision by the Secretary of Agriculture 
                of the training of employees of the Secretary of 
                Homeland Security to carry out the functions 
                transferred pursuant to subsection (a).
                    (B) The transfer of funds to the Secretary of 
                Homeland Security under subsection (f).
            (3) Cooperation and reciprocity.--The Secretary of 
        Agriculture and the Secretary of Homeland Security may include 
        as part of the agreement the following:
                    (A) Authority for the Secretary of Homeland 
                Security to perform functions delegated to the Animal 
                and Plant Health Inspection Service of the Department 
                of Agriculture regarding the protection of domestic 
                livestock and plants, but not transferred to the 
                Secretary of Homeland Security pursuant to subsection 
                (a).
                    (B) Authority for the Secretary of Agriculture to 
                use employees of the Department of Homeland Security to 
                carry out authorities delegated to the Animal and Plant 
                Health Inspection Service regarding the protection of 
                domestic livestock and plants.
    (f) Periodic Transfer of Funds to Department of Homeland 
Security.--
            (1) Transfer of funds.--Out of funds collected by fees 
        authorized under sections 2508 and 2509 of the Food, 
        Agriculture, Conservation, and Trade Act of 1990 (21 U.S.C. 
        136, 136a), the Secretary of Agriculture shall transfer, from 
        time to time in accordance with the agreement under subsection 
        (e), to the Secretary of Homeland Security funds for activities 
        carried out by the Secretary of Homeland Security for which 
        such fees were collected.
            (2) Limitation.--The proportion of fees collected pursuant 
        to such sections that are transferred to the Secretary of 
        Homeland Security under this subsection may not exceed the 
        proportion of the costs incurred by the Secretary of Homeland 
        Security to all costs incurred to carry out activities funded 
        by such fees.
    (g) Transfer of Department of Agriculture Employees.--During the 
transition period, the Secretary of Agriculture shall transfer to the 
Secretary of Homeland Security not more than 3,200 full-time equivalent 
positions of the Department of Agriculture.
    (h) Protection of Inspection Animals.--Title V of the Agricultural 
Risk Protection Act of 2000 (7 U.S.C. 2279e, 2279f) is amended--
            (1) in section 501(a)--
                    (A) by inserting ``or the Department of Homeland 
                Security'' after ``Department of Agriculture''; and
                    (B) by inserting ``or the Secretary of Homeland 
                Security'' after ``Secretary of Agriculture'';
            (2) by striking ``Secretary'' each place it appears (other 
        than in sections 501(a) and 501(e)) and inserting ``Secretary 
        concerned''; and
            (3) by adding at the end of section 501 the following new 
        subsection:
    ``(e) Secretary Concerned Defined.--In this title, the term 
`Secretary concerned' means--
            ``(1) the Secretary of Agriculture, with respect to an 
        animal used for purposes of official inspections by the 
        Department of Agriculture; and
            ``(2) the Secretary of Homeland Security, with respect to 
        an animal used for purposes of official inspections by the 
        Department of Homeland Security.''.

     Section-by-Section Analysis of House Committee on Agriculture 
                      Recommendations to H.R. 5005

    The Committee on Agriculture Recommendation to H.R. 5005 
strikes section 302(4) and adds a new section 3__ to the end of 
title III.
Sec. 3__. Transfer of Plum Island Animal Disease Center, Department of 
        Agriculture.
    Transfers the Plum Island Animal Disease Center from the 
Department of Agriculture to the Department of Homeland 
Security and requires the Secretary of Agriculture and the 
Secretary of Homeland Security, upon completion of the 
transfer, to enter into an agreement providing for continued 
access by USDA for research, diagnostic and other programs.
    The Committee recognizes the critical importance of the 
Plum Island Animal Disease Center to the safety and security of 
animal agriculture in the United States. The Committee expects 
that the transfer of this foreign animal disease facility to 
the Department of Homeland Security shall be completed in a 
manner that minimizes any disruption of agricultural research, 
diagnostic or other Department of Agriculture activities. 
Likewise, the Committee expects that funds that have and 
continue to be appropriated for the maintenance, upgrade, or 
replacement of agricultural research, diagnostic and training 
facilities at the Plum Island Animal Disease Center shall 
continue to be expended for those purposes.
    The Committee shares the goal of expanding the capabilities 
of the Plum Island Animal Disease Center. Likewise, the 
Committee supports the accompanying goal of building agro-
terrorism prevention capabilities within the Department of 
Homeland Security. With this in mind, the Committee fully 
expects that in the absence of alternative facilities for 
current Department of Agriculture activities, the Secretary of 
Homeland Security shall make every possible effort to expand 
and enhance agricultural activities related to foreign animal 
diseases at the Plum Island Animal Disease Center.
    The Recommendations adds a reference to the inspection 
functions of the Department of Agriculture to the list of 
responsibilities of the Under Secretary for Border and 
Transportation Security in section 401.
    The Recommendation to H.R. 5005 strikes section 402(3) and 
adds a new section 4__ to the end of title IV.
Sec. 4__. Transfer of Certain Agricultural Inspection Functions of the 
        Department of Agriculture.
    (a) Transfers to the Secretary of Homeland Security the 
functions of the Secretary of Agriculture relating to 
agricultural import and entry inspection activities.
    The Committee is aware that the Agricultural Quarantine and 
Inspection Program of the Department of Agriculture's Animal 
and Plant Health Inspection Service conducts numerous 
activities with respect to both domestic and international 
commerce in order to protect the health of agriculturally 
important animals and plants within the United States. Within 
the Department of Homeland Security will be created a mission 
area of Border and Transportation Security. In order that the 
new streamlined border security program operates efficiently, 
the Committee has transferred to the Department of Homeland 
Security the responsibility for certain agricultural import and 
entry inspection activities of the Department of Agriculture 
conducted at points of entry. This transfer will include the 
inspection of arriving passengers, luggage, cargo and means of 
conveyance into the United States to the Under Secretary for 
Border and Transportation Security. In addition to inspections 
at points of entry into the United States, responsibility for 
inspections of passengers, luggage and their means of 
conveyance, at points of departure outside the United States, 
where agreements exist for such purposes, shall be the 
responsibility of the Secretary of Homeland Security. The 
provision allows the Secretary of Homeland Security to exercise 
authorities related to import and entry inspection functions 
transferred including conducting warrantless inspections at the 
border, collecting samples, holding and seizing articles that 
are imported into the United States in violation of applicable 
laws and regulations, and assessing and collecting civil 
penalties at the border. The Committee intends that the 
Department of Agriculture will retain the responsibility for 
all other activities of the Agricultural Quarantine and 
Inspection Program regarding imports including pre-clearance of 
commodities, trade protocol verification activities, fumigation 
activities, quarantine, diagnosis, eradication and 
indemnification, as well as other sanitary and phytosanitary 
measures. All functions regarding exports, interstate and 
intrastate activities will remain at the Department of 
Agriculture.
    (b) Delineates the laws governing agricultural import and 
entry inspection activities that are covered by the transfer of 
authorities.
    The Committee is aware that the authority to inspect 
passengers, cargo, and their means of conveyance coming into 
the United States is derived from numerous statutes that date 
back, in some cases, more than 100 years. The Committee does 
not intend that the reference to these statutes should be 
construed to provide any authority to the Secretary of Homeland 
Security beyond the responsibility to carry out inspections 
(including pre-clearance inspections of passengers, luggage and 
their means of conveyance in such countries where agreements 
exist for such purposes) and enforce the regulations of the 
Department of Agriculture at points of entry into the United 
States.
    (c) Excludes quarantine activities from the term 
``functions'' as defined by this Act for the purposes of this 
section.
    While agricultural inspection functions, as well as those 
related administrative and enforcement functions, shall be 
transferred and become the responsibility of the Secretary of 
Homeland Security, the legislation retains all functions 
related to quarantine activities and quarantine facilities 
within the Department of Agriculture. Although the Committee 
has excluded quarantine activities from those functions 
transferred to the Department of Homeland Security, the 
Committee does not intend to preclude the Secretary of Homeland 
Security from taking actions related to inspection functions 
such as seizure or holding of plant or animal materials 
entering the United States. These authorities fall within the 
purview of inspection related enforcement functions that shall 
be transferred to the Secretary of Homeland Security.
    (d) Requires that the authority transferred to the 
Secretary of Homeland Security shall be exercised in accordance 
with the regulations, policies and procedures issued by 
Secretary of Agriculture; requires the Secretary of Agriculture 
to coordinate with the Secretary of Homeland Security whenever 
the Secretary of Agriculture prescribes regulations, policies, 
or procedures for administering the covered laws related to the 
functions transferred under subsection (a); provides that the 
Secretary of Homeland Security, in consultation with the 
Secretary of Agriculture, may issue guidelines and directives 
to ensure the effective use of personnel of the Department of 
Homeland Security to carry out the transferred functions.
    One intention of this legislation is to create a 
streamlined Border and Transportation Security program at 
points of entry into the United States. With regard to the 
protection of animal and plant health, the Committee does not 
intend or expect the Department of Homeland Security to make 
the determination of what animals, plants, animal or plant 
products, soils, or other biological materials present an 
unacceptable risk to the agriculture of the United States. 
Policies and procedures regarding actions necessary to detect 
and prevent such unacceptable risks shall remain the 
responsibility of the Secretary of Agriculture. Likewise, 
policies and regulations defining restrictions on movement into 
the United States of substances that would pose a threat to 
agriculture shall continue to be the responsibility of the 
Secretary of Agriculture.
    The Committee has provided authority for the Secretary of 
Homeland Security to issue directives and guidelines in 
consultation with the Secretary of Agriculture in order to 
efficiently manage inspection resources. When exercising this 
authority, the Committee expects that the agricultural 
inspection function at points of entry into the United States 
shall not be diminished, and as a result, the Committee expects 
that Secretary of Homeland Security shall ensure that necessary 
resources are dedicated to carrying out the agricultural 
inspection functions transferred from the Department of 
Agriculture.
    (e) Requires the Secretary of Agriculture and the Secretary 
of Homeland Security to enter into an agreement to effectuate 
the transfer of functions. The agreement must address the 
training of employees and the transfer of funds. In addition 
the agreement may include authority for the Secretary of 
Homeland Security to perform functions delegated to APHIS for 
the protection of domestic livestock and plants, as well as 
authority for the Secretary of Agriculture to use employees of 
the Department of Homeland Security to carry out APHIS 
functions.
    The Committee is aware of the unique nature and the 
specialized training necessary for effective and efficient 
border inspection activities carried out by the Agricultural 
Quarantine and Inspection Program. The Committee expects that 
the training of personnel and detector dogs for this highly 
specialized function will continue to be supervised by the 
Department of Agriculture.
    While a large proportion of the personnel employed by the 
Agricultural Quarantine and Inspection Program are permanently 
stationed at one of 186 points of entry into the United States, 
the Committee is aware that the Secretary of Agriculture 
commonly re-deploys up to 20 percent of the border inspection 
force in order to manage agricultural pests and diseases 
throughout the United States. In completing the transfer of 
Agricultural Quarantine and Inspection Program border 
inspectors to the Department of Homeland Security, the 
Committee expects that the Secretary of Agriculture and the 
Secretary of Homeland Security will enter into an agreement 
whereby inspection resources, where possible, would continue to 
be made available to the Secretary of Agriculture in response 
to domestic agricultural needs.
    (f) Provides that the Secretary of Agriculture shall 
transfer funds collected by fee authorities to the Secretary of 
Homeland Security so long as the funds do not exceed the 
proportion of the costs incurred by the Secretary of Homeland 
Security in carrying out activities funded by such fees.
    Beginning in fiscal year 2003, the unobligated balance of 
the Agricultural Quarantine and Inspection Fund will be 
transferred to other accounts within the Department of 
Agriculture and will be used to carry out import and domestic 
inspection activities, as well as animal and plant health 
quarantine activities, without additional appropriations. Fees 
for inspection services shall continue to be collected and 
deposited into these accounts in the manner prescribed by 
regulations issued by the Secretary of Agriculture. In 
effectuating the transfer of agricultural import inspection 
activities at points of entry into the United States, the 
Committee intends that funds from these accounts shall be 
transferred to the Department of Homeland Security in order to 
reimburse the Department of Homeland Security for the actual 
inspections carried out by the Department. The Committee 
expects that the Secretary of Agriculture shall continue to 
manage these accounts in a manner that ensures the availability 
of funds necessary to carry out domestic inspection and 
quarantine programs.
    (g) Provides that during the transition period, the 
Secretary of Agriculture shall transfer to the Secretary of 
Homeland Security up to 3,200 full-time equivalent positions of 
the Department of Agriculture.
    (h) Makes conforming amendments to Title V of the 
Agricultural Risk Protection Act of 2000 related to the 
protection of inspection animals.

                        Committee Consideration

I. Hearings
    The Committee on Agriculture held a hearing on June 26, 
2002 to review the Administration's proposed legislation on 
creating a Department of Homeland Security. Witnesses 
representing State agencies and the agricultural community 
testified before the Committee.
II. Full Committee Consideration
    The Committee on Agriculture met in open session pursuant 
to notice on July 11, 2002 and by a voice vote adopted the 
recommendations set forth.

                  Reporting the Bill--Roll Call Votes

    In compliance with clause 3(b) of Rule XIII of the House of 
Representatives, the Committee on Agriculture's recommendation 
to H.R. 5005 was reported by voice vote with a majority quorum 
present. There was no request for a recorded vote.

           Budget Act Compliance (Sections 308, 402, and 423)

    The provisions of clause 3(c)(2) of Rule XIII of the Rules 
of the House of Representatives and section 308(a)(1) of the 
Congressional Budget Act of 1974 (relating to estimates of new 
budget authority, new spending authority, new credit authority, 
or increased or decreased revenues or tax expenditures) are not 
considered applicable. The estimate and comparison required to 
be prepared by the Director of the Congressional Budget Office 
under clause 3(c)(3) of Rule XIII of the Rules of the House of 
Representatives and sections 402 and 423 of the Congressional 
Budget Act of 1974 were not received by the Committee on 
Agriculture prior to submitting its recommendation to the 
Select Committee on Homeland Security. However the Committee 
was notified that this language would not create any new, or 
affect any existing, mandatory spending since this 
recommendation would only transfer employees and functions.

                        Changes in Existing Law

    In compliance with clause 3(e) of Rule XIII of the Rules of 
the House of Representatives changes in existing law made by 
the recommendation of the Committee on Agriculture will be 
provided by Legislative Counsel to the Select Committee on 
Homeland Security.

         Additional Views of the Honorable John Elias Baldacci

                          House of Representatives,
                     Select Committee on Homeland Security,
                                     Washington, DC, July 11, 2002.
Hon. Richard K. Armey
Chairman, House Select Committee on Homeland Security, The 
        Capitol, Washington, D.C. 20515
    Dear Chairman Armey: I am writing to add my opinions to 
those of my colleagues on the House Agriculture Committee with 
regards to the creation of a new Department of Homeland 
Security. I appreciate your attention to my comments.
    The Agriculture Committee has received numerous, pointed 
comments from agriculture groups across the Nation who are 
concerned that the Animal and Plant Health Inspection Service's 
(APHIS) primary mission to prevent and eradicate plant and 
animal diseases may be lost if the entire agency were to be 
moved out of the purview of the US Department of Agriculture 
(USDA). Indeed, many in my home state, including the relevant 
officials in the Maine Department of Agriculture, have 
expressed similar concerns.
    In this process, I feel our first responsibility should be 
to protect the interests of Americans on all fronts. I was 
pleased with the Agriculture Committee's recommendation to 
transfer only the agricultural import and inspection activities 
of APHIS to the Department of Homeland Security. By leaving 
other activities of APHIS within the jurisdiction of USDA, the 
high quality performance of traditional functions such as plant 
and animal disease research, oversight of animal welfare, 
certification of US agricultural products for export, and 
quarantine activities will be maintained.
    Furthermore, the levels of cooperation between the 
Secretaries of Agriculture and Homeland Security recommended by 
the Agriculture Committee will be an important element of any 
future activities to control the vast numbers of imported 
agricultural goods into our country. I applaud the efforts of 
Congress not only in this effort to establish a new Department 
of Homeland Security, but also in earlier actions to boost the 
number of inspectors at US border crossings and points of 
entry.
    My state has one of the longest coastlines in the nation, 
in addition to a significant border with Canada stretching from 
Quebec in our west and New Brunswick in the east. Following the 
horrific events of September 11, imports into the State of 
Maine from Canada were severely delayed due to a lack of 
qualified border inspectors. These delays impacted both the 
economy of my State and, by extension the rest of the nation. I 
would ask that during this reorganization period, that 
additional APHIS inspectors be assigned to border crossings and 
ports in Maine in order to better facilitate the passage of 
agricultural goods into the State and the nation.
    Again, I commend Congress and the Administration on this 
concerted effort to establish a more responsive mechanism to 
address our homeland security needs. I have appreciated the 
opportunity to work with my colleagues on the House Agriculture 
Committee to make responsible recommendations to ensure that 
our nation's food supplies are safe from both terrorist attacks 
and non-terrorism related agricultural disasters. I thank you 
for your attention to my concerns.
        Sincerely,
                                   John E. Baldacci
                                         Member of Congress

              Additional Views of the Honorable Nick Smith

                          House of Representatives,
                      Select Committee on Homeland Security
                                     Washington, DC, July 11, 2002.
Hon. Richard K. Armey
Chairman, House Select Committee on Homeland Security, The 
        Capitol, Washington, D.C. 20515

    Dear Chairman Armey: It is important that your committee 
consider the attached Amendment to H.R. 5005 that would 
authorize establishment of a National Center for Plant Disease 
Research and Control. The virtual center would utilize existing 
facilities of the Department of Homeland Security, U.S. 
Department of Agriculture and state universities to provide 
coordination of a much-needed first line of defense against 
possible acts of bioterrorism directed at the nation's food 
supply.
    Please review the supporting comments from the American 
Phytopathological Society (APS), the world's largest 
organization of plant health scientists, and the National 
Academy of Sciences.
    The APS and the National Academy of Sciences state that 
while there are many scientists with expertise on the subject, 
there is no established network for coordinating their efforts 
and no standardized methods and procedures for detecting such 
events or preventing them from occurring. Using the Centers for 
Disease Control as a model, the amendment would direct the 
Secretary of Homeland Security to evaluate the need for a 
National Center for Plant Disease Research and Control and 
authorize the Secretary to establish the Center if it is 
determined that a need exists. Under the legislation, the 
center would bring together a network of existing laboratories 
and experts for the purposes of detecting and controlling 
diseases that might result from bioterrorist activities. The 
Center would coordinate a rapid response team, develop a high-
capacity communication network, oversee continual monitoring 
and risk assessment of potential threats, support the 
development of new tools for rapid detection and diagnosis of 
plant diseases and expand research on genomics and plant 
biotechnology.
    This amendment is much needed to protect our nation's food 
supply, and the formation of such a center is the effective way 
to coordinate such an effort through scientists and experts. I 
appreciate your consideration of our amendment.
        Sincerely,
                                        Nick Smith,
                                         Member of Congress

                              ------------

            Committee on Science and Technology for
                    Countering Terrorism, National Research
                     Council, National Academy of Sciences,
                                                    Washington, DC.

    Recommendation 5: ... create an agency for control and prevention 
of plant disease. This agency should have the capabilities necessary to 
deal effectively with biothreats.
    For animal disease, USDA operates several laboratories - Plum 
Island and Ames among them - that perform diagnoses, carry out 
research, and provide training for veterinarian. CDC is the central 
agency for the control and prevention of communicable human disease, 
but no center currently exists to serve the same function for plant 
disease. Such a center is desperately needed. Departments of plant 
pathology at various state universities, APHIS, and a wide variety of 
other agencies, all of which often depend on outside experts, currently 
deal with new and unusual plant pathogens as best they can.
    A major research, development, and training center is called for 
that would address fungal, bacterial, and viral diseases of plants. 
Programs would focus on genomics and proteomics, databasing and 
informatics, forensics, pathogenesis, host-parasite interactions, 
diagnostics, sensors, food safety, analytical methods, epidemiology, 
modeling of disease outbreaks, intervention, and management. Other 
efforts could include outreach, technology transfer, collections of 
pathogens, and epidemiological intelligence and response. Close 
linkages could be established with other federal and state agencies, as 
well as with academic institutions, international agencies with 
responsibilities for surveillance of plant diseases and bioterrorism, 
and industrial, extension, and professional organizations. These 
collaborators could, among other functions, provide advice on 
containment and control procedures. Reprinted from: National Academy of 
Sciences: National Research Council ``Making the Nation Safer: The role 
of Science and Technology in Countering Terrorism'' (National Academy 
Press: Washington D.C. 2002) pg.3-ll to 3-12

                              ------------

       Department of Entomology and Plant Pathology
            Oklahoma State University, Stillwater, OK 74078
                                     Washington, DC, March 14, 2002
    Dear Congressman Smith: I am writing as President-Elect of the 
American Phytopathological Society, the professional scientific society 
representing the plant pathologists of America and the world's largest 
professional society concerned with the diffusion of knowledge of plant 
diseases and their control. Members of the American Phytopathological 
Society promote the practice of plant pathology for the welfare of the 
environment plants, animals and human kind. However, with U.S. and 
global vulnerability to agricultural bioterrorism. the nation's 
research and education infrastructure must now work also to protect our 
gains, continue consumer confidence in the safely of our food, and 
assure sustainable growth in the production of food and fiber products 
produced from plants.Part of the vulnerability of our crops and food 
reserves is due to gaps in the nation's infrastructure that are needed 
to detect, diagnose, and limit or recover from such an attack. Whether 
or not an attack should ever materialize, this infrastructure is still 
needed as part of the continuing improvements in this nation's ability 
to produce high quality food in competitive and sustainable production 
systems.
    We believe that the United States needs a national center that can 
provide many of the same services and national leadership currently 
provided for human diseases by the Centers for Disease Control and 
Prevention. The center could be termed the ``Center for Plant Disease 
Control,--or alternatively, the ``National Plant Disease Center.'' I am 
enclosing a brief description of some activities and responsibilities 
that could be performed by such a center.
    We strongly urge you to support the establishment and activities of 
such a center. We recognize that the planning stages must involve input 
and participation from the various Federal and State agencies whose 
missions include aspects of plant food production and safety. The APS 
stands ready to work with you and others in the development of this 
critical national resource.
    Thank you for your consideration and assistance. Please let us know 
how the APS can assist further in this process.
        Sincerely yours,
                               Jacqueline Fletcher,
                                           President-Elect,
                     The American Phytopathological Society

                               AMENDMENT

                    OFFERED BY MR. SMITH OF MICHIGAN

    At the end of title IV, insert the following new section:

SEC. __.INFORMATION COLLECTION AND NATIONAL CENTER FOR PLANT DISEASE 
                    RESEARCH AND CONTROL.

    (a) INFORMATION COLLECTION AND INVESTIGATIVE AUTHORITY.--
The Secretary of Homeland Security may gather and compile 
information and conduct any investigations the Secretary 
considers necessary for the administration and enforcement of 
the agricultural import and entry inspection functions 
transferred to Secretary under section 4 (a)
    (b) EVALUATION OF NEED FOR NATIONAL CENTER.--The Secretary 
of Homeland Security shall evaluate the feasibility and 
desirability of establishing a National Center for Plant 
Disease Research and Control in the Department of Homeland 
Security (in this section referred to as the ``Center'') that;
        (1) would facilitate the gathering and compiling of 
        information and the conducting of basic research and 
        investigations related to plant pests and pathogens 
        that can directly or indirectly injure, cause damage 
        to, or cause disease in plants or plant products; and
        (2) could act as a first responder in the event of an 
        accidental or deliberate introduction or use of a plant 
        pest or pathogen.
    (c) ESTABLISHMENT OF CENTER.--If the results of the 
evaluation conducted under subsection (b) support the need for 
a Center, the Secretary of Homeland Security may establish the 
Center and ass to it the specific functions referred to 
subsections (b) and (d) and such other duties as the Secretary 
considers appropriate. The Secretary shall utilize existing 
facilities of the Department of Homeland Security and land-
grant colleges and universities to establish the Center.
    (d) CENTER FUNCTIONS.--The Center, if established by the 
Secretary of Homeland Security, may be used to perform and 
support the following activities:
        (1) Development of new tools for rapid detection and 
        diagnosis of plant diseases, including by remote 
        sensing.
        (2) Expansion of research on genomics and plant 
        biotechnology as the foundation for more rapid and 
        effective development of crop plants with resistance to 
        pathogens that are potential threat agents.
        (3) Expansion of research on genomics and plant 
        biotechnology that can be used for detection of, 
        forensics related to, or recovery from a bioterrorist 
        attack on plants or plant products.
        (4) Development and maintenance of a data base for the 
        identification of known or potential plant pests and 
        pathogens and for the collection of risk assessments 
        regarding the threat such plant pests and pathogens 
        pose to plants and plant products.
        (5) Coordination of new or acquired collections of 
        foreign and domestic pathogens and development of 
        methods for their characterization and rapid diagnosis.
    (e) COORDINATI0N.--The Secretary of Homeland Security shall 
coordinate the activities of the Center with other Federal and 
State agencies and appropriate experts in the area of plant 
pest control at public and private research institutions.
    (f) FUNDING.There is authorized to be appropriated for each 
fiscal year $5,000,000 to support the activities of the Center.

                      COMMITTEE ON APPROPRIATIONS

                             July 11, 2002

     [RECOMMENDATIONS TO THE SELECT COMMITTEE ON HOMELAND SECURITY]

                         [concerning h.r. 5005]

    The Committee on Appropriations, to whom was referred the 
bill (H.R. 5005) to establish the Department of Homeland 
Security, and for other purposes, having considered the same, 
report thereon with its recommendations and views on the bill. 
In this opinion, the Committee has limited its specific textual 
recommendations to matters within the jurisdiction of the 
Committee on Appropriations, and for other matters, the 
Committee remains descriptive in those matters in which the 
Committee has expertise to lend.
    The Committee believes that the enactment of H.R. 5005, as 
introduced, would constitute a major erosion of the separation 
of powers as established in the United States Constitution, 
abrogating the central role of the Congress--the direction and 
oversight of public expenditures. The bill would provide the 
Secretary of the Department of Homeland Security with 
extraordinary and unprecedented powers that would in effect be 
both legislative and executive in nature and undermine the 
fundamental precept of the founding fathers, ``checks and 
balances.''
    The Committee has been in the forefront of strengthening 
the nation's capacity to identify, find and destroy terrorist 
organizations and to enhance our nation's defenses and capacity 
to respond to terrorist attacks. We strongly support efforts to 
streamline, centralize and improve the management and 
efficiency of the nation's counter-terrorism and homeland 
security activities. The importance of attaining these goals, 
however, need not involve sacrificing the constitutional 
processes that have remained intact for more than two centuries 
and have served the nation well during foreign invasions, civil 
war and two world wars. In fact, the current administrative 
morass troubling a number of key homeland security agencies 
would argue for even more intense Congressional scrutiny and 
oversight.
    For those matters within the jurisdiction of the Committee 
on Appropriations, the Committee recommends that the bill, H.R. 
5005, be amended, with an amendment as follows:
    Page 38, strike lines 19 through 22 and insert the following:
    ``(4) shall deposit the proceeds of any exercise of the authority 
granted by this subsection into the miscellaneous receipts of the 
Treasury in accordance with section 3302(b) of title 31, United States 
Code.''.
    Page 39, strike lines 5 through 14.
    Page 39, line 15, strike ``; TRANSFER''.
    Page 39, line 16, strike ``(a) Allocation of Functions.--''.
    Page 40, strike lines 6 through 13.
    Page 42, beginning on line 12, strike ``or non-reimbursable''.
    Page 42, strike lines 15 through 22.
    Page 42, line 23, strike ``(d)'' and insert ``(c)''.
    Page 43, line 20, strike ``(e)'' and insert ``(d)''.
    Page 44, beginning on line 2, strike ``and'' the second place it 
appears and all that follows through ``Code'' on line 4.
    Page 44, after line 10, insert the following new subsections:
    ``(e) Use of Transferred Funds.--Except as may be provided in an 
appropriation Act pursuant to subsection (g), balances of 
appropriations and any other funds transferred pursuant to this Act 
shall--
          ``(1) be available only for the purposes for which they were 
        originally available; and
          ``(2) remain subject to the same conditions and limitations 
        provided by the law originally appropriating or otherwise 
        making available the amount, including limitations and 
        notification requirements related to the reprogramming of 
        appropriated funds.
    ``(f) Notification Regarding Transfers.--The President shall notify 
Congress at least 15 days in advance of any transfer of appropriations 
balances or other funds pursuant to this Act.
    ``(g) Additional Uses of Funds During Transition.--During the 
transition period and provided that the Committees on Appropriations 
are notified at least 15 days in advance, amounts transferred to or 
otherwise made available to the Department may be used for purposes in 
addition to those for which they were originally available (including 
by transfer among accounts of the Department), but only to the extent 
such transfer or use is specifically permitted in advance in an 
appropriation Act and only under the conditions and for the purposes 
specified in such appropriation Act.''.
    Page 47, strike lines 12 through 19.

      Committee Perspective on Provisions of H.R. 5005 Within the 
            Jurisdication of the Committee on Appropriations

    H.R. 5005 was referred to the Select Committee on Homeland 
Security, and in addition to several permanent committees, 
including the Committee on Appropriations, in each case for 
consideration of such matters as fall within the jurisdiction 
of the committee concerned. For the Committee on 
Appropriations, the matters within its jurisdiction are 
transfers of certain authorities and appropriations and 
unobligated and unexpended balances of previous appropriations.
    Specifically, H.R. 5005 includes:
    1. the general transfer of several agencies, such as the 
Coast Guard, Secret Service, the Federal Emergency Management 
Agency, etc., to the new department and calls for the transfer 
of ``functions, personnel, assets and liabilities''. The 
legislation defines ``assets'' to include (among other items) 
``unobligated or unexpended balances of appropriations, and 
other funds and resources''.
    2. broad powers to help finance the operations of the new 
department. Subsections (d) through (f) of section 732 
authorize the Secretary of Homeland Security to acquire real 
estate and sell or exchange assets owned by the Department, and 
to raise funds by leasing or subleasing property owned or 
leased by the Department. The proceeds raised through these 
arrangements would be available for any purpose of the 
Department, without the need for appropriation or other 
congressional action. These amounts could be substantial, as 
the Department would acquire control over considerable property 
when it absorbs agencies such as the Coast Guard, the Animal 
and Plant Health Inspection Service, and various laboratories. 
The broad authorities granted are contrary to longstanding 
principles of existing law which requires governmental receipts 
to be deposited in the Treasury and spent only pursuant to 
appropriations--except where Congress has authorized specific 
uses.
    3. section 733(b) which provides the Secretary of the new 
department the permanent authority to transfer up to five 
percent of any appropriation available to the secretary in any 
fiscal year to any other appropriation (on 15 days' notice to 
the Appropriations Committees). No Congressional approval is 
required. This provision could allow transfers of $2 billion or 
more.
    4. authority in section 803(c) which allows the President 
to transfer to the new department up to five percent of the 
unobligated balances available to any agency being moved to the 
new department before the move takes place. The amounts 
transferred would then be available to finance any of the 
purposes of the new department, without regard to the purposes 
for which they were originally appropriated. In other words, 
the new department could start its operations with initial 
funding of $1 billion or more, provided not through an 
appropriation for that purpose, but rather through a five 
percent surcharge against appropriations made for agencies such 
as the Coast Guard, the Customs Service, and the Federal 
Emergency Management Agency. Again, no Congressional approval 
is required.
    5. section 803(e), a provision that provides that upon the 
transfer of an agency to the new Department, the personnel, 
assets and liabilities of the agency shall be transferred to 
the Secretary for appropriate allocation, subject only to the 
approval of the Director of the Office of Management and 
Budget. This section would expressly override the provision of 
permanent law (31 U.S.C. 1531(a)(2)) that requires funds 
transferred under such circumstances (that is in connection 
with transfers of functions) be used only for the purposes for 
which the appropriation was originally available.
    6. section 806, which authorizes the director of the Office 
of Management and Budget to make additional and incidental 
dispositions of personnel, assets, and liabilities in 
connection with the functions transferred in the Act, as he 
determines appropriate.
    These transfer provisions are overly broad and sweeping. If 
enacted, they could have a serious impact on the appropriations 
process, hinder Congress in the exercise of its constitutional 
duty to direct the expenditure of public funds, and erode the 
role of Congress as established under Article I of the 
Constitution. They would have the effect of vitiating and 
rendering as irrelevant annual appropriations levels 
established by Congress for specific individual programs and 
would undermine Congressionally-imposed restrictions and 
program allocations. As a matter of fact, H.R. 5005 would 
provide the Secretary of the new department the ability to 
unilaterally rewrite fiscal year 2003 and perhaps some of 
fiscal year 2004 appropriations relating to both homeland 
security and to all other functions (such as other missions of 
the Coast Guard) that he wishes to shift to the new department. 
This would amount to giving the Secretary of Homeland Security 
an unrestricted lump-sum appropriation in an amount that could 
exceed $30 billion. Moreover, this transfer authority would be 
available in perpetuity.

                 Explanation of the Proposed Amendment

    The Committee recommends that the bill, H.R. 5005, be 
amended as follows:
    Page 38, strike lines 19 through 22 and insert the following:
    ``(4) shall deposit the proceeds of any exercise of the authority 
granted by this subsection into the miscellaneous receipts of the 
Treasury in accordance with section 3302(b) of title 31, United States 
Code.''.
    Page 39, strike lines 5 through 14.
    Page 39, line 15, strike ``; TRANSFER''.
    Page 39, line 16, strike ``(a) Allocation of Functions.--''.
    Page 40, strike lines 6 through 13.
    Page 42, beginning on line 12, strike ``or non-reimbursable''.
    Page 42, strike lines 15 through 22.
    Page 42, line 23, strike ``(d)'' and insert ``(c)''.
    Page 43, line 20, strike ``(e)'' and insert ``(d)''.
    Page 44, beginning on line 2, strike ``and'' the second place it 
appears and all that follows through ``Code'' on line 4.
    Page 44, after line 10, insert the following new subsections:
    ``(e) Use of Transferred Funds.--Except as may be provided in an 
appropriation Act pursuant to subsection (g), balances of 
appropriations and any other funds transferred pursuant to this Act 
shall--
          ``(1) be available only for the purposes for which they were 
        originally available; and
          ``(2) remain subject to the same conditions and limitations 
        provided by the law originally appropriating or otherwise 
        making available the amount, including limitations and 
        notification requirements related to the reprogramming of 
        appropriated funds.
    ``(f) Notification Regarding Transfers.--The President shall notify 
Congress at least 15 days in advance of any transfer of appropriations 
balances or other funds pursuant to this Act.
    ``(g) Additional Uses of Funds During Transition.--During the 
transition period and provided that the Committees on Appropriations 
are notified at least 15 days in advance, amounts transferred to or 
otherwise made available to the Department may be used for purposes in 
addition to those for which they were originally available (including 
by transfer among accounts of the Department), but only to the extent 
such transfer or use is specifically permitted in advance in an 
appropriation Act and only under the conditions and for the purposes 
specified in such appropriation Act.''.
    Page 47, strike lines 12 through 19.
    The amendments recommended by the Committee remove the 
various extraordinary transfer authorities and budgetary powers 
that would be conferred on the executive branch by the bill as 
introduced. Instead, the Committee recommends relying on more 
traditional procedures, which allow funds to be transferred 
along with the organizations they finance but which require the 
executive to propose and obtain congressional approval to 
increase funding levels or change the uses of appropriated 
funds.
    The Committee's amendments leave intact the various 
provisions of the introduced bill (such as section 202) that 
provide for transfer to the Department of Homeland Security of 
the assets of the various federal entities being moved to the 
new department, and that define those assets as including 
unobligated or unexpended balances of appropriations. 
Similarly, the amendments leave in place the basic structure of 
section 803(e), which clarifies that the transfer of 
appropriations balances and other assets occurs at the time an 
organization is transferred to the Department of Homeland 
Security and that these balances are transferred to the 
Secretary of Homeland Security for appropriate allocation.
    However, the Committee amendments strike the provision of 
the bill that expressly overrides provisions of permanent law 
requiring that funds transferred under such circumstances be 
used only for the purposes for which they were originally 
appropriated. Instead, the amendments specifically apply the 
basic principles found in sections 1531 and 1532 of title 31, 
United States Code, that transferred funds are available only 
for the same purposes and subject to the same limitations as 
applied prior to the transfer.
    Thus, under the Committee amendments, when an organization 
such as the Immigration and Naturalization Service or the 
Secret Service is moved to the Department of Homeland Security, 
it would bring along its own funding in the form of the 
unobligated and unexpended balances of its appropriations. 
However, such appropriations would not normally be available to 
finance other operations of the new Department. The Committee 
expects the Administration to prepare and propose to Congress a 
specific plan for financing those operations and needs of the 
Department of Homeland Security that do not represent simply 
the continuation of functions for which appropriations are 
already available. Such a plan could consist of any combination 
of appropriations transfers, new appropriations, rescissions 
and other measures as the Administration considers advisable. 
The Committee would expect to act expeditiously on any such 
proposal.
    The process that would be established by H.R. 5005 as 
amended by the Committee is very similar to the process used 
when the Department of Energy was created in 1977 and when the 
Department of Education was created in 1979. In both cases, 
legislation establishing the new departments provided for 
transfer of appropriations balances along with the functions 
being transferred--but only for the purposes for which the 
funds were originally appropriated. In both cases, further 
transfers were allowed only to the extent specifically 
authorized in appropriations legislation.
    The Committee understands the language contained in the 
bill (as amended) transferring appropriations balances and 
other assets to the Department of Homeland Security as applying 
only to the assets of the federal entities specifically 
transferred by sections 202, 302, 402, 502, and 720. Thus, 
nothing in the bill authorizes transfer of any portion of the 
appropriations balances of any agency, such as the National 
Institutes of Health or the Federal Aviation Administration, 
that is not transferred to the Department of Homeland Security 
in whole or in part by the bill. If the Administration wishes 
to shift to the Department of Homeland Security any part of the 
funds appropriated to an agency not being transferred, the 
Administration should propose the necessary specific 
appropriations legislation to Congress.
    Specifically, the amendment recommended by the Committee:
    (1) eliminates provisions of section 732 authorizing the 
Secretary to use, without appropriation, the proceeds from sale 
or lease of Department property. Instead, the Committee 
alternative requires any such proceeds to be deposited in the 
Treasury, where they will be available for spending only by 
appropriation. The Committee also notes, that the General 
Services Administration already possesses authority to recover 
the direct and indirect costs of such sales under 40 U.S.C. 
485, which may be available to the Secretary of Homeland 
Security under section 732(e) of the bill (requiring delegation 
of some GSA authorities to the Secretary). Thus, the Committee 
amendment should not unduly hamper any effort to dispose of the 
Department's surplus property.
    (2) deletes section 733(b) which provides that not to 
exceed five percent of any appropriation available to the 
Secretary of Homeland Security in any fiscal year may be 
transferred between appropriations provided that at least 15 
days' notice is given the Appropriations Committees prior to 
the transfer. The Committee strongly believes that whether and 
in what amounts to grant sweeping transfer authority and the 
restrictions that should apply are matters that should and can 
be addressed through the annual appropriations process, rather 
than through a permanent blanket of general authority.
    (3) amends section 803(b), which allows agencies to provide 
services or detail personnel on a reimbursable or non-
reimbursable basis to assist the transition. The Committee 
amendment deletes the authority to enter into non-reimbursable 
agreements.
    (4) deletes section 803(c) which provides that, prior to 
the actual transfer of an agency to the Department within the 
twelve-month transition period, the President is authorized to 
transfer to the Secretary of Homeland Security not to exceed 
five percent of the unobligated balance of any appropriation 
available to such agency, to fund the purposes authorized in 
the bill, provided that at least 15 days' notice is given the 
Appropriations Committee prior to the transfer. Additional uses 
of funds are addressed in a new subsection (g) to section 803.
    (5) amends section 803(e) which provides that transfers of 
personnel, assets, liabilities, and functions to the Department 
shall be available for activities of the new department. The 
amendment strikes language that would override permanent law 
(31 U.S.C. 1531(a)(2)) which requires executive agencies to 
obligate funds only for the purposes for which they were 
appropriated.
    (6) includes new subsections (e) through (g) to section 803 
regarding the use and notification of appropriations and other 
funds transferred pursuant to provisions of this Act. These new 
provisions allow the limited transfer of appropriations and 
other funds when expressly provided in an annual appropriations 
Act. Such transfers are currently requested, contemplated and 
contained in such Acts. In addition, the new provisions provide 
that amounts transferred to or otherwise made available to the 
new department may be used for purposes in addition to those 
for which they were originally available, but only to the 
extent such transfer or use is expressly permitted in an 
appropriation Act.
    (7) deletes section 806 which provides the Director of the 
Office of Management and Budget the authority to transfer 
``incidental'' assets and personnel as he may deem appropriate.

    Matters Which Less Directly Affect the Committee's Jurisdiction

Coordination and Resource Requirements for Counter-Terrorism Activities
    The Committee is also concerned that at least some of the 
proposed reorganization of administrative authority expressed 
in H.R. 5005 will not improve the efficiency, coordination or 
effectiveness of the nation's counter-terrorism and homeland 
security efforts. We would encourage the committees of 
jurisdiction to weigh carefully the following three principles:
    First, does a proposed transfer of an agency or activity to 
the new department increase the focus and coordination of 
government counter-terrorism activities?
    The organization chart of current government efforts in 
counter-terrorism that accompanied the Administration's 
announcement of plans to create a new department indicates that 
there are approximately 133 programs and offices involved in 
the effort. H.R. 5005 would move less than two-dozen of these 
into the new department. This leaves the overwhelming majority 
of such agencies and activities outside the proposed 
department--including some of the most critical government 
counter-terrorism efforts such as the FBI and the CIA. The 
question that must be asked in each instance is whether or not 
the inclusion of an activity within the department will not 
only improve departmental coordination of counter-terrorism but 
government-wide coordination.
    By the same token, some proposed changes might give the new 
secretary such an unwieldy portfolio as to create serious 
distractions from the underlying mission. H.R. 5005 would place 
functions such as oil spill cleanups, pet store licensing, 
international adoptions, tariff collection and boll weevils 
eradication under the responsibility of the Secretary of 
Homeland Security. While the inclusion of some extraneous 
activities may be unavoidable given the variety of functions 
that many of the agencies proposed for the new department 
perform, having responsibilities as far ranging as those 
proposed in H.R. 5005 would likely increase administrative 
requirements, increase overhead expenditures and make it 
difficult for the leadership of the department to maintain a 
clear focus on security issues.
    Second, will the structure proposed for managing the 
department create a demand for administrative resources that 
will reduce funds available for frontline activities such as 
container inspections or the identification, apprehension and 
deportation of illegal entrants that pose a possible terrorist 
threat?
    In the defense community this question is referred to as 
the relationship between the tooth and the tail. It is easily 
possible to organize government activities in such a way that 
the cost of coordinating the activities becomes more expensive 
than the activities themselves. There is ample reason to be 
concerned that H.R. 5005 could seriously erode resources needed 
to sharpen the tooth.
    This is particularly true if the administration maintains 
its stated intention to fund all activities of the department 
within the existing budgets for those activities. If that 
policy is followed, it will mean that most of the resources 
necessary to fund the activities of the Secretary, Deputy 
Secretary, five proposed Under Secretaries, as many as sixteen 
proposed Assistant Secretaries and six other proposed sub-
cabinet positions will have to be met through cuts in border 
inspectors, immigration enforcement and first responders.
    Thirdly, will the reorganization disrupt highly sensitive 
security functions during critical threat periods?
    There is a reason that the Executive Reorganization Act of 
1947 took place in 1947 and not 1944. The consolidation of the 
War Department and the Navy may have created more efficiency 
and better coordination of defense activities in the long term 
but it certainly had significant short-term costs with respect 
to both of these goals. Similar disruptions are inevitable in 
any reorganization.
    The severity of such disruptions and time lost resulting 
from reorganization will vary based on the amount of 
administrative change envisaged for a particular program or 
activity. Simply changing the chain of command involves a 
relatively small loss of work effort. Changing network servers 
and phone systems and phone numbers adds to the loss in terms 
of short-term performance. Relocating facilities, restructuring 
personnel assignments and lines of authority often entail 
dislocations that can take months or even years to fully 
recover from. If there is a clear case for greater focus and 
long term efficiency these costs may be acceptable so long as 
they do not reduce performance during periods of potential 
threat.
    Any reorganization should carefully weigh these factors 
with respect to both the entities to be transferred to the new 
department and the timing of that transfer.
Fiscal Year 2004 Budget Presentation
    The Committee expects that the President's fiscal year 2004 
budget submission will reflect the newly created department of 
homeland security and its component agencies, consistent with 
statements made by the Administration. Budget estimates and 
accompanying justification materials shall be prepared and 
submitted in the same manner and level of detail as provided 
previously to the Committee on Appropriations for the 
department's component agencies, programs and activities.

    Expression of Views on Other Matters Outside the Appropriations 
                        Committee's Jurisdiction

    Sec. 733(a) of the bill authorizes the Secretary to 
``establish, consolidate, alter, or discontinue'' any 
organizational units of the Department. The provision expressly 
allows consolidating or abolishing organizations and entities 
established by statute, provided only that 90 days advance 
notice is given to Congress. Though the bill does prohibit the 
use of its section 733(a) authority to eliminate specific 
agencies (e.g., the Coast Guard and the Secret Service), there 
is no such prohibition on abolishing various other agencies 
transferred to the Department, such as the Animal and Plant 
Health Inspection Service and the Customs Service, thereby 
allowing the Secretary to unilaterally overturn longstanding 
policies set in law. Congress should not authorize the 
Executive Branch to establish, consolidate, alter, or 
discontinue any agency of government that was established by 
statute. To do so would be tantamount to allowing the executive 
branch to unilaterally amend existing laws, and therefore 
contrary to the constitutional principles that vest legislative 
power in Congress rather than the President.

                      Recorded Votes in Committee

    During consideration of the Committee's recommendations and 
views on H.R. 5005, there were no recorded votes taken in the 
Committee.

                   Constitutional Authority Statement

    Pursuant to clause 3(d)(2) of rule XIII of the Rules of the 
House of Representatives, the Committee finds the 
Constitutional authority for this legislation in Article I, 
clause 8, section 18, that grants Congress the power to make 
all laws necessary and proper for carrying out the powers 
vested by Congress in the Government of the United States or in 
department or officer thereof.

                          Oversight Statement

    No summary of oversight findings and recommendations made 
by the Committee on Government Reform, as provided for in 
clause 3(c)(4) of rule XIII of the Rules of the House of 
Representatives, was available to the Committee with reference 
to the subject matter specifically addressed in the Committee 
amendment proposed to H.R. 5005.

                      Committee Oversight Findings

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee on Appropriations' 
oversight findings and recommendations are reflected in the 
body of this report.

                      Advisory Committee Statement

    No advisory committee within the meaning of section 5(b) of 
the Federal Advisory Committee Act will be created by the 
amendment recommended by the Committee on this legislation.

                Applicability to the Legislative Branch

    The Committee finds that the recommended amendment to the 
legislation does not relate to the terms and conditions of 
employment or access to public services or accommodations 
within the meaning of section 102(b)(3) of the Congressional 
Accountability Act (Public Law 104-1).

                       Federal Mandates Statement

    The amendment recommended by the Committee on this 
legislation contains no unfunded mandates.

                        Changes in Existing Law

    The amendment recommended by the Committee on this 
legislation would make no change in existing law.

                        Congressional Budget Act

    With respect to the requirement of clause 3(c)(2) of rule 
XIII of the Rules of the House of Representatives, and section 
308(a) of the Congressional Budget Act of 1974, the Committee 
amendment would not result in the provision of any new budget 
authority.
                      COMMITTEE ON ARMED SERVICES

                          House of Representatives,
                               Committee on Armed Services,
                                     Washington, DC, July 12, 2002.
Hon. Richard K. Armey
Chairman, House Select Committee on Homeland Security, The 
        Capitol, Washington, D.C.
    Dear Mr. Chairman: Pursuant to Section 6 of House 
Resolution 449, I hereby forward to the Select Committee on 
Homeland Security the recommendations of the Committee on Armed 
Services to the bill H.R. 5005, the Homeland Security Act of 
2002.
    On July 10, 2002, the Committee on Armed Services held a 
mark-up on those portions of H.R. 5005 within its jurisdiction 
and reported out favorably recommendations to the bill by voice 
vote.
    The committee devoted considerable attention and effort in 
reviewing the President's proposal and offers recommendations 
that are fully consistent with the important objectives 
inherent in H.R. 5005. I trust that the Select Committee will 
give these recommendations due consideration and stand ready to 
work with you and other members of the Select Committee in 
moving this process forward.
        Sincerely,
                                         Bob Stump,
                                                  Chairman.
                                ------                                


                               Amendments

                        Amendments to H.R. 5005

               Adopted by the Committee on Armed Services

    Section 2(2) is amended to read as follows:
            (2) The term ``assets'' includes contracts, leases, grants, 
        cooperative and other agreements and other transactions, 
        facilities, property, records, unobligated or unexpended 
        balances of appropriations, and other funds or resources (other 
        than personnel).

    Insert after section 2(10) the following new paragraph (and 
redesignate the subsequent paragraph accordingly):
            (11) The term ``State'' has the meaning given in section 
        102(4) of the Robert T. Stafford Disaster Relief and Emergency 
        Assistance Act (Public Law 93-288; 42 U.S.C. 5122(4)).

    Section 101(b)(2) is amended by inserting the following new 
subparagraph after subparagraph (D) (and redesignating the subsequent 
subparagraph accordingly):
            (E) research, development, test, and evaluation in support 
        of such mission;

    Amend section 202(5) to read as follows:
            (5) the Energy Security and Assurance Program of the 
        Department of Energy, including the National Infrastructure 
        Simulation and Analysis Center and the functions of the 
        Secretary of Energy relating thereto; and

    Section 203 is amended by inserting the following new paragraph 
after paragraph (2) (and redesignating the subsequent paragraph 
accordingly):
            (3) the Secretary shall have full access and input with 
        respect to information from any national collaborative 
        information analysis capability (as referred to in section 924 
        of the National Defense Authorization Act for Fiscal Year 2002 
        (Public Law 107-107; 115 Stat. 1199) established jointly by the 
        Secretary of Defense and the Director of Central Intelligence; 
        and

    Amend section 301 to read as follows:

SEC. 301. UNDER SECRETARY FOR CHEMICAL, BIOLOGICAL, RADIOLOGICAL, AND 
                    NUCLEAR COUNTERMEASURES.

    In assisting the Secretary with the responsibilities specified in 
section 101(b)(2)(B), the primary responsibilities of the Under 
Secretary for Chemical, Biological, Radiological, and Nuclear 
Countermeasures shall include--
            (1) securing the people, infrastructures, property, 
        resources, and systems in the United States from acts of 
        terrorism involving chemical, biological, radiological, or 
        nuclear weapons, explosives and explosive materials, and other 
        emerging threats;
            (2) conducting a national scientific research, development, 
        test, and evaluation program to support the mission of the 
        Department, including developing national policy for and 
        coordinating the Federal Government's civilian efforts to 
        identify, devise, and implement scientific, technological, and 
        other countermeasures to chemical, biological, radiological, 
        nuclear, and other emerging terrorist threats, including 
        directing, funding, and conducting research, development, test, 
        and evaluation relating to the same;
            (3) establishing priorities for, directing, funding, and 
        conducting national research, development, and procurement of 
        technology and systems--
                    (A) for preventing the importation of--
                            (i) chemical, biological, radiological, 
                        nuclear, and related weapons and explosives and 
                        explosive materials; and
                            (ii) materials, technology, and equipment 
                        intended for the illicit research, development, 
                        production, or use of chemical, biological, 
                        radiological, nuclear, and related weapons and 
                        related devices, and explosives and explosive 
                        materials, in the United States; and
                    (B) for detecting, preventing, protecting against, 
                and responding to terrorist attacks in the United 
                States that involve such weapons or material;
            (4) establishing guidelines for State and local government 
        efforts to develop and implement countermeasures to threats of 
        chemical, biological, radiological, and nuclear terrorism, and 
        other terrorist threats; and
            (5) establishing an intelligence analysis capability to 
        support chemical, biological, radiological, and nuclear 
        counterterrorism in the United States.

    Amend section 302 to read as follows:

SEC. 302. FUNCTIONS TRANSFERRED.

    In accordance with title VIII, there shall be transferred to the 
Secretary the functions, personnel, assets, and liabilities of the 
following entities--
            (1) the select agent registration enforcement programs and 
        activities of the Department of Health and Human Services, 
        including the functions of the Secretary of Health and Human 
        Services relating thereto;
            (2) the following programs and activities of the Department 
        of Energy, including the functions of the Secretary of Energy 
        relating thereto (but not including programs and activities 
        directly relating to the mission of the National Nuclear 
        Security Administration, as specified in section 3211 of the 
        National Nuclear Security Administration Act (Pub. Law 106-65; 
        113 Stat. 957; 50 U.S.C. 2401):
                    (A) the programs and activities relating to 
                chemical and biological national security, and 
                supporting programs and activities directly related to 
                homeland security, of the non-proliferation and 
                verification research and development program;
                    (B) the programs and activities relating to nuclear 
                smuggling, and other programs and activities directly 
                related to homeland security, within the proliferation 
                detection program of the non-proliferation and 
                verification research and development program;
                    (C) those aspects of the nuclear assessment program 
                and activities of the assessment, detection, and 
                cooperation program of the international materials 
                protection and cooperation program that are directly 
                related to homeland security;
                    (D) such life sciences activities of the biological 
                and environmental research program related to microbial 
                pathogens as may be designated by the President for 
                transfer to the Department;
                    (E) the Environmental Measurements Laboratory; and
                    (F) the advanced scientific computing research 
                program and activities at Lawrence Livermore National 
                Laboratory;
            (3) the homeland security projects within the Chemical 
        Biological Defense Program of the Department of Defense known 
        as the Biological Defense Homeland Security Support Program and 
        the Biological Counter-Terrorism Research Program; and
            (4) the Plum Island Animal Disease Center of the Department 
        of Agriculture, including the functions of the Secretary of 
        Agriculture relating thereto.

    Strike section 304.

    Title III of the bill is amended by adding at the end the following 
new section:

SEC. 305. ADMINISTRATION OF PROGRAMS AND ACTIVITIES TRANSFERRED FROM 
                    THE DEPARTMENT OF ENERGY.

    (a) Homeland Security Center at National Laboratory.--(1) The 
Secretary shall establish at a national security laboratory of the 
National Nuclear Security Administration selected by the Secretary, a 
center to serve as the primary location for carrying out research, 
development, test, and evaluation activities of the Department in 
support of the mission described in section 101. The Secretary shall 
establish, in concurrence with the Secretary of Energy, such additional 
centers at one or more national laboratories of the Department of 
Energy as the Secretary considers appropriate to serve as secondary 
locations for carrying out such activities.
    (2) Each center established under paragraph (1) shall be composed 
of such facilities and assets as are required for the performance of 
such activities. The particular facilities and assets shall be 
designated by the Secretary of Energy with the concurrence of the 
Secretary.
    (3) Facilities and assets designated under paragraph (2) shall be 
transferred to the Department and, with the concurrence of the 
Secretary and the Secretary of Energy, may be so transferred in place 
of facilities and assets otherwise required to be transferred from the 
Department of Energy under this Act.
    (4) For each center established at a laboratory under this 
subsection, every effort shall be made to consolidate Department 
facilities and assets within existing infrastructure of that 
laboratory.
    (b) Separate Contracting.--To the extent programs and activities 
transferred from the Department of Energy or carried out through 
authorities provided under this Act are carried out through contracts, 
the Secretary, and the Secretary of Energy, shall ensure that such 
contracts are separate from contracts of the Department of Energy.
    (c) Indirect Costs.--In the case of an activity carried out by a 
national laboratory of the Department of Energy but paid for by the 
Department on a reimbursable basis, funds for such activity shall be 
provided through a method under which the Secretary of Energy waives 
any requirement for the Department to pay administrative charges or 
personnel costs of the Department of Energy or its contractors in 
excess of the amount that the Secretary of Energy pays for an activity 
carried out by such laboratory and paid for by the Department of 
Energy.
    (d) Laboratory Directed Research and Development by the Department 
of Energy.--No funds authorized to be appropriated or otherwise made 
available to the Department in any fiscal year may be obligated or 
expended for laboratory directed research and development activities 
carried out by the Department of Energy unless such activities support 
the mission of the Department described in section 101.
    (e) Department of Energy Coordination on Homeland Security Related 
Research.--The Secretary of Energy shall ensure that any research, 
development, test, and evaluation activities conducted within the 
Department of Energy that are directly or indirectly related to 
homeland security are fully coordinated with the Secretary to minimize 
duplication of effort and maximize the effective application of Federal 
budget resources.
    (f) Transition.--(1) Subject to paragraph (2), the transfer of 
functions, personnel, assets, and liabilities required to be 
transferred from the Department of Energy to the Department under this 
Act shall be carried out pursuant to a schedule to be prescribed by the 
Secretary of Energy with the concurrence of the Secretary.
    (2) Transfers referred to in paragraph (1)--
            (A) shall commence not later than January 1, 2003; and
            (B) shall be completed not later than September 30, 2003.

    Amend section 501(2) to read as follows:
            (2) with respect to the Nuclear Incident Response Team 
        (regardless of whether it is operating as an organizational 
        unit of the Department pursuant to this title)--
                    (A) establishing standards, evaluating performance, 
                and certifying when standards have been met; and
                    (B) providing funds to the Department of Energy and 
                the Environmental Protection Agency, as appropriate, 
                for homeland security planning and conducting joint and 
                other exercises and training;

    At the end of section 502(1) insert the following before the 
semicolon ``, and the Integrated Hazard Information System of the 
Department of Defense''.

    Amend section 503 to read as follows:

SEC. 503. NUCLEAR INCIDENT RESPONSE.

    (a) Nuclear Incident Response Team.--At the direction of the 
Secretary (in connection with an actual or threatened terrorist attack, 
major disaster, or other emergency within 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) Construction.--Nothing in this Act shall be construed to affect 
the responsibility of the Secretary of Energy and the Administrator of 
the Environmental Protection Agency for organizing, training, 
equipping, and utilizing their respective entities in the Nuclear 
Incident Response Team, or (subject to the provisions of this title) 
from exercising direction, authority, and control over them when they 
are not operating as a unit of the Department.
    (c) Indemnification of Contractors During Transition Period.--(1) 
To the extent the Department of Energy has a duty under a covered 
contract to indemnify an element of the Nuclear Incident Response Team, 
the Department and the Department of Energy shall each have that duty, 
whether or not the Nuclear Incident Response Team is operating as an 
organizational element of the Department.
    (2) Paragraph (1) applies only to a contract in effect on the date 
of the enactment of this Act, and not to any extension or renewal of 
such contract carried out after the date of the enactment of this Act.

    Amend section 735 to read as follows:

SEC. 735. 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.

    In section 802, insert ``pursuant to this Act'' after ``The 
transfer of an agency''.

    In section 803, strike ``shall provide'' (page 42, line 6) and 
insert ``may provide''.

    Strike section 904(b) and insert the following new subsections (and 
redesignate the subsequent subsection accordingly):
    (b) Title 10, U.S.C.--(1) Title 10, United States Code, is amended 
in sections 101(9), 130b(a), 130b(c)(4), 130c(h)(1), 379, 513(d), 
575(b)(2), 580(e)(6), 580a(e), 651(a), 671(c)(2), 708(a), 716(a), 717, 
806(d)(2), 815(e), 888,946(c)(1), 973(d), 978(d), 983(b)(1), 985(a), 
1033(b)(1), 1033(d), 1034, 1037(c), 1044d(f), 1058(c), 1059(a), 
1059(k)(1), 1073(a), 1074(c)(1), 1089(g)(2), 1090, 1091(a), 1124, 1143, 
1143a(h), 1144, 1145(e), 1148, 1149, 1150(c), 1152(a), 1152(d)(1), 
1153, 1175, 1212(a), 1408(h)(2), 1408(h)(8), 1463(a)(2), 1482a(b), 
1510, 1552(a)(1), 1565(f), 1588(f)(4), 1589, 2002(a), 2302(1), 
2306b(b), 2323(j)(2), 2376(2), 2396(b)(1), 2410a(a), 2572(a), 2575(a), 
2578, 2601(b)(4), 2634(e), 2635(a), 2734(g), 2734a, 2775, 2830(b)(2), 
2835, 2836, 4745(a), 5013a(a), 7361(b), 10143(b)(2), 10146(a), 
10147(a), 10149(b), 10150, 10202(b), 10203(d), 10205(b), 10301(b), 
12103(b), 12103(d), 12304, 12311(c), 12522(c), 12527(a)(2), 12731(b), 
12731(a)(e), 16131(a), 16136(a), 16301(g), and 18501 by striking ``of 
Transportation'' each place it appears and inserting ``of Homeland 
Security''.
    (2) Section 801(1) of such title is amended by striking ``the 
General Counsel of the Department of Transportation'' and inserting 
``an official designated to serve as Judge Advocate General of the 
Coast Guard by the Secretary of Homeland Security''.
    (3) Section 983(d)(2)(B) of such title is amended by striking 
``Department of Transportation'' and inserting ``Department of Homeland 
Security''.
    (4) Section 2664(a) of such title is amended [Note, not sure how to 
address the references to Secretary of Transportation in this 
section]. deg.
    (4) Section 2665(b) of such title is amended by striking 
``Department of Transportation'' and inserting ``Department in which 
the Coast Guard is operating''.
    (5) Section 7045 of such title is amended--
            (A) in subsections (a)(1) and (b), by striking 
        ``Secretaries of the Army, Air Force, and Transportation'' both 
        places it appears and inserting ``Secretary of the Army, the 
        Secretary of the Air Force, and the Secretary of Homeland 
        Security''; and
            (B) in subsection (b), by striking ``Department of 
        Transportation'' and inserting ``Department of Homeland 
        Security''.
    (6) Section 7361(b) of such title is amended in the subsection 
heading by striking ``Transportation'' and inserting ``Homeland 
Security''.
    (7) Section 12522(b) of such title is amended in the subsection 
heading by striking ``Transportation'' and inserting ``Homeland 
Security''.
    (c) Title 37, U.S.C.--Title 37, United States Code, is amended in 
sections 101(5), 204(i)(4), 301a(a)(3), 306(d), 307(c), 308(a)(1), 
308(d)(2), 308(f), 308b(e), 308c(c), 308d(a), 308e(f), 308g(g), 
308h(f), 308i(e), 309(d), 316(d), 323(b), 323(g)(1), 325(i), 402(d), 
402a(g)(1), 403(f)(3), 403(l)(1), 403b(i)(5), 406(b)(1), 417(a), 
417(b), 418(a), 703, 1001(c), 1006(f), 1007(a), and 1011(d) by striking 
``of Transportation'' each place it appears and inserting ``of Homeland 
Security''.
    (d) Other Defense-Related Laws.--(1) Section 363 of Public Law 104-
193 (110 Stat. 2247) is amended--
            (A) in subsection (a)(1) (10 U.S.C. 113 note), by striking 
        ``of Transportation'' and inserting ``of Homeland Security''; 
        and
            (B) in subsection (b)(1) (10 U.S.C. 704 note), by striking 
        ``of Transportation'' and inserting ``of Homeland Security''.
    (2) Section 721(1) of Public Law 104-201 (10 U.S.C. 1073 note) is 
amended by striking ``of Transportation'' and inserting ``of Homeland 
Security''.
    (3) Section 4463(a) of Public Law 102-484 (10 U.S.C. 1143a note) is 
amended by striking ``after consultation with the Secretary of 
Transportation''.
    (4) Section 4466(h) of Public Law 102-484 (10 U.S.C. 1143 note) is 
amended by striking ``of Transportation'' and inserting ``of Homeland 
Security''.
    (5) Section 542(d) of Public Law 103-337 (10 U.S.C. 1293 note) is 
amended by striking ``of Transportation'' and inserting ``of Homeland 
Security''.
    (6) Section 740 of Public Law 106-181 (10 U.S.C. 2576 note) is 
amended in subsections (b)(2), (c), and (d)(1) by striking ``of 
Transportation'' each place it appears and inserting ``of Homeland 
Security''.
    (7) Section 1407(b)(2) of the Defense Dependents' Education Act of 
1978 (20 U.S.C. 926(b)) is amended by striking ``of Transportation'' 
both places it appears and inserting ``of Homeland Security''.
    (8) Section 2301(5)(D) of Public Law 107-110 (20 U.S.C. 6671(5)(D)) 
is amended by striking ``of Transportation'' and inserting ``of 
Homeland Security''.
    (9) Section 2307(a) of Public Law 107-110 (20 U.S.C. 6677(a)) is 
amended by striking ``of Transportation'' and inserting ``of Homeland 
Security''.
    (10) Section 1034(a) of Public Law 105-85 (21 U.S.C. 1505a(a)) is 
amended by striking ``of Transportation'' and inserting ``of Homeland 
Security''.
    (11) The Military Selective Service Act is amended--
            (A) in section 4(a) (50 U.S.C. App. 454(a)), by striking 
        ``of Transportation'' in the fourth paragraph and inserting 
        ``of Homeland Security'';
            (B) in section 4(b) (50 U.S.C. App. 454(b)), by striking 
        ``of Transportation'' both places it appears and inserting ``of 
        Homeland Security'';
            (C) in section 6(d)(1) (50 U.S.C. App. 456(d)(1)), by 
        striking ``of Transportation'' both places it appears and 
        inserting ``of Homeland Security'';
            (D) in section 9(c) (50 U.S.C. App. 459(c)), by striking 
        ``Secretaries of Army, Navy, Air Force, or Transportation'' and 
        inserting ``Secretary of a military department, and the 
        Secretary of Homeland Security with respect to the Coast 
        Guard,''; and
            (E) in section 15(e) (50 U.S.C. App. 465(e)), by striking 
        ``of Transportation'' both places it appears and inserting ``of 
        Homeland Security''.

    Strike section 907.9/12/2002 10:06:19 AM - 
F:\V7\091202\091202.027 Created by: VLCirks deg.

                         Purpose and Background

    The purpose of H.R. 5005, the Homeland Security Act of 
2002, is to implement the President's proposal to create a new 
Department of Homeland Security (DHS). Several portions of this 
bill affect the Department of Defense (DOD) and the defense-
related activities of the Department of Energy (DOE)--both of 
which are under the jurisdictional responsibility of the 
Committee on Armed Services. These sections of H.R. 5005 were 
reviewed and studied by the committee, which subsequently 
amended the legislation on July 10, 2002 to provide the 
President and the new Secretary of Homeland Security the 
necessary authority, organizations, and resources needed to 
accomplish the homeland security mission, while ensuring that 
DOD's and DOE's national security, warfighting, and military 
missions are not diminished.
    The new Department of Homeland Security would be created 
through a sweeping re-organization of the federal government 
that would involve over a half dozen departments, multiple 
agencies, and nearly 170,000 people. The mission of this new 
department would be to prevent terrorist attacks within the 
United States, reduce America's vulnerability to terrorism, and 
minimize the damage and recover from attacks that do occur. 
Under the introduced version of this legislation, the 
Department of Homeland Security would have four organizational 
components, each led by an Under Secretary: Border and 
Transportation Security; Emergency Preparedness and Response; 
Chemical, Biological, Radiological, and Nuclear 
Countermeasures; and, Information Analysis and Infrastructure 
Protection.
    Compared to other departments of the federal government, 
the impact of this initiative on the Department of Defense and 
the defense-related activities of the Department of Energy is 
limited. While establishment of the DHS involves transferring 
organizations and people from DOD and DOE to the Department of 
Homeland Security, collectively these moves represent less than 
1 percent of new department's total projected end strength, and 
less than 2 percent of its projected annual budget authority.
    The committee amendment was developed in keeping with the 
following principles:
     Provide the President and the new Secretary of 
Homeland Security the necessary authority, organizations, and 
personnel needed to accomplish the homeland security mission;
     Ensure that DOD's and DOE's national security, 
warfighting, and military missions are not diminished;
     Allow the new Secretary of Homeland Security 
sufficient latitude and flexibility to efficiently implement 
the provisions of H.R. 5005;
     Ensure the new department will have a sufficient 
research, development, testing, and evaluation (RDT&E) 
capability to meet its mission needs; and
     Prevent the creation of duplicative, impaired, or 
unnecessary organizations and activities.
    Based on these principles, the committee held a number of 
meetings with the Departments of Defense and Energy, and the 
White House beginning in late June 2002. A full committee 
hearing was also held on June 26, 2002, with senior officials 
from the Department of Defense and Department of Energy 
appearing as witnesses. These meetings and the hearing 
highlighted several elements of H.R. 5005 that required further 
refinement, and were incorporated into a comprehensive 
committee amendment.
    Most of the provisions contained in the committee amendment 
made no change to the President's fundamental proposal. Rather, 
they simply clarified and fine tuned ``what'' entities and 
activities will be transferred from DOD and DOE to the 
Department of Homeland Security; ``how'' they will be 
transferred; ``where'' they will be located within the new 
department; and what their new role, mission, and authorities 
will be within the new department. Some of these provisions, 
however, clarify the future relationship (authority, 
limitations, and conditions) between the Department of Energy's 
national laboratories and the Department of Homeland Security 
on matters ranging from contracting and accounting, to research 
and development and control of Nuclear Incident Response Teams. 
Further, these provisions ensure that the Department of 
Homeland Security receives from DOD and DOE only those entities 
and activities directly related to homeland security, that ``no 
harm'' will come to DOD and DOE and their activities as a 
result of this reorganization, and that the Secretary of 
Homeland Security has the tools and resources he needs to 
accomplish the homeland security mission.
    The few provisions in the amended bill that substantively 
deviate from the Administration's legislative proposal are 
designed to maximize organizational effectiveness at the new 
Department of Homeland Security, or to preserve essential 
capabilities and activities at the Department of Energy that 
have a broader national security mission. These changes 
include:
     Transferring the entire Energy Security and 
Awareness program to the Department of Homeland Security Under 
Secretary for Information Analysis and Infrastructure 
Protection, rather than separating the program between the 
above office and the Department of Homeland Security Under 
Secretary for Chemical, Biological, Radiological, and Nuclear 
(CBRN) Countermeasures;
     Expanding the responsibilities of the Under 
Secretary for Chemical, Biological, Radiological, and Nuclear 
Countermeasures to include explosives and explosive materials;
     Giving the Secretary of Homeland Security the 
responsibility and authority to conduct research, development, 
testing and evaluation in support of the Department of Homeland 
Security's mission; and,
     Granting authority to the Department of Homeland 
Security's Under Secretary for CBRN Countermeasures to 
establish an intelligence and analysis capability within DHS 
rather than transferring this organization/activity (as the 
Administration proposed) out of DOE, where it currently 
performs a critical national security mission.
    In conclusion, the provisions contained in H.R. 5005, as 
amended by the Committee on Armed Services, will improve the 
effectiveness of the new Department of Homeland Security, while 
ensuring that the Department of Defense and the Department of 
Energy retain the ability to fully conduct their warfighting 
and military missions so critical to our national security.

                          Legislative History

    H.R. 5005 was introduced on June 24, 2002 and was referred 
to the Select Committee on Homeland Security. The bill was also 
referred jointly and sequentially to the Committee on 
Agriculture; Committee on Appropriations; Committee on Armed 
Services; Committee on Energy and Commerce; Committee on 
Financial Services; Committee on Government Reform; House 
Select Committee on Intelligence; Committee on International 
Relations; Committee on Judiciary; Committee on Science; 
Committee on Transportation and Infrastructure; and the 
Committee on Ways and Means, on June 24, 2002.
    On July 10, 2002 the Committee on Armed Services held a 
mark-up session to consider H.R. 5005. The committee adopted 
the bill with amendments and reported the same favorably by 
voice vote.
    Section-by-Section Analysis
    The following is a section-by-section analysis of those 
sections of H.R. 5005 amended by the Committee on Armed 
Services.
Section 2. Definitions
    This section, as amended, would expand the definition of 
the term ``assets'' to include ``leases, grants, cooperative 
and other agreements and other transactions* * *'' and also 
added a definition of the term ``state''. This latter change 
conforms the definition of the term ``state'' used in this bill 
with that already in existing law in section 102(4) of the 
Robert T. Stafford Disaster Relief and Emergency Assistance Act 
(Public Law 93-288). The effect of this change is to include 
not only the states of the United States, but also the District 
of Columbia, Puerto Rico, the Virgin Islands, Guam, American 
Samoa, and the Commonwealth of the Northern Mariana Islands 
within the defined term ``state''.
Section 101. Executive Department; Mission
    As amended, subsection 101(b)(2) would specify the conduct 
of research, development, test, and evaluation in support of 
homeland security as an additional mission of the Department of 
Homeland Security.
Section 202. Functions Transferred
    As amended, the committee endorses the transfer of the 
National Communication Systems (NCS) in this section to the 
Department of Homeland Security with the understanding that the 
Department of Defense's mission will not be adversely affected 
or degraded. The committee also expects that, in light of DOD's 
unique telecommunication requirements, DOD will continue to be 
a key member of the NCS and receive priority recognition when 
appropriate.
    In addition, the committee believes the NCS should maintain 
its mission to advise the President on protecting critical 
communications assets across all infrastructures. To 
successfully fulfill this mission, the NCS should receive high 
visibility and attention from the Secretary of Homeland 
Security.
    This section, as amended, would also transfer the entire 
Energy Security and Assurance program of the Department of 
Energy, including the National Infrastructure Simulation and 
Analysis Center (NISAC), and related functions, to the Under 
Secretary for Information Analysis and Infrastructure 
Protection.
    In the fiscal year 2003 budget request, the Energy Security 
and Assurance program of the Department of Energy includes 
NISAC as the primary component. The President's legislative 
proposal would place NISAC under the Under Secretary for 
Information Analysis and Infrastructure Protection, but 
transfer the balance of the program to the Under Secretary for 
Chemical, Biological, Radiological, and Nuclear 
Countermeasures. Broadly, the functions of the Energy Security 
and Assurance program are coordination activities to ensure a 
secure flow of energy, analysis of energy infrastructure 
vulnerabilities and interdependencies, and planning for 
response and recovery to disruptions of the supply of energy. 
The program also includes critical infrastructure protection 
functions. The committee believes that all such functions 
properly belong with the Under Secretary for Information 
Analysis and Infrastructure Protection, and are only indirectly 
related to CBRN Countermeasures. Consequently, the committee 
recommends the transfer of the entire program to the Under 
Secretary for Information Analysis and Infrastructure 
Protection.
Section 203. Participation In National Collaborative Intelligence 
        Analysis Capability
    As amended, this section would ensure that the Secretary of 
Homeland Security shall have full access, as a full 
participant, to information from any national collaborative 
information analysis capability, and is authorized to provide 
inputs to the same. The committee notes the Administration's 
increased demand for a national-level capability to analyze 
information and intelligence data from all government agencies 
and other sources. Such a capability would dramatically improve 
the United States' efforts to detect and identify threats to 
the nation's security. As such, the committee included 
supportive language in committee report 107-436 accompanying 
H.R. 4546, the Bob Stump National Defense Authorization Act for 
fiscal year 2003, which endorsed the DOD proposal that this new 
development effort be conducted by the Defense Advanced 
Research Projects Agency (DARPA). The committee also notes that 
the DARPA development initiative is consistent with the 
provision contained in the National Defense Authorization Act 
for Fiscal Year 2002 (Public Law 107-107) that directed the 
Secretary of Defense and the Director of Central Intelligence 
to jointly develop an architecture for a national collaborative 
environment that would enable national-level data-mining of 
intelligence and other information.
    In 1998, the committee identified advances in computer-
based analysis technology that enabled recognition of 
previously undetectable associations and patterns resident 
within large volumes of data compiled from various sources. The 
committee recognized that this capability, commonly known as 
data mining, offered the potential for early detection of 
existing and emerging asymmetric terrorist threats to our 
nation. The committee supported research and development of a 
capability to collect, fuse, and analyze disparate data from 
multiple agencies. The purpose of this capability would be to 
assist policymakers as they decide the actions necessary to 
prevent, preempt, or counter a variety of threats, including 
terrorism, weapons proliferation, espionage, and information 
warfare. Having the ability to better understand the trends and 
relationships between individuals, groups, and actions is 
considered critical to detecting, predicting and preventing 
acts of terrorism. The committee's efforts resulted in the 
eventual increase of $7.0 million for the Army Intelligence 
Command Land Information Warfare Activity in fiscal year 2000.
    After several years of continuous support for research and 
development of the requisite technologies, and successful 
demonstration of this capability, this effort encountered 
another obstacle. Effective data-mining can only occur if it is 
part of a national capability that integrated some 33 separate 
departments, agencies, and other entities into an architecture 
that overcomes the historical stove-piped nature of the 
intelligence community. The committee further recognized that 
full support by all involved agencies for a national 
collaborative intelligence capability would be dependent upon 
the active participation of the administration.
    Therefore, in order to determine the most appropriate 
architecture, the National Defense Authorization Act for Fiscal 
Year 2001 (Public Law 106-398) requires the Secretary of 
Defense, jointly with the Director of Central Intelligence, to 
assess and recommend the best architecture for a multi-agency 
national collaborative information analysis capability (NCIAC). 
The National Defense Authorization Act for Fiscal Year 2002 
(Public Law 107-107) expanded the previous report requirement 
to include a requirement for draft legislation necessary to 
establish such a capability, and identification of any 
legislative or regulatory changes that would be needed to 
implement the preferred architecture.
    The events of September 11, 2001 have added urgency to the 
requirement to establish a national collaborative intelligence 
analysis capability. The committee believes that the Secretary 
of Homeland Security should be a full participant in both 
providing data to a NCIAC and having access to its analyses. 
The committee also believes that the Secretary of Defense and 
the Director of Central Intelligence must, as rapidly as 
possible, determine the best NCIAC architecture, and recommend 
a plan to develop such a capability. The committee believes 
that this capability will transform intelligence analyses, and 
provide a fundamentally new capability to defend our nation 
against both internal and external threats.
Section 301. Under Secretary For Chemical, Biological, Radiological, 
        And Nuclear Countermeasures
    As amended, Section 301 would expand the scope of threats 
for which the Under Secretary for Chemical, Biological, 
Radiological, and Nuclear Countermeasures is responsible by 
including explosives and explosive materials. Additionally, 
subsection 301(3)(A) would clarify that the Under Secretary is 
not only responsible for preventing the importation of CBRN 
weapons, related weapons, and explosives and explosive 
materials, but also the materials, technologies, and equipment 
intended for the illicit research, development, production, or 
use of these weapons and devices.
    The committee recognizes that some weapons of mass 
destruction require explosives in order to be activated or 
disseminated, and that sufficient amounts of explosives or 
explosive materials can be used by terrorists to inflict mass 
casualties or damage. Additionally, there is sufficient 
likelihood that terrorists could not only attempt to covertly 
bring complete CBRN weapons into the country, but that they 
could also import a weapon's key items (goods, technologies, 
and material) into the United States, use these items to 
construct a weapon of mass destruction, and then deliver it to 
their intended target. Therefore, the committee considered it 
imperative that the Under Secretary for CBRN Countermeasures 
not only be responsible for preventing the importation of whole 
weapons, but also the weapons' components.
    The committee recognizes the paramount role intelligence 
will play in preventing future acts of terrorism against the 
United States. This role is particularly heightened by the fact 
that, in the future, terrorists may employ CBRN weapons that 
could prove far more catastrophic than the attacks of September 
11. The committee declined to adopt the Administration's 
proposal to transfer the intelligence program and activities of 
Lawrence Livermore National Laboratory (LLNL) to the Department 
of Homeland Security. The committee is concerned that the 
intelligence effort undertaken by LLNL for the Department of 
Energy is a small part of a much larger program, and questions 
whether that portion is separable without adversely affecting 
Department of Energy nonproliferation programs, as well as 
support for other Federal agencies. Accordingly, as amended, 
subsection 301(5) would authorize the Under Secretary to 
establish a separate intelligence analysis capability to 
support CBRN counterterrorism in the United States.
Section 302. Functions Transferred
    As amended, subsection 302(2) would specifically exclude 
from transfer to the Department of Homeland Security those 
programs and functions of the Department of Energy that are 
directly related to the mission of the National Nuclear 
Security Administration, as specified in section 3211 of the 
National Nuclear Security Administration Act (Public Law 106-
65).
    Subsection 302(2)(A), as amended, would further specify 
that only those supporting activities of the Nonproliferation 
and Verification Research and Development program directly 
related to homeland security, as described in the fiscal year 
2003 budget request, shall be transferred to the Department of 
Homeland Security. A similar condition would be incorporated 
into subsections 302(2)(B) and 302(2)(C) of the bill regarding 
transfer of nuclear smuggling activities of the Proliferation 
Detection Program and the Nuclear Assessment Program, 
respectively.
    Finally, as discussed above, the committee declined to 
adopt the part of subsection 302(2)(F) that would have 
transferred the existing intelligence programs at Lawrence 
Livermore National Laboratory to the Department of Homeland 
Security.

Section 304. Military Activities
    As amended, section 304 was renumbered as section 735. The 
amended section clarifies that nothing in this Act would grant 
authority to the Secretary of Homeland Security to engage in 
warfighting, the military defense of the Untied States, or 
other military activities. This section would further clarify 
that nothing in this Act limits 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.
Section 305. Administration of Programs and Activities Transferred from 
        the Department of Energy
    As amended, Section 305 would specify how certain homeland 
security-related research, development, test, and evaluation 
(RDT&E) activities would be conducted.
    Subsection 305(a) requires the Secretary of Homeland 
Security to establish a primary center for carrying out the 
RDT&E activities of the Department of Homeland Security at a 
national laboratory of the National Nuclear Security 
Administration. This subsection would also provide for the 
establishment of secondary centers at one or more national 
laboratories of the Department of Energy.
    While the committee amendment does not specify which 
laboratory will serve as this center, the committee understands 
that the Administration initially proposed Lawrence Livermore 
National Laboratory as the preferred site for this activity. 
Secondary centers would be established at the discretion of the 
Secretary of Homeland Security with the concurrence of the 
Secretary of Energy.
    This subsection would further provide for the transfer from 
the Department of Energy of facilities and assets required to 
execute the research and development mission of the Department 
of Homeland Security. The Secretary of Energy would designate 
the facilities and assets to be transferred, with the 
concurrence of the Secretary of Homeland Security. The 
facilities and assets transferred under this subsection by the 
Department of Energy could, with the concurrence of the 
Secretary of Homeland Security, substitute for the specific 
transfers of assets required in Titles II and III, provided 
that substitute facilities and assets were substantively 
equivalent.
    It is the intent of the committee to give the Secretary of 
Homeland Security and the Secretary of Energy the flexibility 
to organize and consolidate facilities and assets in a manner 
that is advantageous to the execution of their respective 
missions, consistent with the transfer of functions described 
in this Act. The committee expects this consolidation to occur 
within the existing infrastructure of the national 
laboratories, and for nothing in this section to be construed 
as authorization for new construction.
    The committee wishes to convey special intent with the 
choice of the word ``center''. The committee believes that 
there is great value for the Department of Homeland Security in 
establishing and physically consolidating, within the national 
laboratories, a critical mass of talent and technology whose 
primary focus and application is homeland security. At the same 
time, the committee recognizes that, due to the unique nature 
of some facilities, it will not be possible in all cases to 
achieve such a consolidation.
    Consistent with the committee's intent to consolidate and 
establish a unique identity for homeland security efforts at 
the Department of Energy national laboratories, subsection 
305(b) would require execution of homeland security programs 
under separate contracts with the Department of Homeland 
Security. The committee believes that separate contracts will 
ensure proper focus on the Secretary of Homeland Security's 
unique priorities. The committee expects the Department of 
Homeland Security to take advantage of the unique opportunity 
to stand up a new organizational structure and establish a 
streamlined process for managing these contracts, with clearly 
defined responsibilities and accountability. A small 
headquarters organization can focus on policy, budgeting, 
technical objectives, and strategic planning for research and 
development, with responsibility for day-to-day oversight of 
contract activities delegated to site offices. The committee 
sees no need for intermediate levels of federal management; nor 
does it see a need for the Department of Homeland Security to 
generate detailed guidance for its contractors on how to 
conduct RDT&E activities.
    The committee recognizes that certain activities the 
Department of Homeland Security may wish to conduct at a 
Department of Energy national laboratory might be of limited 
scope or duration. In such cases, it may be more advantageous 
for the Department of Homeland Security to conduct those 
activities on a reimbursable ``work-for-others'' basis, rather 
than through a separate contract. In such a circumstance, 
subsection 305(c) would waive the Department of Energy ``added 
factor'' for pass through of funds from the Department of 
Homeland Security to the national laboratory. It would further 
stipulate that personnel costs charged to the program for 
laboratory contractors could not exceed those that the 
Secretary of Energy authorizes for Department of Energy 
programs at that same laboratory. In other words, this 
subsection would prevent higher personnel costs or pass through 
charges, as is common practice, for future work performed by 
the Department of Energy for the Department of Homeland 
Security on a work-for-others basis.
    The committee understands the value of laboratory-directed 
research and development, but believes that funds should be 
expended for the purpose for which they are authorized and 
appropriated by Congress. Subsection 305(d) would require that 
any laboratory-directed research and development projects 
undertaken at a national laboratory of the Department of 
Energy, with funds derived from the Department of Homeland 
Security, shall support the mission of the Department of 
Homeland Security. This subsection would prevent the use of 
Department of Homeland Security funds for self-directed 
research that is not relevant to homeland security.
    Subsection 305(e) would require the Secretary of Energy to 
coordinate with the Secretary of Homeland Security to ensure 
that homeland security-related RDT&E activities undertaken by 
the Department of Energy are not duplicative of Department of 
Homeland Security efforts. Specifically, the committee cautions 
the Department of Energy against requesting funds in future 
budget submissions for functions that have been assumed by the 
Department of Homeland Security.
    Subsection 305(f) would require the Secretary of Energy, 
with the concurrence of the Secretary of Homeland Security, to 
develop a schedule for transfer of assets from the Department 
of Energy to the Department of Homeland Security. The transfer 
could begin upon enactment of this Act, and must be completed 
by the end of fiscal year 2003.
Section 501. Under Secretary For Emergency Preparedness And Response
    As amended, this section would clarify the role and 
responsibilities of the Under Secretary for Emergency 
Preparedness and Response with regard to the training of 
nuclear incident response teams.
    The committee understands that, regardless of homeland 
security needs, the Secretary of Energy has a requirement to 
respond to nuclear incidents and emergencies. Accordingly, the 
committee believes that the Secretary of Energy should retain 
primary responsibility for organizing, training, and equipping 
nuclear incident response teams to conduct Department of Energy 
missions, as described in subsection 503(b). Thus, it is the 
committee's intent that the Department of Homeland Security 
should bear the incremental cost of joint planning and training 
for the homeland security missions that exceed the scope of 
capabilities required of the nuclear incident response teams by 
the Secretary of Energy.
Section 502. Functions Transferred
    As amended, this section would transfer the Integrated 
Hazard Information System (not including personnel) of the 
Department of Defense to the Department of Homeland Security so 
that the latter would have a near real-time capability to 
detect wild fires in North America.
Section 503. Nuclear Incident Response
    As amended, this section would limit the circumstances 
under which the Secretary of Homeland Security may assume 
operational control of nuclear incident response teams to 
respond to incidents occurring within the United States. This 
section was also amended to ensure that current indemnity 
provisions applicable to these nuclear incident response teams 
remains in place when these teams are activated by the 
Department of Homeland Security.
Section 735. Authorization Of Appropriations
    As amended, this section would strike the original 
provision in the underlying bill that would have provided a 
permanent authorization of appropriations for the new 
Department of Homeland Security. This section would be replaced 
with an amended version of section 304 of the underlying bill, 
which addresses limits placed on the military activities of the 
Department of Homeland Security.
Section 904. Coast Guard
    This section, as amended, would modify certain provisions 
of the United States Code relevant to the potential transfer of 
the Coast Guard from the Department of Transportation to the 
Department of Homeland Security. This section would accomplish 
this task by replacing references to the Department of 
Transportation and the Secretary of Transportation with 
references to the new Department and Secretary of Homeland 
Security. The committee did not address the merits of 
transferring the Coast Guard to the Department of Homeland 
Security; consideration of that matter is properly vested in 
the committee with the primary jurisdiction over the Coast 
Guard. Should the decision be made by the Congress, however, to 
transfer the Coast Guard to the Department of Homeland 
Security, the changes made by this section would assure that 
all pay, benefits, and other privileges afforded to the 
uniformed members of the Coast Guard remain in effect.
Section 907. Transfer Of Department Of Defense Chemical Biological 
        Defense Program Homeland Security Projects
    As amended, this section would strike the requirement for 
the Department of Defense to establish a National Bio-weapons 
Defense Analysis Center, as provided for in the underlying 
bill. After the establishment of the Center in the Department 
of Defense, section 302(3) of H.R. 5005, as introduced, would 
have transferred the Center to the Department of Homeland 
Security. Instead of the original proposal, the amended 
subsection 302(3) would transfer two homeland security projects 
from the Department of Defense chemical-biological defense 
program to the Department of Homeland Security: the biological 
counter-terrorism research program and the biological defense 
homeland security support program.
    The President's fiscal year 2003 budget request for the 
Department of Defense contained a total of $420 million for two 
homeland security initiatives, both of which were added to the 
Department of Homeland Security's initial fiscal year 2003 
budget request. These initiatives would strengthen the federal 
government's chemical and biological defense and response 
capabilities. The request included $118 million ($113 million 
in research and development and $5 million in military 
construction funds) for a biological counter-terrorism research 
program that would focus on assessment of the traditional and 
emerging threats from the perspective of counterterrorism, and 
would include the establishment of a Center for Biological 
Counterterrorism Research at Fort Detrick, Maryland.
    The request also included $272 million in research and 
development, and $30 million in procurement, for the biological 
defense homeland security support program to: initiate a 
comprehensive program to build a National Biological Defense 
System; and, provide an integrated homeland security capability 
to detect, mitigate, and respond to biological-related 
incidents.

