[Federal Register Volume 68, Number 133 (Friday, July 11, 2003)]
[Proposed Rules]
[Pages 41420-41432]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-17561]



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Part II





Department of Homeland Security





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Office of the Secretary



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6 CFR Part 25



Regulations Implementing the Support Anti-Terrorism by Fostering 
Effective Technologies Act of 2002 (the SAFETY Act); Proposed Rule

  Federal Register / Vol. 68, No. 133 / Friday, July 11, 2003 / 
Proposed Rules  

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DEPARTMENT OF HOMELAND SECURITY

Office of the Secretary

6 CFR Part 25

[USCG-2003-15425]
RIN 1601-AA15


Regulations Implementing the Support Anti-Terrorism by Fostering 
Effective Technologies Act of 2002 (the SAFETY Act)

AGENCY: Office of the Secretary, Homeland Security.

ACTION: Notice of proposed rulemaking.

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SUMMARY: This proposed rule would implement Subtitle G of Title VIII of 
the Homeland Security Act of 2002--the Support of Anti-terrorism by 
Fostering Effective Technologies Act of 2002 (``the SAFETY Act'' or 
``the Act''). As discussed in detail below, the SAFETY Act, through 
regulations promulgated by the Department of Homeland Security (``the 
Department''), will provide critical incentives for the development and 
deployment of anti-terrorism technologies by providing liability 
protections for Sellers of ``qualified anti-terrorism technologies'' 
and others.

DATES: Comments and related material must reach the Docket Management 
Facility on or before August 11, 2003.

ADDRESSES: You may submit comments identified by docket number USCG-
2003-15425 to the Docket Management Facility at the U.S. Department of 
Transportation. To avoid duplication, please use only one of the 
following methods:
    (1) Web site: http://dms.dot.gov.
    (2) Mail: Docket Management Facility, U.S. Department of 
Transportation, 400 Seventh Street SW., Washington, DC 20590-0001.
    (3) Fax: 202-493-2251.
    (4) Delivery: Room PL-401 on the Plaza level of the Nassif 
Building, 400 Seventh Street SW., Washington, DC, between 9 a.m. and 5 
p.m., Monday through Friday, except Federal holidays. The telephone 
number is 202-366-9329.
    (5) Federal Rulemaking Portal: http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: If you have questions on this proposed 
rule, call Wendy Howe, Directorate of Science and Technology, 
Department of Homeland Security, telephone 202-772-9887. If you have 
questions on viewing or submitting material to the docket, call Dorothy 
Beard, Chief, Dockets, Department of Transportation, telephone 202-366-
5149.

SUPPLEMENTARY INFORMATION

Public Participation and Request for Comments

    We encourage you to participate in this rulemaking by submitting 
comments and related materials. All comments received will be posted, 
without change, to http://dms.dot.gov and will include any personal 
information you have provided. We have an agreement with the Department 
of Transportation (DOT) to use the Docket Management Facility. Please 
see DOT's ``Privacy Act'' paragraph below.
    Submitting comments: If you submit a comment, please include your 
name and address, identify the docket number for this rulemaking (USCG-
2003-15425), indicate the specific section of this document to which 
each comment applies, and give the reason for each comment. You may 
submit your comments and material by electronic means, mail, fax, or 
delivery to the Docket Management Facility at the address under 
ADDRESSES; but please submit your comments and material by only one 
means. If you submit them by mail or delivery, submit them in an 
unbound format, no larger than 8\1/2\ by 11 inches, suitable for 
copying and electronic filing. If you submit them by mail and would 
like to know that they reached the Facility, please enclose a stamped, 
self-addressed postcard or envelope. We will consider all comments and 
material received during the comment period. We may change this 
proposed rule in view of them.
    Viewing comments and documents: To view comments, as well as 
documents mentioned in this preamble as being available in the docket, 
go to http://dms.dot.gov at any time and conduct a simple search using 
the docket number. You may also visit the Docket Management Facility in 
room PL-401 on the Plaza level of the Nassif Building, 400 Seventh 
Street SW., Washington, DC, between 9 a.m. and 5 p.m., Monday through 
Friday, except Federal holidays.
    Privacy Act: Anyone can search the electronic form of all comments 
received into any of our dockets by the name of the individual 
submitting the comment (or signing the comment, if submitted on behalf 
of an association, business, labor union, etc.). You may review the 
Department of Transportation's Privacy Act Statement in the Federal 
Register published on April 11, 2000 (65 FR 19477), or you may visit 
http://dms.dot.gov.

Public Meeting

    We do not now plan to hold a public meeting. You may, however, 
submit a request for one to the Docket Management Facility at the 
address under ADDRESSES explaining why one would be beneficial. If we 
determine that a public meeting would aid this rulemaking, we will hold 
one at a time and place announced by a later notice in the Federal 
Register.

Regulatory Background and Analysis

    The Department intends to implement the SAFETY Act as quickly as 
possible. Our twin aims are these:
    (1) To produce by regulation as much certainty as possible 
regarding the application of the liability protections created by the 
Act;
    (2) To provide the Department with sufficient program flexibility 
to address the specific circumstances of each particular request for 
SAFETY Act coverage.
    The Department does not intend to resolve every conceivable 
programmatic issue through this proposed rule. Instead, the Department 
will set out a basic set of regulations and commence the implementation 
of the SAFETY Act program while considering possible supplemental 
regulations as experience with the Act grows.
    The Department invites comment on all aspects of these proposed 
regulations and on the policies that underlie them. The initial comment 
period is relatively brief (30 days) in order to permit the Department 
to begin implementation of this critical program as soon as possible. 
After reviewing the comments, the Department may issue an interim final 
rule and seek additional comment on some or all aspects of the program. 
In any event, the Department will begin implementation of the SAFETY 
Act immediately with regard to Federal acquisitions of anti-terrorism 
technologies and will begin accepting other SAFETY Act applications on 
September 1, 2003.

Background

    As part of the Homeland Security Act of 2002, Public Law 107-296, 
Congress enacted several liability protections for providers of anti-
terrorism technologies. The SAFETY Act provides incentives for the 
development and deployment of anti-terrorism technologies by creating a 
system of ``risk management'' and a system of ``litigation 
management.'' The purpose of the Act is to ensure that the threat of 
liability does not deter potential manufacturers or Sellers of anti-
terrorism technologies from developing and commercializing technologies 
that could save lives. The Act thus creates certain liability 
limitations for ``claims arising out of, relating to, or resulting from 
an act of

[[Page 41421]]

terrorism'' where qualified anti-terrorism technologies have been 
deployed. The Act does not limit liability for harms caused by anti-
terrorism technologies when no act of terrorism has occurred.
    Together, the risk and litigation management provisions provide the 
following protections:
    [sbull] Exclusive jurisdiction in federal court for suits against 
the Sellers of ``qualified anti-terrorism technologies'' (Sec.  
863(a)(2));
    [sbull] A limitation on the liability of Sellers of qualified anti-
terrorism technologies to an amount of liability insurance coverage 
specified for each individual technology, provided that Sellers will 
not be required to obtain any more liability insurance coverage than is 
reasonably available ``at prices and terms that will not unreasonably 
distort the sales price'' of the technology (Sec.  864(a)(2));
    [sbull] A prohibition on joint and several liability for 
noneconomic damages, so that Sellers can only be liable for that 
percentage of noneconomic damages proportionate to their responsibility 
for the harm (Sec.  863(b)(2));
    [sbull] A complete bar on punitive damages and prejudgment interest 
(Sec.  863(b)(1));
    [sbull] A reduction of plaintiffs' recovery by amounts that 
plaintiffs received from ``collateral sources'', such as insurance 
benefits or other government benefits (Sec.  863(c)); and
    [sbull] A rebuttable presumption that the Seller is entitled to the 
``government contractor defense'' (Sec.  863(d)).
    The Act provides that these liability protections are conferred by 
two separate actions by the Secretary. The Secretary's designation of a 
technology as a ``qualified anti-terrorism technology'' confers all of 
the liability protections except the rebuttable presumption in favor of 
the government contractor defense. The presumption in favor of the 
government contractor defense requires an additional ``approval'' by 
the Secretary under Sec.  863(d) of the Act. In many cases, however, 
the designation and the approval can be conferred simultaneously.

Analysis

    This preamble to the proposed rule first addresses the two major 
aspects of the Act--the designation of qualified anti-terrorism 
technologies and the approval of technologies for purposes of the 
government contractor defense. Following that discussion, the preamble 
addresses specific issues regarding the proposed rule and the 
Department's interpretation of the Act.