                       Items of Special Interest

Transfer of Work-for-Others Activities
    The committee is aware that ``work-for-others'' activities 
compose a significant fraction of the programmatic activities 
of the national laboratories of the National Nuclear Security 
Administration. It is the committee's expectation that work-
for-others activities related to homeland security, and 
specifically those related to functions transferred from the 
Department of Energy, will also move to the Department of 
Homeland Security where feasible.
Prioritization of Homeland Security Investments
    The committee believes, as the Department of Homeland 
Security embarks upon its important mission, that it should 
first conduct a thorough and critical analysis of the nation's 
homeland security needs. This assessment would not only help 
the department accomplish its current mission, but also allow 
the Secretary to conduct long-term planning and direct future 
investments. Such analysis should also extend beyond a 
prioritization of research and development efforts, and examine 
homeland security on the basis of a system of systems. For 
example, one might consider the relative national security 
costs and benefits of acquiring additional agents for the 
Border Patrol, as compared to procuring imaging equipment to 
scan cargo containers at ports of entry. The committee believes 
that the earlier such investments are made in these areas, the 
more quickly homeland security can be enhanced and savings 
realized. The committee thus recommends that the Department of 
Homeland Security formalize a process to provide an initial 
assessment, and continuous reassessments, of benefits versus 
costs studies of the nation's homeland security needs.
Department of Homeland Security use of existing counterterrorism 
        capabilities
    The committee notes that, independent of the establishment 
of the new Department of Homeland Security, a variety of 
federal, state and local initiatives have been undertaken in 
recent years that may contribute to an improved ability to 
prevent or help respond to terrorist activities against the 
United States. For example, civilian bioterrorism medical 
response centers already exist. Although not specifically 
incorporated into the new Department of Homeland Security by 
H.R. 5005, such centers and others focused on various aspects 
of domestic counterterrorism have the potential to enhance the 
capabilities of both the Departments of Defense and Homeland 
Security to better prepare for and respond to the terrorist 
threat. Accordingly, the committee encourages the Secretary of 
Homeland Security and the Secretary of Defense to take full 
advantage of these centers as they devise plans for how best to 
respond to this pressing threat.
Homeland security research and development program
    The committee believes that one of the Secretary of 
Homeland Security's primary responsibilities and capabilities 
should be to conduct research and development in support of the 
homeland security mission.
    The committee notes that the National Research Council's 
recent report, ``Making the Nation Safer--the Role of Science 
and Technology in Countering Terrorism,'' recommends 
establishment of an Under Secretary for Technology in the 
Department of Homeland Security to provide a focal point for 
guiding key research and technology development programs across 
the Department of Homeland Security. This Under Secretary would 
also coordinate the Department of Homeland Security's research 
and development programs with those of the major science, 
engineering, and medical science agencies outside the 
Department of Homeland Security.
    The committee also notes that the council report recommends 
the establishment of a Homeland Security Institute: a 
dedicated, contracted, not-for-profit organization, which would 
provide technical analysis and support to the Department of 
Homeland Security and the Office of Homeland Security.
    The committee recommends the designation of an individual, 
within the secretariat of the Department of Homeland Security, 
who would be responsible for the department's research and 
development (R&D) program. This individual's duties should 
include the integration of the R&D programs and activities of 
each organizational element within the Department of Homeland 
Security, as well as the coordination of the department's R&D 
programs with those of other federal agencies.

                           Committee Position

    On July 10, 2002, the Committee on Armed Services ordered 
H.R. 5005, as amended, reported to the House with a favorable 
recommendation by voice vote, a quorum being present.

              Additional Views Of Congressman John Spratt

    Soon after Pearl Harbor, President Roosevelt appointed 
James F. Byrnes as head of a War Mobilization Office, and 
vested him with a broad, powerful charter: to marshal the 
nation for war. Byrnes became known as the ``Assistant 
President,''and with the President's proxy and his own personal 
ability, Byrnes made the War Mobilization Office work. I think 
that model is worth remembering and trying in the wake of 
September 11, but I recognize that it is not the only way to 
deal with the threat of terrorism, and not the route we now 
seem bent upon taking. So, I support this legislation and 
accept the need for Congress to act expeditiously. But the bill 
reported by the committee is far from perfect. Efforts to 
improve this bill need to continue in the House Select 
Committee, on the House floor, in conference with the Senate, 
and in the years to come. Merging many organizations, most with 
purposes other than homeland security, into a new department is 
not likely to be done right on the first try, particularly when 
done at a fast clip. In this vein, I want to highlight areas of 
the legislation that I believe could be problematic and that 
warrant continued attention.
    Section 301 of the bill as amended by our committee 
requires the Under Secretary for Chemical, Biological, 
Radiological, and Nuclear (CBRN) Countermeasures to be 
responsible for intelligence analysis of CBRN threats. This 
seems reasonable, but elsewhere the legislation establishes an 
Under Secretary for Information Analysis and Infrastructure 
Protection. I believe placing the CBRN intelligence analysis 
function outside the Under Secretary for Information Analysis 
and Infrastructure Protection may detract from the 
Administration's attempt to establish one threat analysis 
center within the new department. It may also confuse the lines 
of accountability, blurring who is responsible for analyzing 
CBRN threats. I think these provisions need further attention.
    Section 301 also charges the Secretary of CBRN with 
``developing national policy for and coordinating the Federal 
Government's civilian efforts'' for ``identifying, preventing, 
and responding to'' CRBN attacks. To the extent that all such 
federal efforts are located within DHS, this may be workable, 
but I am skeptical that this will be the case. If not, I do not 
believe that an under secretary in one department will be able 
to develop and coordinate a federal strategy that will be 
binding on other agencies. Such an interagency process is 
probably better chaired and handled by the Executive Office of 
the President.
    Section 302 of the bill transfers parts of the Department 
of Energy (DOE) and National Nuclear Security Administration 
(NNSA) to the new Department of Homeland Security (DHS). The 
Chairman and Ranking Member have tried to revise the 
Administration's original bill and narrow the scope and clarify 
the purpose of these transfers. DOE and NNSA will continue to 
conduct critical national security missions--most notably 
stockpile stewardship of the nation's nuclear arsenal and non-
proliferation programs. These roles will not be part of the DHS 
mission. The committee made several important changes to 
emphasize that only those programs and activities directly 
related to homeland security, and not part of DOE and NNSA's 
other important national security missions, are to be 
transferred. But most of the scientists in DOE and NNSA wear 
several hats and work multiple projects. Singling out those who 
work only on homeland security and do nothing else related to 
other national security will be virtually impossible.
    I commend the committee's approach to this matter, but I am 
concerned that the bill language could lead to the transfer of 
more programs and activities than the committee intends, either 
because the Administration interprets the legislation 
differently or because it changes the names or scopes of the 
programs identified in Section 302. The legislation is silent 
on the definition of ``homeland security,'' complicating the 
task of identifying those programs ``directly related to 
homeland security.'' It does not specify what should occur 
should the Secretary of Energy and the Secretary of DHS 
disagree on a transfer, an easily foreseeable circumstance. In 
addition, the legislation contains no reporting requirements to 
Congress during the transition phase, which will make it 
difficult for Congress to oversee the transition and intervene 
if it strongly objects to a particular transition proposal.
    In addition, setting a deadline of September 30, 2003 for 
completion of the transition phase when the Administration's 
proposed legislation set no such date may create undue pressure 
that will complicate rather than ease the arduous task of 
merging different entities into one. I hope our committee will 
continue to assess these issues throughout the legislative 
process and will closely monitor the transfers from DOE and 
NNSA throughout the transition phase.
    Section 305 of the bill requires the Secretary of DHS to 
establish a ``center of excellence'' for homeland security at 
one of the three national security laboratories, Lawrence 
Livermore, Los Alamos, or Sandia. This may be wise, but many 
federal labs and the private sector can be useful in developing 
needed homeland security technology, and the center should not 
become a monopoly that stifles competition. One of the reasons 
for the Manhattan Project's success was that Oppenheimer 
staunchly opposed the compartmentalization that General Groves 
insisted upon. Care must also be taken to ensure that DOE and 
NNSA personnel at this ``center of excellence'' working on 
other critical national security missions--particularly 
stockpile stewardship and non-proliferation--are not absorbed 
with homeland security assignments to the detriment of other 
missions. I understand that the committee is continuing to 
consider this issue, and commend it for doing so.
    Finally, I would sound a cautionary note on cost. It is 
difficult to believe the Bush Administration's assertions that 
DHS will be budget-neutral. The Congressional Budget Office 
estimates that H.R. 5005 as introduced will cost $3 billion 
more over 2003--2007 than we are currently spending. The CBO 
estimate assumes extremely limited transition costs, does not 
assume that the majority of this agency will at some point have 
a central headquarters or use a consistent information 
technology system, and it assumes that the DHS will not require 
increases above 2002 levels of spending to enhance homeland 
security. Given the large, sustained budget deficits that are 
forecast, the unacknowledged costs of homeland security, the 
ambitious ramp-up in defense spending, and the advent of the 
Baby Boom retirement era, Congress and the Administration must 
become much more candid in considering budgetary trade-offs. As 
meritorious as homeland security may be, this bill is 
indicative of a recent and disturbing trend toward committing 
the government to an undertaking without frankly considering 
how we will pay for it.
    This is not a perfect bill, but the committee has made a 
good-faith effort in a short period of time to improve the 
Administration's proposal, and despite my concerns, I support 
it, though I do believe that the work of the committee in this 
area is not ending, but just beginning.

                                        John Spratt

            Dissenting Views Of Congresswoman Heather Wilson

    The Committee added to this bill Section 305, 
Administration of Programs and Activities Transferred From the 
Department of Energy. This section directs the Secretary of 
Homeland Security to establish at a national security 
laboratory of the National Nuclear Security Administration a 
center to serve as the primary location for carrying out 
research, development, test, and evaluation activities for the 
Department.
    I offered an amendment, which in part would have removed 
this section. I withdrew the amendment with the consensus of 
the Committee to further develop and submit my concepts 
relating to strengthening the role and ability of the 
Department to conduct and deploy research and technology that 
will be a critical strategic element for securing our homeland. 
Those provisions have been incorporated into the bill reported 
by the Energy and Commerce Committee.
    The Committee discussed whether any laboratory should be 
designated. We did not discuss which laboratory should be 
designated, and intentionally left that undecided. The 
committee made no recommendation at all in that regard nor 
would I have consented to such an approach.
    I believe that creating a Center for Homeland Security at 
one of our national laboratories without giving the Department 
a stronger overall mission in the R&D area could undermine the 
ability of the Department to acquire the best available 
research and technology from wherever it may be available.
    The Department should develop its research and technology 
priorities and employ the capabilities throughout the country 
whether at universities, in industry, at national laboratories, 
or in other federal agencies to best meet its objectives based 
on considerations of technical merit and demonstrated 
performance.
    I want to be clear that I strongly support the use of the 
national laboratories, which have made and will continue making 
vital contributions to homeland security.

                                     Heather Wilson
                    COMMITTEE ON ENERGY AND COMMERCE

                          House of Representatives,
                          Committee on Energy and Commerce,
                                     Washington, DC, July 12, 2002.
Hon. Richard K. Armey
Chairman, House Select Committee on Homeland Security, The 
        Capitol, Washington, D.C.
    Dear Majority Leader Armey: We take pride in transmitting 
to you herewith the recommendations of the Committee on Energy 
and Commerce with respect to H.R. 5005, the Homeland Security 
Act of 2002.
    Please find enclosed (1) a Committee Print of the 
Committee's specific legislative recommendations, and (2) a 
Report on those recommendations.
    The Committee on Energy and Commerce looks forward to 
working closely with the Select Committee on H.R. 5005. Please 
do not hesitate to contact us or have your staff contact Mr. 
David V. Marventano, the Staff Director, or Mr. Reid Stuntz, 
the Minority Staff Director, if we can be of assistance.
        Sincerely,
                             W.J. ``Billy'' Tauzin,
                                                  Chairman,
                                   John D. Dingell,
                                            Ranking Member.
                                ------                                


                            Committee Print

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Homeland Security 
Act of 2002''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
Sec. 3. Construction; severability.
Sec. 4. Effective date.

                TITLE I--DEPARTMENT OF HOMELAND SECURITY

Sec. 101. Executive department; mission.
Sec. 102. Secretary; functions.
Sec. 103. Other officers.

   TITLE II--CYBERSECURITY, INFORMATION ANALYSIS, AND INFRASTRUCTURE 
                               PROTECTION

Sec. 201. Under Secretary for Cybersecurity, Information Analysis, and 
Infrastructure Protection.
Sec. 202. Functions transferred.
Sec. 203. Access to information.
Sec. 204. Information voluntarily provided.
Sec. 205. Federal cybersecurity program.

        TITLE III--RESEARCH, DEVELOPMENT AND TECHNOLOGY SYSTEMS

Sec. 301. Under Secretary for Research, Development, and Technology 
Systems.
Sec. 302. Functions transferred.
Sec. 303. Conduct of certain public health-related activities.
Sec. 304. Security at Federal research laboratories.

              TITLE IV--BORDER AND TRANSPORTATION SECURITY

Sec. 401. Under Secretary for Border and Transportation Security.
Sec. 402. Functions transferred.
Sec. 403. Visa issuance.

              TITLE V--EMERGENCY PREPAREDNESS AND RESPONSE

Sec. 501. Under Secretary for Emergency Preparedness and Response.
Sec. 502. Functions transferred.
Sec. 503. Nuclear incident response.
Sec. 504. Definition.

                          TITLE VI--MANAGEMENT

Sec. 601. Under Secretary for Management.
Sec. 602. Chief Financial Officer.
Sec. 603. Chief Information Officer.

 TITLE VII--COORDINATION WITH NON-FEDERAL ENTITIES; INSPECTOR GENERAL; 
            UNITED STATES SECRET SERVICE; GENERAL PROVISIONS

                     Subtitle B--Inspector General

Sec. 710. Authority of the Secretary.

                Subtitle C--United States Secret Service

Sec. 720. Functions transferred.

                     Subtitle D--General Provisions

Sec. 730. Establishment of human resources management system.
Sec. 731. Advisory committees.
Sec. 732. Acquisitions; property.
Sec. 733. Reorganization; transfer.
Sec. 734. Miscellaneous provisions.
Sec. 735. Authorization of appropriations.
Sec. 736. Military activities.
Sec. 737. Rule of construction regarding regulatory authority.
Sec. 738. Provisions regarding transfers from Department of Energy.

                         TITLE VIII--TRANSITION

Sec. 801. Definitions.
Sec. 802. Transfer of agencies.
Sec. 803. Transitional authorities.
Sec. 804. Savings provisions.
Sec. 805. Terminations.
Sec. 806. Incidental transfers.

             TITLE IX--CONFORMING AND TECHNICAL AMENDMENTS

Sec. 901. Inspector General Act.
Sec. 902. Executive schedule.
Sec. 903. United States Secret Service.
Sec. 904. Coast Guard.
Sec. 905. Strategic national stockpile and smallpox vaccine 
development.
Sec. 906. Biological agents; Public Health Service Act.
Sec. 907. National Bio-Weapons Defense Analysis Center.

SEC. 2. DEFINITIONS.

    The following shall apply for purposes of this Act:
            (1) The term ``American homeland'' or ``homeland'' means 
        the United States, in a geographic sense.
            (2) The term ``assets'' includes contracts, facilities, 
        property, records, unobligated or unexpended balances of 
        appropriations, and other funds or resources (other than 
        personnel).
            (3) The term ``Department'' means the Department of 
        Homeland Security.
            (4) The term ``emergency response providers'' includes 
        Federal, State, and local emergency public safety, law 
        enforcement, emergency response, emergency medical, and related 
        personnel, agencies, and authorities.
            (5) The term ``executive agency'' means an executive agency 
        and a military department, as defined, respectively, in 
        sections 105 and 102 of title 5, United States Code.
            (6) The term ``functions'' includes authorities, powers, 
        rights, privileges, immunities, programs, projects, activities, 
        duties, responsibilities, and obligations.
            (7) The term ``local government'' has the meaning given in 
        section 102(6) of the Robert T. Stafford Disaster Relief and 
        Emergency Assistance Act (Public Law 93-288).
            (8) The term ``major disaster'' has the meaning given in 
        section 102(2) of the Robert T. Stafford Disaster Relief and 
        Emergency Assistance Act (Public Law 93-288).
            (9) The term ``personnel'' means officers and employees.
            (10) The term ``Secretary'' means the Secretary of Homeland 
        Security.
            (11) The term ``United States'', when used in a geographic 
        sense, means any State (within the meaning of section 102(4) of 
        the Robert T. Stafford Disaster Relief and Emergency Assistance 
        Act (Public Law 93-288)), any possession of the United States, 
        and any waters within the jurisdiction of the United States.

SEC. 3. CONSTRUCTION; SEVERABILITY.

    Any provision of this Act held to be invalid or unenforceable by 
its terms, or as applied to any person or circumstance, shall be 
construed so as to give it the maximum effect permitted by law, unless 
such holding shall be one of utter invalidity or unenforceability, in 
which event such provision shall be deemed severable from this Act and 
shall not affect the remainder thereof, or the application of such 
provision to other persons not similarly situated or to other, 
dissimilar circumstances.

SEC. 4. EFFECTIVE DATE.

    This Act shall take effect thirty days after the date of enactment 
or, if enacted within thirty days before January 1, 2003, on January 1, 
2003.

                TITLE I--DEPARTMENT OF HOMELAND SECURITY

SEC. 101. EXECUTIVE DEPARTMENT; MISSION.

    (a) Establishment.--There is established a Department of Homeland 
Security, as an executive department of the United States within the 
meaning of title 5, United States Code.
    (b) Mission.--(1) The primary mission of the Department is to--
            (A) prevent terrorist attacks within the United States;
            (B) reduce the vulnerability of the United States to 
        terrorism; and
            (C) minimize the damage, and assist in the recovery, from 
        terrorist attacks that occur within the United States.
    (2) The Secretary shall also be responsible for carrying out the 
functions of entities transferred to the Department as provided by law.

SEC. 102. SECRETARY; FUNCTIONS.

    (a) Secretary.--(1) There is a Secretary of Homeland Security, 
appointed by the President, by and with the advice and consent of the 
Senate.
    (2) The Secretary is the head of the Department and shall have 
direction, authority, and control over it.
    (3) All functions of all officers, employees, and organizational 
units of the Department are vested in the Secretary.
    (b) Functions.--The Secretary--
            (1) may delegate any of his functions to any officer, 
        employee, or organizational unit of the Department;
            (2) may promulgate regulations as provided in section 301 
        of title 5, United States Code; and
            (3) shall have the authority to make contracts, grants, and 
        cooperative agreements, and to enter into agreements with other 
        executive agencies, as may be necessary and proper to carry out 
        his responsibilities under this Act or otherwise provided by 
        law.

SEC. 103. OTHER OFFICERS.

    (a) Deputy Secretary; Under Secretaries.--To assist the Secretary 
in the performance of his functions, there are the following officers, 
appointed by the President, by and with the advice and consent of the 
Senate:
            (1) A Deputy Secretary of Homeland Security, who shall be 
        the Secretary's first assistant for purposes of chapter 33, 
        subchapter 3, of title 5, United States Code.
            (2) An Under Secretary for Cybersecurity, Information 
        Analysis, and Infrastructure Protection.
            (3) An Under Secretary for Research, Development, and 
        Technology Systems.
            (4) An Under Secretary for Border and Transportation 
        Security.
            (5) An Under Secretary for Emergency Preparedness and 
        Response.
            (6) An Under Secretary for Management.
            (7) Not more than six Assistant Secretaries.
    (b) Inspector General.--To assist the Secretary in the performance 
of his functions, there is an Inspector General, who shall be appointed 
as provided in section 3(a) of the Inspector General Act of 1978.
    (c) Commandant of the Coast Guard.--To assist the Secretary in the 
performance of his functions, there is a Commandant of the Coast Guard, 
who shall be appointed as provided in section 44 of title 14, United 
States Code.
    (d) Other Officers.--To assist the Secretary in the performance of 
his functions, there are the following officers, appointed by the 
President:
            (1) A General Counsel, who shall be the chief legal officer 
        of the Department.
            (2) Not more than ten Assistant Secretaries.
            (3) A Director of the Secret Service.
            (4) A Chief Financial Officer.
            (5) A Chief Information Officer.
    (e) Performance of Specific Functions.--Subject to the provisions 
of this Act, every officer of the department shall perform the 
functions specified by law for his office or prescribed by the 
Secretary.

   TITLE II--CYBERSECURITY, INFORMATION ANALYSIS, AND INFRASTRUCTURE 
                               PROTECTION

SEC. 201. UNDER SECRETARY FOR CYBERSECURITY, INFORMATION ANALYSIS, AND 
                    INFRASTRUCTURE PROTECTION.

    The Secretary, acting through the Under Secretary for 
Cybersecurity, Information Analysis, and Infrastructure Protection , 
shall have responsibility for--
            (1) taking (with respect to those functions established 
        under another Act and transferred to the Secretary by this Act) 
        or seeking to effect necessary measures to protect the key 
        resources and critical infrastructures in the United States, in 
        coordination with other executive agencies and in cooperation 
        with State and local government personnel, agencies, and 
        authorities, the private sector, and other entities;
            (2) receiving and analyzing law enforcement information, 
        intelligence, and other information in order to understand the 
        nature and scope of the terrorist threat to the American 
        homeland and to detect and identify potential threats of 
        terrorism within the United States;
            (3) comprehensively assessing (in addition to, and not in 
        lieu of, assessments collected, possessed, or prepared by other 
        executive agencies) the vulnerabilities of the key resources 
        and critical infrastructures in the United States to a 
        terrorist attack or other intentional act intended to 
        substantially disrupt the functioning of such resources and 
        infrastructures;
            (4) integrating relevant information, intelligence 
        analyses, and vulnerability assessments (whether such 
        information, analyses, or assessments are provided or produced 
        by the Department or others) to identify protective priorities 
        and to support protective measures by the Department (with 
        respect to those functions established under another Act and 
        transferred to the Secretary by this Act), by other executive 
        agencies, by State and local government personnel, agencies, 
        and authorities, by the private sector, and by other entities;
            (5) developing a comprehensive national plan for securing 
        the key resources and critical infrastructures in the United 
        States to a terrorist attack or other intentional act intended 
        to substantially disrupt the functioning of such resources and 
        infrastructure;
            (6) administering the Homeland Security Advisory System, 
        exercising primary responsibility for public advisories 
        relating to terrorist threats, and (in coordination with other 
        executive agencies) providing specific warning information to 
        State and local government personnel, agencies, and 
        authorities, the private sector, other entities, and the 
        public, as well as advice about appropriate protective actions 
        and countermeasures; and
            (7) reviewing, analyzing, and making recommendations for 
        improvements in the policies and procedures governing the 
        sharing of law enforcement, intelligence, and other information 
        relating to homeland security within the Federal Government and 
        between such government and State and local government 
        personnel, agencies, and authorities.

SEC. 202. FUNCTIONS TRANSFERRED.

    In accordance with title VIII, there shall be transferred to the 
Secretary the functions, personnel, assets, and liabilities of the 
following:
            (1) The National Infrastructure Protection Center of the 
        Federal Bureau of Investigation (other than the Computer 
        Investigations and Operations Section), including the functions 
        of the Attorney General relating thereto.
            (2) The National Communications System of the Department of 
        Defense, including the functions of the Secretary of Defense 
        relating thereto.
            (3) The Critical Infrastructure Assurance Office of the 
        Department of Commerce, including the functions of the 
        Secretary of Commerce relating thereto.
            (4) The Computer Security Division of the National 
        Institute of Standards and Technology, including the functions 
        of the Secretary of Commerce relating thereto.
            (5) The energy security and assurance program and 
        activities of the Department of Energy (including the National 
        Infrastructure Simulation and Analysis Center), including the 
        functions of the Secretary of Energy relating thereto.
            (6) The Federal Computer Incident Response Center of the 
        General Services Administration, including the functions of the 
        Administrator of General Services relating thereto.

SEC. 203. ACCESS TO INFORMATION.

    The Secretary shall have access to all reports, assessments, and 
analytical information relating to threats of terrorism in the United 
States, and to all information concerning the vulnerabilities of key 
resources and critical infrastructures, or other vulnerabilities, of 
the United States to terrorism, whether or not such information has 
been analyzed, that may be collected, possessed, or prepared by any 
executive agency, except as otherwise directed by the President. The 
Secretary shall also have access to other information relating to the 
foregoing matters that may be collected, possessed, or prepared by an 
executive agency, as the President may further provide. With respect to 
the material to which the Secretary has access under this section--
            (1) the Secretary may obtain such material by request, and 
        may enter into cooperative arrangements with other executive 
        agencies to share such material on a regular or routine basis, 
        including requests or arrangements involving broad categories 
        of material;
            (2) regardless of whether the Secretary has made any 
        request or entered into any cooperative arrangement pursuant to 
        paragraph (1), all executive agencies promptly shall provide to 
        the Secretary--
                    (A) all intelligence reports, assessments, and 
                analytical information relating to threats of terrorism 
                in the United States;
                    (B) all information relating to significant and 
                credible threats of terrorism in the United States, 
                whether or not such information has been analyzed, if 
                the President has provided that the Secretary shall 
                have access to such information; and
                    (C) such other material as the President may 
                further provide; and
            (3) the Secretary shall ensure that--
                    (A) material to which the Secretary has access 
                under this section is protected from disclosure to the 
                extent provided under Federal laws other than this Act, 
                and is handled and used only for the performance of 
                official duties;
                    (B) such material that is intelligence information 
                is transmitted, retained, and disseminated consistent 
                with the authority of the Director of Central 
                Intelligence to protect intelligence sources and 
                methods under the National Security Act and related 
                procedures; and
                    (C) such material that is sensitive law enforcement 
                information is transmitted, retained, and disseminated 
                consistent with the authority of the Attorney General 
                under applicable law.

SEC. 204. INFORMATION VOLUNTARILY PROVIDED.


    [Omitted from Committee consideration]


SEC. 205. FEDERAL CYBERSECURITY PROGRAM.

    (a) In General.--The Secretary, acting through the Under Secretary 
for Cybersecurity, Information Analysis, and Infrastructure Protection, 
shall establish and manage a program to improve the security of Federal 
critical information systems, including carrying out responsibilities 
under paragraphs (2) and (3) of section 201 that relate to such 
systems.
    (b) Duties.--The duties of the Secretary under subsection (a) are--
            (1) to evaluate the increased use by civilian executive 
        agencies of techniques and tools to enhance the security of 
        Federal critical information systems, including, as 
        appropriate, consideration of cryptography;
            (2) to provide assistance to civilian executive agencies in 
        protecting the security of Federal critical information 
        systems, including identification of significant risks to such 
        systems; and
            (3) to coordinate research and development for critical 
        information systems relating to supervisory control and data 
        acquisition systems, including, as appropriate, the 
        establishment of a test bed.
    (c) Federal Information System Security Team.--
            (1) In general.--In carrying out subsection (b)(2), the 
        Secretary shall establish, manage, and support a Federal 
        information system security team whose purpose is to provide 
        technical expertise to civilian executive agencies to assist 
        such agencies in securing Federal critical information systems 
        by conducting information security audits of such systems, 
        including conducting tests of the effectiveness of information 
        security control techniques and performing logical access 
        control tests of interconnected computer systems and networks, 
        and related vulnerability assessment techniques.
            (2) Team members.--The Secretary shall ensure that the team 
        under paragraph (1) includes technical experts and auditors, 
        computer scientists, and computer forensics analysts whose 
        technical competence enables the team to conduct audits under 
        such paragraph.
            (3) Agency agreements regarding audits.--Each civilian 
        executive agency may enter into an agreement with the team 
        under paragraph (1) for the conduct of audits under such 
        paragraph of the Federal critical information systems of the 
        agency. Such agreement shall establish the terms of the audit 
        and shall include provisions to minimize the extent to which 
        the audit disrupts the operations of the agency.
            (4) Reports.--Promptly after completing an audit under 
        paragraph (1) of a civilian executive agency, the team under 
        such paragraph shall prepare a report summarizing the findings 
        of the audit and making recommendations for corrective action. 
        Such report shall be submitted to the Secretary, the head of 
        such agency, and the Inspector General of the agency (if any), 
        and upon request of any congressional committee with 
        jurisdiction over such agency, to such committee.
    (d) Definition.--For purposes of this section, the term ``Federal 
critical information system'' means an ``information system'' as 
defined in section 3502 of title 44, United States Code, that--
            (1) is, or is a component of, a key resource or critical 
        infrastructure;
            (2) is used or operated by a civilian executive agency or 
        by a contractor of such an agency; and
            (3) does not include any national security system as 
        defined in section 5142 of the Clinger-Cohen Act of 1996.

        TITLE III--RESEARCH, DEVELOPMENT AND TECHNOLOGY SYSTEMS

SEC. 301. UNDER SECRETARY FOR RESEARCH, DEVELOPMENT AND TECHNOLOGY 
                    SYSTEMS.

    The Secretary, acting through the Under Secretary for Research, 
Development, and Technology Systems, shall have responsibility for--
            (1) conducting and supporting a national scientific 
        research and development program to support the mission of the 
        Department, except that such responsibility does not extend to 
        human health-related research and development activities;
            (2) establishing long-term research and development needs 
        and capabilities for all elements of the Department;
            (3) integrating similar research and development needs 
        between the operating elements of the Department;
            (4) aligning research and development programs with other 
        executive agencies to reduce duplication and identify unmet 
        needs;
            (5) in consultation with other appropriate executive 
        agencies, developing a national policy and strategic plan for, 
        identifying priorities for, and coordinating the Federal 
        Government's civilian efforts to identify and develop 
        countermeasures to chemical, biological, radiological, nuclear, 
        and other emerging terrorist threats;
            (6) establishing priorities for, conducting, and supporting 
        national research, development, demonstration, and, as 
        appropriate, transitional operation of technology and systems--
                    (A) for preventing the importation of chemical, 
                biological, radiological, nuclear weapons and related 
                material;
                    (B) for detecting, preventing, and protecting 
                against terrorist attacks that involve such weapons or 
                related material; and
                    (C) for interoperability of communications systems 
                for emergency response providers;
            (7) establishing a central Federal repository for 
        information relating to technologies and systems described in 
        paragraph (6) for dissemination to Federal, State and local 
        government and private sector personnel, agencies and 
        authorities; and
            (8) developing nonmandatory and technology-neutral 
        standards, and providing recommendations and technical 
        assistance as appropriate, to assist Federal, State and local 
        government and private sector efforts to evaluate and implement 
        the use of technologies and systems described in subparagraphs 
        (A) and (B) of paragraph (6).

SEC. 302. FUNCTIONS TRANSFERRED.

    In accordance with title VIII, there shall be transferred to the 
Secretary the functions, personnel, assets, and liabilities of the 
following:
            (1) The program under section 351A of the Public Health 
        Service Act, and functions thereof, including the functions of 
        the Secretary of Health and Human Services relating thereto, 
        subject to the amendments made by section 906(3), except that 
        such transfer shall not occur unless the program under section 
        212 of the Agricultural Bioterrorism Protection Act of 2002 
        (subtitle B of title II of Public Law 107-188), and functions 
        thereof, including the functions of the Secretary of 
        Agriculture relating thereto, subject to the amendments made by 
        section 907, is transferred to the Department.
            (2) Such aspects of programs and activities of the 
        Department of Energy as relate to homeland security, including 
        the functions of the Secretary of Energy relating thereto (but 
        not including programs and activities relating to the strategic 
        nuclear defense posture of the United States), as follows:
                    (A) The chemical and biological national security 
                and supporting programs and activities of the non-
                proliferation and verification research and development 
                program.
                    (B) The nuclear smuggling programs and activities, 
                and other programs and activities, within the 
                proliferation detection program of the non-
                proliferation and verification research and development 
                program, except that the programs and activities 
                described in this subparagraph may be designated by the 
                President either for transfer to the Department or for 
                joint operation by the Secretary and the Secretary of 
                Energy.
                    (C) The nuclear assessment program and activities 
                of the assessment, detection, and cooperation program 
                of the international materials protection and 
                cooperation program.
                    (D) Such life sciences activities of the biological 
                and environmental research program related to microbial 
                pathogens as may be designated for transfer to the 
                Department by the President.
                    (E) The Environmental Measurements Laboratory.
                    (F) The advanced scientific computing research 
                program and activities, and the intelligence program 
                and activities, at Lawrence Livermore National 
                Laboratory.
            (3) The National Bio-Weapons Defense Analysis Center of the 
        Department of Defense, including the functions of the Secretary 
        of Defense related thereto.
            (4) The Plum Island Animal Disease Center of the Department 
        of Agriculture, including the functions of the Secretary of 
        Agriculture relating thereto.

SEC. 303. CONDUCT OF CERTAIN PUBLIC HEALTH-RELATED ACTIVITIES.

    With respect to civilian human health-related research and 
development activities relating to countermeasures for chemical, 
biological, radiological, and nuclear and other emerging terrorist 
threats carried out by the Department of Health and Human Services 
(including the Public Health Service), the Secretary of Health and 
Human Services shall set priorities for such activities in 
collaboration with the Secretary of the Department of Homeland 
Security.

SEC. 304. SECURITY AT FEDERAL RESEARCH LABORATORIES.

[Former section 304 transferred to title VII]

    The Secretary, in consultation with the Attorney General, shall 
have authority to establish standards for security at Federal civilian 
facilities, other than facilities of the Department of Energy, that 
conduct research and development to identify and develop 
countermeasures to chemical, biological, radiological, nuclear, and 
other emerging terrorist threats.

              TITLE IV--BORDER AND TRANSPORTATION SECURITY


    [Omitted from Committee consideration]


              TITLE V--EMERGENCY PREPAREDNESS AND RESPONSE

SEC. 501. UNDER SECRETARY FOR EMERGENCY PREPAREDNESS AND RESPONSE.

    The Secretary, acting through the Under Secretary for Emergency 
Preparedness and Response, shall have responsibility for--
            (1) assisting in the preparedness of emergency response 
        providers for terrorist attacks, major disasters, and other 
        emergencies;
            (2) with respect to Federal emergency response providers, 
        conducting joint and other exercises and training and 
        evaluating performance in consultation with the heads of the 
        relevant executive agencies;
            (3) with respect to emergency response functions 
        transferred to the Secretary by this Act, providing the Federal 
        Government's response to terrorist attacks and major disasters;
            (4) coordinating other Federal response resources in the 
        event of a terrorist attack or major disaster;
            (5) assisting in the recovery from terrorist attacks and 
        major disasters;
            (6) building a comprehensive national incident management 
        system with Federal, State, and local government personnel, 
        agencies, and authorities, to respond to such attacks and 
        disasters;
            (7) consolidating existing Federal Government emergency 
        response plans into a single, coordinated national response 
        plan; and
            (8) with respect to Federal programs that provide 
        assistance to emergency response providers to enhance 
        preparedness and response for terrorist attacks or major 
        disasters--
                    (A) identifying preparedness priorities;
                    (B) evaluating the effectiveness of, and 
                coordination among, such programs; and
                    (C) making recommendations to enhance the 
                effectiveness of such programs, and to minimize 
                inconsistencies and duplication among such programs.

SEC. 502. FUNCTIONS TRANSFERRED.

    In accordance with title VIII, there shall be transferred to the 
Secretary the functions, personnel, assets, and liabilities of the 
following:
            (1) The Federal Emergency Management Agency, including the 
        functions of the Director of the Federal Emergency Management 
        Agency relating thereto.
            (2) The Office for Domestic Preparedness of the Office of 
        Justice Programs, including the functions of the Attorney 
        General relating thereto.
            (3) The National Domestic Preparedness Office of the 
        Federal Bureau of Investigation, including the functions of the 
        Attorney General relating thereto.
            (4) The Domestic Emergency Support Teams of the Department 
        of Justice, including the functions of the Attorney General 
        relating thereto.
            (5) The Office of Emergency Preparedness, the National 
        Disaster Medical System, and the Metropolitan 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) To the extent provided pursuant to the amendments made 
        by section 905, the Strategic National Stockpile of the 
        Department of Health and Human Services.

SEC. 503. NUCLEAR INCIDENT RESPONSE.

    (a) Nuclear Incident Response Team.--At the direction of the 
Secretary (in connection with an actual or threatened terrorist attack 
or major disaster), 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) Construction.--Nothing in this title limits the authority of 
the Secretary of Energy or the Administrator of the Environmental 
Protection Agency to organize, train, equip, or utilize their 
respective entities in the Nuclear Incident Response Team, or to 
exercise direction, authority, and control of their respective entities 
when the entities are not operating as a unit of the Department.

SEC. 504. DEFINITION.

    For purposes of this title, ``nuclear incident response team'' 
means a resource that includes--
            (1) those entities of the Department of Energy that perform 
        nuclear or radiological emergency support functions (including 
        accident response, search response, advisory, and technical 
        operations functions), radiation exposure functions at the 
        medical assistance facility known as Oak Ridge National 
        Laboratory, radiological assistance functions, and related 
        functions; and
            (2) those entities of the Environmental Protection Agency 
        that perform radiological emergency response and support 
        functions.

[SEC. 505. CONDUCT OF CERTAIN PUBLIC HEALTH-RELATED ACTIVITIES.]


    [The Committee Print strikes section 505.]


                          TITLE VI--MANAGEMENT


    [Omitted from Committee consideration]


 TITLE VII--COORDINATION WITH NON-FEDERAL ENTITIES; INSPECTOR GENERAL; 
            UNITED STATES SECRET SERVICE; GENERAL PROVISIONS


    [Omitted from Committee consideration, except section 701; 733; the 
addition of a section 736 (transferred from title III of the bill); and 
the addition of new sections 737 and 738.]


[SEC. 701. RESPONSIBILITIES.]


    [The Committee Print strikes section 701.]


SEC. 733. REORGANIZATION; TRANSFER.

    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 after 
the expiration of 90 days after providing notice of such action to the 
Congress, which shall include an explanation of the rationale for the 
action. Authority under this section does not extend to the abolition 
of any entity established or required to be maintained as a distinct 
entity by this Act, or to any entity or function transferred to the 
Department by this Act and established by statute.

SEC. 736. MILITARY ACTIVITIES.

[Formerly was section 304]

    Except as specifically provided in this Act, nothing in this Act 
shall confer upon the Secretary any authority to engage in warfighting, 
the military defense of the United States, or other traditional 
military activities.

SEC. 737. RULE OF CONSTRUCTION REGARDING TRANSFER OF AUTHORITY.

    (a) Regulatory Authority.--With respect to regulatory authority 
(whether applying by order, by regulation, or by direct operation of 
law), this Act may not be construed as--
            (1) establishing such authority for the Secretary, except 
        to the extent that a function transferred to the Secretary by 
        section 202, 302, 402, 403, 502, or 720 includes such 
        authority; or
            (2) altering or diminishing such authority of any other 
        executive agency, except to the extent that a function of such 
        agency that includes such authority is transferred to the 
        Secretary by a section specified in paragraph (1).
    (b) Other Authority.--With respect to authority that is not 
regulatory authority, this Act may not be construed as--
            (1) transferring to the Secretary such authority of another 
        executive agency, except to the extent that a function 
        transferred to the Secretary by a section specified in 
        subsection (a)(1) includes such authority; or
            (2) altering or diminishing such authority of any other 
        executive agency, except to the extent that--
                    (A) a function of such agency that includes such 
                authority is transferred to the Secretary by a section 
                specified in subsection (a)(1); or
                    (B) with respect to functions not so transferred to 
                the Secretary, such agency is required by this Act to 
                coordinate or collaborate with the Secretary, or to 
                provide information or documents to the Secretary.

SEC. 738. PROVISIONS REGARDING TRANSFERS FROM DEPARTMENT OF ENERGY.

    (a) Separate Contracting.--To the extent that programs or 
activities transferred by this Act from the Department of Energy to the 
Department of Homeland Security are being carried out through contracts 
with the operator of a national laboratory of the Department of Energy, 
the Secretary of Homeland Security and the Secretary of Energy shall 
ensure that contracts for such programs and activities between the 
Department of Homeland Security and such operator are separate from the 
contracts of the Department of Energy with such operator.
    (b) Reimbursement of Costs.--In the case of an activity carried out 
by the operator of a national laboratory of the Department of Energy 
but under contract with the Department of Homeland Security, the 
Department of Homeland Security shall reimburse the Department of 
Energy for costs of such activity through a method under which the 
Secretary of Energy waives any requirement for the Department of 
Homeland Security to pay administrative charges or personnel costs of 
the Department of Energy or its contractors in excess of the amount 
that the Secretary of Energy pays for an activity carried out by such 
contractor and paid for by the Department of Energy.

                         TITLE VIII--TRANSITION


    [Omitted from Committee consideration]


             TITLE IX--CONFORMING AND TECHNICAL AMENDMENTS


    [Sections 901 through 904 omitted from Committee consideration]


SEC. 905. STRATEGIC NATIONAL STOCKPILE AND SMALLPOX VACCINE 
                    DEVELOPMENT.

    (a) In General.--The Public Health Security and Bioterrorism 
Preparedness and Response Act of 2002 is amended--
            (1) in section 121(a)(1)--
                    (A) by striking ``Secretary of Health and Human 
                Services'' and inserting ``Secretary of Homeland 
                Security'';
                    (B) by inserting ``the Secretary of Health and 
                Human Services and'' between ``in coordination with'' 
                and ``the Secretary of Veterans Affairs''; and
                    (C) by inserting ``of Health and Human Services'' 
                after ``as are determined by the Secretary''; and
            (2) in subsections 121(a)(2) and (b), by inserting ``of 
        Health and Human Services'' after ``Secretary'' each place it 
        appears.
    (b) Effective Date.--The amendments made by this section shall take 
effect on the date of transfer of the Strategic National Stockpile of 
the Department of Health and Human Services to the Department.

SEC. 906. BIOLOGICAL AGENT REGISTRATION; PUBLIC HEALTH SERVICE ACT.

    (a) Public Health Service Act.--The Public Health Service Act is 
amended--
            (1) in section 351A(a)(1)(A), by inserting ``(as defined in 
        subsection (l)(9))'' after ``Secretary'';
            (2) in section 351A(h)(2)(A), by inserting ``Department of 
        Homeland Security, the'' before ``Department of Health and 
        Human Services''; and
            (3) in section 351A(l), by inserting after paragraph (8) a 
        new paragraph as follows:
            ``(9) The term `Secretary' means the Secretary of Homeland 
        Security, in consultation with the Secretary of Health and 
        Human Services.''.
    (b) Public Health Security and Bioterrorism Preparedness and 
Response Act of 2002.--Section 201(b) of the Public Health Security and 
Bioterrorism Preparedness and Response Act of 2002 is amended by 
striking ``Secretary of Health and Human Services'' and inserting 
``Secretary of Homeland Security''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date of transfer of the select agent registration 
enforcement programs and activities of the Department of Health and 
Human Services to the Department.

SEC. 907. NATIONAL BIO-WEAPONS DEFENSE ANALYSIS CENTER.


    [Omitted from Committee consideration]

  the recommendations of the committee on energy and commerce to the 
    select committee on homeland security concerning h.r. 5005, the 
                     homeland security act of 2002

                  Background and Need for Legislation

    The events of September 11, 2001, and other acts of 
terrorism since then, have highlighted the need for a stronger 
emphasis on homeland security. President Bush recognized this 
need by mobilizing, upgrading, and coordinating Federal 
resources, and by appointing Governor Tom Ridge as the Director 
of a newly created Office of Homeland Security to lead the 
effort in enhancing the security of our country and its 
citizens.On June 18, 2002, President Bush sent to Congress a 
proposed bill to establish a Department of Homeland Security. 
Majority Leader Dick Armey introduced the President's bill on 
June 24, 2002, as H.R. 5005, the Homeland Security Act of 2002. 
The bill would consolidate a number of Federal agencies, 
offices, programs, and functions in a new Department in an 
effort to streamline and enhance homeland security efforts, and 
to apply increased direction, coordination, and focus to 
homeland security issues. The general concept of creating such 
a Cabinet-level department has been supported on a bipartisan 
basis. The Committee on Energy and Commerce has direct 
jurisdiction over much of H.R. 5005, including issues contained 
in Title II on cybersecurity, information analysis, and 
infrastructure protection; Title III on research and 
development programs within the Department of Energy (DOE) and 
the Department of Health and Human Services (HHS), and on the 
selection, safety and security of dangerous biological agents; 
Title V on emergency preparedness and response; and related 
provisions elsewhere in the bill.
    Given the Committee's decades of experience dealing with 
complex public health and energy-related policy issues, and its 
aggressive oversight of Federal agencies in these same areas, 
the Committee has the primary expertise to ensure that programs 
within DOE and HHS are coordinated with, or transferred to, 
programs in the new Department of Homeland Security in a manner 
that best effectuates the dual goals of increasing homeland 
security and preserving other national priorities in the health 
and energy areas. Indeed, on June 12, 2002, the President 
signed into law the Public Health Security and Bioterrorism 
Preparedness and Response Act of 2002 (Public Law 107-188), on 
which this Committee spent months of careful work and 
thoughtful deliberation. This critical legislation will greatly 
enhance the structure, coordination, and effectiveness of 
Federal programs for bioterrorism and other public health 
emergency preparedness and response by building up the Nation's 
public health infrastructure. This Act also takes important 
steps to improve the safety, security, and tracking of 
dangerous biological agents and toxins, as well as the 
protection of our food and drinking water supplies.
    In the area of critical infrastructure protection 
(including cyber security)--addressed in Title II of H.R. 
5005--the Committee also has extensive expertise, as the 
Committee is responsible for policy and oversight of the 
Nation's key critical infrastructures. These include the energy 
and telecommunications systems, chemical, oil and gas, and 
nuclear facilities, and the food and drinking water supplies. 
The Committee has used its expertise in this area, as well as 
the other areas discussed above, to craft a strongly bipartisan 
Committee Print to enhance homeland security, and to ensure the 
most effective approach with respect to the new Department of 
Homeland Security.

                                Hearings

    On Tuesday, June 25, 2002, the Subcommittee on Oversight 
and Investigations held a hearing on ``Creating the Department 
of Homeland Security: Consideration of the Administration's 
Proposal,'' focusing on the emergency preparedness and response 
functions proposed for transfer to the new Department. The 
Subcommittee received testimony from: The Honorable Tom Ridge, 
The White House; The Honorable Claude Allen, Deputy Secretary, 
Department of Health and Human Services; General John A. 
Gordon, Administrator, National Nuclear Security 
Administration; Ms. Jan Heinrich, Director, Health Care and 
Public Health Issues, U.S. General Accounting Office; Dr. Harry 
C. Vantine, Program Leader, Counterterrorism and Incident 
Response, Lawrence Livermore National Laboratory; Mr. David 
Nokes, Director, Systems Assessment and Research Center, Sandia 
National Laboratories; Dr. Donald D. Cobb, Associate Director 
for Threat Reduction, Los Alamos National Laboratory; Dr. Lew 
Stringer, Medical Director, Division of Emergency Management, 
North Carolina Department of Crime Control and Public Safety; 
Mr. Edward P. Plaugher, Chief, Arlington County Fire 
Department, Executive Agent for the Washington Area National 
Medical Response Team; Mr. Philip Anderson, Senior Fellow, 
Center for Strategic and International Studies; Dr. Ronald 
Atlas, President-Elect, American Society for Microbiology; and 
Dr. Tara O'Toole, Director, Center for Civilian Biodefense 
Studies, Johns Hopkins University.
    On Tuesday, July 9, 2002, the Subcommittee on Oversight and 
Investigations continued its hearing on ``Creating the 
Department of Homeland Security: Consideration of the 
Administration's Proposal,'' focusing on the research and 
development and critical infrastructure activities proposed for 
transfer to the new Department. The Subcommittee received 
testimony from: Mr. Jerome Hauer, Director, Office of Public 
Health Emergency Preparedness, Department of Health and Human 
Services; Ms. Jan Heinrich, Director, Health Care and Public 
Health Issues, U.S. General Accounting Office; Dr. Gail 
Cassell, Vice President, Scientific Affairs, Distinguished 
Lilly Research Scholar for Infectious Diseases, Eli Lilly and 
Company; Dr. Margaret Hamburg, Vice President, Biological 
Programs, Nuclear Threat Initiative; Mr. John S. Tritak, 
Director, Critical Infrastructure Assurance Office, Department 
of Commerce; Mr. James McDonnell, Director, Energy Security and 
Assurance Program, Department of Energy; Dr. Samuel G. Varnado, 
Director, Infrastructure and Information Systems Center, Sandia 
National Laboratories; Dr. Donald D. Cobb, Associate Director 
for Threat Reduction, Los Alamos National Laboratory; Mr. 
Robert F. Dacey, Director, Information Security Issues, U.S. 
General Accounting Office; Mr. William Smith, Executive Vice 
President, Network Operations, BellSouth; Mr. Guy Copeland, 
Vice President, Information Infrastructure Advisory Programs, 
Federal Sector, Computer Sciences Corporation, on behalf of the 
Information Technology Association of America; Ms. Lynn P. 
Costantini, Director, Online Services, North American Electric 
Reliability Council; Mr. John P. Sullivan, Jr., President and 
Chief Engineer, Boston Water and Sewer Commission, on behalf of 
the Association of Metropolitan Water Agencies; Mr. Kenneth C. 
Watson, President, Partnership for Critical Infrastructure 
Security, Cisco Systems, Inc.; Mr. Jeremiah Baumann, 
Environmental Health Advocate, U.S. Public Interest Research 
Group; Mr. David L. Sobel, General Counsel, Electronic Privacy 
Information Center; Mr. Jason Ahearn, Assistant Commissioner, 
Field Operations, United States Customs Service; Ambassador 
Linton Brooks, Acting Administrator, National Nuclear Security 
Administration; Ms. Gary Jones, Director, Natural Resources and 
Environment Issues, U.S. General Accounting Office; Mr. Frank 
Panico, Manager, International Networks and Transportation, 
United States Postal Service; Mr. David Nokes, Director, 
Systems Assessment and Research Center, Sandia National 
Laboratories; Dr. Wayne J. Shotts, Associate Director for 
Nonproliferation, Arms Control and International Security, 
Lawrence Livermore National Laboratory; Mr. Steven W. Martin, 
Director, Homeland Security Programs, Pacific Northwest 
National Laboratory; Mr. Robert A. Bryden, Vice President, 
Corporate Security, FedEx Corporation; Mr. Jim Holsen, Vice 
President, Engineering, United Parcel Service, Inc.; and Mr. 
Barry Howe, Vice President, Thermo Electron Corporation.

                        Committee Consideration

    On Thursday, July 11, 2002, the Full Committee met in open 
markup session for the consideration of a Committee Print to 
provide recommendations to the Select Committee on Homeland 
Security with respect to H.R. 5005, and approved the Committee 
Print, without amendment, by voice vote.

             Section-by-Section Analysis of the Legislation

Section 1. Short Title; Table of Contents.
    Section 1 of H.R. 5005 sets forth the title and table of 
contents of this Act. The Committee Print makes only technical 
and conforming changes to this section.
Section 2. Definitions.
    Section 2 of H.R. 5005 sets forth the definitions for 
certain terms used in this Act. The Committee Print makes a 
change to the definition of the term ``emergency response 
providers'' to ensure that non-governmental personnel are 
included within the definition used in this Act.
Section 3. Construction; Severability.
    Section 3 of H.R. 5005 sets forth a rule of construction 
regarding severability of the Act's provisions. The Committee 
Print does not make any changes to this section.
Section 4. Effective Date.
    Section 4 of H.R. 5005 sets forth the effective date of the 
Act. The Committee Print does not make any changes to this 
section.

                title i--department of homeland security

Section 101. Executive Department; Mission.
    Section 101 of H.R. 5005 establishes the Department of 
Homeland Security and sets forth its primary mission and 
responsibilities. The Committee Print alters this section of 
H.R. 5005 by striking subsection (b)(2)--which sets forth 
primary responsibilities of the Department using different 
language than that which is contained in subsequent titles of 
the bill--in order to avoid potential confusion or 
misinterpretation of the specific responsibilities provided to 
the new Department.
Section 102. Secretary; Functions.
    Section 102 of H.R. 5005 establishes a Secretary for the 
new Department and sets forth the Secretary's functions and 
authorities. The Committee Print alters subsection (b)(2)--
which authorizes the promulgation of regulations by the 
Secretary--by adding the phrase ``as provided in section 301 of 
title 5, United States Code.'' The intent of this change is to 
ensure that the regulatory authority granted to the Secretary 
in this section is circumscribed to administrative matters 
relating to the organization and functioning of the Department.
Section 103. Other Officers.
    Section 103 of H.R. 5005 sets forth other officers of the 
Department, including a Deputy Secretary and five Under 
Secretaries. The Committee Print makes only technical and 
conforming changes to this section.

   title ii--cybersecurity, information analysis and infrastructure 
                               protection

Section 201. Undersecretary for Cybersecurity, Information Analysis and 
        Infrastructure Protection.
    Section 201 of H.R. 5005 establishes an Undersecretary for 
Information Analysis and Infrastructure Protection, whose 
responsibilities include: receiving and analyzing law 
enforcement, intelligence, and other information regarding 
terrorist threats; comprehensively assessing the 
vulnerabilities of key resources and critical infrastructures 
in the United States; integrating relevant information, 
intelligence analyses, and vulnerability assessments; 
developing a comprehensive national plan for securing key 
resources and critical infrastructures in the United States; 
taking or seeking to effect necessary measures to protect key 
resources and critical infrastructures in the United States; 
administering the Homeland Security Advisory System; and making 
recommendations for improvements in the policies and procedures 
for sharing of law enforcement, intelligence and other 
information.
    The Committee Print makes six changes to this section as 
introduced. First, the Committee Print clarifies that the 
Secretary's responsibility to comprehensively assess critical 
infrastructure vulnerabilities is a function that is in 
addition to, and not in lieu of, assessments collected, 
possessed, or prepared by other executive agencies. Second, the 
Committee Print clarifies that the responsibilities of the 
Secretary in this section to assess critical infrastructure 
vulnerabilities and to develop a national plan for securing 
those infrastructures are related to threats to those 
infrastructures posed by ``a terrorist attack or other 
intentional act intended to substantially disrupt the 
functioning of such resources and infrastructures.'' Third, the 
Committee Print clarifies that the Secretary's responsibility 
for public advisories is limited to those relating to terrorist 
threats. Fourth, the Committee Print renames the Undersecretary 
for Information Analysis and Infrastructure Protection, as 
proposed in H.R. 5005, to the ``Undersecretary for 
Cybersecurity, Information Analysis and Infrastructure 
Protection,'' in order to emphasize the role of the Department 
relating to cybersecurity.
    Fifth, by striking the word ``primary'' before 
``responsibility''in the first sentence of this section as 
introduced, the Committee Print makes clear that the 
Secretary's responsibilities do not alter or diminish the 
authority of another executive agency, except to the extent 
that a function of such agency that includes such authority is 
transferred to the Department under this Act. Finally, in 
sections 201(1) and 201(4), the Committee Print clarifies that 
the Secretary's authority to ``take'' necessary measures and to 
``support protective measures by the Department'' is limited to 
those functions established under another Act and transferred 
to the Department by this Act.
Section 202. Functions Transferred.
    Section 202 of H.R. 5005 transfers to the Department the 
following functions or programs of other executive agencies: 
the National Infrastructure Protection Center of the Federal 
Bureau of Investigation (FBI) (other than the Computer 
Investigations and Operations Section); the National 
Communications System at the Department of Defense (DOD); the 
Critical Infrastructure Assurance Office of the Department of 
Commerce (DOC); the Computer Security Division of the National 
Institute of Standards and Technology (NIST); the National 
Infrastructure Simulation and Analysis Center (NISAC) of the 
Department of Energy (DOE); and the Federal Computer Incident 
Response Center of the General Services Administration (GSA).
    The Committee Print makes one change to this section from 
H.R. 5005, as introduced. The Committee Print includes the 
transfer of the DOE energy security and assurance program in 
section 202, moving it from section 303 of H.R. 5005. The 
Committee recognizes that the NISAC, which is operated jointly 
by Sandia National Laboratories and Los Alamos National 
Laboratory, has been established as part of the energy security 
and assurance program at DOE. Rather than transferring the 
NISAC and its functions to the Undersecretary for 
Cybersecurity, Information Analysis and Infrastructure 
Protection, and also separately transferring the energy 
assurance and security program to the Undersecretary for 
Research, Development and Technology Systems, the Committee 
Prints consolidates the transfer of both programs in section 
202.
Section 203. Access to Information
    Section 203 of H.R. 5005 provides the Secretary with access 
to all reports, assessments, and analytical information 
relating to threats of terrorism in the United States, and to 
information concerning the vulnerabilities of key resources and 
critical infrastructures, or other vulnerabilities, of the 
United States to terrorism that may be collected, possessed, or 
prepared by any executive agency. In addition, this section 
requires all executive agencies to promptly provide, regardless 
of whether the Secretary has requested, all intelligence 
reports, assessments and analytical information relating to 
threats of terrorism in the United States, all information 
concerning infrastructure and other vulnerabilities, and all 
information relating to significant and credible threats of 
terrorism in the United States, whether or not such information 
has been analyzed. Section 203 also requires the Secretary to 
ensure that such information is protected from unauthorized 
disclosure.
    The Committee Print makes two changes to section 203 of 
H.R. 5005, as introduced. First, it changes section 203 by 
eliminating the requirement for all executive agencies to 
provide, regardless of whether requested, all information 
concerning infrastructure and other vulnerabilities of the 
United States to terrorism. The Committee is concerned that the 
phrase ``all information concerning infrastructure'' included 
in section 203(2)(B) of H.R. 5005 is overly broad in scope, and 
that requiring all such information to be submitted to the 
Secretary automatically, including in situations where the 
Secretary has not requested such information, could inundate 
the Secretary with information and make it more difficult to 
identify the most significant vulnerabilities to terrorism of 
critical infrastructures in the United States. As a result, the 
Committee strikes the provision from the bill requiring the 
delivery of such information regardless of whether the 
Secretary has requested it; however, the Secretary retains the 
authority to request such information. Second, the Committee 
Print clarifies that the Secretary's obligation to protect from 
unauthorized disclosure information to which the Secretary has 
access under this section means that the Secretary shall ensure 
that such information is protected from disclosure to the 
extent provided under Federal laws other than this Act.
Section 204 Omitted from Committee consideration.
Section 205. Federal Cybersecurity Program.
    There is no comparable provision in H.R. 5005. Section 205 
of the Committee Print creates a new Federal cybersecurity 
program. Section 205 directs the Secretary to establish and 
manage a program to improve the security of Federal critical 
information systems. It establishes three duties for the 
Secretary. First, the Secretary is responsible for evaluating 
the increased use by civilian executive agencies of techniques 
and tools to enhance the security of Federal critical systems, 
including, as appropriate, consideration of cryptography. 
Second, the Secretary is responsible for providing assistance 
to civilian executive agencies in protecting the security of 
Federal critical information systems, including identification 
of significant risks to such systems. Third, the Secretary is 
responsible for coordinating research and development to 
enhance the security of critical information systems, including 
supervisory control and data acquisition systems, including, as 
appropriate, the establishment of a test bed.
    Section 205 also establishes, as part of the program to 
improve security of Federal critical information systems, a 
Federal Information System Security Team to provide technical 
expertise to civilian executive agencies by conducting 
cybersecurity audits of civilian executive agency information 
systems (other than national security systems), in accordance 
with agreements between the Secretary and the head of such 
agencies. This team will be comprised of computer security 
technical experts who will conduct tests of the effectiveness 
of logical access controls of interconnected computer systems 
and networks of civilian executive agencies and contractors, 
including penetration tests and other vulnerability assessment 
techniques on Federal critical information systems.
    The Committee includes section 205 in the Committee Print 
because greater emphasis is needed on information security of 
Federal critical information systems, and on research and 
development to enhance security of the Nation's critical 
information systems. Over the past several years, the Committee 
has conducted a series of investigations, including information 
security reviews at HHS, DOE, the Department of Commerce (DOC), 
and the Environmental Protection Agency (EPA). The U.S. General 
Accounting Office (GAO) has performed many of the information 
security audits for the Committee, and has documented the 
results of its penetration testing in a series of reports that 
found pervasive computer security weaknesses.
    Moreover, many of the Nation's critical infrastructures are 
controlled and maintained using process control, operations, 
and maintenance technologies, called supervisory access control 
and data acquisition (SCADA) systems. These are information 
systems and computer networks that serve command and control 
functions for such critical infrastructures as electric power 
distribution and drinking water systems. The Committee supports 
the transfer of the National Infrastructure Simulation and 
Analysis Center to the Department of Homeland Security and 
recognizes the work of Sandia and Los Alamos National 
Laboratories in the area of SCADA systems. As part of its 
cybersecurity program under section 205, the Committee 
encourages the Secretary to develop a program to identify and 
address potential vulnerabilities of SCADA systems.

        title iii--research, development, and technology systems

Section 301. Under Secretary for Research, Development and Technology 
        Systems.
    Section 301 of H.R. 5005 creates an Under Secretary for 
Chemical, Biological, Radiological and Nuclear Countermeasures, 
whose principal responsibilities include: conducting a national 
research and development program to support the mission of the 
Department; coordinating Federal civilian efforts to identify, 
develop, and demonstrate countermeasures and technologies to 
protect against chemical, biological, radiological, and nuclear 
terrorist threats; and establishing guidelines for state and 
local government efforts to implement such countermeasures.
    The Committee Print makes several significant changes to 
section 301. First, it changes the title of this officer to the 
Under Secretary for Research, Development and Technology 
Systems in order to reflect the principal responsibilities 
assigned to the Under Secretary, and to emphasize the critical 
role of research, development, and technology in the new 
Department. Second, the Committee Print clarifies that the 
Department will not conduct human health-related research and 
development activities (for reasons more fully described in 
section 303), but will nonetheless play an important role in 
identifying priorities and developing national policy and a 
strategic plan for such research as it pertains to the threats 
of biological, chemical, radiological, and nuclear terrorism. 
The Committee notes that other executive agencies shall 
continue to carry out their similar responsibilities under 
existing authorities, and the new Department shall consult 
closely with such agencies in carrying out its planning and 
coordination roles. Third, the Committee Print adds additional 
responsibilities to the Secretary with respect to research and 
development within and for the Department, and among its 
various elements.
    Moreover, the Committee Print directs the Secretary to 
establish, acting through the Under Secretary, a central 
Federal repository to receive and, as appropriate, review 
solicited and unsolicited submissions relating to homeland 
security-relevant technologies and systems developed by the 
Department, universities and other academic institutions, other 
governmental agencies, and the private sector. The purpose of 
this repository is to serve as a centralized clearinghouse for 
commercial, governmental, and other technology developers, and 
for the dissemination of information about available 
technologies and systems to appropriate Federal, state and 
local governments, emergency response providers, and private 
sector users of such technologies and systems. The Under 
Secretary shall also recommend to the Secretary changes 
necessary to improve policies relating to the acquisition of 
information about governmental, commercial, and other homeland 
security technologies, and regarding the procurement of those 
technologies. Finally, the Committee Print gives the Secretary 
responsibility for developing nonmandatory and technology-
neutral standards, and providing recommendations and technical 
assistance as appropriate, to assist the government and private 
sector in evaluating and implementing the use of such 
technologies.
Section 302. Functions Transferred.
    Section 302 of H.R. 5005 transfers specific functions and 
programs from other executive agencies to the new Department, 
specifically (1) the select agent program of HHS for the 
possession and transfer of dangerous biological agents and 
toxins; (2) various DOE research, development, and assessment 
programs relating to chemical, biological, radiological and 
nuclear agents; and, (3) two other research centers from DOD 
and the Department of Agriculture (USDA).The Committee Print 
amends the transfer of the HHS select agent program by making 
it conditional upon the transfer of the overlapping select 
agent program of USDA to the new Department, as well as upon a 
continuing consultation role for the Secretary of HHS in all 
aspects of the program. While the Committee recognizes the 
disadvantages to transferring the HHS select agent program from 
a scientific, research-oriented agency to a department whose 
focus is combating terrorism, the Committee believes that, on 
balance, the advantages of transferring the program will 
outweigh the disadvantages, provided that the companion program 
currently at USDA is transferred as well. If both programs are 
transferred to a single department, it will enhance the 
coordination and joint registration and regulatory system 
required under the Public Heath Security and Bioterrorism 
Preparedness and Response Act of 2002. However, if the 
agricultural select agent program remains at USDA, then the 
Committee views the transfer of the HHS program to the new 
Department as only exacerbating the existing coordination 
problems by involving yet a third government agency (since the 
HHS consultation role will and must continue).
    With respect to the DOE programs, the Committee Print 
modifies this category of transfers to the new Department by 
emphasizing that only those aspects of these programs that are 
related to homeland security would be transferred to the new 
Department. The Committee recognizes that many of these 
programs serve vital interests and responsibilities of the 
Department of Energy, and thus care must be taken to ensure 
that DOE is not left without critical abilities and resources, 
and that unrelated programs are not transferred.
Section 303. Conduct of Certain Public Health-Related Activities.
    Section 303 of H.R. 5005 provides that, except as the 
President otherwise may direct, the Secretary shall carry out 
his responsibilities for civilian, human health-related 
biological, biomedical, and infectious disease defense research 
and development through HHS, under agreements with the HHS 
Secretary; may transfer funds to the HHS Secretary for carrying 
out such research; and has the authority to establish the 
research and development program and set its priorities, in 
consultation with the HHS Secretary. It also permits similar 
arrangements between the new Department and other executive 
agencies.
    The Committee Print revises section 303 in accordance with 
amendments made to section 301, which clarify that the new 
Department will not have authority to conduct human health-
related research and development. In recognition of the fact 
that the new Department will have important intelligence, 
threat, and vulnerability-related information necessary for the 
identification of certain research priorities, the Committee 
Print provides that the Secretary of HHS shall set priorities 
in collaboration with the Secretary of the Department of 
Homeland Security with respect to human health-related research 
and development activities on countermeasures for chemical, 
biological, radiological, and nuclear terrorist threats. The 
Committee Print also eliminates the transfer of funds provision 
in this section.
    The reasons for these changes are substantial. The 
Committee understands, based on testimony from Governor Ridge, 
that it was not the intent behind the Administration's proposal 
in this area to grant the new Secretary authority to conduct or 
unilaterally direct the research and development programs 
carried out by HHS through the National Institutes of Health 
(NIH) and the Centers for Disease Control and Prevention (CDC). 
However, the original statutory language of section 303 appears 
to grant such authority. The Committee's amendments seek to 
ensure that the primary responsibility for such research 
remains with HHS, while requiring that the HHS Secretary 
collaborate with the Secretary of Homeland Security with 
respect to setting priorities for research activities involving 
countermeasures for chemical, biological, radiological, or 
nuclear terrorism. As experts with GAO emphasized in testimony 
before the Committee on H.R. 5005, much of the terrorism-
related research currently being performed by HHS, through NIH 
and CDC, is dual-purpose in nature, and the Committee believes 
it would be counter-productive to separate such purposes, even 
if it could be done. Accordingly, the Committee believes it 
would be inappropriate for the Homeland Security Department to 
control this research agenda. Similar concerns have been 
expressed by a wide range of national, state, and local health 
and research-related associations. The approach adopted by the 
Committee Print responds to such concerns.
    The Committee also believes it would be unwise, 
unnecessary, and administratively cumbersome for the funds for 
such activities to be appropriated in the first instance to the 
new Department, only to be ``contracted'' back to HHS for 
further distribution to NIH, CDC, and the hundreds of grant 
recipients conducting such research. The Committee understands 
the need and desire of the Administration to improve the 
coordination of funding on such research activities across the 
Federal government. But the Committee believes that such 
coordination can occur without the control of HHS funds that 
H.R. 5005 contemplates, by providing in section 301 an explicit 
grant of authority to the new Secretary to coordinate all 
Federal civilian research efforts in this area. Indeed, under 
the original Administration proposal, the new Secretary would 
not receive control over the substantial research funds of 
other agencies that conduct research activities similar to 
those of HHS, including the Departments of Defense, Veterans' 
Affairs, and Agriculture, the Central Intelligence Agency, and 
others. Given that fact, the Committee does not believe that 
budgetary control is necessary with respect to HHS research 
dollars in order to ensure such coordination.
Section 304. Security at Federal Research Laboratories.
    The Committee Print moves section 304 of H.R. 5005, 
entitled ``Military Activities,'' to section 736 of this Act 
without further change, and creates a new section 304 regarding 
security at Federal civilian research laboratories. The 
Committee Print adopts the concept for this section from 
section 505(a)(1) of H.R. 5005, which the Committee understands 
to grant certain authorities to the new Secretary with respect 
to security-related enhancements to certain HHS research 
facilities. The Committee Print revises the language to ensure 
that the scope of the new Secretary's authority is broadened to 
include all Federal civilian research facilities (except for 
those of the Department of Energy), but appropriately limits 
such authority to setting standards for the security of 
facilities conducting research to identify and develop 
countermeasures to chemical, biological, radiological, or 
nuclear terrorism.

              title iv--border and transportation security

    Title IV was omitted from Committee consideration.

              title v--emergency preparedness and response

Section 501. Under Secretary for Emergency Preparedness and Response.
    Section 501 of H.R. 5005 creates an Under Secretary for 
Emergency Preparedness and Response, whose principal 
responsibilities include enhancing the preparedness of 
emergency response providers at the Federal, state and local 
levels for terrorist attacks, major disasters, and other 
emergencies; managing the Federal government's response to 
terrorist attacks and major disasters, including directing 
certain response assets under the Department's control and 
coordinating other Federal response resources; assisting in the 
recovery from such attacks or disasters; establishing standards 
and conducting joint and other exercises and training for the 
Federal nuclear incident response teams; and developing and 
promoting acquisition of interoperable communications 
technology for emergency response providers.
    The Committee Print makes modifications to section 501 of 
H.R. 5005, including adding a new paragraph (8) that provides 
the Secretary with additional responsibilities with respect to 
Federal assistance programs to enhance the preparedness of 
state and local emergency response providers for terrorist 
attacks. Specifically, the Secretary will have the 
responsibility to identify preparedness priorities for all such 
programs (including those run by HHS), to evaluate the 
effectiveness and coordination of such programs to eliminate 
inconsistencies and duplication, and to make recommendations to 
enhance the effectiveness of such programs.
    Through amendments to sections 501(3) and (4), the 
Committee Print ensures that the new Homeland Security 
Department will have the responsibility for coordinating all 
Federal response resources in the event of a terrorist attack 
or major disaster. Importantly, however, the Committee Print 
eliminates any suggestion that the new Department will itself 
direct programs that are under the jurisdiction of other 
executive agencies. The Committee believes such language could 
supercede authorizations, duties, and responsibilities under 
other laws, such as the Public Health Service Act, which 
provide specific responsibilities and duties to other executive 
agencies and their officers. The Committee believes that such 
responsibilities should remain with such agencies and 
officials, unless those duties are expressly and specifically 
transferred to the new Department.
Section 502. Functions Transferred.
    Section 502 of H.R. 5005 transfers specific functions and 
programs from other executive agencies to the new Department, 
including the Federal Emergency Management Agency (FEMA), and 
other emergency preparedness and response functions from the 
Departments of Justice and Health and Human Services. The 
latter category includes, from HHS, the Office of the Assistant 
Secretary for Public Health Emergency Preparedness, the Office 
of Emergency Preparedness, the National Disaster Medical 
System, the National Strategic Stockpile, and the Metropolitan 
Medical Response System.
    The Committee Print transfers all of the offices and 
programs transferred in H.R. 5005, as introduced, with certain 
modifications. Subsection 502(5) of the Committee Print 
provides for a more limited transfer of authorities from HHS, 
by retaining at HHS the coordination, liaison, and other 
functions of the Office of the Assistant Secretary for Public 
Health Emergency Preparedness. The specific functions of the 
Office of Emergency Preparedness, the National Disaster Medical 
System, and the Metropolitan Medical Response System are 
transferred, along with the responsibilities of the Secretary 
and Assistant Secretary relating thereto. Nothing in this 
section should otherwise reduce the responsibilities of the HHS 
Secretary or the Assistant Secretary for Public Health 
Emergency Preparedness. HHS retains primary responsibility for 
public health emergency preparedness. Moreover, all provisions 
of the Public Health Service Act continue to apply to officials 
at HHS, except for any provisions that specifically apply 
directly to the Office of Emergency Preparedness, the National 
Disaster Medical System, or the Metropolitan Medical Response 
System.
Section 503. Nuclear Incident Response.
    Section 503 of H.R. 5005 provides that the Secretary may 
call into action certain nuclear incident response elements of 
DOE and EPA, in response to a terrorist attack, major disaster, 
or other emergency.The Committee Print provides clarifications 
concerning the nuclear incident response team and the new 
working relationship among the Department of Homeland Security, 
DOE, and EPA. Except as specifically directed by the Secretary 
of Homeland Security in connection with an actual or threatened 
terrorist attack or major disaster, the EPA Administrator and 
the DOE Secretary will continue to exercise control of their 
respective entities in the Nuclear Incident Response Team for 
responding to emergencies and other incidents. For example, the 
radiological and emergency response team at EPA has previously 
responded to emergencies at the Hanford Nuclear Reservation in 
Washington, and in Los Alamos, New Mexico. Similarly, DOE's 
radiological assistance teams often deploy at the request of 
state or local officials to investigate potential radiation 
exposures or contamination events. The Committee intends for 
DOE and EPA to continue to exercise their responsibilities to 
respond to emergencies and other incidents as in the past, 
without the need for direction by the Secretary of Homeland 
Security.
Section 504. Definition.
    Section 504 of H.R. 5005 defines the term ``nuclear 
incident response team'' as used in section 503. The Committee 
Print makes minor clarifications to this section.
Section 505. Conduct of Certain Public Health-Related Activities.
    Section 505 of H.R. 5005 provides that the new Secretary 
shall carry out certain responsibilities through HHS, under 
agreements with the HHS Secretary, including (1) preparedness-
related construction, renovation and enhancement of security 
for research and development or other facilities owned or 
occupied by HHS, and (2) public health-related activities 
carried out by HHS to assist state and local governments and 
other non-Federal public and private health care and 
educational entities to plan or prepare for chemical, 
biological, radiological, and nuclear events and other public 
health emergencies.
    Section 505, as introduced, was eliminated in the Committee 
Print. The Committee found this provision, as introduced, 
highly problematic. While it is not unusual to have statutory 
provisions requiring a Cabinet-level official to have 
responsibilities that flow through certain offices within the 
jurisdiction of that Cabinet-level official, section 505 gave 
broad legal responsibilities to the new Secretary of Homeland 
Security to operate through the Secretary of HHS--a co-equal 
Cabinet-level official. Moreover, section 505, as introduced, 
states that the new Secretary of Homeland Security ``shall have 
authority to establish the preparedness and response program, 
including the setting of priorities.'' The Committee is unclear 
how this provision would impact the duties and authorities of 
the Secretary of HHS with respect to public health emergency 
preparedness and response, including grants and contracting. 
Those responsibilities are specifically spelled out under the 
Public Health Service Act, and the Committee believes that they 
should not be superceded unless there are direct amendments to 
that Act.
    The Committee also is concerned because the language in 
section 505 is unclear in several other respects: would the new 
Secretary have the authority to exercise discretion under the 
provisions of the Public Health Services Act, or even supercede 
or modify those provisions with respect to ``the emergency 
preparedness and response program''? What would be the power to 
``establish'' the program? Would this include the authority to 
declare public health emergencies? If grants were issued, would 
they need approval from both the Secretary of Homeland Security 
and the Secretary of HHS? The uncertainty created by this 
approach is substantial, and could cause damage to a recently 
implemented HHS preparedness program that has been winning 
praise from States, local governments, and public health and 
emergency response communities across the Nation.
    The Committee does not believe it is feasible to separate 
legal responsibilities from the statutes that authorize those 
responsibilities. Nor is it feasible to separate the officials 
charged with administering those responsibilities from the 
personnel required to do so. The Committee believes these 
activities are properly authorized under the Public Health 
Service Act and administered by the Secretary of HHS. Neither a 
wholesale transfer of these responsibilities, nor some unusual 
splitting of responsibilities in this area, is warranted.
    It also has become clear during the Committee's months of 
deliberation on bioterrorism legislation that many public 
health emergency preparedness programs serve dual roles that 
cannot easily be separated from core public health activities. 
The approach of the Committee Print on this issue is amply 
supported in hearings reviewing this legislation. At a hearing 
on June 25, 2002, Dr. Tara O'Toole, M.D., Director, Center for 
Civilian Biodefense Studies, Johns Hopkins University, stated:
        Instead of consolidating similar programs, the proposed 
        agency would split bioterrorism preparedness programs 
        from the related but more encompassing mission of 
        public health protection which is DHHS' main objective 
        * * * [T]he country would be forced to create parallel 
        workforces: one in Homeland Security for bioterrorism 
        preparedness and another in DHSS for `normal' public 
        health functions.
    The same argument was made by Ms. Janet Heinrich, Director, 
Health Care Issues, at GAO:
        Although the HHS programs are important for homeland 
        security, they are just as important to the day-to-day 
        needs of public health agencies and hospitals, such as 
        reporting on disease outbreaks and providing alerts to 
        the medical community. The current proposal does not 
        clearly provide a structure that ensures that both the 
        goals of homeland security and public health will be 
        met.
    The Committee Print provides an overall coordination role 
for the new Secretary of Homeland Security, applying to all 
executive agencies, with respect to Federal response resources 
in the event of a terrorist attack or major disaster. The 
Committee believes, however, that the Secretary of HHS must 
maintain the primary role in public health preparedness. Both 
Secretaries, of course, report to the President, and executive 
authority to create task forces or issue executive orders, 
consistent with other provisions of law, remain as the 
traditional way to ensure coordination, cooperation, and 
collaboration among Cabinet officials.
    The Committee also questions why funding authority for 
certain research facilities at HHS should be transferred to the 
new Department. Obviously, there are many Federal research 
facilities and a need for increased security in many areas. As 
discussed above, the Committee Print provides a role for the 
new Department in establishing standards for security at 
certain Federal civilian research facilities. The assignment to 
the new Department of specific responsibilities for 
construction, renovation and enhancement of certain HHS 
facilities is not appropriate.

                          title vi--management

    Title VI was omitted from Committee consideration.

 title vii--coordination with non-federal entities; inspector general; 
            united states secret service; general provisions

           Subtitle A--Coordination with Non-Federal Entities

Section 701. Responsibilities.
    Section 701 of H.R. 5005 sets forth responsibilities of the 
Secretary relating to coordination with state and local 
governments, the private sector, and other entities, with 
respect to planning, equipment, training and exercise 
activities, Federal communications systems, and Federal grant 
programs for emergency response providers.
    The Committee Print strikes section 701. The Committee 
recognizes the critical importance of Federal coordination with 
state and local governments and private sector entities with 
respect to homeland security matters, especially emergency 
response functions. However, the Committee views the 
responsibilities set forth in this section as either 
duplicative of responsibilities contained in other titles of 
the act, or inconsistent with such responsibilities, 
particularly as amended by the Committee Print.

                     Subtitle B--Inspector General

Section 710. Omitted from Committee consideration.

                Subtitle C--United States Secret Service

Section 720. Omitted from Committee consideration.

                     Subtitle D--General Provisions

Section 730. Omitted from Committee consideration.
Section 731. Omitted from Committee consideration.
Section 732. Omitted from Committee consideration.
Section 733. Reorganization; Transfer.
    Section 733 of H.R. 5005 provides that the Secretary may 
reorganize the Department or reallocate its functions among 
officers of the Department, including establishing, 
discontinuing, or consolidating organizational units within the 
Department. The section prohibits the abolition of any entity 
established or required to be maintained as a distinct entity 
under this Act, or the abolition of any entity or function 
transferred to the Department and established by statute unless 
90 days notice is given to Congress.
    The Committee Print alters the authorities in section 733 
by requiring notice to Congress of any changes to the 
organization of, or allocation of functions within, the 
Department, and expressly prohibits the abolition of entities 
established or required to be maintained as a distinct entity 
under this Act, or the abolition of any entity or function 
transferred to the Department and established by statute, 
regardless of any notification to Congress.
Section 734. Omitted from Committee consideration.
Section 735. Omitted from Committee consideration.
Section 736. Military Activities.
    Section 736 (originally, section 304 of H.R. 5005) provides 
that the Secretary shall have no authority to engage in 
military activities. The Committee Print does not alter this 
language.
Section 737. Rule of Construction Regarding Transfer of Authority.
    There is no comparable provision in H.R. 5005. The 
Committee Print adds a new Section 737 to provide a rule of 
construction regarding the transfers of authority made by this 
Act. Importantly, the rule of construction ensures that, with 
respect to regulatory authority, this Act does not establish 
such authority for the Secretary, except to the extent that a 
function transferred to the Secretary by sections 202, 302, 
402, 403, 502 or 720 of this Act includes such authority. This 
rule of construction also ensures that the Act does not alter 
or diminish the regulatory authority of any other executive 
agency, except to the extent that a function of such agency 
that includes such authority is transferred to the Secretary by 
one of the sections listed in the preceding sentence. Section 
737 also provides a similar rule of construction for other non-
regulatory authorities that are transferred to the Secretary.
Section 738. Provisions Regarding Transfers from Department of Energy.
    There is no comparable provision in H.R. 5005. The 
Committee Print adds a new section 738 to clarify how the 
transfers of authority from DOE to the new Department will 
occur with respect to the activities being carried out for DOE 
by its national laboratories. In such circumstances, the two 
Secretaries shall ensure that the contracts between the 
Department of Homeland Security and the operators of the 
national laboratories are separate from the general management 
contracts between DOE and the operators of the national 
laboratories. Given that the national laboratories performing 
work for the Department of Homeland Security will continue to 
utilize DOE facilities, section 738 further provides that the 
new Department shall reimburse DOE for costs relating to such 
activities. However, the new Department shall not be required 
to pay administrative or personnel costs of DOE or its 
contractors in excess of the amount that the Secretary of 
Energy normally pays for an activity carried out by such a 
contractor. Through this provision, the Committee intends to 
permit direct tasking of the national laboratories by the new 
Department with respect to those transferred activities. The 
Department also may contract with the operators of such 
laboratories to perform other tasks through the existing ``work 
for others'' program of DOE.

                         title viii-transition

    Title VIII was omitted from Committee consideration.

              title ix-conforming and technical amendments

Section 901. Omitted from Committee consideration.
Section 902. Omitted from Committee consideration.
Section 903. Omitted from Committee consideration.
Section 904. Omitted from Committee consideration.
Section 905. Strategic National Stockpile and Small-Pox Vaccine 
        Development.
    Section 905 of H.R. 5005 makes technical and conforming 
changes to the Public Health Security and Bioterrorism 
Preparedness and Response Act of 2002, consistent with the 
transfer of certain authorities over the National Strategic 
Stockpile from HHS to the new Department in section 502 of this 
Act. The Committee Print does not alter the language of this 
section.
Section 906. Biological Agent Registration; Public Health Service Act.
    Section 906 of H.R. 5005 makes technical and conforming 
changes to the Public Health Service Act with respect to the 
program established in section 351A of such Act governing the 
registration of dangerous biological agents and toxins, if the 
program is transferred to the new Department. The Committee 
Print makes minor modifications to this section to address 
errors in the original text.
Section 907. Omitted from Committee consideration.
                    COMMITTEE ON FINANCIAL SERVICES

                          House of Representatives,
                           Committee on Financial Services,
                                     Washington, DC, July 11, 2002.
Hon. Richard K. Armey
Chairman, House Select Committee on Homeland Security, The 
        Capitol, Washington, D.C.
    Dear Chairman Armey: The terrorist attacks of September 
11th demonstrated the need for improved security and prevention 
measures to combat acts of violence against U.S. citizens. The 
Financial Services Committee has contributed to the fight 
against terrorism by cutting off funding for organizations that 
finance terrorist activities and strengthening existing money 
laundering laws through the USA PATRIOT Act (P.L. 107-56). 
Additionally, the Committee has sought to prevent catastrophic 
economic losses from such attacks through the passage of the 
Terrorist Risk Protection Act (H.R. 3210).
    The Financial Services Committee has done an extensive 
review of its jurisdiction as it relates to the President's 
proposal to create a Department of Homeland Security (H.R. 
5005). The Committee strongly supports the efforts of the 
President and the Select Committee on Homeland Security to 
create a new executive department that will coordinate 
resources in an effort to prevent attacks on the United States.
    While the Committee will not mark up H.R. 5005, it would 
like to identify its jurisdiction over this legislation and 
reserve its right to consider the issues within our 
jurisdiction in the future. The Committee believes that it is 
in the best position to continue oversight of these programs, 
regardless of what executive department they are located.
    The following represents our views about how the programs 
within our jurisdiction will integrate into the new Department 
of Homeland Security:

                  Federal Emergency Management Agency

    The Committee has jurisdiction over three programs within 
the Federal Emergency Management Agency (FEMA) that would 
become the responsibility of the new department created through 
H.R. 5005. These programs are: the National Flood Insurance 
Programs, the Defense Production Act and the Emergency Food and 
Shelter Program. FEMA's mission is to prevent, prepare for, 
respond to, and recover from disasters of all types. The 
Committee believes that the expertise of FEMA in consequence 
management is critical to the function of the proposed Office 
of Homeland Security.
    National Flood Insurance Program--The National Flood 
Insurance Act of 1968 (42 USC 4001 et seq.) created the 
National Flood Insurance Program (NFIP) and authorized the 
Director of FEMA to administer the Federal Insurance 
Administration (FIA). The FIA provided insurance protection for 
properties which are vulnerable to floods, but not insured by 
the private sector. Prior to passage of this act, insurance 
companies generally did not offer coverage for flood disasters 
because of the high risks involved. The legislation as amended 
in 1973 and 1994 authorized the FIA and Mitigation Directorate 
to administer the NFIP. In 2001, the FIA and the Mitigation 
Directorate were brought together into a single organization, 
the Federal Insurance and Mitigation Administration (FIMA).
    FIMA has expertise in risk assessment, mitigation or loss 
prevention and insurance. Efforts such as resident education 
and flood mapping enable FEMA to reach out to residents in 
flood prone regions and protect against preventable losses. 
These services work in conjunction with the NFIP and have 
proven successful in building relationships in regions where 
floods are a threat to property and lives. The Committee 
understands that FIMA's risk assessment programs are now being 
designed to assist local communities to identify and address 
their vulnerabilities from natural and man-made disasters.
    The Committee views FEMA's efforts to prevent and mitigate 
damage from floods as critical to the protection of lives and 
property. The Committee further believes that it is important 
that the NFIP and the FIMA to work together efficiently in the 
prevention of losses from floods and from other disasters and 
for that reason should for the time being remain within FEMA as 
it is transferred to the Department of Homeland Security. 
FEMA's programs may be reviewed by the Committee in the future 
in an effort to improve their operation and to ensure that 
users are properly served.
    The Defense Production Act--The goal of the Defense 
Production Act of 1950 (50 USC App. 2062) (DPA) is to ensure 
that the United States has the ability to mobilize industrial 
and other civilian resources in support of national defense an 
civil emergency preparedness maintain military readiness when 
there is a threat to national security. The DPA is essential to 
the protection of the United States in so far as it uses 
economic tools to provide uninterrupted supplies of industrial 
resources in times of military crisis and civil emergency.
    The DPA authorizes FEMA to coordinate Federal agencies' 
decisions concerning the provision of transportation services, 
the priority availability of civil defense resources, 
materials, services and facilities to ensure the dispersal of 
such resources in the interest of national defense. The DPA was 
reauthorized by the Financial Services Committee in 2001 for 
two years (P.L. 107-47).
    The Committee believes the DPA is an important mechanism 
for the protection of the United States and should be located 
in the new Department of Homeland Security. Through the 
President's proposal, the DPA will be very important to 
mobilize national defense and civil emergency preparedness 
resources in the event of a terrorist attack or in an effort to 
ensure that there is adequate preparation to prevent such an 
attack.
    The Emergency Food and Shelter Program--The Emergency Food 
and Shelter Program (EFSP) (P.L. 100-77) is governed by a 
national board consisting of several charitable organizations 
and is chaired by FEMA. The goal of this program is to allocate 
Federal funds for the provision of food and shelter. The 
national board awards funds to jurisdictions based upon a 
formula. Further, a small portion of the overall award is 
allocated by formula to state set-aside committees which then 
allocate funds to jurisdictions based upon the criteria they 
feel is most appropriate. The EFSP seeks to ensure that 
allocations are quickly made to neediest areas of the country, 
that the public and private sectors cooperate, and that 
decisions are made at the local level. In 2001, $140 million in 
aid was distributed through this program.
    It can be argued that the operation of food and shelter 
programs has little to do with the protection of the United 
States from terrorist activities. However, the EFSP is a 
critical program which supplies food and shelter to needy 
people in emergency situations, and to ensure that the program 
remains effective and functional, the Committee recommends that 
it remain within FEMA at this time. The President's 2003 budget 
proposal calls for the EFSP to be moved from FEMA to the 
Department of Housing and Urban Development. This could be an 
effective allocation of Federal resources to aid those in need, 
and the Committee may examine the viability of such a move in 
the future.