Designation of Qualified Anti-Terrorism Technologies

    As noted above, the designation of a technology as a qualified 
anti-terrorism technology confers all of the liability protections 
provided in the Act, except for the presumption in favor of the 
government contractor defense. The Act gives the Secretary broad 
discretion in determining whether to designate a particular technology 
as a ``qualified anti-terrorism technology,'' although the Act sets 
forth the following criteria that must be considered to the extent that 
they are applicable to the technology: (1) Prior United States 
Government use or demonstrated substantial utility and effectiveness; 
(2) availability of the technology for immediate deployment; (3) the 
potential liability of the Seller; (4) the likelihood that the 
technology will not be deployed unless the SAFETY Act protections are 
conferred; (5) the risk to the public if the technology is not 
deployed; (6) evaluation of scientific studies; and (7) the 
effectiveness of the technology in defending against acts of terrorism. 
These criteria are not exclusive--the Secretary may consider other 
factors that he deems appropriate. The Secretary has discretion to give 
greater weight to some factors over others, and the relative weighting 
of the various criteria may vary based upon the particular technology 
at issue and the threats that the technology is designed to address. 
The Secretary may, in his discretion, determine that failure to meet a 
particular criterion justifies denial of an application under the 
SAFETY Act. However, the Secretary is not required to reject an 
application that fails to meet one or more of the criteria. Rather the 
Secretary, after considering all of the relevant criteria, may conclude 
that a particular technology merits designation as a ``qualified anti-
terrorism technology'' even if a particular criterion is not satisfied. 
The Secretary's considerations will also vary with the constantly 
evolving threats and conditions that give rise to the need for the 
technologies. The proposed rule provides for designation as a qualified 
anti-terrorism technology for five to eight years.
    The SAFETY Act applies to a very broad range of technologies, 
including products, services, software, and other forms of intellectual 
property, as long as the Secretary, as an exercise of discretion and 
judgment, determines that a technology merits designation under the 
statutory criteria. Further, as the statutory criteria suggest, a 
``qualified anti-terrorism technology'' is not necessarily required to 
be newly developed--it may have already been employed (e.g. ``prior 
United States government use'') or may be a new application of an 
existing technology.
    The Act also provides that, before designating a ``qualified anti-
terrorism technology,'' the Secretary will examine the amount of 
liability insurance the Seller of the technology proposes to maintain 
for coverage of the technology at issue. Under Section 864(a), the 
Secretary must certify that the coverage level is appropriate ``to 
satisfy otherwise compensable third-party claims arising out of, 
relating to, or resulting from an act of terrorism when qualified anti-
terrorism technologies have been deployed.'' Sec.  864(a)(1). The Act 
further provides that ``the Seller is not required to obtain liability 
insurance of more than the maximum amount of liability insurance 
reasonably available from private sources on the world market at prices 
and terms that will not unreasonably distort the sales price of 
Seller's anti-terrorism technologies.'' Sec.  864(a)(2).
    The Secretary does not intend to set a ``one-size-fits-all'' 
numerical requirement regarding required insurance coverage for all 
technologies. Instead, as the Act suggests, the inquiry will be 
specific to each application and may involve an examination of several 
factors, including the following: the amount of insurance the Seller 
has previously maintained; the amount of insurance maintained by the 
Seller for other technologies or for the Seller's business as a whole; 
the amount of insurance typically maintained by sellers of comparable 
technologies; data and history regarding mass casualty losses; and the 
particular technology at issue. The Secretary will not require 
insurance beyond the point at which the cost of coverage would 
``unreasonably distort'' the price of the technology. Once the 
Secretary concludes the analysis regarding the appropriate level of 
insurance coverage (which might include discussions with the Seller in 
appropriate cases), the Secretary will identify in a short 
certification a description of the coverage appropriate for the 
particular qualified anti-terrorism technology. If, during the term of 
the designation, the Seller would like to request reconsideration of 
that insurance certification due to changed circumstances or for other 
reasons, the Seller may do so. If the Seller fails to maintain coverage 
at the certified level during that time period, the liability 
protections of the Act will continue to apply, but the Seller's 
liability limit will remain at the certified insurance level. Such 
failure, however, will be regarded as a negative factor in the 
consideration

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of any future application by the Seller for renewal of the applicable 
designation, and perhaps in any other application by the Seller.
    The Department solicits comment on the designation of qualified 
anti-terrorism technologies, including whether the five to eight year 
period is an appropriate length of time for such a designation.

Government Contractor Defense

    The Act creates a rebuttable presumption that the government 
contractor defense applies to qualified anti-terrorism technologies 
``approved by the Secretary'' in accordance with certain criteria 
specified in Sec.  863(d)(2). The government contractor defense is an 
affirmative defense that immunizes Sellers from liability for certain 
claims brought under Sec.  863(a) of the Act. See Sec.  863(d)(1). The 
presumption of this defense applies to all ``approved'' qualified anti-
terrorism technologies for claims brought in a ``product liability or 
other lawsuit'' and ``arising out of, relating to, or resulting from an 
act of terrorism when qualified anti-terrorism technologies . . . have 
been deployed in defense against or response or recovery from such act 
and such claims result or may result in loss to the Seller.'' Id. While 
the government contractor defense is a judicially-created doctrine, 
Section 863's express terms supplant many of the requirements in the 
case law for application of the defense.
    First, and most obviously, the Act expressly provides that the 
government contractor defense is available not only to government 
contractors, but also to those who sell to state and local governments 
and the private sector. See Sec.  863(d)(1) (``This presumption of the 
government contractor defense shall apply regardless of whether the 
claim against the Seller arises from a sale of the product to Federal 
Government or non-Federal Government customers.'').
    Second, Sellers of qualified anti-terrorism technologies need not 
design their technologies to federal government specifications in order 
to obtain the government contractor defense under the SAFETY Act. 
Instead, the Act sets forth criteria for the Department's ``approval'' 
of technologies. Specifically, the Act provides that during the process 
of approval for the government contractor defense the Secretary will 
conduct a ``comprehensive review of the design of such technology and 
determine whether it will perform as intended, conforms to the Seller's 
specifications, and is safe for use as intended.'' Sec.  863(d)(2). The 
Act also provides that the Seller will ``conduct safety and hazard 
analyses'' and supply such information to the Secretary. Id. This 
express statutory framework thus governs in lieu of the requirements 
developed in case law for the application of the government contractor 
defense.
    Third, the Act expressly states the limited circumstances in which 
the applicability of the defense can be rebutted. The Act provides 
expressly that the presumption can be overcome only by evidence showing 
that the Seller acted fraudulently or with willful misconduct in 
submitting information to the Secretary during the course of the 
Secretary's consideration of such technology. See Sec.  863(d)(1) 
(``This presumption shall only be overcome by evidence showing that the 
Seller acted fraudulently or with willful misconduct in submitting 
information to the Secretary during the course of the Secretary's 
consideration of such technology under this subsection.'').
    The applicability of the government contractor defense to 
particular technologies is thus governed by these express provisions of 
the Act, rather than by the judicially-developed criteria for 
applicability of the government contractor defense outside the context 
of the SAFETY Act.
    While the Act does not expressly delineate the scope of the defense 
(i.e., the types of claims that the defense bars), the Act and the 
legislative history make clear that the scope is broad. For example, it 
is clear that any Seller of an ``approved'' technology cannot be held 
liable under the Act for design defects or failure to warn claims, 
unless the presumption of the defense is rebutted by evidence that the 
Seller acted fraudulently or with willful misconduct in submitting 
information to the Secretary during the course of the Secretary's 
consideration of such technology.
    The government contractor defense under Boyle and its progeny bars 
a broad range of claims. The Supreme Court in Boyle concluded that 
``state law which holds Government contractors liable for design 
defects'' can present a significant conflict with federal policy 
(including the discretionary function exception to the Federal Tort 
Claims Act) and therefore ``must be displaced.'' Boyle v. United 
Technologies Corp., 487 U.S. 500, 512 (1988). The Department believes 
that Congress incorporated the Supreme Court's Boyle line of cases as 
it existed on the date of enactment of the SAFETY Act, rather than 
incorporating future developments of the government contractor defense 
in the courts. Indeed, it is hard to imagine that Congress would have 
intended a statute designed to provide certainty and protection to 
Sellers of anti-terrorism technologies to be subject to future 
developments of a judicially-created doctrine. In fact, there is 
evidence that Congress rejected such a construction. See, e.g., 148 
Cong. Rec. E2080 (November 13, 2001) (statement of Rep. Armey) 
(``[Companies] will have a government contractor defense as is 
commonplace in existing law.'') (emphasis added).
    Procedurally, the presumption of applicability of the government 
contractor defense is conferred by the Secretary's ``approval'' of a 
qualified anti-terrorism technology specifically for the purposes of 
the government contractor defense. This approval is a separate act from 
the Secretary's ``designation'' of a qualified anti-terrorism 
technology. Importantly, the Seller may submit applications for both 
designation as a qualified anti-terrorism technology and approval for 
purposes of the government contractor defense at the same time, and the 
Secretary may review and act upon both applications simultaneously. The 
distinction between the Secretary's two actions is important, however, 
because the approval process for the government contractor defense 
includes a level of review that is not required for the designation of 
a qualified anti-terrorism technology. Specifically, the Act provides 
that during the process of approval for the government contractor 
defense the Secretary will conduct a ``comprehensive review of the 
design of such technology and determine whether it will perform as 
intended, conforms to the Seller's specifications, and is safe for use 
as intended.'' Sec.  863(d)(2). The Department believes that certain 
Sellers will be able to obtain the protections that come with 
designation as a qualified anti-terrorism technology even if they have 
not satisfied the requirements for the government contractor defense. 
Similarly, even if the applicability of the government contractor 
defense were rebutted under the test set forth in Section 863(d)(1) of 
the Act, the technology may still retain the designation and 
protections as a qualified anti-terrorism technology. Fraud or willful 
misconduct in the submission of information to the Department in 
connection with an application under the Act may result not only in 
rebuttal of the presumed application of the government contractor 
defense, but may also prompt the Department to refer the matter to the 
Department of Justice for pursuit of criminal or civil penalties.
    The Department invites comment regarding the government contractor 
defense.