                      United States Secret Service

    The Committee commends the President for his proposal to 
move the United States Secret Service (USSS) to the new 
Department and maintain it as a ``distinct entity'' outside the 
four major jurisdictional cylinders established under the new 
Secretary. The Committee believes that the long dual-role 
history of the Service--investigative and protective--combined 
with its more recently developed expertise in preventing and 
investigating cyber crimes and its core mission of protecting 
the financial system of the United States, make the USSS 
uniquely suited to draw from and augment the work of the other 
component agencies of the new Department.
    Since its founding in 1865 as the first investigative arm 
of the United States government and the protector of the 
integrity of U.S. currency, the Service has been the primary 
guardian of the country's financial services--banks, currency 
and payment systems. The added mission of personal protection, 
dating to 1901 following the assassination of President William 
McKinley, built on the Service's expertise at preventing 
crimes. That mission statement was expanded again in 1984 with 
passage of the Omnibus Crime Control Act (P.L. 98-473), adding 
jurisdiction over new crimes involving identity theft, access 
devices such as credit cards, and computer crimes. In 1994, 
further jurisdiction was added, recognizing USSS expertise 
investigating fraud against financial institutions. Today, the 
Secret Service has over 6,000 employees, an annual budget of 
just over $1 billion and 125 field offices across the United 
States and around the world.
    Infrastructure Protection--Springing from the Service's 
personal-protection role is the unique and important duty to 
protect critical infrastructures of the United States. The 
Committee believes this role should become an enhanced portion 
of the Service's duties at the new Department.
    The events of September 11 reinforce lessons the Committee 
learned in efforts to protect against financial-system and 
infrastructure failures due to the Year 2000 problem: that in 
an increasingly computerized and inter-connected world, the 
failure of a seemingly innocuous system can cause panic, deaths 
or economic calamity. Recent news stories indicating that Al 
Qaeda operatives have been probing the cyber security of U.S. 
power systems and dams as well as banks and defense systems 
show that the lesson has not been lost on terrorists, either. A 
serious compromise of these electronic networks could wreak 
havoc on our economy, law enforcement, military, health care, 
transportation and emergency services.
    Cyber Crime--Cyber criminals have devised sophisticated 
programs and techniques to defraud both consumers and private 
industry through electronic means. In response, the Secret 
Service has developed new tools to combat the growing areas of 
cyber terrorism, financial crime and computer fraud. These 
techniques include the widely respected Electronic Crimes 
Special Agent Program and the series of task forces modeled on 
the New York Electronic Crimes Task Force that are now under 
development. The former program provides specialized training 
to select agents in all areas of electronic crimes, qualifying 
those personnel as experts in the forensic examination of 
electronic evidence. The USA PATRIOT Act, to which the 
Committee contributed a major title, authorized the Secret 
Service to establish a nationwide network of cyber crime task 
forces, based on the New York model that uses an innovative 
approach allowing local, state and national law enforcement 
agencies to combine their resources and experience with those 
of prosecutors, the private sector and academic institutions to 
deter electronic crimes of all sorts. In recent months, the 
Service has launched similar task forces across the country. 
The Committee strongly supports these efforts and believes they 
can be instrumental in preventing crimes that could disrupt the 
financial systems of the United States.
    Anti-Counterfeiting--The Service's original mission in 1865 
was to block the counterfeiting of the newly issued national 
currency, and while the mission does not today have the profile 
of protecting the President, it remains a core function. 
Indeed, the USSS anti-counterfeiting efforts may be even more 
important today than they were a century ago, as the U.S. 
dollar is the reserve currency of the world, is the official 
currency of a number of countries, and is the default currency 
of many more. The public's faith in the integrity of the dollar 
is at the heart of the stability of the U.S. economy.
    Thus, the Committee believes that the Service's efforts to 
combat counterfeiting deserve continued and enhanced emphasis. 
Recent discoveries in Colombia of credible counterfeits of the 
new U.S. one-dollar coin and in both Colombia and in areas of 
Eastern Europe of counterfeit plants producing or ready to 
produce both U.S. banknotes and the new Euro banknotes indicate 
the magnitude of the problem. The Committee believes that the 
continued growth of counterfeiting by personal computer in the 
U.S. eventually will be mirrored overseas, where counterfeiting 
still mostly is done on presses and is thus somewhat easier to 
interdict. Also, the Committee believes that the establishment 
of more overseas field offices so that agents can gather and 
act on information first-hand--rather than relying on other 
Federal law agencies or other countries' law-enforcement--will 
increase the ability to stop counterfeiting.
    Given the demonstrated nexus between counterfeiting, drug-
running, arms-smuggling and terrorism, the Committee strongly 
believes that trying to staff anti-counterfeiting and other 
anti-crime and threat-assessment efforts for all of Central and 
South America and the Caribbean (except Colombia) from a single 
office in Miami is simply not practical anymore. The Committee 
further believes that the Service's recent agreement with 
Europol to jointly police against counterfeiting is an 
important move and a model for other law enforcement that 
should be encouraged. The Committee stands ready to enhance 
other anti-counterfeiting law, as appropriate.
    Financial Crimes--The Service's pedigree as the only 
Federal investigative unit until some of its agents were 
detailed to help form the Federal Bureau of Investigation in 
1907, and its position within the Department of the Treasury, 
naturally led to a good relationship with the financial 
services industry and successes in stopping financial crimes. 
In the 1980s, with the advent of relatively new technologies 
such as computers and credit cards came a wave of an entirely 
new sort of bank and financial fraud, and the 1984 Act created 
three new criminal statutes--Title 18, Sections 1028, 1029 and 
1030--to deal with fraud in conjunction with identity 
documents, access device fraud and computer crimes, giving the 
Service major new authorities and clear jurisdiction. The USA 
PATRIOT Act cemented the Service's jurisdiction over Sections 
1030 and 1344. The Committee believes that the Service's role 
in these areas, as well as the assessment of threats against 
financial services companies and the protection of that 
infrastructure--communications, power, etc.--vital to those 
companies, is invaluable and should be emphasized.
    Monetary Security--While the President's legislative 
proposal for the new Department does not suggest consolidating 
the Treasury Department's monetary security forces into the new 
Department, the Committee believes that this could be an 
important step that should be closely examined. Currently the 
United States Mint and the Bureau of Engraving and Printing 
(BEP) maintain separate security forces that over the years 
have had varying degrees of success. The Committee feels that 
transferring this mission to the Secret Service in the new 
Department would have important benefits both to the security 
of the facilities that produce the country's currency and 
coins, and also to the security of U.S. gold reserves held at 
Fort Knox, currently under the supervision of the Mint. Noting 
that the BEP currently relies on the USSS heavily for 
consultations on its security arrangements, the Committee 
further believes that moving this mission to the Service may 
allow the currency-production arms of the Treasury to 
concentrate on what they do best and allow the Service to train 
its newest agents in a different form of protection detail, 
ultimately enhancing their abilities.
    The Financial Services Committee strongly supports the 
efforts of the President and the Select Committee on Homeland 
Security to protect our citizens from terrorist attacks. While 
the Committee waives its referral of H.R. 5005, its Members 
stand ready to assist in the structuring of the envisioned 
Department of Homeland Security if such assistance is 
requested.
        Yours truly,
                                  Michael G. Oxley,
                                                  Chairman,
                                   John J. LaFalce,
                                            Ranking Member.
                     COMMITTEE ON GOVERNMENT REFORM

                          House of Representatives,
                            Committee on Government Reform,
                                     Washington, DC, July 15, 2002.
Hon. Richard K. Armey
Majority Leader and Chairman, House Select Committee on 
        Homeland Security, The Capitol, Washington, D.C.
    Dear Chairman Armey: On Thursday, July 11, the Committee on 
Government Reform reported H.R. 5005, the Homeland Security Act 
of 2002, as amended. After adopting a number of amendments to 
help the Department better fulfill its mission, the Committee 
ordered the bill reported with a favorable recommendation by a 
vote of 30 to 1. I am transmitting the final Committee bill to 
you, along with a summary of key provisions adopted by the 
Committee.
    The purpose of this letter is to share with you and other 
Members of the Select Committee my views on a number of 
important issues debated before the Committee.
1. Transfer of Key Agencies:
    If the Department of Homeland Security is to be successful 
in its mission of better protecting the American people from 
threats of terrorism, we must take a comprehensive approach. 
While it is not possible to include within the Department every 
Federal agency that plays a role in homeland security, we must 
include those agencies that play a pivotal role in border 
security, transportation security and recovery from terrorist 
attacks. The proposal sent to Congress by President Bush takes 
just such an approach.
    Last week, the Government Reform Committee cast several 
votes in support of the President's recommendations to shift 
key agencies and functions to the new Department. The Committee 
voted to retain in H.R. 5005 provisions transferring the Coast 
Guard, the Secret Service, the Federal Emergency Management 
Agency and the INS to the Homeland Security Department. I 
believe that the Committee was correct to do so, and I voted to 
retain these key provisions of the President's plan.
    Supporters of the valuable work done by each of these 
agencies correctly note that they perform important functions 
not directly related to countering terrorist threats. It is my 
view that these functions can continue to be performed 
successfully within the Homeland Security Department. In fact, 
the Committee amended H.R. 5005 to make very clear that the 
Department's mission includes these activities. At the same 
time, those homeland security functions directly related to 
preventing terrorist attacks will benefit immeasurably from 
improved coordination and cooperation within the new 
Department. I urge you to retain these fundamental building 
blocks of the President's plan in H.R. 5005.
2. Visa Issuance:
    I have been a strong supporter of transferring the function 
of visa issuance from the State Department to the Homeland 
Security Department in its entirety. I continue to support this 
position, although it did not prevail in Committee.
    The Government Reform Committee's oversight of the State 
Department has produced ample evidence that the Consular 
Services Bureau lacks a meaningful commitment to security 
concerns. When the State Department learned that one of its 
consular officials was selling visas for cash and sex in 
Communist China, they swept the problem under the rug. Instead 
of firing him, or having him prosecuted, they brought him back 
to Washington and placed him in a highly sensitive position -- 
reviewing visa applications from countries such as Iran and 
Iraq that are state sponsors of terrorism. Despite the fact 
that this official, Charles Parish, took the Fifth before the 
Committee, the State Department vigorously defended its 
inexplicable decision-making in this case.
    More recently, we have learned that the Department 
established a program known as `Visa Express' in Saudi Arabia, 
which allows Saudis to apply for passports through travel 
agencies. Of the 15 Saudi nationals who took part in the 
hijackings of September 11, three received their U.S. visas 
through Visa Express. Because they were able to apply through 
travel agents, U.S. consular officials never interviewed them. 
Although the Visa Express program is a clear example of placing 
convenience ahead of security, the State Department continues 
to defend it.
    In just the last few weeks, we have learned that more than 
70 U.S. visas were illegally sold to foreign nationals in 
Qatar. This is another pertinent example of the State 
Department's inability to police itself.
    State Department officials have made their view clear that 
diplomatic considerations play an important role in the 
consideration of visa applications, and the weight of the 
evidence makes it equally clear that such concerns will 
continue to outweigh security concerns as long as this function 
resides at the State Department.
    After lengthy debate, the Government Reform Committee 
adopted a compromise provision that would authorize the 
Secretary of Homeland Security to place a Homeland Security 
official in each consulate. In addition, it clarifies that the 
final decision to reject a visa rests with the Homeland 
Security Department. I support this provision. I continue to 
prefer the more direct approach of shifting this function in 
its entirety to the Homeland Security Department. However, 
given the contrary votes in three House committees, its 
adoption appears unlikely. I would request that you and your 
colleagues on the Select Committee review the Government Reform 
Committee's provision requiring the State Department to 
discontinue its Visa Express program in Saudi Arabia, and 
maintain it in the legislation when it goes to the House floor.
3. Personnel Provisions:
    The Administration has asked for a great deal of 
flexibility in managing the personnel of the Department. In an 
undertaking this large, some flexibility is necessary and 
appropriate. The Committee adopted alternative language that 
gives the Administration flexibility where it is needed most, 
while maintaining appropriate safeguards that have strong 
support on the Committee. The Committee has authorized the new 
Secretary to adjust pay levels to correct disparities in pay 
between agencies being inherited by the Department. The 
Committee has authorized the Secretary to put in place a system 
for the expedited suspension and removal of personnel for 
national security reasons, subject to a hearing. The Committee 
has also authorized the Secretary to develop a human resources 
demonstration program to help the Department recruit and retain 
a talented workforce. While we believe that these provisions 
are sound, we are open to further discussions with the 
Administration to refine this legislative language.
    I want to draw your attention to two specific issues of 
concern in this area. First, Congresswoman Morella offered an 
amendment, which was adopted by one vote, limiting the 
President's ability to restrict collective bargaining rights at 
the Homeland Security Department on national security grounds. 
While I believe that the amendment was well-intentioned, I do 
not believe that it sets good policy, and I urge you to 
reconsider it.
    Under current law, the President has the authority to 
restrict collective bargaining at governmental units that are 
critical to national security. This is an authority that has 
been used judiciously by both Republican and Democratic 
Presidents since the late 1970s. The Morella amendment would 
weaken this Presidential authority at the Department of 
Homeland Security. Ironically, at a time when national security 
concerns are paramount, this provision would give the President 
less authority over the Department of Homeland Security than he 
has over any other Department. While I have great respect for 
the author of this amendment, I believe that this language 
should not be included in the final version of H.R. 5005.
    Second, the Committee bill includes language requiring the 
Administration to adhere to current pay ceilings for members of 
the Executive Schedule and Senior Executive Service. Efforts to 
exempt individual agencies from these limitations in the past 
have been controversial. They have cost the taxpayers 
significant sums of money while failing to produce better 
management at those agencies. This Committee has opposed 
piecemeal exemptions from pay ceilings as a matter of fiscal 
responsibility, and I recommend that the Select Committee 
retain these provisions in the final bill.
4. Indemnification:
    The Committee adopted provisions authorizing Federal 
agencies to indemnify contractors from liability when they 
provide the government with anti-terrorism technology necessary 
to protect critical infrastructures. The Secretary of Homeland 
Security is authorized to provide similar indemnification for 
such technology purchased by state and local governments.
    These provisions were added to address a serious problem. 
While private-sector companies are developing advanced 
technology to help prevent terrorist attacks, they are unable 
to sell it to government agencies because they cannot obtain 
sufficient liability insurance. At a time when terrorist 
organizations are targeting the United States for lethal 
attacks, we must lower the barriers to the use of this 
technology. We have an obligation to do everything we can to 
ensure that we reduce our vulnerabilities to terrorist attacks.
    This legislation is modeled after a law that has 
successfully provided for indemnification of commercial space 
launches for decades. It is fiscally responsible and has been 
constructed to protect the best interests of the government and 
the public. Before offering indemnification, agency heads would 
be required to ensure that contractors have obtained as much 
private insurance coverage in the private marketplace as 
reasonably possible. Agency heads would be required to 
determine that the technology is effective, and would be used 
to protect critical infrastructures. Indemnification would have 
to be approved jointly by the head of an agency and the 
Director of OMB, who would be responsible for protecting the 
overall financial interests of the Federal government.
    These indemnification provisions have been crafted in a 
responsible way to address a serious problem. I hope that the 
Select Committee will approve them and retain them in H.R. 
5005.
    Thank you for your consideration of my views on these 
important issues, and for your consideration of the legislation 
reported by the Government Reform Committee. If you have any 
questions, or are in need of any assistance, please don't 
hesitate to contact me.
        Sincerely,
                                        Dan Burton,
                                                  Chairman.
                                ------                                


                               MEMORANDUM

From: Chairman Dan Burton
To: Majority Leader Dick Armey
Date: July 15, 2002
Re: Amendments to H.R. 5005


    On Thursday, July 11, the Committee on Government Reform 
marked up H.R. 5005, the Homeland Security Act of 2002. After 
15 hours of debate, during which the Committee considered 37 
amendments, the Committee voted 30-1 to report H.R. 5005 to the 
Select Committee with a favorable recommendation.
    The purpose of this memo is to formally transmit the 
Committee's bill to the Select Committee, and to outline the 
most significant actions taken at the mark-up. The Committee 
cast a series of votes in support of the President's proposals 
to shift key agencies to the Homeland Security Department, 
including the Coast Guard, the INS, FEMA and the Secret 
Service. The Committee also adopted a number of important 
management reforms and safeguards to ensure that the new 
Department is able to function efficiently and fulfill its 
mission.
Organizational and Policy Provisions Adopted by the Committee:
    1. In a series of votes, the Committee voted to maintain 
the structural integrity of the proposed Department of Homeland 
Security. The Committee voted to shift into the Department the 
Coast Guard, the Immigration and Naturalization Service, the 
Federal Emergency Management Agency, and the Secret Service.
    2. The Committee adopted a modified approach for the 
inclusion of the Department of Agriculture's Animal and Plant 
Health Inspection Service.
    3. The Committee approved a modification to the 
Administration's proposal regarding visa issuance, authorizing 
the Secretary of Homeland Security to place Homeland Security 
personnel at each consulate to monitor the review of visa 
applications. The Committee also added a provision clarifying 
that the final authority to reject a visa application rests 
with the Secretary of Homeland Security. Finally, the Committee 
voted to prohibit the continuation of the "Visa Express" 
program in Saudi Arabia.
    4. The Committee voted to require the President to develop 
an annual threat assessment and a strategic plan related to 
Homeland Security. Also approved was a requirement that the 
President produce a biannual report to Congress on homeland 
security preparedness.
    5. The Committee adopted provisions allowing Federal 
agencies to indemnify from liability contractors that provide 
anti-terrorism technology to protect critical infrastructures. 
The Secretary of Homeland Security would also have the 
authority to indemnify contractors providing such technology to 
state and local governments, with the concurrence of the 
Director of the Office of Management and Budget.
    6. The Committee voted to add the provisions of legislation 
introduced by Representative Saxby Chambliss (GA) to improve 
the sharing of information with state and local governments.
    7. The Committee voted to add the provisions of legislation 
introduced by Representative Tom Davis (VA) to improve 
information security.
    8. The Committee voted to maintain provisions in H.R. 5005 
to exempt from the Freedom of Information Act information 
provided to the Homeland Security Department regarding the 
vulnerability of critical infrastructures. The Committee also 
adopted an amendment to extend a similar exemption to other 
Federal agencies.
    9. The Committee voted to shift the Port Security functions 
of the Department of Transportation, along with reporting 
requirements, to the Homeland Security Department.
    10. The Committee added the Secretary of Homeland Security 
to the National Security Council.
    11. The Committee also defined "terrorism" and "homeland 
security," and expanded the mission statement to reflect the 
importance of non-terrorist functions and the need to respond 
to natural disasters.
Management Initiatives:
    1. The Committee voted to create a Deputy Secretary for 
Management to oversee critical management functions of the 
Department. Also created by the amendment were a Deputy 
Secretary for Policy, and a Principal Deputy Secretary.
    2. The Committee reduced the number of assistant 
secretaries authorized by the bill from 16 to 12.
    3. The Committee adopted an amendment designating an 
Assistant Secretary for Narcotics Interdiction.
    4. The Committee replaced the Administration's provision 
related to personnel flexibility with a three-part plan. First, 
the Secretary would be authorized to adjust pay rates to 
resolve pay disparities as the Department is being assembled. 
Second, the Secretary would be authorized to suspend or remove 
employees of the Department on national security grounds, 
subject to a hearing. Third, the Secretary would be authorized 
to conduct a demonstration project creating a new human 
resources system designed to help recruit and retain talented 
employees. The Secretary would be required to continue to 
comply with the Whistleblowers Protection Act, veterans' 
preference requirements, and other important safeguards.
    5. The Committee adopted an amendment to limit the 
President's authority to deny collective bargaining rights to 
units of the new Department that have collective bargaining 
agreements in place. The Committee also adopted an amendment 
specifying that, as the Secretary adjusts pay rates to resolve 
pay disparities, he may not reduce pay levels of current 
employees.
    6. The Committee revised the real property provisions of 
H.R. 5005 to give the Secretary flexibility in managing the 
Department's property while ensuring that local zoning 
requirements are taken into consideration and that fair market 
value is obtained when property is sold or leased.
    7. The Committee's modification to H.R. 5005's personal 
services contracts provision allows the Secretary to waive pay 
restrictions for experts and consultants for urgent homeland 
security needs.
    8. With regard to the Federal Advisory Committee Act, the 
Committee deleted provisions in H.R. 5005 exempting the 
Department from public meeting requirements and conflict-of-
interest rules.
    9. The Committee retained provisions in H.R. 5005 placing 
the Inspector General for Homeland Security on the same footing 
as Inspectors General at the Departments of Defense, Treasury 
and Justice. The Committee added a provision requiring 
notification of committees of jurisdiction in the House and 
Senate whenever an inspector general investigation is 
curtailed.
    10. The Committee voted to authorize funding for the 
Department for five years.
    11. The Committee required the Secretary to submit an 
organizational plan for the Department to Congress.
    12. The Committee clarified that the Department may not 
perform prosecutorial or investigative functions unless 
authorized by Congress to do so.
Other Provisions:
    The Committee also approved the following by voice votes:
    1. An amendment by Congressman Horn (CA) that would 
establish an Intergovernmental Coordinating Council to promote 
effective coordination and cooperation among Federal, State and 
local governments on homeland security issues. The council 
would be chaired by the Secretary and consist of State and 
local governmental officials as well as officials of the 
Department and other federal agencies.
    2. An amendment by Congressman Waxman (CA) that would 
establish a privacy officer in the Department. The privacy 
officer would be appointed by the Secretary from among senior 
Department officials and would be responsible for ensuring that 
personally identifiable information in the possession of the 
Department is collected, used and disclosed in accordance with 
the Privacy Act.
    3. An amendment by Rep. Carolyn Maloney (NY) that would 
give the Secretary broader authority to provide federal 
assistance to State and local governments following a major 
disaster.
    4. An amendment offered by Rep. Kucinich (OH) that would 
offer whistleblowers new remedies against retaliation when they 
disclose information to Congress. This amendment would allow 
aggrieved employees to bring a civil action in any U.S. 
district court and seek damages including lost wages and 
benefits, reinstatement, costs and attorney fees.
    5. An amendment offered by Rep. Souder (IN) that would 
designate one of the Department's assistant secretary positions 
as the Assistant Secretary for Narcotics Interdiction.
    6. An amendment offered by Rep. Ose (CA) that would require 
the Department to issue common rules with the Department of 
Transportation on transportation security issues and with the 
Nuclear Regulatory Commission on nuclear security issues.
    7. An amendment offered by Rep. Tierney (MA) that would 
require the Secretary to develop a plan to expeditiously 
deliver Potassium Iodide to individuals exposed to radiation 
following a nuclear power plant disaster.
    8. An amendment offered by Rep. Schakowsky (IL) that would 
require the Secretary to report to Congress on the impact on 
immigration caused by the transfer of the Immigration and 
Naturalization Service into the new Department.
    9. An amendment offered by Rep. Schakowsky (IL) that would 
transfer oversight responsibility for internal investigations 
performed by the Customs Service's Office of Internal Affairs 
and the Secret Service's Office of Inspections from the 
Inspector General at the Treasury Department to the Department 
of Homeland Security Inspector General.
    10. An amendment offered by Rep. Schakowsky (IL) that would 
establish an Office for Civil Rights and Civil Liberties to 
review and evaluate allegations of civil rights, civil 
liberties and racial and ethnic profiling abuses by Department 
officials.
    11. An amendment offered by Rep. Schakowsky (IL) that would 
establish a Citizenship and Immigration Services Ombudsman to 
assist individuals and employers on citizenship and immigration 
matters.
    12. An amendment offered by Rep. Tom Davis (VA) that would 
authorize a pilot program for flexible research and development 
negotiating authority to attract high tech companies to perform 
advanced research projects.
    13. An amendment offered by Rep. Tierney (MA) that would 
limit the use of the personnel authorities granted to the 
Transportation Security Administration to employees working for 
or carrying out the functions of the Transportation Security 
Administration in the new Department.
    14. An amendment offered by Rep. Danny Davis (IL) that 
would establish an Office of Small and Disadvantaged Business 
Utilization in the Department.
    15. An amendment offered by Rep. Kucinich (OH) and Rep. 
Barr (GA), establishing minimum standards for private security 
guards.
                                ------                                


                               H.R. 5005

Showing the Amendment Recommended by the Committee on Government Reform

    Strike all after the enacting clause and insert the following:

SECTION. 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Homeland Security 
Act of 2002''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
Sec. 3. Construction; severability.
Sec. 4. Effective date.

                TITLE I--DEPARTMENT OF HOMELAND SECURITY

Sec. 101. Establishment; mission.
Sec. 102. Secretary; functions.
Sec. 103. Other officers.

TITLE II--INFORMATION ANALYSIS AND INFRASTRUCTURE PROTECTION; CRITICAL 
                       INFRASTRUCTURE INFORMATION

     Subtitle A--Information Analysis and Infrastructure Protection

Sec. 201. Under Secretary for Information Analysis and Infrastructure 
Protection.
Sec. 202. Functions transferred.
Sec. 203. Access to information.

            Subtitle B--Critical Infrastructure Information

Sec. 211. Short title.
Sec. 212. Definitions.
Sec. 213. Designation of critical infrastructure protection program.
Sec. 214. Protection of voluntarily shared critical infrastructure 
information.
Sec. 215. No private right of action.
Sec. 216. Applicability.

      TITLE III--CHEMICAL, BIOLOGICAL, RADIOLOGICAL, AND NUCLEAR 
                            COUNTERMEASURES

Sec. 301. Under Secretary for Chemical, Biological, Radiological, and 
Nuclear Countermeasures.
Sec. 302. Functions transferred.
Sec. 303. Conduct of certain public health-related activities.
Sec. 304. Transfer of Plum Island Animal Disease Center, Department of 
Agriculture.

              TITLE IV--BORDER AND TRANSPORTATION SECURITY

Sec. 401. Under Secretary for Border and Transportation Security.
Sec. 402. Functions transferred.
Sec. 403. Visa issuance.
Sec. 404. Transfer of certain agricultural inspection functions of the 
Department of Agriculture.
Sec. 405. Interagency common rules.
Sec. 406. Immigration functions.
Sec. 407. Citizenship and Immigration Services Ombudsman.
Sec. 408. Seaport security functions.

              TITLE V--EMERGENCY PREPAREDNESS AND RESPONSE

Sec. 501. Under Secretary for Emergency Preparedness and Response.
Sec. 502. Functions transferred.
Sec. 503. Nuclear incident response.
Sec. 504. Definition.
Sec. 505. Conduct of certain public health-related activities.
Sec. 506. Minimum requirements for private security officers.

                          TITLE VI--MANAGEMENT

Sec. 601. Deputy Secretary for Management.
Sec. 602. Chief Financial Officer.
Sec. 603. Chief Information Officer.
Sec. 604. Establishment of Office for Civil Rights and Civil Liberties.

   TITLE VII--COORDINATION; INSPECTOR GENERAL; UNITED STATES SECRET 
    SERVICE; GENERAL PROVISIONS; ACQUISITIONS; INFORMATION SHARING; 
                                PROPERTY

           Subtitle A--Coordination With Non-Federal Entities

Sec. 701. Responsibilities.
Sec. 702. Intergovernmental Coordinating Council.

                     Subtitle B--Inspector General

Sec. 710. Authority of the Secretary.

                Subtitle C--United States Secret Service

Sec. 720. Functions transferred.

                     Subtitle D--General Provisions

Sec. 730. Human resource management.
Sec. 731. Labor-management relations.
Sec. 732. Reporting requirements.
Sec. 733. Requirement to develop comprehensive risk management 
assessment and homeland security strategy.
Sec. 734. Military activities.
Sec. 735. Reorganization; transfer.
Sec. 736. Miscellaneous provisions.
Sec. 737. Authorization of appropriations.

                        Subtitle E--Acquisitions

Sec. 740. Research and development projects.
Sec. 741. Personal services.
Sec. 742. Special streamlined acquisition authority.
Sec. 743. Program to encourage and support innovative solutions to 
enhance homeland security.
Sec. 744. Risk sharing and indemnification.
Sec. 745. Procurements from small businesses.

                    Subtitle F--Information Sharing

Sec. 750. Short title.
Sec. 751. Findings and sense of Congress.
Sec. 752. Facilitating homeland security information sharing 
procedures.
Sec. 753. Report.
Sec. 754. Authorization of appropriations.
Sec. 755. Authority to share grand jury information.
Sec. 756. Authority to share electronic, wire, and oral interception 
information.
Sec. 757. Foreign intelligence information.
Sec. 758. Information acquired from an electronic surveillance.
Sec. 759. Information acquired from a physical search.

                          Subtitle G--Property

Sec. 761. Real property management.
Sec. 762. Criteria for using authorities.
Sec. 763. Outleases.
Sec. 764. Review and revision of transactions by administrator.
Sec. 765. Transactional reports.

                         TITLE VIII--TRANSITION

Sec. 801. Definitions.
Sec. 802. Reorganization plan.
Sec. 803. Transitional authorities.
Sec. 804. Savings provisions.
Sec. 805. Terminations.
Sec. 806. Incidental transfers.

             TITLE IX--CONFORMING AND TECHNICAL AMENDMENTS

Sec. 901. Executive department.
Sec. 902. Executive Schedule.
Sec. 903. Inspector General.
Sec. 904. Chief Financial Officer.
Sec. 905. Chief Information Officer.
Sec. 906. United States Secret Service.
Sec. 907. Coast Guard.
Sec. 908. Strategic national stockpile and smallpox vaccine 
development.
Sec. 909. Select agent registration.
Sec. 910. Membership of Secretary on National Security Council.
Sec. 911. National Bio-Weapons Defense Analysis Center.

                     TITLE X--INFORMATION SECURITY

Sec. 1001. Information security.
Sec. 1002. Management of information technology.
Sec. 1003. National Institute of Standards and Technology.
Sec. 1004. Information security and privacy advisory board.
Sec. 1005. Technical and conforming amendments.
Sec. 1006. Construction.
Sec. 1007. Effective date.

           TITLE XI--ADDITIONAL RESPONSIBILITIES OF SECRETARY

Sec. 1101. Homeland security events.
Sec. 1102. Standards and reporting.
Sec. 1103. Special commission to review air quality.

SEC. 2. DEFINITIONS.

    The following shall apply for purposes of this Act:
            (1) The term ``American homeland'' or ``homeland'' means 
        the United States, in a geographic sense.
            (2) The term ``assets'' includes contracts, facilities, 
        property, records, unobligated or unexpended balances of 
        appropriations, and other funds or resources (other than 
        personnel).
            (3) The term ``Department'' means the Department of 
        Homeland Security.
            (4) The term ``emergency response providers'' includes 
        Federal, State, and local emergency public safety, law 
        enforcement, emergency response, emergency medical, and related 
        personnel, agencies, and authorities.
            (5) The term ``executive agency'' means an executive agency 
        and a military department, as defined, respectively, in 
        sections 105 and 102 of title 5, United States Code.
            (6) The term ``functions'' includes authorities, powers, 
        rights, privileges, immunities, programs, projects, activities, 
        duties, responsibilities, and obligations.
            (7) The term ``homeland security'' means the deterrence, 
        detection, preemption, prevention, and defense against 
        terrorism targeted at the territory, sovereignty, population, 
        or infrastructure of the United States, including the 
        management of the programs and policies necessary to respond to 
        and recover from terrorist attacks within the United States.
            (8) The term ``local government'' has the meaning given in 
        section 102(6) of the Robert T. Stafford Disaster Relief and 
        Emergency Assistance Act (Public Law 93-288).
            (9) The term ``major disaster'' has the meaning given in 
        section 102(2) of the Robert T. Stafford Disaster Relief and 
        Emergency Assistance Act (Public Law 93-288).
            (10) The term ``personnel'' means officers and employees.
            (11) The terms ``terrorism'' and ``terrorist attack'' mean 
        the calculated attack or threat of attack against persons, 
        property, or infrastructure to inculcate fear and intimidate or 
        coerce a government, the civilian population, or any segment of 
        such population, in the pursuit of political, religious, or 
        ideological goals.
            (12) The term ``Secretary'' means the Secretary of Homeland 
        Security.
            (13) The term ``United States'', when used in a geographic 
        sense, means any State of the United States, the District of 
        Columbia, Puerto Rico, the Virgin Islands, Guam, American 
        Samoa, and the Commonwealth of the Northern Mariana Islands, 
        any possession of the United States, and any waters within the 
        jurisdiction of the United States.

SEC. 3. CONSTRUCTION; SEVERABILITY.

    Any provision of this Act held to be invalid or unenforceable by 
its terms, or as applied to any person or circumstance, shall be 
construed so as to give it the maximum effect permitted by law, unless 
such holding shall be one of utter invalidity or unenforceability, in 
which event such provision shall be deemed severable from this Act and 
shall not affect the remainder thereof, or the application of such 
provision to other persons not similarly situated or to other, 
dissimilar circumstances.

SEC. 4. EFFECTIVE DATE.

    This Act shall take effect thirty days after the date of enactment 
or, if enacted within thirty days before January 1, 2003, on January 1, 
2003.

                TITLE I--DEPARTMENT OF HOMELAND SECURITY

SEC. 101. ESTABLISHMENT; MISSION.

    (a) Establishment.--There is established a Department of Homeland 
Security as an executive department of the United States within the 
meaning of title 5, United States Code.
    (b) Mission.--(1) The primary mission of the Department is to--
            (A) prevent terrorist attacks within the United States;
            (B) reduce the vulnerability of the United States to 
        terrorism;
            (C) minimize the damage, and assist in the recovery, from 
        terrorist attacks that do occur within the United States; and
            (D) act as a focal point regarding natural and man-made 
        crises and emergency planning, and carry out all functions of 
        entities transferred to the Department as provided by law.
    (2) In carrying out the mission described in paragraph (1), and as 
further described in this Act, the Department's primary 
responsibilities shall include--
            (A) information analysis and infrastructure protection;
            (B) chemical, biological, radiological, nuclear, and 
        related countermeasures;
            (C) border and transportation security;
            (D) emergency preparedness and response; and
            (E) coordination (including the provision of training and 
        equipment) with other executive agencies, with State and local 
        government personnel, agencies, and authorities, with the 
        District of Columbia, with the private sector, and with other 
        entities.
    (3) Responsibility for investigating and prosecuting terrorism.--
Except as specifically provided by law with respect to entities 
transferred to the Department under this Act, primary responsibility 
for investigating and prosecuting acts of terrorism shall be vested not 
in the Department, but rather in Federal, State, and local law 
enforcement agencies with jurisdiction over the acts in question.

SEC. 102. SECRETARY; FUNCTIONS.

    (a) Secretary.--(1) There is a Secretary of Homeland Security, 
appointed by the President, by and with the advice and consent of the 
Senate.
    (2) The Secretary is the head of the Department and shall have 
direction, authority, and control over it.
    (3) All functions of all officers, employees, and organizational 
units of the Department are vested in the Secretary.
    (b) Functions.--The Secretary--
            (1) may delegate any of his functions to any officer, 
        employee, or organizational unit of the Department, unless 
        otherwise provided by this Act;
            (2) may promulgate such regulations as necessary to carry 
        out the functions and duties of the Department as set forth in 
        this Act;
            (3) shall have the authority to make contracts, grants, and 
        cooperative agreements, and to enter into agreements with other 
        executive agencies, as may be necessary and proper to carry out 
        his responsibilities under this Act or as otherwise provided by 
        law;
            (4) shall take reasonable steps to ensure that information 
        systems and databases of the Department are compatible with 
        each other; and
            (5) shall take reasonable steps to consolidate field 
        offices of the Department in a manner that promotes efficiency 
        without diminishing effectiveness.
    (c) Construction.--This Act may not be construed as establishing 
any regulatory authority for the Secretary, except to the extent that 
the regulatory authority established by another Act is transferred to 
the Secretary by this Act. Nor shall this Act be construed as altering 
the regulatory authority of any other executive agency, except to the 
extent that a regulatory authority of another executive agency is 
expressly transferred to the Department by this Act.

SEC. 103. OTHER OFFICERS.

    (a) Deputy Secretaries; Under and Assistant Secretaries; CFO.--To 
assist the Secretary in the performance of his functions, there are the 
following officers, appointed by the President, by and with the advice 
and consent of the Senate:
            (1) A Deputy Secretary of Homeland Security, who shall be 
        the Secretary's first assistant for purposes of chapter 33, 
        subchapter 3, of title 5, United States Code.
            (2) A Deputy Secretary for Policy.
            (3) A Deputy Secretary for Management.
            (4) An Under Secretary for Information Analysis and 
        Infrastructure Protection.
            (5) An Under Secretary for Chemical, Biological, 
        Radiological, and Nuclear Countermeasures.
            (6) An Under Secretary for Border and Transportation 
        Security.
            (7) An Under Secretary for Emergency Preparedness and 
        Response.
            (8) Not more than four Assistant Secretaries.
            (9) A Chief Financial Officer.
    (b) Inspector General.--To assist the Secretary in the performance 
of his functions, there is an Inspector General, who shall be appointed 
as provided in section 3(a) of the Inspector General Act of 1978.
    (c) Commandant of the Coast Guard.--To assist the Secretary in the 
performance of his functions, there is a Commandant of the Coast Guard, 
who shall be appointed as provided in section 44 of title 14, United 
States Code.
    (d) Privacy Officer.--The Secretary shall appoint a senior official 
in the Department to assume primary responsibility for privacy policy, 
including--
            (1) assuring that the use of new technologies sustains, and 
        does not erode, the protections provided in all statues 
        relating to the use, collection, and disclosure of personal 
        information;
            (2) assuring that personal information contained in systems 
        of records is handled in full compliance with fair information 
        practices under applicable provisions of section 552a of title 
        5, United States Code, popularly known as the Privacy Act of 
        1974;
            (3) evaluating legislative and regulatory proposals 
        involving collection, use, and disclosure of personal 
        information by the Federal Government for consistency with 
        section 552a of title 5, United States Code;
            (4) conducting a privacy impact assessment of proposed 
        rules when the Secretary deems such assessment appropriate; and
            (5) preparing a report to the Congress on an annual basis 
        that--
                    (A) identifies any complaints received from the 
                public regarding privacy violations by the Department; 
                and
                    (B) describes how the Department addressed such 
                complaints, and internal controls implemented by the 
                Department to improve privacy protections.
    (e) Other Officers.--To assist the Secretary in the performance of 
his functions, there are the following officers, appointed by the 
President:
            (1) A General Counsel, who shall be the chief legal officer 
        of the Department.
            (2) Not more than eight Assistant Secretaries, one of which 
        shall be an Assistant Secretary for Narcotics Interdiction.
            (3) A Director of the Secret Service.
            (4) A Chief Information Officer.
    (f) Assistant Secretary for Narcotics Interdiction.--The Assistant 
Secretary for Narcotics Interdiction shall--
            (1) coordinate policy and operations within the Department 
        and with other Federal departments and agencies to interdict 
        the entry of illicit drugs into the United States;
            (2) ensure the adequacy of resources within the Department 
        for illicit drug interdiction; and
            (3) serve as the United States Interdiction Coordinator for 
        the Director of National Drug Control Policy.
    (g) Performance of Specific Functions.--Subject to the provisions 
of this Act, every officer of the department shall perform the 
functions specified by law for his office or prescribed by the 
Secretary.

TITLE II--INFORMATION ANALYSIS AND INFRASTRUCTURE PROTECTION; CRITICAL 
                       INFRASTRUCTURE INFORMATION

     Subtitle A--Information Analysis and Infrastructure Protection

SEC. 201. UNDER SECRETARY FOR INFORMATION ANALYSIS AND INFRASTRUCTURE 
                    PROTECTION.

    The Secretary, acting through the Under Secretary for Information 
Analysis and Infrastructure Protection, shall have responsibility for 
the following:
            (1) Receiving and analyzing law enforcement information, 
        intelligence, and other information in order to understand the 
        nature and scope of the terrorist threat to the American 
        homeland and to detect and identify potential threats of 
        terrorism within the United States.
            (2) Comprehensively assessing the vulnerabilities of the 
        key resources and critical infrastructures in the United 
        States.
            (3) Integrating relevant information, intelligence 
        analyses, and vulnerability assessments (whether such 
        information, analyses, or assessments are provided or produced 
        by the Department or others) to identify protective priorities 
        and support protective measures by the Department, by other 
        executive agencies, by State and local government personnel, 
        agencies, and authorities, by the private sector, and by other 
        entities.
            (4) Developing a comprehensive national plan for securing 
        the key resources and critical infrastructures in the United 
        States.
            (5) Taking or seeking to effect necessary measures to 
        protect the key resources and critical infrastructures in the 
        United States, in coordination with other executive agencies 
        and in cooperation with State and local government personnel, 
        agencies, and authorities, the private sector, and other 
        entities.
            (6) Administering the Homeland Security Advisory System, 
        exercising primary responsibility for public threat advisories, 
        and (in coordination with other executive agencies) providing 
        specific warning information to State and local government 
        personnel, agencies, and authorities, the private sector, other 
        entities, and the public, as well as advice about appropriate 
        protective actions and countermeasures.
            (7) Reviewing, analyzing, and making recommendations for 
        improvements in the policies and procedures governing the 
        sharing of law enforcement, intelligence, and other information 
        relating to homeland security within the Federal Government and 
        between such government and State and local government 
        personnel, agencies, and authorities.

SEC. 202. FUNCTIONS TRANSFERRED.

    In accordance with title VIII, there shall be transferred to the 
Secretary the functions, personnel, assets, and liabilities of the 
following:
            (1) The National Infrastructure Protection Center of the 
        Federal Bureau of Investigation (other than the Computer 
        Investigations and Operations Section), including the functions 
        of the Attorney General relating thereto.
            (2) The National Communications System of the Department of 
        Defense, including the functions of the Secretary of Defense 
        relating thereto.
            (3) The Critical Infrastructure Assurance Office of the 
        Department of Commerce, including the functions of the 
        Secretary of Commerce relating thereto.
            (4) The Computer Security Division of the National 
        Institute of Standards and Technology, including the functions 
        of the Secretary of Commerce relating thereto and the functions 
        of the National Institute of Standards and Technology and the 
        Secretary of Commerce relating to information security 
        established by the amendments made by title X.
            (5) The National Infrastructure Simulation and Analysis 
        Center of the Department of Energy, including the functions of 
        the Secretary of Energy relating thereto.
            (6) The Federal Computer Incident Response Center of the 
        General Services Administration, including the functions of the 
        Administrator of General Services relating thereto.

SEC. 203. ACCESS TO INFORMATION.

    The Secretary shall have access to all reports, assessments, and 
analytical information relating to threats of terrorism in the United 
States and to other areas of responsibility described in section 
101(b), and to all information concerning infrastructure or other 
vulnerabilities of the United States to terrorism, whether or not such 
information has been analyzed, that may be collected, possessed, or 
prepared by any executive agency, except as otherwise directed by the 
President. The Secretary shall also have access to other information 
relating to the foregoing matters that may be collected, possessed, or 
prepared by an executive agency, as the President may further provide. 
With respect to the material to which the Secretary has access under 
this section--
            (1) the Secretary may obtain such material by request, and 
        may enter into cooperative arrangements with other executive 
        agencies to share such material on a regular or routine basis, 
        including requests or arrangements involving broad categories 
        of material;
            (2) regardless of whether the Secretary has made any 
        request or entered into any cooperative arrangement pursuant to 
        paragraph (1), all executive agencies promptly shall provide to 
        the Secretary--
                    (A) all reports, assessments, and analytical 
                information relating to threats of terrorism in the 
                United States and to other areas of responsibility 
                described in section 101(b);
                    (B) all information concerning infrastructure or 
                other vulnerabilities of the United States to 
                terrorism, whether or not such information has been 
                analyzed;
                    (C) all information relating to significant and 
                credible threats of terrorism in the United States, 
                whether or not such information has been analyzed, if 
                the President has provided that the Secretary shall 
                have access to such information; and
                    (D) such other material as the President may 
                further provide; and
            (3) the Secretary shall ensure that any material received 
        pursuant to this section is protected from unauthorized 
        disclosure and handled and used only for the performance of 
        official duties, and that any intelligence information shared 
        under this section shall be transmitted, retained, and 
        disseminated consistent with the authority of the Director of 
        Central Intelligence to protect intelligence sources and 
        methods under the National Security Act and related procedures 
        or, as appropriate, similar authorities of the Attorney General 
        concerning sensitive law enforcement information.

            Subtitle B--Critical Infrastructure Information

SEC. 211. SHORT TITLE.

    This subtitle may be cited as the ``Critical Infrastructure 
Information Act of 2002''.

SEC. 212. DEFINITIONS.

    In this subtitle:
            (1) Agency.--The term ``agency'' has the meaning given it 
        in section 551 of title 5, United States Code.
            (2) Covered federal agency.--The term ``covered Federal 
        agency'' means the Department of Homeland Security and any 
        agency designated by the Department or with which the 
        Department shares critical infrastructure information including 
        the following:
                    (A) The Department of Justice.
                    (B) The Department of Defense.
                    (C) The Department of Commerce.
                    (D) The Department of Transportation.
                    (E) The Department of the Treasury.
                    (F) The Department of Health and Human Services.
                    (G) The Department of Energy.
                    (H) The Environmental Protection Agency.
                    (I) The General Services Administration.
                    (J) The Federal Communications Commission.
                    (K) The Federal Energy Regulatory Commission.
                    (L) The Nuclear Regulatory Commission.
            (3) Critical infrastructure information.--The term 
        ``critical infrastructure information'' means information not 
        customarily in the public domain and related to the security of 
        critical infrastructure or protected systems--
                    (A) actual, potential, or threatened interference 
                with, attack on, compromise of, or incapacitation of 
                critical infrastructure or protected systems by either 
                physical or computer-based attack or other similar 
                conduct (including the misuse of or unauthorized access 
                to all types of communications and data transmission 
                systems) that violates Federal, State, or local law, 
                harms interstate commerce of the United States, or 
                threatens public health or safety;
                    (B) the ability of any critical infrastructure or 
                protected system to resist such interference, 
                compromise, or incapacitation, including any planned or 
                past assessment, projection, or estimate of the 
                vulnerability of critical infrastructure or a protected 
                system, including security testing, risk evaluation 
                thereto, risk management planning, or risk audit; or
                    (C) any planned or past operational problem or 
                solution regarding critical infrastructure or protected 
                systems, including repair, recovery, reconstruction, 
                insurance, or continuity, to the extent it is related 
                to such interference, compromise, or incapacitation.
            (4) Critical infrastructure protection program.--The term 
        ``critical infrastructure protection program'' means any 
        component or bureau of a covered Federal agency that has been 
        designated by the President or any agency head to receive 
        critical infrastructure information.
            (5) Information sharing and analysis organization.--The 
        term ``Information Sharing and Analysis Organization'' means 
        any formal or informal entity or collaboration created or 
        employed by public or private sector organizations, for 
        purposes of--
                    (A) gathering and analyzing critical infrastructure 
                information in order to better understand security 
                problems and interdependencies related to critical 
                infrastructure and protected systems, so as to ensure 
                the availability, integrity, and reliability thereof;
                    (B) communicating or disclosing critical 
                infrastructure information to help prevent, detect, 
                mitigate, or recover from the effects of a 
                interference, compromise, or a incapacitation problem 
                related to critical infrastructure or protected 
                systems; and
                    (C) voluntarily disseminating critical 
                infrastructure information to its members, State, 
                local, and Federal Governments, or any other entities 
                that may be of assistance in carrying out the purposes 
                specified in subparagraphs (A) and (B).
            (6) Protected system.--The term ``protected system''--
                    (A) means any service, physical or computer-based 
                system, process, or procedure that directly or 
                indirectly affects the viability of a facility of 
                critical infrastructure; and
                    (B) includes any physical or computer-based system, 
                including a computer, computer system, computer or 
                communications network, or any component hardware or 
                element thereof, software program, processing 
                instructions, or information or data in transmission or 
                storage therein, irrespective of the medium of 
                transmission or storage.
            (7) Voluntary.--
                    (A) In general.--The term ``voluntary'', in the 
                case of any submittal of critical infrastructure 
                information to a covered Federal agency, means the 
                submittal thereof in the absence of such agency's 
                exercise of legal authority to compel access to or 
                submission of such information and may be accomplished 
                by a single entity or an Information Sharing and 
                Analysis Organization on behalf of itself or its 
                members.
                    (B) Exclusions.--The term ``voluntary''--
                            (i) in the case of any action brought under 
                        the securities laws as is defined in section 
                        3(a)(47) of the Securities Exchange Act of 1934 
                        (15 U.S.C. 78c(a)(47))--
                                    (I) does not include information or 
                                statements contained in any documents 
                                or materials filed with the Securities 
                                and Exchange Commission, or with 
                                Federal banking regulators, pursuant to 
                                section 12(i) of the Securities 
                                Exchange Act of 1934 (15 U.S.C. 
                                781(I)); and
                                    (II) with respect to the submittal 
                                of critical infrastructure information, 
                                does not include any disclosure or 
                                writing that when made accompanied the 
                                solicitation of an offer or a sale of 
                                securities; and
                            (ii) does not include information or 
                        statements submitted or relied upon as a basis 
                        for making licensing or permitting 
                        determinations, or during regulatory 
                        proceedings.

SEC. 213. DESIGNATION OF CRITICAL INFRASTRUCTURE PROTECTION PROGRAM.

    A critical infrastructure protection program may be designated as 
such by one of the following:
            (1) The President.
            (2) The Secretary of the Department of Homeland Security.
            (3) The head of a covered Federal agency by notice 
        published in the Federal Register. This duty may not be 
        delegated.

SEC. 214. PROTECTION OF VOLUNTARILY SHARED CRITICAL INFRASTRUCTURE 
                    INFORMATION.

    (a) Protection.--
            (1) In general.--Notwithstanding any other provision of 
        law, critical infrastructure information (including the 
        identity of the submitting person or entity) that is 
        voluntarily submitted to a covered Federal agency for use by 
        that agency regarding the security of critical infrastructure 
        and protected systems, if analysis, warning, interdependency 
        study, recovery, reconstitution, or other informational 
        purpose, when accompanied by an express statement specified in 
        paragraph (2)--
                    (A) shall be exempt from disclosure under section 
                552 of title 5, United States Code (commonly referred 
                to as the Freedom of Information Act);
                    (B) shall not be subject to any agency rules or 
                judicial doctrine regarding ex parte communications 
                with a decision making official;
                    (C) shall not, without the written consent of the 
                person or entity submitting such information, be used 
                directly by such agency, any other Federal, State, or 
                local authority, or any third party, in any civil 
                action arising under Federal or State law if such 
                information is submitted in good faith;
                    (D) shall not, without the written consent of the 
                person or entity submitting such information, be used 
                or disclosed by any officer or employee of the United 
                States for purposes other than the purposes of this 
                subtitle, except--
                            (i) in furtherance of an investigation or 
                        the prosecution of a criminal act; or
                            (ii) when disclosure of the information 
                        would be--
                                    (I) to either House of Congress, or 
                                to the extent of matter within its 
                                jurisdiction, any committee or 
                                subcommittee thereof, any joint 
                                committee thereof or subcommittee of 
                                any such joint committee; or
                                    (II) to the Comptroller General, or 
                                any authorized representative of the 
                                Comptroller General, in the course of 
                                the performance of the duties of the 
                                General Accounting Office.
                    (E) shall not, if provided to a State or local 
                government or government agency--
                            (i) be made available pursuant to any State 
                        or local law requiring disclosure of 
                        information or records;
                            (ii) otherwise be disclosed or distributed 
                        to any party by said State or local government 
                        or government agency without the written 
                        consent of the person or entity submitting such 
                        information; or
                            (iii) be used other than for the purpose of 
                        protecting critical infrastructure or protected 
                        systems, or in furtherance of an investigation 
                        or the prosecution of a criminal act; and
                    (F) does not constitute a waiver of any applicable 
                privilege or protection provided under law, such as 
                trade secret protection.
            (2) Express statement.--For purposes of paragraph (1), the 
        term ``express statement'', with respect to information or 
        records, means--
                    (A) in the case of written information or records, 
                a written marking on the information or records 
                substantially similar to the following: ``This 
                information is voluntarily submitted to the Federal 
                Government in expectation of protection from disclosure 
                as provided by the provisions of the Critical 
                Infrastructure Information Act of 2002.''; or
                    (B) in the case of oral information, a similar 
                written statement submitted within a reasonable period 
                following the oral communication.
    (b) Limitation.--No communication of critical infrastructure 
information to a covered Federal agency made pursuant to this subtitle 
shall be considered to be an action subject to the requirements of the 
Federal Advisory Committee Act (5 U.S.C. App. 2).
    (c) Independently Obtained Information.--Nothing in this section 
shall be construed to limit or otherwise affect the ability of a State, 
local, or Federal Government entity, agency, or authority, or any third 
party, under applicable law, to obtain critical infrastructure 
information in a manner not covered by subsection (a), including any 
information lawfully and properly disclosed generally or broadly to the 
public and to use such information in any manner permitted by law.
    (d) Treatment of Voluntary Submittal of Information.--The voluntary 
submittal to the Government of information or records that are 
protected from disclosure by this subtitle shall not be construed to 
constitute compliance with any requirement to submit such information 
to a Federal agency under any other provision of law.
    (e) Procedures.--
            (1) In general.--The Secretary of the Department of 
        Homeland Security shall, in consultation with appropriate 
        representatives of the National Security Council and the Office 
        of Science and Technology Policy, establish uniform procedures 
        for the receipt, care, and storage by Federal agencies of 
        critical infrastructure information that is voluntarily 
        submitted to the Government. The procedures shall be 
        established not later than 90 days after the date of the 
        enactment of this subtitle.
            (2) Elements.--The procedures established under paragraph 
        (1) shall include mechanisms regarding--
                    (A) the acknowledgement of receipt by Federal 
                agencies of critical infrastructure information that is 
                voluntarily submitted to the Government;
                    (B) the maintenance of the identification of such 
                information as voluntarily submitted to the Government 
                for purposes of and subject to the provisions of this 
                subtitle;
                    (C) the care and storage of such information; and
                    (D) the protection and maintenance of the 
                confidentiality of such information so as to permit the 
                sharing of such information within the Federal 
                Government and with State and local governments, and 
                the issuance of notices and warnings related to the 
                protection of critical infrastructure and protected 
                systems, in such manner as to protect from public 
                disclosure the identity of the submitting person or 
                entity, or information that is proprietary, business 
                sensitive, relates specifically to the submitting 
                person or entity, and is otherwise not appropriately in 
                the public domain.
    (f) Penalties.--Whoever, being an officer or employee of the United 
States or of any department or agency thereof, publishes, divulges, 
discloses, or makes known in any manner or to any extent not authorized 
by law, any critical infrastructure information protected from 
disclosure by this subtitle coming to him in the course of this 
employment or official duties or by reason of any examination or 
investigation made by, or return, report, or record made to or filed 
with, such department or agency or officer or employee thereof, shall 
be fined under title 18 of the United States Code, imprisoned not more 
that one year, or both, and shall be removed from office or employment.
    (g) Authority To Issue Warnings.--The Federal Government may 
provide advisories, alerts, and warnings to relevant companies, 
targeted sectors, other governmental entities, or the general public 
regarding potential threats to critical infrastructure as appropriate. 
In issuing a warning, the Federal Government shall take appropriate 
actions to protect from disclosure--
            (1) the source of any voluntarily submitted critical 
        infrastructure information that forms the basis for the 
        warning; or
            (2) information that is proprietary, business sensitive, 
        relates specifically to the submitting person or entity, or is 
        otherwise not appropriately in the public domain.
    (h) Authority To Delegate.--The President may delegate authority to 
a critical infrastructure protection program, designated under 
subsection (e), to enter into a voluntary agreement to promote critical 
infrastructure security, including with any Information Sharing and 
Analysis Organization, or a plan of action as otherwise defined in 
section 708 of the Defense Production Act of 1950 (50 U.S.C. App. 
2158).

SEC. 215. NO PRIVATE RIGHT OF ACTION.

    Nothing in this subtitle may be construed to create a private right 
of action for enforcement of any provision of this Act.

SEC. 216. APPLICABILITY.

    Nothing in this subtitle shall apply to any information submitted 
in the course of lobbying any covered Federal agency.

      TITLE III--CHEMICAL, BIOLOGICAL, RADIOLOGICAL, AND NUCLEAR 
                            COUNTERMEASURES

SEC. 301. UNDER SECRETARY FOR CHEMICAL, BIOLOGICAL, RADIOLOGICAL, AND 
                    NUCLEAR COUNTERMEASURES.

    The Secretary, acting through the Under Secretary for Chemical, 
Biological, Radiological, and Nuclear Countermeasures, shall have 
responsibility for the following:
            (1) Securing the people, infrastructures, property, 
        resources, and systems in the United States from acts of 
        terrorism involving chemical, biological, radiological, or 
        nuclear weapons or other emerging threats.
            (2) Conducting a national scientific research and 
        development program to support the mission of the Department, 
        including developing national policy for and coordinating the 
        Federal Government's civilian efforts to identify, devise, and 
        implement scientific, technological, and other countermeasures 
        to chemical, biological, radiological, nuclear, and other 
        emerging terrorist threats, including directing, funding, and 
        conducting research and development relating to the same.
            (3) Establishing priorities for, directing, funding, and 
        conducting national research, development, and procurement of 
        technology and systems--
                    (A) for preventing the importation of chemical, 
                biological, radiological, nuclear, and related weapons 
                and material; and
                    (B) for detecting, preventing, protecting against, 
                and responding to terrorist attacks that involve such 
                weapons or material.
            (4) Establishing guidelines for State and local government 
        efforts to develop and implement countermeasures to threats of 
        chemical, biological, radiological, and nuclear terrorism, and 
        other emerging terrorist threats.
            (5) Promulgating guidelines regarding the health risks of 
        short-, medium-, or long-term exposure to acutely or sub-
        actuely toxic chemicals, biological, and radioactive materials 
        that may be released into the environment as a consequence of a 
        major disaster that the Secretary determines constitutes a 
        homeland security event under section 1101. The Director of the 
        Centers for Disease Control and Prevention shall provide the 
        Under Secretary with such information and analysis as may be 
        necessary for the Under Secretary to promulgate guidelines 
        under this section in the case of biological materials.
            (6) Providing for standardized and rapid data collection 
        and analysis and communication regarding environmental risks 
        following any major disaster that the Secretary determines 
        constitutes a homeland security event under section 1101, in 
        coordination with the Administrator of the Environmental 
        Protection Agency or the Director of the Centers for Disease 
        Control and Prevention (in the case of a release of biological 
        agents) to coordinate all data collection and monitoring and 
        dissemination of analysis regarding the release of pollutants 
        and contaminants (including biological agents) into the 
        environment by reason of any such disaster.
            (7)(A) Providing awards of grants, contracts, and 
        cooperative agreements in consultation with the Secretary of 
        Health and Human Services to public and nonprofit private 
        entities for the purpose of collecting public health data 
        during and in the aftermath of public health emergencies, and 
        conducting research with respect to such data, in order to 
        develop medical therapies and other public health strategies 
        for assisting victims of such emergencies in recovering from 
        the emergencies; and
            (B) Providing for the approval of applications for awards 
        under subparagraph (A) in advance of public health emergencies 
        in order that, upon the occurrence of such an emergency, the 
        Under Secretary can promptly begin disbursing amounts from the 
        awards and the recipients of the awards can promptly begin 
        carrying out the purpose described in subsection (a).

SEC. 302. FUNCTIONS TRANSFERRED.

    In accordance with title VIII, there shall be transferred to the 
Secretary the functions, personnel, assets, and liabilities of the 
following:
            (1) The select agent registration enforcement programs and 
        activities of the Department of Health and Human Services, 
        including the functions of the Secretary of Health and Human 
        Services relating thereto.
            (2) The following programs and activities of the Department 
        of Energy, including the functions of the Secretary of Energy 
        relating thereto (but not including programs and activities 
        relating to the strategic nuclear defense posture of the United 
        States):
                    (A) The chemical and biological national security 
                and supporting programs and activities of the non-
                proliferation and verification research and development 
                program.
                    (B) The nuclear smuggling programs and activities, 
                and other programs and activities directly related to 
                homeland security, within the proliferation detection 
                program of the non-proliferation and verification 
                research and development program, except that the 
                programs and activities described in this subparagraph 
                may be designated by the President either for transfer 
                to the Department or for joint operation by the 
                Secretary and the Secretary of Energy.
                    (C) The nuclear assessment program and activities 
                of the assessment, detection, and cooperation program 
                of the international materials protection and 
                cooperation program.
                    (D) The energy security and assurance program and 
                activities.
                    (E) Such life sciences activities of the biological 
                and environmental research program related to microbial 
                pathogens as may be designated by the President for 
                transfer to the Department.
                    (F) The Environmental Measurements Laboratory.
                    (G) The advanced scientific computing research 
                program and activities, and the intelligence program 
                and activities, at Lawrence Livermore National 
                Laboratory.
            (3) The National Bio-Weapons Defense Analysis Center of the 
        Department of Defense, including the functions of the Secretary 
        of Defense related thereto.

SEC. 303. CONDUCT OF CERTAIN PUBLIC HEALTH-RELATED ACTIVITIES.

    (a) Certain Activities Carried Out Through HHS.--(1) Except as the 
President may otherwise direct, the Secretary shall carry out his 
civilian human health-related biological, biomedical, and infectious 
disease defense research and development (including vaccine research 
and development) responsibilities through the Department of Health and 
Human Services (including the Public Health Service), under agreements 
with the Secretary of Health and Human Services, and may transfer funds 
to him in connection with such agreements.
    (2) With respect to any responsibilities carried out through the 
Department of Health and Human Services under this subsection, the 
Secretary, in consultation with the Secretary of Health and Human 
Services, shall have the authority to establish the research and 
development program, including the setting of priorities.
    (b) Transfer of Funds.--With respect to such other research and 
development responsibilities under this title, including health-related 
chemical, radiological, and nuclear defense research and development 
responsibilities, as he may elect to carry out through the Department 
of Health and Human Services (including the Public Health Service) 
(under agreements with the Secretary of Health and Human Services) or 
through other Federal agencies (under agreements with their respective 
heads), the Secretary may transfer funds to the Secretary of Health and 
Human Services, or to such heads, as the case may be.

SEC. 304. TRANSFER OF PLUM ISLAND ANIMAL DISEASE CENTER, DEPARTMENT OF 
                    AGRICULTURE.

    (a) Transfer Required.--In accordance with title VIII, the 
Secretary of Agriculture shall transfer to the Secretary of Homeland 
Security the Plum Island Animal Disease Center of the Department of 
Agriculture, including the assets and liabilities of the Center.
    (b) Continued Department of Agriculture Access.--Upon the transfer 
of the Plum Island Animal Disease Center, the Secretary of Homeland 
Security and the Secretary of Agriculture shall enter into an agreement 
to ensure Department of Agriculture access to the center for research, 
diagnostic, and other activities of the Department of Agriculture.

              TITLE IV--BORDER AND TRANSPORTATION SECURITY

SEC. 401. UNDER SECRETARY FOR BORDER AND TRANSPORTATION SECURITY.

    The Secretary, acting through the Under Secretary for Border and 
Transportation Security, shall have responsibility for the following:
            (1) Preventing the entry of terrorists and the instruments 
        of terrorism into the United States.
            (2) Securing the borders, territorial waters, ports, 
        terminals, waterways, and air, land, and sea transportation 
        systems of the United States, including managing and 
        coordinating governmental activities at ports of entry.
            (3) Administering the immigration and naturalization laws 
        of the United States, including the rules governing the 
        granting of visas or other forms of permission, including 
        parole, to enter the United States to individuals who are not 
        citizens or lawful permanent residents thereof.
            (4) Administering the customs laws of the United States.
            (5) Conducting the inspection and related administrative 
        functions of the Department of Agriculture transferred to the 
        Secretary of Homeland Security under section 404.
            (6) In carrying out the foregoing responsibilities, 
        ensuring the speedy, orderly, and efficient flow of lawful 
        traffic and commerce.

SEC. 402. FUNCTIONS TRANSFERRED.

    In accordance with title VIII, there shall be transferred to the 
Secretary the functions, personnel, assets, and liabilities of the 
following:
            (1) The United States Customs Service of the Department of 
        the Treasury, including the functions of the Secretary of the 
        Treasury relating thereto.
            (2) The Immigration and Naturalization Service of the 
        Department of Justice, including the functions of the Attorney 
        General relating thereto.
            (3) The Visa Office of the Bureau of Consular Affairs of 
        the Department of State, including the functions of the 
        Secretary of State relating thereto.
            (4) The Coast Guard of the Department of Transportation, 
        which shall be maintained as a distinct entity within the 
        Department, including the functions of the Secretary of 
        Transportation relating thereto.
            (5) The Transportation Security Administration of the 
        Department of Transportation, including the functions of the 
        Secretary of Transportation, and of the Under Secretary of 
        Transportation for Security, relating thereto.
            (6) The Federal Protective Service of the General Services 
        Administration, including the functions of the Administrator of 
        General Services relating thereto.

SEC. 403. VISA ISSUANCE.

    (a) In General.--Notwithstanding section 104(a) of the Immigration 
and Nationality Act (8 U.S.C. 1104(a)) or any other provision of law, 
and except as provided in subsection (b) of this section, the 
Secretary--
            (1) shall be vested exclusively with all authorities to 
        issue regulations with respect to, administer, and enforce the 
        provisions of such Act, and of all other immigration and 
        nationality laws, relating to the functions of consular 
        officers of the United States in connection with the granting 
        or refusal of visas, including the authority to refuse visa 
        applications and develop programs of training for consular 
        officers, which authorities shall be exercised through the 
        Secretary of State, except that the Secretary shall not have 
        authority to alter or reverse the decision of a consular 
        officer to refuse a visa to an alien; and
            (2) shall have authority to confer or impose upon any 
        officer or employee of the United States, with the consent of 
        the head of the executive agency under whose jurisdiction such 
        officer or employee is serving, any of the functions specified 
        in paragraph (1).
    (b) Authority of the Secretary of State.--
            (1) The Secretary of State may direct a consular officer to 
        refuse a visa to an alien if the Secretary of State considers 
        such refusal necessary or advisable in the foreign policy or 
        security interests of the United States.
            (2) Nothing in this section shall be construed as affecting 
        the authorities of the Secretary of State under the following 
        provisions of law:
                    (A) Section 101(a)(15)(A) of the Immigration and 
                Nationality Act (8 U.S.C. 1101(a)(15)(A)).
                    (B) Section 212(a)(3)(C) of the Immigration and 
                Nationality Act (8 U.S.C. 1182(a)(3)(C)).
                    (C) Section 212(f) of the Immigration and 
                Nationality Act (8 U.S.C. 1182(f)).
                    (D) Section 237(a)(4)(C) of the Immigration and 
                Nationality Act (8 U.S.C. 1227(a)(4)(C)).
                    (E) Section 104 of the Cuban Liberty and Democratic 
                Solidarity (LIBERTAD) Act of 1996 (22 U.S.C. 6034; 
                Public Law 104-114).
                    (F) Section 613 of the Departments of Commerce, 
                Justice, and State, the Judiciary, and Related Agencies 
                Appropriations Act, 1999 (as contained in section 
                101(b) of division A of Public Law 105-277 (Omnibus 
                Consolidated and Emergency Supplemental Appropriations 
                Act, 1999; 112 Stat. 2681; H.R. 4328; (Originally H.R. 
                4276) as amended by section 617 of Public Law 106-553.
                    (G) Section 801 of H.R. 3427, the Admiral James W. 
                Nance and Meg Donovan Foreign Relations Authorization 
                Act, Fiscal Years 2000 and 2001, as enacted by 
                reference in Public Law 106-113.
                    (H) Section 568 of the Foreign Operations, Export 
                Financing, and Related Programs Appropriations Act, 
                2002 (Public Law 107-115).
    (c) Assignment of Homeland Security Employees to Diplomatic and 
Consular Posts.--
            (1) In general.--The Secretary is authorized to assign 
        employees of the Department of Homeland Security to any 
        diplomatic and consular posts abroad to perform the following 
        functions:
                    (A) Provide expert advice and training to consular 
                officers regarding specific security threats relating 
                to the adjudication of individual visa applications or 
                classes of applications.
                    (B) Review any or all such applications prior to 
                their adjudication, either on the initiative of the 
                employee of the Department of Homeland Security or upon 
                request by a consular officer or other person charged 
                with adjudicating such applications.
                    (C) Conduct investigations with respect to matters 
                under the jurisdiction of the Secretary.
            (2) Permanent assignment; participation in terrorist 
        lookout committee.--When appropriate, employees of the 
        Department of Homeland Security assigned to perform functions 
        described in paragraph (1) may be assigned permanently to 
        overseas diplomatic or consular posts with country-specific or 
        regional responsibility. If the Secretary so directs, any such 
        employee, when present at an overseas post, shall participate 
        in the terrorist lookout committee established under section 
        304 of the Enhanced Border Security and Visa Entry Reform Act 
        of 2002 (8 U.S.C. 1733).
            (3) Training and hiring.--
                    (A) The Secretary shall ensure that any employees 
                of the Department of Homeland Security assigned to 
                perform functions described in paragraph (1) shall be 
                provided all necessary training to enable them to carry 
                out such functions, including training in foreign 
                languages, in conditions in the particular country 
                where each employee is assigned, and in other 
                appropriate areas of study.
                    (B) Prior to assigning employees of the Department 
                to perform the functions described in paragraph (1), 
                the Secretary shall promulgate regulations establishing 
                foreign language proficiency requirements for employees 
                of the Department performing the functions described in 
                paragraph (1) and providing that preference shall be 
                given to individuals who meet such requirements in 
                hiring employees for the performance of such functions.
                    (C) The Secretary is authorized to use the National 
                Foreign Affairs Training Center, on a reimbursable 
                basis, to obtain the training described in subparagraph 
                (A).
    (d) No Creation of Private Right of Action.--Nothing in this 
section shall be construed to create or authorize a private right of 
action to challenge a decision of a consular officer or other United 
States official or employee to grant or deny a visa.
    (e) Study Regarding Use of Foreign Nationals.--
            (1) In general.--The Secretary of Homeland Security shall 
        conduct a study of the role of foreign nationals in the 
        granting or refusal of visas and other documents authorizing 
        entry of aliens into the United States. The study shall address 
        the following:
                    (A) The proper role, if any, of foreign nationals 
                in the process of rendering decisions on such grants 
                and refusals.
                    (B) Any security concerns involving the employment 
                of foreign nationals.
                    (C) Whether there are cost-effective alternatives 
                to the use of foreign nationals.
            (2) Report.--Not later than 2 years after the date of the 
        enactment of this Act, the Secretary shall submit a report 
        containing the findings of the study conducted under paragraph 
        (1) to the Committee on the Judiciary, the Committee on 
        International Relations, and the Committee on Government Reform 
        of the House of Representatives, and the Committee on the 
        Judiciary, the Committee on Foreign Relations, and the 
        Committee on Governmental Affairs of the Senate.
    (f) Termination of Noninterview Programs.--All third-party 
screening, interview waiver, or other noninterview programs in Saudi 
Arabia shall be terminated upon enactment of this Act, and no such 
program may be created after the date of enactment. On-site personnel 
of the Department of Homeland Security shall review all applications 
prior to adjudication. All individuals applying for a visa in Saudi 
Arabia must be interviewed unless on-site personnel of the Department 
of Homeland Security determine, in writing, and pursuant to written 
guidelines issued by the Secretary, that such individual is unlikely to 
present a risk to homeland security. Such guidelines shall be written 
within 30 days of the date of enactment.

SEC. 404. TRANSFER OF CERTAIN AGRICULTURAL INSPECTION FUNCTIONS OF THE 
                    DEPARTMENT OF AGRICULTURE.

    (a) Transfer of Agricultural Import and Entry Inspection 
Functions.--There shall be transferred to the Secretary of Homeland 
Security the functions of the Secretary of Agriculture relating to 
agricultural import and entry inspection activities under the laws 
specified in subsection (b).
    (b) Covered Animal and Plant Protection Laws.--The laws referred to 
in subsection (a) are the following:
            (1) The Act commonly known as the Virus-Serum-Toxin Act 
        (the eighth paragraph under the heading ``Bureau of Animal 
        Industry'' in the Act of March 4, 1913; 21 U.S.C. 151 et seq.).
            (2) Section 1 of the Act of August 31, 1922 (commonly known 
        as the Honeybee Act; 7 U.S.C. 281).
            (3) Title III of the Federal Seed Act (7 U.S.C. 1581 et 
        seq.).
            (4) The Plant Protection Act (7 U.S.C. 7701 et seq.).
            (5) The Animal Protection Act (subtitle E of title X of 
        Public Law 107-171; 7 U.S.C. 8301 et seq.).
            (6) The Lacey Act Amendments of 1981 (16 U.S.C. 3371 et 
        seq.).
            (7) Section 11 of the Endangered Species Act of 1973 (16 
        U.S.C. 1540).
    (c) Exclusion of Quarantine Activities.--For purposes of this 
section, the term ``functions'' does not include any quarantine 
activities carried out under the laws specified in subsection (b).
    (d) Effect of Transfer.--
            (1) Compliance with department of agriculture 
        regulations.--The authority transferred pursuant to subsection 
        (a) shall be exercised by the Secretary of Homeland Security in 
        accordance with the regulations, policies, and procedures 
        issued by the Secretary of Agriculture regarding the 
        administration of the laws specified in subsection (b).
            (2) Rulemaking coordination.--The Secretary of Agriculture 
        shall coordinate with the Secretary of Homeland Security 
        whenever the Secretary of Agriculture prescribes regulations, 
        policies, or procedures for administering the laws specified in 
        subsection (b) at the locations referred to in subsection (a).
            (3) Effective administration.--The Secretary of Homeland 
        Security, in consultation with the Secretary of Agriculture, 
        may issue such directives and guidelines as are necessary to 
        ensure the effective use of personnel of the Department of 
        Homeland Security to carry out the functions transferred 
        pursuant to subsection (a).
    (e) Transfer Agreement.--
            (1) Agreement required; revision.--Before the end of the 
        transition period, as defined in section 801(2), the Secretary 
        of Agriculture and the Secretary of Homeland Security shall 
        enter into an agreement to effectuate the transfer of functions 
        required by subsection (a). The Secretary of Agriculture and 
        the Secretary of Homeland Security may jointly revise the 
        agreement as necessary thereafter.
            (2) Required Terms.--The agreement required by this 
        subsection shall specifically address the following:
                    (A) The supervision by the Secretary of Agriculture 
                of the training of employees of the Secretary of 
                Homeland Security to carry out the functions 
                transferred pursuant to subsection (a).
                    (B) The transfer of funds to the Secretary of 
                Homeland Security under subsection (f).
            (3) Cooperation and reciprocity.--The Secretary of 
        Agriculture and the Secretary of Homeland Security may include 
        as part of the agreement the following:
                    (A) Authority for the Secretary of Homeland 
                Security to perform functions delegated to the Animal 
                and Plant Health Inspection Service of the Department 
                of Agriculture regarding the protection of domestic 
                livestock and plants, but not transferred to the 
                Secretary of Homeland Security pursuant to subsection 
                (a).
                    (B) Authority for the Secretary of Agriculture to 
                use employees of the Department of Homeland Security to 
                carry out authorities delegated to the Animal and Plant 
                Health Inspection Service regarding the protection of 
                domestic livestock and plants.
    (f) Periodic Transfer of Funds to Department of Homeland 
Security.--
            (1) Transfer of funds.--Out of funds collected by fees 
        authorized under sections 2508 and 2509 of the Food, 
        Agriculture, Conservation, and Trade Act of 1990 (21 U.S.C. 
        136, 136a), the Secretary of Agriculture shall transfer, from 
        time to time in accordance with the agreement under subsection 
        (e), to the Secretary of Homeland Security funds for activities 
        carried out by the Secretary of Homeland Security for which 
        such fees were collected.
            (2) Limitation.--The proportion of fees collected pursuant 
        to such sections that are transferred to the Secretary of 
        Homeland Security under this subsection may not exceed the 
        proportion of the costs incurred by the Secretary of Homeland 
        Security to all costs incurred to carry out activities funded 
        by such fees.
    (g) Transfer of Department of Agriculture Employees.--During the 
transition period, the Secretary of Agriculture shall transfer to the 
Secretary of Homeland Security not more than 3,200 full-time equivalent 
positions of the Department of Agriculture.
    (h) Protection of Inspection Animals.--Title V of the Agricultural 
Risk Protection Act of 2000 (7 U.S.C. 2279e, 2279f) is amended--
            (1) in section 501(a)--
                    (A) by inserting ``or the Department of Homeland 
                Security'' after ``Department of Agriculture''; and
                    (B) by inserting ``or the Secretary of Homeland 
                Security'' after ``Secretary of Agriculture'';
            (2) by striking ``Secretary'' each place it appears (other 
        than in sections 501(a) and 501(e)) and inserting ``Secretary 
        concerned''; and
            (3) by adding at the end of section 501 the following new 
        subsection:
    ``(e) Secretary Concerned Defined.--In this title, the term 
`Secretary concerned' means--
            ``(1) the Secretary of Agriculture, with respect to an 
        animal used for purposes of official inspections by the 
        Department of Agriculture; and
            ``(2) the Secretary of Homeland Security, with respect to 
        an animal used for purposes of official inspections by the 
        Department of Homeland Security.''.

SEC. 405. INTERAGENCY COMMON RULES.

    The Secretary shall issue common rules with modal units of the 
Department of Transportation with respect to matters relating to 
transportation security, including with respect to the following:
            (1) Air transportation security matters under the authority 
        of the Federal Aviation Administration.
            (2) Road, highway, and bridge security matters under the 
        authority of the Federal Highway Administration.
            (3) Railroad security matters under the authority of the 
        Federal Railroad Administration.
            (4) Mass transit security matters under the authority of 
        the Federal Transit Administration.
            (5) Maritime transportation security matters under the 
        authority of the Maritime Administration.

SEC. 406. IMMIGRATION FUNCTIONS.

    (a) Annual Report.--
            (1) In general.--One year after the date of the enactment 
        of this Act, and each year thereafter, the Secretary shall 
        submit a report to the President, to the Committees on the 
        Judiciary and Government Reform of the United States House of 
        Representatives, and to the Committees on the Judiciary and 
        Government Affairs of the Senate, on the impact the transfer 
        made by section 402(2) has had on immigration functions.
            (2) Matter included.--The report shall address the 
        following with respect to the period covered by the report:
                    (A) The aggregate number of all immigration 
                applications and petitions received, and processed, by 
                the Department;
                    (B) Region-by-region statistics on the aggregate 
                number of immigration applications and petitions filed 
                by an alien (or filed on behalf of an alien) and 
                denied, and the reasons for such denials, disaggregated 
                by category of denial and application or petition type.
                    (C) The quantity of backlogged immigration 
                applications and petitions that have been processed, 
                the aggregate number awaiting processing, and a 
                detailed plan for eliminating the backlog.
                    (D) The median processing period for immigration 
                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, 
                and if those grievances were resolved.
                    (F) Plans to address grievances and improve 
                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 the Congress Regarding Immigration Services.--It is 
the sense of the Congress that--
            (1) the quality and efficiency of immigration services 
        rendered by the Federal Government should be improved after the 
        transfer made by section 402(2) takes effect; and
            (2) the Secretary should undertake efforts to guarantee 
        that concerns regarding the quality and efficiency of 
        immigration services are addressed after such effective date.

SEC. 407. CITIZENSHIP AND IMMIGRATION SERVICES OMBUDSMAN.

    (a) In General.--Within the Department, there shall be a position 
of Citizenship and Immigration Services Ombudsman (in this section 
referred to as the ``Ombudsman''). The Ombudsman shall report directly 
to the Secretary. The Ombudsman shall have a background in customer 
service as well as immigration law. The Ombudsman may establish an 
office (other than the local offices described in this section) within 
the Department, and hire staff as appropriate, consistent with other 
Federal employment law .
    (b) Functions.--It shall be the function of the Ombudsman--
            (1) to assist individuals and employers in resolving 
        problems with citizenship and immigration services;
            (2) to identify areas in which individuals and employers 
        have problems in dealing with citizenship and immigration 
        services personnel of the Department;
            (3) to the extent possible, to propose changes in the 
        administrative practices of the Department to mitigate problems 
        identified under paragraph (2); and
            (4) to identify potential legislative changes that may be 
        appropriate to mitigate such problems.
    (c) Annual Reports.--
            (1) Objectives.--Not later than June 30 of each calendar 
        year, the Ombudsman shall report to the Committees on the 
        Judiciary and Government Reform of the United States House of 
        Representatives, and the Committees on the Judiciary and 
        Government Affairs of the Senate, on the objectives of the 
        Office of the Ombudsman for the fiscal year beginning in such 
        calendar year. Any such report shall contain full and 
        substantive analysis, in addition to statistical information, 
        and--
                    (A) shall identify the initiatives the Ombudsman 
                has taken on improving services and responsiveness of 
                the Department in providing citizenship and immigration 
                services;
                    (B) shall contain a summary of the most pervasive 
                and serious problems encountered by individuals and 
                employers, including a description of the nature of 
                such problems;
                    (C) shall contain an inventory of the items 
                described in subparagraphs (A) and (B) for which action 
                has been taken and the result of such action;
                    (D) shall contain an inventory of the items 
                described in subparagraphs (A) and (B) for which action 
                remains to be completed and the period during which 
                each item has remained on such inventory;
                    (E) shall contain an inventory of the items 
                described in subparagraphs (A) and (B) for which no 
                action has been taken, the period during which each 
                item has remained on such inventory, the reasons for 
                the inaction, and shall identify any official of the 
                Department who is responsible for such inaction;
                    (F) shall contain recommendations for such 
                administrative and legislative action as may be 
                appropriate to resolve problems encountered by 
                individuals and employers, including problems created 
                by excessive backlogs in the adjudication and 
                processing of immigration benefit petitions and 
                applications; and
                    (G) shall include such other information as the 
                Ombudsman may deem advisable.
            (2) Report to be submitted directly.--Each report required 
        under this subsection shall be provided directly to the 
        committees described in paragraph (1) without any prior review 
        or comment from the Secretary or any other officer or employee 
        of the Department or the Office of Management and Budget.
    (d) Other Responsibilities.--The Ombudsman--
            (1) shall monitor the coverage and geographic allocation of 
        local offices of the Ombudsman;
            (2) shall develop guidance to be distributed to all 
        officers and employees of the Department performing immigration 
        functions outlining the criteria for referral of inquiries to 
        local offices of the Ombudsman;
            (3) shall ensure that the local telephone number for each 
        local office of the Ombudsman is published and available to 
        individuals and employers served by the office;
            (4) shall ensure that identifying information about 
        individuals and employers seeking assistance is not disclosed 
        by the Ombudsman or any employee of the Ombudsman without the 
        consent of the individual or employer; and
            (5) shall meet regularly with the Secretary (or the 
        Secretary's delegate) to identify serious immigration service 
        problems and to present recommendations for such administrative 
        action as may be appropriate to resolve problems encountered by 
        individuals and employers.
    (e) Personnel Actions.--
            (1) In general.--The Ombudsman shall have the 
        responsibility and authority--
                    (A) to appoint local ombudsmen and make available 
                at least 1 such ombudsman for each State; and
                    (B) to evaluate and take personnel actions 
                (including dismissal) with respect to any employee of 
                any local office of the Ombudsman consistent with other 
                Federal employment law.
            (2) Consultation.--The Ombudsman may consult with the 
        appropriate supervisory personnel of the Department in carrying 
        out the Ombudsman's responsibilities under this subsection.
    (f) Response of Recommendations.--The Secretary shall establish 
procedures requiring a formal response to all recommendations submitted 
by the Ombudsman within 3 months after submission.
    (g) Operation of Local Offices.--
            (1) In general.--Each local ombudsman--
                    (A) shall report to the Ombudsman or the delegate 
                thereof;
                    (B) may consult with the appropriate supervisory 
                personnel of the Department regarding the daily 
                operation of the local office of such ombudsman;
                    (C) shall, at the initial meeting with any 
                individual or employer seeking the assistance of such 
                local office, notify such individual or employer that 
                the local offices of the Ombudsman operate 
                independently of any other component of the Department 
                and report directly to the Congress through the 
                Ombudsman; and
                    (D) at the local ombudsman's discretion, may 
                determine not to disclose to any other component of the 
                Department contact with, or information provided by, 
                such individual or employer.
            (2) Maintenance of independent communications.--Each local 
        office of the Ombudsman shall maintain a phone, facsimile, and 
        other means of electronic communication access, and a post 
        office address, that is separate from those maintained by any 
        other component of the Department.

SEC. 408. SEAPORT SECURITY FUNCTIONS.

    (a) Transfers.--In addition to the other transfers under this 
title, in accordance with title VIII there shall be transferred to the 
Secretary the functions, personnel, assets, and liabilities of the 
Department of Transportation relating to port security that are 
authorized by the Ports and Waterways Safety Act (33 U.S.C. 1221 et 
seq.), the International Maritime and Port Security Act (46 App. U.S.C. 
1807 et seq.), and chapter 37 of title 46, United States Code.
    (b) Report.--Not later than 2 years after the date of the enactment 
of this Act, the Secretary shall submit to the Congress a report on 
whether or not efforts undertaken on the development of contingency 
plans and procedures to prevent or respond to acts of terrorism under 
section 7 of the Ports and Waterways Safety Act (33 U.S.C. 1226) meet 
the following goals:
            (1) Port of origin goals.--
                    (A) Increasing proactive policing of international 
                cargo.
                    (B) Increasing inspection of arriving cargo based 
                on port of origin cargo screening capability and 
                compliance with security standards.
                    (C) Increasing communications with foreign 
                governments and recommend steps to improve foreign port 
                security and cargo screening.
            (2) Transit goals.--
                    (A) Developing an improved cargo identification and 
                screening system for containerized cargo.
                    (B) Developing standards to improve the physical 
                security of the cargo containers themselves, including 
                standards for seals and locks.
                    (C) Developing a plan to extend the seaward 
                jurisdiction of the Coast Guard to a point farther than 
                three miles from shore.
            (3) Port of entry goals.--
                    (A) Developing an improved import cargo information 
                system enabling shippers and carriers of containerized 
                cargo to provide import cargo information 24 hours 
                before the container is loaded on a ship destined for 
                the United States.
                    (B) Developing an improved system to require ocean 
                carriers to provide crew and passenger manifests in 
                advance of a vessel's arrival in the United States.
            (4) Port security technical security goals.--
                    (A) Conducting vulnerability assessments at each 
                seaport.
                    (B) Conducting regular mandatory security meetings 
                at each seaport between Federal, State, and local law 
                enforcement organizations, the trade, and port 
                authorities.
                    (C) Developing a plan that assigns first responder 
                duties and responsibilities among Federal, State, and 
                local government agencies and sets minimum training, 
                drills, and antiterrorism action standards for vessel 
                and facility personnel.
                    (D) Establishing a system of surveillance to 
                safeguard against and provide the earliest possible 
                notice of a terrorist act.
                    (E) Developing a system of standard security cards 
                to be used in identifying personnel with access to 
                sensitive areas.
                    (F) Developing standardized guidelines for 
                physical, procedural, and personnel security for 
                seaports.
                    (G) Developing a central database of the 
                individuals responsible for implementing antiterrorism 
                actions at each seaport.
            (5) Inspections goals.--
                    (A) Increasing inspections based on each ship's 
                threat potential as assessed before it is allowed to 
                enter a United States port.
                    (B) Creating teams of specifically trained 
                inspectors to assess threats.
                    (C) Creating teams of specially trained incident 
                managers to manage identified threats.
                    (D) Developing a plan to consolidate federal 
                inspection facilities and co-locate Federal inspectors 
                in joint facilities.
                    (E) Develop a plan to move remotely located 
                inspection facilities to the docks.

              TITLE V--EMERGENCY PREPAREDNESS AND RESPONSE

SEC. 501. UNDER SECRETARY FOR EMERGENCY PREPAREDNESS AND RESPONSE.

    The Secretary, acting through the Under Secretary for Emergency 
Preparedness and Response, shall have responsibility for the following:
            (1) Helping to ensure the preparedness of emergency 
        response providers for terrorist attacks, major disasters, and 
        other emergencies.
            (2) With respect to the Nuclear Incident Response Team 
        (regardless of whether it is operating as an organizational 
        unit of the Department pursuant to this title)--
                    (A) establishing standards and certifying when 
                those standards have been met;
                    (B) conducting joint and other exercises and 
                training and evaluating performance; and
                    (C) providing funds to the Department of Energy and 
                the Environmental Protection Agency, as appropriate, 
                for homeland security planning, 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 Support Team, 
                the Strategic National Stockpile, the National Disaster 
                Medical System, and (when operating as an 
                organizational unit of the Department pursuant to this 
                title) the Nuclear Incident Response Team;
                    (C) overseeing the Metropolitan Medical Response 
                System; and
                    (D) coordinating other Federal response resources 
                in the event of a terrorist attack or major disaster.
            (4) Aiding the recovery from terrorist attacks and major 
        disasters.
            (5) Building a comprehensive national incident management 
        system with Federal, State, and local government personnel, 
        agencies, and authorities, to respond to such attacks and 
        disasters.
            (6) Consolidating existing Federal Government emergency 
        response plans into a single, coordinated national response 
        plan while maintaining the programmatic integrity of existing 
        Federal-State-local partnerships including under the FIRE Act 
        and the COPS program.
            (7) Developing comprehensive programs for developing 
        interoperative communications technology, and helping to ensure 
        that emergency response providers acquire such technology.
            (8) Providing direct assistance with amounts appropriated 
        by the Congress to State and local emergency responders through 
        a block grant program that--
                    (A) meets short- and long-term security needs and 
                complies with applicable laws;
                    (B) funds, among other activities, additional law 
                enforcement, fire, public health and emergency 
                resources, improving cyber and infrastructure security, 
                and devising a homeland security plan; and
                    (C) provides that grants may be used to cover costs 
                incurred for eligible activities on or after September 
                11, 2001, so as to allow local communities a soft match 
                of overtime and security expenses incurred as a result 
                of the September 11, 2001, terrorist attacks and 
                Federal directives to secure communities thereafter.

SEC. 502. FUNCTIONS TRANSFERRED.

    In accordance with title VIII, there shall be transferred to the 
Secretary the functions, personnel, assets, and liabilities of the 
following:
            (1) The Federal Emergency Management Agency, including the 
        functions of the Director of the Federal Emergency Management 
        Agency relating thereto.
            (2) The Office for Domestic Preparedness of the Office of 
        Justice Programs, including the functions of the Attorney 
        General relating thereto.
            (3) The National Domestic Preparedness Office of the 
        Federal Bureau of Investigation, including the functions of the 
        Attorney General relating thereto.
            (4) The Domestic Emergency Support Teams of the Department 
        of Justice, including the functions of the Attorney General 
        relating thereto.
            (5) The Office of the Assistant Secretary for Public Health 
        Emergency Preparedness (including the Office of Emergency 
        Preparedness, the National Disaster Medical System, and the 
        Metropolitan Medical Response System) of the Department of 
        Health and Human Services, including the functions of the 
        Secretary of Health and Human Services relating thereto.
            (6) The Strategic National Stockpile of the Department of 
        Health and Human Services, including the functions of the 
        Secretary of Health and Human Services relating thereto.

SEC. 503. NUCLEAR INCIDENT RESPONSE.

    (a) Nuclear Incident Response Team.--At the direction of the 
Secretary (in connection with an actual or threatened terrorist attack, 
major disaster, or other emergency), 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) Delivery of Potassium Iodide.--In the event of a terrorist 
attack, major disaster, or other emergency, the Secretary shall devise 
a plan to deliver Potassium Iodide (KI) to the people for whom it is 
intended within 4 hours after exposure to radioactive iodines from a 
nuclear power plant, and as expeditiously as possible to persons beyond 
the immediate 20-mile radius of protection.
    (c) Common Interagency Rules.--The Secretary shall issue common 
rules with the Nuclear Regulatory Commission with respect to matters 
relating to nuclear security.
    (d) Construction.--Nothing in this title shall be understood to 
limit the ordinary responsibility of the Secretary of Energy, the 
Administrator of the Environmental Protection Agency, and the Nuclear 
Regulatory Commission for organizing, training, equipping, and 
utilizing their respective entities in the Nuclear Incident Response 
Team, or (subject to the provisions of this title) from exercising 
direction, authority, and control over them when they are not operating 
as a unit of the Department.

SEC. 504. DEFINITION.

    For purposes of this title, ``nuclear incident response team'' 
means a resource that includes--
            (1) those entities of the Department of Energy that perform 
        nuclear or radiological emergency support functions (including 
        accident response, search response, advisory, and technical 
        operations functions), radiation exposure functions at the 
        medical assistance facility known as Oak Ridge National 
        Laboratory, radiological assistance functions, and related 
        functions;
            (2) those entities of the Environmental Protection Agency 
        that perform such support functions (including radiological 
        emergency response functions) and related functions; and
            (3) those entities of the Nuclear Regulatory Commission 
        that perform such support and related functions.

SEC. 505. CONDUCT OF CERTAIN PUBLIC HEALTH-RELATED ACTIVITIES.

    (a) In General.--Except as the President may otherwise direct, the 
Secretary shall carry out the following responsibilities through the 
Department of Health and Human Services (including the Public Health 
Service), under agreements with the Secretary of Health and Human 
Services, and may transfer funds to such Secretary in connection with 
such agreements:
            (1) All biological, chemical, radiological, and nuclear 
        preparedness-related construction, renovation, and enhancement 
        of security for research and development or other facilities 
        owned or occupied by the Department of Health and Human 
        Services.
            (2) All public health-related activities being carried out 
        by the Department of Health and Human Services on the effective 
        date of this Act (other than activities under functions 
        transferred by this Act to the Department) to assist State and 
        local government personnel, agencies, or authorities, non-
        Federal public and private health care facilities and 
        providers, and public and non-profit health and educational 
        facilities, to plan, prepare for, prevent, identify, and 
        respond to biological, chemical, radiological, and nuclear 
        events and public health emergencies, by means including direct 
        services, technical assistance, communications and 
        surveillance, education and training activities, and grants.
    (b) Preparedness and Response Program.--With respect to any 
responsibilities carried out through the Department of Health and Human 
Services under this section, the Secretary, in consultation with the 
Secretary of Health and Human Services, shall have the authority to 
establish the preparedness and response program, including the setting 
of priorities.

SEC. 506. MINIMUM REQUIREMENTS FOR PRIVATE SECURITY OFFICERS.

    (a) Increase of Grants.--The Secretary shall increase grants 
awarded by the Federal Emergency Management Agency to a State for 
purposes other than emergency relief by 10 percent if the Secretary has 
certified that the State meets the requirements of subsection (b).
    (b) Minimum Requirements.--In order to be eligible under subsection 
(a), the following requirements shall apply with respect to private 
security officers employed within the State:
            (1) Each private security officer shall receive 24 hours of 
        training before any security assignment, an additional 16 hours 
        within 90 days of the initial security assignment, and an 
        additional 8 hours of training each year. All training 
        described in this paragraph shall be certified by the State.
            (2) The State shall perform criminal background checks on 
        all private security officers, including State and Federal name 
        and fingerprint checks.
            (3) No private security officer may work in the State 
        without a license that verifies that the officer has completed 
        the requirements of this subsection.
            (4) The State shall have an advisory council regarding 
        requirements for private security officers representing various 
        stakeholders, including private security officers.
            (5) The State shall maintain a registry of all licensed 
        private security officers which shall be open to public 
        inquiry.
            (6) The State shall establish enforcement mechanisms that 
        include dedicated enforcement personnel, a complaint procedure 
        open to any member of the public, open record keeping, and the 
        ability to fine, suspend, and revoke private security officer 
        licenses.
            (7) Whistleblower protections shall be afforded to private 
        security officers in the State.
    (c) Private Security Officer Defined.--In this section, the term 
``private security officer'' means any individual working as a contract 
security officer or a proprietary security officer who--
            (1) advertises as providing or performs bodyguard services 
        or otherwise guards persons or property;
            (2) attempts to prevent theft or unlawful taking of goods, 
        wares, or merchandise; or
            (3) attempts to prevent the misappropriation or concealment 
        of goods, wares, or merchandise.
    (d) User Fee.--As specified in subsection (b)(2), an association of 
employers of private security officers, designated for the purposes of 
this section by the State Attorney General, may submit fingerprints or 
other methods of positive identification approved by the appropriate 
Federal authority to the appropriate Federal authority on behalf of any 
applicant for a State license or certificate of registration as a 
private security officer or employer of private security officers. In 
response to such a submission, the State Attorney General may, to the 
extent provided by State law conforming to the requirements of the 
second paragraph under the heading ``Federal Bureau of Investigation'' 
and the subheading ``Salaries and Expenses'' in title II of Public Law 
92-544 (86 Stat. 1115), exchange, for licensing and employment 
purposes, identification and criminal history records with the 
appropriate Federal authority.

                          TITLE VI--MANAGEMENT

SEC. 601. DEPUTY SECRETARY FOR MANAGEMENT.

    The Secretary, acting through the Deputy Secretary for Management, 
shall have responsibility for the following with respect to the 
Department:
            (1) The budget, appropriations, expenditures of funds, 
        accounting, and finance.
            (2) Procurement.
            (3) Human resources and personnel.
            (4) Information technology and communications systems.
            (5) Facilities, property, equipment, and other material 
        resources.
            (6) Security for personnel, information technology and 
        communications systems, facilities, property, equipment, and 
        other material resources.
            (7) Identification and tracking of performance measures 
        relating to the responsibilities of the Department.
            (8) Grants and other assistance management programs.
            (9) The transition process, to ensure an efficient and 
        orderly transfer of functions and personnel to the Department, 
        including the development of a transition plan.
            (10) The conduct of internal audits and management analyses 
        of the programs and activities of the Department.
            (11) Any other management duties that the Secretary may 
        designate.

SEC. 602. CHIEF FINANCIAL OFFICER.

    Notwithstanding section 902(a)(1) of title 31, United States Code, 
the Chief Financial Officer of the Department shall report to the 
Secretary, or to the Deputy Secretary for Management, as the Secretary 
may direct.

SEC. 603. CHIEF INFORMATION OFFICER.

    Notwithstanding section 3506(a)(2) of title 44, United States Code, 
the Chief Information Officer shall report to the Secretary, or to the 
Deputy Secretary for Management, as the Secretary may direct.

SEC. 604. ESTABLISHMENT OF OFFICE FOR CIVIL RIGHTS AND CIVIL LIBERTIES.

    The Secretary shall establish in the Department an Office for Civil 
Rights and Civil Liberties, the head of which shall be the Director for 
Civil Rights and Civil Liberties. The Director shall--
            (1) review and assess information alleging abuses of civil 
        rights, civil liberties, and racial and ethnic profiling by 
        employees and officials of the Department;
            (2) make public through the Internet, radio, television, or 
        newspaper advertisements information on the responsibilities 
        and functions of, and how to contact, the Office; and
            (3) submit to the President of the Senate, the Speaker of 
        the House of Representatives, and the appropriate committees 
        and subcommittees of the Congress on a semiannual basis a 
        report on the implementation of this section, including the use 
        of funds appropriated to carry out this section, and detailing 
        any allegations of abuses described in paragraph (1) and any 
        actions taken by the Department in response to such 
        allegations.

   TITLE VII--COORDINATION; INSPECTOR GENERAL; UNITED STATES SECRET 
    SERVICE; GENERAL PROVISIONS; ACQUISITIONS; INFORMATION SHARING; 
                                PROPERTY

           Subtitle A--Coordination With Non-Federal Entities

SEC. 701. RESPONSIBILITIES.

    In discharging his responsibilities relating to coordination 
(including the provision of training and equipment) with State and 
local government personnel, agencies, and authorities, with the private 
sector, and with other entities, the responsibilities of the Secretary 
shall include--
            (1) coordinating with State and local government personnel, 
        agencies, and authorities, and with the private sector, to 
        ensure adequate planning, equipment, training, and exercise 
        activities;
            (2) coordinating and, as appropriate, consolidating, the 
        Federal Government's communications and systems of 
        communications relating to homeland security with State and 
        local government personnel, agencies, and authorities, the 
        private sector, other entities, and the public;
            (3) directing and supervising grant programs of the Federal 
        Government for State and local government emergency response 
        providers; and
            (4) distributing or, as appropriate, coordinating the 
        distribution of, warnings and information to State and local 
        government personnel, agencies, and authorities and to the 
        public.

SEC. 702. INTERGOVERNMENTAL COORDINATING COUNCIL.

    (a) Establishment and Purposes.--The Secretary shall establish an 
Intergovernmental Coordinating Council to serve as an ongoing advisory 
forum for promoting effective coordination and cooperation among 
Federal, State, and local governments on matters relevant to the work 
of the Department. The subjects to be addressed by the Council shall 
include--
            (1) ensuring that State and local officials have the 
        information they need to prepare for and respond to homeland 
        security threats;
            (2) ensuring the greatest possible coordination and 
        consistent operation of Federal homeland security programs and 
        activities;
            (3) ensuring that State and local governments provide the 
        greatest cooperation and support for the work of the Department 
        and other Federal agencies with respect to homeland security;
            (4) ensuring that the needs and perspectives of State and 
        local government officials are integrated into all relevant 
        aspects of the homeland security strategies and work of the 
        Department and other Federal agencies; and
            (5) such other subjects as the Chair or Vice Chair of the 
        Council may suggest.
    (b) Chair and Vice Chair.--The Secretary shall chair the Council 
and shall designate an official of a State or local government to serve 
as Vice Chair of the Council.
    (c) Composition.--The Council shall consist of officials of State 
and local governments as well as such officials of the Department and 
of other Federal agencies as the Secretary designates. The Secretary 
shall determine the size and composition of the Council in accordance 
with the criteria set forth in this subsection and in consultation with 
the Vice Chair. With respect to State and local government members, the 
Council shall be representative of--
            (1) the full range of emergency response providers;
            (2) the geographical regions of the country;
            (3) different levels and sizes of governments; and
            (4) jurisdictions that face different homeland security 
        threats.
    (d) Meetings.--The Council shall hold regular meetings at such 
times and locations as the Secretary determines, in consultation with 
the Vice Chair.
    (e) Definition of State.--For the purposes of this section, 
``State'' includes the District of Columbia, Puerto Rico, the Virgin 
Islands, Guam, American Samoa, and the Commonwealth of the Northern 
Mariana Islands.

                     Subtitle B--Inspector General

SEC. 710. AUTHORITY OF THE SECRETARY.

    (a) In General.--Notwithstanding the last two sentences of section 
3(a) of the Inspector General Act of 1978, the Inspector General shall 
be under the authority, direction, and control of the Secretary with 
respect to audits or investigations, or the issuance of subpoenas, that 
require access to information concerning--
            (1) intelligence, counterintelligence, or counterterrorism 
        matters;
            (2) ongoing criminal investigations or proceedings;
            (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 authorized protection by 
        section 3056 of title 18, United States Code, section 202 of 
        title 3 of such Code, or any provision of the Presidential 
        Protection Assistance Act of 1976; or
            (6) other matters the disclosure of which would, in the 
        Secretary's judgment, constitute a serious threat to national 
        security.
    (b) Prohibition of Certain Investigations.--With respect to the 
information described in subsection (a), the Secretary may prohibit the 
Inspector General from carrying out or completing any audit or 
investigation or from issuing any subpoena, or may delay the issuance 
of any report by the Inspector General, after the Inspector General has 
decided to initiate, carry out, or complete such audit or 
investigation, issue such subpoena, or issue such report, if the 
Secretary determines that such prohibition or delay, respectively, is 
necessary to prevent the disclosure 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) Notifications Required.--
            (1) Notification by secretary.--The Secretary shall, within 
        7 days after any exercise of authority under subsection (b), 
        transmit a written statement of the reasons for the exercise of 
        such authority to the President of the Senate, the Speaker of 
        the House of Representatives, the Committee on Government 
        Reform of the House of Representatives, and the Committee on 
        Governmental Affairs of the Senate.
            (2) Notification by inspector general.--The Inspector 
        General shall provide written notification to the Committee on 
        Government Reform of the House of Representatives and the 
        Committee on Governmental Affairs of the Senate of any exercise 
        of authority by the Secretary under subsection (b) by not later 
        than 7 days after receiving notice of such exercise of 
        authority.
    (d) Access to Information by Congress.--The exercise 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 General Act of 1978 (5 
U.S.C. App.) is further 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 Homeland Security shall have 
oversight responsibility for the internal investigations performed by 
the Office of Internal Affairs of the United States Customs Service and 
the Office of Inspections of the United States Secret Service. The head 
of each such office shall promptly report to the Inspector General the 
significant activities being carried out by such office.''.

                Subtitle C--United States Secret Service

SEC. 720. FUNCTIONS TRANSFERRED.

    In accordance with title VIII, there shall be transferred to the 
Secretary the functions, personnel, assets, and liabilities of the 
United States Secret Service, which shall be maintained as a distinct 
entity within the Department, including the functions of the Secretary 
of the Treasury relating thereto.

                     Subtitle D--General Provisions

SEC. 730. HUMAN RESOURCE MANAGEMENT.

    (a) Authority To Adjust Pay Schedules.--
            (1) In general.--Notwithstanding any provision of title 5, 
        United States Code, the Secretary may, under regulations 
        prescribed jointly with the Director of the Office of Personnel 
        Management, provide for such adjustments in rates of basic pay 
        as may be necessary to address inequitable pay disparities 
        among employees within the Department performing similar work 
        in similar circumstances.
            (2) Applicability.--No authority under paragraph (1) may be 
        exercised with respect to any employee who serves in--
                    (A) an Executive Schedule position under subchapter 
                II of chapter 53 of title 5, United States Code; or
                    (B) a position for which the rate of basic pay is 
                fixed in statute by reference to a section or level 
                under subchapter II of chapter 53 of such title 5.
            (3) Limitations.--Nothing in this subsection shall 
        constitute authority--
                    (A) to fix pay at a rate greater than the maximum 
                amount of cash compensation allowable under section 
                5307 of title 5, United States Code, in a year; or
                    (B) to exempt any employee from the application of 
                such section 5307.
            (4) Sunset provision.--Effective 5 years after the 
        effective date of this Act, all authority to issue regulations 
        under this subsection (including regulations which would 
        modify, supersede, or terminate any regulations previously 
        issued under this subsection) shall cease to be available.
    (b) Suspension and Removal of Employees in the Interests of 
National Security.--The Secretary shall establish procedures consistent 
with section 7532 of title 5, United States Code, to provide for the 
suspension and removal of employees of the Department when necessary in 
the interests of national security or homeland security. Such 
regulations shall provide for written notice, hearings, and review 
similar to that provided by such section 7532.
    (c) Demonstration Project.--
            (1) In general.--Not later than 5 years after the effective 
        date of this Act, the Secretary shall submit to Congress a 
        proposal for a demonstration project, the purpose of which 
        shall be to help attain a human resources management system 
        which in the judgment of the Secretary is necessary in order to 
        enable the Department best to carry out its mission.
            (2) Requirements.--The proposal shall--
                    (A) ensure that veterans' preference and 
                whistleblower protection rights are retained;
                    (B) ensure that existing collective bargaining 
                agreements and rights under chapter 71 of title 5, 
                United States Code, remain unaffected;
                    (C) ensure the availability of such measures as may 
                be necessary in order to allow the Department to 
                recruit and retain the best persons possible to carry 
                out its mission;
                    (D) include one or more performance appraisal 
                systems which shall--
                            (i) provide for periodic appraisals of the 
                        performance of covered employees;
                            (ii) provide for meaningful participation 
                        of covered employees in the establishment of 
                        employee performance plans; and
                            (iii) use the results of performance 
                        appraisals as a basis for rewarding, reducing 
                        in grade, retaining, and removing covered 
                        employees; and
                    (E) contain recommendations for such legislation or 
                other actions by Congress as the Secretary considers 
                necessary.
            (3) Definition of a covered employee.--For purposes of 
        paragraph (2)(D), the term ``covered employee'' means a 
        supervisor or management official (as defined in paragraphs 
        (10) and (11) of section 7103(a) of title 5, United States 
        Code, respectively) who occupies a position within the 
        Department which is in the General Schedule.
    (d) Merit System Principles.--All authorities under subsections (a) 
and (b) shall be exercised in a manner, and all personnel management 
flexibilities or authorities proposed under subsection (c) shall be, 
consistent with merit system principles under section 2301 of title 5, 
United States Code.
    (e) Remedies for Retaliation Against Whistleblowers.--
    Section 7211 of title 5, United States Code, is amended--
            (1) by inserting ``(a)'' before ``The right''; and
            (2) by adding at the end the following:
    ``(b) Any employee aggrieved by a violation of subsection (a) may 
bring a civil action in the appropriate United States district court, 
within 3 years after the date on which such violation occurs, against 
any agency, organization, or other person responsible for the 
violation, for lost wages and benefits, reinstatement, costs and 
attorney fees, compensatory damages, and equitable, injunctive, or any 
other relief that the court considers appropriate. Any such action 
shall, upon request of the party bringing the action, be tried by the 
court with a jury.
    ``(c) The same legal burdens of proof in proceedings under 
subsection (b) shall apply as under sections 1214(b)(4)(B) and 1221(e) 
in the case of an alleged prohibited personnel practice described in 
section 2302(b)(8).
    ``(d) For purposes of this section, the term `employee' means an 
employee (as defined by section 2105) and any individual performing 
services under a personal services contract with the Government 
(including as an employee of an organization).''.
    (f) Nonreduction in Pay.--Nothing in this section shall, with 
respect to any employee who is transferred to the Department pursuant 
to this Act, constitute authority to reduce the rate of basic pay 
(including any comparability pay) payable to such employee below the 
rate last payable to such employee before the date on which such 
employee is so transferred.

SEC. 731. 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.
            (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) 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.

SEC. 732. REPORTING REQUIREMENTS.

    (a) Biennial Reports.--Every 2 years the Secretary shall submit to 
Congress--
            (1) a report assessing the resources and requirements of 
        executive agencies relating to border security and emergency 
        preparedness issues;
            (2) a report certifying the preparedness of the United 
        States to prevent, protect against, and respond to natural 
        disasters, cyber attacks, and incidents involving weapons of 
        mass destruction; and
            (3) a report assessing the emergency preparedness of each 
        State, including an assessment of each State's coordination 
        with the Department with respect to the responsibilities 
        specified in section 501.
    (b) Additional Report.--Not later than 1 year after the effective 
date of this Act, the Secretary shall submit to Congress a report--
            (1) assessing the progress of the Department in--
                    (A) implementing this Act; and
                    (B) ensuring the core functions of each entity 
                transferred to the Department are maintained and 
                strengthened; and
            (2) recommending any conforming changes in law necessary as 
        a result of the enactment and implementation of this Act.

SEC. 733. REQUIREMENT TO DEVELOP COMPREHENSIVE RISK MANAGEMENT 
                    ASSESSMENT AND HOMELAND SECURITY STRATEGY.

    (a) Requirement To Develop Strategy.--The President shall develop a 
comprehensive strategy for homeland security under which Federal, 
State, and local government organizations coordinate and cooperate to 
meet homeland security objectives.
    (b) Components of Strategy.--The homeland security strategy 
required to be developed under subsection (a) shall include the 
following components:
            (1) Identification of specific homeland security threats 
        based upon the results of the assessment under subsection (c).
            (2) Development of a specific strategy with respect to 
        antiterrorism activities and consequence management that 
        includes specific, measurable objectives by which the efficacy 
        of the execution of the strategy may be determined.
            (3) Identification of the executive departments, agencies, 
        and other organizations that should play a role in protecting 
        homeland security and specification of the role of each such 
        organization.
            (4) Providing for the selective use of personnel and assets 
        of the Armed Forces in circumstances in which those personnel 
        and assets would provide unique capability and could be used 
        without infringing on the civil liberties of the people of the 
        United States.
            (5) Optimization of the use of intelligence assets and 
        capabilities, including improvement of the processes by which 
        intelligence information is provided to State and local 
        governments.
            (6) Providing for augmentation of existing medical response 
        capability and equipment stockpiles at the Federal, State, and 
        local levels.
            (7) Development of a multiyear plan for phased 
        implementation of the strategy and a comprehensive projected 
        budget.
    (c) Requirement To Develop Risk Assessment.--The President shall 
conduct a comprehensive threat and risk assessment with respect to 
homeland security to be used as the basis for the identification of 
specific homeland security threats for purposes of subsection (b)(1). 
Not later than six months after the enactment of this Act, and annually 
thereafter, the President shall submit to Congress a comprehensive, 
national-level risk management assessment, which shall be submitted in 
unclassified form to the maximum extent possible, with a classified 
annex, if necessary.
    (d) Components of Risk Assessment.--The assessment required to be 
developed under subsection (c) shall include the following components:
            (1) A description of the most significant threats to the 
        United States, including military, terrorist, State, non-State, 
        foreign, domestic, conventional, and unconventional threats.
            (2) A description of the most significant vulnerabilities 
        of the United States, including those relating to population 
        and infrastructure.
            (3) A prioritization of the most significant risks to the 
        United States, based on the likelihood of the threats 
        identified under subsection (b)(1) and the potential damage 
        they could cause by exploiting vulnerabilities identified under 
        subsection (b)(2).
    (e) Participation of Executive Agencies.--The President shall 
direct the participation of any executive agencies, departments, or 
offices to develop the assessment required in subsection (c), including 
the provision of all necessary intelligence and other information.

SEC. 734. MILITARY ACTIVITIES.

    Except as specifically provided in this Act, nothing in this Act 
shall confer upon the Secretary any authority to engage in warfighting, 
the military defense of the United States, or other traditional 
military activities.

SEC. 735. REORGANIZATION; TRANSFER.

    (a) Allocation of Functions.--The Secretary is authorized to 
allocate or reallocate functions among the officers of the Department, 
and to establish, consolidate, alter, or discontinue such 
organizational units within the Department, as the Secretary may deem 
necessary or appropriate, but such authority does not extend to the 
abolition of any entity established or required to be maintained as a 
distinct entity by this Act.
    (b) Transfer of Appropriations.--Except as otherwise specifically 
provided by law, not to exceed five percent of any appropriation 
available to the Secretary in any fiscal year may be transferred 
between such appropriations, except that not less than fifteen days' 
notice shall be given to the Committees on Appropriations of the Senate 
and House of Representatives before any such transfer is made.
    (c) Limitation.--Notwithstanding any other provision of this 
section, and except as otherwise specifically provided in this Act, the 
Secretary may not abolish any entity that is transferred to the 
Department, or terminate any function that is transferred to the 
Secretary, the Department, or any of the personnel of the Department, 
if such entity or function, respectively, is established or required by 
statute.

SEC. 736. MISCELLANEOUS PROVISIONS.

    (a) Seal.--The Department shall have a seal, whose design is 
subject to the approval of the President.
    (b) Gifts, Devises, and Bequests.--With respect to the Department, 
the Secretary shall have the same authorities that the Attorney General 
has with respect to the Department of Justice under section 524(d) of 
title 28, United States Code.
    (c) 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.
    (d) 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. 737. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated for each of fiscal years 
2003 through 2007 such sums as maybe necessary to carry out this Act.

                        Subtitle E--Acquisitions

SEC. 740. RESEARCH AND DEVELOPMENT PROJECTS.

    (a) Authority.--During the five-year period following the effective 
date of this Act, the Secretary may carry out a pilot program under 
which the Secretary may exercise the following authorities:
            (1)(A) In carrying out basic, applied, and advanced 
        research and development projects for response to existing or 
        emerging terrorist threats, the Secretary may exercise the same 
        authority (subject to the same limitations and conditions) with 
        respect to such research and projects as the Secretary of 
        Defense may exercise under section 2371 of title 10, United 
        States Code (except for subsections (b) and (f) of such 
        section), after making a determination that--
                    (i) the use of a contract, grant, or cooperative 
                agreement for such projects is not feasible or 
                appropriate; and
                    (ii) use of other authority to waive Federal 
                procurement laws or regulations would not be feasible 
                or appropriate to accomplish such projects.
            (B) The annual report required under subsection (h) of such 
        section 2371, as applied to the Secretary by this paragraph, 
        shall be submitted to the President of the Senate and the 
        Speaker of the House of Representatives.
            (2)(A) Under the authority of paragraph (1) and subject to 
        the limitations of such paragraph, the Secretary may carry out 
        prototype projects, in accordance with the requirements and 
        conditions provided for carrying out prototype projects under 
        section 845 of the National Defense Authorization Act for 
        Fiscal Year 1994 (Public Law 103-160; 10 U.S.C. 2371 note).
            (B) In applying the authorities of such section 845--
                    (i) subsection (c) thereof shall apply with respect 
                to prototype projects under this paragraph, except that 
                in applying such subsection any reference in such 
                subsection to the Comptroller General shall be deemed 
                to refer to the Comptroller General and the Inspector 
                General of the Department; and
                    (ii) the Secretary shall perform the functions of 
                the Secretary of Defense under subsection (d) thereof.
    (b) Report.--Not later than one year after the effective date of 
this Act, and annually thereafter, the Comptroller General shall report 
to the Committee on Government Reform of the House of Representatives 
and the Committee on Governmental Affairs of the Senate on--
            (1) whether use of the authorities described in subsection 
        (a) attracts nontraditional Government contractors and results 
        in the acquisition of needed technologies; and
            (2) if such authorities were to be made permanent, whether 
        additional safeguards are needed with respect to the use of 
        such authorities.
    (c) 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. 741. 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, including the services of 
        experts or consultants (or organizations thereof), without 
        regard to the pay limitations of such section 3109.

SEC. 742. SPECIAL STREAMLINED ACQUISITION AUTHORITY.

    (a) Authority.--(1) The Secretary may use the authorities set forth 
in this section with respect to 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) The authority to make the determination described in paragraph 
(1) may not be delegated by the Secretary to an officer of the 
Department who is not appointed by the President with the advice and 
consent of the Senate.
    (3) Not later than the date that is seven days after the date of 
any determination under paragraph (1), the Secretary shall submit to 
the Committee on Government Reform of the House of Representatives and 
the Committee on Governmental Affairs of the Senate--
            (A) notification of such determination; and
            (B) the justification for such determination.
    (b) Increased Micro-Purchase Threshold For Certain Procurements.--
(1) The Secretary may designate certain employees of the Department to 
make procurements described in subsection (a) for which in the 
administration of section 32 of the Office of Federal Procurement 
Policy Act (41 U.S.C. 428) the amount specified in subsections (c), 
(d), and (f) of such section 32 shall be deemed to be $5,000.
    (2) The number of employees designated under paragraph (1) shall 
be--
            (A) fewer than the number of employees of the Department 
        who are authorized to make purchases without obtaining 
        competitive quotations, pursuant to section 32(c) of the Office 
        of Federal Procurement Policy Act (41 U.S.C. 428(c));
            (B) sufficient to ensure the geographic dispersal of the 
        availability of the use of the procurement authority under such 
        paragraph at locations reasonably considered to be potential 
        terrorist targets; and
            (C) sufficiently limited to allow for the careful 
        monitoring of employees designated under such paragraph.
    (3) Procurements made under the authority 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.--(1) With respect to a 
procurement described in subsection (a), the Secretary may deem the 
simplified acquisition threshold referred to in section 4(11) of the 
Office of Federal Procurement Policy Act (41 U.S.C. 403(11)) to be 
$175,000.
    (2) Section 18(c)(1) of the Office of Federal Procurement Policy 
Act is amended by adding at the end the following new subparagraph:
                    ``(H) the procurement is by the Secretary of 
                Homeland Security pursuant to the special procedures 
                provided in section 742(c) of the Homeland Security Act 
                of 2002.''.
    (d) Application of Certain Commercial Items Authorities.--(1) 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) The $5,000,000 limitation provided in section 31(a)(2) of the 
Office of Federal Procurement Policy Act (41 U.S.C. 427(a)(2)) and 
section 303(g)(1)(B) of the Federal Property and Administrative 
Services Act of 1949 (41 U.S.C. 253(g)(1)(B)) shall be deemed to be 
$7,500,000 for purposes of property or services under the authority of 
this subsection.
    (3) Authority under a provision of law referred to in paragraph (2) 
that expires under section 4202(e) of the Clinger-Cohen Act of 1996 
(divisions D and E of Public Law 104-106; 10 U.S.C. 2304 note) shall, 
notwithstanding such section, continue to apply for a procurement 
described in subsection (a).
    (e) Report.--Not later than 180 days after the end of fiscal year 
2005, the Comptroller General shall submit to the Committee on 
Governmental Affairs of the Senate and the Committee on Government 
Reform of the House of Representatives a report on the use of the 
authorities provided in this section. The report shall contain the 
following:
            (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 Department as described in 
        section 101.
            (2) An assessment of the extent to which prices for 
        property and services acquired using authorities provided under 
        this section reflected the best value.
            (3) The number of employees designated by each executive 
        agency under subsection (b)(1).
            (4) An assessment of the extent to which the Department has 
        implemented subsections (b)(2) and (b)(3) to monitor the use of 
        procurement authority by employees designated under subsection 
        (b)(1).
            (5) Any recommendations of the Comptroller General for 
        improving the effectiveness of the implementation of the 
        provisions of this section.

SEC. 743. PROGRAM TO ENCOURAGE AND SUPPORT INNOVATIVE SOLUTIONS TO 
                    ENHANCE HOMELAND SECURITY.

    (a) Establishment of Program.--The Secretary shall establish and 
promote a program to encourage and recognize contractor innovation and 
excellence in facilitating the mission of the Department (as described 
in section 101).
    (b) Issuance of Announcements Seeking Innovative Solutions.--Under 
the program, the Secretary shall issue announcements seeking unique and 
innovative solutions to advance the mission of the Department.
    (c) Technical Assistance Team.--(1) The Secretary shall convene a 
multifunction technical assistance team to assist in screening 
proposals submitted to the Secretary to provide unique and innovative 
solutions to advance the mission of the Department. The team shall be 
composed of Department employees who have expertise in scientific and 
technical disciplines that would facilitate the assessment of the 
feasibility of the proposals.
    (2) The technical assistance team shall--
            (A) assess the feasibility, scientific and technical 
        merits, and estimated cost of each proposal; and
            (B) submit each proposal, and the assessment of the 
        proposal, to each Under Secretary of the Department whose 
        duties most coincide with the subject matter of the proposal 
        and to any other executive agency whose mission would, in the 
        opinion of the technical assistance team, be facilitated by the 
        subject matter of the proposal.
    (3) The technical assistance team shall not consider or evaluate 
proposals submitted in response to a solicitation for offers for a 
pending procurement or for a specific agency requirement.
    (d) Monetary Awards for Innovative Solutions.--(1) Under the 
program carried out under this section, the Secretary shall provide 
monetary awards in recognition of unique and innovative solutions with 
the potential to significantly advance the mission of the Department.
    (2) The Secretary shall use a competitive process to select 
recipients of monetary awards under this subsection which shall include 
the widely advertised solicitation (including the announcements 
described in subsection (b)) of descriptive submissions on technology 
developments and prototypes, the substance of which are not otherwise 
available to the United States. The Secretary shall work with the 
technical assistance team described in subsection (c) in carrying out 
the competitive selection process.
    (3) An award made under this subsection may not exceed $20,000. The 
total amount of awards made under this subsection in a fiscal year may 
not exceed $500,000.
    (4) At least one quarter of the total amount awarded under this 
subsection during a fiscal year shall be awarded to small business 
concerns, within the meaning of such term as used in the Small Business 
Act (15 U.S.C. 632 et seq.).

SEC. 744. RISK SHARING AND INDEMNIFICATION.

    (a) Definitions.--Section 4 of the Office of Federal Procurement 
Policy Act (41 U.S.C. 403) is amended by adding at the end the 
following new paragraphs:
            ``(16) The term `anti-terrorism technology and services' 
        means any product, equipment, service or device, including 
        information technology as defined in section 5002 of the 
        Clinger-Cohen Act of 1996, system integration and any other 
        kind of services (including support services) related to 
        technology, designed, developed, modified or procured for the 
        purpose of preventing, detecting, identifying, or otherwise 
        deterring acts of terrorism.
            ``(17) The term `act of terrorism,' means the calculated 
        attack or threat of attack against persons, property or 
        infrastructure to inculcate fear, intimidate or coerce a 
        government, the civilian population, or any segment thereof, in 
        the pursuit of political, religious or ideological grounds.
            ``(18) 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.
            ``(19) The term `liability insurance' means insurance for 
        legal liabilities incurred by the insured resulting from--
                    ``(A) loss of or damage to property of others;
                    ``(B) ensuing loss of income or extra expense 
                incurred because of loss of or damage to property of 
                others;
                    ``(C) bodily injury (including death) to persons 
                other than the insured or its employees; or
                    ``(D) loss resulting from debt or default of 
                another.
            ``(20) The term `homeland security procurement' means any 
        procurement of anti-terrorism technology and services, as 
        determined by the head of the agency, procured for the purpose 
        of preventing, detecting, or otherwise deterring acts of 
        terrorism.''
    (b) Federal Risk Sharing and Indemnification.--The Office of 
Federal Procurement Policy Act is further amended by adding at the end 
the following new sections:

``SEC. 40. FEDERAL RISK SHARING AND INDEMNIFICATION.

    ``(a) When conducting a homeland security procurement the head of 
an agency may include in a contract an indemnification provision 
specified in subsection (e) if the head of the agency determines in 
writing that it is in the best interest of the Government to do so and 
determines that--
            ``(1) the anti-terrorism technology and services are needed 
        to protect critical infrastructure services or facilities;
            ``(2) the anti-terrorism technology and services would be 
        effective in facilitating the defense against acts of 
        terrorism; and
            ``(3) the supplier of the anti-terrorism technology is 
        unable to secure insurance coverage adequate to make the anti-
        terrorism technology and services available to the Government.
    ``(b) The head of the agency may exercise the authority in this 
section only if authorized by the Director of the Office of Management 
and Budget to do so.
    ``(c) In order to be eligible for an indemnification provision 
specified in this section, any entity that provides anti-terrorism 
technology and services to an agency identified in this Act shall 
obtain liability insurance of such types and in such amounts, to the 
maximum extent practicable as determined by the agency, to satisfy 
otherwise compensable third party claims resulting from an act of 
terrorism when anti-terrorism technologies and services have been 
deployed in defense against acts of terrorism.
    ``(d) An indemnification provision included in a contract under the 
authority of this section shall be without regard to other provisions 
of law relating to the making, performance, amendment or modification 
of contracts.
    ``(e)(1) The indemnification provision to be included in a contract 
under the authority of this section shall indemnify, in whole or in 
part, the contractor for liability, including reasonable expenses of 
litigation and settlement, that is not covered by the insurance 
required under subsection (c), for:
            ``(A) Claims by third persons, including employees of the 
        contractor, for death, personal injury, or loss of, damage to, 
        or loss of use of property, or economic losses resulting from 
        an act of terrorism;
            ``(B) Loss of, damage to, or loss of use of property of the 
        Government; and
            ``(C) Claims arising (i) from indemnification agreements 
        between the contractor and a subcontractor or subcontractors, 
        or (ii) from such arrangements and further indemnification 
        arrangements between subcontractors at any tier, provided that 
        all such arrangements were entered into pursuant to the terms 
        of this section.
    ``(2) Liabilities arising out of the contractor's willful 
misconduct or lack of good faith shall not be entitled to 
indemnification under the authority of this section.
    ``(f) An indemnification provision included in a contract under the 
authority of this section shall be negotiated and signed by the agency 
contracting officer and an authorized representative of the contractor 
and approved by the head of the agency prior to the commencement of 
performance of the contract.
    ``(g) The authority conferred by this section shall be limited to 
the following agencies:
            ``(1) The Department of Homeland Security;
            ``(2) The Department of Agriculture;
            ``(3) The Department of Commerce;
            ``(4) The Department of Defense;
            ``(5) The Department of Energy;
            ``(6) The Department of Health and Human Services;
            ``(7) The Department of the Interior;
            ``(8) The Department of Justice;
            ``(9) The Department of State;
            ``(10) The Department of the Treasury;
            ``(11) The Department of Transportation;
            ``(12) The Federal Emergency Management Agency;
            ``(13) The Federal Reserve System;
            ``(14) The General Services Administration;
            ``(15) The National Aeronautics and Space Administration;
            ``(16) The Tennessee Valley Authority;
            ``(17) The U.S. Postal Service;
            ``(18) The Central Intelligence Agency;
            ``(19) The Architect of the Capitol; and
            ``(20) Any other agency designated by the Secretary of 
        Homeland Security that engages in homeland security contracting 
        activities.
    ``(h) If any suit or action is filed or any claim is made against 
the contractor for any losses to third parties arising out of an act of 
terrorism when its anti-terrorism technologies and services have been 
deployed such that the cost and expense of the losses may be 
indemnified by the United States under this section, the contractor 
shall--
            ``(1) immediately notify the Secretary and promptly furnish 
        copies of all pertinent papers received;
            ``(2) authorize United States Government representatives to 
        collaborate with counsel for the contractor's insurance carrier 
        in settling or defending the claim when the amount of the 
        liability claimed may exceed the amount of insurance coverage; 
        and
            ``(3) authorize United States Government representatives to 
        settle or defend the claim and to represent the contractor in 
        or to take charge of any litigation, if required by the United 
        States Government, when the liability is not insured.
The contractor may, at its own expense, be associated with the United 
States Government representatives in any such claim or litigation.''.
    (c) State and Local Risk Sharing and Indemnification.--(1) The 
Secretary may, upon the application of a State or local government, 
provide for indemnification of contractors who provide anti-terrorism 
technologies and services to State or local governments if the 
Secretary determines in writing that--
            (A) it is in the best interest of the Government to do so;
            (B) the State or local government is unable to provide the 
        required indemnification; and
            (C) the anti-terrorism technology and services are needed 
        to protect critical infrastructure services or facilities, 
        would be effective in facilitating the defense against acts of 
        terrorism, and would not be reasonably available absent 
        indemnification.
    (2) The Secretary may exercise the authority in this subsection 
only if authorized by the Director of the Office of Management and 
Budget to do so.
    (3) In order to be eligible for indemnification, any entity that 
provides anti-terrorism technology and services to a State or local 
government shall obtain liability insurance of such types and in such 
amounts to the maximum extent practicable, as determined by the 
Secretary, to satisfy otherwise compensable third party claims 
resulting from an act of terrorism when anti-terrorism technologies and 
services have been deployed in defense against acts of terrorism.
    (4) The indemnification provided under the authority of this 
subsection shall indemnify, in whole or in part, the contractor for 
liability, including reasonable expenses of litigation and settlement, 
that is not covered by the insurance required under paragraph (3) for--
            (A) claims by third persons, including employees of the 
        contractor, for death, personal injury, or loss of, damage to, 
        or loss of use of property, or economic losses resulting from 
        an act of terrorism;
            (B) loss of, damage to, or loss of use of property of the 
        Government; and
            (C) claims arising--
                    (i) from indemnification agreements between the 
                contractor and a subcontractor or subcontractors; or
                    (ii) from such arrangements and further 
                indemnification arrangements between subcontractors at 
                any tier, provided that all such arrangements were 
                entered into pursuant to the terms of this subsection.
Liabilities arising out of the contractor's willful misconduct or lack 
of good faith shall not be entitled to indemnification under the 
authority of this subsection.
    (5) If any suit or action is filed or any claim is made against the 
contractor for any losses to third parties arising out of an act of 
terrorism when its anti-terrorism technologies and services have been 
deployed such that the cost and expense of the losses may be 
indemnified by the United States under this subsection, the contractor 
shall--
            (A) immediately notify the Secretary and promptly furnish 
        copies of all pertinent papers received;
            (B) authorize United States Government representatives to 
        collaborate with counsel for the contractor's insurance carrier 
        in settling or defending the claim when the amount of the 
        liability claimed may exceed the amount of insurance coverage; 
        and
            (C) authorize United States Government representatives to 
        settle or defend the claim and to represent the contractor in 
        or to take charge of any litigation, if required by the United 
        States Government, when the liability is not insured.
The contractor may, at its own expense, be associated with the United 
States Government representatives in any such claim or litigation.
    (6) In this subsection, the definitions in paragraphs (16) through 
(20) of section 4 of the Office of Federal Procurement Policy Act shall 
apply.
    (c) Implementing Regulations.--Not later than 120 days after the 
date of the enactment of this Act, the Federal Acquisition Regulation 
shall be amended to ensure consistency between the Federal Acquisition 
Regulation and this section.

SEC. 745. PROCUREMENTS FROM SMALL BUSINESSES.

    There is established in the Department an office to be known as the 
``Office of Small and Disadvantaged Business Utilization''. The 
management of such office shall be vested in the manner described in 
section 15(k) of the Small Business Act (15 U.S.C. 644(k)) and shall 
carry out the functions described in such section.

                    Subtitle F--Information Sharing

SEC. 750. SHORT TITLE.

    This subtitle may be cited as the ``Homeland Security Information 
Sharing Act''.

SEC. 751. FINDINGS AND SENSE OF CONGRESS.

    (a) Findings.--The Congress finds the following:
            (1) The Federal Government is required by the Constitution 
        to provide for the common defense, which includes terrorist 
        attack.
            (2) The Federal Government relies on State and local 
        personnel to protect against terrorist attack.
            (3) The Federal Government collects, creates, manages, and 
        protects classified and sensitive but unclassified information 
        to enhance homeland security.
            (4) Some homeland security information is needed by the 
        State and local personnel to prevent and prepare for terrorist 
        attack.
            (5) The needs of State and local personnel to have access 
        to relevant homeland security information to combat terrorism 
        must be reconciled with the need to preserve the protected 
        status of such information and to protect the sources and 
        methods used to acquire such information.
            (6) Granting security clearances to certain State and local 
        personnel is one way to facilitate the sharing of information 
        regarding specific terrorist threats among Federal, State, and 
        local levels of government.
            (7) Methods exist to declassify, redact, or otherwise adapt 
        classified information so it may be shared with State and local 
        personnel without the need for granting additional security 
        clearances.
            (8) State and local personnel have capabilities and 
        opportunities to gather information on suspicious activities 
        and terrorist threats not possessed by Federal agencies.
            (9) The Federal Government and State and local governments 
        and agencies in other jurisdictions may benefit from such 
        information.
            (10) Federal, State, and local governments and 
        intelligence, law enforcement, and other emergency preparation 
        and response agencies must act in partnership to maximize the 
        benefits of information gathering and analysis to prevent and 
        respond to terrorist attacks.
            (11) Information systems, including the National Law 
        Enforcement Telecommunications System and the Terrorist Threat 
        Warning System, have been established for rapid sharing of 
        classified and sensitive but unclassified information among 
        Federal, State, and local entities.
            (12) Increased efforts to share homeland security 
        information should avoid duplicating existing information 
        systems.
    (b) Sense of Congress.--It is the sense of Congress that Federal, 
State, and local entities should share homeland security information to 
the maximum extent practicable, with special emphasis on hard-to-reach 
urban and rural communities.

SEC. 752. FACILITATING HOMELAND SECURITY INFORMATION SHARING 
                    PROCEDURES.

    (a) Procedures for Determining Extent of Sharing of Homeland 
Security Information.--
            (1) The Secretary shall prescribe procedures under which 
        relevant Federal agencies determine--
                    (A) whether, how, and to what extent homeland 
                security information may be shared with appropriate 
                State and local personnel, and with which such 
                personnel it may be shared;
                    (B) how to identify and safeguard homeland security 
                information that is sensitive but unclassified; and
                    (C) to the extent such information is in classified 
                form, whether, how, and to what extent to remove 
                classified information, as appropriate, and with which 
                such personnel it may be shared after such information 
                is removed.
            (2) The Secretary shall ensure that such procedures apply 
        to all agencies of the Federal Government.
            (3) Such procedures shall not change the substantive 
        requirements for the classification and safeguarding of 
        classified information.
            (4) Such procedures shall not change the requirements and 
        authorities to protect sources and methods.
    (b) Procedures for Sharing of Homeland Security Information.--
            (1) Under procedures prescribed by the Secretary, all 
        appropriate agencies, including the intelligence community, 
        shall, through information sharing systems, share homeland 
        security information with appropriate State and local personnel 
        to the extent such information may be shared, as determined in 
        accordance with subsection (a), together with assessments of 
        the credibility of such information.
            (2) Each information sharing system through which 
        information is shared under paragraph (1) shall--
                    (A) have the capability to transmit unclassified or 
                classified information, though the procedures and 
                recipients for each capability may differ;
                    (B) have the capability to restrict delivery of 
                information to specified subgroups by geographic 
                location, type of organization, position of a recipient 
                within an organization, or a recipient's need to know 
                such information;
                    (C) be configured to allow the efficient and 
                effective sharing of information; and
                    (D) be accessible to appropriate State and local 
                personnel.
            (3) The procedures prescribed under paragraph (1) shall 
        establish conditions on the use of information shared under 
        paragraph (1)--
                    (A) to limit the redissemination of such 
                information to ensure that such information is not used 
                for an unauthorized purpose;
                    (B) to ensure the security and confidentiality of 
                such information;
                    (C) to protect the constitutional and statutory 
                rights of any individuals who are subjects of such 
                information; and
                    (D) to provide data integrity through the timely 
                removal and destruction of obsolete or erroneous names 
                and information.
            (4) The procedures prescribed under paragraph (1) shall 
        ensure, to the greatest extent practicable, that the 
        information sharing system through which information is shared 
        under such paragraph include existing information sharing 
        systems, including, but not limited to, the National Law 
        Enforcement Telecommunications System, the Regional Information 
        Sharing System, and the Terrorist Threat Warning System of the 
        Federal Bureau of Investigation.
            (5) Each appropriate Federal agency, as determined by the 
        Secretary, shall have access to each information sharing system 
        through which information is shared under paragraph (1), and 
        shall therefore have access to all information, as appropriate, 
        shared under such paragraph.
            (6) The procedures prescribed under paragraph (1) shall 
        ensure that appropriate State and local personnel are 
        authorized to use such information sharing systems--
                    (A) to access information shared with such 
                personnel; and
                    (B) to share, with others who have access to such 
                information sharing systems, the homeland security 
                information of their own jurisdictions, which shall be 
                marked appropriately as pertaining to potential 
                terrorist activity.
            (7) Under procedures prescribed jointly by the Director of 
        Central Intelligence and the Attorney General, each appropriate 
        Federal agency, as determined by the Secretary, shall review 
        and assess the information shared under paragraph (6) and 
        integrate such information with existing intelligence.
    (c) Sharing of Classified Information and Sensitive but 
Unclassified Information With State and Local Personnel.--
            (1) The Secretary shall prescribe procedures under which 
        Federal agencies may, to the extent the President considers 
        necessary, share with appropriate State and local personnel 
        homeland security information that remains classified or 
        otherwise protected after the determinations prescribed under 
        the procedures set forth in subsection (a).
            (2) It is the sense of Congress that such procedures may 
        include one or more of the following means:
                    (A) Carrying out security clearance investigations 
                with respect to appropriate State and local personnel.
                    (B) With respect to information that is sensitive 
                but unclassified, entering into nondisclosure 
                agreements with appropriate State and local personnel.
                    (C) Increased use of information-sharing 
                partnerships that include appropriate State and local 
                personnel, such as the Joint Terrorism Task Forces of 
                the Federal Bureau of Investigation, the Anti-Terrorism 
                Task Forces of the Department of Justice, and regional 
                Terrorism Early Warning Groups.
    (d) Responsible Officials.--For each affected Federal agency, the 
head of such agency shall designate an official to administer this Act 
with respect to such agency.
    (e) Federal Control of Information.--Under procedures prescribed 
under this section, information obtained by a State or local government 
from a Federal agency under this section shall remain under the control 
of the Federal agency, and a State or local law authorizing or 
requiring such a government to disclose information shall not apply to 
such information.
    (f) Definitions.--As used in this section:
            (1) The term ``homeland security information'' means any 
        information possessed by a Federal, State, or local agency 
        that--
                    (A) relates to the threat of terrorist activity;
                    (B) relates to the ability to prevent, interdict, 
                or disrupt terrorist activity;
                    (C) would improve the identification or 
                investigation of a suspected terrorist or terrorist 
                organization;
                    (D) would improve the response to a terrorist act; 
                or
                    (E) does not include individually identifiable 
                information collected solely for statistical purposes.
            (2) The term ``intelligence community'' has the meaning 
        given such term in section 3(4) of the National Security Act of 
        1947 (50 U.S.C. 401a(4)).
            (3) The term ``State and local personnel'' means any of the 
        following persons involved in prevention, preparation, or 
        response for terrorist attack:
                    (A) State Governors, mayors, and other locally 
                elected officials.
                    (B) State and local law enforcement personnel and 
                firefighters.
                    (C) Public health and medical professionals.
                    (D) Regional, State, and local emergency management 
                agency personnel, including State adjutant generals.
                    (E) Other appropriate emergency response agency 
                personnel.
                    (F) Employees of private-sector entities that 
                affect critical infrastructure, cyber, economic, or 
                public health security, as designated by the Federal 
                government in procedures developed pursuant to this 
                section.
            (4) The term ``State'' includes the District of Columbia 
        and any commonwealth, territory, or possession of the United 
        States.

SEC. 753. REPORT.

    (a) Report Required.--Not later than 12 months after the date of 
the enactment of this Act, the Secretary shall submit to the 
congressional committees specified in subsection (b) a report on the 
implementation of section 752. The report shall include any 
recommendations for additional measures or appropriation requests, 
beyond the requirements of section 752, to increase the effectiveness 
of sharing of information among Federal, State, and local entities.
    (b) Specified Congressional Committees.--The congressional 
committees referred to in subsection (a) are the following committees:
            (1) The Permanent Select Committee on Intelligence and the 
        Committee on the Judiciary of the House of Representatives.
            (2) The Select Committee on Intelligence and the Committee 
        on the Judiciary of the Senate.

SEC. 754. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated such sums as may be 
necessary to carry out section 752.

SEC. 755. AUTHORITY TO SHARE GRAND JURY INFORMATION.

    Rule 6(e) of the Federal Rules of Criminal Procedure is amended--
            (1) in paragraph (2), by inserting ``, or of guidelines 
        jointly issued by the Attorney General and Director of Central 
        Intelligence pursuant to Rule 6,'' after ``Rule 6''; and
            (2) in paragraph (3)--
                    (A) in subparagraph (A)(ii), by inserting ``or of a 
                foreign government'' after ``(including personnel of a 
                state or subdivision of a state'';
                    (B) in subparagraph (C)(i)--
                            (i) in subclause (I), by inserting before 
                        the semicolon the following: ``or, upon a 
                        request by an attorney for the government, when 
                        sought by a foreign court or prosecutor for use 
                        in an official criminal investigation'';
                            (ii) in subclause (IV)--
                                    (I) by inserting ``or foreign'' 
                                after ``may disclose a violation of 
                                State'';
                                    (II) by inserting ``or of a foreign 
                                government'' after ``to an appropriate 
                                official of a State or subdivision of a 
                                State''; and
                                    (III) by striking ``or'' at the 
                                end;
                            (iii) by striking the period at the end of 
                        subclause (V) and inserting ``; or''; and
                            (iv) by adding at the end the following:
                            ``(VI) when matters involve a threat of 
                        actual or potential attack or other grave 
                        hostile acts of a foreign power or an agent of 
                        a foreign power, domestic or international 
                        sabotage, domestic or international terrorism, 
                        or clandestine intelligence gathering 
                        activities by an intelligence service or 
                        network of a foreign power or by an agent of a 
                        foreign power, within the United States or 
                        elsewhere, to any appropriate federal, state, 
                        local, or foreign government official for the 
                        purpose of preventing or responding to such a 
                        threat.''; and
                    (C) in subparagraph (C)(iii)--
                            (i) by striking ``Federal'';
                            (ii) by inserting ``or clause (i)(VI)'' 
                        after ``clause (i)(V)''; and
                            (iii) by adding at the end the following: 
                        ``Any state, local, or foreign official who 
                        receives information pursuant to clause (i)(VI) 
                        shall use that information only consistent with 
                        such guidelines as the Attorney General and 
                        Director of Central Intelligence shall jointly 
                        issue.''.

SEC. 756. AUTHORITY TO SHARE ELECTRONIC, WIRE, AND ORAL INTERCEPTION 
                    INFORMATION.

    Section 2517 of title 18, United States Code, is amended by adding 
at the end the following:
    ``(7) Any investigative or law enforcement officer, or attorney for 
the government, who by any means authorized by this chapter, has 
obtained knowledge of the contents of any wire, oral, or electronic 
communication, or evidence derived therefrom, may disclose such 
contents or derivative evidence to a foreign investigative or law 
enforcement officer to the extent that such disclosure is appropriate 
to the proper performance of the official duties of the officer making 
or receiving the disclosure, and foreign investigative or law 
enforcement officers may use or disclose such contents or derivative 
evidence to the extent such use or disclosure is appropriate to the 
proper performance of their official duties.
    ``(8) Any investigative or law enforcement officer, or attorney for 
the government, who by any means authorized by this chapter, has 
obtained knowledge of the contents of any wire, oral, or electronic 
communication, or evidence derived therefrom, may disclose such 
contents or derivative evidence to any appropriate Federal, State, 
local, or foreign government official to the extent that such contents 
or derivative evidence reveals a threat of actual or potential attack 
or other grave hostile acts of a foreign power or an agent of a foreign 
power, domestic or international sabotage, domestic or international 
terrorism, or clandestine intelligence gathering activities by an 
intelligence service or network of a foreign power or by an agent of a 
foreign power, within the United States or elsewhere, for the purpose 
of preventing or responding to such a threat. Any official who receives 
information pursuant to this provision may use that information only as 
necessary in the conduct of that person's official duties subject to 
any limitations on the unauthorized disclosure of such information, and 
any State, local, or foreign official who receives information pursuant 
to this provision may use that information only consistent with such 
guidelines as the Attorney General and Director of Central Intelligence 
shall jointly issue.''.

SEC. 757. FOREIGN INTELLIGENCE INFORMATION.

    (a) Dissemination Authorized.--Section 203(d)(1) of the Uniting and 
Strengthening America by Providing Appropriate Tools Required to 
Intercept and Obstruct Terrorism Act (USA PATRIOT ACT) of 2001 (Public 
Law 107-56; 50 U.S.C. 403-5d) is amended by adding at the end the 
following: ``It shall be lawful for information revealing a threat of 
actual or potential attack or other grave hostile acts of a foreign 
power or an agent of a foreign power, domestic or international 
sabotage, domestic or international terrorism, or clandestine 
intelligence gathering activities by an intelligence service or network 
of a foreign power or by an agent of a foreign power, within the United 
States or elsewhere, obtained as part of a criminal investigation to be 
disclosed to any appropriate Federal, State, local, or foreign 
government official for the purpose of preventing or responding to such 
a threat. Any official who receives information pursuant to this 
provision may use that information only as necessary in the conduct of 
that person's official duties subject to any limitations on the 
unauthorized disclosure of such information, and any State, local, or 
foreign official who receives information pursuant to this provision 
may use that information only consistent with such guidelines as the 
Attorney General and Director of Central Intelligence shall jointly 
issue.''.
    (b) Conforming Amendments.--Section 203(c) of that Act is amended--
            (1) by striking ``section 2517(6)'' and inserting 
        ``paragraphs (6) and (8) of section 2517 of title 18, United 
        States Code,''; and
            (2) by inserting ``and (VI)'' after ``Rule 
        6(e)(3)(C)(i)(V)''.

SEC. 758. INFORMATION ACQUIRED FROM AN ELECTRONIC SURVEILLANCE.

    Section 106(k)(1) of the Foreign Intelligence Surveillance Act of 
1978 (50 U.S.C. 1806) is amended by inserting after ``law enforcement 
officers'' the following: ``or law enforcement personnel of a State or 
political subdivision of a State (including the chief executive officer 
of that State or political subdivision who has the authority to appoint 
or direct the chief law enforcement officer of that State or political 
subdivision)''.

SEC. 759. INFORMATION ACQUIRED FROM A PHYSICAL SEARCH.

    Section 305(k)(1) of the Foreign Intelligence Surveillance Act of 
1978 (50 U.S.C. 1825) is amended by inserting after ``law enforcement 
officers'' the following: ``or law enforcement personnel of a State or 
political subdivision of a State (including the chief executive officer 
of that State or political subdivision who has the authority to appoint 
or direct the chief law enforcement officer of that State or political 
subdivision)''.

                          Subtitle G--Property

SEC. 761. REAL PROPERTY MANAGEMENT.

    The Secretary, in accordance with this title and regulations 
prescribed jointly by the Secretary, the Administrator of General 
Services, and the Director of the Office of Management and Budget--
            (1) may acquire replacement real property (including 
        interests therein)--
                    (A) by transfer or exchange of real property under 
                the jurisdiction, custody, and control of the 
                Department with other executive agencies; or
                    (B) by sale to or exchange of such property with 
                non-Federal entities, if--
                            (i) the transaction does not conflict with 
                        other applicable laws governing the acquisition 
                        of interests in real property by Federal 
                        agencies;
                            (ii) following consultation with the 
                        Administrator, the agency first made the 
                        property available for transfer or exchange to 
                        other Federal agencies; and
                            (iii) the transaction results in the agency 
                        receiving fair market value, which shall be 
                        based upon an appraisal;
            (2) by lease, permit, license, or other similar instrument, 
        may make available to other executive agencies and to non-
        Federal entities, on a fair market rental value basis, the 
        unexpired portion of any Government lease for real property 
        under the jurisdiction, custody, and control of the Director;
            (3) may make available by outlease agreements with other 
        executive agencies or with non-Federal entities, any unused or 
        underused portion of or interest in any real property and 
        related personal property under the jurisdiction, custody, and 
        control of the Department; and
            (4) obligate or expend amounts received by the United 
        States as a result of any exercise of the authority granted by 
        paragraph (2) or (3) without regard to fiscal year limitations, 
        for the capital asset expenditures of the Department.

SEC. 762. CRITERIA FOR USING AUTHORITIES.

    (a) In General.--Subject to the requirements of subsection (b), the 
Secretary may apply authority under section 761 to a real property 
interest only if--
            (1) the Secretary has determined that such real property 
        interest is not excess property, and includes as part of the 
        documentation required under subsection (b)(3) a description of 
        the need and mission requirement fulfilled by the Federal 
        property;
            (2) the real property interest is used to fulfill or 
        support a continuing mission requirement of the Department; and
            (3) the real property interest can, by the application of 
        the authority, improve the support of such mission.
    (b) Criteria for Application.--Before applying authority under 
section 761 to a real property interest, the Secretary, in consultation 
with the Administrator of General Services, must determine that such 
application meets all of the following criteria:
            (1) The application supports the goals and objectives set 
        forth in the Department's strategic plan under section 306 of 
        title 5, United States Code.
            (2) Use of the real property is economical, cost effective, 
        and in the best interests of the United States.
            (3) The application is documented in a business plan that, 
        commensurate with the nature of the authority applied--
                    (A) analyzes all reasonable options for using the 
                property;
                    (B) describes how the application will be in 
                compliance with applicable provisions of law, including 
                such provisions of--
                            (i) the National Environmental Policy Act 
                        of 1969 (42 U.S.C. 4321 et seq.); and
                            (ii) the McKinney-Vento Homeless Assistance 
                        Act (42 U.S.C. 11301 et seq.), including by--
                                    (I) describing the result of the 
                                determination under that Act by the 
                                Secretary of Housing and Urban 
                                Development of the suitability of the 
                                property for use to assist the 
                                homeless; and
                                    (II) explaining the rationale for 
                                the Department's decision not to make 
                                the property available for use to 
                                assist the homeless; and
                    (C) establishes effective procedures for 
                soliciting, assessing, and taking into account input 
                from the local community.

SEC. 763. OUTLEASES.

    (a) In General.--The Secretary may make property available by an 
outlease agreement authorized by section 761 only if--
            (1) the Secretary finds that--
                    (A) there is no long-term mission requirement for 
                the property, but the Federal Government is not 
                permitted to dispose of it; or
                    (B)(i) there is a continuing, long-term mission 
                requirement of the Department for the property to 
                remain in Government ownership; and
                    (ii) the use of the real property by the lessee 
                will not be inconsistent with such mission;
            (2) in the case of an outlease to a non-Federal entity, the 
        outlease is conducted competitively; and
            (3) the agreement--
                    (A) is for a term no longer than 50 years; and
                    (B) will result in the Department receiving fair 
                market value which, in the case of an exchange or sale 
                of Federal real property, shall be based upon an 
                appraisal.
    (b) Construction on Outleased Property; Applicable Law.--
            (1) Property subject to retained authority.--If the 
        Secretary retains authority over any decision to construct or 
        alter buildings on property outleased to a non-Federal entity 
        under section 761, then any such construction or alteration 
        shall comply with section 21 of the Public Buildings Act of 
        1959 (40 U.S.C. 619).
            (2) Property not subject to retained authority.--(A) If the 
        Secretary does not retain authority over any decision to 
        construct or alter buildings on property outleased to a non-
        Federal entity under section 761, then any such construction or 
        alteration shall comply with all laws described in subparagraph 
        (B) that would apply to such construction or alteration if the 
        property were not Federal property.
            (B) The laws referred to in subparagraph (A) are all laws 
        of a State, and of a political subdivision of a State, relating 
        to zoning, landscaping, open space, minimum distance of a 
        building from a property line, maximum building height, 
        historic preservation, esthetic qualities of a building, 
        building codes, and similar matters, and any other State or 
        local laws relating to construction or alteration of a 
        building, respectively, by the non-Federal entity on non-
        Federal lands.
            (C) The Secretary may waive the application of subparagraph 
        (A) if the Secretary determines that application of that 
        subparagraph would hinder fulfillment of the mission of the 
        Department under section 101(b).
    (c) Reports.--The Comptroller General of the United States shall 
submit biennial reports to the Congress, including to the Committee on 
Government Reform of the House of Representatives and the Committee on 
Governmental Affairs of the Senate, on the effectiveness of the use of 
outlease authority under section 761.

SEC. 764. REVIEW AND REVISION OF TRANSACTIONS BY ADMINISTRATOR.

    The Administrator of General Services may, in the sole discretion 
of the Administrator, review any transaction of the Department 
undertaken utilizing authority under section 761. After such review, 
the Administrator may disapprove such transaction if the Administrator 
determines the transaction does not reflect due diligence by the 
Department, is not in the best interest of the United States, or does 
not comply with the requirements of this title.

SEC. 765. TRANSACTIONAL REPORTS.

    (a) In General.--For those transactions authorized under section 
761 involving the sale, exchange, or outlease to a non-Federal entity 
of any asset valued in excess of $700,000 at the time of the 
transaction, the Secretary shall submit the business plan required by 
section 762(b)(3) to the Director of the Office of Management and 
Budget, the Committee on Governmental Affairs of the Senate, and the 
Committee on Government Reform of the House of Representatives at least 
30 calendar days before the final execution of such transaction.
    (b) Disposal of Real Property by Negotiation.--The Secretary shall 
prepare and submit to the Committee on Governmental Affairs of the 
Senate and the Committee on Government Reform of the House of 
Representatives, a statement explaining the circumstances of each 
disposal by negotiation, under section 761, of any real property that 
has an estimated fair market value in excess of $700,000.
    (c) Adjustment of Threshold.--The Administrator of General Services 
may increase or decrease the dollar amounts in subsections (a) and (b) 
to reflect a percentage increase or decrease in the Department of 
Commerce Consumer Price Index.

                         TITLE VIII--TRANSITION

SEC. 801. DEFINITIONS.

    For purposes of this title--
            (1) the term ``agency'' includes any entity, organizational 
        unit, or function; and
            (2) the term ``transition period'' means the 12-month 
        period beginning on the effective date of this Act.

SEC. 802. REORGANIZATION PLAN.

    (a) Submission of Plan.--Not later than 60 days after the date of 
the enactment of this Act, the President shall transmit to the 
appropriate congressional committees a reorganization plan regarding 
the following:
            (1) The transfer of agencies, personnel, assets, and 
        obligations to the Department pursuant to sections 202, 302, 
        402, and 502.
            (2) Any consolidation, reorganization, or streamlining of 
        agencies transferred to the Department pursuant to sections 
        202, 302, 402, and 502.
    (b) Plan Elements.--The plan transmitted under subsection (a) shall 
contain, consistent with this Act, such elements as the President deems 
appropriate, including the following:
            (1) Identification of any functions of agencies transferred 
        to the Department pursuant to sections 202, 302, 402, and 502 
        that will not be transferred to the Department under the plan.
            (2) Specification of the steps to be taken by the Secretary 
        to organize the Department, including the delegation or 
        assignment of functions transferred to the Department among 
        officers of the Department in order to permit the Department to 
        carry out the functions transferred under the plan.
            (3) Specification of the funds available to each agency 
        that will be transferred to the Department as a result of 
        transfers under the plan.
            (4) Specification of the proposed allocations within the 
        Department of unexpended funds transferred in connection with 
        transfers under the plan.
            (5) Specification of any proposed disposition of property, 
        facilities, contracts, records, and other assets and 
        obligations of agencies transferred under the plan.
    (c) Modification of Plan.--The President may, on the basis of 
consultations with the appropriate congressional committees, modify or 
revise any part of the plan until that part of the plan becomes 
effective in accordance with subsection (d).
    (d) Effective Date.--
            (1) In general.--The reorganization plan described in this 
        section, including any modifications or revisions of the plan 
        under subsection (d), shall become effective for an agency on 
        the earlier of--
                    (A) the date specified in the plan (or the plan as 
                modified pursuant to subsection (d)), except that such 
                date may not be earlier than 90 days after the date the 
                President has transmitted the reorganization plan to 
                the appropriate congressional committees pursuant to 
                subsection (a); or
                    (B) the end of the transition period.
            (2) Statutory construction.--Nothing in this subsection may 
        be construed to require the transfer of functions, personnel, 
        records, balances of appropriations, or other assets of an 
        agency on a single date.
            (3) Supersedes existing law.--Paragraph (1) shall apply 
        notwithstanding section 905(b) of title 5, United States Code.

SEC. 803. TRANSITIONAL AUTHORITIES.

    (a) Provision of Assistance by Officials.--Until the transfer of an 
agency to the Department, any official having authority over or 
functions relating to the agency immediately before the effective date 
of this Act shall provide to the Secretary such assistance, including 
the use of personnel and assets, as he may request in preparing for the 
transfer and integration of the agency into the Department.
    (b) Services and Personnel.--During the transition period, upon the 
request of the Secretary, the head of any executive agency may, on a 
reimbursable or nonreimbursable basis, provide services or detail 
personnel to assist with the transition.
    (c) Transfer of Funds.--Until the transfer of an agency to the 
Department, the President is authorized to transfer to the Secretary 
not to exceed five percent of the unobligated balance of any 
appropriation available to such agency, to fund the purposes authorized 
in this Act, except that not less than 15 days' notice shall be given 
to the Committees on Appropriations of the Senate and House of 
Representatives before any such funds transfer is made.
    (d) Acting Officials.--(1) During the transition period, pending 
the advice and consent of the Senate to the appointment of an officer 
required by this Act to be appointed by and with such advice and 
consent, the President may designate any officer whose appointment was 
required to be made by and with such advice and consent and who was 
such an officer immediately before the effective date of this Act (and 
who continues in office) or immediately before such designation, to act 
in such office until the same is filled as provided in this Act. While 
so acting, such officers shall receive compensation at the higher of--
            (A) the rates provided by this Act for the respective 
        offices in which they act; or
            (B) the rates provided for the offices held at the time of 
        designation.
    (2) Nothing in this Act shall be understood to require the advice 
and consent of the Senate to the appointment by the President to a 
position in the Department of any officer whose agency is transferred 
to the Department pursuant to this Act and whose duties following such 
transfer are germane to those performed before such transfer.
    (e) Transfer of Personnel, Assets, Liabilities, and Functions.--
Upon the transfer of an agency to the Department--
            (1) the personnel, assets, and liabilities held by or 
        available in connection with the agency shall be transferred to 
        the Secretary for appropriate allocation, subject to the 
        approval of the Director of the Office of Management and Budget 
        and notwithstanding the provisions of section 1531(a)(2) of 
        title 31, United States Code; and
            (2) the Secretary shall have all functions relating to the 
        agency that any other official could by law exercise in 
        relation to the agency immediately before such transfer, and 
        shall have in addition all functions vested in the Secretary by 
        this Act or other law.

SEC. 804. SAVINGS PROVISIONS.

    (a) Completed Administrative Actions.--(1) Completed administrative 
actions of an agency shall not be affected by the enactment of this Act 
or the transfer of such agency to the Department, but shall continue in 
effect according to their terms until amended, modified, superseded, 
terminated, set aside, or revoked in accordance with law by an officer 
of the United States or a court of competent jurisdiction, or by 
operation of law.
    (2) For purposes of paragraph (1), the term ``completed 
administrative action'' includes orders, determinations, rules, 
regulations, personnel actions, permits, agreements, grants, contracts, 
certificates, licenses, registrations, and privileges.
    (b) Pending Proceedings.--Subject to the authority of the Secretary 
under this Act--
            (1) pending proceedings in an agency, including notices of 
        proposed rulemaking, and applications for licenses, permits, 
        certificates, grants, and financial assistance, shall continue 
        notwithstanding the enactment of this Act or the transfer of 
        the agency to the Department, unless discontinued or modified 
        under the same terms and conditions and to the same extent that 
        such discontinuance could have occurred if such enactment or 
        transfer had not occurred; and
            (2) orders issued in such proceedings, and appeals 
        therefrom, and payments made pursuant to such orders, shall 
        issue in the same manner and on the same terms as if this Act 
        had not been enacted or the agency had not been transferred, 
        and any such orders shall continue in effect until amended, 
        modified, superseded, terminated, set aside, or revoked by an 
        officer of the United States or a court of competent 
        jurisdiction, or by operation of law.
    (c) Pending Civil Actions.--Subject to the authority of the 
Secretary under this Act, pending civil actions shall continue 
notwithstanding the enactment of this Act or the transfer of an agency 
to the Department, and in such civil actions, proceedings shall be had, 
appeals taken, and judgments rendered and enforced in the same manner 
and with the same effect as if such enactment or transfer had not 
occurred.
    (d) References.--References relating to an agency that is 
transferred to the Department in statutes, Executive orders, rules, 
regulations, directives, or delegations of authority that precede such 
transfer or the effective date of this Act shall be deemed to refer, as 
appropriate, to the Department, to its officers, employees, or agents, 
or to its corresponding organizational units or functions. Statutory 
reporting requirements that applied in relation to such an agency 
immediately before the effective date of this Act shall continue to 
apply following such transfer if they refer to the agency by name.
    (e) Employment Provisions.--(1) Notwithstanding the generality of 
the foregoing (including subsections (a) and (d)), in and for the 
Department the Secretary may, in regulations prescribed jointly with 
the Director of the Office of Personnel Management, adopt the rules, 
procedures, terms, and conditions, established by statute, rule, or 
regulation before the effective date of this Act, relating to 
employment in any agency transferred to the Department pursuant to this 
Act, except that the rules, procedures, terms, and conditions relating 
to employment in the Transportation Security Administration before the 
effective date of this Act may be applied only to the personnel 
employed by or carrying out the functions of the Transportation 
Security Administration.
    (2) Except as otherwise provided in this Act, or under authority 
granted by this Act, the transfer pursuant to this Act of personnel 
shall not alter the terms and conditions of employment, including 
compensation, of any employee so transferred.

SEC. 805. TERMINATIONS.

    Except as otherwise provided in this Act, whenever all the 
functions vested by law in any agency have been transferred pursuant to 
this Act, each position and office the incumbent of which was 
authorized to receive compensation at the rates prescribed for an 
office or position at level II, III, IV, or V, of the Executive 
Schedule, shall terminate.

SEC. 806. INCIDENTAL TRANSFERS.

    The Director of the Office of Management and Budget, in 
consultation with the Secretary, is authorized and directed to make 
such additional incidental dispositions of personnel, assets, and 
liabilities held, used, arising from, available, or to be made 
available, in connection with the functions transferred by this Act, as 
he may deem necessary to accomplish the purposes of this Act.

             TITLE IX--CONFORMING AND TECHNICAL AMENDMENTS

SEC. 901. EXECUTIVE DEPARTMENT.

    Section 101 of title 5, United States Code, is amended by inserting 
after ``The Department of Housing and Urban Development.'' the 
following:
            ``The Department of Homeland Security.''.

SEC. 902. EXECUTIVE SCHEDULE.

    Title 5, United States Code, is amended--
            (1) in section 5312, by inserting ``Secretary of Homeland 
        Security.'' as a new item after ``Affairs.'';
            (2) in section 5313, by inserting the following new items 
        after ``Affairs.'':
            ``Deputy Secretary, Department of Homeland Security.''
            ``Deputy Secretary for Policy, Department of Homeland 
        Security.''
            ``Deputy Secretary for Management, Department of Homeland 
        Security.''
            (3) in section 5314, by inserting ``Under Secretaries, 
        Department of Homeland Security.'' as a new item after 
        ``Affairs.'' the third place it appears;
            (4) in section 5315, by inserting after ``Affairs.'' the 
        first place it appears the following:
            ``Assistant Secretaries, Department of Homeland Security.
            ``General Counsel, Department of Homeland Security.
            ``Chief Financial Officer, Department of Homeland Security.
            ``Chief Information Officer, Department of Homeland 
        Security.
            ``Inspector General, Department of Homeland Security.''.

SEC. 903. INSPECTOR GENERAL.

    (a) IN General.--Section 11 of the Inspector General Act of 1978 
(Public Law 95-452) is amended--
            (1) by inserting ``Homeland Security,'' after 
        ``Transportation,'' each place it appears;
            (2) by striking ``; and'' each place it appears and 
        inserting ``;'';
            (3) by striking ``,,'' and inserting ``,''; and
            (4) by striking ``;;'' and inserting ``;''.
    (b) Oversight Responsibility.--Section 8D of the Inspector General 
Act of 1978 (5 U.S.C. App.) is amended--
            (1) in subsection (b) by striking ``, the Office of 
        Internal Affairs of the United States Customs Service, and the 
        Office of Inspections of the United States Secret Service,'';
            (2) in subsection (c) by striking ``and services''; and
            (3) in subsection (d) by striking ``or service'' each place 
        it appears.

SEC. 904. CHIEF FINANCIAL OFFICER.

    Section 901(b)(1) of title 31, United States Code, is amended--
            (1) by redesignating subparagraphs (G) through (P) as 
        subparagraphs (H) through (Q), respectively; and
            (2) by inserting the following new subparagraph after 
        subparagraph (F):
                    ``(G) The Department of Homeland Security.''.

SEC. 905. CHIEF INFORMATION OFFICER.

    (a) Clinger-Cohen Act.--(1) The provisions enacted in section 5125 
of the Clinger-Cohen Act of 1996 (division E of Public Law 104-106; 110 
Stat. 684) shall apply with respect to the Chief Information Officer of 
the Department.
    (2) Section 5131(c) of the Clinger-Cohen Act of 1996 (40 U.S.C. 
1441(c)) is amended by inserting ``or appointed'' after ``the Chief 
Information Officer designated''.
    (b) Title 44.--Chapter 35 of title 44, United States Code, is 
amended--
            (1) in section 3506(a)(2)--
                    (A) in subparagraph (A) by striking ``subparagraph 
                (B)'' and inserting ``subparagraphs (B) and (C)''; and
                    (B) by adding at the end the following:
    ``(C) The Chief Information Officer of the Department of Homeland 
Security shall be an individual who is appointed by the President.'';
            (2) in each of subsections (a)(3), (a)(4), and (c)(1) of 
        section 3506 by inserting ``or appointed'' after ``the Chief 
        Information Officer designated''; and
            (3) in section 3507(i) by inserting ``or appointed'' after 
        ``the Chief Information Officer designated''.

SEC. 906. UNITED STATES SECRET SERVICE.

    (a) In General.--The United States Code is amended in sections 202 
and 208 of title 3, and in section 3056 of title 18, by striking ``of 
the Treasury'', each place it appears and inserting ``of Homeland 
Security''.
    (b) Effective Date.--The amendments made by this section shall take 
effect on the date of transfer of the United States Secret Service to 
the Department.

SEC. 907. COAST GUARD.

    (a) Title 14, U.S.C.--Title 14 of the United States Code is 
amended--
            (1) in sections 1, 3, 53, 95, 145, 516, 666, 669, 673 (as 
        added by Public Law 104-201), 673 (as added by Public Law 104-
        324), 674, 687, and 688, by striking ``of Transportation'', 
        each place it appears, and inserting ``of Homeland Security''; 
        and
            (2) after executing the other amendments required by this 
        subsection, by redesignating the section 673 added by Public 
        Law 104-324 as section 673a.
    (b) Title 10, U.S.C.--Section 801(1) of title 10, United States 
Code, is amended by striking ``the General Counsel of the Department of 
Transportation'' and inserting ``an official designated to serve as 
Judge Advocate General of the Coast Guard by the Secretary of Homeland 
Security''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date of transfer of the Coast Guard to the Department.

SEC. 908. STRATEGIC NATIONAL STOCKPILE AND SMALLPOX VACCINE 
                    DEVELOPMENT.

    (a) In General.--The Public Health Security and Bioterrorism 
Preparedness and Response Act of 2002 is amended--
            (1) in section 121(a)(1)--
                    (A) by striking ``Secretary of Health and Human 
                Services'' and inserting ``Secretary of Homeland 
                Security'';
                    (B) by inserting ``the Secretary of Health and 
                Human Services and'' between ``in coordination with'' 
                and ``the Secretary of Veterans Affairs''; and
                    (C) by inserting ``of Health and Human Services'' 
                after ``as are determined by the Secretary''; and
            (2) in subsections 121(a)(2) and (b), by inserting ``of 
        Health and Human Services'' after ``Secretary'' each place it 
        appears.
    (b) Effective Date.--The amendments made by this section shall take 
effect on the date of transfer of the Strategic National Stockpile of 
the Department of Health and Human Services to the Department.

SEC. 909. SELECT AGENT REGISTRATION.

    (a) Public Health Service Act.--The Public Health Service Act is 
amended--
            (1) in section 351A(a)(1)(A), by inserting ``(as defined in 
        subsection (l)(9))'' after ``Secretary'';
            (2) in section 351A(h)(2)(A), by inserting ``Department of 
        Homeland Security, the'' before ``Department of Health and 
        Human Services'';
            (3) in section 351A(l), by inserting after paragraph (8) a 
        new paragraph as follows:
            ``(9) The term `Secretary' means the Secretary of Homeland 
        Security, in consultation with the Secretary of Health and 
        Human Services.''; and
            (4) in section 352A(i)--
                    (A) by striking ``(1)'' the first place it appears; 
                and
                    (B) by striking paragraph (2).
    (b) Public Health Security and Bioterrorism Preparedness and 
Response Act of 2002.--Section 201(b) of the Public Health Security and 
Bioterrorism Preparedness and Response Act of 2002 is amended by 
striking ``Secretary of Health and Human Services'' and inserting 
``Secretary of Homeland Security''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date of transfer of the select agent registration 
enforcement programs and activities of the Department of Health and 
Human Services to the Department.

SEC. 910. MEMBERSHIP OF SECRETARY ON NATIONAL SECURITY COUNCIL.

    Section 101(a) of the National Security Act of 1947 (50 U.S.C. 
402(a)) is amended in the fourth sentence--
            (1) in paragraph (6), by striking ``and'' at the end;
            (2) by redesignating paragraph (7) as paragraph (8); and
            (3) by inserting after paragraph (6) the following new 
        paragraph:
            ``(7) the Secretary of Homeland Security.''.

SEC. 911. NATIONAL BIO-WEAPONS DEFENSE ANALYSIS CENTER.

    There is established in the Department of Defense a National Bio-
Weapons Defense Analysis Center, whose mission is to develop 
countermeasures to potential attacks by terrorists using weapons of 
mass destruction.

                     TITLE X--INFORMATION SECURITY

SEC. 1001. INFORMATION SECURITY.

    (a) Short Title.--The amendments made by this title may be cited as 
the ``Federal Information Security Management Act of 2002''.
    (b) Information Security.--
            (1) In general.--Subchapter II of chapter 35 of title 44, 
        United States Code, is amended to read as follows:

                 ``SUBCHAPTER II--INFORMATION SECURITY

``Sec. 3531. Purposes

    ``The purposes of this subchapter are to--
            ``(1) provide a comprehensive framework for ensuring the 
        effectiveness of information security controls over information 
        resources that support Federal operations and assets;
            ``(2) recognize the highly networked nature of the current 
        Federal computing environment and provide effective 
        governmentwide management and oversight of the related 
        information security risks, including coordination of 
        information security efforts throughout the civilian, national 
        security, and law enforcement communities;
            ``(3) provide for development and maintenance of minimum 
        controls required to protect Federal information and 
        information systems;
            ``(4) provide a mechanism for improved oversight of Federal 
        agency information security programs;
            ``(5) acknowledge that commercially developed information 
        security products offer advanced, dynamic, robust, and 
        effective information security solutions, reflecting market 
        solutions for the protection of critical information 
        infrastructures important to the national defense and economic 
        security of the nation that are designed, built, and operated 
        by the private sector; and
            ``(6) recognize that the selection of specific technical 
        hardware and software information security solutions should be 
        left to individual agencies from among commercially developed 
        products.''.

``Sec. 3532. Definitions

    ``(a) In General.--Except as provided under subsection (b), the 
definitions under section 3502 shall apply to this subchapter.
    ``(b) Additional Definitions.--As used in this subchapter--
            ``(1) the term `information security' means protecting 
        information and information systems from unauthorized access, 
        use, disclosure, disruption, modification, or destruction in 
        order to provide--
                    ``(A) integrity, which means guarding against 
                improper information modification or destruction, and 
                includes ensuring information nonrepudiation and 
                authenticity;
                    ``(B) confidentiality, which means preserving 
                authorized restrictions on access and disclosure, 
                including means for protecting personal privacy and 
                proprietary information;
                    ``(C) availability, which means ensuring timely and 
                reliable access to and use of information; and
                    ``(D) authentication, which means utilizing digital 
                credentials to assure the identity of users and 
                validate their access;
            ``(2) the term `national security system' means any 
        information system (including any telecommunications system) 
        used or operated by an agency or by a contractor of an agency, 
        or other organization on behalf of an agency--
                    ``(A) the function, operation, or use of which--
                            ``(i) involves intelligence activities;
                            ``(ii) involves cryptologic activities 
                        related to national security;
                            ``(iii) involves command and control of 
                        military forces;
                            ``(iv) involves equipment that is an 
                        integral part of a weapon or weapons system; or
                            ``(v) is critical to the direct fulfillment 
                        of military or intelligence missions provided 
                        that this definition does not apply to a system 
                        that is used for routine administrative and 
                        business applications (including payroll, 
                        finance, logistics, and personnel management 
                        applications); or
                    ``(B) is protected at all times by procedures 
                established for information that have been specifically 
                authorized under criteria established by an Executive 
                order or an Act of Congress to be kept secret in the 
                interest of national defense or foreign policy; and
            ``(3) the term `information technology' has the meaning 
        given that term in section 5002 of the Clinger-Cohen Act of 
        1996 (40 U.S.C. 1401).

``Sec. 3533. Authority and functions of the Director

    ``(a) The Director shall oversee agency information security 
policies and practices, including--
            ``(1) developing and overseeing the implementation of 
        policies, principles, standards, and guidelines on information 
        security, including through the oversight of standards 
        promulgated under section 5131 of the Clinger-Cohen Act of 1996 
        (40 U.S.C. 1441);
            ``(2) requiring agencies, consistent with the standards 
        promulgated under such section 5131 and the requirements of 
        this subchapter, to identify and provide information security 
        protections commensurate with the risk and magnitude of the 
        harm resulting from the unauthorized access, use, disclosure, 
        disruption, modification, or destruction of--
                    ``(A) information collected or maintained by or on 
                behalf of an agency; or
                    ``(B) information systems used or operated by an 
                agency or by a contractor of an agency or other 
                organization on behalf of an agency;
            ``(3) coordinating the development of standards and 
        guidelines under section 20 of the National Institute of 
        Standards and Technology Act (15 U.S.C. 278g-3) with agencies 
        and offices operating or exercising control of national 
        security systems (including the National Security Agency) to 
        assure, to the maximum extent feasible, that such standards and 
        guidelines are complementary with standards and guidelines 
        developed for national security systems;
            ``(4) overseeing agency compliance with the requirements of 
        this subchapter, including through any authorized action under 
        section 5113(b)(5) of the Clinger-Cohen Act of 1996 (40 U.S.C. 
        1413(b)(5)) to enforce accountability for compliance with such 
        requirements;
            ``(5) reviewing at least annually, and approving or 
        disapproving, agency information security programs required 
        under section 3534(b);
            ``(6) coordinating information security policies and 
        procedures with related information resources management 
        policies and procedures; and
            ``(7) reporting to Congress no later than March 1 of each 
        year on agency compliance with the requirements of this 
        subchapter, including--
                    ``(A) a summary of the findings of evaluations 
                required by section 3535;
                    ``(B) significant deficiencies in agency 
                information security practices;
                    ``(C) planned remedial action to address such 
                deficiencies; and
                    ``(D) a summary of, and the views of the Director 
                on, the report prepared by the National Institute of 
                Standards and Technology under section 20(e)(7) of the 
                National Institute of Standards and Technology Act (15 
                U.S.C. 278g-3).''.
    ``(b) Except for the authorities described in paragraphs (4) and 
(7) of subsection (a), the authorities of the Director under this 
section shall not apply to national security systems.

``Sec. 3534. Federal agency responsibilities

    ``(a) The head of each agency shall--
            ``(1) be responsible for--
                    ``(A) providing information security protections 
                commensurate with the risk and magnitude of the harm 
                resulting from unauthorized access, use, disclosure, 
                disruption, modification, or destruction of--
                            ``(i) information collected or maintained 
                        by or on behalf of the agency; and
                            ``(ii) information systems used or operated 
                        by an agency or by a contractor of an agency or 
                        other organization on behalf of an agency;
                    ``(B) complying with the requirements of this 
                subchapter and related policies, procedures, standards, 
                and guidelines, including--
                            ``(i) information security standards 
                        promulgated under section 5131 of the Clinger-
                        Cohen Act of 1996 (40 U.S.C. 1441); and
                            ``(ii) information security standards and 
                        guidelines for national security systems issued 
                        in accordance with law and as directed by the 
                        President; and
                    ``(C) ensuring that information security management 
                processes are integrated with agency strategic and 
                operational planning processes;
            ``(2) ensure that senior agency officials provide 
        information security for the information and information 
        systems that support the operations and assets under their 
        control, including through--
                    ``(A) assessing the risk and magnitude of the harm 
                that could result from the unauthorized access, use, 
                disclosure, disruption, modification, or destruction of 
                such information or information systems;
                    ``(B) determining the levels of information 
                security appropriate to protect such information and 
                information systems in accordance with standards 
                promulgated under section 5131 of the Clinger-Cohen Act 
                of 1996 (40 U.S.C. 1441) for information security 
                classifications and related requirements;
                    ``(C) implementing policies and procedures to cost-
                effectively reduce risks to an acceptable level; and
                    ``(D) periodically testing and evaluating 
                information security controls and techniques to ensure 
                that they are effectively implemented;
            ``(3) delegate to the agency Chief Information Officer 
        established under section 3506 (or comparable official in an 
        agency not covered by such section) the authority to ensure 
        compliance with the requirements imposed on the agency under 
        this subchapter, including--
                    ``(A) designating a senior agency information 
                security officer who shall--
                            ``(i) carry out the Chief Information 
                        Officer's responsibilities under this section;
                            ``(ii) possess professional qualifications, 
                        including training and experience, required to 
                        administer the functions described under this 
                        section;
                            ``(iii) have information security duties as 
                        that official's primary duty; and
                            ``(iv) head an office with the mission and 
                        resources to assist in ensuring agency 
                        compliance with this section;
                    ``(B) developing and maintaining an agencywide 
                information security program as required by subsection 
                (b);
                    ``(C) developing and maintaining information 
                security policies, procedures, and control techniques 
                to address all applicable requirements, including those 
                issued under section 3533 of this title, and section 
                5131 of the Clinger-Cohen Act of 1996 (40 U.S.C. 1441);
                    ``(D) training and overseeing personnel with 
                significant responsibilities for information security 
                with respect to such responsibilities; and
                    ``(E) assisting senior agency officials concerning 
                their responsibilities under subparagraph (2);
            ``(4) ensure that the agency has trained personnel 
        sufficient to assist the agency in complying with the 
        requirements of this subchapter and related policies, 
        procedures, standards, and guidelines; and
            ``(5) ensure that the agency Chief Information Officer, in 
        coordination with other senior agency officials, reports 
        annually to the agency head on the effectiveness of the agency 
        information security program, including progress of remedial 
        actions.
    ``(b) Each agency shall develop, document, and implement an 
agencywide information security program, approved by the Director under 
section 3533(a)(5), to provide information security for the information 
and information systems that support the operations and assets of the 
agency, including those provided or managed by another agency, 
contractor, or other source, that includes--
            ``(1) periodic assessments of the risk and magnitude of the 
        harm that could result from the unauthorized access, use, 
        disclosure, disruption, modification, or destruction of 
        information and information systems that support the operations 
        and assets of the agency;
            ``(2) policies and procedures that--
                    ``(A) are based on the risk assessments required by 
                subparagraph (1);
                    ``(B) cost-effectively reduce information security 
                risks to an acceptable level;
                    ``(C) ensure that information security is addressed 
                throughout the life cycle of each agency information 
                system; and
                    ``(D) ensure compliance with--
                            ``(i) the requirements of this subchapter;
                            ``(ii) policies and procedures as may be 
                        prescribed by the Director, and information 
                        security standards promulgated under section 
                        5131 of the Clinger-Cohen Act of 1996 (40 
                        U.S.C. 1441);
                            ``(iii) minimally acceptable system 
                        configuration requirements, as determined by 
                        the agency; and
                            ``(iv) any other applicable requirements, 
                        including standards and guidelines for national 
                        security systems issued in accordance with law 
                        and as directed by the President;
            ``(3) subordinate plans for providing adequate information 
        security for networks, facilities, and systems or groups of 
        information systems, as appropriate;
            ``(4) security awareness training to inform personnel, 
        including contractors and other users of information systems 
        that support the operations and assets of the agency, of--
                    ``(A) information security risks associated with 
                their activities; and
                    ``(B) their responsibilities in complying with 
                agency policies and procedures designed to reduce these 
                risks;
            ``(5) periodic testing and evaluation of the effectiveness 
        of information security policies, procedures, and practices, to 
        be performed with a frequency depending on risk, but no less 
        than annually, of which such testing--
                    ``(A) shall include testing of management, 
                operational, and technical controls of every 
                information system identified in the inventory required 
                under section 3505(c); and
                    ``(B) may include testing relied on in a evaluation 
                under section 3535;
            ``(6) a process for planning, implementing, evaluating, and 
        documenting remedial action to address any deficiencies in the 
        information security policies, procedures, and practices of the 
        agency;
            ``(7) procedures for detecting, reporting, and responding 
        to security incidents, consistent with guidance issued under 
        section 3536, including--
                    ``(A) mitigating risks associated with such 
                incidents before substantial damage is done;
                    ``(B) notifying and consulting with the Federal 
                information security incident center established under 
                section 3536; and
                    ``(C) notifying and consulting with, as 
                appropriate--
                            ``(i) law enforcement agencies and relevant 
                        Offices of Inspector General;
                            ``(ii) an office designated by the 
                        President for any incident involving a national 
                        security system; and
                            ``(iii) any other agency or office, in 
                        accordance with law or as directed by the 
                        President; and
            ``(8) plans and procedures to ensure continuity of 
        operations for information systems that support the operations 
        and assets of the agency.
    ``(c) Each agency shall--
            ``(1) report annually to the Director, the Committees on 
        Government Reform and Science of the House of Representatives, 
        the Committees on Governmental Affairs and Commerce, Science, 
        and Transportation of the Senate, the appropriate authorization 
        and appropriations committees of Congress, and the Comptroller 
        General on the adequacy and effectiveness of information 
        security policies, procedures, and practices, and compliance 
        with the requirements of this subchapter, including compliance 
        with each requirement of subsection (b);
            ``(2) address the adequacy and effectiveness of information 
        security policies, procedures, and practices in plans and 
        reports relating to--
                    ``(A) annual agency budgets;
                    ``(B) information resources management under 
                subchapter 1 of this chapter;
                    ``(C) information technology management under the 
                Clinger-Cohen Act of 1996 (40 U.S.C. 1401 et seq.);
                    ``(D) program performance under sections 1105 and 
                1115 through 1119 of title 31, and sections 2801 and 
                2805 of title 39;
                    ``(E) financial management under chapter 9 of title 
                31, and the Chief Financial Officers Act of 1990 (31 
                U.S.C. 501 note; Public Law 101-576) (and the 
                amendments made by that Act);
                    ``(F) financial management systems under the 
                Federal Financial Management Improvement Act (31 U.S.C. 
                3512 note); and
                    ``(G) internal accounting and administrative 
                controls under section 3512 of title 31, United States 
                Code, (known as the `Federal Managers Financial 
                Integrity Act'); and
            ``(3) report any significant deficiency in a policy, 
        procedure, or practice identified under paragraph (1) or (2)--
                    ``(A) as a material weakness in reporting under 
                section 3512 of title 31, United States Code; and
                    ``(B) if relating to financial management systems, 
                as an instance of a lack of substantial compliance 
                under the Federal Financial Management Improvement Act 
                (31 U.S.C. 3512 note).
    ``(d)(1) In addition to the requirements of subsection (c), each 
agency, in consultation with the Director, shall include as part of the 
performance plan required under section 1115 of title 31 a description 
of--
            ``(A) the time periods, and
            ``(B) the resources, including budget, staffing, and 
        training,
that are necessary to implement the program required under subsection 
(b).
    ``(2) The description under paragraph (1) shall be based on the 
risk assessments required under subsection (b)(2)(1).
    ``(e) Each agency shall provide the public with timely notice and 
opportunities for comment on proposed information security policies and 
procedures to the extent that such policies and procedures affect 
communication with the public.

``Sec. 3535. Annual independent evaluation

    ``(a)(1) Each year each agency shall have performed an independent 
evaluation of the information security program and practices of that 
agency to determine the effectiveness of such program and practices.
    ``(2) Each evaluation by an agency under this section shall 
include--
            ``(A) testing of the effectiveness of information security 
        policies, procedures, and practices of a representative subset 
        of the agency's information systems;
            ``(B) an assessment (made on the basis of the results of 
        the testing) of compliance with--
                    ``(i) the requirements of this subchapter; and
                    ``(ii) related information security policies, 
                procedures, standards, and guidelines; and
            ``(C) separate presentations, as appropriate, regarding 
        information security relating to national security systems.
    ``(b) Subject to subsection (c)--
            ``(1) for each agency with an Inspector General appointed 
        under the Inspector General Act of 1978, the annual evaluation 
        required by this section shall be performed by the Inspector 
        General or by an independent external auditor, as determined by 
        the Inspector General of the agency; and
            ``(2) for each agency to which paragraph (1) does not 
        apply, the head of the agency shall engage an independent 
        external auditor to perform the evaluation.
    ``(c) For each agency operating or exercising control of a national 
security system, that portion of the evaluation required by this 
section directly relating to a national security system shall be 
performed--
            ``(1) only by an entity designated by the agency head; and
            ``(2) in such a manner as to ensure appropriate protection 
        for information associated with any information security 
        vulnerability in such system commensurate with the risk and in 
        accordance with all applicable laws.
    ``(d) The evaluation required by this section--
            ``(1) shall be performed in accordance with generally 
        accepted government auditing standards; and
            ``(2) may be based in whole or in part on an audit, 
        evaluation, or report relating to programs or practices of the 
        applicable agency.
    ``(e) Each year, not later than such date established by the 
Director, the head of each agency shall submit to the Director the 
results of the evaluation required under this section.
    ``(f) Agencies and evaluators shall take appropriate steps to 
ensure the protection of information which, if disclosed, may adversely 
affect information security. Such protections shall be commensurate 
with the risk and comply with all applicable laws and regulations.
    ``(g)(1) The Director shall summarize the results of the 
evaluations conducted under this section in the report to Congress 
required under section 3533(a)(8).
    ``(2) The Director's report to Congress under this subsection shall 
summarize information regarding information security relating to 
national security systems in such a manner as to ensure appropriate 
protection for information associated with any information security 
vulnerability in such system commensurate with the risk and in 
accordance with all applicable laws.
    ``(3) Evaluations and any other descriptions of information systems 
under the authority and control of the Director of Central Intelligence 
or of National Foreign Intelligence Programs systems under the 
authority and control of the Secretary of Defense shall be made 
available to Congress only through the appropriate oversight committees 
of Congress, in accordance with applicable laws.
    ``(h) The Comptroller General shall periodically evaluate and 
report to Congress on--
            ``(1) the adequacy and effectiveness of agency information 
        security policies and practices; and
            ``(2) implementation of the requirements of this 
        subchapter.