[[Page 41423]]

Specific Issues Regarding the Act and This Rule

    1. Definition of Anti-Terrorism Technologies. The Department 
recognizes that the universe of technologies that can be deployed 
against terrorism includes far more than physical products. Rather, the 
defense of the homeland will require deployment of a broad range of 
technologies that includes services, software, and other forms of 
intellectual property. Thus, consistent with Section 865 of the Act, 
Section 25.3(a) of the proposed rule defines qualified anti-terrorism 
technologies very broadly to include ``any qualifying product, 
equipment, service (including support services), device, or technology 
(including information technology)'' that the Secretary, as an exercise 
of discretion and judgment, determines to merit designation under the 
statutory criteria.
    2. Development of New Technologies. The Act's success depends not 
only upon encouraging Sellers to provide existing anti-terrorism 
technologies, but also upon encouraging Sellers to develop new and 
innovative technologies to respond to the ever-changing threats to the 
American people. The proposed rule is thus designed to allow the 
Department to assist would-be Sellers during the invention, design, and 
manufacturing phases in two important respects. First, Section 25.3(h) 
of the proposal makes clear that the Department, within its discretion 
and where feasible, may provide feedback to manufacturers regarding 
whether proposed or developing anti-terrorism technologies might meet 
the qualification factors under the Act. To be sure, the Department 
cannot provide advance designation, as some of the factors for the 
Secretary's consideration cannot be addressed in advance. The 
Department may, however, provide feedback regarding other factors, with 
the goal of giving potential Sellers some understanding of whether it 
might be advantageous to proceed with further development of the 
technology. Departmental feedback at the design, prototyping, or 
testing stage of development, to the extent feasible, may provide 
manufacturers with added incentive to commence and/or complete 
production of cutting-edge anti-terrorism technology that otherwise 
might not be produced or deployed in the absence of the risk and 
litigation management protections in the Act. The Department will 
perform these consultations with potential Sellers in a manner 
consistent with the protection of intellectual property and trade 
secrets, as discussed below.
    Second, Section 25.3(g) of the proposal recognizes that Federal 
agencies will often be the purchasers of anti-terrorism technologies. 
The Department recognizes that terms on which Sellers are able to 
provide anti-terrorism technologies to Federal agencies may vary 
depending on whether the technologies receive SAFETY Act coverage or 
not. The proposal thus provides that the Department may coordinate 
SAFETY Act reviews with agency procurements. The Department also 
intends to review SAFETY Act applications relating to technologies that 
are the subject of agency procurements on an expedited basis.
    The Department requests public comments regarding the best way for 
the Department to provide feedback to potential Sellers regarding 
SAFETY Act coverage and the best way for the Department to coordinate 
SAFETY Act review with agency procurements.
    3. Protection of Intellectual Property and Trade Secrets. The 
Department believes that successful implementation of the Act requires 
that applicants' intellectual property interests and trade secrets 
remain protected in the application process and beyond. Toward that 
end, the Department will create an application and review process in 
which the Department maintains the confidentiality of an applicant's 
proprietary information. The Department notes that laws mandating 
disclosure of information submitted to the government generally contain 
exclusions or exceptions for such information. The Freedom of 
Information Act, for instance, provides specific exceptions for 
proprietary information submitted to Federal agencies. The Department 
seeks further input on this issue.
    4. Evaluation of Scientific Studies; Consultation with Scientific 
and Technical Experts. Section 862(b)(6) of the Act provides that, as 
one of many factors in determining whether to designate a particular 
technology under the Act, the Secretary shall consider evaluation of 
all scientific studies ``that can be feasibly conducted'' in order to 
assess the capability of the technology to substantially reduce the 
risks of harm. An important part of this provision is that it 
contemplates review only of such studies as can ``feasibly'' be 
conducted. The Department believes that the need to protect the 
American public by facilitating the manufacture and marketing of anti-
terrorism technologies might render it infeasible to defer a 
designation decision until after every conceivable scientific study is 
completed. In many cases, existing information (whether based on 
scientific studies, experience with the technology or a related 
technology, or other factors) might enable the Secretary to perform an 
appropriate assessment of the capability of the technology to reduce 
risks of harm. In other cases, even where less information is available 
about the capability of a technology to reduce risks of harm, the 
public interest in making the technology available as soon as 
practicable may render it infeasible to await the conduct of further 
scientific studies on that issue. In considering whether or to what 
extent it is feasible to defer a designation decision until additional 
scientific studies can be conducted, the Department will bring to bear 
its expertise concerning the protection of the American homeland and 
will consider the urgency of the need for the technology and other 
relevant factors and circumstances. The Department invites comment on 
how the Department should determine what scientific studies ``can be 
feasibly conducted.''
    5. ``Exclusive Federal Jurisdiction'' and ``Scope'' of Insurance 
Coverage under Sec.  864(a)(3). The Act creates an exclusive Federal 
cause of action ``for any claim for loss of property, personal injury, 
or death arising out of, relating to, or resulting from an act of 
terrorism when qualified anti-terrorism technologies have been deployed 
in defense against or response or recovery from such act and such 
claims result or may result in loss to the Seller.'' Sec.  863(a)(2); 
see also Sec.  863(a)(1). This exclusive ``Federal cause of action 
shall be brought only for claims for injuries that are proximately 
caused by sellers that provide qualified anti-terrorism technology.'' 
Sec.  863(a)(1). The best reading of Sec.  863(a), and the reading the 
Department is inclined to adopt, is that (1) only one Federal cause of 
action exists for loss of property, personal injury, or death when a 
claim relates to performance or non-performance of the Seller's 
qualified and deployed anti-terrorism technology, and (2) such cause of 
action may be brought only against the Seller.
    The exclusive Federal nature of this cause of action is evidenced 
in large part by the exclusive jurisdiction provision in Sec.  
863(a)(2). That subsection states: ``Such appropriate district court of 
the United States shall have original and exclusive jurisdiction over 
all actions for any claim for loss of property, personal injury, or 
death arising out of, relating to, or resulting from an act of 
terrorism when qualified anti-terrorism technologies have been

[[Page 41424]]