``Sec. 3536. Federal information security incident center

    ``(a) The Secretary of Homeland Security shall cause to be 
established and operated a central Federal information security 
incident center to--
            ``(1) provide timely technical assistance to operators of 
        agency information systems regarding security incidents, 
        including guidance on detecting and handling information 
        security incidents;
            ``(2) compile and analyze information about incidents that 
        threaten information security;
            ``(3) inform operators of agency information systems about 
        current and potential information security threats, and 
        vulnerabilities; and
            ``(4) consult with agencies or offices operating or 
        exercising control of national security systems (including the 
        National Security Agency) and such other agencies or offices in 
        accordance with law and as directed by the President regarding 
        information security incidents and related matters.
    ``(b) Each agency operating or exercising control of a national 
security system shall share information about information security 
incidents, threats, and vulnerabilities with the Federal information 
security incident center to the extent consistent with standards and 
guidelines for national security systems, issued in accordance with law 
and as directed by the President.

``Sec. 3537. National security systems

    ``The head of each agency operating or exercising control of a 
national security system shall be responsible for ensuring that the 
agency--
            ``(1) provides information security protections 
        commensurate with the risk and magnitude of the harm resulting 
        from the unauthorized access, use, disclosure, disruption, 
        modification, or destruction of the information contained in 
        such system;
            ``(2) implements information security policies and 
        practices as required by standards and guidelines for national 
        security systems, issued in accordance with law and as directed 
        by the President; and
            ``(3) complies with the requirements of this subchapter.

``Sec. 3538. Authorization of appropriations

    ``There are authorized to be appropriated to carry out the 
provisions of this subchapter such sums as may be necessary for each of 
fiscal years 2003 through 2007.

``Sec. 3539. Effect on existing law

    ``Nothing in this subchapter, section 5131 of the Clinger-Cohen Act 
of 1996 (40 U.S.C. 1441), or section 20 of the National Standards and 
Technology Act (15 U.S.C. 278g-3) may be construed as affecting the 
authority of the President, the Office of Management and Budget or the 
Director thereof, the National Institute of Standards and Technology, 
or the head of any agency, with respect to the authorized use or 
disclosure of information, including with regard to the protection of 
personal privacy under section 552a of title 5, the disclosure of 
information under section 552 of title 5, the management and 
disposition of records under chapters 29, 31, or 33 of title 44, the 
management of information resources under subchapter I of chapter 35 of 
this title, or the disclosure of information to the Congress or the 
Comptroller General of the United States.''.
            (2) Clerical amendment.--The items in the table of sections 
        at the beginning of such chapter 35 under the heading 
        ``SUBCHAPTER II'' are amended to read as follows:

``3531. Purposes.
``3532. Definitions.
``3533. Authority and functions of the Director.
``3534. Federal agency responsibilities.
``3535. Annual independent evaluation.
``3536. Federal information security incident center.
``3537. National security systems.
``3538. Authorization of appropriations.
``3539. Effect on existing law.''.
    (c) Information Security Responsibilities of Certain Agencies.--
            (1) National security responsibilities.--(A) Nothing in 
        this Act (including any amendment made by this Act) shall 
        supersede any authority of the Secretary of Defense, the 
        Director of Central Intelligence, or other agency head, as 
        authorized by law and as directed by the President, with regard 
        to the operation, control, or management of national security 
        systems, as defined by section 3532(3) of title 44, United 
        States Code.
            (B) Section 2224 of title 10, United States Code, is 
        amended--
                    (i) in subsection 2224(b), by striking ``(b) 
                Objectives and Minimum Requirements.--(1)'' and 
                inserting ``(b) Objectives of the Program.--'';
                    (ii) in subsection 2224(b), by striking ``(2) the 
                program shall at a minimum meet the requirements of 
                section 3534 and 3535 of title 44, United States 
                Code.''; and
                    (iii) in subsection 2224(c), by inserting 
                ``, including through compliance with subtitle II of 
                chapter 35 of title 44'' after ``infrastructure''.
            (2) Atomic energy act of 1954.--Nothing in this Act shall 
        supersede any requirement made by or under the Atomic Energy 
        Act of 1954 (42 U.S.C. 2011 et seq.). Restricted Data or 
        Formerly Restricted Data shall be handled, protected, 
        classified, downgraded, and declassified in conformity with the 
        Atomic Energy Act of 1954 (42 U.S.C. 2011 et seq.).

SEC. 1002. MANAGEMENT OF INFORMATION TECHNOLOGY.

    Section 5131 of the Clinger-Cohen Act of 1996 (40 U.S.C. 1441) is 
amended to read as follows:

``SEC. 5131. RESPONSIBILITIES FOR FEDERAL INFORMATION SYSTEMS 
                    STANDARDS.

    ``(a)(1)(A) Except as provided under paragraph (2), the Secretary 
of Commerce shall, on the basis of proposed standards developed under 
paragraphs (2) and (3) of section 20(a) of the National Institute of 
Standards and Technology Act (15 U.S.C. 278g-3(a)) and in consultation 
with the Director of the Office of Management and Budget, promulgate 
standards pertaining to Federal information systems.
    ``(B) Standards promulgated under subparagraph (A) shall include--
            ``(i) standards that provide minimum information security 
        requirements as determined under section 20(b) of the National 
        Institute of Standards and Technology Act (15 U.S.C. 278g-
        3(b)); and
            ``(ii) such standards that are otherwise necessary to 
        improve the efficiency of operation or security of Federal 
        information systems.
    ``(C) Standards described under subparagraph (B) shall be 
compulsory and binding.
    ``(2) Standards and guidelines for national security systems, as 
defined under section 3532(3) of title 44, United States Code, shall be 
developed, promulgated, enforced, and overseen as otherwise authorized 
by law and as directed by the President.
    ``(b) The head of an agency may employ standards for the cost-
effective information security for all operations and assets within or 
under the supervision of that agency that are more stringent than the 
standards promulgated under this section, if such standards--
            ``(1) contain, at a minimum, the provisions of those 
        applicable standards made compulsory and binding by the 
        Secretary of Commerce; and
            ``(2) are otherwise consistent with policies and guidelines 
        issued under section 3533 of title 44, United States Code.
    ``(c)(1) The decision regarding the promulgation of any standard by 
the Secretary of Commerce under subsection (a) shall occur not later 
than 6 months after the submission of the proposed standard to the 
Secretary of Commerce under section 20 of the National Institute of 
Standards and Technology Act (15 U.S.C. 278g-3).
    ``(2) A decision by the Secretary of Commerce to significantly 
modify, or not promulgate, a proposed standard developed as provided 
under section 20 of the National Institute of Standards and Technology 
Act (15 U.S.C. 278g-3), shall be made after the public is given an 
opportunity to comment on the Secretary of Commerce's proposed 
decision.''.
    ``(d) In this section, the term `information security' has the 
meaning given that term in section 3532(b)(1) of title 44, United 
States Code.''.

SEC. 1003. NATIONAL INSTITUTE OF STANDARDS AND TECHNOLOGY.

    Section 20 of the National Institute of Standards and Technology 
Act (15 U.S.C. 278g-3), is amended by striking the text and inserting 
the following:
    ``(a) The Institute shall--
            ``(1) have the mission of developing standards, guidelines, 
        and associated methods and techniques for information systems;
            ``(2) develop standards and guidelines, including minimum 
        requirements, for information systems used or operated by an 
        agency or by a contractor of an agency or other organization on 
        behalf of an agency, other than national security systems (as 
        defined in section 3532(b)(2) of title 44, United States Code);
            ``(3) develop standards and guidelines, including minimum 
        requirements, for providing adequate information security for 
        all agency operations and assets, but such standards and 
        guidelines shall not apply to national security systems; and
            ``(4) carry out the responsibilities described in paragraph 
        (3) through the Computer Security Division.
    ``(b) The standards and guidelines required by subsection (a) shall 
include, at a minimum--
            ``(1)(A) standards to be used by all agencies to categorize 
        all information and information systems collected or maintained 
        by or on behalf of each agency based on the objectives of 
        providing appropriate levels of information security according 
        to a range of risk levels;
            ``(B) guidelines recommending the types of information and 
        information systems to be included in each such category; and
            ``(C) minimum information security requirements for 
        information and information systems in each such category;
            ``(2) a definition of and guidelines concerning detection 
        and handling of information security incidents; and
            ``(3) guidelines developed in coordination with the 
        National Security Agency for identifying an information system 
        as a national security system consistent with applicable 
        requirements for national security systems, issued in 
        accordance with law and as directed by the President.
    ``(c) In developing standards and guidelines required by 
subsections (a) and (b), the Institute shall--
            ``(1) consult with other agencies and offices (including, 
        but not limited to, the Director of the Office of Management 
        and Budget, the Departments of Defense and Energy, the National 
        Security Agency, and the General Accounting Office) to assure--
                    ``(A) use of appropriate information security 
                policies, procedures, and techniques, in order to 
                improve information security and avoid unnecessary and 
                costly duplication of effort; and
                    ``(B) that such standards and guidelines are 
                complementary with standards and guidelines employed 
                for the protection of national security systems and 
                information contained in such systems;
            ``(2) provide the public with an opportunity to comment on 
        proposed standards and guidelines;
            ``(3) submit to the Secretary of Commerce for promulgation 
        under section 5131 of the Clinger-Cohen Act of 1996 (40 U.S.C. 
        1441)--
                    ``(A) standards, as required under subsection 
                (b)(1)(A), no later than 12 months after the date of 
                the enactment of this section; and
                    ``(B) minimum information security requirements for 
                each category, as required under subsection (b)(1)(C), 
                no later than 36 months after the date of the enactment 
                of this section;
            ``(4) issue guidelines as required under subsection 
        (b)(1)(B), no later than 18 months after the date of the 
        enactment of this Act;
            ``(5) ensure that such standards and guidelines do not 
        require specific technological solutions or products, including 
        any specific hardware or software security solutions;
            ``(6) ensure that such standards and guidelines provide for 
        sufficient flexibility to permit alternative solutions to 
        provide equivalent levels of protection for identified 
        information security risks; and
            ``(7) use flexible, performance-based standards and 
        guidelines that, to the greatest extent possible, permit the 
        use of off-the-shelf commercially developed information 
        security products.''
    ``(d) The Institute shall--
            ``(1) submit standards developed pursuant to subsection 
        (a), along with recommendations as to the extent to which these 
        should be made compulsory and binding, to the Secretary of 
        Commerce for promulgation under section 5131 of the Clinger-
        Cohen Act of 1996 (40 U.S.C. 1441);
            ``(2) provide assistance to agencies regarding--
                    ``(A) compliance with the standards and guidelines 
                developed under subsection (a);
                    ``(B) detecting and handling information security 
                incidents; and
                    ``(C) information security policies, procedures, 
                and practices;
            ``(3) conduct research, as needed, to determine the nature 
        and extent of information security vulnerabilities and 
        techniques for providing cost-effective information security;
            ``(4) develop and periodically revise performance 
        indicators and measures for agency information security 
        policies and practices;
            ``(5) evaluate private sector information security policies 
        and practices and commercially available information 
        technologies to assess potential application by agencies to 
        strengthen information security;
            ``(6) evaluate security policies and practices developed 
        for national security systems to assess potential application 
        by agencies to strengthen information security;
            ``(7) periodically assess the effectiveness of standards 
        and guidelines developed under this section and undertake 
        revisions as appropriate;
            ``(8) solicit and consider the recommendations of the 
        Information Security and Privacy Advisory Board, established by 
        section 21, regarding standards and guidelines developed under 
        subsection (a) and submit such recommendations to the Secretary 
        of Commerce with such standards submitted to the Secretary; and
            ``(9) prepare an annual public report on activities 
        undertaken in the previous year, and planned for the coming 
        year, to carry out responsibilities under this section.
    ``(e) As used in this section--
            ``(1) the term `agency' has the same meaning as provided in 
        section 3502(1) of title 44, United States Code;
            ``(2) the term `information security' has the same meaning 
        as provided in section 3532(1) of such title;
            ``(3) the term `information system' has the same meaning as 
        provided in section 3502(8) of such title;
            ``(4) the term `information technology' has the same 
        meaning as provided in section 5002 of the Clinger-Cohen Act of 
        1996 (40 U.S.C. 1401); and
            ``(5) the term `national security system' has the same 
        meaning as provided in section 3532(b)(2) of such title.
    ``(f) There are authorized to be appropriated to the Secretary of 
Commerce $20,000,000 for each of fiscal years 2003, 2004, 2005, 2006, 
and 2007 to enable the National Institute of Standards and Technology 
to carry out the provisions of this section.''.

SEC. 1004. INFORMATION SECURITY AND PRIVACY ADVISORY BOARD.

    Section 21 of the National Institute of Standards and Technology 
Act (15 U.S.C. 278g-4), is amended--
            (1) in subsection (a), by striking ``Computer System 
        Security and Privacy Advisory Board'' and inserting 
        ``Information Security and Privacy Advisory Board'';
            (2) in subsection (a)(1), by striking ``computer or 
        telecommunications'' and inserting ``information technology'';
            (3) in subsection (a)(2)--
                    (A) by striking ``computer or telecommunications 
                technology'' and inserting ``information technology''; 
                and
                    (B) by striking ``computer or telecommunications 
                equipment'' and inserting ``information technology'';
            (4) in subsection (a)(3)--
                    (A) by striking ``computer systems'' and inserting 
                ``information system''; and
                    (B) by striking ``computer systems security'' and 
                inserting ``information security'';
            (5) in subsection (b)(1) by striking ``computer systems 
        security'' and inserting ``information security'';
            (6) in subsection (b) by striking paragraph (2) and 
        inserting the following:
            ``(2) to advise the Institute and the Director of the 
        Office of Management and Budget on information security and 
        privacy issues pertaining to Federal Government information 
        systems, including through review of proposed standards and 
        guidelines developed under section 20; and'';
            (7) in subsection (b)(3) by inserting ``annually'' after 
        ``report'';
            (8) by inserting after subsection (e) the following new 
        subsection:
    ``(f) The Board shall hold meetings at such locations and at such 
time and place as determined by a majority of the Board.'';
            (9) by redesignating subsections (f) and (g) as subsections 
        (g) and (h), respectively;
            (10) by striking subsection (h), as redesignated by 
        paragraph (9), and inserting the following:
    ``(h) As used in this section, the terms ``information system'' and 
``information technology'' have the meanings given in section 20.''; 
and
            (11) by inserting at the end the following:
    ``(i) There are authorized to be appropriated to the Secretary of 
Commerce $1,250,000 for each of fiscal years 2003, 2004, 2005, 2006, 
and 2007 to enable the Information Security and Privacy Advisory Board 
to identify emerging issues related to information security and 
privacy, and to convene public meetings on those subjects, receive 
presentations, and publish reports and recommendations for public 
distribution.''.

SEC. 1005. TECHNICAL AND CONFORMING AMENDMENTS.

    (a) Computer Security Act.--Sections 5 and 6 of the Computer 
Security Act of 1987 (40 U.S.C. 1441 note) are repealed.
    (b) Floyd D. Spence National Defense Authorization Act for Fiscal 
Year 2001.--The Floyd D. Spence National Defense Authorization Act for 
Fiscal Year 2001 (Public Law 106-398) is amended by striking subtitle G 
of title X.
    (c) Paperwork Reduction Act.--(1) Section 3504(g) of title 44, 
United States Code, is amended--
            (A) by adding ``and'' at the end of paragraph (1);
            (B) in paragraph (2)--
                    (i) by striking ``sections 5 and 6 of the Computer 
                Security Act of 1987 (40 U.S.C. 759 note)'' and 
                inserting ``subchapter II of this title''; and
                    (ii) by striking the semicolon and inserting a 
                period; and
            (C) by striking paragraph (3).
    (2) Section 3505 of such title is amended by adding at the end--
    ``(c)(1) The head of each agency shall develop and maintain an 
inventory of the information systems (including national security 
systems) operated by or under the control of such agency;
    ``(2) The identification of information systems in an inventory 
under this subsection shall include an identification of the interfaces 
between each such system and all other systems or networks, including 
those not operated by or under the control of the agency;
    ``(3) Such inventory shall be--
            ``(A) updated at least annually;
            ``(B) made available to the Comptroller General; and
            ``(C) used to support information resources management, 
        including--
                    ``(i) preparation and maintenance of the inventory 
                of information resources under section 3506(b)(4);
                    ``(ii) information technology planning, budgeting, 
                acquisition, and management under section 3506(h), the 
                Clinger-Cohen Act of 1996, and related laws and 
                guidance;
                    ``(iii) monitoring, testing, and evaluation of 
                information security controls under subchapter II;
                    ``(iv) preparation of the index of major 
                information systems required under section 552(g) of 
                title 5, United States Code; and
                    ``(v) preparation of information system inventories 
                required for records management under chapters 21, 29, 
                31, and 33.
    ``(4) The Director shall issue guidance for and oversee the 
implementation of the requirements of this subsection.''.
    (3) Section 3506(g) of such title is amended--
            (A) by adding ``and'' at the end of paragraph (1);
            (B) in paragraph (2)--
                    (i) by striking ``the Computer Security Act of 1987 
                (40 U.S.C. 759 note)'' and inserting ``subchapter II of 
                this title''; and
                    (ii) by striking the semicolon and inserting a 
                period; and
            (C) by striking paragraph (3).

SEC. 1006. CONSTRUCTION.

    Nothing in this Act, or the amendments made by this Act, affects 
the authority of the National Institute of Standards and Technology or 
the Department of Commerce relating to the development and promulgation 
of standards or guidelines under paragraphs (1) and (2) of section 
20(a) of the National Institute of Standards and Technology Act (15 
U.S.C. 278g-3(a)).

SEC. 1007. EFFECTIVE DATE.

    This title and the amendments made by this title shall take effect 
30 days after the date of the enactment of this Act.

           TITLE XI--ADDITIONAL RESPONSIBILITIES OF SECRETARY

SEC. 1101. HOMELAND SECURITY EVENTS.

    (a) In General.--At the request of the Governor of the affected 
State, the Secretary may declare that a major disaster constitutes a 
homeland security event for the purposes of this section. Such a 
request shall be based on a finding that Federal assistance is 
necessary because the event poses a significant risk to the security of 
the people and property of the Nation and is of such severity and 
magnitude that effective response is beyond the capability of the 
effected State and local government.
    (b) Federal Assistance.--In any homeland security event, in 
addition to providing other assistance made available under title IV of 
the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 
U.S.C. 5170 et seq.) in a major disaster, the Secretary may--
            (1) establish a coordinating office and appoint a disaster 
        recovery director--
                    (A) to work with and coordinate efforts with the 
                Federal coordinating officer appointed under section 
                302 of such Act;
                    (B) to oversee and coordinate the timely 
                distribution of Federal compensation to persons injured 
                in such disaster;
                    (C) develop methods to expedite claims for relief 
                and assistance by individuals and businesses;
                    (D) coordinate long-term recovery efforts with 
                State and local authorities; and
                    (E) work with Federal agencies to develop more 
                effective methods to assist affected parties;
            (2) require that if an office described in paragraph (1) is 
        established, the disaster recovery director--
            (A) shall consult with local officials in developing a 
        recovery plan; and
            (B) may appoint an independent claims manager to assist in 
        providing assistance;
            (3) in any case in which a Federal official issues a high 
        security alert after a homeland security event, provide 
        technical assistance and reimbursement to State and local 
        governments in the disaster area for expenses incurred related 
        to such alert, including overtime for law enforcement officers 
        for a period of time that the Secretary determines is 
        necessary;
            (4) provide grants to a local government which may suffer a 
        substantial loss of tax and other revenues;
            (5) authorize reimbursement to a school system for--
                    (A) providing additional classroom instruction time 
                and related activities to students who lost 
                instructional time as a result of the homeland security 
                event;
                    (B) providing mental health and trauma counseling 
                and other appropriate support services to students 
                suffering from trauma-related disorders resulting from 
                the homeland security event;
                    (C) providing guidance and grief counseling and 
                mental health services, including overtime payment for 
                counselors and mental health professionals, for 
                students and school staff;
                    (D) clean up and structural inspections and repairs 
                of school facilities;
                    (E) textbooks and other school supplies and 
                equipment used to support the relocation of students 
                from schools in the disaster area;
                    (F) the cost of relocating students, including 
                transportation of students to temporary school 
                facilities; and
                    (G) loss of perishable food stock and revenue lost 
                from food services; and
            (6) provide grants, equipment, supplies, and personnel, to 
        any non-profit medical facility that has--
                    (A) lost equipment or revenue due to a major 
                disaster;
                    (B) incurred additional costs for security 
                enhancements in anticipation of a homeland security 
                event;
                    (C) purchased emergency supplies, medicine, or 
                equipment, or contracted with medical specialists, in 
                order to respond to casualties expected to be treated 
                as a result of a major disaster; or
                    (D) complied with Federal and state requirements 
                concerning maintenance of health service treatment 
                procedures (such as dialysis facilities) that may not 
                be used as a result of a major disaster;
            (7) Provide reimbursement to for-profit telecommunications 
        and phone services and for-profit utilities (including power, 
        water (including water provided by an irrigation organization 
        or facility), sewer, and wastewater treatment) except that 
        these for-profit entities shall be reimbursed only for 
        structures and property losses that occur during a homeland 
        security event if such losses are not covered by such entity's 
        insurance policies: and
            (8) authorize testing of indoor air quality deemed 
        necessary by the Under Secretary for Chemical, Biological, 
        Radiological, and Nuclear Countermeasures and to undertake such 
        remedial actions as may be necessary, in the discretion of the 
        Under Secretary, to protect human health and safety from the 
        contamination of indoor air quality following any such event.

SEC. 1102. STANDARDS AND REPORTING.

    The Director of the Office of Management and Budget shall--
            (1) establish standards for reporting information regarding 
        disaster efforts made by each agency that assists in providing 
        relief in a disaster that the Secretary has determined 
        constitutes a homeland security event under section 1101;
            (2) collect data from each such agency regarding the 
        efforts of such agency for each major disaster described in 
        paragraph (1) not less than once each year;
            (3) report such data to the appropriate committees of 
        Congress annually.

SEC. 1103. SPECIAL COMMISSION TO REVIEW AIR QUALITY.

    The Secretary shall appoint a special commission to undertake a 
study of the authorities available to the Environmental Protection 
Agency following a major disaster that the Secretary determines 
constitutes a homeland security event under section 1101, particularly 
a terrorist attack using chemical, biological, or nuclear weapons. The 
Commission shall examine the agency's authorities to--
            (1) monitor the environment,
            (2) evaluate health risks associated with air pollutants 
        that may be released into the environment as result of such a 
        disaster; and
            (3) communicate with affected communities and first 
        responders.
The Commission shall submit a report to the Secretary and to the 
Congress containing the results of such study and including any 
recommendations of the special commission regarding the clarification 
and recommendation of Environmental Protection Agency authorities in 
such situations.
               PERMANENT SELECT COMMITTEE ON INTELLIGENCE

                          House of Representatives,
                Permanant Select Committee on Intelligence,
                                     Washington, DC, July 12, 2002.
Hon. Dick Armey
Chairman, House Select Committee on Homeland Security, The 
        Capitol, Washington, D.C.
    Dear Chairman Armey: Yesterday, in open session, the House 
Permanent Select Committee approvied the attached 
recommendations to H.R. 5005, by a recorded vote of 17 ayes to 
1 no vote. The amendment to Title II of H.R. 5005 would 
establish an all-source Intelligence Analysis Center within the 
Department of Homeland Security headed by the Under Secretary 
for Information Analysis and Infrastructure Protection.
    We also appreciate your invitation to testify on the 
Committee's recommendations next Wednesday before the Select 
Committee on Homeland Security and look forward to sharing the 
Committee's views on its recommendations.
        Sincerely,
                                       Porter Goss,
                                                  Chairman,
                                       Nancy Pelosi
                                            Ranking Member.
                                ------                                


                    Proposed Amendment to H.R. 5005 

   (Recommended to the Select Committee on Homeland Security by the 
              Permanent Select Committee on Intelligence)

    Amend title II to read as follows:

      TITLE II--INFORMATION ANALYSIS AND INFRASTRUCTURE PROTECTION

Subtitle A--Under Secretary for Information Analysis and Infrastructure 
                               Protection

SEC. 201. UNDER SECRETARY FOR INFORMATION ANALYSIS AND INFRASTRUCTURE 
                    PROTECTION.

    (a) In General.--The Under Secretary for Information Analysis and 
Infrastructure Protection (hereinafter in this title referred to as the 
``Under Secretary'') shall assist the Secretary with the 
responsibilities specified in section 101. The primary responsibility 
of the Under Secretary shall be to provide for information analysis and 
infrastructure protection to reduce the vulnerability of the United 
States to acts of terrorism.
    (b) Duties.--In carrying out subsection (a), the Under Secretary 
shall--
            (1) conduct analysis of information, including foreign 
        intelligence and open source information, lawfully collected by 
        Federal, State and local law enforcement agencies and by 
        elements of the intelligence community with respect to threats 
        of terrorist acts against the United States;
            (2) integrate information, intelligence, and intelligence 
        analyses to produce and disseminate infrastructure 
        vulnerability assessments with respect to such threats;
            (3) identify priorities for protective and support measures 
        by the Department, by other executive agencies, by State and 
        local governments, by the private sector, and by other 
        entities;
            (4) review, analyze, and recommend improvements in law, 
        policy, and procedure for the sharing of intelligence and other 
        information with respect to threats against the United States 
        within the Federal Government and between the Federal 
        Government and State and local governments;
            (5) under the direction of the Secretary, develop a 
        comprehensive national plan to provide for the security of key 
        resources and critical infrastructures;
            (6) coordinate with other executive agencies, State and 
        local government personnel, agencies, and authorities, and the 
        private sector, to provide advice on implementation of such 
        comprehensive national plan;
            (7) establish and administer a system to advise Federal, 
        State, and local authorities, the private sector, other 
        entities, and the public, of the likelihood of an act of 
        terrorism committed in the United States (such system to be 
        known as the Homeland Security Advisory System) under which the 
        Under Secretary exercises primary responsibility for public 
        threat advisories, and (in coordination with other executive 
        agencies) provides specific warning information to such 
        authorities, the private sector, other entities, and the 
        public, as well as advice about appropriate protective actions 
        and countermeasures;
            (8) support the intelligence and information requirements 
        of the Department;
            (9) establish requirements for the collection of 
        information or foreign intelligence by elements of the 
        intelligence community authorized to undertake such collection, 
        Federal law enforcement agencies, other executive agencies, and 
        for the request of information from State and local law 
        enforcement agencies or private sector entities as appropriate; 
        and
            (10) perform such other functions as the Secretary may 
        direct.

                Subtitle B--Intelligence Analysis Center

SEC. 211. INTELLIGENCE ANALYSIS CENTER

    (a) Establishment; NFIP Agency.--(1) There is established within 
the Department the Intelligence Analysis Center. The Under Secretary 
shall be the head of the Intelligence Analysis Center.
    (2) The Intelligence Analysis Center is a program of the 
intelligence community for purposes of the National Foreign 
Intelligence Program (as defined in section 3(6) of the National 
Security Act of 1947 (50 U.S.C. 401a(6))).
    (b) Functions.--The Under Secretary, through the Intelligence 
Analysis Center, shall carry out the duties specified in paragraphs 
(1), (2), (3), (8), (9), and (10) of section 201(b).
    (c) Detail of Certain Personnel.--
            (1) In general.--The Secretary and the Director of Central 
        Intelligence, the Secretary of Defense, the Attorney General, 
        the Secretary of State, or the head of another agency or 
        Department as the case may be, shall enter into cooperative 
        arrangements to provide for an appropriate number of 
        individuals to be detailed to the Under Secretary to perform 
        analytical functions and duties with respect to the mission of 
        the Department from the following agencies:
                    (A) The Central Intelligence Agency.
                    (B) The Federal Bureau of Investigation.
                    (C) The National Security Agency.
                    (D) The National Imagery and Mapping Agency.
                    (E) The Department of State.
                    (F) The Defense Intelligence Agency.
                    (G) Any other agency or department that the 
                President determines appropriate.
            (2) Terms of detail.--Any officer or employee of the United 
        States or a member of the Armed Forces who is detailed to the 
        Under Secretary under paragraph (1) shall be detailed on a 
        reimbursable basis for a period of less than two years for the 
        performance of temporary functions as required by the Under 
        Secretary.
    (d) Inclusion of Office of Intelligence as an Element of the 
Intelligence Community.--Section 3(4) of the National Security Act of 
1947 (50 U.S.C. 401a(4)) is amended--
    (1) by striking ``and'' at the end of subparagraph (I);
    (2) by redesignating subparagraph (J) as subparagraph (K); and
    (3) by inserting after subparagraph (I) the following new 
subparagraph:
                    ``(J) the Intelligence Analysis Center of the 
                Department of Homeland Security; and''.

SEC. 212. MISSION OF THE INTELLIGENCE ANALYSIS CENTER.

    (a) In General.--The mission of the Intelligence Analysis Center is 
as follows:
            (1) Analysis and production.--
                    (A) Correlating and evaluating information and 
                intelligence related to the mission of the Department 
                collected from all sources available.
                    (B) Producing all-source collaborative intelligence 
                analysis, warnings, tactical assessments, and strategic 
                assessments of the terrorist threat and infrastructure 
                vulnerabilities of the United States.
                    (C) Providing apprporiate dissemination of such 
                assessments.
                    (D) Improving the lines of communication with 
                respect to homeland security between the Federal 
                Government and State and local public safety agencies 
                and the private sector through the timely dissemination 
                of information pertaining to threats of acts of 
                terrorism against the United States.
            (2) Requests for the collection and coordination of 
        information.--
                    (A) Requesting the collection of information or 
                national intelligence by elements of the intelligence 
                community authorized to undertake such collection, 
                Federal law enforcement agencies, other executive 
                agencies, or request information from State and local 
                law enforcement agencies or private sector entities as 
                appropriate.
                    (B) Coordinating with elements of the intelligence 
                community and with Federal, State, and local law 
                enforcement agencies, and the private sector as 
                appropriate.
            (3) Additional Duties.--Performing such other functions as 
        the Secretary may direct.
    (b) Strategic and Tactical Missions of the Intelligence Analysis 
Center.--The Under Secretary shall conduct strategic and tactical 
assessments and warnings through the Intelligence Analysis Center, 
including research, analysis, and the production of assessments on the 
following as they relate to the mission of the Department:
            (1) Domestic terrorism.
            (2) International terrorism.
            (3) Counterintelligence.
            (4) Transnational crime.
            (5) Proliferation of weapons of mass destruction.
            (6) Illicit financing of terrorist activities.
            (7) Cybersecurity and cybercrime.
            (8) Key resources and critical infrastructures.
    (c) Staffing of the Intelligence Analysis Center.--
            (1) Functions transferred.--In accordance with title VIII, 
        for purposes of carrying out this title, there is transferred 
        to the Under Secretary the functions, personnel, assets, and 
        liabilities of the following entities:
                    (A) The National Infrastructure Protection Center 
                of the Federal Bureau of Investigation (other than the 
                Computer Investigations and Operations Section).
                    (B) The Critical Infrastructure Assurance Office of 
                the Department of Commerce.
                    (C) The Computer Security Division of the National 
                Institute of Standards and Technology.
                    (D) The Federal Computer Incident Response Center 
                of the General Services Administration.
                    (E) The National Infrastructure Simulation and 
                Analysis Center of the Department of Energy.
                    (F) The National Communications System of the 
                Department of Defense.
                    (G) The intelligence element of the Coast Guard.
                    (H) The intelligence element of the United States 
                Customs Service.
                    (I) The intelligence element of the Immigration and 
                Naturalization Service.
                    (J) The intelligence element of the Transportation 
                Security Administration.
                    (K) The intelligence element of the Federal 
                Protective Service.
                    (L) The El Paso Intelligence Center of the Drug 
                Enforcement Administration.
            (2) Structure.--It is the sense of Congress that the Under 
        Secretary should model the Intelligence Analysis Center on the 
        technical, analytic approach of the Information Dominance 
        Center of the Department of the Army to the maximum extent 
        feasible and appropriate.

                   Subtitle C--Additional Provisions

SEC. 221. ACCESS TO INTELLIGENCE.

    (a) In General.--To the extent approved by the President, the 
Secretary and the Under Secretary shall have access to all intelligence 
which is collected by any department, agency, or other entity of the 
United States that is related to threats of acts of terrorism against 
the United States and to other areas of responsibility described in 
section 101(b).
    (b) Immediate Provision of Certain Intelligence.--Without regard to 
whether the Secretary or the Under Secretary has made any request or 
entered into any cooperative arrangement to receive material on a 
regular or routine basis, all executive agencies promptly shall provide 
to the Secretary and the Under Secretary--
                    (1) all reports, assessments, and analytical 
                information relating to threats of terrorism in the 
                United States and to other areas of responsibility 
                described in section 101(b);
                    (2) all information concerning infrastructure or 
                other vulnerabilities of the United States to 
                terrorism, whether or not such information has been 
                analyzed;
                    (3) all information relating to significant and 
                credible threats of terrorism in the United States, 
                whether or not such information has been analyzed, if 
                the President has provided that the Secretary or the 
                Under Secretary shall have access to such information; 
                and
                    (4) such other material as the President may 
                further provide.
    (c) Protection from Unauthorized Disclosure.--The Secretary shall 
ensure that any material received pursuant to this section is protected 
from unauthorized disclosure and handled and used only for the 
performance of official duties, and that any intelligence information 
shared under this section shall be transmitted, retained, and 
disseminated consistent with the authority of the Director of Central 
Intelligence to protect intelligence sources and methods under the 
National Security Act and related procedures or, as appropriate, 
similar authorities of the Attorney General concerning sensitive law 
enforcement information.

SEC. 222. PROTECTION OF INFORMATION.

    (a) Information Voluntarily Provided.--Information provided 
voluntarily by non-Federal entities or individuals that relates 
directly to the duties of the Under Secretary for Information Analysis 
and Infrastructure Protection to reduce the vulnerability of the United 
States to acts of terrorism and is or has been in the possession of the 
Department shall not be subject to section 552 of title 5, United 
States Code.
    (b) Information Provided to State and Local Governments.--
Information obtained by a State or local government from a Federal 
agency under this section shall remain under the control of the Federal 
agency, and a State or local law authorizing or requiring such a 
government to disclose information shall not apply to such information.

SEC. 223. CONFORMING AMENDMENTS.

    (a) Inclusion of Under Secretary on the Committee on Transnational 
Threats of the National Security Council.--Section 101(i)(2) of the 
National Security Act of 1947 (50 U.S.C. 402(i)(2)) is amended--
            (1) by redesignating subparagraph (F) as subparagraph (G); 
        and
            (2) by inserting after subparagraph (E) the following new 
        subparagraph:
            ``(F) The Under Secretary for Information Analysis and 
        Infrastructure Protection of the Department of Homeland 
        Security.
    (b) Title 5, United States Code.--Section 5313 of title 5, United 
States Code, is amended by adding at the end the following:
            ``The Under Secretary for Information Analysis and 
        Infrastructure Protection of the Department of Homeland 
        Security.''.9/12/2002 10:07:59 AM - 
        F:\V7\091202\091202.028 Created by: VLCirks deg.
                  COMMITTEE ON INTERNATIONAL RELATIONS

                          House of Representatives,
                      Committee on International Relations,
                                     Washington, DC, July 12, 2002.
Hon. Dick Armey
Chairman, House Select Committee on Homeland Security, The 
        Capitol, Washington, D.C.
    Dear Mr. Chairman: Pursuant to H.Res. 449, the Committee on 
International Relations submits its recommendations on portions 
of the bill, H.R. 5005, the ``Homeland Security Act of 2002,'' 
which were referred to it by the Speaker pursuant to Rule X of 
the House Rules. The text of these recommendations and 
supporting explanatory material are included herein.
        Sincerely,
                                     Henry J. Hyde,
                                                  Chairman.
                                ------                                


                House International Relations Committee

submission of recommendations to the house select committee on homeland 
                                security

                     HOMELAND SECURITY ACT OF 2002

                             July 12, 2002

    Mr. Hyde, from the Committee on International 
Relations,submitted the following

                            RECOMMENDATIONS

              to the Select Committee on Homeland Security

                        [To accompany H.R. 5005]

    The Committee on International Relations, to whom was 
referred portions of the bill, H.R. 5005, the Homeland Security 
Act of 2002, hereby submits its recommendations to the 
Committee on Homeland Security.

                             The Amendments

                   Showing the Amendment to H.R. 5005

                   Offered by Mr. Hyde and Mr. Lantos

         As Adopted by the Committee on International Relations

    Page 18, beginning on line 18, strike ``and activities of the 
assessment, detection, and cooperation program''.
    Page 23, strike line 10 and all that follows through line 6 on page 
24, and insert the following:

SEC. 403. VISA ISSUANCE.

    (a) In General.--Notwithstanding section 104(a) of the Immigration 
and Nationality Act (8 U.S.C. 1104(a)) or any other provision of law, 
and except as provided in subsection (b) of this section, the 
Secretary--
            (1) shall be vested exclusively with all authorities to 
        issue regulations with respect to, administer, and enforce the 
        provisions of such Act, and of all other immigration and 
        nationality laws, relating to the functions of consular 
        officers of the United States in connection with the granting 
        or refusal of visas, which authorities shall be exercised 
        through the Secretary of State, except that the Secretary shall 
        not have authority to alter or reverse the decision of a 
        consular officer to refuse a visa to an alien; and
            (2) shall have authority to confer or impose upon any 
        officer or employee of the United States, with the consent of 
        the head of the executive agency under whose jurisdiction such 
        officer or employee is serving, any of the functions specified 
        in paragraph (1).
    (b) Authority of the Secretary of State.--
            (1) The Secretary of State may direct a consular officer to 
        refuse a visa to an alien if the Secretary of State considers 
        such refusal necessary or advisable in the foreign policy or 
        security interests of the United States.
            (2) Nothing in this section shall be construed as affecting 
        the authorities of the Secretary of State under the following 
        provisions of law:
                    (A) Section 101(a)(15)(A) of the Immigration and 
                Nationality Act (8 U.S.C. 1101(a)(15)(A)).
                    (B) Section 212(a)(3)(C) of the Immigration and 
                Nationality Act (8 U.S.C. 1182(a)(3)(C)).
                    (C) Section 212(f) of the Immigration and 
                Nationality Act (8 U.S.C. 1182(f)).
                    (D) Section 237(a)(4)(C) of the Immigration and 
                Nationality Act (8 U.S.C. 1227(a)(4)(C)).
                    (E) Section 401 of the Cuban Liberty and Democratic 
                Solidarity (LIBERTAD) Act of 1996 (22 U.S.C. 6091; 
                Public Law 104-114).
                    (F) Section 613 of the Departments of Commerce, 
                Justice, and State, the Judiciary, and Related Agencies 
                Appropriations Act, 1999 (as contained in section 
                101(b) of division A of Public Law 105-277 (Omnibus 
                Consolidated and Emergency Supplemental Appropriations 
                Act, 1999; 112 Stat. 2681; H.R. 4328; (Originally H.R. 
                4276) as amended by section 617 of Public Law 106-553.
                    (G) Section 801 of H.R. 3427, the Admiral James W. 
                Nance and Meg Donovan Foreign Relations Authorization 
                Act, Fiscal Years 2000 and 2001, as enacted by 
                reference in Public Law 106-113.
                    (H) Section 568 of the Foreign Operations, Export 
                Financing, and Related Programs Appropriations Act, 
                2002 (Public Law 107-115).
            (3) Procedure for Issuance of Student Visas.--
        Notwithstanding any other provision of law, an alien may not be 
        granted a visa for study in the United States under 
        subparagraphs (F), (J), or (M) of section 101(a)(15) of the 
        Immigration and Nationality Act without review by the Secretary 
        of State if the alien is a national of a country designated 
        under section 620A of the Foreign Assistance Act of 1961 (22 
        U.S.C. 2371) as a country that has repeatedly provided support 
        for acts of international terrorism, section 6(j) of the Export 
        Administration Act (50 U.S.C. app. 2405(j)) as a country that 
        supports acts of international terrorism, or section 40A of the 
        Arms Export Control Act (22 U.S.C. 2781) as a country not 
        cooperating fully with United States antiterrorism efforts.
            (4) Procedure for Issuance of Diversity Immigrant Visas.--
        Notwithstanding any other provision of law, an alien may not be 
        granted an immigrant visa under section 203(c) of the 
        Immigration and Nationality Act (8 U.S.C. 1153(c)) relating to 
        diversity immigrants without review by the Secretary of State 
        if the alien is a national of a country designated under 
        section 620A of the Foreign Assistance Act of 1961 (22 U.S.C. 
        2371) as a country that has repeatedly provided support for 
        acts of international terrorism, section 6(j) of the Export 
        Administration Act (50 U.S.C. app. 2405(j)) as a country that 
        supports acts of international terrorism, or section 40A of the 
        Arms Export Control Act (22 U.S.C. 2781) as a country not fully 
        cooperating with United States antiterrorism efforts.
    (c) Assignment of Homeland Security Employees to Diplomatic and 
Consular Posts.--
            (1) In general.--The Secretary is authorized to assign 
        employees of the Department of Homeland Security to diplomatic 
        and consular posts abroad to perform the following functions:
                    (A) Provide expert advice to consular officers 
                regarding specific security threats relating to the 
                adjudication of individual visa applications or classes 
                of applications.
                    (B) Review any such applications, either on the 
                initiative of the employee of the Department of 
                Homeland Security or upon request by a consular officer 
                or other person charged with adjudicating such 
                applications.
                    (C) Conduct investigations with respect to matters 
                under the jurisdiction of the Secretary.
            (2) Permanent assignment; participation in terrorist 
        lookout committee.--When appropriate, employees of the 
        Department of Homeland Security assigned to perform functions 
        described in paragraph (1) may be assigned permanently to 
        overseas diplomatic or consular posts with country-specific or 
        regional responsibility. If the Secretary so directs, any such 
        employee, when present at an overseas post, shall participate 
        in the terrorist lookout committee established under section 
        304 of the Enhanced Border Security and Visa Entry Reform Act 
        of 2002 (8 U.S.C. 1733).
            (3) Training and hiring.--
                    (A) The Secretary shall ensure that any employees 
                of the Department of Homeland Security assigned to 
                perform functions described in paragraph (1) shall be 
                provided all necessary training to enable them to carry 
                out such functions, including training in foreign 
                languages, in conditions in the particular country 
                where each employee is assigned, and in other 
                appropriate areas of study.
                    (B) Prior to assigning employees of the Department 
                to perform the functions described in paragraph (1), 
                the Secretary shall promulgate regulations establishing 
                foreign language proficiency requirements for employees 
                of the Department performing the functions described in 
                paragraph (1) and providing that preference shall be 
                given to individuals who meet such requirements in 
                hiring employees for the performance of such functions.
                    (C) The Secretary is authorized to use the National 
                Foreign Affairs Training Center, on a reimbursable 
                basis, to obtain the training described in subparagraph 
                (A).
    (d) No Creation of Private Right of Action.--Nothing in this 
section shall be construed to create or authorize a private right of 
action to challenge a decision of a consular officer or other United 
States official or employee to grant or deny a visa.

                      Section by Section Analysis

    Section 302, as amended by the Committee, will transfer 
from the Department of Energy to the Department of Homeland 
Security certain programs related to nuclear safety, but not 
overseas assistance programs for the countries of the former 
Soviet Union relating to the protection of nuclear materials in 
these countries.
    Section 403(a)(1), as amended in the Committee markup, 
provides that (with certain exceptions provided in subsection 
(b)), the Secretary shall be vested exclusively with 
regulatory, administrative, and enforcement authority over 
immigration and nationality laws relating to the functions of 
consular officers in connection with the granting or refusal of 
visas. This paragraph further provides that the visa-related 
authorities conferred upon the Secretary of Homeland Security 
shall be exercised through the Secretary of State, and that the 
Secretary of Homeland Security shall not have authority to 
alter or reverse a decision of a consular officer to refuse a 
visa.
    Section 403(a)(2) provides that the Secretary of Homeland 
Security may confer or impose the visa-related authorities 
specified in paragraph (1) on any officer or employee of the 
United States, with the consent of the head of the agency by 
which such person is employed. This could include, for 
instance, a delegation of some or all of these authorities back 
to the Secretary of State.
    Section 403(b)(1) provides that the Secretary of State may 
direct a consular officer to refuse a visa on foreign policy or 
security grounds. This authority is similar to the authority 
currently provided the Secretary of State under section 
212(a)(3)(c) of the Immigration and Nationality Act.
    Section 403(b)(2) specifies a number of foreign policy-
related authorities under the Immigration and Nationality Act 
which will be retained by the Secretary of State.
    Section 403(b)(3) provides that no student visa may be 
issued to a national of a state that has been designated a 
sponsor of international terrorism, or that is not cooperating 
fully with United States antiterrorism efforts, without a 
review by the Secretary of State.
    Section 403(b)(4) provides that no diversity immigrant visa 
may be issued to a national of a state that has been designated 
a sponsor of international terrorism, or that is not 
cooperating fully with United States antiterrorism efforts, 
without a review by the Secretary of State.
    Section 403 (c)(1) provides that the Secretary of Homeland 
Security shall have authority to assign Homeland Security 
employees to diplomatic and consular posts abroad to advise 
consular officers on homeland security issues, to review visa 
applications, and to conduct investigations on threats to 
homeland security.
    Section 403(c)(2) provides that the overseas assignments 
described in paragraph (1) may, where appropriate, be permanent 
assignments, and that the Secretary of Homeland Security may 
direct that employees on such permanent assignments shall 
participate in terrorist lookout committees at such posts.
    Section 403(c)(3) provides that the Secretary of Homeland 
Security shall provide training for Homeland Security employees 
assigned abroad in foreign languages, country conditions, and 
other appropriate areas of study; shall establish foreign 
language requirements for such positions and employment 
preferences for persons who meet such requirements; and may use 
the National Foreign Affairs Training Center for the purpose of 
training described in subparagraph (a).
    Section 403(d) provides that nothing in section 403 shall 
be construed to create a private right of action to challenge a 
decision of a consular officer to grant or deny a visa. This is 
to ensure that the amendment provided by this section does not 
affect current law with respect to non-reviewability of visa 
decisions.

                          Purpose and Summary

Sections 302 and 403 of H.R. 5005.
    The Speaker referred H.R. 5005 to the Committee on 
International Relations for action on provisions within its 
rule X jurisdiction. Those provisions are Section 302, dealing 
with the nonproliferation programs of the Department of Energy, 
and Section 403, dealing with issuance and denial of visas.
    The Committee considered and adopted three amendments. An 
amendment to section 302(2)(C) was offered by Chairman Hyde at 
the request of the Administration. This amendment deletes a 
clause relating to certain assistance programs designed to 
reduce the risk of nuclear proliferation abroad. Under 
subsection 302(2)(c) certain programs and activities of the 
Department of Energy, including the Nuclear Assessment Program, 
would move to the new Department of Homeland Security. 
Subsection 302(c) of the bill as introduced also included a 
clause which would transfer to the new Department certain 
assistance programs to the countries of the former Soviet 
Union. These programs, which are currently part of the 
Cooperative Threat Reduction Program, are designed to prevent 
the proliferation of nuclear materials in the recipient 
countries.
    The amendment adopted by the Committee strikes the clause 
that would have transferred these assistance programs based on 
the representation from the Administration officials that the 
transfer of such assistance programs was no longer 
contemplated.
    The Committee also considered and adopted an substitute 
amendment to section 403. This amendment is intended to improve 
the President's proposal for reforming the processes by which 
applications for visas to the United States are considered at 
United States diplomatic and consular posts abroad. It 
preserves the fundamental recommendation of the President to 
transfer to the Secretary of Homeland Security exclusive 
authority to issue regulations with respect to, administer, and 
enforce provisions of the Immigration and Nationality Act and 
other immigration and nationality laws relating to the 
functions of consular officers of the United States in 
connection with the granting or refusal of visas. However, 
under both the bill as introduced and the amendment adopted by 
the Committee, the actual processing of visa applications will 
continue to be done primarily by consular officers and other 
employees of the Department of State. United States Ambassadors 
and other heads of United States missions abroad would also 
continue to exercise their authority as chiefs of mission under 
Section 207 of the Foreign Service Act of 1980.
    The Committee amendment to Section 403 embodies a 
compromise between the Administration's original plan for visa 
processing, as reflected in H.R. 5005 as introduced, and a 
dramatically different proposal which was offered and 
ultimately rejected in the Committees on the Judiciary and 
Government Reform, under which all visa processing would have 
been performed by employees of the Department of Homeland 
Security. The amendment adopted by the International Relations 
Committee explicitly authorizes the assignment of Homeland 
Security employees in U.S. diplomatic and consular posts 
abroad. Rather than assume all visa processing functions, 
however, these employees will concentrate on identifying and 
reviewing cases that present homeland security issues.
    Under the amendment, Homeland Security officers at U.S. 
embassies and other overseas posts would provide expert advice 
and training to consular officers, ensure their access to 
appropriate information, investigate threats to the homeland 
security of the United States (including but not limited to 
participating in ``terrorist lookout committees'' mandated for 
each Embassy by the Enhanced Border Security and Visa Entry 
Reform Act of 2002), and review individual visa petitions. This 
will preserve the essence of the Administration's proposal 
while ensuring that security concerns will be central to key 
decisions made abroad.
    The amendment makes clear that the Secretary of Homeland 
Security would have no authority to reverse a visa denial by a 
consular officer. It also provides that nothing in section 403 
would create or authorize a private right of action to 
challenge such a decision. This change is designed to avoid an 
unintended consequence of the original language, which might 
have subjected denials of visas by consular officers to various 
types of administrative and judicial review that do not apply 
to such decisions under current law.
    The amendment also preserves the authority of the Secretary 
of State to refuse a visa on foreign policy grounds, and 
extends this authority to cover security grounds.
    The amendment also includes a provision that makes clear 
that nothing in section 403 shall be construed to affect the 
Secretary's authorities under certain laws. The Committee 
believes that these are some of the key authorities that the 
Secretary currently has, but that other authorities vested in 
the Secretary of State by the Immigration and Nationality Act 
and other relevant laws will continue to remain with the 
Secretary, consistent with Section 403(a)(1). The Committee 
believes that the list of provisions in its recommendation 
should be further refined as the legislative process moves 
forward and is prepared to work with the Select Committee in 
this regard.
    The amendment also makes other technical and conforming 
changes, including requirements for language training of 
certain Homeland Security employees.
    A perfecting amendment to the substitute amendment to 
section 403 was adopted by the Committee requiring that no 
application for a nonimmigrant student visa or a diversity 
lottery immigrant visa may be granted without a review by the 
Secretary of State if the applicant is a national of a country 
designated as supporting terrorism, or a country that is not 
fully cooperating with U.S. antiterrorism efforts. The 
substitute amendment as amended was adopted.
    The Committee believes that the Secretary of Homeland 
Security should review the effectiveness of the student visa 
program with the goal of ensuring that no student visas be 
granted to nationals of: (1) countries on the State 
Department's list of state sponsors of terrorism; or (2) 
countries in which the governments or persons operating with 
the complicity or protection of such governments that have been 
sanctioned for the proliferation of weapons of mass destruction 
or the means to deliver them for a period of at least five 
years from the date of imposition of such sanctions, if the 
visa applicant is seeking to engage in a commercial activity or 
academic pursuit related to one of the critical fields on the 
government's Technology Alert List. This list, which has been 
distributed to all of our consular posts, includes such 
subjects as: nuclear technology; missile technology, 
propulsion, and guidance systems; chemical and biotechnology 
engineering; and remote imaging technologies.

                Background and Need for the Legislation

    On June 6, 2002, President Bush proposed creating a new 
Department of Homeland Security. On June 18, 2002, the White 
House issued proposed legislative language, which was 
introduced on June 24, 2002 by Mr. Armey (by request) as H.R. 
5005.
    The September 11 terrorist attacks on the United States 
brought to light serious shortcomings in current United States 
visa adjudication processes and policies. While efforts to 
encourage courtesy and facilitate legitimate travel, such as 
the reunification of families, commercial activities, tourism, 
cultural and educational exchange, and the admission of those 
with needed skills, to the United States are entirely 
appropriate, they must be accompanied by an abiding commitment 
to security and by more vigorous and effected methods of 
investigation to help identify and exclude persons who threaten 
the security of the United States.
    In order to identify persons who are known or reasonably 
believed to present security or other concerns for the United 
States, State Department consular officers must rely on a 
database the content of which is supplied by law enforcement 
and intelligence agencies. To the extent this database is 
insufficient, the consular officers will be at a disadvantage 
when making determinations on whether to issue or deny visas. 
The transfer of ultimate authority over visa processing to the 
Department of Homeland Security should facilitate the 
integration and sharing of information among intelligence and 
law enforcement agencies and with United States Government 
personnel charged with considering visa applications.

                                Hearings

    The Committee held one day of hearings on H.R. 5005 on June 
26, 2002. Testimony was received from Under Secretary of State 
for Political Affairs Marc Grossman, representing the 
Department of State and the Bush Administration.Committee 
Consideration
    On July 10, 2002 the Committee met in open session and 
recommended 3 amendments be submitted to the Committee on 
Homeland Security by voice vote, a quorum being present.

                Congressional Budget Ofice Cost Estimate

    CBO estimates these amendments would not affect direct 
spending or revenues.
                       COMMITTEE ON THE JUDICIARY

                          House of Representatives,
                                Committee on the Judiciary,
                                     Washington, DC, July 12, 2002.
Hon. Richard Armey
Chairman,
Hon. Nancy Pelosi
Ranking Member, House Select Committee on Homeland Security, The 
        Capitol, Washington, D.C.
    Dear Chairman Armey and Ranking Member Pelosi: Pursuant to H. Res. 
449, we are pleased to transmit to the Select Committee on Homeland 
Security the Committee on the Judiciary's views and recommendations 
concerning H.R. 5005, the ``Homeland Security Act of 2002.'' The 
recommendations represent the Judiciary Committee's bipartisan support 
for the creation of a Department of Homeland Security and reflect the 
Committee's judgment that H.R. 5005 can be further refined to ensure 
that this Department fulfills its fundamental purpose to prevent 
terrorist attacks on American soil.
    On June 26, 2002, the Committee on the Judiciary received testimony 
from Homeland Security Director Tom Ridge concerning H.R. 5005. In 
addition, the Judiciary Committee Subcommittees on Crime, Terrorism, 
and Homeland Security, Immigration Border Security, and Claims, and 
Commercial and Administrative Law conducted separate hearings which 
examined this proposed legislation. The Committee recommendations 
reflect the views received at these hearings as well as extensive 
consultation with Administration officials, outside experts, and the 
conclusions of several congressionally-chartered antiterrorism 
commissions.
    The proposed Department's central, predominate purpose is to 
assess, prevent, and respond to terrorism and other threats affecting 
America's internal security. The Judiciary Committee has a special 
responsibility to help effectuate this goal. As it has done repeatedly 
since September 11, 2001, the Committee has responded to the 
President's call to action by diligently and expeditiously discharging 
its responsibility to ensure the security of all Americans. Given the 
Committee's jurisdiction over subversive activities affecting the 
internal security of the United States, the nation's immigration and 
naturalization laws, federal civil and criminal procedure, and federal 
administrative practice and procedure, the Committee is uniquely 
positioned to assist the creation of a focused and effective Department 
of Homeland Security.
    The amendments to H.R. 5005 discussed in this letter were favorably 
reported by the Judiciary Committee on July 10, 2002. Most of these 
changes were contained in a Manager's Amendment which we jointly 
introduced. We have included a summary of these recommendations and 
additional views presented by the members of the Judiciary Committee 
for your review. While consistent with the articulated mission of the 
Department of Homeland Security, the proposed amendments recommend 
important structural changes which would strengthen the Department's 
ability to effectively assess, deter, and respond to terrorist threats. 
Of no less importance, the Committee makes critical recommendations to 
help safeguard the civil liberties and freedoms cherished by all 
Americans.
    The Judiciary Committee strongly supports the establishment of a 
federal Department primarily dedicated to homeland security. Our 
recommendations help advance this goal and should provide valuable 
guidance to the Select Committee as it completes the critical task of 
shaping the Department of Homeland Security.
        Sincerely,
                       F. James Sensenbrenner, Jr.,
                                                  Chairman,
                                 John Conyers, Jr.,
                                            Ranking Member.
                                 ______
                                 

                        Amendments to H.R. 5005

               Adopted by the Committee on the Judiciary

                            (July 10, 2002)

      (Page & line nos. refer to the text of the introduced bill)

    Strike ``emergency response providers'' each place it appears in 
the bill and insert ``emergency responders''.

    Page 4, strike lines 2 and 3 and insert the following:

    For purposes of this Act:

    Page 4, strike lines 13 through 17 and insert the following:

            (4) The term ``emergency responder''--
                    (A) means those organizations that represent or 
                support the first arriving agent or unit capable of 
                moderating an emergency condition or administering to 
                the needs created by an emergency event; and
                    (B) includes Federal, State, and local law 
                enforcement, emergency medical services, emergency 
                management, fire, hazardous materials response, public 
                works, public safety communications personnel; public 
                health and medical care personnel; and chief executive 
                governmental officials.

    Page 5, strike lines 3 through 6 and insert the following:

            (7) The term ``local government'' means--
                    (A) a county, municipality, city, town, township, 
                local public authority, school district, special 
                district, intrastate district, council of governments 
                (regardless of whether the council of governments is 
                incorporated as a non-profit corporation under state 
                law), or regional or interstate government.
                    (B) an Indian tribe or authorized tribal 
                organization, or an Alaska Native village or 
                organization; and
                    (C) a rural community, unincorporated town or 
                village, or other public entity.

    Page 5, strike lines 7 through 10.

    Page 5, strike lines 15 through 21 and insert the following:

            (11) The term ``United States'', when used in a geographic 
        sense, means any State of the United States, the District of 
        Columbia, Puerto Rico, the Virgin Islands, Guam, American 
        Samoa, and the Commonwealth of the Northern Mariana Islands, 
        any possession of the United States, and any waters within the 
        jurisdiction of the United States.

    Page 5, after line 21, insert the following:

            (12)(A) The term ``crisis management''--
                    (i) means a function that is predominantly a law 
                enforcement function;
                    (ii) includes measures to identify, acquire, and 
                plan the use of resources needed to anticipate, 
                prevent, or resolve a threat or act of terrorism.
            (B) With respect to a terrorist incident, the term--
                    (i) includes traditional law enforcement missions, 
                such as intelligence, surveillance, tactical 
                operations, negotiations, forensics, and 
                investigations, as well as technical support missions, 
                such as agent identification, search, render safe 
                procedures, transfer and disposal, and limited 
                decontamination;
                    (ii) in addition to the traditional law enforcement 
                missions, also includes assurance of public health and 
                safety.
            (13) The term ``consequence management'' means a function 
        that is predominantly emergency management and includes 
        measures to protect public health and safety, restore essential 
        government services, and provide emergency relief to 
        governments, businesses, and individuals affected by the 
        consequences of terrorism.
            (14)(A) The term ``terrorism'' includes international 
        terrorism or domestic terrorism.
            (B) In this paragraph the term ``international terrorism'' 
        means activities that occur primarily outside the territorial 
        jurisdiction of the United States, or transcend national 
        boundaries in terms of the means by which they are 
        accomplished, the persons they appear intended to intimidate or 
        coerce, or the locale in which their perpetrators operate or 
        seek asylum, and--
                    (i) involve violent acts or acts dangerous to human 
                life that are a violation of the criminal laws of the 
                United States or of any State, or that would be a 
                criminal violation if committed within the jurisdiction 
                of the United States or of any State; or
                    (ii) appear to be intended--
                            (I) to intimidate or coerce a civilian 
                        population;
                            (II) to influence the policy of a 
                        government by intimidation or coercion;
                            (III) to affect the conduct of a government 
                        by mass destruction, assassination or 
                        kidnapping; or
                            (IV) to retaliate against a government or 
                        its civilian population.
            (C) In this paragraph the term ``domestic terrorism'' means 
        activities that occur primarily within the territorial 
        jurisdiction United States, and--
                    (i) involve violent acts or acts dangerous to human 
                life that are a violation of the criminal laws of the 
                United States or of any State, or that would be a 
                criminal violation if committed within the jurisdiction 
                of the United States or of any State; or
                    (ii) appear to be intended--
                            (I) to intimidate or coerce a civilian 
                        population;
                            (II) to influence the policy of a 
                        government by intimidation or coercion;
                            (III) to affect the conduct of a government 
                        by mass destruction, assassination or 
                        kidnapping; or
                            (IV) to retaliate against a government or 
                        its civilian population.
            (15) The term ``critical infrastructure'' means physical 
        and cyber-based public and private systems essential to the 
        minimum operations of the economy and government, including 
        information and telecommunications, energy, banking and 
        finance, transportation, and water systems and emergency 
        services.

    Page 7, strike lines 1 through 3 and insert the following:

                    (C) coordinate Federal, State, and local government 
                personnel, agencies, and authorities with each other 
                and with the private sector to prevent, prepare, and 
                disrupt terrorist activities.''

    Page 7, strike line 11 and insert the following:

            (C) enforcement and security; and

    Page 7, strike line 12 and insert the following:

            (D) crisis and consequence training and coordination.

    Page 7, strike lines 13 through 17.

    Page 8, strike line 18 and insert the following:

    (a) Deputy Secretary; Under Secretaries; General Counsel.--

    Page 9, strike lines 7 through 8 and insert the following:

            (4) An Under Secretary for Enforcement and Security.

    Page 9, strike lines 9 through 10.

    Page 9, after line 12, insert the following:

            (8) A General Counsel, who shall be the chief legal officer 
        of the Department.

    Page 10, strike lines 1 and 2 (and redesignate provisions 
accordingly).

    Page 10, strike line 4 (and redesignate provisions accordingly).

    Page 12, line 4, after ``countermeasures'' insert ``related to the 
warnings''.

    Page 12, strike ``and'' at line 5, strike the period at line 12 and 
insert ``; and'', and after line 12 insert the following:

            (8) securing the people, infrastructures, property, 
        resources, and systems in the United States from acts of 
        terrorism involving chemical, biological, radiological, or 
        nuclear weapons or other emerging threats.

    Page 13, line 17, strike ``The'' and insert ``(a) In General.--
The''.

    Page 13, line 17, strike ``reports, assessments, and analytical''.

    Page 14, line 16, strike ``reports, assessments, and analytical''.

    Page 15, after line 18, insert the following:

    (b) Information Sharing.--The Secretary shall make regulations to 
provide that information required to be made available to the Secretary 
under subsection (a) is shared with Federal, State, and local agencies 
and employees as necessary to guard against threats to homeland 
security.

    Page 15, after line 24 insert the following (and redesignate 
provisions and amend the table of contents accordingly):

SEC. 205. PROCEDURES FOR SHARING INFORMATION.

    The Secretary shall establish procedures on the use of information 
shared under this title that--
    (1) limit the redissemination of such information to ensure that it 
is not used for an unauthorized purpose;
    (2) ensure the security and confidentiality of such information;
    (3) protect the constitutional and statutory rights of any 
individuals who are subjects of such information; and
    (4) provide data integrity through the timely removal and 
destruction of obsolete or erroneous names and information.

SEC. 206. PRIVACY OFFICER.

    The Secretary shall appoint a senior official in the Department to 
assume primary responsibility for privacy policy, including-
            (1) assuring that the use of new technologies sustain, and 
        do not erode, the protections provided in all statues relating 
        to the use, collection, and disclosure of personal information;
            (2) assuring that personal information contained in Privacy 
        Act systems of records is handled in full compliance with fair 
        information practices as set out in the Privacy Act of 1974 and 
        section 552a of title 5, United States Code;
            (3) evaluating legislative and regulatory proposals 
        involving collection, use, and disclosure of personal 
        information by the Federal government for consistency with the 
        Privacy Act of 1974 and section 552a of title 5, United States 
        Code;
            (4) conducting a privacy impact assessment of proposed 
        rules when the Secretary deems such assessment appropriate; and
            (5) preparing a report to the Congress on an annual basis 
        that identifies any complaints received from the public as to 
        privacy violations and how the Department addressed such 
        complaints as well as internal controls implemented to improve 
        privacy protections.

    Page 16, strike lines 11 through 15.

    Page 16, line 16, strike ``(2)`` and insert ``(1)''.

    Page 16, line 25, insert ``and'' after the semicolon.

    Page 17, line 1, strike ``(3)'' and insert ``(2)''.

    Page 17, line 9, strike ``; and'' and insert a period.

    Page 17, strike lines 10 through 14.

    Page 21, after line 2, insert the following (and redesignate 
provisions and amend the table of contents accordingly):

SEC. 305. COMPELLING NEED FOR SCIENCE AND TECHNOLOGY RESEARCH AND 
                    DEVELOPMENT.

    It is the sense of the Committee on the Judiciary of the House of 
Representatives that there is a compelling need for the Department of 
Homeland Security to carry out science and technology research and 
development in a robust and effective manner to prevent and detect 
terrorist attacks, including weapons of mass destruction and cyber 
security attacks.

    Page 21, strike lines 3 through 4 and insert the following (and 
amend the table of contents accordingly):

                   TITLE IV--ENFORCEMENT AND SECURITY

Subtitle A--Assignment of Responsibilities for Enforcement and Security

    Page 21, strike lines 5 through 6, and insert the following:

SEC. 401. UNDER SECRETARY FOR ENFORCEMENT AND SECURITY.

    Page 21, beginning at line 9, strike ``Border and Transportation'' 
and insert with ``Enforcement and''.

    Page 21, strike lines 18 through 24 and insert the following (and 
redesignate provisions accordingly):

            (3) carrying out the immigration enforcement functions 
        vested by statute in, or performed by, the Commissioner of 
        Immigration and Naturalization (or any officer, employee, or 
        component of the Immigration and Naturalization Service) 
        immediately before the date on which the transfer of functions 
        specified under section 411 takes effect;
            (4) establishing and administering rules, in accordance 
        with section 403, governing the granting of visas or other 
        forms of permission, including parole, to enter the United 
        States to individuals who are not a citizen or an alien 
        lawfully admitted for permanent residence in the United States;

    Page 22, line 2, strike ``and''.

    Page 22, line 5, strike the period and insert a semicolon.

    Page 22, after line 5, insert the following:

            (7) developing a national program to enhance the capacity 
        of State and local agencies in crisis and consequence 
        management to prepare for and respond to incident of terrorism 
        and other emergencies, through coordinated training, equipment 
        acquisition, technical assistance, and support for Federal, 
        State, and local exercises;
            (8) with respect to the Nuclear Incident Response Team 
        (regardless of whether it is operating as an organizational 
        unit of the Department pursuant to this title)--
                    (A) establishing standards and certifying when 
                those standards have been met;
                    (B) conducting joint and other exercises and 
                training and evaluating performance; and
                    (C) providing funds to the Department of Energy and 
                the Environmental Protection Agency, as appropriate, 
                for homeland security planning, exercises and training, 
                and equipment;
            (9) coordinating other Federal response resources in the 
        event of a terrorist attack and other emergencies;
            (10) aiding the recovery from terrorist attacks and other 
        emergencies;
            (11) building a comprehensive national incident management 
        system with Federal, State, and local government personnel, 
        agencies, and authorities, to respond to such attacks and other 
        emergencies;
            (12) consolidating existing Federal Government emergency 
        response plans into a single, coordinated national response 
        plan; and
            (13) developing comprehensive programs for developing 
        interoperative communications technology, and helping to ensure 
        that emergency response providers acquire such technology.

    Page 22, strike lines 13 through 15 (and redesignate provisions 
accordingly).

    Page 23, line 5, strike ``and''.

    Page 23, line 9, strike the period and insert a semicolon.

    Page 23, after line 9, insert the following:

            (7) the Office of National Preparedness of the Federal 
        Emergency Management Agency, including the functions of the 
        Director of the Federal Emergency Management Agency relating 
        thereto;
            (8) the Office for Domestic Preparedness of the Office of 
        Justice Programs, including the functions of the Attorney 
        General relating thereto;
            (9) the National Domestic Preparedness Office of the 
        Federal Bureau of Investigation, including the functions of the 
        Attorney General relating thereto;
            (10) the Domestic Emergency Support Teams of the Department 
        of Justice, including the functions of the Attorney General 
        relating thereto;
            (11) the Office of the Assistant Secretary for Public 
        Health Emergency Preparedness (including the Office of 
        Emergency Preparedness, the National Disaster Medical System, 
        and the Metropolitan Medical Response System) of the Department 
        of Health and Human Services, including the functions of the 
        Secretary of Health and Human Services relating thereto; and
            (12) the Strategic National Stockpile of the Department of 
        Health and Human Services, including the functions of the 
        Secretary of Health and Human Services relating thereto.

    Beginning on page 23, strike line 10 through page 24, line 6, and 
insert the following:

SEC. 403. VISA ISSUANCE.

    (a) In General.--Notwithstanding section 104(a) of the Immigration 
and Nationality Act (8 U.S.C. 1104(a)) or any other provision of law, 
and except as provided in subsection (b) of this section, the 
Secretary--
            (1) shall be vested exclusively with all authorities to 
        issue regulations with respect to, administer, and enforce the 
        provisions of such Act, and of all other immigration and 
        nationality laws, relating to the functions of consular 
        officers of the United States in connection with the granting 
        or refusal of visas, which authorities shall be exercised 
        through the Secretary of State, except that the Secretary shall 
        not have authority to alter or reverse the decision of a 
        consular officer to refuse a visa to an alien; and
            (2) shall have authority to confer or impose upon any 
        officer or employee of the United States, with the consent of 
        the head of the executive agency under whose jurisdiction such 
        officer or employee is serving, any of the functions specified 
        in paragraph (1).
    (b) Authority of the Secretary of State.--
            (1) Foreign Policy or Security Interests of the United 
        States.--The Secretary of State may direct a consular officer 
        to refuse a visa to an alien if the Secretary of State 
        considers such refusal necessary or advisable in the foreign 
        policy or security interests of the United States.
            (2) Construction.--Nothing in this section shall be 
        construed as affecting the authorities of the Secretary of 
        State under the following provisions of law:
                    (A) Section 101(a)(15)(A) of the Immigration and 
                Nationality Act (8 U.S.C. 1101(a)(15)(A)).
                    (B) Section 212(a)(3)(C) of the Immigration and 
                Nationality Act (8 U.S.C. 1182(a)(3)(C)).
                    (C) Section 212(f) of the Immigration and 
                Nationality Act (8 U.S.C. 1182(f)).
                    (D) Section 237(a)(4)(C) of the Immigration and 
                Nationality Act (8 U.S.C. 1227(a)(4)(C)).
                    (E) Section 401 of the Cuban Liberty and Democratic 
                Solidarity (LIBERTAD) Act of 1996 (22 U.S.C. 6091).
                    (F) Section 613 of the Departments of Commerce, 
                Justice, and State, the Judiciary, and Related Agencies 
                Appropriations Act, 1999 (as contained in section 
                101(b) of division A of Public Law 105-277 (Omnibus 
                Consolidated and Emergency Supplemental Appropriations 
                Act, 1999; 112 Stat. 2681; H.R. 4328; (Originally H.R. 
                4276) as amended by section 617 of Public Law 106-553.
                    (G) Section 801 of H.R. 3427, the Admiral James W. 
                Nance and Meg Donovan Foreign Relations Authorization 
                Act, Fiscal Years 2000 and 2001, as enacted by 
                reference in Public Law 106-113.
                    (H) Section 568 of the Foreign Operations, Export 
                Financing, and Related Programs Appropriations Act, 
                2002 (Public Law 107-115).
    (c) Assignment of Homeland Security Employees to Diplomatic and 
Consular Posts.--
            (1) In general.--The Secretary is authorized to assign 
        employees of the Department of Homeland Security to diplomatic 
        and consular posts abroad to perform the following functions:
                    (A) Provide expert advice to consular officers 
                regarding specific security threats relating to the 
                adjudication of individual visa applications or classes 
                of applications.
                    (B) Review any such applications, either on the 
                initiative of the employee of the Department of 
                Homeland Security or upon request by a consular officer 
                or other person charged with adjudicating such 
                applications.
                    (C) Conduct investigations with respect to matters 
                under the jurisdiction of the Secretary.
            (2) Permanent assignment; participation in terrorist 
        lookout committee.--When appropriate, employees of the 
        Department of Homeland Security assigned to perform functions 
        described in paragraph (1) may be assigned permanently to 
        overseas diplomatic or consular posts with country-specific or 
        regional responsibility. If the Secretary so directs, any such 
        employee, when present at an overseas post, shall participate 
        in the terrorist lookout committee established under section 
        304 of the Enhanced Border Security and Visa Entry Reform Act 
        of 2002 (8 U.S.C. 1733).
            (3) Training and hiring.--
                    (A) In general.--The Secretary shall ensure that 
                any employees of the Department of Homeland Security 
                assigned to perform functions described in paragraph 
                (1) and, as appropriate, consular officers, shall be 
                provided all necessary training to enable them to carry 
                out such functions, including training in foreign 
                languages, interview techniques, fraud detection 
                techniques, and other skills required by such 
                employees, in conditions in the particular country 
                where each employee is assigned, and in other 
                appropriate areas of study.
                    (B) Foreign language proficiency.--Prior to 
                assigning employees of the Department to perform the 
                functions described in paragraph (1), the Secretary 
                shall promulgate regulations establishing foreign 
                language proficiency requirements for employees of the 
                Department performing the functions described in 
                paragraph (1) and providing that preference shall be 
                given to individuals who meet such requirements in 
                hiring employees for the performance of such functions.
                    (C) Use of national foreign affairs training 
                center.--The Secretary is authorized to use the 
                National Foreign Affairs Training Center, on a 
                reimbursable basis, to obtain the training described in 
                subparagraph (A).
    (d) No Creation of Private Right of Action.--Nothing in this 
section shall be construed to create or authorize a private right of 
action to challenge a decision of a consular officer or other United 
States official or employee to grant or deny a visa.
    (e) Study Regarding Use of Foreign Nationals.--
            (1) In general.--The Secretary of Homeland Security shall 
        conduct a study of the role of foreign nationals in the 
        granting or refusal of visas and other documents authorizing 
        entry of aliens into the United States. The study shall address 
        the following:
                    (A) The proper role, if any, of foreign nationals 
                in the process of rendering decisions on such grants 
                and refusals.
                    (B) Any security concerns involving the employment 
                of foreign nationals.
                    (C) Whether there are cost-effective alternatives 
                to the use of foreign nationals.
            (2) Report.--Not later than 2 years after the date of the 
        enactment of this Act, the Secretary shall submit a report 
        containing the findings of the study conducted under paragraph 
        (1) to the Committee on the Judiciary, the Committee on 
        International Relations, and the Committee on Government Reform 
        of the House of Representatives, and the Committee on the 
        Judiciary, the Committee on Foreign Relations, and the 
        Committee on Governmental Affairs of the Senate.

    Page 24, after line 6, insert the following (and amend the table of 
contents accordingly):

           Subtitle B--Immigration and Nationality Functions

                   CHAPTER 1--IMMIGRATION ENFORCEMENT

SEC. 411. TRANSFER OF FUNCTIONS TO UNDER SECRETARY FOR ENFORCEMENT AND 
                    SECURITY.

    In accordance with title VIII, there shall be transferred from the 
Commissioner of Immigration and Naturalization to the Under Secretary 
for Enforcement and Security all functions performed under the 
following programs, and all personnel, assets, and liabilities 
pertaining to such programs, immediately before such transfer occurs:
            (1) The Border Patrol program.
            (2) The detention and removal program.
            (3) The intelligence program.
            (4) The investigations program.
            (5) The inspections program.

SEC. 412. ESTABLISHMENT OF BUREAU OF IMMIGRATION ENFORCEMENT.

    (a) Establishment of Bureau.--
            (1) In general.--There is established in the Department of 
        Homeland Security a bureau to be known as the ``Bureau of 
        Immigration Enforcement''.
            (2) Director.--The head of the Bureau of Immigration 
        Enforcement shall be the Director of the Bureau of Immigration 
        Enforcement, who--
                    (A) shall report directly to the Under Secretary 
                for Enforcement and Security; and
                    (B) shall have a minimum of 10 years professional 
                experience in law enforcement, at least 5 of which 
                shall have been years of service in a managerial 
                capacity.
            (3) Functions.--The Director of the Bureau of Immigration 
        Enforcement--
                    (A) shall establish the policies for performing 
                such functions as are--
                            (i) transferred to the Under Secretary for 
                        Enforcement and Security by section 411 and 
                        delegated to the Director by the Under 
                        Secretary for Enforcement and Security; or
                            (ii) otherwise vested in the Director by 
                        law;
                    (B) shall oversee the administration of such 
                policies; and
                    (C) shall advise the Under Secretary for 
                Enforcement and Security with respect to any policy or 
                operation of the Bureau of Immigration Enforcement that 
                may affect the Bureau of Citizenship and Immigration 
                Services of the Department of Justice established under 
                chapter 2, including potentially conflicting policies 
                or operations.
            (4) Program to collect information relating to foreign 
        students.--The Director of the Bureau of Immigration 
        Enforcement shall be responsible for administering the program 
        to collect information relating to nonimmigrant foreign 
        students and other exchange program participants described in 
        section 641 of the Illegal Immigration Reform and Immigrant 
        Responsibility Act of 1996 (8 U.S.C. 1372), including the 
        Student and Exchange Visitor Information System established 
        under that section, and shall use such information to carry out 
        the enforcement functions of the Bureau.
            (5) Managerial rotation program.--
                    (A) In general.--Not later than 1 year after the 
                date on which the transfer of functions specified under 
                section 411 takes effect, the Director of the Bureau of 
                Immigration Enforcement shall design and implement a 
                managerial rotation program under which employees of 
                such bureau holding positions involving supervisory or 
                managerial responsibility and classified, in accordance 
                with chapter 51 of title 5, United States Code, as a 
                GS-14 or above, shall, as a condition on further 
                promotion--
                            (i) gain some experience in all the major 
                        functions performed by such bureau; and
                            (ii) work in at least one local office of 
                        such bureau.
                    (B) Report.--Not later than 2 years after the date 
                on which the transfer of functions specified under 
                section 411 takes effect, the Secretary shall submit a 
                report to the Congress on the implementation of such 
                program.
    (b) Chief of Policy and Strategy.--
            (1) In general.--There shall be a position of Chief of 
        Policy and Strategy for the Bureau of Immigration Enforcement.
            (2) Functions.--In consultation with Bureau of Immigration 
        Enforcement personnel in local offices, the Chief of Policy and 
        Strategy shall be responsible for--
                    (A) establishing national immigration enforcement 
                policies and priorities;
                    (B) performing policy research and analysis on 
                immigration enforcement issues; and
                    (C) coordinating immigration policy issues with the 
                Chief of Policy and Strategy for the Bureau of 
                Citizenship and Immigration Services of the Department 
                of Justice (established under chapter 2), and the 
                Assistant Attorney General for Citizenship and 
                Immigration Services, as appropriate.
    (c) General Counsel.--
            (1) In general.--There shall be a position of General 
        Counsel for the Bureau of Immigration Enforcement.
            (2) Functions.--The General Counsel shall serve as the 
        principal legal advisor to the Director of the Bureau of 
        Immigration Enforcement. The General Counsel shall be 
        responsible for--
                    (A) providing specialized legal advice, opinions, 
                determinations, regulations, and any other assistance 
                to the Director of the Bureau of Immigration 
                Enforcement with respect to legal matters affecting the 
                Bureau of Immigration Enforcement; and
                    (B) representing the Bureau of Immigration 
                Enforcement in all exclusion, deportation, or removal 
                proceedings before the Executive Office for Immigration 
                Review, including in proceedings to adjudicate relief 
                from exclusion, deportation, or removal, and in other 
                legal or administrative proceedings involving 
                immigration enforcement issues.
    (d) Chief Budget Officer.--
            (1) In general.--There shall be a position of Chief Budget 
        Officer for the Bureau of Immigration Enforcement.
            (2) Functions.--
                    (A) In general.--The Chief Budget Officer shall be 
                responsible for--
                            (i) formulating and executing the budget of 
                        the Bureau of Immigration Enforcement;
                            (ii) financial management of the Bureau of 
                        Immigration Enforcement; and
                            (iii) collecting all payments, fines, and 
                        other debts for the Bureau of Immigration 
                        Enforcement.
            (3) Authority and functions of agency chief financial 
        officers.--The Chief Budget Officer for the Bureau of 
        Immigration Enforcement shall have the authorities and 
        functions described in section 902 of title 31, United States 
        Code, in relation to financial activities of such bureau.
    (e) Chief of Congressional, Intergovernmental, and Public 
Affairs.--
            (1) In general.--There shall be a position of Chief of 
        Congressional, Intergovernmental, and Public Affairs for the 
        Bureau of Immigration Enforcement.
            (2) Functions.--The Chief of Congressional, 
        Intergovernmental, and Public Affairs shall be responsible 
        for--
                    (A) providing information relating to immigration 
                enforcement to the Congress, including information on 
                specific cases relating to immigration enforcement;
                    (B) serving as a liaison with other Federal 
                agencies on immigration enforcement issues; and
                    (C) responding to inquiries from the media and the 
                general public on immigration enforcement issues.
    (f) Citizenship and Immigration Services Liaison.--
            (1) In general.--There shall be a position of Citizenship 
        and Immigration Services Liaison for the Bureau of Immigration 
        Enforcement.
            (2) Functions.--The Citizenship and Immigration Services 
        Liaison shall be responsible for the appropriate allocation and 
        coordination of resources involved in supporting shared support 
        functions for the Bureau of Citizenship and Immigration 
        Services of the Department of Justice (established under 
        chapter 2) and the Bureau of Immigration Enforcement, 
        including--
                    (A) information resources management, including 
                computer databases and information technology;
                    (B) records and file management; and
                    (C) forms management.

SEC. 413. PROFESSIONAL RESPONSIBILITY AND QUALITY REVIEW.

    (a) In General.--The Under Secretary for Enforcement and Security 
shall be responsible for--
            (1) conducting investigations of noncriminal allegations of 
        misconduct, corruption, and fraud involving any employee of the 
        Bureau of Immigration Enforcement that are not subject to 
        investigation by the Inspector General for the Department;
            (2) inspecting the operations of the Bureau of Immigration 
        Enforcement and providing assessments of the quality of the 
        operations of such bureau as a whole and each of its 
        components; and
            (3) providing an analysis of the management of the Bureau 
        of Immigration Enforcement.
    (b) Special Considerations.--In providing assessments in accordance 
with subsection (a)(2) with respect to a decision of the Bureau of 
Immigration Enforcement, or any of its components, consideration shall 
be given to--
            (1) the accuracy of the findings of fact and conclusions of 
        law used in rendering the decision;
            (2) any fraud or misrepresentation associated with the 
        decision; and
            (3) the efficiency with which the decision was rendered.

SEC. 414. EMPLOYEE DISCIPLINE.

    The Under Secretary for Enforcement and Security may, 
notwithstanding any other provision of law, impose disciplinary action, 
including termination of employment, pursuant to policies and 
procedures applicable to employees of the Federal Bureau of 
Investigation, on any employee of the Bureau of Immigration Enforcement 
who willfully deceives the Congress or agency leadership on any matter.

SEC. 415. REPORT ON IMPROVING ENFORCEMENT FUNCTIONS.

    (a) In General.--The Secretary, not later than 1 year after the 
effective date of this Act, shall submit to the Committees on 
Appropriations and the Judiciary of the United States House of 
Representatives and of the Senate a report with a plan detailing how 
the Bureau of Immigration Enforcement, after the transfer of functions 
specified under section 411 takes effect, will enforce comprehensively, 
effectively, and fairly all the enforcement provisions of the 
Immigration and Nationality Act (8 U.S.C. 1101 et seq.) relating to 
such functions.
    (b) Consultation.--In carrying out subsection (a), the Secretary of 
Homeland Security shall consult with the Attorney General, the 
Secretary of State, the Assistant Attorney General for Citizenship and 
Immigration Services, the Director of the Federal Bureau of 
Investigation, the Secretary of the Treasury, the Secretary of Labor, 
the Commissioner of Social Security, the Director of the Executive 
Office for Immigration Review, and the heads of State and local law 
enforcement agencies to determine how to most effectively conduct 
enforcement operations.

SEC. 416. REPORT ON INTERIOR CHECKPOINTS.

    Not later than 6 months after the date of the enactment of this 
Act, the Attorney General shall submit to the Congress a report on 
whether all permanent interior checkpoints operated by the Immigration 
and Naturalization Service ought to be closed, and the funds that 
otherwise would be expended for the operation of such checkpoints ought 
to be reallocated for protecting and maintaining the integrity of the 
borders of the United States and increasing enforcement at other points 
of entry into the United States.

            CHAPTER 2--CITIZENSHIP AND IMMIGRATION SERVICES

                  Subchapter A--Transfers of Functions

SEC. 421. ESTABLISHMENT OF BUREAU OF CITIZENSHIP AND IMMIGRATION 
                    SERVICES.

    (a) Establishment of Bureau.--
            (1) In general.--There is established in the Department of 
        Justice a bureau to be known as the ``Bureau of Citizenship and 
        Immigration Services''.
            (2) Assistant attorney general.--The head of the Bureau of 
        Citizenship and Immigration Services shall be the Assistant 
        Attorney General for Citizenship and Immigration Services, 
        who--
                    (A) shall report directly to the Deputy Attorney 
                General; and
                    (B) shall have a minimum of 10 years professional 
                experience in the rendering of adjudications on the 
                provision of government benefits or services, at least 
                5 of which shall have been years of service in a 
                managerial capacity or in a position affording 
                comparable management experience.
            (3) Functions.--The Assistant Attorney General for 
        Citizenship and Immigration Services--
                    (A) shall establish the policies for performing 
                such functions as are transferred to the Assistant 
                Attorney General by this section or this Act or 
                otherwise vested in the Assistant Attorney General by 
                law;
                    (B) shall oversee the administration of such 
                policies;
                    (C) shall advise the Deputy Attorney General with 
                respect to any policy or operation of the Bureau of 
                Citizenship and Immigration Services that may affect 
                the Bureau of Immigration Enforcement of the Department 
                of Homeland Security, including potentially conflicting 
                policies or operations;
                    (D) shall meet regularly with the Ombudsman 
                described in section 422 to correct serious service 
                problems identified by the Ombudsman; and
                    (E) shall establish procedures requiring a formal 
                response to any recommendations submitted in the 
                Ombudsman's annual report to the Congress within 3 
                months after its submission to the Congress.
            (4) Managerial rotation program.--
                    (A) In general.--Not later than 1 year after the 
                effective date specified in section 427, the Assistant 
                Attorney General for Citizenship and Immigration 
                Services shall design and implement a managerial 
                rotation program under which employees of such bureau 
                holding positions involving supervisory or managerial 
                responsibility and classified, in accordance with 
                chapter 51 of title 5, United States Code, as a GS-14 
                or above, shall, as a condition on further promotion--
                            (i) gain some experience in all the major 
                        functions performed by such bureau; and
                            (ii) work in at least one field office and 
                        one service center of such bureau.
                    (B) Report.--Not later than 2 years after the 
                effective date specified in section 427, the Attorney 
                General shall submit a report to the Congress on the 
                implementation of such program.
            (5) Pilot initiatives for backlog elimination.--The 
        Assistant Attorney General for Citizenship and Immigration 
        Services is authorized to implement innovative pilot 
        initiatives to eliminate any remaining backlog in the 
        processing of immigration benefit applications, and to prevent 
        any backlog in the processing of such applications from 
        recurring, in accordance with section 204(a) of the Immigration 
        Services and Infrastructure Improvements Act of 2000 (8 U.S.C. 
        1573(a)). Such initiatives may include measures such as 
        increasing personnel, transferring personnel to focus on areas 
        with the largest potential for backlog, and streamlining 
        paperwork.
    (b) Transfer of Functions From Commissioner.--There are transferred 
from the Commissioner of Immigration and Naturalization to the 
Assistant Attorney General for Citizenship and Immigration Services the 
following functions, and all personnel, infrastructure, and funding 
provided to the Commissioner in support of such functions immediately 
before the effective date specified in section 427:
            (1) Adjudications of immigrant visa petitions.
            (2) Adjudications of naturalization petitions.
            (3) Adjudications of asylum and refugee applications.
            (4) Adjudications performed at service centers.
            (5) All other adjudications performed by the Immigration 
        and Naturalization Service immediately before the effective 
        date specified in section 427.
    (c) Chief of Policy and Strategy.--
            (1) In general.--There shall be a position of Chief of 
        Policy and Strategy for the Bureau of Citizenship and 
        Immigration Services.
            (2) Functions.--In consultation with Bureau of Citizenship 
        and Immigration Services personnel in field offices, the Chief 
        of Policy and Strategy shall be responsible for--
                    (A) establishing national immigration services 
                policies and priorities;
                    (B) performing policy research and analysis on 
                immigration services issues; and
                    (C) coordinating immigration policy issues with the 
                Chief of Policy and Strategy for the Bureau of 
                Immigration Enforcement of the Department of Homeland 
                Security.
    (d) General Counsel.--
            (1) In general.--There shall be a position of General 
        Counsel for the Bureau of Citizenship and Immigration Services.
            (2) Functions.--The General Counsel shall serve as the 
        principal legal advisor to the Assistant Attorney General for 
        Citizenship and Immigration Services. The General Counsel shall 
        be responsible for--
                    (A) providing specialized legal advice, opinions, 
                determinations, regulations, and any other assistance 
                to the Assistant Attorney General for Citizenship and 
                Immigration Services with respect to legal matters 
                affecting the Bureau of Citizenship and Immigration 
                Services; and
                    (B) representing the Bureau of Citizenship and 
                Immigration Services in visa petition appeal 
                proceedings before the Executive Office for Immigration 
                Review and in other legal or administrative proceedings 
                involving immigration services issues.
    (e) Chief Budget Officer.--
            (1) In general.--There shall be a position of Chief Budget 
        Officer for the Bureau of Citizenship and Immigration Services.
            (2) Functions.--
                    (A) In general.--The Chief Budget Officer shall be 
                responsible for--
                            (i) formulating and executing the budget of 
                        the Bureau of Citizenship and Immigration 
                        Services;
                            (ii) financial management of the Bureau of 
                        Citizenship and Immigration Services; and
                            (iii) collecting all payments, fines, and 
                        other debts for the Bureau of Citizenship and 
                        Immigration Services.
            (3) Authority and functions of agency chief financial 
        officers.--The Chief Budget Officer for the Bureau of 
        Citizenship and Immigration Services shall have the authorities 
        and functions described in section 902 of title 31, United 
        States Code, in relation to financial activities of such 
        bureau.
    (f) Chief of Congressional, Intergovernmental, and Public 
Affairs.--
            (1) In general.--There shall be a position of Chief of 
        Congressional, Intergovernmental, and Public Affairs for the 
        Bureau of Citizenship and Immigration Services.
            (2) Functions.--The Chief of Congressional, 
        Intergovernmental, and Public Affairs shall be responsible 
        for--
                    (A) providing information relating to immigration 
                services to the Congress, including information on 
                specific cases relating to immigration services issues;
                    (B) serving as a liaison with other Federal 
                agencies on immigration services issues; and
                    (C) responding to inquiries from the media and the 
                general public on immigration services issues.
    (g) Immigration Enforcement Liaison.--
            (1) In general.--There shall be a position of Immigration 
        Enforcement Liaison for the Bureau of Citizenship and 
        Immigration Services.
            (2) Functions.--The Immigration Enforcement Liaison shall 
        be responsible for the appropriate allocation and coordination 
        of resources involved in supporting shared support functions 
        for the Bureau of Immigration Enforcement of the Department of 
        Homeland Security and the Bureau of Citizenship and Immigration 
        Services, including--
                    (A) information resources management, including 
                computer databases and information technology;
                    (B) records and file management; and
                    (C) forms management.
    (h) Chief of Office of Citizenship.--
            (1) In general.--There shall be a position of Chief of the 
        Office of Citizenship for the Bureau of Citizenship and 
        Immigration Services.
            (2) Functions.--The Chief of the Office of Citizenship for 
        the Bureau of Citizenship and Immigration Services shall be 
        responsible for promoting instruction and training on 
        citizenship responsibilities for aliens interested in becoming 
        naturalized citizens of the United States, including the 
        development of educational materials.

SEC. 422. CITIZENSHIP AND IMMIGRATION SERVICES OMBUDSMAN.

    (a) In General.--Within the Department of Justice, there shall be a 
position of Citizenship and Immigration Services Ombudsman (in this 
section referred to as the ``Ombudsman''). The Ombudsman shall report 
directly to the Deputy Attorney General. The Ombudsman shall have a 
background in customer service as well as immigration law.
    (b) Functions.--It shall be the function of the Ombudsman--
            (1) to assist individuals and employers in resolving 
        problems with the Bureau of Citizenship and Immigration 
        Services;
            (2) to identify areas in which individuals and employers 
        have problems in dealing with the Bureau of Citizenship and 
        Immigration Services;
            (3) to the extent possible, to propose changes in the 
        administrative practices of the Bureau of Citizenship and 
        Immigration Services to mitigate problems identified under 
        paragraph (2); and
            (4) to identify potential legislative changes that may be 
        appropriate to mitigate such problems.
    (c) Annual Reports.--
            (1) Objectives.--Not later than June 30 of each calendar 
        year, the Ombudsman shall report to the Committee on the 
        Judiciary of the United States House of Representatives and the 
        Senate on the objectives of the Office of the Ombudsman for the 
        fiscal year beginning in such calendar year. Any such report 
        shall contain full and substantive analysis, in addition to 
        statistical information, and--
                    (A) shall identify the initiatives the Office of 
                the Ombudsman has taken on improving services and 
                responsiveness of the Bureau of Citizenship and 
                Immigration Services;
                    (B) shall contain a summary of the most pervasive 
                and serious problems encountered by individuals and 
                employers, including a description of the nature of 
                such problems;
                    (C) shall contain an inventory of the items 
                described in subparagraphs (A) and (B) for which action 
                has been taken and the result of such action;
                    (D) shall contain an inventory of the items 
                described in subparagraphs (A) and (B) for which action 
                remains to be completed and the period during which 
                each item has remained on such inventory;
                    (E) shall contain an inventory of the items 
                described in subparagraphs (A) and (B) for which no 
                action has been taken, the period during which each 
                item has remained on such inventory, the reasons for 
                the inaction, and shall identify any official of the 
                Bureau of Citizenship and Immigration Services who is 
                responsible for such inaction;
                    (F) shall contain recommendations for such 
                administrative and legislative action as may be 
                appropriate to resolve problems encountered by 
                individuals and employers, including problems created 
                by excessive backlogs in the adjudication and 
                processing of immigration benefit petitions and 
                applications; and
                    (G) shall include such other information as the 
                Ombudsman may deem advisable.
            (2) Report to be submitted directly.--Each report required 
        under this subsection shall be provided directly to the 
        committees described in paragraph (1) without any prior review 
        or comment from the Attorney General, Deputy Attorney General, 
        Assistant Attorney General for Citizenship and Immigration 
        Services, or any other officer or employee of the Department of 
        Justice or the Office of Management and Budget.
    (d) Other Responsibilities.--The Ombudsman--
            (1) shall monitor the coverage and geographic allocation of 
        local offices of the Ombudsman;
            (2) shall develop guidance to be distributed to all 
        officers and employees of the Bureau of Citizenship and 
        Immigration Services outlining the criteria for referral of 
        inquiries to local offices of the Ombudsman;
            (3) shall ensure that the local telephone number for each 
        local office of the Ombudsman is published and available to 
        individuals and employers served by the office; and
            (4) shall meet regularly with the Assistant Attorney 
        General for Citizenship and Immigration Services to identify 
        serious service problems and to present recommendations for 
        such administrative action as may be appropriate to resolve 
        problems encountered by individuals and employers.
    (e) Personnel Actions.--
            (1) In general.--The Ombudsman shall have the 
        responsibility and authority--
                    (A) to appoint local ombudsmen and make available 
                at least 1 such ombudsman for each State; and
                    (B) to evaluate and take personnel actions 
                (including dismissal) with respect to any employee of 
                any local office of the Ombudsman.
            (2) Consultation.--The Ombudsman may consult with the 
        appropriate supervisory personnel of the Bureau of Citizenship 
        and Immigration Services in carrying out the Ombudsman's 
        responsibilities under this subsection.
    (f) Responsibilities of Bureau of Citizenship and Immigration 
Services.--The Assistant Attorney General for Citizenship and 
Immigration Services shall establish procedures requiring a formal 
response to all recommendations submitted to such Assistant Attorney 
General by the Ombudsman within 3 months after submission to such 
director.
    (g) Operation of Local Offices.--
            (1) In general.--Each local ombudsman--
                    (A) shall report to the Ombudsman or the delegate 
                thereof;
                    (B) may consult with the appropriate supervisory 
                personnel of the Bureau of Citizenship and Immigration 
                Services regarding the daily operation of the local 
                office of such ombudsman;
                    (C) shall, at the initial meeting with any 
                individual or employer seeking the assistance of such 
                local office, notify such individual or employer that 
                the local offices of the Ombudsman operate 
                independently of any other component of the Department 
                of Justice and report directly to the Congress through 
                the Ombudsman; and
                    (D) at the local ombudsman's discretion, may 
                determine not to disclose to the Bureau of Citizenship 
                and Immigration Services contact with, or information 
                provided by, such individual or employer.
            (2) Maintenance of independent communications.--Each local 
        office of the Ombudsman shall maintain a phone, facsimile, and 
        other means of electronic communication access, and a post 
        office address, that is separate from those maintained by the 
        Bureau of Citizenship and Immigration Services, or any 
        component of the Bureau of Citizenship and Immigration 
        Services.

SEC. 423. PROFESSIONAL RESPONSIBILITY AND QUALITY REVIEW.

    (a) In General.--The Assistant Attorney General for Citizenship and 
Immigration Services shall be responsible for--
            (1) conducting investigations of noncriminal allegations of 
        misconduct, corruption, and fraud involving any employee of the 
        Bureau of Citizenship and Immigration Services that are not 
        subject to investigation by the Department of Justice Office of 
        the Inspector General;
            (2) inspecting the operations of the Bureau of Citizenship 
        and Immigration Services and providing assessments of the 
        quality of the operations of such bureau as a whole and each of 
        its components; and
            (3) providing an analysis of the management of the Bureau 
        of Citizenship and Immigration Services.
    (b) Special Considerations.--In providing assessments in accordance 
with subsection (a)(2) with respect to a decision of the Bureau of 
Citizenship and Immigration Services, or any of its components, 
consideration shall be given to--
            (1) the accuracy of the findings of fact and conclusions of 
        law used in rendering the decision;
            (2) any fraud or misrepresentation associated with the 
        decision; and
            (3) the efficiency with which the decision was rendered.

SEC. 424. EMPLOYEE DISCIPLINE.

    The Assistant Attorney General for Citizenship and Immigration 
Enforcement may, notwithstanding any other provision of law, impose 
disciplinary action, including termination of employment, pursuant to 
policies and procedures applicable to employees of the Federal Bureau 
of Investigation, on any employee of the Bureau of Citizenship and 
Immigration Services who willfully deceives the Congress or agency 
leadership on any matter.

SEC. 425. OFFICE OF IMMIGRATION STATISTICS WITHIN BUREAU OF JUSTICE 
                    STATISTICS.

    (a) In General.--Part C of title I of the Omnibus Crime Control and 
Safe Streets Act of 1968 (42 U.S.C. 3731 et seq.) is amended by adding 
at the end the following:
                   ``office of immigration statistics
    ``Sec. 305. (a) There is established within the Bureau of Justice 
Statistics of the Department of Justice an Office of Immigration 
Statistics (in this section referred to as the `Office'), which shall 
be headed by a Director who shall be appointed by the Attorney General 
and who shall report to the Director of Justice Statistics.
    ``(b) The Director of the Office shall be responsible for the 
following:
            ``(1) Maintenance of all immigration statistical 
        information of the Bureau of Citizenship and Immigration 
        Services and the Executive Office for Immigration Review. Such 
        statistical information shall include information and 
        statistics of the type contained in the publication entitled 
        `Statistical Yearbook of the Immigration and Naturalization 
        Service' prepared by the Immigration and Naturalization Service 
        (as in effect on the day prior to the effective date specified 
        in section 427 of the Homeland Security Act of 2002), 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 offices and bureaus, and 
        the reasons for such denials, disaggregated by category of 
        denial and application or petition type.
            ``(2) Establishment of standards of reliability and 
        validity for immigration statistics collected by the Bureau of 
        Citizenship and Immigration Services and the Executive Office 
        for Immigration Review.
    ``(c) The Bureau of Citizenship and Immigration Services and the 
Executive Office for Immigration Review shall provide statistical 
information to the Office of Immigration Statistics from the 
operational data systems controlled by the Bureau of Citizenship and 
Immigration Services and the Executive Office for Immigration Review, 
respectively, for the purpose of meeting the responsibilities of the 
Director.''.
    (b) Transfer of Functions.--There are transferred to the Office of 
Immigration Statistics established under section 305 of the Omnibus 
Crime Control and Safe Streets Act of 1968, as added by subsection (a), 
the functions performed immediately before such transfer occurs by the 
Statistics Branch of the Office of Policy and Planning of the 
Immigration and Naturalization Service with respect to the following:
            (1) Adjudications of immigrant visa petitions.
            (2) Adjudications of naturalization petitions.
            (3) Adjudications of asylum and refugee applications.
            (4) Adjudications performed at service centers.
            (5) All other adjudications performed by the Immigration 
        and Naturalization Service.
    (c) Conforming Amendments.--Section 302(c) of the Omnibus Crime 
Control and Safe Streets Act of 1968 (42 U.S.C. 3732(c)) is amended--
            (1) by striking ``and'' at the end of paragraph (22);
            (2) by striking the period at the end of paragraph (23) and 
        inserting ``; and''; and
            (3) by adding at the end the following:
            ``(24) collect, maintain, compile, analyze, publish, and 
        disseminate information and statistics involving the functions 
        of the Bureau of Citizenship and Immigration Services and the 
        Executive Office for Immigration Review.''.

SEC. 426. PRESERVATION OF ATTORNEY GENERAL'S AUTHORITY.

    (a) In General.--Any function for which this subchapter vests 
responsibility in an official other than the Attorney General, or which 
is transferred by this subchapter to such an official, may, 
notwithstanding any provision of this subchapter, be performed by the 
Attorney General, or the Attorney General's delegate, in lieu of such 
official.
    (b) References.--In a case in which the Attorney General performs a 
function described in subsection (a), any reference in any other 
Federal law, Executive order, rule, regulation, document, or delegation 
of authority to the official otherwise responsible for the function is 
deemed to refer to the Attorney General.

SEC. 427. EFFECTIVE DATE.

    Notwithstanding section 4, this subchapter, and the amendments made 
by this subchapter, shall take effect on the date on which the transfer 
of functions specified under section 411 takes effect.

SEC. 428. TRANSITION.

    (a) References.--With respect to any function transferred by this 
subchapter to, and exercised on or after the effective date specified 
in section 427 by, the Assistant Attorney General for Citizenship and 
Immigration Services, any reference in any other Federal law, Executive 
order, rule, regulation, or delegation of authority, or any document of 
or pertaining to a component of government from which such function is 
transferred--
            (1) to the head of such component is deemed to refer to the 
        Assistant Attorney General for Citizenship and Immigration 
        Services; or
            (2) to such component is deemed to refer to the Bureau of 
        Citizenship and Immigration Services.
    (b) Other Transition Issues.--
            (1) Exercise of authorities.--Except as otherwise provided 
        by law, a Federal official to whom a function is transferred by 
        this subchapter may, for purposes of performing the function, 
        exercise all authorities under any other provision of law that 
        were available with respect to the performance of that function 
        to the official responsible for the performance of the function 
        immediately before the effective date specified in section 427.
            (2) Savings provisions.--Subsections (a), (b), and (c) of 
        section 804 shall apply to a transfer of functions under this 
        subchapter in the same manner as such provisions apply to a 
        transfer of functions under this Act to the Department of 
        Homeland Security.
            (3) Transfer and allocation of appropriations and 
        personnel.--The personnel of the Department of Justice employed 
        in connection with the functions transferred by this subchapter 
        (and functions that the Attorney General determines are 
        properly related to the functions of the Bureau of Citizenship 
        and Immigration Services), and the assets, liabilities, 
        contracts, property, records, and unexpended balance of 
        appropriations, authorizations, allocations, and other funds 
        employed, held, used, arising from, available to, or to be made 
        available to, the Immigration and Naturalization Service in 
        connection with the functions transferred by this subchapter, 
        subject to section 202 of the Budget and Accounting Procedures 
        Act of 1950, shall be transferred to the Assistant Attorney 
        General for Citizenship and Immigration Services for allocation 
        to the appropriate component of the Department of Justice. 
        Unexpended funds transferred pursuant to this paragraph shall 
        be used only for the purposes for which the funds were 
        originally authorized and appropriated. The Attorney General 
        shall have the right to adjust or realign transfers of funds 
        and personnel effected pursuant to this subchapter for a period 
        of 2 years after the effective date specified in section 427.
            (4) Authorities of attorney general.--The Attorney General 
        (or a delegate of the Attorney General), at such time or times 
        as the Attorney General (or the delegate) shall provide, may 
        make such determinations as may be necessary with regard to the 
        functions transferred by this subchapter, and may make such 
        additional incidental dispositions of personnel, assets, 
        liabilities, grants, contracts, property, records, and 
        unexpended balances of appropriations, authorizations, 
        allocations, and other funds held, used, arising from, 
        available to, or to be made available in connection with such 
        functions, as may be necessary to carry out the provisions of 
        this subchapter. The Attorney General shall provide for such 
        further measures and dispositions as may be necessary to 
        effectuate the purposes of this subchapter.

                     Subchapter B--Other Provisions

SEC. 431. FUNDING FOR CITIZENSHIP AND IMMIGRATION SERVICES.

    (a) Establishment of Fees for Adjudication and Naturalization 
Services.--Section 286(m) of the Immigration and Nationality Act (8 
U.S.C. 1356(m)) is amended by striking ``services, including the costs 
of similar services provided without charge to asylum applicants or 
other immigrants.'' and inserting ``services.''.
    (b) Authorization of Appropriations for Refugee and Asylum 
Adjudications.--There are authorized to be appropriated such sums as 
may be necessary to carry out the provisions of sections 207 through 
209 of the Immigration and Nationality Act (8 U.S.C. 1157-1159). All 
funds appropriated under this subsection shall be deposited into the 
Immigration Examinations Fee Account established under section 286(m) 
of the Immigration and Nationality Act (8 U.S.C. 1356(m)) and shall 
remain available until expended.

SEC. 432. BACKLOG ELIMINATION.

    Section 204(a) of the Immigration Services and Infrastructure 
Improvements Act of 2000 (8 U.S.C. 1573(a)) is amended by striking 
``October 17, 2000;'' and inserting ``1 year after the date of the 
enactment of the Homeland Security Act of 2002;''.

SEC. 433. REPORT ON IMPROVING IMMIGRATION SERVICES.

    (a) In General.--The Attorney General, not later than 1 year after 
the effective date of this Act, shall submit to the Committees on the 
Judiciary and Appropriations of the United States House of 
Representatives and of the Senate a report with a plan detailing how 
the Bureau of Citizenship and Immigration Services, after the transfer 
of functions specified in subchapter 1 takes effect, will complete 
efficiently, fairly, and within a reasonable time, the adjudications 
described in paragraphs (1) through (5) of section 421(b).
    (b) Contents.--For each type of adjudication to be undertaken by 
the Assistant Attorney General for Citizenship and Immigration 
Services, the report shall include the following:
            (1) Any potential savings of resources that may be 
        implemented without affecting the quality of the adjudication.
            (2) The goal for processing time with respect to the 
        application.
            (3) Any statutory modifications with respect to the 
        adjudication that the Attorney General considers advisable.
    (c) Consultation.--In carrying out subsection (a), the Attorney 
General shall consult with the Secretary of State, the Secretary of 
Labor, the Director of the Bureau of Immigration Enforcement of the 
Department of Homeland Security, and the Director of the Executive 
Office for Immigration Review to determine how to streamline and 
improve the process for applying for and making adjudications described 
in section 421(b) and related processes.

SEC. 434. REPORT ON RESPONDING TO FLUCTUATING NEEDS.

    Not later than 30 days after the date of the enactment of this Act, 
the Attorney General shall submit to the Congress a report on changes 
in law, including changes in authorizations of appropriations and in 
appropriations, that are needed to permit the Immigration and 
Naturalization Service, and, after the transfer of functions specified 
in subchapter 1 takes effect, the Bureau of Citizenship and Immigration 
Services, to ensure a prompt and timely response to emergent, 
unforeseen, or impending changes in the number of applications for 
immigration benefits, and otherwise to ensure the accommodation of 
changing immigration service needs.

SEC. 435. APPLICATION OF INTERNET-BASED TECHNOLOGIES.

    (a) Establishment of Tracking System.--The Attorney General, not 
later than 1 year after the effective date of this Act, in consultation 
with the Technology Advisory Committee established under subsection 
(c), shall establish an Internet-based system, that will permit a 
person, employer, immigrant, or nonimmigrant who has filings with the 
Attorney General for any benefit under the Immigration and Nationality 
Act (8 U.S.C. 1101 et seq.), access to online information about the 
processing status of the filing involved.
    (b) Feasibility Study for Online Filing and Improved Processing.--
            (1) Online filing.--The Attorney General, in consultation 
        with the Technology Advisory Committee established under 
        subsection (c), shall conduct a feasibility study on the online 
        filing of the filings described in subsection (a). The study 
        shall include a review of computerization and technology of the 
        Immigration and Naturalization Service relating to the 
        immigration services and processing of filings related to 
        immigrant services. The study shall also include an estimate of 
        the timeframe and cost and shall consider other factors in 
        implementing such a filing system, including the feasibility of 
        fee payment online.
            (2) Report.--A report on the study under this subsection 
        shall be submitted to the Committees on the Judiciary of the 
        United States House of Representatives and the Senate not later 
        than 1 year after the effective date of this Act.
    (c) Technology Advisory Committee.--
            (1) Establishment.--The Attorney General shall establish, 
        not later than 60 days after the effective date of this Act, an 
        advisory committee (in this section referred to as the 
        ``Technology Advisory Committee'') to assist the Attorney 
        General in--
                    (A) establishing the tracking system under 
                subsection (a); and
                    (B) conducting the study under subsection (b).
        The Technology Advisory Committee shall be established after 
        consultation with the Committees on the Judiciary of the United 
        States House of Representatives and the Senate.
            (2) Composition.--The Technology Advisory Committee shall 
        be composed of representatives from high technology companies 
        capable of establishing and implementing the system in an 
        expeditious manner, and representatives of persons who may use 
        the tracking system described in subsection (a) and the online 
        filing system described in subsection (b)(1).

SEC. 436. CHILDREN'S AFFAIRS.

    (a) Transfer of Functions.--There are transferred to the Director 
of the Office of Refugee Resettlement of the Department of Health and 
Human Services functions under the immigration laws of the United 
States with respect to the care of unaccompanied alien children that 
were vested by statute in, or performed by, the Commissioner of 
Immigration and Naturalization (or any officer, employee, or component 
of the Immigration and Naturalization Service) immediately before the 
effective date specified in subsection (d).
    (b) Functions.--
            (1) In general.--Pursuant to the transfer made by 
        subsection (a), the Director of the Office of Refugee 
        Resettlement shall be responsible for--
                    (A) coordinating and implementing the care and 
                placement of unaccompanied alien children who are in 
                Federal custody by reason of their immigration status, 
                including developing a plan to be submitted to the 
                Congress on how to ensure that qualified and 
                independent legal counsel is timely appointed to 
                represent the interests of each such child;
                    (B) ensuring that the interests of the child are 
                considered in decisions and actions relating to the 
                care and custody of an unaccompanied alien child;
                    (C) making placement determinations for all 
                unaccompanied alien children who are in Federal custody 
                by reason of their immigration status;
                    (D) implementing the placement determinations;
                    (E) implementing policies with respect to the care 
                and placement of unaccompanied alien children;
                    (F) identifying a sufficient number of qualified 
                individuals, entities, and facilities to house 
                unaccompanied alien children;
                    (G) overseeing the infrastructure and personnel of 
                facilities in which unaccompanied alien children 
                reside;
                    (H) reuniting unaccompanied alien children with a 
                parent abroad in appropriate cases;
                    (I) compiling, updating, and publishing at least 
                annually a state-by-state list of professionals or 
                other entities qualified to provide guardian and 
                attorney representation services for unaccompanied 
                alien children;
                    (J) maintaining statistical information and other 
                data on unaccompanied alien children for whose care and 
                placement the Director is responsible, which shall 
                include--
                            (i) biographical information, such as a 
                        child's name, gender, date of birth, country of 
                        birth, and country of habitual residence;
                            (ii) the date on which the child came into 
                        Federal custody by reason of his or her 
                        immigration status;
                            (iii) information relating to the child's 
                        placement, removal, or release from each 
                        facility in which the child has resided;
                            (iv) in any case in which the child is 
                        placed in detention or released, an explanation 
                        relating to the detention or release; and
                            (v) the disposition of any actions in which 
                        the child is the subject;
                    (K) collecting and compiling statistical 
                information from the Department of Justice, the 
                Department of Homeland Security, and the Department of 
                State on each department's actions relating to 
                unaccompanied alien children; and
                    (L) conducting investigations and inspections of 
                facilities and other entities in which unaccompanied 
                alien children reside.
            (2) Coordination with other entities; no release on own 
        recognizance.--In making determinations described in paragraph 
        (1)(C), the Director of the Office of Refugee Resettlement--
                    (A) shall consult with appropriate juvenile justice 
                professionals, the Director of the Bureau of 
                Citizenship and Immigration Services of the Department 
                of Justice, and the Director of the Bureau of 
                Immigration Enforcement of the Department of Homeland 
                Security to ensure that such determinations ensure that 
                unaccompanied alien children described in such 
                subparagraph--
                            (i) are likely to appear for all hearings 
                        or proceedings in which they are involved;
                            (ii) are protected from smugglers, 
                        traffickers, or others who might seek to 
                        victimize or otherwise engage them in criminal, 
                        harmful, or exploitive activity; and
                            (iii) are placed in a setting in which they 
                        not likely to pose a danger to themselves or 
                        others; and
                    (B) shall not release such children upon their own 
                recognizance.
            (3) Duties with respect to foster care.--In carrying out 
        the duties described in paragraph (1)(G), the Director of the 
        Office of Refugee Resettlement is encouraged to use the refugee 
        children foster care system established pursuant to section 
        412(d) of the Immigration and Nationality Act (8 U.S.C. 
        1522(d)) for the placement of unaccompanied alien children.
    (c) Rule of Construction.--Nothing in this section may be construed 
to transfer the responsibility for adjudicating benefit determinations 
under the Immigration and Nationality Act (8 U.S.C. 1101 et seq.) from 
the authority of any official of the Department of Justice, the 
Department of Homeland Security, or the Department of State.
    (d) Effective Date.--Notwithstanding section 4, this section shall 
take effect on the date on which the transfer of functions specified 
under section 411 takes effect.
    (e) References.--With respect to any function transferred by this 
section, any reference in any other Federal law, Executive order, rule, 
regulation, or delegation of authority, or any document of or 
pertaining to a component of government from which such function is 
transferred--
            (1) to the head of such component is deemed to refer to the 
        Director of the Office of Refugee Resettlement; or
            (2) to such component is deemed to refer to the Office of 
        Refugee Resettlement of the Department of Health and Human 
        Services.
    (f) Other Transition Issues.--
            (1) Exercise of authorities.--Except as otherwise provided 
        by law, a Federal official to whom a function is transferred by 
        this section may, for purposes of performing the function, 
        exercise all authorities under any other provision of law that 
        were available with respect to the performance of that function 
        to the official responsible for the performance of the function 
        immediately before the effective date specified in subsection 
        (d).
            (2) Savings provisions.--Subsections (a), (b), and (c) of 
        section 804 shall apply to a transfer of functions under this 
        section in the same manner as such provisions apply to a 
        transfer of functions under this Act to the Department of 
        Homeland Security.
            (3) Transfer and allocation of appropriations and 
        personnel.--The personnel of the Department of Justice employed 
        in connection with the functions transferred by this section, 
        and the assets, liabilities, contracts, property, records, and 
        unexpended balance of appropriations, authorizations, 
        allocations, and other funds employed, held, used, arising 
        from, available to, or to be made available to, the Immigration 
        and Naturalization Service in connection with the functions 
        transferred by this section, subject to section 202 of the 
        Budget and Accounting Procedures Act of 1950, shall be 
        transferred to the Director of the Office of Refugee 
        Resettlement for allocation to the appropriate component of the 
        Department of Health and Human Services. Unexpended funds 
        transferred pursuant to this paragraph shall be used only for 
        the purposes for which the funds were originally authorized and 
        appropriated.
    (g) Definitions.--As used in this section--
            (1) the term ``placement'' means the placement of an 
        unaccompanied alien child in either a detention facility or an 
        alternative to such a facility; and
            (2) the term ``unaccompanied alien child'' means a child 
        who--
                    (A) has no lawful immigration status in the United 
                States;
                    (B) has not attained 18 years of age; and
                    (C) with respect to whom--
                            (i) there is no parent or legal guardian in 
                        the United States; or
                            (ii) no parent or legal guardian in the 
                        United States is available to provide care and 
                        physical custody.

                     CHAPTER 3--GENERAL PROVISIONS

SEC. 441. ABOLISHMENT OF INS.

    The Immigration and Naturalization Service of the Department of 
Justice is abolished.

SEC. 442. VOLUNTARY SEPARATION INCENTIVE PAYMENTS.

    (a) Definitions.--For purposes of this section--
            (1) the term ``employee'' means an employee (as defined by 
        section 2105 of title 5, United States Code) who--
                    (A) has completed at least 3 years of current 
                continuous service with 1 or more covered entities; and
                    (B) is serving under an appointment without time 
                limitation;
        but does not include any person under subparagraphs (A)-(G) of 
        section 663(a)(2) of Public Law 104-208 (5 U.S.C. 5597 note);
            (2) the term ``covered entity'' means--
                    (A) the Immigration and Naturalization Service;
                    (B) the Bureau of Immigration Enforcement of the 
                Department of Homeland Security; and
                    (C) the Bureau of Citizenship and Immigration 
                Services of the Department of Justice; and
            (3) the term ``transfer date'' means the date on which the 
        transfer of functions specified under section 411 takes effect.
    (b) Strategic Restructuring Plan.--Before the Attorney General or 
the Secretary obligates any resources for voluntary separation 
incentive payments under this section, such official shall submit to 
the appropriate committees of Congress a strategic restructuring plan, 
which shall include--
            (1) an organizational chart depicting the covered entities 
        after their restructuring pursuant to this Act;
            (2) a summary description of how the authority under this 
        section will be used to help carry out that restructuring; and
            (3) the information specified in section 663(b)(2) of 
        Public Law 104-208 (5 U.S.C. 5597 note).
As used in the preceding sentence, the ``appropriate committees of 
Congress'' are the Committees on Appropriations, Government Reform, and 
the Judiciary of the House of Representatives, and the Committees on 
Appropriations, Governmental Affairs, and the Judiciary of the Senate.
    (c) Authority.--The Attorney General and the Secretary may, to the 
extent necessary to help carry out their respective strategic 
restructuring plan described in subsection (b), make voluntary 
separation incentive payments to employees. Any such payment--
            (1) shall be paid to the employee, in a lump sum, after the 
        employee has separated from service;
            (2) shall be paid from appropriations or funds available 
        for the payment of basic pay of the employee;
            (3) shall be equal to the lesser of--
                    (A) the amount the employee would be entitled to 
                receive under section 5595(c) of title 5, United States 
                Code; or
                    (B) an amount not to exceed $25,000, as determined 
                by the Attorney General or the Secretary;
            (4) may not be made except in the case of any qualifying 
        employee who voluntarily separates (whether by retirement or 
        resignation) before the end of--
                    (A) the 3-month period beginning on the date on 
                which such payment is offered or made available to such 
                employee; or
                    (B) the 3-year period beginning on the date of the 
                enactment of this Act,
        whichever occurs first;
            (5) shall not be a basis for payment, and shall not be 
        included in the computation, of any other type of Government 
        benefit; and
            (6) shall not be taken into account in determining the 
        amount of any severance pay to which the employee may be 
        entitled under section 5595 of title 5, United States Code, 
        based on any other separation.
    (d) Additional Agency Contributions to the Retirement Fund.--
            (1) In general.--In addition to any payments which it is 
        otherwise required to make, the Department of Justice and the 
        Department of Homeland Security shall, for each fiscal year 
        with respect to which it makes any voluntary separation 
        incentive payments under this section, remit to the Office of 
        Personnel Management for deposit in the Treasury of the United 
        States to the credit of the Civil Service Retirement and 
        Disability Fund the amount required under paragraph (2).
            (2) Amount required.--The amount required under this 
        paragraph shall, for any fiscal year, be the amount under 
        subparagraph (A) or (B), whichever is greater.
                    (A) First method.--The amount under this 
                subparagraph shall, for any fiscal year, be equal to 
                the minimum amount necessary to offset the additional 
                costs to the retirement systems under title 5, United 
                States Code (payable out of the Civil Service 
                Retirement and Disability Fund) resulting from the 
                voluntary separation of the employees described in 
                paragraph (3), as determined under regulations of the 
                Office of Personnel Management.
                    (B) Second method.--The amount under this 
                subparagraph shall, for any fiscal year, be equal to 45 
                percent of the sum total of the final basic pay of the 
                employees described in paragraph (3).
            (3) Computations to be based on separations occurring in 
        the fiscal year involved.--The employees described in this 
        paragraph are those employees who receive a voluntary 
        separation incentive payment under this section based on their 
        separating from service during the fiscal year with respect to 
        which the payment under this subsection relates.
            (4) Final basic pay defined.--In this subsection, the term 
        ``final basic pay'' means, with respect to an employee, the 
        total amount of basic pay which would be payable for a year of 
        service by such employee, computed using the employee's final 
        rate of basic pay, and, if last serving on other than a full-
        time basis, with appropriate adjustment therefor.
    (e) Effect of Subsequent Employment with the Government.--An 
individual who receives a voluntary separation incentive payment under 
this section and who, within 5 years after the date of the separation 
on which the payment is based, accepts any compensated employment with 
the Government or works for any agency of the Government through a 
personal services contract, shall be required to pay, prior to the 
individual's first day of employment, the entire amount of the 
incentive 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 Attorney General (for transfer to the 
appropriate component of the Department of Justice, if necessary) or 
the Under Secretary for Enforcement and Security (for transfer to the 
appropriate component of the Department of Homeland Security, if 
necessary).
    (f) Effect on Employment Levels.--
            (1) Intended effect.--Voluntary separations under this 
        section are not intended to necessarily reduce the total number 
        of full-time equivalent positions in any covered entity.
            (2) Use of voluntary separations.--A covered entity may 
        redeploy or use the full-time equivalent positions vacated by 
        voluntary separations under this section to make other 
        positions available to more critical locations or more critical 
        occupations.

SEC. 443. AUTHORITY TO CONDUCT A DEMONSTRATION PROJECT RELATING TO 
                    DISCIPLINARY ACTION.

    (a) In General.--The Attorney General and the Secretary may each, 
during a period ending not later than 5 years after the date of the 
enactment of this Act, conduct 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 resolution (as 
        defined in section 571 of title 5, United States Code) shall be 
        encouraged, whenever appropriate; and
            (2) each covered entity under the jurisdiction of the 
        official conducting the project shall be required to provide 
        for the expeditious, fair, and independent review of any action 
        to which section 4303 or subchapter II of chapter 75 of such 
        title 5 would otherwise apply (except an action described in 
        section 7512(5) thereof).
    (d) Actions Involving Discrimination.--Notwithstanding any other 
provision of this section, if, in the case of any matter described in 
section 7702(a)(1)(B) of title 5, United States Code, there is no 
judicially reviewable action under the demonstration project within 120 
days after the filing of an appeal or other formal request for review 
(referred to in subsection (c)(2)), an employee shall be entitled to 
file a civil action to the same extent and in the same manner as 
provided in section 7702(e)(1) of such title 5 (in the matter following 
subparagraph (C) thereof).
    (e) Certain Employees.--Employees shall not be included within any 
project under this section if such employees 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 employee 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 Reform 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 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 require to carry out this subsection.
    (g) Definition.--In this section, the term ``covered entity'' has 
the meaning given such term in section 442(a)(2).

SEC. 444. SENSE OF CONGRESS.

    It is the sense of the Congress that--
            (1) the missions of the Bureau of Immigration Enforcement 
        of the Department of Homeland Security and the Bureau of 
        Citizenship and Immigration Services of the Department of 
        Justice 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. 445. REPORTS AND IMPLEMENTATION PLANS.

    (a) Division of Funds.--The Attorney General and the Secretary, not 
later than 120 days after the effective date of this Act, shall each 
submit to the Committees on Appropriations and the Judiciary of the 
United States 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 Immigration Enforcement.
    (b) Division of Personnel.--The Attorney General and the Secretary, 
not later than 120 days after the effective date of this Act, shall 
each submit to the Committees on Appropriations and the Judiciary of 
the United States House of Representatives and of the Senate a report 
on the proposed division of personnel between the Bureau of Citizenship 
and Immigration Services and the Bureau of Immigration Enforcement.
    (c) Implementation Plan.--
            (1) In general.--The Attorney General and 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 each submit to the Committees on 
        Appropriations and the Judiciary of the United States House of 
        Representatives 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 Bureau of Citizenship 
        and Immigration Services and the Bureau of Immigration 
        Enforcement, including the following:
                    (A) Organizational structure, including the field 
                structure.
                    (B) Chain of command.
                    (C) Procedures for interaction among such bureaus.
                    (D) Fraud detection and investigation.
                    (E) The processing and handling of 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 separating the 
                administrative support systems of the Immigration and 
                Naturalization Service in order to provide for separate 
                administrative support systems for the Bureau of 
                Citizenship and Immigration Services and the Bureau of 
                Immigration Enforcement.
    (d) Comptroller General Studies and Reports.--
            (1) Status reports on transition.--Not later than 18 months 
        after the date on which the transfer of functions specified 
        under section 411 takes effect, and every 6 months thereafter, 
        until full implementation of this subtitle has been completed, 
        the Comptroller General of the United States shall submit to 
        the Committees on Appropriations and on the Judiciary of the 
        United States House of Representatives and the Senate a report 
        containing the following:
                    (A) A determination of whether the transfers of 
                functions made by chapters 1 and 2 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 chapters 
                1 and 2 have been completed, an identification of any 
                issues that have arisen due to the completed transfers.
                    (C) An identification of any issues that may arise 
                due to any future transfer of functions.
            (2) Report on management.--Not later than 4 years after the 
        date on which the transfer of functions specified under section 
        411 takes effect, the Comptroller General of the United States 
        shall submit to the Committees on Appropriations and on the 
        Judiciary of the United States 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 Naturalization 
                Service to the Bureau of Citizenship and Immigration 
                Services and the Bureau of Immigration Enforcement have 
                improved, with respect to each function transferred, 
                the following:
                            (i) Operations.
                            (ii) Management, including accountability 
                        and communication.
                            (iii) Financial administration.
                            (iv) Recordkeeping, including information 
                        management and technology.
                    (B) A statement of the reasons for the 
                determinations under subparagraph (A).
                    (C) Any recommendations for further improvements to 
                the Bureau of Citizenship and Immigration Services and 
                the Bureau of Immigration Enforcement.
            (3) Report on fees.--Not later than 1 year after the date 
        of the enactment of this Act, the Comptroller General of the 
        United States shall submit to the Committees on the Judiciary 
        of the House of Representatives and of the Senate a report 
        examining whether the Bureau of Citizenship and Immigration 
        Services is likely to derive sufficient funds from fees to 
        carry out its functions in the absence of appropriated funds.

    Page 24, strike line 7 and all that follows through page 27, line 
15.

    Page 27, line 16, strike ``503'' and insert ``404''.

    Page 28, line 10, strike ``504''; and insert ``405''.

    Page 29, line 1, strike ``505'' and insert ``406''.

    Page 30, line 12, before ``In'' insert ``(a) In General.--

    Page 31, after line 6, insert the following:

    (b) Immigration Enforcement.--
            (1) In general.--In addition to the responsibilities 
        described in subsection (a), the Under Secretary for Management 
        shall be responsible for the following:
                    (A) Maintenance of all immigration statistical 
                information of the Bureau of Immigration Enforcement. 
                Such statistical information shall include information 
                and statistics of the type contained in the publication 
                entitled ``Statistical Yearbook of the Immigration and 
                Naturalization Service'' prepared by the Immigration 
                and Naturalization Service (as in effect immediately 
                before the date on which the transfer of functions 
                specified under section 411 takes effect), 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 reliability and 
                validity for immigration statistics collected by the 
                Bureau of Immigration Enforcement.
    (2) Transfer of functions.--In accordance with title VIII, there 
shall be transferred to the Under Secretary for Management all 
functions performed immediately before such transfer occurs by the 
Statistics Branch of the Office of Policy and Planning of the 
Immigration and Naturalization Service with respect to the following 
programs:
                    (A) The Border Patrol program.
                    (B) The detention and removal program.
                    (C) The intelligence program.
                    (D) The investigations program.
                    (E) The inspections program.

    Page 31, strike lines 15 through 19 and insert the following:

            TITLE VII--INSPECTOR GENERAL; GENERAL PROVISIONS

    Page 31, strike line 20 and all that follows through page 32, line 
19.

    Page 32, line 20, strike ``Subtitle B'' and insert ``Subtitle A''.

    Page 33, line 2, insert ``sensitive'' before ``information''.

    Page 34, strike lines 7 through 10 and insert the following:

    (c) Notification Required.--If the Secretary exercises 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 General agrees or disagrees with such exercise and (2) the 
reasons for any disagreement, to the President of the Senate and the 
Speaker of the House of Representatives and to appropriate committees 
and subcommittees of the Congress.
    (d) Appointment of Deputy Inspector General for Civil Rights and 
Civil Liberties.--The Inspector General of the Department of Homeland 
Security shall appoint a Deputy Inspector General for Civil Rights and 
Civil Liberties (hereinafter in this subsection referred to as the 
``Deputy'').
    (e) Civil Rights and Civil Liberties Review.--The Deputy shall--
            (1) review information alleging abuses of civil rights, 
        civil liberties, and racial and ethnic profiling by employees 
        and officials of the Department of Homeland Security;
            (2) make public through the Internet, radio, television, or 
        newspaper advertisements information on the responsibilities 
        and functions of, and how to contact, the Deputy; and
            (3) submit to the President of the Senate, the Speaker of 
        the House of Representatives, and the appropriate committees 
        and subcommittees of the Congress on a semiannual basis a 
        report on the implementation of this subsection and detailing 
        any abuses described in paragraph (1), including the use of 
        funds appropriated to carry out this subsection.

    Page 34, beginning at line 11, strike subtitle C of title VII (and 
redesignate provisions accordingly)

    Page 34, line 20, strike ``Subtitle D'' and insert ``Subtitle B''.

    Page 35, line 5, insert ``(a)'' before ``Notwithstanding''.

    Page 35, line 13, strike ``; and'', and after line 13 insert the 
following:

    ``(b) Notwithstanding any other provision of this title, 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 title 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 the 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.''; and

    Page 41, after line 6, insert the following (and redesignate 
provisions and amend the table of contents accordingly):

SEC. 735. CONTINUING PROTECTION OF WHISTLEBLOWER PROTECTION ACT.

    It is the sense of the Committee on the Judiciary of the House of 
Representatives that employees transferred to the Department who, on 
the date of the enactment of this Act, are covered by section 
2302(b)(8) of title 5, United States Code (popularly known as the 
Whistleblower Protection Act), should continue to receive that 
protection. However, recognizing that personnel in the Department will 
have access to substantial law enforcement information and 
intelligence, the Committee believes that such whistleblower 
protections should not compromise information or intelligence that 
would be protected if it remained in other agencies.

SEC. 736. ESTABLISHMENT OF INTERNET SITE FOR REPORTING SUSPICIOUS 
                    ACTIVITIES.

    It is the sense of the Committee on the Judiciary of the House of 
Representatives that the Secretary of Homeland Security shall establish 
a site on the Internet, the purpose of which shall be to provide a 
single location at which may be found a direct connection to all other 
Internet sites established by Federal agencies for reporting suspicious 
activities. The Committee recommends that the Secretary take such 
action as is necessary to ensure that the domain name for the site is 
www.911.gov, or an equally identifiable domain name.
    Page 44, after line 10 insert the following:

    (f) Task Force on Administrative Procedure.--The Secretary shall 
appoint a task force to resolve conflicts among and harmonize the 
various administrative procedures of the agencies transferred to the 
Department. The task force should be composed of legal officers (or 
similarly qualified persons) made available for this purpose by the 
head of the executive agency from which the transferred agency came.
    (g) Administrative Law Judges.--The Office of Personnel Management 
shall ensure that there are sufficient qualified administrative law 
judge resources available to the Department to conduct matters required 
to be conducted by administrative law judges in agencies transferred to 
the Department.

    Page 45, line 1, strike ``Subject'' and insert ``(1) Subject''.

    Page 45, line 3, strike ``(1)'' and insert ``(A)''.

    Page 45, line 12, strike ``(2)'' and insert ``(B)''.

    Page 45, after line 20, insert the following:

    (2)(A) The Secretary's authority under paragraph (1) does not 
extend to a pending proceeding in or an order issued by an agency that 
has not yet been transferred to the Department.
    (B) Unless the Secretary makes a determination in writing stating 
the reason it should not do so--
            (i) a pending proceeding before an agency transferred to 
        the Department shall continue to be pending;
            (ii) an order issued by an agency transferred to the 
        Department shall continue in force; and
            (iii) the procedure applicable before the transfer shall 
        continue to apply to such proceeding or order.

    Page 47, after line 19, insert the following:

SEC. 807. AUTHORIZATIONS.

    Nothing in this Act shall be construed to authorize the development 
of a national identification system or card.

    Page 48, line 8, before ``Title'' insert ``(a) In General.--''.
    Page 48, line 24, strike the period at the end and insert ``; 
and''.

    Page 48, after line 24, insert the following:

            (5) in section 5315, by striking ``Commissioner of 
        Immigration and Naturalization, Department of Justice.''.
    (b) Special Effective Date.--Notwithstanding section 4, the 
amendment made by subsection (a)(5) shall take effect on the date on 
which the transfer of functions specified under section 411 takes 
effect.

    Page 49, line 4, strike ``of the Treasury'' and insert ``Secretary 
of the Treasury''.

    Page 49, line 5, strike ``of Homeland Security'' and insert 
``Attorney General''.

    At the end of the bill add the following:

           TITLE    --TRANSFERS TO THE DEPARTMENT OF JUSTICE

SEC. __01. TRANSFER OF THE FEDERAL LAW ENFORCEMENT TRAINING CENTER.

    There shall be transferred to the Attorney General the functions, 
personnel, assets, and liabilities of the Federal Law Enforcement 
Training Center, including any functions of the Secretary of the 
Treasury relating thereto.

SEC. __02. TRANSFER OF THE UNITED STATES SECRET SERVICE.

    There shall be transferred to the Attorney General the functions, 
personnel, assets, and liabilities of the United States Secret Service, 
including any functions of the Secretary of the Treasury relating 
thereto.

SEC. __03. STUDY.

    Not later than 90 days after the effective date of this Act, the 
Attorney General shall submit a plan to the Committee on the Judiciary 
of the House of Representatives and the Committee on the Judiciary of 
the Senate regarding the integration of the United States Secret 
Service and the Federal Law Enforcement Training Center into the 
Department of Justice.

9/12/2002 10:04:24 AM - F:\V7\091202\091202.026 Created by: 
                 VLCirks deg.Committee on the Judiciary

                     U.S. House of Representatives

                 Views and Recommendations on H.R. 5005

                 ``The Homeland Security Act of 2002''

                             July 12, 2002

  Principal Provisions of Judiciary Committee Amendments to H.R. 5005

    The Committee amendments to H.R. 5005 are fully consistent 
with the articulated mission of the proposed Department of 
Homeland Security (DHS). Reported amendments merely streamline 
the structure and focus the mission of the Department to help 
ensure its success. The Committee recommends modifying the 
mission statement of the Department to stress that its core 
mission should be the prevention, detection, disruption, and 
effective response to terrorist threats and activities. The 
Manager's Amendment to H.R. 5005 would enhance the 
effectiveness of the new Department and reduce bureaucracy by: 
(1) limiting the number of Under Secretaries to four; (2) 
transferring only a small component of the Federal Emergency 
Management Agency to the new Department; (3) transferring the 
Secret Service to the Department of Justice; and (4) ensuring 
that immigration services remain at the Department of Justice. 
The amendments also make important recommendations to reduce 
potential abuses by the new Department, including the addition 
of a privacy officer, the creation of deputy Inspector General 
for civil rights and civil liberties, and the inclusion of 
strengthened whistleblower protection provisions. The following 
chart reflects the revised organizational structure the 
Committee recommends for the proposed Department.
          
        
        
          

           Law Enforcement and Emergency Response Amendments

                       clarification of key terms

    The Committee recommends the statutory definition of terms 
which are critical to the effective functioning of the proposed 
Department. Accordingly, ``critical infrastructure'' and 
``terrorism'' are clearly defined. The definition of critical 
infrastructures is based up Presidential Decision Directive 63. 
The definition of terrorism is derived from 18 U.S.C. Sec.  
2331 as amended by the PATRIOT Act of 2001. The Committee 
recommends clarification of these terms in order to provide 
definitional guidance and consistency to the Department. It 
also important to define these terms because the new Department 
will have authority to share and analyze intelligence 
information relating to terrorist threats. Providing a clear 
definition of terrorism will ensure that DHS will not obtain or 
misuse unrelated personal information.

              crisis management and consequence management

    As introduced, H.R. 5005 would make consequence management, 
not crisis management, the primary mission of the new 
Department. The Committee amendments clarify that crisis 
management is a central function of the proposed Department. 
The Committee amendment defines crisis management and 
consequence management to better delineate the functions of the 
new Department. ``Crisis management'' includes measures to 
identify, acquire and plan the use of resources needed to 
anticipate, prevent, or resolve a threat or act of terrorism. 
In contrast, ``consequence management'' is primarily concerned 
with the response and coordination of relief activities after 
an attack occurs. There is a clear and vital distinction 
between crisis and consequence management and this distinction 
must not be lost in the creation of the new Department.

             preservation of fema as an independent agency

    The amendments reported by the Committee recommend 
modifying the provisions of H.R. 5005 that would transfer all 
of functions of the Federal Emergency Management Agency (FEMA) 
to the new Department. This is because FEMA's main mission as a 
consequence management agency is to respond to natural 
disasters. In most fiscal years, 75 to 95 percent of FEMA's 
budget is directed towards disaster relief assistance. 
Transferring FEMA in its entirety to DHS would detract from the 
agency's core mission. A terrorist attack is a federal crime 
and a crisis event, which requires a response different from 
that of a natural disaster. In addition, transferring all of 
FEMA to the new Department would divert FEMA from its vital and 
highly effective disaster relief role.
    The Judiciary Committee's recommendation to maintain FEMA 
as a separate federal agency obviates the need for an Under 
Secretary for Emergency Preparedness and Response. Thus, the 
Committee's amendment eliminates the Under Secretary for 
Emergency Preparedness and Response, and transfers remaining 
functions to the Undersecretary for Border and Transportation 
Security. To reflect the centrality of law enforcement to this 
component, the Judiciary Committee amendment also changes the 
title of the Undersecretary for Border and Transportation 
Security to the Under Secretary for Enforcement and Security. 
This change properly reflects the comprehensive enforcement and 
security functions of this division, while acknowledging the 
primacy of other law enforcement functions and responsibilities 
which would be transferred. For example, the Coast Guard, 
Customs Service, and Border Patrol are charged with enforcing 
federal laws pertaining to drug interdiction, child 
pornography, intellectual property, and illegal immigration.
    In addition, FEMA does not belong at DHS because directors 
of this agency have explicitly refused to provide first 
responders with training and assistance in crisis management 
functions. For example, in a March 13, 2002, letter to Chairman 
Sensenbrenner, the Director of FEMA stated that FEMA would not 
handle crisis management or law enforcement training, technical 
assistance, exercises, and equipment. The Director asserted 
that: ``While FEMA will coordinate grants and assistance to 
first responders, it will not assume any law enforcement 
functions, nor will FEMA provide law enforcement training--
training or investigative techniques, evidence collection 
techniques * * *''. State and local emergency responders must 
receive crisis management training as it is an essential 
component of an effective, coordinated homeland security 
strategy.
    DHS must serve all first responders through training and 
assistance in both consequence and crisis management to be 
adequately prepared for today's terrorist threat. As reported 
by the Judiciary Committee, H.R. 5005 would make the Under 
Secretary for Enforcement and Security responsible for training 
and coordinating state and local emergency responders in both 
crisis and consequence management. It must be stressed that 
investing the Under Secretary for Enforcement and Security with 
these responsibilities in no way detracts from the Federal 
Bureau of Investigation's lead role in investigating terrorist 
threats or events; nor does it undermine the role of FEMA, 
which would remain an independent agency charged with 
consequence management in the event of a natural disaster.

       transfer of fema's office of national preparedness to dhs

    The Committee's amendment recommends the transfer of a 
small component of FEMA, the Office of National Preparedness 
(ONP), to the new Department. ONP's primary focus is to provide 
training and technical assistance for first responders in 
consequence management following a terrorist attack. 
Transferring ONP from FEMA would augment other training and 
emergency assistance functions transferred to DHS from other 
agencies. These include the Office for Domestic Preparedness 
(ODP) within the Department of Justice as well as offices 
within the Department of Health and Human Services which 
provide grants, technical assistance and equipment to first 
responders. The selective transfer of ONP from FEMA to DHS 
would strengthen the Department's ability to respond to 
terrorist events while averting the imposition of extraneous 
and burdensome responsibilities which would detract from the 
Department's central homeland security mission. This would help 
guarantee a centralized crisis and consequence management 
function at the new Department.

      transfer of the secret service to the department of justice

    As introduced, H.R. 5005 would transfer the Secret Service 
to DHS while preserving the Service as a ``distinct entity.'' 
The Committee recommends streamlining and focusing the proposed 
Department by transferring Secret Service to the Department of 
Justice rather than DHS. The Judiciary Committee is the 
authorizing Committee for the Secret Service and has concluded 
that the Service does not properly belong at DHS. Crime 
prevention and law enforcement are central to the mission of 
the Secret Service. The Secret Service is charged with 
enforcing several federal statutes relating to counterfeiting, 
threats against governments officials such as the President and 
Vice President, credit card fraud, computer crimes, and fraud 
against financial institutions. Furthermore, unlike nearly all 
of the law enforcement agencies H.R. 5005 would transfer to 
DHS, the Service is not a border or transportation security 
agency. Finally, while the Service coordinates with federal and 
state agencies when providing security for national events, 
these activities comprise a fraction of its overall 
responsibilities.

    transfer of the federal law enforcement training center to the 
                         department of justice

    The Committee further recommends transferring the Federal 
Law Enforcement Training Center (FLETC) from the Treasury 
Department to the Justice Department. FLETC was established in 
1970 to provide an interagency law enforcement training program 
to train federal, state, local, and foreign law enforcement 
entities. FLETC's training curriculum closely resembles that 
provided by the Federal Bureau of Investigation. Its basic 
training course provides instruction in criminal investigation 
to uniformed law enforcement officers who possess authority to 
carry firearms and effect arrests. FLETC's transfer to the 
Department of Justice assures a greater level of consistency 
and coordination of federal law enforcement training procedures 
under the direction of the nation's chief law enforcement 
officer, the Attorney General. The rationale for shifting FLETC 
to the Department of Justice is even more pronounced given the 
fact that H.R. 5005's transfer of the Customs Service from the 
Treasury Department to DHS would leave Treasury with a greatly 
diminished law enforcement mission.

            Immigration Enforcement and Services Amendments

  steps to ensure the effective operation and integration of certain 
                    immigration functions within dhs

    The Committee recommends the incorporation of many of the 
immigration-related structural reform provisions contained in 
H.R. 3231, the ``Barbara Jordan Immigration Reform and 
Accountability Act,'' which passed the House by a vote of 405-
9. Like H.R. 3231, the Committee recommends the abolition of 
the Immigration and Naturalization Service (INS). In addition, 
the amendment retains H.R. 3231's requirements concerning: the 
Ombudsman; the Citizenship Office; the requirement to utilize 
Internet-based technology to promote administrative efficiency; 
pilot initiatives for reduce administrative backlogs; voluntary 
separation incentive payments; the authority to conduct a 
demonstration project relating to disciplinary action of 
immigration officers; the managerial rotation program; a 
reporting requirement on interior checkpoints; and an 
assessment of shifting demands presented by fluctuating 
immigration needs.

    separation of immigration enforcement from immigration services

    The Committee recommends establishing the Bureau of 
Immigration Enforcement within the Department of Homeland 
Security's office of Border and Transportation Security 
(renamed the division of Enforcement and Security), while 
establishing the Bureau of Citizenship and Immigration Services 
in the Department of Justice. The Bureau of Immigration 
Enforcement recommended by the amendment would be nearly 
identical to the enforcement bureau created by H.R. 3231. The 
Bureau of Citizenship and Immigration Services, is also very 
similar to the services bureau contained H.R. 3231. Finally, 
the Committee amendment would create an Assistant Attorney 
General for Citizenship and Immigration Services who would 
report to the Deputy Attorney General.
    These organizational reforms will help address widely-
recognized, systemic ``mission overload'' problems within the 
INS, while helping to ensure that immigration services will 
receive the resources necessary to professionally respond to 
the needs of legal immigrants. By separating immigration 
enforcement from immigration services and elevating the status 
of immigration services within the Justice Department, the 
amendment gives legal immigration services the focus and 
attention they deserve. Maintaining immigration services in the 
Justice Department would also promote a closer examination of 
the financial needs of the service bureau to improve 
immigration services than if the component resided in the 
Department of Homeland Security. If the services bureau were 
transferred to DHS, appropriating funds for these services 
would be an afterthought.
    Retaining responsibility for immigration services at the 
Department of Justice, which is responsible for administering 
immigration benefits, would also ensure the legitimate needs of 
legal immigrants are not subsumed by the massive size and scope 
of a Department which would be primarily dedicated to homeland 
security. It would affirm America's commitment to welcome legal 
immigrants to the United States in a timely and professional 
manner by personnel who will not assume that all legal 
immigrants present a security threat.
    With respect to immigration enforcement, the Committee 
recognizes that several enforcement functions of the INS, such 
as inspections and the Border Patrol, naturally fit together 
with Customs and other border components. These units should be 
consolidated as a border security unit, which is an integral 
part of the Department of Homeland Security. Therefore, the 
Committee recommends that the immigration enforcement be 
transferred to DHS and established as the Bureau of Immigration 
Enforcement within the Border and Transportation Security 
division (renamed the division of Enforcement and Security).
    With the proposed transfer of immigration enforcement and 
services functions to two separate Departments, it is essential 
that the enforcement and service bureaus communicate 
effectively with one another. Many aliens must interact with 
both immigration services and enforcement officers; this 
overlap is unavoidable. Accordingly, the Committee Amendment 
would create a liaison in each bureau to communicate with the 
other bureau. To ensure that the two bureaus share information 
and coordinate their efforts, each liaison would be required to 
create a common access system to information technology, 
databases, records, files, and other administrative resources. 
Currently, the INS has systemic administrative and 
organizational problems, often misplacing or losing 
applications and other paperwork. Sending and receiving paper 
files between the two Departments would only compound the 
problem. The Committee Amendment, like H.R. 3231, would thus 
require the Attorney General to establish an Internet-based 
system so that aliens may apply for benefits and check the 
status of their applications online. The INS must move away 
from its antiquated paper filing system. Dividing the INS 
between DHS and the Justice Department would facilitate 
movement toward an electronic filing system so that both the 
service and enforcement bureaus can easily access and maintain 
the integrity of alien files. Most importantly, these changes 
would ensure that fewer files are lost.

                      office of children's affairs

    With respect to the Office of Children's Affairs, the 
Committee amendment would transfer the same functions created 
in H.R. 3231 to the Director of the Office of Refugee 
Resettlement within the Department of Health and Human 
Services. These functions include ``unaccompanied alien 
childrens'' care and placement that were exercised by the INS 
Commissioner prior to the effective date of the bill; 
coordinating and implementing the law and policy for 
unaccompanied alien children who come into federal custody; 
making placement determinations for all unaccompanied alien 
children in federal custody; identifying and overseeing the 
infrastructure and personnel of facilities that house 
unaccompanied alien children; annually publishing a state-by-
state list of professionals or other entities qualified to 
provide guardian and attorney services; maintaining statistics 
on unaccompanied alien children; and reuniting unaccompanied 
alien children with a parent abroad, where appropriate.
    The Committee amendment also gives the Director of the 
Bureau of Immigration Enforcement the responsibility for 
collecting information relating to nonimmigrant foreign 
students and other exchange program participants, including the 
Student and Exchange Visitor Information System, and using such 
information to carry out the enforcement functions of the 
bureau.

         Protections Against Potential Abuses by the Department

                safeguards to protect individual privacy

    The amendments to H.R. 5005 add important provisions to 
protect against the unauthorized use or disclosure of private 
information. The amendment requires the appointment of a 
privacy officer to ensure the Department's compliance with the 
Privacy Act of 1974, and permits congressional oversight of 
such compliance. In addition to information technologies, the 
privacy officer would be responsible for assuring that all 
forms of technologies, are not employed by DHS to erode 
citizens' privacy protections.
    The privacy officer will report to Congress on privacy 
violations and conduct privacy impact assessments of proposed 
rules when deemed appropriate by the Secretary. The Committee 
recommends that the DHS Secretary establish procedures ensuring 
the confidentiality and accuracy of personally identifiable 
information. These procedures would require the DHS Secretary 
to: (1) limit the redissemination of personally identifiable 
information (such as Social Security numbers) to ensure that it 
is not used for an unauthorized purpose; (2) ensure the 
security and confidentiality of such information; (3) protect 
the constitutional and statutory rights of any individuals who 
are subjects of such information; and (4) provide data 
integrity through the timely removal and destruction of 
obsolete or erroneous names and information. The text of this 
provision is substantively identical to H.R. 4598, the 
``Homeland Security Information Sharing Act.'' In addition, the 
amendment contains a clear mandate that nothing in H.R. 5005 be 
construed to authorize the development of a national 
identification card or system. Finally, the amendment would 
require the Secretary of DHS to appoint a task force to 
harmonize the administrative procedures and adjudicative 
processes of the new Department.

               inspector general amendments to h.r. 5005

    As introduced, section 710(a) and (b) of H.R. 5005 would 
allow the Secretary to restrict the activities of the Inspector 
General (IG) when those activities involve certain information, 
generally related to national security. Specifically, H.R. 5005 
would permit the Secretary to exercise control over the 
Inspector General's authority to conduct audits or 
investigations or to issue subpoenas if these activities would 
require access to information concerning: (1) intelligence, 
counterintelligence, or counterterrorism matters; (2) ongoing 
criminal investigations or proceedings; (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 certain persons or property; and (5) other 
matters that, in the Secretary's judgment, would constitute a 
serious threat to national security. Section 710(c) requires 
the Secretary to notify the President of the Senate and the 
Speaker of the House within 30 days of the exercise of that 
authority.
    The proposed amendment conforms the Secretary's authority 
and responsibilities more closely to the corresponding 
provisions relating to the authority and responsibilities of 
other department heads at the Departments of Defense, Justice, 
and Treasury and the Central Intelligence Agency. First, the 
language would amend subsection 710(a) to allow the Secretary 
to restrict the IG's authority when access to ``sensitive'' 
information--not just any information-- concerning the 
specified matters is involved. Provisions governing other 
inspectors general specifically refer to ``sensitive'' 
information, not just any information. Second, the amendment 
alters and expands the reporting requirement in subsection 
701(c) to require: (1) the Secretary to notify the IG and 
provide reasons for the exercise of the authority; (2) the IG 
to forward the Secretary's notification and reasons to the 
President of the Senate, the Speaker of the House, and 
appropriate committees and subcommittees of Congress; and (3) 
the IG to report to Congress whether he or she disagrees with 
the Secretary. If there is a disagreement, the amendment 
requires the IG to explain the reason for the disagreement in 
his report to Congress.

   establishment of a deputy ig for civil rights and civil liberties

    The amendment would also require the Inspector General to 
appoint a Deputy Inspector General to examine allegations of 
civil rights abuses, including allegations of racial or ethnic 
profiling, by employees of the Department of Homeland Security. 
The Deputy Inspector General must advertise his or her 
responsibilities and report to Congress on a semi-annual basis 
regarding his responsibilities.

                   enhanced whistleblower protections

    The Manager's Amendment contains a sense of the Committee 
that employees transferred to DHS continue to receive existing 
whistleblower protections provided that sensitive intelligence 
or law enforcement information is not compromised. The general 
whistleblower statute broadly applies to federal employees. 
However, federal personnel are not protected by this statute if 
they work in an ``excepted service'' or are excluded from 
coverage by the President ``based on a determination that [it] 
is necessary and warranted by conditions of good administration 
* * *''. This statute specifically does not apply to the 
Federal Bureau of Investigation, Central Intelligence Agency, 
and other foreign intelligence or counterintelligence agencies. 
Federal employees who handle sensitive and classified law 
enforcement and counter-intelligence information have been 
extended whistleblower protections, but are subject to special 
treatment because of the sensitive nature of the information 
that may be involved in any investigation or complaint brought 
forward by an employee.
    The Committee's language seeks to ensure that when 
regulations are implemented by the Department they should 
reflect the procedures that have been adopted in other agencies 
to protect such information. Section 730 of the bill as 
introduced appeared to permit the Secretary to eliminate those 
protections. In response to Members questions, Governor Ridge 
testified that the bill was not intended to strip whistleblower 
protections from employees by moving them to the Department of 
Homeland Security. The amendment expresses the sense of the 
Committee that the protections should be continued in the new 
Department, but that sensitive law enforcement information and 
intelligence need to continue to be protected as they are under 
current law in other agencies.

                         Additional Amendments

      harmonization and rationalization of department compensation

    DHS would incorporate law enforcement personnel from a 
number of existing agencies. Disparate pay scales and 
retirement policies among similarly situated law enforcement 
personnel threatens to erode employee morale and jeopardize the 
success of the new Department's law enforcement mission. The 
Committee expresses concern that pay and benefit disparities 
among law enforcement agencies have resulted in substantial 
defections from agencies where the pay and benefit package 
appears to be low to agencies where the pay and benefit 
packages are perceived to The amendment requires the Secretary 
of Homeland Security, in consultation with the Director of the 
Office of Personnel Management, to submit a plan (within 90 
days of the establishment of the Department) to the President 
and Congress to ensure, to the maximum extent practicable, the 
elimination of disparities in pay and benefits among employees 
(especially among law enforcement personnel) of the new 
Department. The Committee is particularly concerned that 
increased compensation provided to employees of the 
Transportation Security Administration (TSA) is causing 
qualified law enforcement personnel from the Secret Service, 
Capitol Hill Police, and Park Service to migrate to the TSA.

                          Additional Concerns

                executive office for immigration review

    The Executive Office for Immigration Review (EOIR), located 
in the Justice Department, houses the immigration courts and 
the Board of Immigration Appeals. These units adjudicate the 
deportability of aliens and aliens' applications for relief 
from deportation in immigration proceedings. Although the 
Committee Amendment did not address EOIR, the Committee 
believes that it should remain in the Justice Department.

                   impact on civil service employees

    The Committee is also concerned about the impact the bill 
has on civil service protections which currently exist for 
federal employees that would be transferred to DHS. Section 
804(e)(2) notes only that current employment terms (pay, civil 
service protections) would remain in place until a new human 
resources management system is established by DHS. The 
Committee recommends that the Select Committee and other 
committees of jurisdiction address concerns regarding the 
potential loss of civil service protections by employees 
affected by the bill.

 the federal advisory committee act and the freedom of information act

    The Committee recognizes that the new Department will have 
a significant need to establish and use the services of 
advisory committees with respect to highly confidential and 
sensitive national security matters. In its current form, H.R. 
5005 would exempt from the requirements of the Federal Advisory 
Committee Act (FACA) any advisory committees established by the 
Secretary of DHS. Although FACA currently exempts the Central 
Intelligence Agency and the Federal Reserve Board from its 
requirements, the Committee is concerned that such an exemption 
may substantially diminish the openness and public-access goals 
of the FACA. The bill also creates an exemption to the Freedom 
of Information Act (FOIA) for information that companies and 
individuals voluntarily provide that ``relates to'' 
infrastructure vulnerabilities and related matters. Because the 
FOIA is so important to preserving openness and accountability 
in government, the breadth of this new exemption also raises 
serious concerns.
    The Committee recognizes, however, that public access to 
this information may have two unintended effects: (1) companies 
will be deterred from providing that information to the new 
Department; and (2) potential terrorists will have access to 
that information. It is worth noting that FOIA currently 
contains exemptions restricting the disclosure of national 
security information (see 5 U.S.C. 552(b)(1)), sensitive law 
enforcement information (see 5 U.S.C. 552(b)(7)) or 
confidential business information (see 5 U.S.C. 552 (b)(4)). 
That being the case, any additional exemption from FOIA must be 
demonstrably necessary and should be extremely narrow. The 
Committee recommends that the possibility of narrowing the 
scope of this provision be considered to make clear that 
material that would be exempt from disclosure may be 
segregated, to the extent feasible, from non-exempt, releasable 
material. Any exception to current FACA and FOIA requirements 
should be carefully considered with a view toward maintaining 
the sunshine safeguards needed to preserve an open and 
accountable governmental, while providing the Department with 
the needed flexibility to carry out its mission. The Committee 
recommends that the Select Committee and the other committees 
of jurisdiction address these concerns.

        Additional Views of Chairman F. James Sensenbrenner, Jr.

    I strongly believe that all visa granting functions of the 
Department of State should be transferred to the new Department 
of Homeland Security. The State Department has repeatedly 
demonstrated that it cannot perform this function with due 
regard for national security. In fact, its core mission as a 
diplomatic agency is incompatible with the responsibility to 
make grant and denial decisions on the millions of visa 
requests it receives each year.
    While lapses at the Immigration and Naturalization Service 
and other federal agencies that increased America's 
vulnerability to the World Trade Center and Pentagon terrorists 
attacks have received attention, only recently has attention 
been given to equally if not more serious failures at the State 
Department.
    Fifteen of the Saudi terrorists who launched the 9-11 
attacks had been granted visas by State Department consular 
officers in Saudi Arabia. Twelve of the terrorists were 
personally interviewed by the consular officers. A large scale 
investigation has just come to light into the sale of 70 visas 
at the U.S. embassy in Qatar, including one to the roommate of 
two of the 9-11 terrorists. The State Department has come under 
intense criticism for the ``Visa Express'' program in Saudi 
Arabia, which raises disturbing questions about the role of 
Saudi travel agencies in pre-screening visa applicants and 
which continues in operation today. Just last month, Deputy 
Secretary of State Richard Armitage sent a letter to the 
Justice Department rejecting the Foreign Terrorist Tracking 
Task Force's (FTTTF) recommendations to deny visas to specific 
aliens because ``the information we have received states only 
that the FTTTF believes the applicants may pose a threat to 
national security * * *'' It seems as if the events of 
September 11 have gone unnoticed by the State Department.
    At the State Department, visas are considered first and 
foremost a device to curry favor with foreign governments. The 
more visas issued, the happier the foreign government. 
Consequently, State Department consular officers are under 
intense pressure from the Secretary of State and their 
ambassador and superiors to approve as many visas as possible. 
Employee evaluations are often tied to the number of visas 
issued without regard to adequate screening. In other words, 
the quantity of visas issued is valued more highly than the 
quality of interviews given.
    Besides being under pressure to approve visas, consular 
officers are sent out into the field with wholly inadequate 
training. They receive no more than a few hours training in 
interviewing techniques, probably the single most important 
skill they will need in their jobs. On the other hand, FBI 
agents are given 51 hours of training in interviewing 
techniques and many follow-up mock interviews at the academy. 
Compounding these problems is the crisis in motivation. Now, 
the talent and educational credentials of foreign service 
officers are not open to question. However, men and women are 
attracted to the foreign service because of their desire to be 
diplomats. They consider consular duty as ``grunt work'' to 
``pay their dues.'' They generally dislike their jobs and leave 
for political and economic posts as soon as they are allowed.
    There is unanimity among former consular officers that the 
State Department's Visa Office should be transferred in its 
entirety to the Department of Homeland Security. What would be 
the benefits of such a move? First, the institutional pressures 
on consular officers to bias their visa decisions in favor of 
grants would evaporate. Consular officers would know that their 
job performance would in large part be graded based on their 
abilities to withhold visas from those aliens who would violate 
our immigration laws or do American harm. Second, consular 
staffs would be filled by law enforcement professionals who 
choose to perform this vital function, would take pride in and 
feel challenged by their jobs, and would want to make careers 
out of consular work.
    The consular reforms contained in the Committee-approved 
bill unfortunately create an unwieldy hybrid consular office 
that will do nothing to remedy the office's current ills. 
Giving the Department of Homeland Security only oversight 
authority over the consular service and the ability to issue 
regulations does nothing to change the fact that it will still 
be State Department foreign service officers who will have the 
responsibility of interviewing visa applicants and have the 
decision making power to grant visas. They will still be 
subject to inappropriate pressure to issue visas in order to 
comply with the diplomatic goals of their employer, the 
Secretary of State. Their career advancement will still be 
dependent on the good will of the ambassador. And, they will 
still be junior officers going through a rite of passage rather 
than seasoned law enforcement professionals with a zeal for 
uncovering fraud and deceit by aliens seeking visas. Thus, the 
Committee approved bill fails the fundamental test of true 
reform.
    Now, there is one possible way in which the Committee-
approved Visa Office can perform with appropriate regard for 
national security. A Department of Homeland Security law 
enforcement officer would have to review in-depth the file of 
every visa grant and also have to sit in on every interview and 
be able to ask questions. For, without doing so, how could he 
or she be able to personally observe the demeanor of the alien 
applicant, critical in determining the alien's true intent, and 
be able to ensure that all pertinent questions were asked? 
While this is theoretically allowed for by the Committee bill, 
it is clear that it will never happen. For in order to have it 
happen, we would need a massive and costly increase in the 
federal bureaucracy. We would have to add to the federal 
workforce a large force of Department of Homeland Security 
personnel, without at the same time decreasing the number of 
State Department consular officers. It is not even clear 
whether our embassies and consulates would be physically big 
enough to house all these new employees. And it would be hugely 
inefficient. We would have in essence two individuals 
performing the work of one. In each and every case, the State 
Department employee would be superfluous.
    For the above stated reasons, I believe it is crucial that 
visa granting responsibilities be transferred to the Department 
of Homeland Security.
    Let me answer one obvious question. How could the transfer 
of the consular function take place in a smooth manner without 
disruption to the process of issuing millions of visas a year? 
Those State Department foreign service officers who would 
prefer to remain as consular officers would certainly be given 
the opportunity. However, it is to be expected that most would 
decline because of their lack of interest in the task. We would 
clearly need a transition period in order to give the 
Department of Homeland Security time to train a new corps of 
consular officers in language skills, interviewing techniques, 
and other skills. Many would likely come with a background in 
law enforcement. INS inspectors and investigators would 
certainly find a foreign posting attractive. I have therefore 
proposed that for a two-year period, current consular officers 
would be detailed from the State Department to the Department 
of Homeland Security. Gradually, these officers would be 
replaced and returned to the State Department as new employees 
come on board.

                        F. James Sensenbrenner, Jr.

                       Separate Views of Mr. Hyde

    I write separately to discuss two amendments that were 
adopted by the Committee at its markup of H.R. 5005.

                           i. visa processing

    The President's homeland security plan, as reflected in the 
introduced version of H.R. 5005, would transfer to the 
Secretary of Homeland Security all responsibility for enforcing 
and administering the laws relating to processing of visa 
petitions at United States diplomatic and consular posts 
abroad. Section 403 of H.R. 5005 provides that the authority 
vested in the Secretary of Homeland Security shall be exercised 
through the Secretary of State.
    A proposal was offered at the markup that would have 
dramatically altered the President's plan. This provision would 
have required Homeland Security personnel to do the actual 
adjudication of all visa applications at all our Embassies and 
consulates--over 10 million applications per year. It would 
have all but eliminated the role of the Secretary of State in 
granting and denying visa applications, which is among the most 
important responsibilities of our Embassies and consulates.
    In my view, this provision was well-intentioned but 
ultimately self-defeating. It would ultimately have required 
the creation of a whole new bureaucracy, and it would have 
caused enormous practical difficulties in our Embassies and 
consulates abroad. Even more important, it would have risked 
overwhelming Homeland Security personnel with non-homeland 
security functions and thereby make it difficult or impossible 
for them to perform their central mission.
    I therefore offerend an amendment with Mr. Berman to 
provide for a compromise on the issue of visa adjudication by 
Homeland Security employees. This amendment, which was adopted 
by the Committee, explicitly authorizes the assignment of 
Homeland Security employees in U.S. diplomatic and consular 
posts abroad. Rather than assume all visa processing functions, 
however, these employees will concentrate on identifying and 
reviewing cases that present homeland security issues.
    Under the Hyde-Berman amendment, Homeland Security officers 
at U.S. Embassies and other overseas posts will investigate 
threats to the security of the United States and advise 
consular officers on these threats. They will ensure that these 
officers have access to information that would identify visa 
applications presenting possible homeland security questions, 
and Homeland Security employees would review these applications 
individually. This arrangement will preserve the essence of the 
Administration's proposal--the sensible division of labor under 
which homeland security officers will be allowed to concentrate 
on homeland security functions--while helping to ensure that 
security concerns are central to key decisions made abroad.
    The Hyde-Berman amendment retains the requirement of the 
underlying Chairman's amendment for a study of the role of 
foreign nationals in visa processing and a report to Congress 
on this issue.
    Finally, the Hyde-Berman amendment addresses a possible 
unintended consequence of turning over visa decisions to the 
Department of Homeland Security: the subjection of such 
decisions to various types of administrative and judicial 
review which do not apply to such decisions under current law. 
With over 3 million visa applications denied each year, this 
change would have enormous implications for our judicial system 
as well as for the security of our borders. The Hyde-Berman 
provision will ensure that denials of visa petitions in our 
overseas posts will continue to be non-reviewable.
    By retaining a role for consular officers in adjudicating 
the millions of applications presenting no security-related 
issues, the President's plan will allow Homeland Security 
officers to perform their homeland security mission. By 
authorizing the presence of Homeland Security officers in our 
overseas posts to identify and deal with homeland security 
issues, the Hyde-Berman amendment will ensure that the 
President's plan works as intended.

                ii. law enforcement information sharing.

    The Committee also adopted an important amendment to 
section 203 of H.R. 2005, which gives the Secretary of Homeland 
Security access to information in the possession of other 
government agencies that is relevant to homeland security. The 
amendment adopted by the Committee takes the logical next step, 
by requiring the Secretary to promulgate regulations to ensure 
that this important information is shared with other federal, 
state, and local law enforcement agencies as necessary to guard 
against threats to homeland security.
    The failure or inability of law enforcement and 
intelligence agencies to share information with one another 
prior to the September 11 attacks has been widely noted. Other 
legislation currently under consideration by Congress would 
take some tentative steps toward wider information sharing, but 
the problem is still very much with us. I am informed, for 
instance, that there are at least 41 federal and local law 
enforcement agencies with at least some jurisdiction in the 
District of Columbia, and that only a handful of these agencies 
are under any legal obligation to share information with any of 
the others.
    The Committee amendment is simple and straightforward. It 
applies only to information to which the Secretary will have 
access under section 203, and it gives him the authority and 
the mandate to ensure that the information gets to the proper 
authorities so that it can be used to anticipate and counter 
threats to homeland security.

                                     Henry J. Hyde.

               Additional Views of the Honorable Bob Barr

                  privacy and administrative procedure

    The Subcommittee on Commercial and Administrative Law, 
which I chair, held an oversight hearing on July 9, 2002, with 
respect to H.R. 5005, the Homeland Security Act of 2002. The 
hearing focused on administrative law, adjudicatory issues, and 
privacy ramifications of the proposed legislation. Three 
witnesses testified, including a representative on behalf of 
the Administration and two experts from academia.
    The testimony received at the hearing, as well as the 
comments of the Subcommittee Members who attended the hearing, 
clearly highlighted the need for a privacy officer in the new 
Department of Homeland Security; the inclusion of procedural 
guidelines regarding the sharing of information; restrictions 
with respect to national identification card(s); and 
whistleblower protections, among other concerns. For example, 
the Administration's witness assured the Subcommittee that 
employees of the new Department of Homeland Security, ``will 
retain whistleblower protection and other basic rights like 
equal pay for equal work and fair and equitable treatment.''\1\ 
Likewise, there was general support for implementing procedural 
safeguards with respect to personally identifiable information 
shared among governmental agencies, and to having a privacy 
officer appointed to ensure compliance with the Privacy Act and 
congressional oversight of such compliance.\2\
---------------------------------------------------------------------------
    \1\ Adminstrative Law, Adjudicatory Issues, and Privacy 
Ramifications of Creating a Department of Homeland Security: Hearing on 
H.R. 5005 Before the Subcommittee on Commercial and Administrative Law 
of the House Comm. on Judiciary, 107th Cong. (2002) (statement of Mark 
Everson, Controller of the Office of Federal Financial Management, 
Office of Management and Budget).
    \2\ Id. (Statements of Jefferey S. Lubbers, Professor of Law at the 
American University Washington College of Law, and Peter P. Swire, 
Professor of Law at Ohio State University).
---------------------------------------------------------------------------
    H.R. 5005, as reported by the House Judiciary Committee on 
July 10, 2002, includes provisions that adequately address 
these concerns, and I would urge their inclusion in the bill 
reported by the Select Committee. Specifically with respect to 
privacy concerns, the bill ensures the privacy officer will, in 
addition to information technologies, be responsible for 
assuring that all forms of technologies, including Carnivore-
like surveillance systems, do not erode citizens' privacy 
protections. In addition, this officer will be charged with the 
responsibility to conduct privacy impact assessments of 
proposed rules when deemed appropriate by the Secretary.
    The bill, as amended, contains a clear mandate that it not 
be construed to authorize the development of a national 
identification system or card. In light of the fact that the 
Administration witness would not issue a clear, definitive 
statement the Administration was not interested in, and would 
not pursue, a national identification card, I believe it is 
essential this Committee insist the final legislation include 
an unequivocal prohibition on a national identification card 
within the context or jurisdiction of the new Department of 
Homeland Security to be established by H.R. 5005.
    Finally, the bill as reported by our Committee also 
includes important provisions intended to better effectuate the 
administrative procedures and adjudicative processes of the new 
Department.

                                          Bob Barr.

                  Additional Views of Rep. Zoe Lofgren

    I very much appreciate Chairman Sensenbrenner's acceptance 
of my amendment transferring to the Office of Refugee 
Resettlement in the Department of Health and Human Services 
oversight responsibility for care, placement and custody of 
unaccompanied alien children. I believe that the Chairman's 
bill has evolved significantly to take into consideration many 
of my concerns and I appreciate his cooperation and dedication 
to this immense undertaking.
    I am pleased that this amendment has strong bipartisan 
support in the Judiciary Committee. Given the level of support 
from the Judiciary Committee, I fully expect any Homeland 
Security legislation emerging from further committee action to 
contain language on unaccompanied alien children that was 
accepted by the Judiciary Committee Chairman and the majority 
of the Members of the Committee. In accepting the amendment, 
the Judiciary Committee Members have expressed their belief 
that unaccompanied alien children would be better served in the 
Department of Health and Human Services than in the Department 
of Homeland Security. It is my sincere hope that as the members 
of further committees review the entirety of the Homeland 
Security legislative package that they consider the strong 
interests of the Members of the committee of jurisdiction.

                                       Zoe Lofgren.

     Additional Minority Views of the Honorable Sheila Jackson Lee

  treatment of minors detained by the department of homeland security

    Minors may for unjustified reasons, come within the custody 
of the Department of Homeland Security. This Amendment would 
simply ensure that minors in custody of the DHS are provided 
access to independent counsel within 24 hours and the DHS 
endeavors to make contact with a parent or guardian as soon as 
possible. The Department of Homeland Security must take 
affirmative action towards assisting the minor in contacting 
the minor's parent or guardian.
    Minors come to the U.S. for many reasons. Many are trying 
to establish some type of legal residency in order to be an 
anchor for other family members. Many children are coming to 
work and help support poverty stricken family members in the 
country of origin. Others are fleeing some type of oppression 
and are ultimately granted asylum and others are looking for an 
education and a future. Minors, both immigrant and 
nonimmigrant,, may come into the custody of the Department of 
Homeland Security--for example, through an unannounced raid. 
These minors should have these minimal procedural protections.
    The INS houses approximately 450 to 600 juveniles at any 
one given time. An average daily population could be projected 
as 475 to 500. In FY 97, 3,149 unaccompanied juveniles were 
taken into custody; in FY 98, there were 5,323 custody events 
representing 4,457 different juveniles; and in FY 99, there 
were 5,644 custody events representing 4,607 different 
juveniles. Of May 25, 2000, there were 523 juveniles in INS 
custody nationwide. Of these, 87 were held in facilities in 
California. creasing numbers of children are trafficked by 
international criminal organizations for various types of 
exploitation. Most frequently, they are used as a cheap source 
of labor.
    Congress should ensure that these minors are provided 
adequate representation and ensure that the Department of 
Homeland Security does all that it can to facilitate contact 
with parents or guardians. I would ask members to support 
similar provisions in legislation creating the Department of 
Homeland Security.

             creating a 5th division of immigration affairs

    Splitting the enforcement and service functions of the 
Immigration and Naturalization Service (INS) between two 
agencies raises concerns about coordination between the two 
separate functions that dictate that it be kept together in a 
single department. Splitting the services and enforcement 
functions raises serious concerns that the INS' service 
function will be left to wither on the vine in another agency 
without the attention and resources it deserves. An alternative 
proposal could have the entire INS (a) pulled from the Border 
and Transportation Security division; (b) placed in its own 
division headed by an Undersecretary for Immigration Security 
and Services; and (c) restructured as envisioned by H.R. 3231.
    I offered ana amendment that would create a fifth division 
to the Department of Homeland Security. I presented the 
amendment to the committee but withdrew it in order to allow 
the Committee to move forward. The proposal would be consistent 
wit the INS in that it would incorporate the INS in whole into 
the Department of Homeland Security. It would It would 
accomplish this, however, in a manner different from the 
Administration's Proposal. The Jackson Lee Proposal would 
create a fifth division within the Department of Homeland 
Security titled the Division of Immigration Services and 
Security. This division would house three subdivisions titled; 
(1) Border Security; (2) Immigration Services and (3) Visa 
processing. This Division will separate the function of the INS 
allowing greater focus on the services component of this 
agency. This proposed Division would, however, preserve the 
unity of the Enforcement and Service function, as opposed to 
removing the service function out of the Homeland Security 
Department. Under this approach, the services and enforcement 
functions would be given equal priority within the new 
division. By raising this issue to the undersecretary level, 
the service function will have an advocate focused on the clear 
and defined mission of running the Immigration affairs of the 
nation. Additionally, the important coordination and 
communication that occurs between the enforcement and service 
functions of the INS will be maintained. The agency will be 
able to better share information and coordinate with other 
homeland security agencies and ensure a strong services 
function. This approach is also consistent with the President's 
goal of placing the entire INS in the DHS.
    Also troubling is the prospect of placing the entire visa 
issuance function currently the responsibility of the State 
Department, within the exclusive authority of the Secretary of 
Homeland Security. Everyday, in consular posts around the 
world, issues arise as to how a policy or regulation should 
apply in a specific case. Cases often turn on questions that 
have a significant impact on U.S. foreign policy interests, 
U.S. business interests, or American values of family unity and 
humanitarian protection. These issues all lie within the 
expertise of the state Department and therefore should be 
resolved in consultation with it.
    Furthermore, there are functions of the current INS that 
require a presence outside the United States. Primarily, these 
are refugee processing, orphan/adoption processing and the 
adjudication of waivers. These functions need to be preserved 
as much as possible as functions of the State Department, which 
already possesses related expertise and has the needed 
infrastructure in the countries where these activities take 
place.
    Placing the entire visa issuance function within the 
exclusive authority of the Secretary for Homeland Security will 
diminish the effectiveness of the this important function. The 
Hyde-Berman Amendment, which passed during full committee 
markup, is the preferred alternative which can be reconciled 
with the administration's proposal. I spoke in favor of this 
amendment during the markup, which allows the administration of 
visa issuance function by State Department employees with the 
oversight and regulatory guidance of the Department of Homeland 
Security. I am willing to comport my amendment with the Hyde-
Berman Amendment.
    I am also willing to comport my amendment with the Lofgren-
Jackson Lee Amendment which will allow the Administration for 
Children and Families (ACF) within the Department of Health and 
Human Services to be the lead agency with responsibility for 
unaccompanied alien children. These children, pose no threat to 
the interests of the United States and the expertise ACF has 
demonstrated in dealing with similar issues will serve the 
needs of the children better than the Department of Homeland 
Security .
    The creation of the Department of Homeland Security is a 
chief priority of the Administration and Congress to achieve in 
a very short time. This is a difficult task integrating 
functions between the Justice Department and the Department of 
Homeland Security and the Judiciary Committee's expertise is 
crucial to providing proper guidance.

                                Shelia Jackson Lee.

                     Additional Views of Ms. Waters

    I am writing to request that the Members of the Select 
Committee consider a serious oversight in H.R. 5005. 
Specifically, I am concerned that the legislation does not 
explicitly refer to the Small Business Act and the protections 
it provides to minority- and female-owned small businesses.
    As originally drafted, H.R. 5005 contains two procurement 
provisions. The first is in Section 301, ``Under Secretary for 
Chemical, Biological, Radiological, and Nuclear 
Countermeasures.'' One of the responsibilities of the new Under 
Secretary for Chemical, Biological, Radiological, and Nuclear 
Countermeasures is ``establishing priorities for, directing, 
funding, and conducting national research, development, and 
procurement of technology and systems'' (emphasis added). The 
second place that refers to procurement is in Section 601 of 
H.R. 5005 as introduced. Section 601 sets out the primary 
responsibilities of the Under Secretary for Management. Among 
those responsibilities is procurement. However, there is no 
language in the proposed legislation to ensure that procurement 
complies with the provisions of the Small Business Act.
    The Small Business Act, first enacted in 1953, was created 
to protect small businesses and assist them in becoming viable 
contributors to our economy. Language from the Act itself 
confirm this, as where it says: ``The essence of the American 
economic system of private enterprise is free competition. Only 
through full and free competition can free markets, free entry 
into business, and opportunities for the expression and growth 
of personal initiative and individual judgment be assured. The 
preservation and expansion of such competition is basic not 
only to the economic well-being but to the security of this 
Nation. Such security and well-being cannot be realized unless 
the actual and potential capacity of small business is 
encouraged and developed.''
    The language goes on to say, ``It is the declared policy of 
the Congress that the Government should aid, counsel, assist, 
and protect, insofar as is possible, the interests of small-
business concerns in order to preserve free competitive 
enterprise, to insure that a fair proportion of the total 
purchases and contracts or subcontracts for property and 
services for the Government (including but not limited to 
contracts or subcontracts for maintenance, repair, and 
construction) be placed with small-business enterprises, to 
insure that a fair proportion of the total sales of Government 
property be made to such enterprises, and to maintain and 
strengthen the overall economy of the Nation.''
    The need for protecting small businesses hasn't changed. If 
anything, we need to protect small businesses even more in our 
current market situation, where the technology firms have gone 
bust and more and more large companies-like Enron and WorldCom-
are cooking the books. We all have small businesses in our 
districts, businesses that provide good jobs and help maintain 
our economy. As we're developing the Department of Homeland 
Security, we must be sure to remember those businesses.
    Therefore, I urge the Members of the Select Committee to 
make an amendment that would affect the two aforementioned 
sections of H.R. 5005. The suggested amendment language is as 
follows:
    Page 17, after line 14, insert the following:
          ``(5) Nothing in this Act shall reduce the effect of Section 
        637 of Title 15 of the United States Code.''
    Page 30, line 12, insert at the beginning the following:
    ``(a)''
    Page 31, after line 6, insert the following:
    ``(b) Nothing in this Act shall reduce the effect of Section 637 of 
Title 15 of the United States Code.''
    The goal of this amendment is simply to ensure that the 
provisions of the Small Business Act relating to procurement 
opportunities for minority- and female-owned small businesses 
apply to government contracts of the new Department of Homeland 
Security.

                                     Maxine Waters.

Additional Views of Messrs. Flake, Green, Barr, Ms. Hart, and Mr. Pence

    Simultaneous termination of visas and drivers licenses.--As 
cosponsors of a proposal to require states to issue driver's 
licenses that expire when a temporary visitor's legal stay 
concludes, we urge the Select Committee on Homeland Security to 
adopt this policy into the Homeland Security Act of 2002. We 
note that the administration's Director for Homeland Security 
has publicly advocated such a policy change. In order to 
encourage compliance by states, driver's licenses or other 
comparable identification documents issued by a state would not 
be accepted by a federal agency for identification purposes 
unless the state issuing the license were in compliance with 
the law.
    Simply having a valid state driver's license, which has 
become the de facto identification card in the U.S., has made 
it easy for non-citizen visa holders to remain in the U.S. past 
the expiration date on their visas. A driver's license 
facilitates many legal interactions in the United States, from 
boarding an airplane to entering a government building to 
opening a bank account.