deployed in defense against or response or recovery from such act and 
such claims result or may result in loss to the Seller.'' Id. Any 
presumption of concurrent causes of action (between State and Federal 
law) is overcome by two basic points. First, Congress would not have 
created in this Act a Federal cause of action to complement State law 
causes of action. Not only is the substantive law for decision in the 
Federal action derived from State law (and thus would be surplusage), 
but in creating the Act Congress plainly intended to limit rather than 
increase the liability exposure of Sellers. Second, the granting of 
exclusive jurisdiction to the Federal district courts provides further 
evidence that Congress wanted an exclusive Federal cause of action. 
Indeed, a Federal district court (in the absence of diversity) does not 
have jurisdiction over state law claims, and the statute makes no 
mention of diversity claims anywhere in the Act.
    Further, it is clear that the Seller is the only appropriate 
defendant in this exclusive Federal cause of action. First and 
foremost, the Act unequivocally states that a ``cause of action shall 
be brought only for claims for injuries that are proximately caused by 
sellers that provide qualified anti-terrorism technology.'' Sec.  
863(a)(1) (emphasis added). Second, if the Seller of the qualified 
anti-terrorism technology at issue was not the only defendant, would-be 
plaintiffs could, in an effort to circumvent the statute, bring claims 
(arising out of or relating to the performance or non-performance of 
the Seller's qualified anti-terrorism technology) against arguably less 
culpable persons or entities, including but not limited to contractors, 
subcontractors, suppliers, vendors, and customers of the Seller of the 
technology. Because the claims in the cause of action would be 
predicated on the performance or non-performance of the Seller's 
qualified anti-terrorism technology, those persons or entities, in 
turn, would file a third-party action against the Seller. In such 
situations, the claims against non-Sellers thus ``may result in loss to 
the Seller'' under Sec.  863(a)(2). The Department believes Congress 
did not intend through the Act to increase rather than decrease the 
amount of litigation arising out of or related to the deployment of 
qualified anti-terrorism technology. Rather, Congress balanced the need 
to provide recovery to plaintiffs against the need to ensure adequate 
deployment of anti-terrorism technologies by creating a cause of action 
that provides a certain level of recovery against Sellers, while at the 
same time protecting others in the supply chain.
    The scope of federal preemption of state laws is highly relevant to 
the Department's implementation of the Act, as the Department will have 
to determine the amount of insurance that Sellers must obtain. 
Accordingly, the Department seeks comment on that matter.
    6. Amount of Insurance. The Act requires that Sellers obtain 
liability insurance ``of such types and in such amounts'' certified by 
the Secretary ``to satisfy otherwise compensable third-party claims 
arising out of, relating to, or resulting from an act of terrorism when 
qualified anti-terrorism technologies have been deployed.'' Sec.  
864(a)(1). However, the Act makes clear that Sellers are not required 
to obtain liability insurance beyond ``the maximum amount of liability 
insurance reasonably available from private sources on the world market 
at prices and terms that will not unreasonably distort the sales price 
of Seller's anti-terrorism technologies.'' Sec.  864(a)(2).
    As explained above, the Department eschews any ``one-size-fits-
all'' approach to the insurance coverage requirement. Instead, the 
Department construes the Act as contemplating the examination of 
several factors. Section 25.4(b) of the proposed rule therefore sets 
forth a nonexclusive list of several factors that the Department may 
consider. These include the amount of insurance the Seller has 
previously maintained; the amount of insurance maintained by the Seller 
for other technologies or for the Seller's business as a whole; the 
amount of insurance typically maintained by sellers of comparable 
technologies; data and history regarding mass casualty losses; 
information regarding the amount of liability insurance offered on the 
world market; the particular technology at issue and its intended use; 
and the point at which the cost of coverage would ``unreasonably 
distort'' the price of the technology.
    In the course of determining the amount of insurance required under 
the Act for a particular technology, the Department may consult with 
the Seller, the Seller's insurer, and others. While the decision 
regarding the amount of insurance required will generally be specific 
to each Seller or each technology, the Department recognizes that the 
incentive-based purposes of the Act may be furthered if the Department 
provides information to potential Sellers regarding the types and 
amounts of insurance that they will likely be required to obtain. Thus 
the Secretary may, where appropriate, give guidance to potential 
Sellers regarding the type and amounts of insurance that may be 
sufficient under the Act for particular technologies or categories of 
technologies.
    The Department also recognizes that the amount of insurance 
available at prices that will not unreasonably distort the price of the 
anti-terrorism technology may vary over time. Thus, the proposed rule 
is written to give the Department flexibility to address fluctuating 
insurance prices by providing that, during the term of the designation, 
the Seller may request reconsideration of the insurance certification 
due to changed circumstances or other reasons.
    The Proposed Rule provides that the Seller shall certify on an 
annual basis that the Seller has maintained the insurance required by 
the Under Secretary's certification. It further provides that the Under 
Secretary may terminate the designation as a qualified anti-terrorism 
technology if the Seller fails to provide the certification or provides 
a false certification. Termination of the designation would mean that 
the Seller would not be able to sell the technology as a qualified 
anti-terrorism technology after the date of the termination. The 
Seller's failure to maintain the insurance also may adversely affect 
the Seller's ability to obtain a renewal of the designation for the 
technology, and may even adversely affect the Seller's ability to 
obtain future designations of ``qualified anti-terrorism 
technologies.'' Finally, a false certification may result in criminal 
or other penalties under existing laws.
    The liability protections of the Act will continue to apply to 
technologies sold while the SAFETY Act designation was effective, 
regardless of whether the seller maintains the required insurance. This 
is necessary because the SAFETY Act protects not only the Seller, but 
also others in the supply chain. For example, a buyer who purchases the 
technology while the SAFETY Act designation is still in effect should 
not be punished for the Seller's failure to maintain the insurance. The 
Seller, however, will face potential uninsured liability, because the 
Seller's liability limit will remain at the certified insurance level. 
This is because subsection (c) of Section 864 makes clear that the 
Seller's liability is capped at the amount of insurance ``required'' to 
be maintained under Section 864, rather than the amount of coverage 
actually obtained. The limitation of liability thus relates entirely to 
the amount of insurance required and makes no reference to whether such 
insurance is, in fact, maintained by the Seller.

[[Page 41425]]

    The Department, as part of each certification, will specify the 
Seller or Sellers of the anti-terrorism technology for purposes of 
SAFETY Act coverage. The Department may, but need not, specify in the 
certification the others who are covered by the liability insurance 
required to be purchased by the Seller.
    The Department invites comment regarding the appropriate 
interpretation of ``prices and terms that will not unreasonably distort 
sales prices,'' the factors that the Department should consider in 
determining the appropriate amount of insurance, and the relevance of 
any other provisions of law, such as the Terrorism Risk Insurance Act 
of 2002 (``TRIA'').
    7. Use of Standards. Section 25.3(c) of the proposed rule provides 
that the Under Secretary may issue safety and effectiveness standards 
for categories of anti-terrorism technologies, and that the Under 
Secretary may consider compliance with any such applicable standards in 
determining whether to grant a designation under the Act. The 
Department seeks comment on how the Department can best develop 
standards and implement the SAFETY Act provisions to provide the 
appropriate market and industry incentives for the development and 
deployment of anti-terrorism technologies.
    8. Relationship of the SAFETY Act to Indemnification under Public 
Law 85-804. The Department recognizes that Congress intended that the 
SAFETY Act's liability protections would substantially reduce the need 
for the United States to provide indemnification under Public Law 85-
804 to Sellers of anti-terrorism technologies. The strong liability 
protections of the SAFETY Act should, in most circumstances, make it 
unnecessary to provide indemnification to Sellers. The Department 
recognizes, however, that there might be, in some limited 
circumstances, technologies or services with respect to which both 
SAFETY Act coverage and indemnification might be warranted. See 148 
Cong. Rec. E2080 (statement by Rep. Armey) (November 13, 2002) (stating 
that in some situations the SAFETY Act protections will ``complement 
other government risk-sharing measures that some contractors can use 
such as Public Law 85-804'').
    In recognition of this close relationship between the SAFETY Act 
and indemnification authority, in Section 73 of Executive Order 13286 
of February 28, 2003, the President recently amended the existing 
Executive Order on indemnification--Executive Order 10789 of November 
14, 1958, as amended. The amendment granted the Department of Homeland 
Security authority to indemnify under Public Law 85-804. At the same 
time, it requires that all agencies--not just the Department of 
Homeland Security--follow certain procedures to ensure that the 
potential applicability of the SAFETY Act is considered before any 
indemnification is granted for an anti-terrorism technology. 
Specifically, the amendment provides that federal agencies cannot 
provide indemnification ``with respect to any matter that has been, or 
could be, designated by the Secretary of Homeland Security as a 
qualified anti-terrorism technology'' unless the Secretary of Homeland 
Security has advised whether SAFETY Act coverage would be appropriate 
and the Director of the Office of Management and Budget has approved 
the exercise of indemnification authority. The amendment includes an 
exception for the Department of Defense where the Secretary of Defense 
has determined that indemnification is ``necessary for the timely and 
effective conduct of United States military or intelligence 
activities.''

Application of Various Laws and Executive Orders to This Rulemaking

Executive Order 12866--Regulatory Planning and Review

    The Department has examined the economic implications of this 
proposed rule as required by Executive Order 12866. Executive Order 
12866 directs agencies to assess all costs and benefits of available 
regulatory alternatives and, when regulation is necessary, to select 
regulatory approaches that maximize net benefits (including potential 
economic, environmental, public health and safety, and other 
advantages; distributive impacts; and equity). Executive Order 12866 
classifies a rule as significant if it meets any one of a number of 
specified conditions, including: Having an annual effect on the economy 
of $100 million, adversely affecting a sector of the economy in a 
material way, adversely affecting competition, or adversely affecting 
jobs. A regulation is also considered a significant regulatory action 
if it raises novel legal or policy issues.
    The Department concludes that this proposed rule is a significant 
regulatory action under the Executive Order because it will have a 
positive, material effect on public safety under Section 3(f)(1), and 
it raises novel legal and policy issues under Section 3(f)(4). The 
Department tentatively concludes, however, that this proposed rule does 
not meet the significance threshold of $100 million effect on the 
economy in any one year under Section 3(f)(1), due to the relatively 
low estimated burden of applying for this technology program, the 
unknown number of certifications and designations that the Department 
will dispense, and the unknown probability of a terrorist attack that 
would have to occur in order for the protections put in place in this 
proposed rule to have a large impact on the public. The Department 
requests comments regarding this determination, and invites commenters 
to submit any relevant data that will assist the agency in estimating 
the impact of this rule.