                                         Jeff Flake
                                         Mark Green
                                           Bob Barr
                                       Melissa Hart
                                         Mike Pence

                 Addtional Views of Mr. Smith of Texas

    As Chairman of the Subcommittee on Crime, Terrorism and 
Homeland Security, I fully support the actions taken by the 
Committee on Judiciary with regard to the transfer of only the 
Office of National Preparedness from the Federal Emergency 
Management Agency (FEMA). It is important that neither FEMA nor 
the new Department of Homeland Security are distracted from its 
core mission. FEMA has an important role to play when a natural 
disaster occurs. Its core mission is to provide assistance to 
states and local officials to address needs after a flood or 
hurricane. Moving the entire agency over to the Department of 
Homeland Security will also distract FEMA from this core 
mission.
    FEMA is well-equipped to perform the duties and functions 
that it has traditionally performed, training first responders 
to address the aftermath of a disaster. However, it is not 
well-equipped to provide training for law enforcement and other 
first responders in how to recognize and disrupt possible 
terrorist threats.
    Several first responders groups have expressed concerns 
about FEMA being the agency responsible for such training. The 
National Sheriff's Association testified before this 
Committee's Subcommittee on Crime, Terrorism and Homeland 
Security, ``[t]he prevention, detection and apprehension of 
terrorists are law enforcement functions, and it is not 
appropriate for training and coordination to be assigned to the 
FEMA regime, where there are no such responsibilities. In the 
tragic event that there is a terrorist attack, that crisis is 
also a law enforcement responsibility. Sheriffs and Chiefs of 
Police are shocked that OMB would propose that FEMA should 
assume responsibility in these areas, where there is neither 
experience nor legal authority to act.''\1\
---------------------------------------------------------------------------
    \1\ This is a test of the footnote.
---------------------------------------------------------------------------
    These same views have been reiterated by the International 
Brotherhood of Police Officers (IBPO). In a March 8, 2002 
letter to the Subcommittee on Crime, Terrorism and Homeland 
Security the IBPO stated that it ``is concerned that FEMA does 
not have the experience or understanding that a law enforcement 
agency has when investigating terrorism.''
    Additionally, the Police Executive Research Forum (PERF), a 
national organization of police executive professionals, that 
serves more than 50 percent of the country's population, 
explained that while it respects and values FEMA's role in 
disaster mitigation, it was troubled about FEMA assuming a new 
role in training in antiterrorism efforts by state and local 
law enforcement. PERF explained:
        [t]he mission of FEMA and its area of expertise are 
        based on disaster response and mitigation. While law 
        enforcement, firefighting, emergency medical services, 
        and HAZMAT agencies could all be first responders to a 
        critical incident, the role of law enforcement is 
        unique in its crisis prevention, detection activities, 
        and apprehension of suspects. Police agencies have 
        primary responsibility for local intelligence 
        gathering, public safety and maintaining public order 
        before and during a crisis. They do this through 
        combinations of community policing, criminal 
        investigation, and emergency response. All of this must 
        be done while meeting the day-to-day demands of a local 
        police department. These efforts require [F]ederal 
        support that is based on extensive experience and 
        knowledge of local police operations and challenges* * 
        * . The knowledge that comes from this experience 
        cannot be easily transferred to an agency that is 
        relatively new to law enforcement issues.
    FEMA's experience and expertise have traditionally been in 
other areas of public safety and welfare than law enforcement. 
They have little history of effective partnership with local 
law enforcement on proactive efforts. Additionally, FEMA has 
indicated that regardless of where it is transferred in the 
Federal government, it will not provide training in crisis 
management for first responders; it will continue to provide 
training in consequence management only.
    Last week, an article in the New York Times outlined in 
detail how the lack of a coordinated response, or coordinated 
communication systems, between state and local law enforcement 
and firefighters could have caused additional avoidable 
tragedies on September 11. We must make sure that any future 
terrorist threats are addressed with a coordinated response. 
The Department of Homeland Security can ensure this type of 
response by allowing the transferred Office of Domestic 
Preparedness to continue to provide the coordinated training 
for all state and local first responders in both crisis and 
consequence management.
    I support the decision by the Committee on Judiciary to 
allow FEMA to continue to perform its mission as a separate 
agency. This will ensure that the creation of the new 
Department of Homeland Security will not detract from the 
important services the Federal government has traditionally 
provided for the American people after a natural disaster.

                                       Lamar Smith.
                          COMMITTEE ON SCIENCE

                          House of Representatives,
                                      Committee on Science,
                                     Washington, DC, July 12, 2002.
Hon. Richard K. Armey
Chairman, House Select Committee on Homeland Security, The 
        Capitol, Washington, D.C.
    Dear Mr . Chairman: The Committee on Science was referred 
the bill, H.R. 5005, the Homeland Security Act of 2002, and 
reports its recommendations and views thereon.
    The Committee reported its recommendations by voice vote on 
July 10, 2002. The Committee is looking forward to working with 
you and your staff to bring the bill to a successful markup in 
the Select Committee and passage on the floor of the House.
    Thank you for your consideration.
        Sincerely,
                              Sherwood L. Boehlert,
                                                  Chairman,
                                     Ralph M. Hall,
                                   Ranking Minority Member.
                                ------                                


Amendments to H.R. 5005 as Adopted by the Committee on Science on July 
                                10, 2002

                        Amendments to H.R. 5005

                 as Adopted by the Committee on Science

                            on July 10, 2002

    Page 4, after line 10, insert the following and renumber subsequent 
paragraphs accordingly:

            (3) The term ``critical infrastructure'' means physical and 
        cyber-based public and private systems essential to the minimum 
        operations of the economy and government, including information 
        and telecommunications, energy, banking and finance, 
        transportation, and water systems and emergency services.

    Page 5, after line 2, insert the following and renumber subsequent 
paragraphs accordingly:

            (8) The term ``key resources'' means publicly or privately 
        controlled resources essential to the minimal operations of the 
        economy and government.

    Page 7, line 12, strike ``; and'' and insert a semicolon.

    Page 7, line 17, strike the period and insert ``; and''.

    Page 7, after line 17, insert the following new subparagraph:

            (F) research, development, demonstration, testing, 
        evaluation, and deployment in support of subparagraphs (A) 
        through (E).

    Page 8, after line 16, insert the following new subsection:

    (c) Standards Policy.--All standards activities of the Department 
shall be conducted in accordance with section 12(d) of the National 
Technology Transfer Advancement Act of 1995 (15 U.S.C. 272 note) and 
OMB Circular A-119.

    Page 9, after line 11, insert the following new paragraph and 
redesignate the subsequent paragraphs accordingly:

            (7) An Under Secretary for Science and Technology.

    Page 12, line 14, strike ``title VIII'' and insert ``title IX''.

    Page 13, lines 4 through 7, strike paragraph (4) and redesignate 
the subsequent paragraphs accordingly.

    Page 13, strike ``and'' at the end of line 11.

    Page 13, strike the period at the end of line 15 and insert ``; 
and''.

    Page 13, after line 15, insert the following new paragraph:

            (6) the Energy Security and Assurance Program and 
        activities of the Department of Energy, including the functions 
        of the Secretary of Energy relating thereto.

    Page 15, after line 24, insert the following new sections:

SEC. 205. INFORMATION SECURITY.

    (a) Responsibilities.--In carrying out his duties under section 
201, the Under Secretary for Information Analysis and Infrastructure 
Protection shall--
            (1) as appropriate, provide to Federal, State, and local 
        government entities, and, upon request, to private entities 
        that own or operate critical information systems and 
        communications networks--
                    (A) analysis and warnings related to threats to, 
                and vulnerabilities of, information systems and 
                communications networks; and
                    (B) in coordination with the Under Secretary for 
                Emergency Preparedness and Response, crisis management 
                support in response to threats to, or attacks on 
                information systems and communications networks;
            (2) develop, in concert with the private sector and with 
        other government entities and in coordination with the Under 
        Secretary for Emergency Preparedness and Response, emergency 
        recovery plans to respond to major failures of critical 
        information systems and communications networks; and
            (3) promulgate information security standards for Federal 
        information systems, except for national security and national 
        intelligence information systems, developed by the National 
        Institute of Standards and Technology under subsection (b).
    (b) Federal Computer Security.--In developing the standards for 
promulgation under subsection (a)(3), the Director of the National 
Institute of Standards and Technology shall--
            (1) emphasize the development of technology-neutral policy 
        guidelines and standards for computer security and electronic 
        authentication practices by Federal agencies;
            (2) develop qualitative and quantitative measures 
        appropriate for assessing the quality and effectiveness of 
        information security and privacy programs at Federal agencies;
            (3) promote the development of accreditation procedures for 
        Federal agencies based on the measures developed under 
        paragraph (2);
            (4) consult with, and provide assistance to, Federal 
        agencies regarding the selection by agencies of security 
        technologies and products and the implementation of security 
        practices;
            (5) develop uniform testing procedures suitable for 
        determining the conformance of commercially available security 
        products to the guidelines and standards developed under 
        paragraph (1);
            (6) establish procedures for the certification of private 
        sector laboratories to perform the tests of commercially 
        available security products developed in accordance with 
        paragraph (5);
            (7) promote the testing of commercially available security 
        products for their conformance with guidelines developed under 
        paragraph (1); and
            (8) develop technology-neutral guidelines and standards, or 
        adopt existing technology-neutral industry guidelines and 
        standards, for electronic authentication infrastructures to be 
        made available to Federal agencies so that such agencies may 
        effectively select and utilize electronic authentication 
        technologies in a manner that is adequately secure to meet the 
        needs of those agencies and their transaction partners and 
        interoperable to the maximum extent possible, and ensure that 
        those guidelines and standards include--
                    (A) protection profiles for cryptographic and 
                noncryptographic methods of authenticating identity for 
                electronic authentication products and services;
                    (B) a core set of interoperability specifications 
                for the use of electronic authentication products and 
                services in electronic transactions between Federal 
                agencies and their transaction partners; and
                    (C) validation criteria to enable Federal agencies 
                to select cryptographic electronic authentication 
                products and services appropriate to their needs.
    (c) Definitions.--As used in this section--
            (1) the term ``information system'' means any equipment or 
        interconnected system or subsystems of equipment that is used 
        in the automatic acquisition, storage, manipulation, 
        management, movement, control, display, switching, interchange, 
        transmission, or reception of data or information, and 
        includes--
                    (A) computers and computer networks;
                    (B) ancillary equipment;
                    (C) software, firmware, and related procedures;
                    (D) services, including support services; and
                    (E) related resources;
            (2) the term ``Federal information system'' means an 
        information system operated by a Federal agency or by a 
        contractor of a Federal agency or other organization that 
        processes information (using an information system) on behalf 
        of the Federal Government to accomplish a Federal function;
            (3) the term ``electronic authentication'' means 
        cryptographic or noncryptographic methods of authenticating 
        identity in an electronic communication; and
            (4) the term ``electronic authentication infrastructure'' 
        means the software, hardware, and personnel resources, and the 
        procedures, required to effectively utilize electronic 
        authentication technologies.

SEC. 206. NET GUARD.

    (a) In General.--The Under Secretary for Information Analysis and 
Infrastructure Protection, in coordination with the Under Secretary for 
Emergency Preparedness and Response, shall establish a national 
technology guard, known as NET Guard, comprising teams of volunteers 
with expertise in relevant areas of science and technology, to assist 
local communities to respond and recover from attacks on information 
systems and communications networks (if requested by a local community 
and approved by the Under Secretary for Information Analysis and 
Infrastructure Protection). In carrying out this responsibility, the 
Under Secretary for Information Analysis and Infrastructure Protection 
shall--
            (1) establish procedures for the deployment of NET Guard 
        teams;
            (2) establish criteria for the certification of such teams, 
        including--
                    (A) the types of expertise, capabilities, and 
                equipment required; and
                    (B) minimum training and practice requirements;
            (3) issue credentials and forms of identification, as 
        appropriate, identifying each such team and its members and may 
        suspend or terminate certification of, and recover credentials 
        and forms of identification from, any NET Guard team, or any 
        member thereof, when the Under Secretary deems it appropriate; 
        and
            (4) disseminate to local communities information about the 
        capabilities of NET Guard.
    (b) Deployment.--The Under Secretary for Information Analysis and 
Infrastructure Protection, in coordination with the Under Secretary for 
Emergency Preparedness and Response, may--
            (1) activate NET Guard teams in an emergency (as defined in 
        section 102(1) of the Robert T. Stafford Disaster Relief and 
        Emergency Assistance Act), or a major disaster;
            (2) authorize the payment to a member of a NET Guard team 
        for the period that member is engaged in performing duties as 
        such at the request of the United States by--
                    (A) compensating them as employees for temporary or 
                intermittent services as experts or consultants under 
                section 3109 or title 5, United States Code; and
                    (B) providing travel or transportation expenses, 
                including per diem in lieu of subsistence, as provided 
                by section 5703 of title 5, United States Code;
            (3) assign, on a voluntary basis, NET Guard teams to work, 
        on a temporary basis, on such other technology-related projects 
        that the Under Secretary for Information Analysis and 
        Infrastructure Protection deems appropriate; and
            (4) conduct such additional activities as the Under 
        Secretary for Information Analysis and Infrastructure 
        Protection deems necessary to fulfill the purpose of this 
        section.

    Page 16, line 15, through page 17, line 3, strike ``threats'' and 
all that follows through ``technology and systems'' and insert 
``threats, including establishing priorities''.

    Page 17, line 10, redesignate paragraph (4) as paragraph (2).

    Page 17, line 16, strike ``title VIII'' and insert ``title IX''.

    Page 18, lines 4 though 7, strike subparagraph (A).

    Page 18, lines 8 and 18, redesignate subparagraphs (B) and (C) as 
subparagraphs (A) and (B), respectively.

    Page 18, line 17, insert ``and'' after ``Secretary of Energy;''.

    Page 18, line 21, insert ``and'' after ``and cooperation 
program;''.

    Strike page 18, line 22, through page 19, line 9.

    Page 19, line 13, strike ``; and'' and insert a period.

    Page 19, strike lines 14 through 17.

    Page 19, line 18, through page 20, line 21, strike section 303, and 
renumber the subsequent section accordingly.

    Page 22, line 2, strike ``and''.

    Page 22, line 5, strike the period and insert ``; and''.

    Page 22, after line 5, insert the following new paragraph:

            (6) promulgating identification and security standards and 
        measures for use by the Department in carrying out paragraphs 
        (1), (2), and (5).

    Page 22, line 7, strike ``title VIII'' and insert ``title IX''.

    Page 23, line 2, insert ``(except its research and development 
activities)'' after ``of the Department of Transportation''.

    Page 24, after line 6, insert the following new subsection:

    (c) Report.--Not later than December 31, 2002, or 30 days after the 
date of the enactment of this Act, whichever is later, the Director of 
the Office of Science and Technology Policy shall submit to the 
Congress a report on how the provisions of this section will affect 
procedures for the issuance of student visas.

    Page 25, line 22, insert ``, including interventions to treat the 
psychological consequences of terrorist attacks or major disasters and 
provision for training for mental health workers to allow them to 
respond effectively to such attacks or disasters'' after ``major 
disasters''.

    Page 26, line 11, strike ``title VIII'' and insert ``title IX''.

    Page 26, line 17, insert ``, and the Integrated Hazard Information 
System of the National Oceanic and Atmospheric Administration'' after 
``relating thereto''.

    Page 30, after line 9, insert the following new section:

SEC. 506. UNITED STATES FIRE ADMINISTRATION.

    (a) Statutory Authority.--The United States Fire Administration 
shall continue to exist as a distinct entity within the Department, and 
shall continue to carry out the activities specified in the Federal 
Fire Prevention and Control Act of 1974.
    (b) Assistance to Firefighters Grants Program.--
            (1) In general.--The Under Secretary for Emergency 
        Preparedness and Response, through the United States Fire 
        Administration, shall administer the grant program under 
        section 33 of the Federal Fire Prevention and Control Act of 
        1974 (15 U.S.C. 2229).
            (2) Amendments.--Section 33 of the Federal Fire Prevention 
        and Control Act of 1974 (15 U.S.C. 2229) is amended--
                    (A) in subsection (b)(2)(B)(i), by inserting ``, 
                including a requirement for peer review of the 
                selection process'' after ``under this section'';
                    (B) in subsection (b)(3)(N), by inserting 
                ``including funding to enable training described in 
                subparagraph (B)'' after ``that utilize volunteers'';
                    (C) in subsection (b)(5)(B)(i), by inserting ``In 
                allocating funds under this section, the Administrator 
                shall not discriminate against an applicant whose 
                funding jurisdiction places a high budget priority on 
                fire department needs.'' after ``for which applied.''; 
                and
                    (D) in subsection (b)(11), by striking 
                ``professional'' and inserting ``career''.
    (c) Consultation.--The Under Secretary for Emergency Preparedness 
and Response shall consult with the Administrator of the United States 
Fire Administration on the implementation of programs that involve 
firefighters or emergency medical personnel, including the First 
Responder Grant Initiative.

    Page 31, after line 14, insert the following new title and renumber 
the subsequent titles and sections accordingly:

                   TITLE VII--SCIENCE AND TECHNOLOGY

SEC. 701. UNDER SECRETARY FOR SCIENCE AND TECHNOLOGY.

    In assisting the Secretary with the responsibilities specified in 
section 101(b)(2)(F), the primary responsibilities of the Under 
Secretary for Science and Technology shall include--
            (1) establishing and administering the primary research and 
        development activities of the Department;
            (2) conducting basic and applied research, development, 
        demonstration, testing, and evaluation activities that are 
        relevant to any or all units of the Department, through both 
        intramural and extramural programs;
            (3) serving as the chief scientist and chief technology 
        officer of the Department, providing advice to the Secretary on 
        all matters relating to science and technology;
            (4) coordinating all research, development, demonstration, 
        testing, and evaluation activities of the Department;
            (5) facilitating the deployment of technology that will 
        serve to enhance homeland security;
            (6) developing and overseeing the administration of 
        guidelines for merit review of research and development 
        projects throughout the Department;
            (7) developing guidelines for the dissemination of research 
        conducted or sponsored by the Department; and
            (8) coordinating with the Office of Science and Technology 
        Policy and the White House Office of Homeland Security and 
        other appropriate Federal agencies in developing and carrying 
        out the science and technology agenda of the Department.

SEC. 702. FUNCTIONS TRANSFERRED.

    (a) In general.--In accordance with title IX, there shall be 
transferred to the Secretary the functions, personnel, assets, and 
liabilities of the following entities--
            (1) the following programs and activities of the Department 
        of Energy, including the functions of the Secretary of Energy 
        relating thereto (but not including programs and activities 
        relating to the strategic nuclear defense posture of the United 
        States)--
                    (A) the chemical and biological national security 
                and supporting programs and activities of the 
                nonproliferation and verification research and 
                development program;
                    (B) such life sciences activities of the biological 
                and environmental research program related to microbial 
                pathogens as may be designated by the President for 
                transfer to the Department;
                    (C) the Environmental Measurements Laboratory; and
                    (D) the advanced scientific computing research 
                program and activities, and the intelligence program 
                and activities, at Lawrence Livermore National 
                Laboratory;
            (2) the Plum Island Animal Disease Center of the Department 
        of Agriculture, including the functions of the Secretary of 
        Agriculture relating thereto; and
            (3) the research and development activities of the 
        Transportation Security Administration.
    (b) Notification.--(1) At least 60 days before effecting any 
transfer pursuant to subsection (a)(1)(A), the President shall transmit 
to the Congress a report describing--
            (A) which national laboratories will be affected by the 
        transfer, and the estimated number of employees and amount of 
        expenditures that would be transferred at each affected 
        national laboratory;
            (B) any changes to the contracts between the Department of 
        Energy and the operators of national laboratories necessary for 
        the Department to carry out activities at the national 
        laboratories, and any other agreements necessary to carry out 
        such activities;
            (C) any changes to the physical plant of any national 
        laboratory and any transfer of workers to a different location 
        that will result from the transfer under subsection (a)(1)(A);
            (D) how the transfer under subsection (a)(1)(A) will affect 
        the duties of workers at affected national laboratories who 
        work on both homeland security issues and other matters; and
            (E) what impact the transfer under subsection (a)(1)(A) 
        will have on the ability of the national laboratories to carry 
        out their other duties.
    (2) At least 60 days before effecting any transfer pursuant to 
subsection (a)(1)(B), the President shall notify the Congress of the 
proposed transfer and shall include the reasons for the transfer and a 
description of the impact of the transfer on the activities of the 
Department of Energy.
    (3) At least 60 days before effecting any transfer pursuant to 
subsection (a)(1)(D), the President shall submit a report to the 
Congress describing--
            (A) any changes to the contract between the Department of 
        Energy and the operator of Lawrence Livermore National 
        Laboratory necessary for the Department to carry out activities 
        at Lawrence Livermore National Laboratory, and any other 
        agreements necessary to carry out such activities;
            (B) any changes to the physical plant or transfers of 
        workers to different sites at Lawrence Livermore National 
        Laboratory being made to enable the Department to carry out 
        activities at the Laboratory;
            (C) how the transfer under subsection (a)(1)(D) will affect 
        the duties of workers at Lawrence Livermore National Laboratory 
        who work on both homeland security issues and other matters; 
        and
            (D) any relationships the Department intends to develop 
        with other national laboratories of the Department of Energy.
    (4) At least 180 days before any change in the biosafety level at 
the facility described in subsection (a)(2), the President shall notify 
the Congress of the change and describe the reasons therefor. No such 
change may be made until at least 180 days after the completion of the 
transition period defined in section 901(2).

SEC. 703. CONDUCT OF CERTAIN PUBLIC HEALTH-RELATED ACTIVITIES.

    (a) Certain Activities Carried Out Through HHS.--(1) Except as the 
President may otherwise direct, the Secretary shall carry out his 
civilian human health-related biological, biomedical, and infectious 
disease defense research and development (including vaccine research 
and development) responsibilities through the Department of Health and 
Human Services (including the Public Health Service), under agreements 
with the Secretary of Health and Human Services, and may transfer funds 
to him in connection with such agreements.
    (2) With respect to any responsibilities carried out through the 
Department of Health and Human Services under this subsection, the 
Secretary, in consultation with the Secretary of Health and Human 
Services, shall have the authority to establish the research and 
development program, including the setting of priorities.
    (b) Transfer of Funds.--With respect to such other research and 
development responsibilities under this title, including health-related 
chemical, radiological, and nuclear defense research and development 
responsibilities, as he may elect to carry out through the Department 
of Health and Human Services (including the Public Health Service) 
(under agreements with the Secretary of Health and Human Services) or 
through other Federal agencies (under agreements with their respective 
heads), the Secretary may transfer funds to the Secretary of Health and 
Human Services, or to such heads, as the case may be.
    (c) Report.--Not later than 30 days after the end of each fiscal 
year, beginning with the first fiscal year in which the Department is 
in operation, the Under Secretary for Science and Technology shall 
submit to the Congress a report describing the responsibilities of the 
Department that have been carried out in accordance with this section 
and listing all transfers of funds carried out under subsection (b) 
along with the specific purpose of each transfer.

SEC. 704. HOMELAND SECURITY INSTITUTE.

    (a) Establishment.--The Secretary shall establish a federally 
funded research and development center to be known as the ``Homeland 
Security Institute'' (in this section referred to as the 
``Institute'').
    (b) Administration.--The Institute shall be administered as a 
separate entity by the Secretary.
    (c) Duties.--The duties of the Institute shall be determined by the 
Secretary, and may include the following:
            (1) Systems analysis, risk analysis, and simulation and 
        modeling to determine the vulnerabilities of the Nation's 
        critical infrastructures and the effectiveness of the systems 
        deployed to reduce those vulnerabilities.
            (2) Economic and policy analysis to assess the distributed 
        costs and benefits of alternative approaches to enhancing 
        security.
            (3) Evaluation of the effectiveness of measures deployed to 
        enhance the security of institutions, facilities, and 
        infrastructure that may be terrorist targets.
            (4) Identification of instances when common standards and 
        protocols could improve the interoperability and effective 
        utilization of tools developed for field operators and first 
        responders.
            (5) Assistance for Federal agencies and departments in 
        establishing testbeds to evaluate the effectiveness of 
        technologies under development and to assess the 
        appropriateness of such technologies for deployment.
            (6) Assistance for disaster decisionmaking to enhance skill 
        in making decisions by public safety and other crisis 
        management personnel, in order to keep Americans safe before, 
        during, and after terrorist incidents and natural disasters.
            (7) Design of metrics and use of those metrics to evaluate 
        the effectiveness of homeland security programs throughout the 
        Federal Government, including all national laboratories.
            (8) Design of and support for the conduct of homeland 
        security-related exercises and simulations.
            (9) Creation of strategic technology development plans to 
        reduce vulnerabilities in the Nation's critical infrastructure 
        and key resources.
    (d) Consultation on Institute Activities.--In carrying out the 
duties described in subsection (c), the Institute shall consult widely 
with representatives from private industry, institutions of higher 
education, and nonprofit institutions.
    (e) Annual Reports.--The Institute shall transmit to the Secretary 
and the Congress an annual report on the activities of the Institute 
under this section.

SEC. 705. INQUIRIES.

    (a) Office.--The Secretary, acting through the Under Secretary for 
Science and Technology, shall establish an office to serve as a point 
of entry for individuals or companies seeking guidance on how to pursue 
proposals to develop or deploy products that would contribute to 
homeland security. Such office shall refer those seeking guidance on 
Federal funding, regulation, acquisition, or other matters to the 
appropriate unit of the Department or to other appropriate Federal 
agencies.
    (b) Functions.--The Under Secretary for Science and Technology 
shall work in conjunction with the Technical Support Working Group 
(organized under the April, 1982, National Security Decision Directive 
Numbered 30) to--
            (1) screen proposals described in subsection (a), as 
        appropriate;
            (2) assess the feasibility, scientific and technical 
        merits, and estimated cost of proposals screened under 
        paragraph (1), as appropriate;
            (3) identify areas where existing technologies may be 
        easily adapted and deployed to meet the homeland security 
        agenda of the Federal Government; and
            (4) develop and oversee the implementation of homeland 
        security technology demonstration events, held at least 
        annually, for the purpose of improving contact among technology 
        developers, vendors, and acquisition personnel.

SEC. 706. MISCELLANEOUS PROVISIONS.

    (a) Authority To Reorganize.--
            (1) In general.--Notwithstanding any other provision of 
        this Act, the responsibilities of the Under Secretary for 
        Science and Technology under section 701 may not be reassigned 
        to any other Under Secretary, or to any person under the 
        authority of any other Under Secretary.
            (2) Notice to congress.--(A) As soon as practicable after 
        the date of enactment of this Act, but not later than December 
        31, 2002, the President shall submit to the Congress a plan 
        regarding how the science and technology functions of the 
        Department, including those functions transferred to the 
        Department from other departments and agencies, are to be 
        organized. Such plan shall not take effect until 90 days after 
        the President has submitted the plan to the Congress.
            (B) The President shall notify the Congress of any 
        subsequent changes to the plan, and no proposed changes shall 
        take effect until 90 days after the notification has been 
        submitted to the Congress.
    (b) Classification.--(1) To the greatest extent practicable, 
research conducted or supported by the Department shall be 
unclassified.
    (2) The Under Secretary for Science and Technology shall--
            (A) decide whether classification is appropriate prior to 
        the award of a research grant, contract, or cooperative 
        agreement by the Department and, if so, shall control the 
        research results through standard classification procedures; 
        and
            (B) periodically review all classified research grants, 
        contracts, or cooperative agreements issued by the Department 
        to determine whether classification is still necessary.
No restrictions shall be placed upon the conduct or reporting of 
federally-funded fundamental research that has not received national 
security classification, except as provided in applicable provisions of 
law.
    (c) Construction.--Nothing in this title shall be construed to 
preclude any Under Secretary of the Department from carrying out 
research, development, demonstration, or deployment activities, as long 
as such activities are coordinated through the Under Secretary for 
Science and Technology.
    (d) Regulations.--The Secretary, acting through the Under Secretary 
for Science and Technology, may issue necessary regulations with 
respect to research, development, demonstration, testing, and 
evaluation activities of the Department, including the conducting, 
funding, and reviewing of such activities.
    (e) Sense of Congress.--It is the sense of Congress that the 
Secretary should consult with the National Aeronautics and Space 
Administration in developing computer security systems and processes, 
capitalizing on their expertise developed through International Space 
Station and satellite technology research.

SEC. 707. COORDINATION COUNCIL.

    (a) Establishment and Composition.--There is established within the 
Department a Homeland Security Science and Technology Coordination 
Council (in this section referred to as the ``Coordination Council''). 
The Coordination Council shall be composed of all the Under Secretaries 
of the Department and any other Department officials designated by the 
Secretary, and shall be chaired by the Undersecretary for Science and 
Technology. The Coordination Council shall meet at the call of the 
chair.
    (b) Responsibilities.--The Coordination Council shall--
            (1) establish priorities for research, development, 
        demonstration, testing, and evaluation activities conducted or 
        supported by the Department;
            (2) ensure that the priorities established under paragraph 
        (1) reflect the acquisition needs of the Department; and
            (3) assist the Under Secretary for Science and Technology 
        in carrying out his responsibilities under section 701(4).

SEC. 708. HOMELAND SECURITY SCIENCE AND TECHNOLOGY ADVISORY COMMITTEE.

    (a) Establishment.--There is established within the Department a 
Homeland Security Science and Technology Advisory Committee (in this 
section referred to as the ``Advisory Committee''). The Advisory 
Committee shall make recommendations with respect to the activities of 
the Under Secretary for Science and Technology, including identifying 
research areas of potential importance to the security of the Nation.
    (b) Membership.--
            (1) Appointment.--The Advisory Committee shall consist of 
        20 members appointed by the Under Secretary for Science and 
        Technology, which shall include emergency first-responders or 
        representatives of organizations or associations of emergency 
        first-responders. The Advisory Committee shall also include 
        representatives of citizen groups, including economically 
        disadvantaged communities. The individuals appointed as members 
        of the Advisory Committee--
                    (A) shall be eminent in fields such as emergency 
                response, research, engineering, new product 
                development, business, and management consulting;
                    (B) shall be selected solely on the basis of 
                established records of distinguished service;
                    (C) shall not be employees of the Federal 
                Government; and
                    (D) shall be so selected as to provide 
                representation of a cross-section of the research, 
                development, demonstration, and deployment activities 
                supported by the Under Secretary for Science and 
                Technology.
            (2) National research council.--The Under Secretary for 
        Science and Technology may enter into an arrangement for the 
        National Research Council to select members of the Advisory 
        Committee, but only if the panel used by the National Research 
        Council reflects the representation described in paragraph (1).
    (c) Terms of Office.--
            (1) In general.--Except as otherwise provided in this 
        subsection, the term of office of each member of the Advisory 
        Committee shall be 3 years.
            (2) Original appointments.--The original members of the 
        Advisory Committee shall be appointed to three classes of three 
        members each. One class shall have a term of one year, one a 
        term of two years, and the other a term of three years.
            (3) Vacancies.--A member appointed to fill a vacancy 
        occurring before the expiration of the term for which the 
        member's predecessor was appointed shall be appointed for the 
        remainder of such term.
    (d) Eligibility.--A person who has completed two consecutive full 
terms of service on the Advisory Committee shall thereafter be 
ineligible for appointment during the one-year period following the 
expiration of the second such term.
    (e) Meetings.--The Advisory Committee shall meet at least quarterly 
at the call of the Chair or whenever one-third of the members so 
request in writing. Each member shall be given appropriate notice of 
the call of each meeting, whenever possible not less than 15 days 
before the meeting.
    (f) Quorum.--A majority of the members of the Advisory Committee 
not having a conflict of interest in the matter being considered by the 
Advisory Committee shall constitute a quorum.
    (g) Conflict of Interest Rules.--The Advisory Committee shall 
establish rules for determining when one of its members has a conflict 
of interest in a matter being considered by the Advisory Committee.
    (h) Reports.--
            (1) Annual report.--The Advisory Committee shall render an 
        annual report to the Under Secretary for Science and Technology 
        for transmittal to the Congress on or before January 31 of each 
        year. Such report shall describe the activities and 
        recommendations of the Advisory Committee during the previous 
        year.
            (2) Additional reports.--The Advisory Committee may render 
        to the Under Secretary for transmittal to the Congress such 
        additional reports on specific policy matters as it considers 
        appropriate.
    (i) FACA Exemption.--Section 14 of the Federal Advisory Committee 
Act shall not apply to the Advisory Committee.

SEC. 709. UNIVERSITY-BASED CENTERS FOR HOMELAND SECURITY.

    (a) Establishment.--The Secretary, acting through the Under 
Secretary for Science and Technology, shall establish up to 4 
university-based centers for homeland security to provide a 
coordinated, university-based approach to enhance the Nation's homeland 
security.
    (b) Selection.--In selecting colleges or universities as centers 
for homeland security, the Secretary shall consider the following 
criteria:
            (1) Demonstrated expertise in the training of first 
        responders.
            (2) Demonstrated expertise in responding to incidents 
        involving weapons of mass destruction.
            (3) Demonstrated expertise in health sciences.
            (4) Demonstrated expertise in emergency medical services.
            (5) Demonstrated expertise in the area of biological and 
        life sciences.
            (6) Strong affiliations with animal and plant diagnostic 
        laboratories.
            (7) Demonstrated expertise in food safety.
            (8) Affiliation with Department of Agriculture laboratories 
        or training centers.
            (9) Demonstrated expertise in water and wastewater 
        operations.
            (10) Nationally recognized programs dealing with 
        environment and public health in both urban and rural areas.
            (11) Demonstrated expertise in port and waterway security.
            (12) Demonstrated expertise in multi-modal transportation.
            (13) Nationally recognized programs in information 
        security.
            (14) Nationally recognized programs in engineering.
            (15) Demonstrated expertise in educational outreach and 
        technical assistance.
            (16) Demonstrated expertise in border transportation and 
        security.
            (17) Demonstrated expertise in interdisciplinary public 
        policy research and communication outreach regarding science, 
        technology and public policy.
    (c) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as may be necessary to carry out this section.

    Page 36, strike lines 12 through 25.

    Page 37, strike lines 1 through 10 and renumber the subsequent 
subsections accordingly.

    Page 52, after line 11, add the following new sections:

SEC. 1008. OFFICE OF SCIENCE AND TECHNOLOGY POLICY.

    The National Science and Technology Policy, Organization, and 
Priorities Act is amended--
            (1) in section 204(b)(1) (42 U.S.C. 6613(b)(1)), by 
        inserting ``homeland security,'' after ``national security,''; 
        and
            (2) in section 208(a)(1) (42 U.S.C. 6617(a)(1)), by 
        inserting ``the Office of Homeland Security,'' after ``National 
        Security Council,''.

SEC. 1009. NATIONAL OCEANOGRAPHIC PARTNERSHIP PROGRAM.

    Section 7902 (b) of title 10, United States Code, is amended by 
adding at the end the following new paragraphs:
            ``(13) The Under Secretary of Homeland Security for Science 
        and Technology.
            ``(14) Other Federal officials the Council considers 
        appropriate.''.

SEC. 1010. CONDUCT OF CERTAIN MEASUREMENT AND STANDARDS DEVELOPMENT 
                    ACTIVITIES.

    The National Institute of Standards and Technology Act (15 U.S.C. 
271 et seq.) is amended--
            (1) by redesignating section 32 as section 34; and
            (2) by inserting after section 31 the following new 
        section:
 ``conduct of certain measurement and standards development activities
    ``Sec. 32. (a) Activities by Institute.--Except as the President 
may otherwise direct, the Institute, in accordance with cooperative 
agreements entered into with the Secretary of Homeland Security, shall 
carry out--
            ``(1) a program of measurement and standards development 
        activities related to the detection of chemical, biological, 
        radiological, nuclear, and explosive threats; and
            ``(2) a program to develop standards and guidelines with 
        respect to border and transportation security technologies, 
        which shall include conformity assessment and related 
        activities.
The Secretary of Homeland Security shall transfer funds to the Director 
in connection with such programs.
    ``(b) Report.--Not later than 30 days after the end of each fiscal 
year, beginning with the first fiscal year in which the Department of 
Homeland Security is in operation, the Director shall transmit to the 
Congress a report describing the activities carried out under this 
section, and listing all transfers of funds carried out under 
subsection (a), along with the specific purpose of each transfer.''.

SEC. 1011. STANDARDS REVIEW.

    The National Institute of Standards and Technology Act (15 U.S.C. 
271 et seq.), as amended by section 1010 of this Act, is further 
amended by adding after section 32 the following new section:
                           ``standards review
    ``Sec. 33. The Director, in accordance with an agreement entered 
into with the Secretary of Homeland Security, and in consultation with 
standards development organizations as appropriate, shall prepare a 
list of United States homeland security-related voluntary consensus 
standards needs. Within one year after the date of the enactment of the 
Homeland Security Act of 2002--
            ``(1) the Director shall transmit to the Congress a 3-year 
        plan outlining research priorities to assist in the development 
        of the listed standards; and
            ``(2) the Secretary of Homeland Security shall transmit to 
        the Congress a Government-wide plan for expediting the 
        development, revision, and promulgation of these standards, 
        including specific steps that Federal agencies should take to 
        provide the resources to voluntary standards development 
        organizations needed to have the standards in place as soon as 
        is practicable.''.9/12/2002 10:00:12 AM - 
        F:\V7\091202\091202.024 Created by: VLCirks deg.

Section-by-Section Description of Science Committee Amendments to H.R. 
                                  5005

Amendments to Section 2. definitions.
    Provision: defines ``critical infrastructure'' as physical 
and cyber-based public and private systems essential to the 
minimum operations of the economy and government, including 
information and telecommunications, energy, banking and 
finance, transportation, and water systems and emergency 
services.
    Rationale: the term ``critical infrastructure'' is used 
throughout the bill but is not defined.
    Provision: defines ``key resources'' as publicly or 
privately controlled resources essential to the minimal 
operations of the economy and government, including reservoirs.
    Rationale: the term ``key resources'' is used in Title II 
but is not defined.
Amendment to Section 101. executive department; mission.
    Provision: adds ``research, development, demonstration, and 
testing and evaluation'' related to homeland security to the 
responsibilities of the Department of Homeland Security.
    Rationale: science and technology are widely recognized as 
among the principal tools with which the mission of the 
department will be realized. Accordingly, research and 
development should be included explicitly in the department's 
responsibilities.
    Provision: requires that all standards activities of the 
Department shall be conducted in accordance with the National 
Technology Transfer Advancement Act of 1995 and OMB Circular A-
119.
    Rationale: the Science Committee wants to assure that any 
standards-setting functions transferred to the Department of 
Homeland Security continue to conform to the voluntary, 
consensus-based standards development process that is the norm 
for most standards activities in the U.S.
Amendment to Section 103. other officers.
    Provision: adds an Under Secretary for Science and 
Technology to the roster of departmental officers.
    Rationale: science and technology for homeland security 
will require both high-level attention and management. The 
cross-cutting nature of homeland security technical challenges 
suggest that the department will need a central research and 
development organization (led by the Under Secretary for S&T).
Amendment to Section 202. functions transferred. (to the Secretary of 
        Homeland Security within Title II--Information Security and 
        Infrastructure Protection)
    Provision: transfers the Energy Security and Assurance 
Program and activities of the Department of Energy to Title II 
(Information Analysis and Infrastructure Protection), rather 
than to Title III (Chemical, Biological, Radiological, and 
Nuclear Countermeasures).
    Rationale: this program is related to infrastructure 
protection, particularly protection of power generation and 
distribution systems.

    Amendments to Title II--information analysis and infrastructure 
                               protection

    Provision: strikes the paragraph in H.R. 5005 that 
transfers the Computer Security Division of the Information 
Technology Laboratory at the National Institute of Standards 
and Technology (NIST) to the Department of Homeland Security.
    Rationale: The NIST Computer Security Division develops 
information security standards, and testing and evaluation 
tools for use in federal agencies and in the private sector. 
The effectiveness of the division is directly related to its 
tight integration with other NIST laboratories, including the 
other divisions of the Information Technology Laboratory, the 
Physics Laboratory, and the Electronics and Electrical 
Engineering Laboratory. The effectiveness of the Computer 
Security Division is further enhanced by its close relationship 
with NIST's industrial customers. For example, the Advanced 
Encryption Standard, recently certified by NIST and widely used 
in both government and industry, was developed largely through 
the coordinated efforts of private sector and academic computer 
security experts with the NIST Computer Security Division 
acting as an honest broker that also provided technical support 
and test and evaluation services. It is the view of the 
Committee that the expertise of the Computer Security Division 
could best be harnessed in the service of homeland security if 
the division remains within NIST.
    Provision: adds a new section (Section 205) on information 
security that gives the Under Secretary for Information 
Analysis and Infrastructure Protection responsibility for
    (1) providing analysis and warnings related to information 
and communications threats and vulnerabilities;
    (2) providing crisis management support in response to 
threats to, or attacks on information systems and 
communications networks;
    (3) promulgating information security standards for Federal 
information systems, except for national security and national 
intelligence information systems (the National Security Agency 
is responsible for information security standards for these 
systems). The information security standards will be developed 
by the National Institute of Standards and Technology (NIST).
    In elaborating NIST's responsibilities for developing 
technology-neutral information security standards, the new 
section includes most of the relevant provisions of the 
Computer Security Enhancement Act, H.R. 1259, passed by the 
House of Representatives on November 27, 2001.
    Rationale: the vulnerability of critical information and 
communication systems has been identified as one of the most 
serious security threats facing the United States, yet 
cybersecurity is not specifically addressed in H.R. 5005 as 
introduced. The amendment lays out explicit responsibility and 
authority for addressing information threats directed at non-
military systems.
    Provision: adds a new section (Section 206) establishing a 
volunteer corps of technical experts, known as NET Guard, to 
assist local communities to respond and recover from attacks on 
information systems and communications networks. The section 
requires the Under Secretary to establish procedures for 
deploying NET Guard teams and criteria for certifying teams, 
including expertise, training, and practice requirements. The 
Under Secretary for Information Analysis and Infrastructure 
Protection, in coordination with the Under Secretary for 
Emergency Preparedness and Response, is authorized to deploy 
NET Guard teams in the event of an emergency (as defined by the 
Stafford Disaster Relief and Emergency Assistance Act) or major 
disaster. The Under Secretary is also authorized to temporarily 
assign volunteer NET Guard teams to technology-related projects 
deemed appropriate by the Under Secretary.
    Rationale: most of the nation's expertise in information 
security and information infrastructure protection resides 
outside of the public sector. This section establishes a 
mechanism whereby technical experts in academia and the private 
sector can offer their services to a national ``volunteer fire 
department'' organized by the Department of Homeland Security 
and dedicated to responding to information and communications 
attacks (putting out cyber ``fires'').
Amendment to Section 301. under secretary for chemical, biological, 
        radiological, and nuclear countermeasures.
    Provision: strikes the paragraphs that give the Under 
Secretary responsibility for research, development, and 
procurement of science and technology for homeland security.
    Rationale: as mentioned above, the Science Committee would 
give these responsibilities to a new Under Secretary for 
Science and Technology. In the Committee's view, science and 
technology should be organized within a dedicated secretariat 
that serves the needs of the entire department. The research 
and development requirements cut across the four functional 
areas established by the bill-information and infrastructure, 
chem-bio-nuclear, border and transportation, and emergency 
preparedness and response. The Committee believes it would be 
unwise to house responsibility for research and development 
within just one of these functional areas. In addition, the 
research and development language in section 301 of H.R. 5005 
is too vague and general to give the Department clear 
responsibility for homeland security research and development.
Amendments to Section 302. functions transferred. (to the Secretary of 
        Homeland Security within Title III-Chemical, Biological, 
        Radiological, and Nuclear Countermeasures)
    Provision: strikes the paragraphs that transfer a number of 
research and development programs in the Department of Energy, 
including:
    (1) the chemical and biological national security and 
supporting programs and activities of the non-proliferation and 
verification research and development program,
    (2) life science activities of the biological and 
environmental research program related to microbial pathogens,
    (3) the Environmental Measurements Laboratory,
    (4) and the advanced scientific computing research program 
and activities, and the intelligence program and activities, at 
Lawrence Livermore National Laboratory.
    Rationale: these are research and development programs and 
facilities that properly should be housed within the under-
secretariat for science and technology created in a 
subsequently listed Science Committee amendment.
    Provision: strikes the paragraph that transfers the energy 
security and assurance program in the Department of Energy.
    Rationale: this is a critical infrastructure assurance 
program that properly belongs in the under-secretariat for 
information analysis and infrastructure protection (transferred 
there by a previously-listed Science Committee amendment).
    Provision: strikes the paragraph that transfers the Plum 
Island Animal Disease Center of the Department of Agriculture.
    Rationale: this is a scientific research facility that 
properly belongs in the under-secretariat for science and 
technology (transferred there by a subsequently-listed Science 
Committee amendment).
Amendment to Section 303. conduct of certain public health-related 
        activities.
    Provision: strikes the paragraphs directing the Secretary 
of Homeland Security to carry out civilian human health-related 
biological, biomedical, and infectious disease defense research 
and development through the Department of Health and Human 
Services.
    Rationale: these paragraphs relate to research and 
development. They are transferred in their entirety into the 
new Title VII establishing an under-secretariat for science and 
technology by a subsequently listed Science Committee 
amendment.
Amendment to Section 401. under secretary for border and transportation 
        security.
    Provision: adds ``promulgating identification and security 
standards and measures'' for border and transportation security 
to the responsibilities of the Under Secretary for Border and 
Transportation Security.
    Rationale: standards and measures will be required for the 
development and deployment of border and transportation 
security technologies such as biometric identification 
technology, explosives detection technology, etc. The Science 
Committee wants to assure that this is an explicit 
responsibility of the Under Secretary.
Amendment to Section 402. functions transferred. (to the Secretary of 
        Homeland Security within Title IV-Border and Transportation 
        Security).
    Provision: qualifies the transfer of the Transportation 
Security Administration by excluding transfer of its research 
and development activities. Those activities are transferred 
within Title VII the under-secretariat for science and 
technology by a subsequently listed Science Committee 
amendment.
    Rationale: the Science Committee's view is that research 
and development functions should be housed under the Under 
Secretary for Science and Technology.
Amendment to Section 403. visa issuance.
    Provision: adds a requirement that the Director of the 
Office of Science and Technology Policy submit a report to 
Congress on how the transfer of administrative and regulatory 
responsibility for visa issuance to the Secretary of Homeland 
Security will affect the issuance of student visas.
    Rationale: early draft plans for implementing new security 
rules for student visas caused some justified consternation in 
academic circles at the time those plans were made public. 
Subsequently, the Director of the Office of Science and 
Technology Policy created the Interagency Panel on Advanced 
Science Security (IPASS) to review the implementation plans and 
propose revisions. A new implementation plan for improving the 
security of the student visa process, developed by IPASS, has 
relieved most of the previously expressed concerns of the 
academic institutions that would be responsible for enforcing 
student visa regulations. The Science Committee wants to assure 
that a robust and workable security regime for student visas 
survives intact in the transfer of the visa function to 
Homeland Security.
Amendments to Title V--emergency preparedness and response
    Provision: adds ``interventions to treat the psychological 
consequences of terrorist attacks or major disasters'' to the 
responsibilities of the Under Secretary for Emergency 
Preparedness and Response in aiding in the recovery from 
terrorist attacks and major disasters.
    Rationale: the primary goal of terrorist attacks is to 
cause widespread psychological distress in order to demoralize 
the civilian population of the United States. With that in 
mind, the Science Committee deems it appropriate to address 
psychological consequences in any response to incidences of 
terrorism or other major disasters.
    Provision: transfers the Integrated Hazard Information 
System of the National Oceanic and Atmospheric Administration 
to the Department of Homeland Security.
    Rationale: the Science Committee views the system as an 
emergency preparedness asset that can contribute to the 
effectiveness of the other functions transferred to the 
Department within the under-secretariat for emergency 
preparedness and response.
    Provision: adds a new section (Section 506) on the U.S. 
Fire Research Administration specifying that the Fire 
Administration shall continue to exist as a distinct entity 
within the Department of Homeland Security (H.R. 5005 transfers 
the Fire Administration to the Dept. of Homeland Security) and 
shall continue to carry out the activities specified in the 
Federal Fire Prevention and Control Act of 1974. The amendment 
also requires the Under Secretary for Emergency Preparedness 
and Response to administer the Assistance to Firefighters 
Grants Program.
    Rationale: in the view of the Science Committee, the U.S. 
Fire Research Administration and the associated Assistance to 
Firefighters Grants Program are important national resources 
that aid in the prevention and control of fire. They should be 
preserved as distinct entities within their new home in the 
Homeland Security Department.
Amendment establishing a new Title VII--science and technology
    Provision: adds a title to the bill (Title VII, the 
existing Title VII and subsequent titles are renumbered) 
establishing an Under Secretary for Science and Technology and 
transferring within that title most of the research and 
development functions transferred to the Department of Homeland 
Security by H.R. 5005. The Under Secretary for Science and 
Technology would be responsible for conducting basic and 
applied research, development, demonstration, and testing and 
evaluation relevant to any or all units of the Department. The 
Under Secretary would also serve as the chief scientist and 
chief technology officer of the Department. Individual elements 
of this new title are discussed below.
    Rationale: just as it was in the Cold War, scientific and 
technological research and development will confer differential 
advantage to the United States in its war against terrorism. 
Carrying out a research and development agenda focused on 
countering terrorism will be one of the most important 
responsibilities of the new department. The scientific and 
technical challenges posed by the threat of terrorism cut 
across science and engineering disciplines and cut across the 
functional units established by H.R. 5005. The Science 
Committee believes, therefore, that scientific and 
technological research and development must be centrally 
organized at a high level within the department.
    Provision: transfers research and development functions 
within the under-secretariat for science and technology. 
Functions already transferred by H.R. 5005-and identified as 
research and development activities-are moved into the science 
and technology division.
    Rationale: in order to maximize the effectiveness of the 
department's homeland security science and technology 
development efforts, the Science Committee believes that 
research and development functions should be consolidated 
within the under-secretariat for science and technology.
    Provision: requires Congressional notification prior to 
effecting the transfer of Department of Energy's chemical and 
biological national security and supporting programs and 
activities of the nonproliferation and verification research 
and development program. The report to Congress must describe 
which national laboratories will be affected and how, how the 
contract between the Department of Energy and the relevant 
laboratory operator will be changed, and whether any change to 
the physical plant or transfer of personnel to a different 
location will be involved.
    Rationale: the Science Committee has received contradictory 
information regarding the precise identity of these programs, 
their location within the national laboratory system, their 
budgets, and the number of personnel involved. In the exercise 
of its normal oversight responsibilities, the Committee wants 
to assure that any transfer or reorganization of civilian 
research programs conducted at the Department of Energy's 
national laboratories are both orderly and well justified.
    Provision: requires Congressional notification prior to 
effecting the transfer of ``such life sciences activities of 
the biological and environmental research program [at the 
Department of Energy] related to microbial pathogens as may be 
designated by the President for transfer to the Department.''
    Rationale: both H.R. 5005 and the Science Committee's 
amendments thereto authorize, at the President's discretion, 
the transfer of research related to microbial pathogens from 
the Department of Energy to the Department of Homeland 
Security. The Science Committee believes that, prior to any 
transfer, the Administration notify Congress and provide 
reasons for the transfer and an assessment of its impact on the 
Department of Energy.
    Provision: requires Congressional notification prior to 
effecting the transfer of any programs, personnel, or 
facilities of the Lawrence Livermore National Laboratory to the 
Department of Homeland Security. The provision also requires 
Congressional notification prior to any changes to the contract 
between the Department of Energy and the operator of Lawrence 
Livermore National Laboratory.
    Rationale: several programs at Lawrence Livermore National 
Laboratory are transferred to the Department of Homeland 
Security by H.R. 5005, but the programs listed in the bill are 
not specified in such a way as they may be easily identified 
with actual programs at the laboratory. Moreover, the Science 
Committee has received contradictory testimony, as well as 
contradictory information in private briefings, regarding the 
nature of the programs slated for transfer and the plans for 
reorganizing the laboratory. In the exercise of its normal 
oversight responsibilities, the Committee wants to assure that 
any transfer or reorganization at Livermore both orderly and 
well justified.
    Provision: requires Congressional notification prior to 
changing the maximum biosafety level of the biological 
containment facilities of the Plum Island Animal Disease 
Center.
    Rationale: the Science Committee wishes to assure proper 
Congressional oversight of biological containment at the Plum 
Island Center.
    Provision: moves text directing the Secretary of Homeland 
Security to carry out civilian human health-related biological, 
biomedical, and infectious disease defense research and 
development through the Department of Health and Human 
Services. The text is moved in its entirety from Title III to 
Title VII.
    Rationale: these provisions relate to research and 
development and should appear within Title VII where all of the 
department's research and development functions are 
consolidated.
    Provision: requires the Under Secretary for Science and 
Technology to submit an annual report to Congress on how the 
Department's responsibilities with regard to human health-
related biomedical research have been carried out. The 
provision requires a listing all funds transferred from the 
Department to any other federal agency for the purposes of 
conducting human health-related biomedical research. The 
provision also requires an explanation of the specific purpose 
of each inter-agency transfer.
    Rationale: assures Congressional oversight of inter-agency 
(inter-departmental) transfers of funds.
    Provision: establishes a Homeland Security Institute, a 
federally funded research and development center to provide 
independent analysis to the Secretary of Homeland Security.
    Rationale: the top-level recommendation of the National 
Academy of Sciences with regard to homeland security was to 
establish a Homeland Security Institute, a federally funded 
research and development center that would provide independent 
technical advice and analysis.
    Provision: establishes an office that would act as a single 
point of entry for individuals or companies seeking guidance on 
how to pursue proposals to develop or deploy products that 
would contribute to homeland security.
    Rationale: both Congress and the Executive Branch have been 
overwhelmed with unsolicited proposals related to homeland 
security products and technologies. Currently, there is no 
central clearinghouse where proposals can be received and 
evaluated. In the view of the Science Committee, the creation 
and operation of such a clearinghouse is an appropriate role 
for the Department of Homeland Security.
    Provision: prevents the reassignment, under any future 
departmental reorganization, of the responsibilities of the 
Under Secretary for Science and Technology to any other Under 
Secretary or any person under the authority of any other Under 
Secretary.
    Rationale: given that scientific and technological research 
and development for homeland security will be among the most 
important activities of the new department, the Science 
Committee want to assure that this function remains undiluted 
in any future reorganization.
    Provision: requires the Administration to submit a plan to 
Congress on how the science and technology functions of the 
Department of Homeland Security are to be organized-and 
stipulates that the plan shall not take effect until 90 days 
after the plan has been submitted to Congress. The 
Administration is required to notify Congress of any subsequent 
changes to the plan and any proposed changes cannot take effect 
until 90 days after Congress has been notified.
    Rationale: assures Congressional oversight of the 
organization and possible reorganization of the department's 
scientific and technological research and development.
    Provision: requires that, to the greatest extent 
practicable, homeland security research should remain 
unclassified.
    Rationale: clearly some homeland security research must be 
classified, but experience suggests that classified research 
may not always be subject to the same level of scientific 
scrutiny that unclassified published research is subject to. It 
is the Science Committee's observation that unclassified 
research has a greater number of quality checks associated with 
it because a broader community of scientists and engineers has 
access to the results and, through the normal scientific 
process, has the opportunity to comment or offer criticism.
    Provision: makes it clear that other Under Secretaries in 
the Department my carry out research, development, 
demonstration, and deployment activities as long as those 
activities are coordinated through the Under Secretary for 
Science and Technology.
    Rationale: the Science Committee doesn't want to preclude 
the conduct of research and development within other under-
secretariats of the Department, as appropriate.
    Provision: grants the Secretary of Homeland Security 
authority to issue regulations, as necessary, with respect to 
the conduct of research, development, demonstration, and 
testing and evaluation carried out by the Department.
    Rationale: in order to carry out his responsibilities, the 
Secretary will need authority to issue regulations concerning 
the conduct, funding, and review of intramural and extramural 
research, development, demonstration, and testing and 
evaluation related to homeland security science and technology.
    Provision: declares that it is the sense of Congress that 
the Secretary of Homeland Security should consult with the 
National Aeronautics and Space Administration (NASA) in 
developing computer security systems and processes and 
utilizing NASA's expertise developed through space station and 
satellite technology research.
    Rationale: the new Department should draw upon the relevant 
expertise and experience of other technology-intensive federal 
agencies whenever it is feasible to do so.
    Provision: establishes a Homeland Security Science and 
Technology Coordinating Council, composed of the all of the 
Under Secretaries of the Department and chaired by the Under 
Secretary for Science and Technology, to establish priorities 
for research and development and to assure that those 
priorities reflect the acquisition needs of the Department.
    Rationale: provides a mechanism to coordinate research and 
development throughout the department.
    Provision: establishes a Homeland Security Science and 
Technology Advisory Committee to help identify research areas 
of potential importance to the nation's security.
    Rationale: the Science Committee believes that an advisory 
committee of outside experts can help assure a comprehensive, 
high-quality research agenda for the Department.
    Provision: requires the Secretary of Homeland Security to 
establish up to 4 university-based centers for extramural 
homeland security research.
    Rationale: to explicitly recognize the importance of 
university-based research in developing security-related 
science and technology.
    Provision: strikes the ``other transactions authority'' 
granted to the Secretary of Homeland Security in H.R. 5005.
    Rationale: other transactions authority enables the 
authorized party to bypass federal procurement regulations. The 
General Accounting Office has indicated that use of this 
authority has been problematic in the Department of Defense, 
the only federal agency that currently has such authority.
    Provision: amends the National Science and Technology 
Policy, Organization, and Priorities Act to add homeland 
security to the list of issues that the Director of the Office 
of Science and Technology Policy (OSTP) should advise the 
President on and adds the Office of Homeland Security to list 
of offices OSTP is required to coordinate with.
    Rationale: OSTP has responsibility for overall coordination 
of federal science and technology programs and homeland 
security will have a substantial science and technology 
component.
    Provision: amends Section 7902(b) of Title 10, USC, to add 
the Under Secretary of Homeland Security for Science and 
Technology to the National Ocean Research Leadership Council of 
the National Oceanic Partnership Program.
    Rationale: the Council coordinates ocean research, a 
significant portion of which is related to coastal and port 
security.
    Provision: amends the National Institute of Standards and 
Technology Act (NIST Act) to authorize NIST to develop 
measurements and standards related to the detection of 
chemical, biological, radiological, nuclear, and explosive 
threats, and to support border and transportation security.
    Rationale: credible technical standards and measurement 
tools will facilitate the rapid deployment of new detection, 
and border and transportation security technologies.
    Provision: amends the National Institute of Standards and 
Technology Act (NIST Act) to require the Director of NIST to 
assess the nation's needs with regard to voluntary consensus 
standards that could promote greater security. The amendment 
also requires the Director to deliver to Congress a 3-year 
research plan to develop those standards, and requires the 
Secretary of Homeland Security to deliver to Congress a plan to 
disseminate those standards throughout the government.
    Rationale: the development and promulgation of security-
related voluntary consensus standards can improve our domestic 
security posture.

                            Committee Views

               (In order of Appearance in the Amendment)

                               standards

    The Amendment requires that all standards activities of the 
Department of Homeland Security be conducted in accordance with 
the National Technology Transfer Advancement Act of 1995 and 
OMB Circular A-119. The Committee wants to assure that any 
standards-setting functions transferred to the Department 
continue to conform to the voluntary, consensus-based standards 
development process that is the norm for most standards 
activities in the U.S. By requiring conformity with the Act and 
with the OMB Circular, the Committee is assuring that the 
private sector will maintain its leading role in developing 
standards.
    By law and under OMB Circular A-119, the Federal government 
is required to use voluntary consensus standards in its 
regulations and in its procurement activities and is encouraged 
to lend expertise to, but not to dominate, the standards 
development process. Our private sector-led standards 
development process has given the U.S. the world's most robust 
standards.

         national institute of standards and technology (nist)

    The Amendment strikes section 202(4) transferring the 
Computer Security Division of NIST to the Department of 
Homeland Security. The NIST Computer Security Division develops 
information security standards, testing and evaluation tools 
for use in federal agencies and the private sector. The 
effectiveness of the Division is directly related to its tight 
integration with other NIST laboratories, including the other 
divisions of the Information Technology Laboratory, the Physics 
Laboratory, and the Electronics and Electrical Engineering 
Laboratory. The effectiveness of the Computer Security Division 
is further enhanced by its close relationship with NIST's 
industrial customers. For example, the Advanced Encryption 
Standard, recently certified by NIST and widely used in both 
government and industry, was developed largely through the 
coordinated efforts of private sector and academic computer 
security experts with the NIST Computer Security Division 
acting as an honest broker that also provided technical support 
and test and evaluation services. The Committee has received 
extensive comments from the information technology community 
expressing concern that the Computer Security Division's close 
working relationship with industry likely would not survive if 
the division were transferred out of NIST. In addition, a 
bipartisan group of 16 Members of Congress, led by 
Representatives Goodlatte and Boucher, wrote to the Committee 
to express their opposition to the transfer. It is the view of 
the Committee that the expertise of the Computer Security 
Division could best be harnessed in the service of homeland 
security if the division remains within NIST.

                 energy security and assurance program

    The Amendment transfers the Energy Security and Assurance 
(ESA) program of the Department of Energy (DOE) to the 
Department of Homeland Security under the management of the 
Undersecretary for Information Analysis and Infrastructure 
Protection (Title II), rather than to the Undersecretary for 
Chemical, Biological, Radiological, and Nuclear Countermeasures 
(Title III), as proposed by the Administration, or the new 
Undersecretary for Science and Technology (Title VII), 
established by the Amendment. Both ESA and the National 
Infrastructure Simulation and Analysis Center (NISAC) are 
components of the DOE's Energy Security program. H.R. 5005 
proposes to transfer NISAC into Title II but would transfer the 
ESA program into Title III. Keeping the ESA and NISAC programs 
together will maintain program coherence, since ESA provides 
analysis and support for NISAC. Furthermore, ESA's mission of 
providing threat and vulnerability assessment, response 
planning, emergency support, and multi-sector coordination for 
the nation's critical energy infrastructure is an operational 
role that fits more closely with the Information Analysis and 
Infrastructure Protection mission outlined in Title II.

                          information security

    The Science Committee views the vulnerability of critical 
information and communication systems as being one of the most 
serious security threats facing the United States, yet 
cybersecurity is not specifically addressed in H.R. 5005. The 
Amendment adds a new section 205 on information security that 
gives the Under Secretary for Information Analysis and 
Infrastructure Protection explicit responsibility and authority 
to address information threats directed at non-military 
information and communications systems in federal agencies. The 
Committee believes that the Under Secretary should establish an 
Office of Cyber Security to fulfill these responsibilities 
(although the Amendment does not set up such an office).
    Section 205 also requires NIST to develop information 
security standards that would be promulgated to civilian 
federal agencies by the Department. In elaborating NIST's 
responsibilities for developing technology-neutral information 
security standards, the new section includes most of the 
relevant provisions of H.R. 1259, the Computer Security 
Enhancement Act, that was approved by the House of 
Representatives on November 27, 2001.

                               net guard

    The Committee recognizes that most of the nation's 
expertise in information security and information 
infrastructure protection resides within the private sector. 
The Amendment establishes a mechanism whereby technical experts 
in academia and the private sector can volunteer their services 
to state and local governments to assist them in responding to 
natural disasters or terrorist attacks that disrupt information 
and communications systems. The Amendment emphasizes that this 
is a volunteer program and that participating experts may not 
be compelled to participate in any given response effort. In 
addition, the Department need not pay any of the volunteers for 
their services.

                           behavioral science

    The Under Secretary for Emergency Preparedness and Response 
will aid the recovery from terrorist attacks and major 
disasters. The Committee adopted an amendment that explicitly 
authorizes the Under Secretary to provide interventions to 
treat the psychological consequences of these events and 
provide for appropriate training for mental health workers who 
must deal with the aftermath of these events.

                        u.s. fire administration

    The Committee expects that the U.S. Fire Administration 
(USFA) will play an important role in the homeland security 
effort. However, many of USFA's most important activities are 
not directly related to homeland security. These activities 
include: 1) educating the public on fire and fire prevention 
issues; 2) supporting technological advancement through the 
development and testing of new tools that result in improved 
fire suppression technology and equipment; 3) compiling and 
maintaining a comprehensive database for publication, analysis, 
and dissemination of information related to fire prevention and 
control; and 4) conducting research on all aspects of fire with 
the aim of reducing the loss of life and property from fires.
    The Committee believes it is important that these 
activities, as well as the Assistance to Firefighters Grants 
Program currently administered by USFA, continue to be 
performed by USFA. The Amendment requires that USFA be 
preserved as a distinct entity in the Homeland Security 
Department, retaining its responsibilities as outlined in the 
Federal Fire Prevention and Control Act of 1974 as amended.

             national earthquake hazards reduction program

    The National Earthquake Hazards Reduction Program, an 
interagency research effort led by the Federal Emergency 
Management Agency (FEMA) and established under P.L. 95-124, 
plays an important role in the effort to better understand 
earthquakes and thus reduce the damage to life and property 
caused by them. The Committee expects that FEMA will continue 
to fulfill this responsibility after it is transferred to the 
Department of Homeland Security. The Committee will carefully 
review this situation next year when the program is 
reauthorized.

                organization of research and development

    The Committee believes strongly that securing the homeland 
will depend upon science and technology. As in past wars, 
maintaining a technological edge against the enemy will be 
critical. Recognizing the important role that will be played by 
science and technology in detecting and countering chemical, 
biological, nuclear, or radiological weapons, H.R. 5005 
included significant research and development activities within 
the Under Secretariat for Chemical, Biological, Radiological, 
and Nuclear Countermeasures.
    The Committee believes, however, that science and 
technology will have an important role to play in virtually 
every aspect of homeland security-not just in countering tools 
of mass destruction such as chemical or biological weapons. For 
example, borders will be made more secure when biometric 
technologies can be reliably used to identify bad actors from 
good. New technologies for detecting explosives and other 
weapons will make travel safer. 'Data mining' technologies that 
enable the rapid identification of important data from among 
the vast quantities collected will help law enforcement 
identify terrorist activities. Advances in cyber security will 
help protect the nation's critical infrastructures, as they are 
intrinsically intertwined with, and dependent on, networks such 
as the Internet. Technologies that enable first responders to 
communicate more effectively during a crisis will improve 
disaster response.
    To ensure that science and technology are effectively 
mobilized in all aspects of the war against terrorism, the 
Committee believes that the Department must have, at its core, 
a robust research and development enterprise headed up by an 
Under Secretary whose expertise and primary responsibilities 
will be science and technology. As such, the Committee believes 
that research and development should be centrally organized and 
placed at a high level within the Department. The Amendment 
places primary responsibility for research and development in a 
distinct unit, overseen by an Under Secretary for Science and 
Technology who is responsible for basic and applied research, 
development, demonstration, testing and evaluation relevant to 
any and all of the missions of the Department.
    The Amendment moves most of the research and development 
functions transferred from existing agencies to the new 
Department in the Under Secretariat for Science and Technology. 
At the same time, however, the Committee believes that certain 
functions, such as the Department of Energy's nuclear 
assessment program and the Department of Defense's National 
Bio-Weapons Defense Analysis Center, should be retained within 
Title III, given their clear links to the operations of that 
unit.
    The organizational changes recommended by the Committee 
will maximize the effectiveness of the Department's overall 
science and technology development efforts while still allowing 
each unit to conduct some research and development efforts on 
activities closely related to the unit's specific function.

                  department of energy (doe) programs

    The Amendment accepts the President's proposed transfers of 
DOE research programs to the Department even though the 
Administration has been unable to answer several fundamental 
questions about the impact and mechanics of these transfers.
    The Committee has accepted the proposed transfers because 
the Department will clearly need some laboratory facilities and 
related research programs from which to build the research and 
development programs it will need to carry out its mission. 
However, the Committee was unwilling to see those transfers 
proceed before basic questions about them can be answered.
    Therefore, the Amendment requires reports before the 
transfers can occur that must address such fundamental issues 
as how the transfer will affect the contractual relationships 
between the national labs and DOE; how scientists who work on 
both homeland security matters and other issues will be 
affected by the transfer; and how the transfer will affect the 
physical plant of the labs. In the report, DOE should describe 
the effect of the transfer not only on the laboratories from 
which programs are being transferred, but also on any other DOE 
labs whose mission and work may be affected because of the 
transfer.
    The Committee retained language in H.R. 5005 that leaves 
some of the transfers up to the President, but the Amendment 
requires the President to notify Congress of his decision. 
Also, because the programs described in H.R. 5005 do not 
correspond exactly to program names used in DOE budgets or 
other documents, the Amendment requires notification of all DOE 
transfers so Congress can know precisely what is being 
transferred. The Committee believes that the President should 
not transfer programs that primarily support destruction of 
foreign weapons of mass destruction or intelligence analysis of 
weapons of mass destruction because such programs are not 
directly related to homeland security.
    The Committee expects, however, that the Department will 
continue to interact with many national labs on a wide variety 
of research matters, regardless of whether their programs are 
transferred to the Department.

                      homeland security institute

    The Committee adopted an amendment that establishes a 
Homeland Security Institute, as recommended in the National 
Research Council's June 2002 report entitled Making the Nation 
Safer: The Role of Science and Technology in Countering 
Terrorism. The Secretary should create the Institute as a 
federally funded research and development center administered 
separately from the Department. The Institute would provide 
technical analysis and support for the Secretary including in 
areas such as bioterrorism agents.
    The Committee intends for the Institute to be a dedicated, 
contract, not-for-profit organization funded by the Department. 
This type of structure is necessary because the depth and 
breadth of technical expertise needed cannot be supplied by the 
new Department or other existing federal agencies. The primary 
advantage to this type of quasi-governmental organization is a 
structure and management that can quickly provide deep 
understanding of technical issues for decision-making by 
government officials. Another advantage is its ability to hire 
highly specialized talent required to perform its duties.

                           Fields of Research

    The Committee intends that the research activities 
supported by the Department not be limited to the physical and 
biological sciences and engineering, but also include the 
behavioral and social sciences. Relevant topics of inquiry 
would include research on psychological stresses on victims of, 
and responders to terrorist acts, human factors associated with 
the interface between technology and human behavior, the root 
causes of terrorism, and decision-making and management under 
extreme conditions.

                               inquiries

    The Amendment provides for establishment of an office to 
serve as a point of entry for those seeking guidance on how to 
pursue proposals to develop or deploy products that would 
contribute to homeland security. The Committee adopted an 
amendment that further refined this idea and directs the 
Department, in conjunction with the existing inter-agency group 
known as the Technical Support Working Group (TSWG), to screen 
promising unsolicited ideas or white papers; assess their 
feasibility, technical merits, and costs; pursue proposals that 
adapt and deploy existing technologies; and match promising 
technologies with appropriate acquisition personnel. The 
provision will help eliminate bottlenecks that thwart the 
development and deployment of new homeland security 
technologies.

                             classification

    The Committee believes that research conducted or supported 
by the Department should, ``to the maximum extent possible,'' 
be unclassified. This policy was implemented by President 
Ronald Reagan in National Security Decision Directive 189 in 
1985, and it has mediated the tension between the need for 
openness as a fundamental principle of scientific research and 
the need to keep secret certain information that can be 
employed to support attacks on the U.S.
    Consistent with this Directive, the Committee adopted an 
amendment that requires the Under Secretary, before issuing 
research and development grants, contracts or other agreements, 
to determine whether the research should be classified. The 
Under Secretary must also use existing statutes when deciding 
whether to reclassify an existing research program. Finally, 
the Under Secretary must review the Department's classified 
research programs at regular intervals to determine whether 
classification continues to be necessary. These additional 
provisions are intended give researchers some certainty as to 
whether their research will be classified before the grant is 
awarded.

                          student visas/ipass

    The U.S. depends on foreign graduate students in many 
science and technology fields. The Committee believes it is 
important that procedures for granting student visas balance 
the need to improve homeland security with the benefits that 
are gained when talented students from other countries study in 
the U.S.
    Earlier this year, draft plans for new security rules for 
student visas caused concern among academic institutions. 
However, an implementation plan for improving the security of 
the student visa process by establishing an Interagency Panel 
on Advanced Science Security (IPASS), relieved most of these 
concerns. Recognizing the role that the Director of the Office 
of Science and Technology Policy (OSTP) played in creating 
IPASS, the Amendment requires the OSTP Director to report to 
Congress regarding how the provisions of section 403 will 
affect procedures for the issuance of student visas.

          national aeronautics and space administration (nasa)

    The Committee adopted an amendment expressing the Sense of 
Congress that the Secretary should consult NASA on matters 
related to computer security systems and processes. The 
Committee recognizes that NASA has developed significant 
expertise in this area that could be of value in the fight 
against terrorism. In addition, NASA has recently partnered 
with computer companies and Carnegie Mellon University in an 
initiative to develop software that will meet the higher 
standards of reliability and security that the Nation will need 
in the future. The Committee believes that the new Department 
could benefit from the computer security expertise resident in 
NASA and encourages the Secretary to seek it out as 
appropriate.

      homeland security science and technology advisory committee

    The Committee adopted an amendment establishing an advisory 
committee to review and make recommendations with respect to 
general policy issues (including budget priorities) within the 
purview of the Undersecretary for Science and Technology. The 
20-member Advisory Committee will consist of experts in science 
and technology. One or more of those members must be a 
representative of the users of the Department's research 
activities such as emergency responders. In addition, one or 
more members must be representative of citizen groups, 
including groups from economically disadvantaged communities.
    The Committee feels that it is important to include the 
end-user community on the Advisory Committee. Inclusion of the 
emergency response and citizen group communities will help 
ensure that research agendas are firmly tied to the actual 
needs of those who will be on the front lines if the nation is 
subjected to a terrorist attack.
    The Committee believes that the Advisory Committee can play 
a significant role in strengthening the Department of Homeland 
Security's research agenda and focus. The Advisory Committee 
will provide an independent and unbiased review by which the 
Department and Congress can assess the efficacy and utility of 
its science and technology activities.

                                  ostp

    The Amendment changes the National Science and Technology 
Policy, Organization, and Priorities Act to add homeland 
security to the list of issues on which the Director of the 
Office of Science and Technology Policy (OSTP) should advise 
the President and adds the Office of Homeland Security to the 
list of offices with which OSTP is required to coordinate.
    OSTP has responsibility for overall coordination of Federal 
science and technology programs. When coordinating science and 
technology activities that may benefit homeland security, the 
Committee believes OSTP should consult with the Office of 
Homeland Security and the Under Secretary for Science and 
Technology in the Department of Homeland Security.

                  national oceanic partnership program

    National Ocean Research Leadership Council of the National 
Oceanic Partnership Program coordinates ocean research, a 
significant portion of which is relevant to coastal and port 
security. The Science Committee believes the Under Secretary 
for Science and Technology should be a statutory member of the 
Council.

                            nist organic act

    The Committee adopted an amendment that changes the NIST 
Organic Act to allow that agency to use its expertise to assist 
the Department. Section 1010 requires NIST, working through a 
cooperative agreement with the Secretary of Homeland Security 
to (1) carry out measurement and standards activities related 
to chemical, biological, radiological, nuclear, and explosive 
threats and (2) support the development of standards and 
guidelines with respect to border and transportation security 
technologies. This section requires an annual report to 
Congress of the activities carried out under this section.
    Section 1011 requires the new Department and NIST to engage 
in a systematic review and upgrading of voluntary consensus 
standards related to homeland security. In consultation with 
standards development organizations (SDO), NIST and the 
Department shall prepare a list of homeland security-related 
voluntary consensus standards. It further requires NIST to 
develop a research plan to aid in the development of the 
necessary standards while requiring the Secretary to develop a 
Government-wide plan to help SDOs accelerate the development, 
revision, and promulgation of these standards.

             COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

                          House of Representatives,
            Committee on Transportation and Infrastructure,
                                     Washington, DC, July 11, 2002.
Hon. Richard K. Armey
Chairman, House Select Committee on Homeland Security, The 
        Capitol, Washington, D.C. 20515
    Dear Mr. Chairman: On June 24, 2002, H.R. 5005, that 
proposes to establish a department of homeland security, was 
referred to the Committee on Transportation and Infrastructure. 
On July 11, 2002, the Committee met and, in open session, 
unanimously approved, by voice vote, amendments to the bill. 
Pursuant to H. Res. 449, the Committee herewith transmits its 
recommendations on H.R.5005 to the Select Committee on Homeland 
Security for consideration.
        Sincerely,
                                         Don Young,
                                                   Chairman

Legislative Recommendations Submitted to the House Select Committee on 
                         Homeland Security For