Need for the Regulation and Market Failure

    This regulation implements the SAFETY Act and is intended to 
implement the provisions set forth in that Act. The Department believes 
the current development of anti-terrorism technologies has been slowed 
due to the potential liability risks associated with their development 
and eventual deployment. In a fully functioning insurance market, 
technology developers would be able to insure themselves against 
excessive liability risk; however, the terrorism risk insurance market 
appears to be in disequilibrium. The attacks of September 11 
fundamentally changed the landscape of terrorism insurance. Congress, 
in the findings of TRIA, concluded that temporary financial assistance 
in the insurance market is needed to ``allow for a transitional period 
for the private markets to stabilize, resume pricing of such insurance, 
and build capacity to absorb any future losses.'' TRIA Sec.  101(b)(2). 
This rulemaking addresses a similar concern, to the extent that 
potential technology developers are unable to efficiently insure 
against large losses due to an ongoing reassessment of terrorism issues 
in insurance markets.
    Even after a temporary insurance market adjustment, purely private 
terrorism risk insurance markets may exhibit negative externalities. 
Because the risk pool of any single insurer may not be large enough to 
efficiently spread and therefore insure against the risk of damages 
from a terrorist attack, and because the potential for excessive 
liability may render any terrorism insurance prohibitively expensive, 
society may suffer from less than optimal technological protection 
against terrorist attacks. The measures set forth in this proposed rule 
are designed to meet this goal; they will provide certain liability 
protection from lawsuits and consequently will increase the

[[Page 41426]]

likelihood that businesses will pursue important technologies that may 
not be pursued without this protection.

Costs and Benefits to Technology Development Firms

    Since this rulemaking puts in place an additional voluntary option 
for technology developers, the expected direct net benefits to firms of 
this rulemaking will be positive; companies presumably will not choose 
to pursue the designation of ``anti-terrorism technology'' unless they 
believe it to be a profitable endeavor. The Department cannot predict 
with certainty the number of applicants for this program. An additional 
source of uncertainty is the reaction of the insurance market to this 
designation. As mentioned above, insurance markets appear to currently 
be adjusting their strategy for terrorism risk, so little market 
information exists that would inform this estimate. The Department 
invites comments on these issues.
    If a firm chooses to invest effort in pursuing SAFETY Act liability 
protection, the direct costs to that firm will be the time and money 
required to submit the required paperwork and other information to the 
Department. Only companies that choose to request this protection will 
incur costs. In the preliminary Paperwork Reduction Act analysis, we 
estimate the reporting burden assuming that each applicant will spend 
at least 40 hours, and perhaps 200 hours, to prepare the information 
required by the Department for consideration. For the purposes of this 
analysis, we assume a loaded labor rate of the personnel preparing the 
information package of $100 per hour. Consequently, the total cost of 
the application requirements is estimated to be at least $4,000 per 
application for a relatively simple application. The Department does 
not yet have sufficient information to estimate the number of 
applicants annually. If we assume 1,000 applications annually, the 
total cost of the application requirement is estimated to range from 
$4,000,000 to $20,000,000 annually (1,000 applicants x 40 to 200 hours 
x $100 per hour). The regulation further requires that firms conduct 
safety, effectiveness, utility, and hazard analyses and provide them to 
the Secretary in the course of applying for this designation. We do not 
have quantified estimates of the impact of this provision, but we 
expect that much of the safety, effectiveness, utility, and hazard 
analysis activity will already take place in the normal course of 
technology development, since those matters are fundamental 
characteristics of a product. The Department acknowledges considerable 
uncertainty in these estimates, but even if the estimates were 
considerably higher, this does not represent a large investment by 
firms relative to overall development costs.
    The direct benefits to firms include lower potential losses from 
liability for terrorist attacks, and as a consequence a lower burden 
from liability insurance for this type of technology. In this 
assessment, we were careful to only consider benefits and costs 
specifically due to the proposed rulemaking and not costs that would 
have been incurred by companies absent the proposed rulemaking. The 
SAFETY Act requires the sellers of the technology to obtain liability 
insurance ``of such types and in such amounts'' certified by the 
Secretary. The entire cost of insurance is not a cost specifically 
imposed by the proposed rulemaking, as companies in the course of good 
business practice routinely purchase insurance absent Federal 
requirements to do so. Any difference in the amount or price of 
insurance purchased as a result of the SAFETY Act would be a cost or 
benefit of this rule for firms.
    The wording of the SAFETY Act clearly states that sellers are not 
required to obtain liability insurance beyond the maximum amount of 
liability insurance reasonably available from private liability sources 
on the world market at prices and terms that will not unreasonably 
distort the sales price of the seller's anti-terrorism technologies. We 
tentatively conclude, however, that this rulemaking will impact both 
the prices and terms of liability insurance relative to the amount of 
insurance coverage absent the SAFETY Act. The probable effect of this 
rule is to lower the quantity of liability coverage needed in order for 
a firm to protect itself from terrorism liability risks, which would be 
considered a benefit of this rule to firms. This change will most 
likely be a shift back in demand that leads to a movement along the 
supply curve for technology firms already in this market; they probably 
will buy less liability coverage. This will have the effect of lowering 
the price per unit of coverage in this market.
    The Department also expects, however, that this rulemaking will 
lead to greater market entry, which will generate surplus for both 
technology firms and insurers. Again, this market is still in 
development, and the Department solicits comments on exactly how to 
predict the effect of this rulemaking on technology development.

Costs and Benefits to Insurers

    The Department has little information on the future structure of 
the terrorism risk insurance market, and how this rulemaking will 
affect that structure. As stated above, this type of intervention could 
serve to lower the demand for insurance in the current market, thus the 
static effect on the profitability of insurers is negative. The 
benefits of the lower insurance burden to technology firms would be 
considered a cost to insurers; the static changes to insurance coverage 
would cause a transfer from insurers to technology firms. On the other 
hand, this type of intervention should serve to increase the surplus of 
insurers by making some types of insurance products possible that would 
have been prohibitive to customers or impossible for insurers to design 
in the absence of this rulemaking. The Department is interested in 
public comment on any possible negative or positive impacts to insurers 
caused by the SAFETY Act and this rulemaking, and whether these impacts 
would result in transfers within this market or an efficiency change 
not captured by another party. We encourage commenters to be as 
specific as possible.

Costs and Benefits to the Public

    The benefits to the public of this proposed rulemaking are very 
difficult to put in dollar value terms since its ultimate objective is 
the development of new technologies that will help prevent or limit the 
damage from terrorist attacks. It is not possible to even determine 
whether these technologies could help prevent large or small scale 
attacks, as the SAFETY Act applies to a vast range of technologies, 
including products, services, software, and other forms of intellectual 
property that could have a widespread impact. In qualitative terms, the 
SAFETY Act removes a great deal of the risk and uncertainty associated 
with product liability and in the process creates a powerful incentive 
that will help fuel the development of critically needed anti-terrorism 
technologies. Additionally, we expect the SAFETY Act to reduce the 
research and development costs of these technologies.
    The tradeoff, however, may be that a greater number of technologies 
may be developed and qualify for this program that have a lower average 
effectiveness against terrorist attacks than technologies currently on 
the market, or technologies that would be developed in the absence of 
this rulemaking. The reason for that tradeoff is that, in the absence 
of this rulemaking, potential

[[Page 41427]]

liability might discourage the deployment of anti-terrorism 
technologies designed to address the most likely and catastrophic 
scenarios, because profit-maximizing firms will always choose to 
develop the technologies with the highest demand first. It is the 
tentative conclusion of the Department that liability discouragement in 
this market is too strong or prohibitive, for the reasons mentioned 
above. The Department tentatively concludes that this rule will have 
positive net benefits to the public, since it serves to strike a better 
balance between consumer protection and technological development. The 
Department welcomes comments informing this tradeoff argument, and 
public input on whether this rulemaking does strike the correct 
balance.

Regulatory Flexibility Act

    The Regulatory Flexibility Act requires the Department to determine 
whether this proposed rulemaking will have a significant impact on a 
substantial number of small entities. Although we expect that many of 
the applicants for SAFETY Act protection are likely to meet the Small 
Business Administration's criteria for being a small entity, we do not 
believe this proposed rulemaking will impose a significant financial 
impact on them. In fact, we believe this proposed rule will be a 
benefit to technology development businesses, especially small 
businesses, by presenting them with an attractive, voluntary option of 
pursuing a potentially profitable investment by reducing the amount of 
risk and uncertainty of lawsuits associated with developing anti-
terrorist technology. The requirements of this proposed rulemaking will 
only be imposed on such businesses that voluntarily seek the liability 
protection of the SAFETY Act. If a company does not request that 
protection, the company will bear no cost.
    To the extent that demand for insurance falls, however, insurers 
may be adversely impacted by this rule. The Department believes that 
eventual new entry into this market and further opportunities to insure 
against terrorism risk implies that the long-term impact of this 
rulemaking on insurers is ambiguous but could very well be positive. We 
also expect that this rulemaking will affect relatively few firms and 
relatively few insurers either positively or negatively, as this 
appears to be a specialized industry. Therefore, we preliminarily 
certify this notice of proposed rulemaking will not have a significant 
impact on a substantial number of small entities, and we request 
comments on this certification.

Unfunded Mandates Reform Act of 1995

    This rule will not result in the expenditure by State, local and 
tribal governments, in the aggregate, or by the private sector, of $100 
million or more in any one year, and it will not significantly or 
uniquely affect small governments. Therefore, no actions were deemed 
necessary under the provisions of the Unfunded Mandates Reform Act of 
1995.

Paperwork Reduction Act of 1995

    The Department will submit the following information collection 
request to the Office of Management and Budget (OMB) for review in 
accordance with procedures of the Paperwork Reduction Act of 1995. The 
proposed information collection will be published to obtain comments 
from the public and affected agencies.
    The Department will request comments on at least the following four 
points:
    (1) Whether the proposed collection of information is necessary for 
the proper performance of the functions of the agency, including 
whether the information will have practical utility;
    (2) The accuracy of the agency's estimate of the burden of the 
proposed collection of information, including the validity of the 
methodology and assumptions used;
    (3) The quality, utility, and clarity of the information to be 
collected; and
    (4) The burden of the collection of information on those who are to 
respond, including through the use of appropriate automated, 
electronic, mechanical, or other technological collection techniques or 
other forms of information technology, e.g., permitting electronic 
submission of responses.
Overview of This Information Collection
    (1) Type of Information Collection: New Collection.
    (2) Title of the Form/Collection: Application for Designation of 
Qualified Anti-terrorism Technology; Application for Certification as 
an Approved Product for Homeland Security.
    (3) Agency form numbers and applicable component sponsoring the 
collection: Form Numbers: SAFETY-001, SAFETY-002, Directorate of 
Science and Technology, Department of Homeland Security.
    (4) Affected public who will be asked or required to respond, as 
well as a brief abstract: Primary: Sellers and potential Sellers of 
qualified anti-terrorism technology. Abstract: The Application Form for 
Designation and/or Approval of Qualified Anti-terrorism Technology will 
be used to provide information to the Under Secretary for Science and 
Technology of the Department of Homeland Security in determining 
whether Sellers qualify for risk and litigation management protections 
under the SAFETY Act.
    (5) An estimate of the total number of respondents and the amount 
of time estimated for an average respondent to respond: 1,000 
applicants annually. 40 to 200 hours per application.
    (6) An estimate of the total public burden (in hours) associated 
with the collection: 40,000 to 200,000 hours.
    If additional information is required, contact: Directorate of 
Science and Technology, SAFETY Act/room 4320, Department of Homeland 
Security, Washington, DC 20528.

Small Business Regulatory Fairness Act of 1996

    As noted above, the Department has tentatively determined that this 
proposed rule would not qualify as a ``major rule'' as defined by 
section 804 of the Small Business and Regulatory Enforcement Act of 
1996.

Executive Order 13132--Federalism

    The Department of Homeland Security does not believe this proposed 
rule will have substantial direct effects on the States, on the 
relationship between the national government and the States, or on 
distribution of power and responsibilities among the various levels of 
government. States will, however, benefit from this rule to the extent 
that they are purchasers of qualified anti-terrorism technologies. The 
Department requests comment on the federalism impact of this Rule. In 
particular, the Department seeks comment on whether this proposed rule 
will raise significant federalism implications and, if so, what is the 
nature of those implications.

List of Subjects in 6 CFR Part 25

    Administrative practice and procedure, Business and industry, 
Insurance, Science and technology, Security measures.

    For the reasons discussed in the preamble, 6 CFR Chapter I is 
proposed to be amended by adding part 25 to read as follows:

PART 25--REGULATIONS TO SUPPORT ANTI-TERRORISM BY FOSTERING 
EFFECTIVE TECHNOLOGIES

Sec.
25.1 Purpose.
25.2 Delegation.

[[Page 41428]]

25.3 Designation of qualified anti-terrorism technologies.
25.4 Obligations of seller.
25.5 Procedures for designation of qualified anti-terrorism 
technologies.
25.6 Government contractor defense.
25.7 Procedures for certification of approved products for Homeland 
Security.
25.8 Confidentiality and protection of intellectual property.
25.9 Definitions.

    Authority: Subtitle G of Title VIII of Pub. L. 107-296, 116 
Stat. 2238 (6 U.S.C. 441-444).


Sec.  25.1  Purpose.

    This part implements the Support Anti-terrorism by Fostering 
Effective Technologies Act of 2002, Subtitle G of Title VIII of Public 
Law 107-296 (``the SAFETY Act'' or ``the Act'').


Sec.  25.2  Delegation.

    All of the Secretary's responsibilities, powers, and functions 
under the SAFETY Act may be exercised by the Under Secretary for 
Science and Technology of the Department of Homeland Security (``the 
Under Secretary'') or the Under Secretary's designees.


Sec.  25.3  Designation of qualified anti-terrorism technologies.

    (a) General. The Under Secretary may designate as a qualified anti-
terrorism technology for purposes of protections set forth in Subtitle 
G of Title VIII of Public Law 107-296 any qualifying product, 
equipment, service (including support services), device, or technology 
(including information technology) designed, developed, modified, or 
procured for the specific purpose of preventing, detecting, 
identifying, or deterring acts of terrorism or limiting the harm such 
acts might otherwise cause.
    (b) Criteria to be considered. In determining whether to grant the 
designation under paragraph (a) of this section (a ``Designation''), 
the Under Secretary may exercise discretion and judgment in 
interpreting and weighting the various criteria in each case in 
determining whether to grant a Designation:
    (1) Prior United States Government use or demonstrated substantial 
utility and effectiveness.
    (2) Availability of the technology for immediate deployment in 
public and private settings.
    (3) Existence of extraordinarily large or extraordinarily 
unquantifiable potential third party liability risk exposure to the 
Seller or other provider of such anti-terrorism technology.
    (4) Substantial likelihood that such anti-terrorism technology will 
not be deployed unless protections under the system of risk management 
provided under Subtitle G of Title VIII of Public Law 107-296 are 
extended.
    (5) Magnitude of risk exposure to the public if such anti-terrorism 
technology is not deployed.
    (6) Evaluation of all scientific studies that can be feasibly 
conducted in order to assess the capability of the technology to 
substantially reduce risks of harm.
    (7) Anti-terrorism technology that would be effective in 
facilitating the defense against acts of terrorism, including 
technologies that prevent, defeat or respond to such acts.
    (8) Any other factor that the Under Secretary may consider to be 
relevant to the determination or to the homeland security of the United 
States.
    (c) Use of standards. From time to time the Under Secretary may 
develop, issue, revise, and adopt safety and effectiveness standards 
for various categories of anti-terrorism technologies. Such standards 
will be published by the Department at http://www.dhs.gov, and copies 
may also be obtained by mail by sending a request to: Directorate of 
Science and Technology, SAFETY Act/room 4320, Department of Homeland 
Security, Washington, DC 20528. Compliance with any such standards that 
are applicable to a particular anti-terrorism technology may be 
considered before any Designation will be granted for such technology 
under paragraph (a) of this section; in such cases, the Under Secretary 
may consider test results produced by an independent laboratory or 
other entity engaged to test or verify the safety, utility, 
performance, or effectiveness of such technology.
    (d) Consideration of substantial equivalence. In determining 
whether a particular technology satisfies the criteria in paragraph (b) 
of this section and complies with any applicable standards referenced 
in paragraph (c) of this section, the Under Secretary may take into 
consideration evidence that the technology is substantially equivalent 
to other, similar technologies (``predicate technologies'') that have 
been previously designated as ``qualified anti-terrorism technologies'' 
under the SAFETY Act. A technology may be deemed to be substantially 
equivalent to a predicate technology if:
    (1) It has the same intended use as the predicate technology; and
    (2) It has the same or substantially similar technological 
characteristics as the predicate technology.
    (e) Duration and depth of review. Recognizing the urgency of 
certain security measures, the Under Secretary will make a judgment 
regarding the duration and depth of review appropriate for a particular 
technology. This review will include submissions by the applicant for 
SAFETY Act coverage, along with information that the Under Secretary 
can feasibly gather from other sources. For technologies with which the 
Federal Government or other governmental entity already has substantial 
experience or data (through the procurement process or through prior 
use or review), the review may rely in part upon that prior experience 
and, thus, may be expedited. The Under Secretary may consider any 
scientific studies, testing, field studies, or other experience with 
the technology that he deems appropriate and that are available or can 
be feasibly conducted or obtained in order to assess the capability of 
the technology to substantially reduce risks of harm. Such studies may, 
in the Under Secretary's discretion, include:
    (1) Public source studies;
    (2) Classified and otherwise confidential studies;
    (3) Studies, tests, or other performance records or data provided 
by or available to the producer of the specific technology; and
    (4) Proprietary studies that are available to the Under Secretary.
    In considering whether or the extent to which it is feasible to 
defer a decision on a Designation until additional scientific studies 
can be conducted on a particular technology, the Under Secretary will 
bring to bear his or her expertise concerning the protection of the 
security of the American homeland and will consider the urgency of the 
need for the technology.
    (f) Content of designation. A Designation shall specify the 
technology and the Seller(s) of the technology. The Designation may, 
but need not, also specify others who are required to be covered by the 
liability insurance required to be purchased by the Seller. The 
Designation shall include the Under Secretary's certification required 
by Sec.  25.4(h). The Designation may also include such other 
specifications as the Under Secretary may deem to be appropriate. 
Failure to specify a covered person or entity in a Designation will not 
preclude application of the Act's protections to that person or entity.
    (g) Government procurements. The Under Secretary may coordinate a 
SAFETY Act review in connection with an agency procurement of an anti-
terrorism technology in any manner he or she deems appropriate and 
consistent with the Act and other applicable laws.
    (h) Pre-application consultations. To the extent that he or she 
deems it appropriate, the Under Secretary may consult with potential 
SAFETY Act