               H.R. 5005 - HOMELAND SECURITY ACT OF 2002

                             JULY 12, 2002

    The Transportation and Infrastructure Committee met on July 
11, 2002, to consider H.R. 5005. The Committee adopted two 
amendments to the bill. Chairman Don Young and Ranking Member 
Jim Oberstar offered an en bloc manager's amendment which was 
adopted by voice vote by the Committee and Congresswoman Eddie 
Bernice Johnson offered an amendment to the amendment, which 
was also adopted by voice vote. The amendments contained the 
following legislative recommendations.
Issuance of Regulations (Section 102(c) )\1\
---------------------------------------------------------------------------
    \1\ Refers to Section in H.R. 5005 as included in the Committee 
Print showing the Amendment Adopted by the Committee on Transportation 
and Infrastructure.
---------------------------------------------------------------------------
    The amendment clarifies that any regulation adopted by the 
Secretary must be subject to the Administrative Procedure Act 
(APA), except as specifically provided in H.R. 5005, if enacted 
or some other law granting regulatory authority transferred to 
the Department of Homeland Security.
    The Committee is concerned that H.R. 5005 is not clear as 
to the applicability of other existing laws to the rule making 
authority of the Secretary of Homeland Security. Unless 
Congress has specifically provided otherwise, the Committee 
believes that the public notice and comment requirements of the 
APA are essential components of governing.
Transfer of Transportation Security Programs (Section 404)
    The amendment recognizes that transportation security is 
undergoing a transition. A new agency, the Transportation 
Security Administration (TSA), was created only last November. 
It is still in the process of getting organized at the same 
time that it is being pressed to meet some very tight deadlines 
for overhauling the aviation security system.
    The underlying goal of this amendment is to ensure that the 
transfer to a new Department does not interfere with that 
overhaul.
Therefore, the amendment would--
    a. Require that the transportation security functions 
transferred by this Act be maintained within a distinct unit 
under the Under Secretary of Border and Transportation 
Security. An Assistant Secretary for Transportation Security 
would head this separate unit.
    b. Require that notwithstanding Title 8 of this Act, the 
transfer of the transportation security functions shall not 
occur until --
          i. the Secretary of Homeland Security, the Under 
        Secretary of Border and Transportation Security, and 
        the Assistant Secretary of Transportation Security have 
        taken office.
          ii. the Secretary of Transportation certifies that 
        explosive detection systems are deployed at all U.S. 
        airports where they are required and that these systems 
        are screening all checked baggage, as required under 
        the Aviation and Transportation Security Act. This Act 
        mandates that such systems must be deployed by the end 
        of 2002.
          iii. the Secretary certifies that a sufficient number 
        of federal screeners, security managers, security 
        personnel, and law enforcement officers have been 
        deployed by November 19, 2002 at all airports in the 
        United States where screening is required, except the 
        five airports participating in the pilot program.
    c. Establish a liaison office within the Department of 
Homeland Security to provide a mechanism for consulting with 
the FAA on any action that might affect aviation safety, air 
carrier operations, aircraft airworthiness or the use of 
airspace. There is a close nexus between aviation security and 
other aspects of the aviation system. The Committee wants to 
make sure that when aviation security is moved to a separate 
Department, it does not result in a degradation of aviation 
safety due to a lack of coordination between the aviation 
security regulator and the aviation safety regulator.
    d. Make clear that nothing in this Act gives the Secretary 
of Homeland Security any additional authority over 
transportation security beyond that previously exercised by the 
DOT Secretary under Chapter 449 of Title 49 or by the TSA Under 
Secretary.
    e. Prohibit the new Department from spending any Airport 
Improvement Program (AIP) funds. Only the FAA can make AIP 
grants.
With the Transportation Security Administration (TSA) impending 
transfer to the Department of Homeland Defense, the Committee 
is concerned that TSA may lose sight of its responsibility to 
ensure both effective security and an efficient transportation 
system. In light of this, it is important that in any final 
legislative product, Congress make clear that the 
Transportation Security Administration should use all 
reasonable measures to ensure efficiency and a viable 
transportation system in all modes as it fulfills its security 
responsibilities.
Clarification of transfer authority (Section 404(e))
    H.R. 5005 as introduced authorizes the transfer of the TSA 
from the DOT to the Department of Homeland Security.
    The Aviation and Transportation Security Act that was 
enacted in November 2001 (P.L. 107-71) created the TSA and gave 
it responsibility for civil aviation security as well as 
security for other modes of transportation. To date, the TSA 
has focused on aviation security, so it is not yet known what 
other security-related programs may eventually be transferred 
to the TSA from other areas of the DOT.
    The amendment would only authorize the transfer of those 
programs in the TSA that are included in the Administration's 
FY 2003 budget request for the Transportation Security 
Administration (TSA). However, the amendment also requires the 
Administration to notify Congress before transferring any other 
security-related programs from the Department of Transportation 
(DOT) to the Department of Homeland Security.
    The proposed amendment would provide Congress with an 
opportunity to review any proposal to transfer additional 
programs from the DOT to the Department of Homeland Security. 
Under the proposed amendment, such additional programs may not 
be transferred before the last day of a 30-day period of 
continuous session of Congress following the date of 
transmittal by the President to Congress of a notice of the 
President's intent to make such a transfer. This language 
should not be misinterpreted to authorize the transfer of 
existing functions, agencies, personnel, authorities, or 
programs in the Department of Transportation that are not 
specifically authorized for transfer.
    It is essential that Congress exercise its oversight role 
and approve any additional transfers of existing programs 
within the DOT and that such transfers are not encouraged.
Report to Congress on checked baggage deadline (Section 404(f))
    The amendment also directs the DOT to report to Congress 
within 60 days on how it plans to meet the deadline in current 
law that all checked baggage be screened by the end of the 
year. The report is desirable because concerns have been 
expressed about whether TSA will meet the deadlines and we must 
make every effort to oversee it's progress and prevent 
unnecessary delays.
Functions of the Administrator of GSA (Section 405)
    The amendment provides limited authority to the 
Administrator of GSA and gives him the flexibility to meet the 
security needs of federal agencies under special circumstances 
and permits the Administrator to respond to routine building 
maintenance situations (for example if someone is stuck in an 
elevator) without having to call in the DHS. In addition, the 
amendment allows GSA to retain the ability to collect fees for 
protection services under its current rent billing structure 
and to reimburse DHS for FPS protection, which eliminates the 
need for DHS to establish its own billing structure for 
building security.
Interagency Security Committee (Section 407)
    The amendment codifies Executive Order 12977 which 
established an Interagency Security Committee. The Committee 
establishes policies for building security, develops security 
standards, ensures compliance with the standards, and takes 
actions as necessary to enhance the quality and effectiveness 
of security and protection of federal facilities. The executive 
order establishes GSA as the Chair of the Committee. The 
amendment allows GSA to remain as Chair or Co-Chair of the 
Committee.
Federal Emergency Management Agency (FEMA) (Section 506)
    The amendment strikes those portions of the homeland 
security bill that transfer FEMA to the DHS, keeping FEMA as an 
independent agency. The amendment would also strike those 
portions of the bill that would transfer preparedness and 
response functions presently handled by FEMA, but unrelated to 
homeland security.
    The Federal Emergency Management Agency (FEMA), is an 
independent agency reporting to the President that has as its 
mission ``. . .to reduce the loss of life and property and 
protect the nation from all hazards by leading and supporting 
the nation in a comprehensive, risk-based emergency management 
program of mitigation, preparedness, response, and recovery.'' 
At its inception, FEMA was created to consolidate and 
coordinate the efforts of over 15 different agencies and 
departments that were responsible for responding to and 
preparing for disasters. Created by President Carter with an 
Executive Order in 1979, FEMA is tasked with carrying out the 
authorities contained in the Robert T. Stafford Disaster Relief 
and Emergency Assistance Act (42 U.S.C. Sec. 5121 et. seq., as 
amended), which is an amalgamation of previous disaster relief 
acts, including the National Flood Insurance Act of 1968, the 
Disaster Relief Acts of 1970 and 1974, the Flood Disaster 
Protection Act of 1973, and the Federal Fire Prevention and 
Control Act of 1974.
    Through his executive order, President Carter also merged 
many separate federal government disaster-related 
responsibilities and agencies into one agency. Among others, 
FEMA absorbed the Federal Insurance Administration, the 
National Fire Prevention and Control Administration, the 
National Weather Service Community Preparedness Program, the 
Federal Preparedness Agency of the General Services 
Administration and the Federal Disaster Assistance 
Administration activities from HUD. Civil defense 
responsibilities were also transferred to the new agency from 
the Defense Department's Defense Civil Preparedness Agency.
    While recognizing the important role that FEMA would play 
in responding to any terrorist attack regardless of where it is 
administratively situated, the Transportation and 
Infrastructure Committee believes that this role would best be 
served if FEMA retains its independent status, with an 
increased emphasis on coordination with the newly created 
Department of Homeland Security (DHS). Retaining this 
independence will allow FEMA to continue to effectively carry 
out its mission of reducing "the loss of life and property and 
protecting the nation from all hazards by leading and 
supporting the nation in a comprehensive, risk-based emergency 
management program of mitigation, preparedness, response and 
recovery", unencumbered by a new bureaucracy which will be 
focused on security activities. Only by allowing FEMA to retain 
its independent coordinating role can we ensure that the 
government will be able to effectively respond to and help the 
nation recover from all disasters.
    FEMA's role in responding to the attacks of September 11th 
has become the most high profile of its activities. However, 
preparing for and responding to terrorist acts is a small part 
of FEMA's preparedness and response activities. Since 1976, 
there have been only four federally declared disasters for 
terrorism\2\, yet during the same time frame, there have been 
927 federally declared disasters and 77 emergency declarations 
resulting from such natural hazards as fires, earthquakes, 
floods, hurricanes, and tornados. In none of the federally 
declared disasters resulting from terrorism was the ability of 
FEMA to respond ever diminished by its independent status. For 
example, in responding to the attacks on New York, FEMA 
effectively coordinated the efforts of Federal, State and local 
first responders, non-profit social service groups, and 
individual providers.
---------------------------------------------------------------------------
    \2\ Declaration 1391 for the attack in New York City on September 
11, 2001; declaration 1392 for the attack at the Pentagon on September 
11, 2001; Declaration 1048 for the attack at the Murrah Federal 
Building in Oklahoma City on April 26, 1995; and Declaration 984 for 
the attack at the World Trade Center in New York City on April 2, 1993.
---------------------------------------------------------------------------
    Through the existing Federal Response Plan and cooperative 
agreements with many state and local agencies, FEMA's 
independence has allowed it to effectively marshal all 
necessary assets from across the government to respond 
effectively and efficiently to each of these disasters. During 
the development of the Federal Response Plan, developed in 
1992, and signed by the heads of 27 agencies and organizations, 
FEMA was vital in coordinating and organizing the myriad roles 
and responsibilities of each signatory agency. Since its 
inception, it has been vital in the Federal response effort, 
yet it is a flexible document, and from time to time has been 
updated. Each time this has occurred, FEMA has led the way and 
effectively updated the plan to reflect changing conditions and 
laws. By retaining FEMA as the lead agency in the Federal 
Response Plan, we are ensuring a continuity of knowledge and 
using an existing framework to shape future efforts to ensure 
seamless provision of federal assistance.
    Under this amendment, FEMA retains its role as the lead 
agency under the Federal Response Plan in responding to 
disasters caused by natural hazards, such as fires, 
earthquakes, floods, hurricanes, and tornados and DHS would be 
the lead agency for disasters caused by terrorist attacks. The 
amendment directs DHS, in consultation with FEMA, to develop a 
coordinated preparedness and response program to terrorist 
attacks that will become a part of the Federal Response Plan. 
In order to effectuate this plan, FEMA and DHS will sign a 
memorandum of understanding to clarify the circumstances under 
which each agency would respond, similar to agreements that 
FEMA already has in place relating to other agencies for 
disasters. To ensure that there is no legislative overlap, 
references to "Major Disaster," as defined by the Stafford Act, 
were stricken. The Committee would like to work with the Select 
Committee to develop a definition of "terrorist attack" that 
does not overlap or conflict with the "Major Disaster" 
definition in the Stafford Act.
    Besides coordinating the response activities of as many as 
27 Federal Agencies and numerous non-governmental groups such 
as the American Red Cross, FEMA is also responsible for the 
delivery of a myriad of disaster assistance programs, including 
Disaster Unemployment Assistance, Temporary Housing Assistance, 
the Individual and Family Grant Program, Disaster Legal 
Assistance, Home Repair Assistance, and its Debris Removal 
Program. Following the provision of assistance in the aftermath 
of a disaster to individuals, FEMA is also responsible for the 
provision of prospective mitigation assistance to communities 
through its Hazard Mitigation Grant Program, which helps to 
make these communities more disaster resistant.
    In addition to these response and recovery roles, FEMA is 
also responsible for such diverse preparedness activities as 
the Emergency Food and Shelter program, maintenance of 
floodplain maps, provision and maintenance of the National 
Flood Insurance Program, and the U.S. Fire Administration, 
which teaches basic firefighting skills under a "train the 
trainer" model and also works to develop new methodologies and 
equipment. Under the Administration's proposal, each of these 
non-homeland security activities would become a part of the 
DHS. The Committee believes that it is essential to preserve 
these non-security related functions by keeping FEMA 
independent from the DHS.
    In addition to its preparedness, response, and recovery 
responsibilities, FEMA will retain all of its responsibilities 
covered by the Floodplain Management Program, National Flood 
Insurance Program, Dam Safety Program, Hazard Mitigation Grant 
Program, Emergency Management Institute, Urban Search and 
Rescue, and U.S. Fire Administration. Each of these programs is 
geared towards mitigating the effects of traditional disasters, 
yet they also serve a role in homeland security. The amendment 
makes clear that increased coordination will allow DHS to 
benefit from FEMA's vast experience, while at the same time, 
preserving these programs and their founding missions. The 
amendment also makes clear that H.R. 5005 will have no effect 
on FEMA's authority to independently administer, make policy 
relating to, or promulgate regulations for its many grant 
programs. In those grant programs where some overlap may occur 
(i.e., provision of assistance to fire fighters) FEMA will be 
required to coordinate its activities with the Secretary of 
Homeland Security to ensure that no efforts are duplicated.
    The Transportation and Infrastructure Committee believes 
that the best way to improve the delivery of federal disaster 
assistance is to allow FEMA to remain the independent 
coordinating agency that it has always been. It is the position 
of the Committee that the best way to accomplish both 
consolidation and coordination is to preserve FEMA's core 
mission and to keep FEMA as a distinct entity.
    Considering the important role that FEMA serves in the 
nation's ability to prepare for and effectively deal with 
disasters, it is vital that it not be given secondary status or 
absorbed within a large bureaucracy which has little or no 
experience addressing these issues. Prior to the creation of 
FEMA in 1979, the federal government had no centralized, 
coordinated or effective response to disasters. Breaking FEMA 
up and separating its employees throughout DHS, an agency whose 
primary role will be security, would have the effect of 
diluting its ability to effectively carry out its mandate of 
preparing the nation to mitigate the effects of a disaster, 
preparing first responders, ensuring the adequacy of the 
federal response, and assisting in the recovery from disasters. 
By keeping FEMA as an independent agency and as a "distinct 
entity", FEMA's core mission will be protected and the nation 
will be a safer place.
Homeland Security Department Headquarters (Section 732(c))
    The amendment strikes the authority of the Secretary to 
undertake real property arrangements not consistent with 
existing law and requires the Administrator of GSA to construct 
a new headquarters facility for the Department of Homeland 
Security consistent with the Public Buildings Act of 1959. The 
Committee is concerned about the broad reach of several real 
property provisions in H.R. 5005 that could be undertaken 
without Congressional oversight. Included in these provisions 
is authority to acquire real property by transfer or exchange, 
or by sale to or exchange with non-Federal parties. Further, 
the Committee is gravely concerned these real estate activities 
will necessitate the creation of a bureaucracy within the new 
Department solely for the purpose of conducting real estate 
transactions, thus draining much needed resources away from the 
legitimate activities of homeland security.
    Under the amendment, the Secretary will be responsible for 
homeland security, while the government's landlord, GSA, is 
responsible for acquiring the appropriate space for the agency 
to properly carry out its intended mission. The Public Building 
Service (PBS) of GSA operates and maintains 1,993 Federal 
buildings with more than 184 million square feet of office, 
storage and special space in the United States for use by 
civilian employees of the Federal government. PBS also acts as 
the leasing agent for the Federal government, and currently has 
in place over 7,400 leases in 6,300 buildings with over 150 
million square feet of space.
    The Committee on Transportation and Infrastructure 
recognizes the importance of establishing a new headquarters 
facility for the Department of Homeland Security by direct 
federal construction, lease-purchase, or other arrangements 
using the Federal Financing Bank. However, the Committee does 
not recommend providing the Secretary of the Department of 
Homeland Security authority beyond the Public Buildings Act of 
1959 to undertake real property functions. The Secretary should 
be responsible for homeland security, while the government's 
landlord, GSA, should be responsible for acquiring the 
appropriate space for the agency to properly carry out its 
intended mission.
    The amendment authorizes the Administrator to construct 
through direct appropriation, or through lease-purchase, or 
through a loan by the Federal Financing Bank appropriate 
headquarters space. The amendment further exempts any of these 
activities from current scoring rules so the cost of the 
headquarters will be amortized over a set period of time and 
scored on an annual basis. It also allows for appropriate 
Congressional oversight through the prospectus process 
established under section 7 of the Public Buildings Act of 
1959.
Congressional Oversight of Organizational Plan (Section 802(b))
    The amendment would require the Secretary, before any 
agency can be transferred, to submit an organizational plan to 
Congress for oversight review for a continuous 60-day period.
    The purpose of this amendment is to insure that Congress 
has an adequate opportunity to insure that the transfer of 
agencies and functions is being carried out consistent with the 
intent of the Act.
Prohibition on Use of Transportation Trust Funds (Section 803(f))
    The amendment would prohibit funds derived from the 
transportation trust funds from being transferred to or 
otherwise made available to the new Department of Homeland 
Security. The amendment would not apply to certain security 
related funds made available to the Federal Aviation 
Administration for fiscal years preceding 2003.
    H.R. 5005 as proposed by the Administration provides broad 
authority to transfer the assets "held by or available in 
connection with" each agency that is transferred to the new 
Department of Homeland Security. The term "assets" is broadly 
defined to include "unexpended balances of appropriations, and 
other funds or resources".
    The Committee is concerned that this broad authority could 
be used to transfer funds derived from the transportation trust 
funds to the new Department of Homeland Security. The 
Department of Homeland Security is being established in 
response to national security concerns; therefore, the costs of 
its activities are inherently national security costs. National 
security costs should be funded by the general fund, not the 
transportation trust funds. The balances in the transportation 
trust funds are barely sufficient to maintain our 
transportation systems, and cannot be relied upon to meet the 
extraordinary security costs of the post 9/11 era as well.
Revision of Transportation Security Oversight Board (Section 907)
    The amendment revises the Transportation Security Oversight 
Board by moving the Board into the Department of Homeland 
Security, making the Secretary of Homeland Security a Member of 
the Board and the Chairperson of the Board.
    The Transportation Security Oversight Board plays an 
important role in reviewing orders issued by the Undersecretary 
of the Transportation Security Administration (TSA). Congress 
gave the Undersecretary very strong and broad authority to 
issue security directives and regulations relative to all 
Transportation security matters without providing notice or 
opportunity for comment. The Board has authority to review and 
disapprove any regulations or security directives issued by the 
Undersecretary within 30 days of issuance. Therefore, the Board 
plays an important appellate role.
    It is important that the Board operate effectively and 
promptly to review the orders and regulations of the 
Undersecretary and that it vigorously exercise its review 
function, as well as the other statutory functions given to it 
by Congress. This amendment, while somewhat technical in 
nature, will insure the continued smooth functioning of the 
Board.
FAA Consultation Requirements (Section 907(b))
    The amendment revises Chapter 471 of Title 49 to require 
the Federal Aviation Administration to consult with the new 
Department before it makes an AIP grant for security equipment 
or terminal modification to accommodate that equipment. It is 
important that after the TSA is transferred out of DOT, the 
close working relationship that it currently has with the FAA 
and vice versa, continue.
Transfer of Federal Protective Service (Sec. 908)
    The amendment retains the transfer of the Federal 
Protective Service (FPS) and enhances the authority, 
responsibility, pay, and benefits of FPS officers by granting 
them Law Enforcement Officer (LEO) status. The amendment gives 
the Secretary special pay authority to compensate FPS officers 
equal to other federal law enforcement officers. The amendment 
clarifies that the Act does not impact the current functions 
and authority of the Administrator of GSA with regard to the 
protection of federal buildings or limit the Administrator's 
authority to collect fees for protective services. The 
amendment also sustains limited authority for the Administrator 
of GSA with regard to the protection of federal buildings and 
facilitates the continuation of GSA's billing structure and 
authority to collect fees for related building expenses. The 
amendment also establishes an Interagency Security Committee 
with GSA as the chair or co-chair, which was previously 
authorized by Executive Order 12977, signed October 19, 1995.
    While recognizing the important role the FPS plays in 
protecting federal buildings, the Transportation and 
Infrastructure Committee believes that this role is best served 
if FPS officers are given similar authorities as other police 
organizations that are being transferred to the Department of 
Homeland Security (DHS). Recently, the FPS has shifted its 
emphasis from a fixed guard post concept to a mobile police 
patrol and response concept. FPS officers perform all duties 
attendant to the normal interpretation of a police officer 
function, including maintaining law and order, preventing or 
deterring disturbances, and investigating both felonies and 
misdemeanors. The increased authorities and responsibilities 
provided under the amendment will allow current FPS officers to 
participate as an equal partner on task forces and commissions 
related to homeland security activities or be incorporated into 
any newly created police force.
    At present, FPS officers can only make arrests (including 
arrests during the commission of a crime), serve warrants, and 
detain suspects on federal property. This puts FPS officers in 
the awkward position of having to call 911 and stand idly by as 
crimes are committed off federal property, even though they may 
be in a position to apprehend a suspect or stop a crime. 
Additionally, there are inconsistent jurisdictional policies 
with regard to state and local law enforcement authorities 
entering Federal facilities to serve warrants and make arrests. 
Under provisions of the amendment, the Secretary will have the 
authority to clarify and resolve these inconsistent and 
sometimes conflicting policies by entering into cooperative 
agreements with state and local entities.
    The current FPS force is composed of both uniformed and 
non-uniformed officers, including criminal investigators and 
physical security specialists. All officers receive eight weeks 
of instruction at the Federal Law Enforcement Training Center 
in Glynco, Georgia, with additional periodic in-service and 
refresher training courses. Physical security specialists 
receive further training to conduct security surveys and 
provide recommendations pertaining to federal facilities.
    The FPS has been a part of the Public Buildings Service 
(PBS) since 1949. Originally known as the Public Buildings 
Administration, PBS is the real property arm of GSA. PBS 
operates and maintains 1,993 Federal buildings with more than 
184 million square feet of office, storage and special space in 
the United States for use by civilian employees of the Federal 
government. PBS also acts as the leasing agent for the Federal 
government, and currently has in place over 7,400 leases in 
6,300 buildings with over 150 million square feet of space. The 
amendment maintains that the Administrator will retain current 
authorities for the protection of federal buildings and the 
ability to collect fees for protection services and prohibits 
DHS from using the Federal Building Fund for anything other 
than building security.
    The amendment is similar to H.R. 4770 approved by the 
Committee on May 22, 2002. The amendment enhances the FPS, 
provides for the continued protection of federal buildings, and 
requires that payments to the Federal Building Fund by agencies 
for building security be limited to reimbursements for building 
protection services.
Preservation of the Coast Guard within the Department of Transportation 
        (Title X and Section 406)
    The amendment includes provisions that strike all 
references to the transfer of the U.S. Coast Guard and ensures 
that Coast Guard core missions are performed at adequate 
levels.
    The amendment establishes a new Under Secretary of 
Transportation for the Coast Guard. The provision creates a 
hierarchy within the Department of Transportation that is 
similar to the civilian leadership structure in the Department 
of Defense. Under this amendment, the Coast Guard will have the 
advice and support of a civilian leader, to the same extent as 
the military services within the Department of Defense. The 
Coast Guard Under Secretary will also be the same level as the 
five Under Secretaries in the new Department of Homeland 
Security, which will enable the head of the Coast Guard to work 
and coordinate effectively with the new Department. The Under 
Secretary will be responsible for coordinating with Homeland 
Security on security matters affecting the Coast Guard.
    Finally, the amendment requires the Coast Guard to continue 
to devote an adequate amount of resources to core Coast Guard 
missions of search and rescue, fisheries law enforcement, drug 
interdiction, migrant interdiction, marine environmental 
protection, and marine safety. This will ensure that the Coast 
Guard has the flexibility to address all homeland security and 
port security threats, and also perform other important 
maritime missions.
    The amendment specifies the levels of funding for each 
mission by a minimum percentage that must be obligated. This is 
intended to be a minimum level of commitment of resources to 
those missions and should be adjusted for inflation to allow 
those levels of resources to rise.
    After thorough consideration of the proposal to move the 
Coast Guard from the U.S. Department of Transportation to the 
new Department of Homeland Security, the Transportation and 
Infrastructure Committee has concluded that it would be in the 
best interest of the citizens of the United States for the 
Coast Guard to remain a part of the Department of 
Transportation. The Committee is very concerned that moving the 
Coast Guard to the new Department of Homeland Security will 
force the Coast Guard to place less emphasis on its vital 
traditional missions.
    The U.S. Coast Guard currently has primary responsibility 
for the promotion of safety of life and property at sea, the 
enforcement of all applicable Federal laws on, under, and over 
the high seas and United States waters. The agency also is 
charged with protecting the marine environment, conducting 
icebreaking activities, maintaining aids to navigation, and 
securing the safety of vessels, ports, waterways, and related 
facilities.
    As a military service and a branch of the Armed Forces, the 
Coast Guard also maintains a readiness to operate as a 
specialized service in the Navy upon the declaration of war or 
when the President directs. The Coast Guard has defended our 
Nation in every war since 1790, including the 1990-1991 
conflict in the Persian Gulf.
    The Coast Guard's highest priority mission is search and 
rescue. The Coast Guard's search and rescue activities save the 
lives of approximately ten Americans each day and is unrelated 
to the primary mission of the new Department of Homeland 
Security. The Coast Guard provides around the clock readiness 
to conduct search and rescue missions in all areas of the 
maritime environment. Annually, the Coast Guard responds to 
approximately 40,000 calls for assistance. This year the Coast 
Guard saved 84 percent of all mariners in distress.
    The Coast Guard is in process of upgrading and improving 
its search planning tools to conduct more efficient and 
effective maritime searches. In addition, the Coast Guard is 
developing the new National Distress Response System 
Modernization Project. This vital multi-million dollar project 
will modernize the Coast Guard's outdated distress 
communications system allowing the Coast Guard to better 
respond to mariners in distress and thereby preventing the 
tragic loss of hundreds of American lives.
    As the only military service with law enforcement 
authority, the Coast Guard apprehends smugglers attempting to 
import illegal drugs into the United States through the six 
million square mile transit zone. Drug trafficking must be 
obstructed to halt the destructive influence of drug 
consumption on Americans. The Coast Guard seized a record 
138,000 pounds of cocaine in 2001. An untold number of American 
children were kept from the ravages of drug addiction due to 
the efforts of the Coast Guard. While the Coast Guard seized a 
record amount of cocaine, it will not meet its 2001 performance 
target due to the great increase in the northward flow of 
cocaine toward the United States and the Coast Guard's greatly 
increased post September 11th homeland security efforts.
    Another important mission of the Coast Guard involves the 
protection of American fisheries resources. Commercial and 
recreational fisheries contribute about $50 billion annually to 
the U.S. economy. Responsible management of ocean resources is 
critical as the world's population continues to grow, demanding 
increasing food sources. The Coast Guard works to prevent 
foreign fishing vessels from entering the U.S. Exclusive 
Economic Zone. The agency also partners closely with other 
Federal and state agencies to improve the health of fish 
stocks.
    The Coast Guard's prevention, enforcement and response 
operations in marine environmental protection help to protect 
our natural resources and reduce the amount of pollution 
entering U.S. and international waterways. Due to the Coast 
Guard's continued enforcement of the Oil Pollution Act of 1990, 
few major oil spills occurred during 2001.
    The Coast Guard focuses marine environmental protection 
activities on oil spill prevention programs. When oil accidents 
do happen, the Coast Guard responds with its partners in other 
Federal agencies, state governments, and the maritime industry 
to ensure that the impacts of a spill are minimized. These and 
other prevention efforts have been effective in reducing oil 
spills in all parts of the country.
    The Coast Guard also works to prevent undocumented migrants 
from illegally entering the United States. The Coast Guard 
patrols throughout the Caribbean and Florida Straits and 
responds to intelligence about suspicious voyages along the 
East and West Coasts and throughout U.S. territories in the 
Pacific in its efforts to curtail illegal immigration.
    Each year millions of passengers are carried aboard cruise 
ships, ferries, charter boats, sightseeing boats, gaming 
vessels and other commercial passenger vessels in the U.S. 
However, only seven fatalities occurred in fiscal year 2001. 
This low death rate is a marked decrease in the actual number 
of passenger deaths as well as a decline in the death rate. The 
Coast Guard aims to ensure the safety of passengers on board 
vessels by preventing accidents, responding promptly to 
accidents when they occur, and investigating accidents to 
prevent them from happening again in the future. The Coast 
Guard is also responsible for recreational boating safety. The 
Coast Guard estimates that 742 recreational boating fatalities 
occurred during 2001. The ratio of fatalities to the registered 
number of boaters is decreasing despite an increasing number of 
registered boaters. The Coast Guard coordinates national 
outreach campaigns targeting life jacket wear, boating safety 
education, vessel safety checks, carbon monoxide poisoning, and 
the danger of boating while under the influence of drugs and 
alcohol.
    The Coast Guard's legal responsibilities have expanded over 
the past twenty years. Many of the laws the Coast Guard 
administers are codified in subtitle II of title 46, United 
States Code. The Coast Guard enforces the following laws:
     The Western Hemisphere Drug Elimination Act, which 
provides a three-year increase of Coast Guard drug interdiction 
resources to respond to the illegal drug threat facing our 
country.
     The Anti-Drug Abuse Acts of 1986 and 1988, which 
expand the Coast Guard's role in waterborne and airborne marine 
drug interdiction.
     The Maritime Drug Law Enforcement Act, which 
authorizes the Coast Guard to search and seize any vessel that 
is manufacturing, distributing, or possessing with the intent 
to manufacture or distribute a controlled substance in the 
United States.
     The Deepwater Port Act of 1974, which directs the 
Coast Guard to oversee offshore oil port operation and 
construction.
     The Port and Waterways Safety Act of 1974, which 
directs the Coast Guard to ensure port and merchant vessel 
safety.
     The Port and Tanker Safety Act of 1978, which 
authorizes the Coast Guard to inspect foreign tankers, evaluate 
crew standards, and monitor offshore lightering activities in 
U.S. waters.
     The Omnibus Diplomatic Security and Antiterrorism 
Act of 1986, which requires the Coast Guard to maintain and 
improve port, harbor, and coastal facilities security.
     The Federal Boating Safety Act of 1971, which 
authorized the Coast Guard to prescribe standards for the 
manufacture of pleasure boats and associated equipment.
     The Recreational Boating Safety Improvement Act of 
1998 which promotes recreational boating safety and access 
through a state grant program.
     The Federal Water Pollution Control Act of 1972 
(popularly known as the Clean Water Act), which requires the 
Coast Guard to regulate discharges of oil and sewage from 
vessels.
     The Oil Pollution Act of 1990 (OPA 90), which 
expands the Coast Guard's authority over oil spills, and 
establishes a comprehensive regime for oil spill compensation, 
liability, response, and research and development.
     The Marine Protection, Research and Sanctuaries 
Act of 1972, which gives the Coast Guard enforcement authority 
over ocean dumping and marine sanctuaries.
     The Act to Prevent Pollution from Ships, which 
requires the Coast Guard to administer and enforce 
international environmental pollution agreements through vessel 
and port certification and inspections.
     The Marine Plastic Pollution Research and Control 
Act of 1987, which requires the Coast Guard to enforce 
prohibitions on the disposal of plastic materials and other 
garbage at sea.
     The Hazardous Materials Transportation Act, which 
requires the Coast Guard to enforce safety standards for the 
waterborne transportation of hazardous materials.
     The Intervention on the High Seas Act, which 
authorizes the Coast Guard to intervene in situations involving 
pollution discharges on the high seas that pose a threat to the 
United States and its territorial waters.
     The Fishery Conservation and Management Act of 
1976, which assigns joint responsibility to the Coast Guard and 
the National Marine Fisheries Services to enforce U.S. 
fisheries laws within the 200-mile Exclusive Economic Zone of 
the United States.
     The Outer Continental Shelf Lands Act Amendments 
of 1978, which authorizes the Coast Guard to enforce 
environmental and safety regulations governing oil and gas 
development activities on the outer Continental Shelf.
     The National Invasive Species Act of 1996, which 
amended the Nonindigenous Aquatic Nuisance Prevention and 
Control Act of 1990 to strengthen and improve the nation's 
response to threats posed by aquatic nuisance species.
                                ------                                


                         Amendment to H.R. 5005

                     Offered by Mr. Young of Alaska

    Page 6, line 21, insert ``and'' after the semicolon.

    Page 6, line 23, strike ``; and'' and insert a period.

    Page 7, strike lines 1 through 3.

    Page 7, line 10, insert ``and'' after the semicolon.

    Page 7, line 11, strike the semicolon and insert a period.

    Page 7, strike lines 12 through 17.

    Page 8, after line 16, insert the following:

    (c) Issuance of Regulations.--The issuance of regulations by the 
Secretary shall be governed by the provisions of chapter 5 of title 5, 
United States Code, except as specifically provided in this Act, in 
laws granting regulatory authorities that are transferred by this Act, 
and in laws enacted after the date of enactment of this Act.

    Page 9, strike lines 17 through 21.

    Page 22, strike lines 20 through 24 (and redesignate subsequent 
paragraphs accordingly).

    Page 23, line 1, insert ``subject to section 404,'' after ``(4)''.

    Page 23, line 3, strike ``of the Secretary of Transportation, and''

    Page 23, line 4, strike the comma at the end.

    Page 23, line 6, insert ``subject to section 405,'' after ``(5)''.

    Page 24, after line 6, insert the following (and conform the table 
of contents of the bill accordingly):

SEC. 404. FUNCTIONS OF TRANSPORTATION SECURITY ADMINISTRATION.

    (a) In General.--The functions of the Transportation Security 
Administration of the Department of Transportation transferred under 
section 402(5) shall be carried out by an Assistant Secretary of the 
Department appointed by the President under section 103(a)(7). The 
Assistant Secretary shall be known as the Assistant Secretary for 
Transportation Security (in this section referred to as the ``Assistant 
Secretary'').
    (b) Reporting.--The Assistant Secretary shall report to the Under 
Secretary for Border and Transportation Security.
    (c) Consultation With Federal Aviation Administration.--The 
Secretary and other officials in the Department shall consult with the 
Administrator of the Federal Aviation Administration before taking any 
action that might affect aviation safety, air carrier operations, 
aircraft airworthiness, or the use of airspace. The Secretary shall 
establish a liaison office within the Department for the purpose of 
consulting with the Administrator of the Federal Aviation 
Administration.
    (d) Date of Transfer of Functions.--Notwithstanding section 802 or 
any other provision of this Act, the transfer relating to the 
Transportation Security Administration under section 402(5) shall not 
occur until after--
            (1) the Secretary, Assistant Secretary, and the Under 
        Secretary for Border and Transportation Security have each 
        taken office;
            (2) the Secretary of Transportation certifies that 
        explosive detection systems are deployed at all United States 
        airports described in section 44903(c) of title 49, United 
        States Code, and that these systems are screening all checked 
        baggage; and
            (3) the Secretary of Transportation certifies that a 
        sufficient number of Federal screeners, Federal Security 
        Managers, Federal security personnel, and Federal law 
        enforcement officers have been deployed at all airports in the 
        United States at which screening is required under section 
        44901 of title 49, United States Code, other than airports 
        participating in the pilot program under section 44919 of such 
        title.
    (e) TSA and Other Security-Related Programs.--
            (1) TSA programs.--For purposes of the transfer under 
        section 402(5), the Transportation Security Administration 
        shall be considered to consist of those programs for which 
        funds are specifically requested for the Transportation 
        Security Administration in the President's budget submission to 
        Congress for fiscal year 2003.
            (2) Other security-related programs.--Other security-
        related programs within the Department of Transportation may 
        not be transferred to the Department of Homeland Security 
        before the last day of a 30-day period of continuous session of 
        Congress following the date of transmittal by the President to 
        Congress of a notice of the President's intent to make such a 
        transfer. For purposes of the preceding sentence, continuity of 
        a session of Congress is broken only by an adjournment sine 
        die, and there shall be excluded from the computation of such 
        30-day period any day during which either House of Congress is 
        not in session during an adjournment of more than 3 days to a 
        day certain.
    (f) Report to Congress.--Not later than 60 days after the date of 
enactment of this Act, the Secretary of Transportation shall transmit 
to Congress a report containing a plan for complying with the 
requirements of section 44901(d) of title 49, United States Code.
    (g) Limitations on Statutory Construction.--
            (1) Grant of authority.--Nothing in this Act may be 
        construed to vest in the Secretary or any other official in the 
        Department any authority over transportation security that is 
        not vested in the Under Secretary of Transportation for 
        Security, or in the Secretary of Transportation under chapter 
        449 of title 49, United States Code, on the day before the date 
        of enactment of this Act.
            (2) Obligation of aip funds.--Nothing in this Act may be 
        construed to authorize the Secretary or any other official in 
        the Department to obligate amounts made available under section 
        48103 of title 49, United States Code.
    (h) References.--References relating to the Under Secretary of 
Transportation for Security and the Transportation Security 
Administration of the Department of Transportation in statutes, 
Executive orders, rules, regulations, directives, or delegations of 
authority that precede the effective date of the transfer under section 
402(5) shall be deemed to refer, as appropriate, to the Assistant 
Secretary and the Department, respectively.

SEC. 405. FUNCTIONS OF ADMINISTRATOR OF GENERAL SERVICES.

    (a) Operation, Maintenance, and Protection of Federal Buildings and 
Grounds.--Nothing in this Act may be construed to affect the functions 
or authorities of the Administrator of General Services with respect to 
the operation, maintenance, and protection of buildings and grounds 
owned or occupied by the Federal Government and under the jurisdiction, 
custody, or control of the Administrator. Except for the law 
enforcement and related security functions transferred under section 
402(6), the Administrator shall retain all powers, functions, and 
authorities vested in the Administrator under the Federal Property and 
Administrative Services Act of 1949 (40 U.S.C. 471 et seq.) and other 
provisions of law that are necessary for the operation, maintenance, 
and protection of such buildings and grounds.
    (b) Collection of Rents and Fees; Federal Buildings Fund.--
            (1) Statutory construction.--Nothing in this Act may be 
        construed--
                    (A) to direct the transfer of, or affect, the 
                authority of the Administrator of General Services to 
                collect, rents and fees, including fees collected for 
                protective services; or
                    (B) to authorize the Secretary or any other 
                official in the Department to obligate amounts in the 
                Federal Buildings Fund established by section 210(f) of 
                the Federal Property and Administrative Services Act of 
                1949 (40 U.S.C. 490(f)).
            (2) Use of transferred amounts.--Any amounts transferred by 
        the Administrator of General Services to the Secretary out of 
        rents and fees collected by the Administrator shall be used by 
        the Secretary solely for the protection of buildings or grounds 
        owned or occupied by the Federal Government.

SEC. 406. RETENTION OF COAST GUARD FUNCTIONS.

    (a) Limitation on Functions of Under Secretary.--Notwithstanding 
any other provision of this title, the functions of the Under Secretary 
for Border and Transportation Security do not include any function that 
immediately before this Act takes effect is a function of the Coast 
Guard.
    (b) Preservation of Coast Guard Functions.--The functions of the 
Coast Guard (and of the Secretary of the Department in which the Coast 
Guard is operating with respect to such functions) are not affected by 
this title.

SEC. 407. INTERAGENCY SECURITY COMMITTEE.

    (a) Purpose.--It is the purposes of this section to enhance the 
quality and effectiveness of security in and protection of buildings 
and facilities in the United States occupied by Federal employees for 
nonmilitary activities (in this section referred to as ``Federal 
facilities'') and to provide a permanent body to address continuing 
Government-wide security for Federal facilities.
    (b) Establishment.--There is established within the executive 
branch the Interagency Security Committee (in this section referred to 
as the ``Committee''). The Committee shall consist of the following 
members:
            (1) The Administrator of General Services.
            (2) Representatives from the following agencies, appointed 
        by the agency heads:
                    (A) Department of State.
                    (B) Department of the Treasury.
                    (C) Department of Defense.
                    (D) Department of Justice.
                    (E) Department of Homeland Security.
                    (F) Department of the Interior.
                    (G) Department of Agriculture.
                    (H) Department of Commerce.
                    (I) Department of Labor.
                    (J) Department of Health and Human Services.
                    (K) Department of Housing and Urban Development.
                    (L) Department of Transportation.
                    (M) Department of Energy.
                    (N) Department of Education.
                    (O) Department of Veterans Affairs.
                    (P) Environmental Protection Agency.
                    (Q) Central Intelligence Agency.
                    (R) Office of Management and Budget.
            (3) The following individuals or their designees:
                    (A) The Director, United States Marshals Service.
                    (B) The head of the Federal Protective Service.
                    (C) The Assistant to the President for National 
                Security Affairs.
                    (D) The Director, Security Policy Board.
            (4) Such other Federal employees as the President shall 
        appoint.
    (c) Chair.--The Committee shall be chaired or co-chaired by the 
Administrator of General Services, or the designee of the 
Administrator.
    (d) Working Groups.--The Committee is authorized to establish 
interagency working groups to perform such tasks as may be directed by 
the Committee.
    (e) Consultation.--The Committee may consult with other parties, 
including the Administrative Office of the United States Courts, to 
perform its responsibilities under this section and, at the discretion 
of the Committee, such other parties may participate in the working 
groups.
    (f) Duties and Responsibilities.--The Committee shall--
            (1) establish policies for security in and protection of 
        Federal facilities;
            (2) develop and evaluate security standards for Federal 
        facilities, develop a strategy for ensuring compliance with 
        such standards, and oversee the implementation of appropriate 
        security measures in Federal facilities; and
            (3) take such actions as may be necessary to enhance the 
        quality and effectiveness of security and protection of Federal 
        facilities, including--
                    (A) encouraging agencies with security 
                responsibilities to share security-related intelligence 
                in a timely and cooperative manner;
                    (B) assessing technology and information systems as 
                a means of providing cost-effective improvements to 
                security in Federal facilities;
                    (C) developing long-term construction standards for 
                those locations with threat levels or missions that 
                require blast resistant structures or other specialized 
                security requirements;
                    (D) evaluating standards for the location of, and 
                special security related to, day care centers in 
                Federal facilities; and
                    (E) assisting the Administrator of General Services 
                in developing and maintaining a centralized security 
                data base of all Federal facilities.
    (g) Agency Support and Cooperation.--
            (1) Administrative support.--To the extent permitted by law 
        and subject to the availability of appropriations, the 
        Administrator of General Services shall provide the Committee 
        such administrative services, funds, facilities, staff, and 
        other support services as may be necessary for the performance 
        of its functions under this section.
            (2) Cooperation.--Each executive agency and department 
        shall cooperate and comply with the policies and 
        recommendations of the Committee issued pursuant to this 
        section, except to the extent that the Director of Central 
        Intelligence determines that compliance would jeopardize 
        intelligence sources and methods. To the extent permitted by 
        law and subject to the availability of appropriations, 
        executive agencies and departments shall provide such support 
        as may be necessary to enable the Committee to perform its 
        duties and responsibilities under this section.
            (3) Compliance.--The Administrator of General Services 
        shall be responsible for monitoring Federal agency compliance 
        with the policies and recommendations of the Committee.

SEC. 408. ANNUAL ASSESSMENT OF TERRORIST-RELATED THREATS TO PUBLIC 
                    TRANSPORTATION.

    On an annual basis, the Secretary, in consultation with the heads 
of other appropriate Federal departments and agencies, shall conduct an 
assessment of terrorist-related threats to all forms of public 
transportation, including public gathering areas related to public 
transportation.

    Page 24, lines 16 and 17, strike ``, major disasters, and other 
emergencies''.

    Page 25, line 7, strike ``and major disasters''.

    Page 25, lines 19 and 20, strike ``or major disaster''.

    Page 25, line 22, strike ``and major disasters''.

    Page 26, strike lines 3 through 5 and insert the following:

            (6) in consultation with the Director of the Federal 
        Emergency Management Agency, consolidating existing Federal 
        Government emergency response plans for terrorist attacks into 
        the Federal Response Plan referred to in section 506(b); and

    Page 26, strike lines 14 through 17 (and redesignate subsequent 
paragraphs accordingly).

    Page 30, after line 9, insert the following:

SEC. 506. ROLE OF FEDERAL EMERGENCY MANAGEMENT AGENCY.

    (a) In General.--The functions of the Federal Emergency Management 
Agency include, but are not limited to, 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 comprehensive, risk-based emergency 
        management program--
                    (A) of mitigation, by taking sustained actions to 
                reduce or eliminate long-term risk to people and 
                property from hazards and their effects;
                    (B) of preparedness, by building the emergency 
                management profession to prepare effectively for, 
                mitigate against, respond to, and recover from any 
                hazard by planning, training, and exercising;
                    (C) of response, by conducting emergency operations 
                to save lives and property through positioning 
                emergency equipment and supplies, through evacuating 
                potential victims, through providing food, water, 
                shelter, and medical care to those in need, and through 
                restoring critical public services;
                    (D) of recovery, by rebuilding communities so 
                individuals, businesses, and governments can function 
                on their own, return to normal life, and protect 
                against future hazards; and
                    (E) of increased efficiencies, by coordinating 
                efforts relating to preparedness and response 
                activities to maximize efficiencies.
    (b) Federal Response Plan.--
            (1) Role of fema.--Notwithstanding any other provision of 
        this Act, the Federal Emergency Management 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 reflect the establishment of and incorporate 
        the Department.
            (3) Memorandum of understanding.--Not later than 60 days 
        after the date of enactment of this Act, the Secretary and the 
        Director of the Federal Emergency Management Agency shall adopt 
        a memorandum of understanding to address the roles and 
        responsibilities of their respective agencies under this title.

    Page 31, at the beginning of line 23, insert ``(a) In General.--''.

    Page 32, strike lines 3 through 6 (and redesignate subsequent 
paragraphs accordingly).

    Page 32, strike lines 13 through 15 and insert the following:

            (2) subject to subsection (b), directing and supervising 
        grant programs of the Federal Government for State, local, and 
        tribal government emergency response providers; and

    Page 32, after line 19, insert the following:

    (b) Limitation.--Subsection (a)(2) shall not be construed to affect 
any grant program carried out by the Director of the Federal Emergency 
Management Agency; except that the Director shall coordinate with the 
Secretary in making grants relating to emergency response providers.

    Page 37, strike line 16 and all that follows through line 14 on 
page 39 and insert the following:

    (c) Department Headquarters.--
            (1) In general.--Subject to the requirements of the Public 
        Buildings Act of 1959 (40 U.S.C. 601 et seq.), the 
        Administrator of General Services shall construct a public 
        building to serve as the headquarters for the Department.
            (2) Location and construction standards.--The headquarters 
        facility shall be constructed to such standards and 
        specifications and at such a location as the Administrator of 
        General Services decides. In selecting a site for the 
        headquarters facility, the Administrator shall give preference 
        to parcels of land that are federally owned.
            (3) Scoring of expenditures, obligations, and 
        appropriations.--Notwithstanding any provision of the 
        Congressional Budget Act of 1974 (2 U.S.C. 621 et seq.), the 
        Balanced Budget and Emergency Deficit Control Act of 1985 (2 
        U.S.C. 900 et seq.), or chapter 13 or 15 of title 31, United 
        States Code, or any other provision of law, any expenditures, 
        obligations, and appropriations made for the headquarters 
        facility shall be scored on an annual basis.
            (4) Alternate financing methods.--In the absence of 
        appropriations in fiscal year 2003 for Federal construction of 
        the headquarters facility--
                    (A) the Administrator of General Services may 
                construct the facility by lease-purchase or installment 
                purchase and may use any lease or installment purchase 
                instrument as a means of financing the acquisition of a 
                site, if necessary, and the construction of the 
                facility, either through commercial financial 
                establishments or through the Federal Financing Bank;
                    (B) any lease or installment purchase obligation of 
                the Administrator used in financing the construction of 
                the facility shall be scored, for borrowing authority 
                or budget authority purposes, only to the extent 
                outlays are made from the Federal Buildings Fund 
                annually to amortize such obligations; and
                    (C) if the financing is placed with the Federal 
                Financing Bank, any loans, promissory notes, draws, or 
                other disbursements made by the Bank and secured by the 
                lease rental or installment contract payments by the 
                Administrator of General Services shall for budgetary 
                purposes be treated as a means of financing the 
                Department or the General Services Administration, but 
                only to the extent outlays are made from the Federal 
                Buildings Fund annually to amortize such obligations.
            (5) Use of headquarters facility.--The Administrator of 
        General Services shall make the headquarter facility, as well 
        as other Government-owned or leased facilities, available to 
        the Secretary pursuant to the Administrator's authorities under 
        section 210 of the Federal Property and Administrative Services 
        Act of 1949 (40 U.S.C. 490 et seq.) and there is authorized to 
        be appropriated to the Secretary such amounts as may be 
        necessary to pay the annual charges for General Services 
        Administration furnished space and services.

    Page 41, lines 17 and 18, strike ``the effective date of this Act'' 
and insert ``the date of transmittal of a plan to Congress under 
section 802(b)''.

    Page 41, line 20, strike ``The transfer'' and insert the following:

    (a) In General.--Subject to subsection (b), the transfer

    Page 41, after line 25, insert the following:

    (b) Organization Plan.--
            (1) Plan to be completed before transfers occur.--The 
        transfer of an agency, or any of its functions, to the 
        Department under this Act shall not occur before the last day 
        of a 60-day period of continuous session of Congress following 
        the date of transmittal by the Secretary to Congress of a plan 
        for the organization of the Department.
            (2) Contents of plan.--The plan submitted under paragraph 
        (1) shall include--
                    (A) a designation of which agency in the Department 
                will be carrying out each of the functions assigned to 
                the Department;
                    (B) a proposal for funding the Department;
                    (C) a designation of the number of employees that 
                will be employed by the Department;
                    (D) a description of the manner in which the 
                Department will carry out each function or service 
                transferred to the Department from another agency; and
                    (E) a designation of the number of employees who 
                will be performing each function or service transferred 
                to the Department from another agency.
            (3) Congressional review period.--For purposes of paragraph 
        (1), continuity of a session of Congress is broken only by an 
        adjournment sine die, and there shall be excluded from the 
        computation of the 60-day period any day during which either 
        House of Congress is not in session during an adjournment of 
        more than 3 days to a day certain.

    Page 44, after line 10, insert the following:

    (f) Prohibition on Use of Transportation Trust Funds.--
            (1) In general.--Notwithstanding any other provision of 
        this Act, no funds derived from the Highway Trust Fund, Airport 
        and Airway Trust Fund, Inland Waterway Trust Fund, Harbor 
        Maintenance Trust Fund, or Oil Spill Liability Trust Fund may 
        be transferred to, made available to, or obligated by the 
        Secretary or any other official in the Department.
            (2) Limitation.--This subsection shall not apply to 
        security-related funds provided to the Federal Aviation 
        Administration for fiscal years preceding fiscal year 2003 for 
        (A) operations, (B) facilities and equipment, or (C) research, 
        engineering, and development.

    Page 49, strike line 9 and all that follows through page 50, line 3 
(and redesignate subsequent sections of the bill accordingly).

    At the end of the bill, add the following (and conform the table of 
contents of the bill accordingly):

SEC. 907. TRANSPORTATION SECURITY.

    (a) Transportation Security Oversight Board.--
            (1) Establishment.--Section 115(a) of title 49, United 
        States Code, is amended by striking ``Department of 
        Transportation'' and inserting ``Department of Homeland 
        Security''.
            (2) Membership.--Section 115(b)(1) of title 49, United 
        States Code, is amended--
                    (A) by striking subparagraph (G);
                    (B) by redesignating subparagraphs (A) through (F) 
                as subparagraphs (B) through (G), respectively; and
                    (C) by inserting before subparagraph (B) (as so 
                redesignated) the following:
                    ``(A) The Secretary of Homeland Security, or the 
                Secretary's designee.''.
            (3) Chairperson.--Section 115(b)(2) of title 49, United 
        States Code, is amended by striking ``Secretary of 
        Transportation'' and inserting ``Secretary of Homeland 
        Security''.
    (b) Approval of AIP Grant Applications for Security Activities.--
Section 47106 of title 49, United States Code, is amended by adding at 
the end the following:
    ``(g) Consultation With Secretary of Homeland Security.--The 
Secretary shall consult with the Secretary of Homeland Security before 
approving an application under this subchapter for an airport 
development project grant for activities described in section 
47102(3)(B)(ii) (relating to security equipment) or section 
47102(3)(B)(x) (relating to installation of bulk explosive detection 
systems).''.

SEC. 908. TRANSFER OF CERTAIN SECURITY AND LAW ENFORCEMENT FUNCTIONS 
                    AND AUTHORITIES.

    (a) Amendment to Property Act.--Section 210(a)(2) of the Federal 
Property and Administrative Services Act of 1949 (40 U.S.C. 490(a)(2)) 
is repealed.
    (b) Law Enforcement Authority.--The Act of June 1, 1948 (40 U.S.C. 
318-318d; chapter 359; 62 Stat. 281) is amended to read as follows:

``SECTION 1. SHORT TITLE.

    ``This Act may be cited as the `Protection of Public Property Act'.

``SEC. 2. LAW ENFORCEMENT AUTHORITY OF SECRETARY OF HOMELAND SECURITY 
                    FOR PROTECTION OF PUBLIC PROPERTY.

    ``(a) In General.--The Secretary of Homeland Security (in this Act 
referred to as the ``Secretary'') shall protect the buildings, grounds, 
and property that are owned, occupied, or secured by the Federal 
Government (including any agency, instrumentality, or wholly owned or 
mixed-ownership corporation thereof) and the persons on the property.
    ``(b) Officers and Agents.--
            ``(1) Designation.--The Secretary may designate employees 
        of the Department of Homeland Security, including employees 
        transferred to the Department from the Office of the Federal 
        Protective Service of the General Services Administration 
        pursuant to the Homeland Security Act of 2002, as officers and 
        agents for duty in connection with the protection of property 
        owned or occupied by the Federal Government and persons on the 
        property, including duty in areas outside the property to the 
        extent necessary to protect the property and persons on the 
        property.
            ``(2) Powers.--While engaged in the performance of official 
        duties, an officer or agent designated under this subsection 
        may--
                    ``(A) enforce Federal laws and regulations for the 
                protection of persons and property;
                    ``(B) carry firearms;
                    ``(C) make arrests without a warrant for any 
                offense against the United States committed in the 
                presence of the officer or agent or for any felony 
                cognizable under the laws of the United States if the 
                officer or agent has reasonable grounds to believe that 
                the person to be arrested has committed or is 
                committing a felony;
                    ``(D) serve warrants and subpoenas issued under the 
                authority of the United States; and
                    ``(E) conduct investigations, on and off the 
                property in question, of offenses that may have been 
                committed against property owned or occupied by the 
                Federal Government or persons on the property.
                    ``(F) carry out such other activities for the 
                promotion of homeland security as the Secretary may 
                prescribe.
    ``(c) Regulations.--
            ``(1) In general.--The Secretary, in consultation with the 
        Administrator of General Services, may prescribe regulations 
        necessary for the protection and administration of property 
        owned or occupied by the Federal Government and persons on the 
        property. The regulations may include reasonable penalties, 
        within the limits prescribed in paragraph (2), for violations 
        of the regulations. The regulations shall be posted and remain 
        posted in a conspicuous place on the property.
            ``(2) Penalties.--A person violating a regulation 
        prescribed under this subsection shall be fined under title 18, 
        United States Code, imprisoned for not more than 30 days, or 
        both.
    ``(d) Details.--
            ``(1) Requests of agencies.--On the request of the head of 
        a Federal agency having charge or control of property owned or 
        occupied by the Federal Government, the Secretary may detail 
        officers and agents designated under this section for the 
        protection of the property and persons on the property.
            ``(2) Applicability of regulations.--The Secretary may--
                    ``(A) extend to property referred to in paragraph 
                (1) the applicability of regulations prescribed under 
                this section and enforce the regulations as provided in 
                this section; or
                    ``(B) utilize the authority and regulations of the 
                requesting agency if agreed to in writing by the 
                agencies.
            ``(3) Facilities and services of other agencies.--When the 
        Secretary determines it to be economical and in the public 
        interest, the Secretary may utilize the facilities and services 
        of Federal, State, and local law enforcement agencies, with the 
        consent of the agencies.
    ``(e) Authority Outside Federal Property.--For the protection of 
property owned or occupied by the Federal Government and persons on the 
property, the Secretary may enter into agreements with Federal agencies 
and with State and local governments to obtain authority for officers 
and agents designated under this section to enforce Federal laws and 
State and local laws concurrently with other Federal law enforcement 
officers and with State and local law enforcement officers.
    ``(f) Secretary and Attorney General Approval.--The powers granted 
to officers and agents designated under this section shall be exercised 
in accordance with guidelines approved by the Secretary and the 
Attorney General.
    ``(g) Limitation on Statutory Construction.--Nothing in this 
section shall be construed to--
            ``(1) preclude or limit the authority of any Federal law 
        enforcement agency; or
            ``(2) restrict the authority of the Administrator of 
        General Services to promulgate regulations affecting property 
        under the Administrator's custody and control.

``SEC. 3. SPECIAL PAY.

    ``Without regard to the pay provisions of chapter 51 of title 5, 
United States Code, and subchapter III of chapter 53 of such title, the 
Secretary may, in the Secretary's sole discretion, fix the rates of 
basic pay for the positions occupied by officers and agents designated 
under this Act so as to enable the officers and agents to be 
appropriately compensated in comparison to personnel performing 
comparable duties in other law enforcement organizations in the local 
labor market.''.
    (c) Maximum Age for Entry Into the Position of Federal Protective 
Service Officer.--Section 3307 of title 5, United States Code, is 
amended--
            (1) in subsection (a) by striking ``and (f)'' and inserting 
        ``(f), and (g)''; and
            (2) by adding at the end the following:
    ``(g) The Secretary of Homeland Security may determine and fix the 
maximum age limit for an original appointment to a position as a 
Federal Protective Service Officer, as defined by section 8331(29) or 
8401(35).''.
    (d) Amendments Relating to the Civil Service Retirement System.--
            (1) Definition.--Section 8331 of title 5, United States 
        Code, is amended--
                    (A) by striking ``and'' at the end of paragraph 
                (27);
                    (B) by striking the period at the end of paragraph 
                (28) and inserting ``; and''; and
                    (C) by adding at the end the following:
            ``(29) `Federal Protective Service Officer' means--
                    ``(A) an employee occupying a position in the 
                Department of Homeland Security and designated as an 
                officer or agency under section 2(b)(1) of the 
                Protection of Public Property Act, the duties of which 
                position are primarily--
                            ``(i) to detect, investigate, apprehend, 
                        arrest, or detain individuals suspected or 
                        convicted of offenses against the criminal laws 
                        of the United States;
                            ``(ii) to protect and secure the personal 
                        safety of officials and other employees of the 
                        United States, as well as occupants and 
                        visitors on federally controlled property; and
                            ``(iii) to gather, assess, and analyze 
                        information relating to threats, and to respond 
                        to threats and attacks, against persons and 
                        property of the United States; and
                    ``(B) an employee who is transferred directly to a 
                supervisory or administrative position in the 
                Department of Homeland Security from a position of 
                Federal Protective Service Officer (as defined by 
                subparagraph (A)) or law enforcement officer;
        any determination as to whether or not an employee satisfies 
        subparagraph (B) shall, in the case of an employee occupying a 
        position in the Office of the Federal Protective Service of the 
        General Services Administration on the date of the enactment of 
        this paragraph, be made without regard to any requirement that 
        the employee have completed a minimum period of one or more 
        types of service before the date of transfer.''.
            (2) Deductions, contributions, and deposits.--Section 8334 
        of title 5, United States Code, is amended--
                    (A) in subsection (a)(1), by striking ``or nuclear 
                materials courier,'' and inserting ``nuclear materials 
                courier, or Federal Protective Service Officer,''; and
                    (B) in subsection (c), by adding after the item 
                relating to a nuclear materials courier the following:




``Federal Protective Service Officer....  7.5....................  After the date of the enactment of the
                                                                    Homeland Security Act of 2002.''.


            (3) Computation of annuity for certain officers mandatorily 
        separated.--Section 8339 of title 5, United States Code, is 
        amended by adding at the end the following:
    ``(v) The annuity of a Federal Protective Service Officer retiring 
under section 8335(e) is--
            ``(1) 2\1/2\ percent of the officer's average pay 
        multiplied by so much of his total service, performed as a 
        Federal Protective Service Officer or law enforcement officer, 
        as does not exceed 20 years; plus
            ``(2) 2 percent of the officer's average pay multiplied by 
        so much of his total service as exceeds the number of years of 
        service taken into account under paragraph (1).''.
            (4) Immediate retirement.--Section 8336(c)(1) of title 5, 
        United States Code, is amended by striking ``or nuclear 
        materials courier'' and inserting ``nuclear materials courier, 
        or Federal Protective Service Officer''.
            (5) Mandatory separation.--
                    (A) In general.--Section 8335(b) of title 5, United 
                States Code, is amended--
                            (i) by striking ``or nuclear materials 
                        courier'' and inserting ``nuclear materials 
                        courier, or Federal Protective Service Officer 
                        (other than one described in subsection (e))''; 
                        and
                            (ii) by striking ``or courier'' and 
                        inserting ``courier, or Federal Protective 
                        Service Officer (other than one described in 
                        subsection (e))''.
                    (B) Provisions relating to certain incumbents.--
                Section 8335 of title 5, United States Code, is amended 
                by inserting after subsection (d) the following:
    ``(e) A Federal Protective Service Officer who is employed by the 
Office of the Federal Protective Service of the General Services 
Administration on the date of the enactment of the Homeland Security 
Act of 2002, and who is otherwise eligible for immediate retirement 
under section 8336, shall be separated from the service on the last day 
of the month in which such officer becomes 57 years of age or completes 
10 years of service as a Federal Protective Service Officer if then 
over that age. The Secretary of Homeland Security, under such 
regulations as the Secretary may prescribe, may exempt a Federal 
Protective Service Officer having exceptional skills and experience as 
a Federal Protective Service Officer from the automatic separation 
provisions of this subsection until the officer becomes 60 years of 
age. The Secretary shall notify the officer in writing of the date of 
separation at least 60 days before that date. Action to separate the 
officer is not effective, without the consent of the officer, until the 
last day of the month in which the 60-day notice expires.''.
    (e) Amendments Relating to the Federal Employees' Retirement 
System.--
            (1) Definition.--Section 8401 of title 5, United States 
        Code, is amended--
                    (A) by striking ``and'' at the end of paragraph 
                (33);
                    (B) by striking the period at the end of paragraph 
                (34) and inserting ``; and''; and
                    (C) by adding at the end the following:
            ``(35) `Federal Protective Service Officer' has the meaning 
        given that term in section 8331(29).''.
            (2) Deductions and contributions.--
                    (A) Employee deductions and contributions.--Section 
                8422(a)(3) of title 5, United States Code, is amended 
                by adding after the item relating to a nuclear 
                materials courier the following:




``Federal Protective Service Officer....  7.5....................  After the date of the enactment of the
                                                                    Homeland Security Act of 2002.''.


                    (B) Agency contributions.--Paragraphs (1)(B)(i) and 
                (3)(A) of section 8423(a) of title 5, United States 
                Code, are amended by inserting ``Federal Protective 
                Service Officers,'' after ``firefighters,'' each place 
                it appears.
            (3) Provisions relating to computation of basic annuity.--
                    (A) Annuity for certain officers mandatorily 
                separated.--Section 8415 of title 5, United States 
                Code, is amended by adding at the end the following:
    ``(l) The annuity of a Federal Protective Service Officer retiring 
under section 8425(e) is--
            ``(1) 2\1/2\ percent of the officer's average pay 
        multiplied by so much of his total service, performed as a 
        Federal Protective Service Officer or law enforcement officer, 
        as does not exceed 20 years; plus
            ``(2) 2 percent of the officer's average pay multiplied by 
        so much of his total service as exceeds the number of years of 
        service taken into account under paragraph (1).''.
                    (B) Technical and conforming amendments.--
                            (i) Inapplicability of 1.1 percent accrual 
                        rate.--Section 8415(g)(2) of title 5, United 
                        States Code, is amended by inserting ``Federal 
                        Protective Service Officer,'' after ``nuclear 
                        materials courier,''.
                            (ii) Annuities on reemployment.--Section 
                        8468(b)(1)(A) of title 5, United States Code, 
                        is amended by inserting ``and (l)'' after 
                        ``through (g)''.
            (4) Immediate retirement.--Section 8412(d) of title 5, 
        United States Code, is amended by striking ``or nuclear 
        materials courier'' each place it appears and inserting 
        ``nuclear materials courier, or Federal Protective Service 
        Officer''.
            (5) Mandatory separation.--
                    (A) In general.--Section 8425(b) of title 5, United 
                States Code, is amended by inserting ``Federal 
                Protective Service Officer (other than one described in 
                subsection (e)),'' after ``law enforcement officer,'' 
                each place it appears.
                    (B) Provisions relating to certain incumbents.--
                Section 8425 of title 5, United States Code, is amended 
                by redesignating subsection (e) as subsection (f), and 
                by inserting after subsection (d) the following:
    ``(e) A Federal Protective Service Officer who is employed by the 
Office of the Federal Protective Service of the General Services 
Administration on the date of the enactment of the Homeland Security 
Act of 2002, and who is otherwise eligible for immediate retirement 
under section 8412, shall be separated from the service on the last day 
of the month in which such officer becomes 57 years of age or completes 
10 years of service as a Federal Protective Service Officer if then 
over that age. The Secretary of Homeland Security, under such 
regulations as the Secretary may prescribe, may exempt a Federal 
Protective Service Officer having exceptional skills and experience as 
a Federal Protective Service Officer from the automatic separation 
provisions of this subsection until the officer becomes 60 years of 
age. The Secretary shall notify the officer in writing of the date of 
separation at least 60 days before that date. Action to separate the 
officer is not effective, without the consent of the officer, until the 
last day of the month in which the 60-day notice expires.''.
    (f) Payments.--
            (1) In general.--The Secretary shall pay into the Civil 
        Service Retirement and Disability Fund an amount determined by 
        the Director of the Office of Personnel Management to be 
        necessary to reimburse the Fund for any estimated increase in 
        the unfunded liability of the Fund resulting from the 
        amendments made by subsection (e).
            (2) Timing.--The Secretary shall pay the amount so 
        determined in 5 equal annual installments with interest 
        computed at the rate used in the most recent valuation of the 
        Civil Service Retirement System, with the first payment thereof 
        due by the end of fiscal year 2003.
    (g) Law Enforcement Pay.--
            (1) Pay and benefits under provisions of fepca.--A Federal 
        Protective Service Officer (within the meaning of section 
        8331(29) or 8401(35) of title 5, United States Code) is 
        entitled to the same pay and benefits as are provided by 
        sections 403, 404, and 407 of the Federal Employees Pay 
        Comparability Act of 1990 (5 U.S.C. 5305 note) to a law 
        enforcement officer (as defined by section 402 of such Act).
            (2) Award for foreign language capabilities.--Section 4521 
        of title 5, United States Code is amended--
                    (A) by striking ``and'' at the end of paragraph 
                (5);
                    (B) by striking the period at the end of paragraph 
                (6) and inserting ``; and''; and
                    (C) by adding at the end the following:
            ``(7) a Federal Protective Service Officer (within the 
        meaning of section 8331(29) or 8401(35)).''.
            (3) Overtime pay.--Section 5542(a)(4) of title 5, United 
        States Code, is amended by inserting ``or a Federal Protective 
        Service Officer (within the meaning of section 8331(29) or 
        8401(35))'' after ``law enforcement officer''.
    (h) Limitation.--Notwithstanding the authority of the Secretary to 
establish a human resources management system under section 10001 of 
title 5, United States Code (as added by this Act), or any other 
authority granted to the Secretary, the Secretary may not reduce the 
pay or benefits of a Federal Protective Service Officer, within the 
meaning of section 8331(29) or 8401(35) of such title (as added by this 
section), below the level provided by such title.

   TITLE X--COAST GUARD FUNCTIONS RELATING TO DEPARTMENT OF HOMELAND 
                                SECURITY

SEC. 1001. UNDER SECRETARY OF THE COAST GUARD.

    (a) In General.--Title 14, United States Code, is amended by 
inserting before section 41 the following:

``Sec. 40. Under Secretary of the Coast Guard

    ``(a)(1) There is an Under Secretary of the Coast Guard appointed 
from civilian life by the President, by and with the advice and consent 
of the Senate. The Under Secretary of the Coast Guard is the head of 
the Coast Guard.
    ``(2) A person may not be appointed as Under Secretary of the Coast 
Guard within five years after relief from active duty as a commissioned 
officer of a regular component of an armed force.
    ``(b) Subject to the authority, direction, and control of the 
Secretary of the department in which the Coast Guard is operating, the 
Under Secretary of the Coast Guard is responsible for, and has the 
authority necessary to conduct, all affairs of the Coast Guard.
    ``(c) After first informing the Secretary of the department in 
which the Coast Guard is operating, the Under Secretary of the Coast 
Guard may make such recommendations to Congress relating to the Coast 
Guard as the Under Secretary considers appropriate.
    ``(d) The Under Secretary of the Coast Guard may assign such of 
Under Secretary's functions, powers, and duties as the Under Secretary 
considers appropriate to the Commandant. Officers of the Coast Guard 
shall, as directed by the Under Secretary of the Coast Guard, report on 
any matter to the Under Secretary of the Coast Guard or the Commandant.
    ``(e) In addition to the other duties of the Under Secretary of the 
Coast Guard, the Under Secretary shall be responsible for acting as the 
liaison to the Department of Homeland Security with respect to all 
Coast Guard functions.
    ``(f) The Under Secretary of the Coast Guard may--
            ``(1) assign, detail, and prescribe the duties of officers 
        and members of the Coast Guard and civilian personnel of the 
        Coast Guard; and
            ``(2) prescribe regulations to carry out his or her 
        functions, powers, and duties under law.''.
    (b) Clerical Amendment.--The table of sections at the beginning of 
chapter 3 of title 14, United States Code, is amended by inserting 
before the item relating to section 41 the following:

``40.    Under Secretary of the Coast Guard.''.

    (c) Transfer of Functions.--
            (1) Transfer.--There are transferred to the Under Secretary 
        of the Coast Guard all functions that are vested by law, 
        regulation, or Executive order in the Commandant of the Coast 
        Guard.
            (2) Reference.--Any reference in any law, regulation, or 
        Executive order to the Commandant of the Coast Guard with 
        respect to a function transferred under paragraph (1) is deemed 
        to refer to the Under Secretary of the Coast Guard.

SEC. 1002. MAINTENANCE OF ALLOCATIONS OF FUNDING FOR COAST GUARD 
                    OPERATION AND MAINTENANCE.

    (a) In General.--Chapter 17 of title 14, United States Code, is 
amended by adding at the end the following:

``Sec. 676. Maintenance of allocations for operation and maintenance

    ``(a) In General.--Of the amount appropriated for operation and 
maintenance of the Coast Guard for each fiscal year, not less than the 
percentage specified in subsection (b) with respect to a purpose shall 
be obligated or expended for expenses related to that purpose.
    ``(b) Purposes and Percentages.--The purposes and percentages 
referred to in subsection (a) are, respectively, the following:
            ``(1) For search and rescue, 12 percent.
            ``(2) For drug interdiction, 13 percent.
            ``(3) For fisheries law enforcement, 11 percent.
            ``(4) For interdiction of migrants, 4 percent.
            ``(5) For environmental law enforcement, 8 percent.
            ``(6) For marine safety, 5 percent.''.
    (b) Technical Correction; Clerical Amendment.--Chapter 17 of title 
14, United States Code, is amended--
            (1) by redesignating the second section 673 (relating to 
        ``Small boat station rescue capability'') and section 674 in 
        order as sections 674 and 675; and
            (2) in the table of sections at the beginning of the 
        chapter by striking the items relating to ``Small boat rescue 
        capability'' and``Small boat station closures'' and inserting 
        the following:

``674. Small boat rescue capability.
``675. Small boat station closures.
``676. Maintenance of allocations for operation and maintenance.''.
                      COMMITTEE ON WAYS AND MEANS

                          House of Representatives,
                               Committee on Ways and Means,
                                     Washington, DC, July 12, 2002.
Hon. Richard K. Armey
Chairman, House Select Committee on Homeland Security, The 
        Capitol, Washington, D.C.
    Dear Mr. Chairman: As specified in section 6 of H.Res. 449, 
this letter transmits the views and recommendations of the 
Committee on Ways and Means on those aspects within the 
jurisdiction of the Committee of the bill, H.R. 5005, to 
establish a Department of Homeland Security and transfer the 
United States Customs Service to the new department. The 
recommended legislative text is attached and was favorably 
reported from Committee on July 10, 2002.
    The Committee on Ways and Means looks forward to working 
with the Select Committee on Homeland Security as we promote 
security while maintaining the free flow of trade across 
American borders.
        Best regards,
                                        Bill Thomas
                                                  Chairman.
                                ------                                


                    Proposed Amendments to H.R. 5005

                    Proposed Amendments to H.R. 5005

   (Recommended to the Select Committee on Homeland Security by the 
                      Committee on Ways and Means)

    Page 21, after line 4, insert the following (and conform the table 
of contents accordingly):

                     Subtitle A--General Provisions

    Page 22, line 1, insert after ``(4)'' the following: ``except as 
provided in subtitle B,''.

    Page 22, strike lines 10 through 12 and insert the following:
            (1) the United States Customs Service, except as provided 
        in subtitle B;''.

    Page 24, after line 6, add the following (and conform the table of 
contents accordingly):

               Subtitle B--United States Customs Service

SEC. 411. ESTABLISHMENT; COMMISSIONER OF CUSTOMS.

    (a) Establishment.--There is established in the Department the 
United States Customs Service, under the authority of the Under 
Secretary for Border and Transportation Security, which shall be vested 
with those functions set forth in section 420(7), and the personnel, 
assets, and liabilities attributable to those functions.
    (b) Commissioner of Customs.--
            (1) In General.--There shall be at the head of the Customs 
        Service a Commissioner of Customs, who shall be appointed by 
        the President, by and with the advice and consent of the 
        Senate.
            (2) Compensation.--Section 5314 of title 5, United States 
        Code, is amended by striking
            ``Commissioner of Customs, Department of the Treasury''
and inserting
            ``Commissioner of Customs, Department of Homeland 
        Security.''.
            (3) Continuation in office.--The individual serving as the 
        Commissioner of Customs on the day before the effective date of 
        this Act may serve as the Commissioner of Customs on and after 
        such effective date until a Commissioner of Customs is 
        appointed under paragraph (1).

SEC. 412. RETENTION OF CUSTOMS REVENUE FUNCTIONS BY SECRETARY OF THE 
                    TREASURY.

    (a) Retention by Secretary of the Treasury.--
            (1) Retention of authority.--Notwithstanding sections 
        401(4), 402(1), and 803(e)(2), authority that was vested in the 
        Secretary of the Treasury by law before the effective date of 
        this Act under those provisions of law set forth in paragraph 
        (2) shall not be transferred to the Secretary by reason of this 
        Act, and on and after the effective date of this Act, the 
        Secretary of the Treasury may delegate any such authority to 
        the Secretary at the discretion of the Secretary of the 
        Treasury. The Secretary of the Treasury shall consult with the 
        Secretary regarding the exercise of any such authority not 
        delegated to the Secretary.
            (2) Statutes.--The provisions of law referred to in 
        paragraph (1) are the following: the Tariff Act of 1930; 
        section 249 of the Revised Statutes of the United States (19 
        U.S.C. 3); section 2 of the Act of March 4, 1923 (19 U.S.C. 6); 
        section 13031 of the Consolidated Omnibus Budget Reconciliation 
        Act of 1985 (19 U.S.C. 58c); section 251 of the Revised 
        Statutes of the United States (19 U.S.C. 66); section 1 of the 
        Act of June 26, 1930 (19 U.S.C. 68); the Foreign Trade Zones 
        Act (19 U.S.C. 81a et seq.); section 1 of the Act of March 2, 
        1911 (19 U.S.C. 198); the Trade Act of 1974; the Trade 
        Agreements Act of 1979; the North American Free Trade Area 
        Implementation Act; the Uruguay Round Agreements Act; the 
        Caribbean Basin Economic Recovery Act; the Andean Trade 
        Preference Act; the African Growth and Opportunity Act; and any 
        other provision of law vesting customs revenue functions in the 
        Secretary of the Treasury.
    (b) Maintenance of Customs Revenue Functions.--
            (1) Maintenance of functions.--Notwithstanding section 733, 
        the Secretary may not consolidate, alter, discontinue, or 
        diminish those functions described in paragraph (2) performed 
        by the United States Customs Service (as established under 
        section 411) on or after the effective date of this Act, reduce 
        the staffing level, or the compensation or benefits under title 
        5, United States Code, of personnel attributable to such 
        functions, or reduce the resources attributable to such 
        functions, and the Secretary shall ensure that an appropriate 
        management structure is implemented to carry out such 
        functions.
            (2) Functions.--The functions referred to in paragraph (1) 
        are those functions performed by the following personnel, and 
        associated support staff, of the United States Customs Service 
        on the day before the effective date of this Act: Import 
        Specialists, Entry Specialists, Drawback Specialists, National 
        Import Specialist, Fines and Penalties Specialists, attorneys 
        of the Office of Regulations and Rulings, Customs Auditors, 
        International Trade Specialists, Financial Systems Specialists.
    (c) New Personnel.--The Secretary of the Treasury is authorized to 
appoint up to 20 new personnel to work with personnel of the Department 
in performing customs revenue functions.

SEC. 413. ALLOCATION OF RESOURCES BY THE SECRETARY.

    (a) In General.--The Secretary shall ensure that adequate staffing 
is provided to assure that levels of customs revenue services provided 
on the day before the effective date of this Act shall continue to be 
provided.
    (b) Notification of Congress.--The Secretary shall notify the 
Committee on Ways and Means of the House of Representatives and the 
Committee on Finance of the Senate at least 180 days prior to taking 
any action which would--
            (1) result in any significant reduction in customs revenue 
        services, including hours of operation, provided at any office 
        within the Department or any port of entry;
            (2) eliminate or relocate any office of the Department 
        which provides customs revenue services; or
            (3) eliminate any port of entry.
    (c) Definition.--In this section, the term ``customs revenue 
services'' means those customs revenue functions described in 
paragraphs (1) through (6) and (8) of section 420.

SEC. 414. ESTABLISHMENT AND IMPLEMENTATION OF COST ACCOUNTING SYSTEM; 
                    REPORTS.

    (a) Establishment and Implementation.--
            (1) In general.--Not later than September 30, 2003, the 
        Commissioner of Customs shall, in accordance with the audit of 
        the Customs Service's fiscal years 2000 and 1999 financial 
        statements (as contained in the report of the Office of the 
        Inspector General of the Department of the Treasury issued on 
        February 23, 2001), establish and implement a cost accounting 
        system for expenses incurred in the operation of the Customs 
        Service.
            (2) Additional requirement.--The cost accounting system 
        described in paragraph (1) shall provide for an identification 
        of expenses based on the type of operation, the port at which 
        the operation took place, the amount of time spent on the 
        operation by personnel of the Customs Service, and an 
        identification of expenses based on any other appropriate 
        classification necessary to provide for an accurate and 
        complete accounting of the expenses.
            (3) Use of merchandise processing fees.--The cost 
        accounting system described in paragraph (1) shall provide for 
        an identification of all amounts expended pursuant to section 
        13031(f)(2) of the Consolidated Omnibus Reconciliation Act of 
        1985.
    (b) Reports.--Beginning on the date of the enactment of this Act 
and ending on the date on which the cost accounting system described in 
subsection (a) is fully implemented, the Commissioner of Customs shall 
prepare and submit to the Committee on Ways and Means of the House of 
Representatives and the Committee on Finance of the Senate on a 
quarterly basis a report on the progress of implementing the cost 
accounting system pursuant to subsection (a).

SEC. 415. PRESERVATION OF CUSTOMS FUNDS.

    Notwithstanding section 733(b), no funds available to the United 
States Customs Service or collected under paragraphs (1) through (8) of 
section 13031(a) of the Consolidated Omnibus Reconciliation Act of 1985 
may be transferred for use by any other agency or office in the 
Department.

SEC. 416. REPORTS TO CONGRESS.

    The United States Customs Service shall, on and after the effective 
date of this Act, continue to submit to the Committee on Ways and Means 
of the House of Representatives and the Committee on Finance of the 
Senate any report required, on the day before such the effective date 
of this Act, to be so submitted under any provision of law.

SEC. 417. CUSTOMS USER FEES.

    Section 13031(f) of the Consolidated Omnibus Budget Reconciliation 
Act of 1985 (19 U.S.C. 58c(f)) is amended--
            (1) in paragraph (1), by striking subparagraph (B) and 
        inserting the following:
            ``(B) amounts deposited into the Customs Commercial 
        Automation Account under paragraph (5).'';
            (2) in paragraph (4), by striking ``(other than the excess 
        fees determined by the Secretary under paragraph (5))''; and
            (3) by striking paragraph (5) and inserting the following:
    ``(5)(A) There is created within the general fund of the Treasury a 
separate account that shall be known as the `Customs Commercial 
Automation Account'. In each of fiscal years 2003, 2004, and 2005 there 
shall be deposited into the Customs Commercial Automation Account from 
fees collected under subsection (a)(9)(A), $350,000,000.
    ``(B) There is authorized to be appropriated from the Customs 
Commercial Automation Account in fiscal years 2003 through 2005 such 
amounts as are available in that Account for the development, 
establishment, and implementation of the Automated Commercial 
Environment computer system for the processing of merchandise that is 
entered or released. Amounts appropriated pursuant to this subparagraph 
are authorized to remain available until expended.
    ``(C) In adjusting the fee imposed by subsection (a)(9)(A) for 
fiscal year 2006, the Secretary of the Treasury shall reduce the amount 
estimated to be collected in fiscal year 2006 by the amount by which 
total fees deposited to the Customs Commercial Automation Account 
during fiscal years 2003, 2004, and 2005 exceed total appropriations 
from that Account.''.

SEC. 418. SEPARATE BUDGET REQUEST FOR CUSTOMS.

    The President shall include in each budget transmitted to the 
Congress under section 1105 of title 31, United States Code, a separate 
budget request for the United States Customs Service.

SEC. 419. PAYMENT OF DUTIES AND FEES.

    Section 505(a) of the Tariff Act of 1930 (19 U.S.C. 1505(a)) is 
amended--
            (1) in the first sentence--
                    (A) by striking ``Unless the merchandise'' and 
                inserting ``Unless the entry of merchandise is covered 
                by an import activity summary statement, or the 
                merchandise''; and
                    (B) by inserting after ``by regulation'' the 
                following: ``(but not to exceed 10 working days after 
                entry or release, whichever occurs first)''; and
            (2) by striking the second and third sentences and 
        inserting the following: ``If an import activity summary 
        statement is filed, the importer or record shall deposit 
        estimated duties and fees for entries of merchandise covered by 
        the import activity summary statement no later than the 15th 
        day of the month following the month in which the merchandise 
        is entered or released, whichever occurs first.''.

SEC. 420. DEFINITION.

    In this subtitle, the term ``customs revenue function'' means the 
following:
            (1) Assessing and collecting customs duties (including 
        antidumping and countervailing duties and duties imposed under 
        safeguard provisions), excise taxes, fees, and penalties due on 
        imported merchandise, including classifying and valuing 
        merchandise for purposes of such assessment.
            (2) Processing and denial of entry of persons, baggage, 
        cargo, and mail, with respect to the assessment and collection 
        of import duties.
            (3) Detecting and apprehending persons engaged in 
        fraudulent practices designed to circumvent the customs laws of 
        the United States.
            (4) Enforcing section 337 of the Tariff Act of 1930 and 
        provisions relating to import quotas and the marking of 
        imported merchandise, and providing Customs Recordations for 
        copyrights, patents, and trademarks.
            (5) Collecting accurate import data for compilation of 
        international trade statistics.
            (6) Enforcing reciprocal trade agreements.
            (7) Functions performed by the following personnel, and 
        associated support staff, of the United States Customs Service 
        on the day before the effective date of this Act: Import 
        Specialists, Entry Specialists, Drawback Specialists, National 
        Import Specialist, Fines and Penalties Specialists, attorneys 
        of the Office of Regulations and Rulings, Customs Auditors, 
        International Trade Specialists, Financial Systems Specialists.
            (8) Functions performed by the following offices, with 
        respect to any function described in any of paragraphs (1) 
        through (7), and associated support staff, of the United States 
        Customs Service on the day before the effective date of this 
        Act: the Office of Information and Technology, the Office of 
        Laboratory Services, the Office of the Chief Counsel, the 
        Office of Congressional Affairs, the Office of International 
        Affairs, and the Office of Training and Development.

SEC. 421. GAO REPORT TO CONGRESS.

    Not later than 3 months after the effective date of this Act, the 
Comptroller General of the United States shall submit to the Congress a 
report that sets forth all trade functions performed by the executive 
branch, specifying each agency that performs each such function.

SEC. 422. CORPORATE EXPATRIATES.

    (a) Limitation.--The United States Customs Service shall not enter 
into any new contract with a subsidiary of a publicly traded 
corporation if the corporation is incorporated in a tax haven country 
but the United States is the principal market for the public trading of 
the corporation's stock.
    (b) Definition.--For purposes of subsection (a), the term ``tax 
haven country'' means each of the following: Barbados, Bermuda, British 
Virgin Islands, Cayman Islands, Commonwealth of the Bahamas, Cyprus, 
Gibraltar, Isle of Man, the Principality of Liechtenstein, the 
Principality of Monaco, and the Republic of the Seychelles.
    (c) Waiver.--The President may waive subsection (a) with respect to 
any specific contract if the President certifies to the Committee on 
Ways and Means of the House of Representatives and the Committee on 
Finance of the Senate that the waiver is required in the interest of 
national security.

                   Explanation of Proposed Amendments

                             i. introduction

A. Background on the United States Customs Service
    Since 1789, the United States Customs Service has been a 
federal agency under the United States Treasury Department. 
Congress created the Customs Service as its fifth legislative 
act in order to implement the first Act of Congress, the Tariff 
Act of 1789. Virtually all federal government revenue was 
originally collected by the Customs Service through duties. 
Today, the Customs Service collects over $20 billion of 
revenue, ensures that all imports and exports comply with U.S. 
laws and regulations, guards against smuggling, and is 
responsible for the following:
    1. Assessing and collecting customs duties, excise taxes, 
fees and penalties due on imported merchandise;
    2. Interdicting and seizing contraband, including narcotics 
and illegal drugs;
    3. Processing persons, baggage, cargo and mail, and 
administering certain navigation laws;
    4. Detecting and apprehending persons engaged in fraudulent 
practices designed to circumvent customs and related laws;
    5. Protecting American business and labor and intellectual 
property rights by enforcing U.S. laws intended to prevent 
illegal trade practices, including provisions related to quotas 
and the marking of imported merchandise;
    6. Collecting anti-dumping and other duties under our trade 
remedies laws and by providing customs recordation for 
copyrights, patents and trademarks;
    7. Protecting the general welfare and security of the 
United States by enforcing import and export restrictions and 
prohibitions, including the export of critical technology used 
to develop weapons of mass destruction, and money laundering; 
and
    8. Collecting accurate import and export data for 
compilation of international trade statistics.
    Today, in addition to its own laws, the Customs Service 
enforces well over 400 other provisions of law for at least 40 
agencies. A number of these statutes relate to quality of life 
issues involving the environment, such as motor vehicle safety 
and emission controls, water pollution standards, pesticide 
controls, freon smuggling, and the protection of endangered 
wildlife. Other laws safeguard American agriculture, business 
and public health, and consumer safety.
B. The President's Homeland Security Proposal and H.R. 5005
    On June 18, 2002, President Bush proposed to transfer all 
of the authority and assets of the Customs Service, as well as 
many other federal agencies, to a new Department of Homeland 
Security. This proposal was incorporated into H.R. 5005, which 
was introduced on June 24, 2002. Specifically, the Customs 
Service would be placed under an Under Secretariat for Border 
and Transportation Security along with the Immigration and 
Naturalization Service, the Animal and Plant Health Inspection 
Service, the Coast Guard, and the Transportation Security 
Administration. Unlike the Coast Guard, H.R. 5005 does not 
require that the Customs Service be maintained as a separate 
entity. Under Section 402 of H.R. 5005, the Secretary of 
Homeland Security would be vested in the functions, personnel, 
assets, and liabilities of the United States Customs Service of 
the Department of the Treasury, including the functions of the 
Secretary of the Treasury relating thereto. The President's 
proposal would give the Secretary significant authority to 
reorganize the Customs Service, reallocate reserves within 
Customs, and make changes to Customs employees' compensation.
C. Rationale for the Committee's Recommendations to Amend H.R. 5005
    Unlike other agencies that are being transferred to the new 
Department of Homeland Security, the Customs Service has four 
unique characteristics:
    1. The Customs Service is a revenue-collecting agency with 
significant trade facilitation functions. The Customs Service 
collects over $20 billion a year in duties, second only to the 
Internal Revenue Service in collections. Economically critical 
trade laws are implemented by the Customs Service. Because of 
its border presence, the Customs Service has taken on other 
border-related missions such as preventing drug smuggling and 
stopping weapons of mass destruction.
    2. A significant portion of the Customs Service's budget is 
funded through over $1 1/2 billion worth of user fees paid by 
importers, and by law those fees must be used only for specific 
inspectional services or as budgetary offsets to general 
commercial operations.
    3. Most of the Customs Service's legal authority is held by 
the Treasury Department or other agencies of government and 
delegated to the Customs Service. For example, 19 U.S.C. 3 
states that the Secretary of the Treasury shall supervise the 
collection of duties. Historically, this responsibility has 
been delegated to the Customs Service.
    4. Substantial portions of the Customs Service's trade work 
is very technical and esoteric. The work requires professionals 
with legal and regulatory skills that are unlike border 
security skills.
    For these reasons, the Members of the Committee recommend 
that the Select Committee on Homeland Security recognize the 
unique mission of the Customs Service and adopt the attached 
bill language to amend H.R. 5005. In making these 
recommendations, the Committee adopts the fundamental basis for 
of the President's proposal and agrees to transfer Customs 
assets and personnel in their entirety to the new Department of 
Homeland Security. The Committee rejected the option of carving 
up the Customs Service into commercial and non-commercial 
elements. Instead, the Committee sought to identify and prevent 
further reorganization or reductions in a closely defined core 
group that perform revenue-collection functions.
    The Committee was guided by one over-riding goal: to ensure 
that the Department of Homeland Security would be successful 
and not hamstrung by any limits on its authority or ability to 
carry out the protection of Americans. It is also important to 
ensure that revenue continues to be collected and that goods 
keep moving across the border with little delay in order to 
maintain delicately balanced commercial schedules and 
operations. The Committee is confident that the proposed 
changes to H.R. 5005 do not interfere with the new Department's 
missions but will enhance its effectiveness.
    Four amendments were offered to the Chairman's mark. The 
first amendment, offered by Mr. Cardin, would have designated 
the existing Customs Service as a ``distinct entity'' within 
the Homeland Security Department. This amendment failed by 
voice vote. The second amendment, offered by Mr. Becerra, would 
have expanded the dedicated use provision for the merchandise 
processing fee (MPF) in the Chairman's mark to require use of 
MPF receipts (in excess) of the $350 million dedicated for ACE 
development) for commercial operations. This amendment failed 
by a roll call vote of 12 ayes to 24 noes. The third amendment, 
offered by Mr. McDermott, would have preserved existing and 
future Customs' employees pay, performance standards, etc. as 
provided under Title 19 and Title 5. This amendment failed by a 
voice vote. Mr. Doggett offered an amendment to prohibit the 
Customs Service from entering into contracts with companies 
that have reincorporated overseas in order to avoid U.S. 
taxation. This amendment was agreed to without objection.

         ii. explanation of recommendations to amend h.r. 5005

    Sec. 402 of base text: The recommendation would authorize 
the transfer of functions, personnel, assets, and liabilities 
of the existing Customs Service in their entirety to the 
Division for Border and Transportation Security of the 
Department of Homeland Security, subject to other provisions of 
the amendment. Unlike H.R. 5005, the Committee does not 
recommend transferring the functions of the Department of the 
Treasury related to the Customs Service for the reasons given 
below in Sections 411 and 412.
    Sec. 411: A core Customs Service is established within the 
Department of Homeland Security and vested, at a minimum, with 
certain revenue-related offices and functions as specifically 
identified. This core Customs entity will continue to have a 
Senate-confirmed Commissioner, and the incumbent Commissioner 
may continue to serve until a new Commissioner is named.
    The primary function of the Customs Service has always been 
revenue collection and trade facilitation, and it is imperative 
to maintain these activities. However, revenue and trade will 
be relatively minor activities within the very large, new 
Department of Homeland Security. Given the importance of trade 
and government revenue, an independent and separate 
Congressional mandate for trade and revenue collection is 
appropriate. Accordingly, Customs Service personnel and offices 
that handle these unique revenue and trade functions should 
continue to operate within their organization after the 
transfer to the new Department.
    This section refers to Section 420(7) of the amendment for 
the list of components within the current Customs Service that 
the Committee determines to be completely or primarily devoted 
to the performance of revenue collection: Import Specialists, 
Entry Specialists, Drawback Specialists, National Import 
Specialists, Fines and Penalties Specialists, attorneys of the 
Office of Regulations and Rulings, Customs Auditors, 
International Trade Specialists, and Financial Systems 
Specialists. The personnel who perform this work have 
specialized skills in the very technical field of trade law, 
which are unlike the skills related to border security. For 
this reason, the group identified in Section 420(7) would 
comprise the Customs Service core established under Section 411 
within the Department of Homeland Security and would have a 
distinct existence apart, though integrated with, the many 
border security elements of the new Department.
    Regarding the provision requiring a Senate confirmed 
Customs Commissioner, the Committee believes that the person 
who leads the Customs Service must be an extraordinary 
individual to handle the multiple functions of that office. The 
Commissioner should continue to answer to, and be endorsed by 
Congress to ensure that all of Customs' missions are 
recognized.
    Sec. 412(a): The recommendation would reserve revenue 
collecting statutory authority to Treasury, where it is 
currently vested, and transfer all other authority exercised by 
the existing Customs Service to the Department of Homeland 
Security. Treasury may delegate its reserved authority to 
Homeland Security, as it often does to Customs today. Treasury 
shall consult with Homeland Security on all matters and 
regulations affecting customs functions. The recommendation 
authorizes the Department of the Treasury to hire additional 
staff to exercise this authority.
    It is not unusual for the Customs Service to implement and 
enforce laws that by statute are intended to be implemented by 
entirely different departments; indeed, Customs Service 
currently enforces 400 laws on behalf of 40 different agencies. 
The proposed changes would continue to empower the Secretary of 
the Treasury to promulgate regulations on a myriad of highly 
technical trade matters, while leaving it to the new Department 
of Homeland Security to implement them. In this way, Treasury's 
trade expertise and macroeconomic outlook is retained to 
address technical trade matters.
    Sec. 412(b): With regard to the Customs Service core 
established under Section 411, reorganization or decrease in 
the funding or staff or reductions to Title 5 pay and benefits 
levels is prohibited in order to preserve these critical trade 
functions.
    The President and Governor Ridge have described their wish 
for flexibility in the Department structure created by 
Congress, and there are many ways that the Administration will 
be able to obtain the ``synergy'' it seeks for the new Homeland 
Security Department with the Committee's recommendations. As 
described earlier, however, the revenue-oriented group 
established under Section 411 has unique functions distinct 
from security functions. It is therefore appropriate to 
prohibit reductions to this core group and to preserve these 
critical trade functions.
    Sec. 413: The recommendation provides that the Secretary 
shall maintain adequate staffing to assure that existing levels 
of customs revenue services are maintained, and the Secretary 
shall notify Congress of actions that reduce such services.
    Although all offices of the Customs Service conduct 
revenue-collecting services, those components of Customs that 
are outside of the core revenue-collecting group described in 
Section 420(7) and required to be kept intact per Section 
412(b) perform mixed functions. The Committee is mindful of the 
flexibility needs and security goals of the President and 
therefore requires only that customs revenue services, not 
necessarily staffing, be maintained at the existing levels as 
the Customs Service is transferred to the new Department of 
Homeland Security. Any significant reduction in services must 
be reported to Congress in advance, which is consistent with 
current law at 19 U.S.C. 2075(g).
    Sec. 414: The Customs Service is required to implement a 
cost accounting system in order to determine and track the use 
of $1.5 billion of Customs user fees.
    The Committee is concerned that Customs Service is 
currently unable to answer fundamental questions about how it 
spends money. For example, Customs officials state that it 
spends a certain amount of money on commercial operations. The 
figure is not based upon the addition of various commercial 
costs from all operations within the Customs Service, such as 
the number of people who actually processed entries of 
merchandise at specific ports during a set period. Instead, the 
figure is based upon Customs officials' belief that a set 
percentage of its work is always related to commercial 
activities. That static percentage is based upon a no longer 
available, ad hoc survey conducted by Customs several years 
ago. A modern cost accounting system would allow the Customs 
Service to accurately identify the amount of money spent at 
specific locations and for specific revenue functions.
    Given that $1.5 billion of Customs' $2.6 billion budget 
comes from the collection of fees that are ostensibly for 
specified revenue services, the Committee adopted this 
provision to ensure that revenue collecting functions can be 
closely tracked within the overall Department of Homeland 
Security, with strict account for such fees. Therefore, this 
reform is appropriate for a bill to transfer the Customs 
Service to the new Department of Homeland Security.
    Such a system would also provide compliance with the core 
financial system requirements of the Joint Financial Management 
Improvement Program (JFMIP), which is a joint and cooperative 
undertaking of the U.S. Department of the Treasury, the General 
Accounting Office, the Office of Management and Budget, and the 
Office of Personnel Management working in cooperation with each 
other and other agencies to improve financial management 
practices in government. That Program has statutory 
authorization in the Budget and Accounting Procedures Act of 
1950 (31 U.S.C. 65).
    Sec. 415: The recommendation provides that Customs fees 
(with the exception of the merchandise processing fee) must 
continue to be used for currently authorized functions. Fee 
receipts may not be transferred to any other agency or office 
in the Department.
    Congress created import fees to help fund critical customs 
activities. Fees are paid by commercial interests in return for 
specific commercial services. There have long been concerns 
about whether Customs can adequately account for the cost of 
providing commercial services in return for the fees collected. 
See the discussion in Section 414 above. It would be 
inappropriate and potentially inconsistent with United States 
trade obligation for importers to pay fees that subsidize non-
commercial functions of the new Department of Homeland 
Security. For these reasons, the Committee believes that fees 
should continue to be spent only on activities already defined 
in 19 U.S.C. 58c.
    Sec. 416: The recommendation would make further changes for 
the purpose of ensuring that certain commercial functions are 
carried out. The text would require that all reports now 
provided to Congress from the Customs Service shall continue to 
be provided to the House Ways and Means and Senate Finance 
Committees.
    Transferring the assets and functions of the Customs 
Service to the new Department of Homeland Security will not 
lessen the need of these committees for information about trade 
operations. Through the Customs Service, the Department will be 
implementing virtually all trade obligations of the United 
States. These trade obligations lie within the jurisdiction of 
these committees. Therefore, existing reports should continue 
to be provided to the Congressional committees of jurisdiction 
on trade to allow the committees to continue appropriate 
oversight and authorizations.
    Sec. 417: The recommendation provides that a portion of the 
Customs Merchandise Processing Fee must go to build the new 
Customs computer.
    The Customs Service's current import system, the Automated 
Commercial System (ACS), was designed in 1984 and will not be 
able to meet the increasingly complex, long-term requirements 
impacted by the growth in trade, responsibilities, and 
legislation. Consequently, replacing ACS with the Automated 
Commercial Environment (ACE) is a critical component in the 
modernization and development of the Customs Service. The new 
computer system has also taken center stage in the fight 
against terrorism since security data collection will be an 
important objective of the new Department. It is therefore 
entirely appropriate to mandate that the ACE system be built 
from the proceeds of the merchandise processing fee.
    This provision has strong support from the import business 
community that pays the merchandise processing fee. Moreover, 
Governor Ridge has stated that he anticipates ``the rapid 
development of the ACE system will continue as will the 
interagency community's development of an International Trade 
Data System that creates a harmonized system for import-related 
data. These systems will likely become a cornerstone of the 
Department of Homeland Security's enterprise architecture.''
    Sec. 418: The recommendation requires that the 
Administration provide a separate budget request on the customs 
revenue functions within the new Department.
    This recommendation is consistent with the overall approach 
of the Committee in assuring that the core revenue-collecting 
components of the Customs Service are maintained. Coupled with 
the cost accounting system that will record expenditures for 
customs revenue services, this requirement for a separate 
budget request will ensure that the Committee can continue to 
oversee that revenue is properly collected and trade is 
continuing appropriately.
    Sec. 419: The recommendation would change the merchandise 
entry process to authorize monthly billing with a prohibition 
against deferral of duty past a statutory deadline.
    This provision is a general reform of the import process. 
The purpose is to modernize the customs system from an 
antiquated entry-by-entry billing method to a modern monthly 
billing method that is more consistent with general business 
practice. Congress provided regulatory flexibility to the 
Executive Branch in the Customs Modernization Act to implement 
a modern billing system; however, there has been insufficient 
progress to date. In addition, the Administration has twice 
this year used the underlying statute (19 U.S.C. 1505(a)) in 
what the Committee believes is an inappropriate ad hoc manner 
to defer duties for extraordinary lengths of time. The 
provision creates a statutory deadline that may not be 
extended.
    This provision is appropriate for the Homeland Security 
bill because it supports the overall goal of a modern, 
automated import system that will be used for commercial and 
homeland security purposes. Moreover, there is a further 
benefit in that the process of collecting import data and 
determining admissibility (linked closely to a homeland 
security mission) becomes more clearly removed from the 
collection of revenue (the traditional customs revenue 
mission).
    Sec. 420: The recommendation defines customs revenue 
functions to include the assessing and collecting of all types 
of duties, fees, and taxes; the processing and denial of entry 
of persons and goods; enforcing quota, marking, and 
intellectual property laws; collecting trade data; enforcing 
trade agreements; functions of certain revenue collecting 
specialists; and functions of certain revenue collecting 
support offices.
    These definitions are used throughout the recommended 
amendment in order to 1) define the scope of the newly created 
Customs Service core within the Department of Homeland Security 
and its directions for the Department's future operations 
related to trade and revenue collection; 2) describe to the 
scope of the authorities retained by the Department of the 
Treasury for delegation to the Secretary of Homeland Security; 
and 3) describe the services that must be maintained by the 
Department of Homeland Security even outside the newly-created 
Customs Service core.
    Sec. 421: The recommendation provides that GAO will report 
on all trade functions performed by the executive branch.
    The creation of a new Department that will have significant 
trade responsibilities has led the Committee to recommend a 
comprehensive report to identify all agencies in the executive 
branch that have trade functions. This report will assist the 
Committee in continuing to conduct oversight of international 
trade functions.
    Sec. 422: The recommendation provides that Customs is 
prohibited from entering into new contracts with publicly 
traded corporations if the corporation is incorporated in a tax 
haven country as defined in the section, subject to the 
President's power to waive based upon national security 
reasons.

       DISSENTING VIEWS OF MESSRS. STARK, McDERMOTT, AND BECERRA

    On the Chairman's Proposed Amendment to H.R. 5005, July 11, 2002

    While the Administration's current focus is on the creation of the 
new Department of Homeland Security (DHS), the Ways & Means Committee 
is responsible for the Customs Service functions under the new 
Department. This includes the need to ensure that Customs employees' 
labor protections are maintained. And as Members of Congress, we are 
responsible for ensuring that the creation of this new department does 
not trample on existing laws and our democratic process. The absence of 
civil service and Freedom of Information Act protections in the 
Chairman's mark is ample reason to reject the amendment. But the hasty 
fashion in which this new agency is being developed is completely 
unacceptable under a democratic rule of law.
    We commend the Chairman for attempting to preserve the revenue- 
raising functions of the Customs Service as a distinct entity within 
Customs. However, the Chairman's amendment only includes a small 
subsection of existing Customs personnel and includes a limited 
mandate. Although the Administration continues to reiterate its promise 
that Customs employees' civil service, collective bargaining, and 
whistle-blower protections will be maintained under the reorganized 
agency, these protections were not specifically included in the 
Chairman's amendment. While the Chairman advised the Committee that 
these protections do not fall under the Ways & Means jurisdiction, our 
support cannot rest on a mere promise from the Administration. Twenty-
two existing federal agencies are targets for inclusion under the new 
DHS umbrella. We would discourage our colleagues from taking a cavalier 
approach with the lives of tens of thousands of civil servants for the 
sake of meeting a September 11 deadline.
    Nothing in the Chairman's mark ensures that the Freedom of 
Information Act, the Federal Advisory Committee Act and the Government 
in Sunshine Act are maintained in the new Customs department under the 
DHS. As envisioned by the Administration, this leaves the option of 
closed-door meetings and secrecy up to the discretion of sixteen 
assistant secretaries for the new agencies--ten of whom would not need 
Senate confirmation to hold their posts.There is no reason that the new 
department needs to be hastily rushed through the Ways & Means 
Committee, nor any other Congressional committee. This Committee held a 
hearing two weeks ago in which the Department of Treasury 
representative provided very little detailed information on the 
structure and components of the new Customs agency under DHS. Two weeks 
later, the same representative could not provide any additional 
information on the new Customs agency. The checks and balances 
established by our country's founding fathers should not be ignored in 
pursuit of meeting a self-imposed September 11 deadline.
    We wish to make perfectly clear that our dissension must not be 
interpreted as opposition to securing our domestic territories under 
the new Department of Homeland Security, but rather as an exercise in 
maintaining the checks and balances so crucial to the democratic 
process. This is the largest overhaul of the executive branch in fifty 
years and will have ramifications long beyond our tenure as Members of 
Congress. Any new department should be fashioned correctly the first 
time with all the sunlight the democratic process can afford. 
Regretfully, perfecting amendments offered during the Committee markup 
were rejected along party lines. In conclusion, the Chairman's 
amendment to H.R. 5005 does not provide the necessary elements for a 
long-standing democratic Department.

                                         Pete Stark
                                      Jim McDermott
                                    Xavier Bercerra

                                 
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