[[Page 41429]]

applicants regarding the need for or advisability of particular types 
of anti-terrorism technologies, although no pre-approval of any 
particular technology may be given. The confidentiality provisions in 
Sec.  25.8 shall be applicable to such consultations.


Sec.  25.4  Obligations of seller.

    (a) Liability insurance required. Any person or entity that sells 
or otherwise provides a qualified anti-terrorism technology to Federal 
and non-Federal Government customers shall obtain liability insurance 
of such types and in such amounts as shall be required in accordance 
with this section and certified by the Under Secretary to satisfy 
otherwise compensable third-party claims arising out of, relating to, 
or resulting from an act of terrorism when qualified anti-terrorism 
technologies have been deployed in defense against, response to, or 
recovery from, such act. The Under Secretary may request at any time 
(before or after the certification process established under this 
section) that the Seller or any other provider of qualified anti-
terrorism technology submit any information that would:
    (1) Assist in determining the amount of liability insurance 
required; or
    (2) Show that the Seller or any other provider of qualified anti-
terrorism technology otherwise has met all the requirements of this 
section.
    (b) Maximum amount. For the total claims related to one such act of 
terrorism, the Seller will not be required to obtain liability 
insurance of more than the maximum amount of liability insurance 
reasonably available from private sources on the world market at prices 
and terms that will not unreasonably distort the sales price of the 
Seller's anti-terrorism technology. The Under Secretary will determine 
the amount of liability insurance required for each technology, or, to 
the extent feasible and appropriate, a particular group of 
technologies. The Under Secretary or his designee may find that--
notwithstanding the level of risk exposure for a particular technology, 
or group of technologies--the maximum amount of liability insurance 
from private sources on the world market is set at a price or 
contingent on terms that will unreasonably distort the sales price of a 
Seller's technology, thereby necessitating liability insurance coverage 
below the maximum amount available. In determining the amount of 
liability insurance required, the Under Secretary may consider any 
factor, including, but not limited to, the following:
    (1) The particular technology at issue;
    (2) The amount of liability insurance the Seller maintained prior 
to application;
    (3) The amount of liability insurance maintained by the Seller for 
other technologies or for the Seller's business as a whole;
    (4) The amount of liability insurance typically maintained by 
sellers of comparable technologies;
    (5) Information regarding the amount of liability insurance offered 
on the world market;
    (6) Data and history regarding mass casualty losses;
    (7) The intended use of the technology;
    (8) The possible effects of the cost of insurance on the price of 
the product, and the possible consequences thereof for development, 
production, or deployment of the technology; and
    (9) In the case of a Seller seeking approval to self-insure, the 
factors described in 48 CFR 28.308(d).
    (c) Scope of coverage. Liability insurance obtained pursuant to 
this section shall, in addition to the Seller, protect the following, 
to the extent of their potential liability for involvement in the 
manufacture, qualification, sale, use, or operation of qualified anti-
terrorism technologies deployed in defense against, response to, or 
recovery from, an act of terrorism:
    (1) Contractors, subcontractors, suppliers, vendors and customers 
of the Seller.
    (2) Contractors, subcontractors, suppliers, and vendors of the 
customer.
    (d) Third party claims. Any liability insurance required to be 
obtained under this section shall provide coverage against third party 
claims arising out of, relating to, or resulting from an act of 
terrorism when the applicable qualified anti-terrorism technologies 
have been deployed in defense against, response to, or recovery from 
such act.
    (e) Reciprocal waiver of claims. The Seller shall enter into a 
reciprocal waiver of claims with its contractors, subcontractors, 
suppliers, vendors, and customers, and contractors and subcontractors 
of the customers, involved in the manufacture, sale, use, or operation 
of qualified anti-terrorism technologies, under which each party to the 
waiver agrees to be responsible for losses, including business 
interruption losses, that it sustains, or for losses sustained by its 
own employees resulting from an activity resulting from an act of 
terrorism when qualified anti-terrorism technologies have been deployed 
in defense against, response to, or recovery from such act.
    (f) Information to be submitted by the seller. The Seller shall 
provide a statement, executed by a duly authorized representative of 
the Seller, of all liability insurance coverage applicable to third-
party claims arising out of, relating to, or resulting from an act of 
terrorism when the Seller's Qualified Anti-terrorism Technology has 
been deployed in defense against, response to, or recovery from such 
act, including:
    (1) Names of insurance companies, policy numbers, and expiration 
dates;
    (2) A description of the types and nature of such insurance 
(including the extent to which the Seller is self-insured or intends to 
self-insure);
    (3) Dollar limits per occurrence and annually of such insurance, 
including any applicable sublimits;
    (4) Deductibles or self-insured retentions, if any, that are 
applicable;
    (5) Any relevant exclusions from coverage under such policies;
    (6) The price for such insurance, if available, and the per-unit 
amount or percentage of such price directly related to liability 
coverage for the Seller's Qualified Anti-terrorism Technology deployed 
in defense against, or response to, or recovery from an act of terror;
    (7) Where applicable, whether the liability insurance, in addition 
to the Seller, protects contractors, subcontractors, suppliers, vendors 
and customers of the Seller and contractors, subcontractors, suppliers, 
vendors and customers of the customer to the extent of their potential 
liability for involvement in the manufacture, qualification, sale, use 
or operation of Qualified Anti-terrorism Technologies deployed in 
defense against, response to, or recovery from an act of terrorism;
    (8) Any limitations on such liability insurance; and
    (9) In the case of a Seller seeking approval to self-insure, all of 
the information described in 48 CFR 28.308(a)(1) through (a)(10).
    (g) Seller's continuing obligation. Within one year after the Under 
Secretary's certification required by paragraph (h) of this section, 
and each year thereafter, the Seller shall certify to the Under 
Secretary that the Seller has maintained the insurance required by the 
Under Secretary's certification. The Under Secretary may terminate the 
designation as a qualified anti-terrorism technology for the technology 
at issue if the Seller fails to provide the certification required by 
this paragraph or provides a false certification. The Under Secretary 
may also consider such failure to provide the certification or 
provision of a false certification when reviewing future applications 
from the same Seller. The Seller must also notify the Under Secretary 
of any changes in

[[Page 41430]]

types or amounts of liability insurance coverage for any Qualified 
Anti-terrorism Technology.
    (h) Under Secretary's certification. For each Qualified Anti-
Terrorism Technology, the Under Secretary shall certify the amount of 
insurance required under Section 864 of the Act. The Under Secretary 
shall include the certification under this section as a part of the 
applicable Designation. The certification may specify a period of time 
for which the certification will apply. The Seller of a Qualified Anti-
terrorism Technology may at any time petition the Under Secretary for a 
revision or termination of the certification under this section. The 
Under Secretary or his designee may at any time request information 
from the Seller regarding the insurance maintained by the Seller or the 
amount of insurance available to the Seller.


Sec.  25.5  Procedures for designation of qualified anti-terrorism 
technologies.

    (a) Application procedure. Any Seller seeking a Designation shall 
submit all information supporting such request to the Assistant 
Secretary for Plans, Programs, and Budget of the Department of Homeland 
Security Directorate of Science and Technology (``the Assistant 
Secretary''), or such other official of such Directorate as may be 
designated from time to time by the Under Secretary. The Under 
Secretary shall make application forms available at http://www.dhs.gov 
and by mail upon request sent to: Directorate of Science and 
Technology, SAFETY Act/room 4320, Department of Homeland Security, 
Washington, DC 20528.
    (b) Initial notification. Within 30 days after receipt of an 
Application for a Designation, the Assistant Secretary or his or her 
designee shall notify the applicant in writing that:
    (1) The Application is complete and will be reviewed; or
    (2) That the Application is incomplete, in which case the missing 
or incomplete parts will be specified.
    (c) Review process. The Assistant Secretary or his or her designee 
will review each complete Application and any included supporting 
materials. In performing this function, the Assistant Secretary or his 
or her designee may, but is not required to:
    (1) Request additional information from the Seller;
    (2) Meet with representatives of the Seller;
    (3) Consult with, and rely upon the expertise of, any other federal 
or nonfederal entity;
    (4) Perform studies or analyses of the technology or the insurance 
market for such technology; and
    (5) Seek information from insurers regarding the availability of 
insurance for such technology.
    (d) Recommendation of the Assistant Secretary. Within 90 days after 
receipt of a complete Application for a Designation, the Assistant 
Secretary shall make one of the following recommendations to the Under 
Secretary regarding such Application: that the Application be approved 
and a Designation be issued to the Seller; that the Seller be notified 
that the technology is potentially eligible for a Designation, but that 
additional specified information is needed before a decision may be 
reached; or that the Application be denied. If approval is recommended, 
the recommendation shall include a recommendation regarding the 
certification required by Sec.  25.4(h). The Assistant Secretary may 
extend the time period beyond 90 days upon notice to the Seller; the 
Assistant Secretary is not required to provide a reason or cause for 
such extension.
    (e) Action by the Under Secretary. Within 30 days after receiving a 
recommendation from the Assistant Secretary pursuant to paragraph (d) 
of this section, the Under Secretary shall take one of the following 
actions: approve the Application and issue an appropriate Designation 
to the Seller, which shall include the certification required by Sec.  
25.4(h); notify the Seller in writing that the technology is 
potentially eligible for a Designation, but that additional specified 
information is needed before a decision may be reached; or deny the 
Application, and notify the Seller in writing of such decision. The 
Under Secretary may extend the time period beyond 30 days upon notice 
to the Seller; the Under Secretary is not required to provide a reason 
or cause for such extension. The Under Secretary's decision shall be 
final and not subject to review, except at the discretion of the Under 
Secretary.
    (f) Term of designation; renewal. A Designation shall be valid and 
effective for a term of five to eight years (as determined by the Under 
Secretary based upon the technology) commencing on the date of 
issuance, and the protections conferred by the Designation shall 
continue in full force and effect indefinitely, after the expiration of 
the Designation, to all sales of qualified anti-terrorism technologies 
covered by the Designation that were consummated during such term. At 
any time after the third anniversary of such issuance, the Seller may 
apply for renewal of the Designation. The Under Secretary shall make 
the application form for renewals available at http://www.dhs.gov and 
by mail upon request sent to: Directorate of Science and Technology, 
SAFETY Act/room 4320, Department of Homeland Security, Washington, DC 
20528.
    (g) Transfer of designation. Any Designation may be transferred and 
assigned to any other person or entity to which the Seller transfers 
and assigns all right, title, and interest in and to the technology 
covered by the Designation, including the intellectual property rights 
therein (or, if the Seller is a licensee of the technology, to any 
person or entity to which such Seller transfers all of its right, 
title, and interest in and to the applicable license agreement). Such 
transfer and assignment of a Designation will not be effective unless 
and until the Under Secretary is notified in writing of the transfer 
using the ``Application for Transfer of Designation'' form issued by 
the Under Secretary (the Under Secretary shall make this application 
form available at http://www.dhs.gov and by mail by written request 
sent to: Directorate of Science and Technology, SAFETY Act/room 4320, 
Department of Homeland Security, Washington, DC 20528), and the 
transferee complies with all applicable provisions of the SAFETY Act, 
this Part, and the relevant Designation as if the transferee were the 
Seller. Upon the effectiveness of such transfer and assignment, the 
transferee will be deemed to be a Seller in the place and stead of the 
transferor with respect to the applicable technology for all purposes 
under the SAFETY Act, this Part, and the transferred Designation. The 
transferred Designation will continue to apply to the transferor with 
respect to all transactions and occurrences that occurred through the 
time at which the transfer and assignment of the Designation became 
effective, as specified in the applicable Application for Transfer of 
Designation.
    (h) Application of designation to licensees. Any Designation shall 
apply to any other person or entity to which the Seller licenses 
(exclusively or nonexclusively) the right to manufacture and sell the 
technology, in the same manner and to the same extent that such 
Designation applies to the Seller, effective as of the date of 
commencement of the license, provided that the Seller notifies the 
Under Secretary of such license by submitting, within 30 days after 
such date of commencement, a ``Notice of License of Qualified Anti-
terrorism Technology'' form issued by the Under Secretary. The

[[Page 41431]]

Under Secretary shall make this form available at http://www.dhs.gov 
and by mail upon request sent to: Directorate of Science and 
Technology, SAFETY Act/room 4320, Department of Homeland Security, 
Washington, DC 20528. Such notification shall not be required for any 
licensee listed as a Seller on the applicable Designation.
    (i) Termination of designation resulting from substantial 
modification. A Designation shall terminate automatically, and have no 
further force or effect, if the designated Qualified Anti-terrorism 
Technology is significantly changed or modified. A significant change 
or modification in the technology is one that could significantly 
affect the safety or effectiveness of the device. This could include a 
significant change or modification in design, material, chemical 
composition, energy source, manufacturing process, or purpose for which 
it is to be sold. Changes or modifications will be evaluated at a 
minimum with reference to the description of the technology and its 
purposes as provided in the Seller's application and with reference to 
what was designated in the applicable Designation. If a Seller is 
planning a significant change or modification to a designated 
technology as defined above, such Seller may apply for a corresponding 
modification of the applicable Designation in advance of the 
implementation of such modification. Application for such a 
modification must be made using the ``Application for Modification of 
Designation'' form issued by the Under Secretary. The Under Secretary 
shall make this application form available at http://www.dhs.gov and by 
mail upon request sent to: Directorate of Science and Technology, 
SAFETY Act/room 4320, Department of Homeland Security, Washington, DC 
20528.


Sec.  25.6  Government contractor defense.

    The Under Secretary may certify a qualified anti-terrorism 
technology as an Approved Product for Homeland Security for purposes of 
establishing a rebuttable presumption of the applicability of the 
government contractor defense. In determining whether to grant such 
certification, the Under Secretary or his or her designee shall conduct 
a comprehensive review of the design of such technology and determine 
whether it will perform as intended, conforms to the Seller's 
specifications, and is safe for use as intended. The Seller shall 
provide safety and hazard analyses and other relevant data and 
information regarding such technology to the Department in connection 
with an application. The Under Secretary or his designee may require 
that the Seller submit any information that the Under Secretary or his 
designee considers relevant to the application for approval. The Under 
Secretary or his designee may consult with, and rely upon the expertise 
of, any other governmental or non-governmental person or entity, and 
may consider test results produced by an independent laboratory or 
other person or entity engaged by the Seller.


Sec.  25.7  Procedures for certification of approved products for 
Homeland Security.

    (a) Application procedure. A Seller seeking certification of anti-
terrorism technology as an Approved Product for Homeland Security under 
Sec.  25.6 (a ``Certification'') shall submit all information 
supporting such request to the Assistant Secretary. The Under Secretary 
shall make application forms available at http://www.dhs.gov, and 
copies may also be obtained by mail by sending a request to: 
Directorate of Science and Technology, SAFETY Act/room 4320, Department 
of Homeland Security, Washington, DC 20528. An Application for a 
Certification may not be filed unless the Seller has also filed an 
Application for Designation of Qualified Anti-Terrorism Technology for 
the same technology. The two applications may be filed simultaneously 
and may be reviewed simultaneously.
    (b) Initial notification. Within 30 days after receipt of an 
Application for a Certification, the Assistant Secretary or his or her 
designee shall notify the applicant in writing that:
    (1) The Application is complete and will be reviewed; or
    (2) That the Application is incomplete, in which case the missing 
or incomplete parts will be specified.
    (c) Review process. The Assistant Secretary or his or her designee 
will review each complete Application for a Certification and any 
included supporting materials. In performing this function, the 
Assistant Secretary or his or her designee may, but is not required to:
    (1) Request additional information from the Seller;
    (2) Meet with representatives of the Seller;
    (3) Consult with, and rely upon the expertise of, any other federal 
or nonfederal entity; and
    (4) Perform or seek studies or analyses of the technology.
    (d) Recommendation of the Assistant Secretary. Within 90 days after 
receipt of a complete Application for a Certification, the Assistant 
Secretary shall make one of the following recommendations to the Under 
Secretary regarding such Application: that the Application be approved 
and a Certification be issued to the Seller; that the Seller be 
notified that the technology is potentially eligible for a 
Certification, but that additional specified information is needed 
before a decision may be reached; or that the Application be denied. 
The Assistant Secretary may extend the time period beyond 90 days upon 
notice to the Seller; the Assistant Secretary is not required to 
provide a reason or cause for such extension.
    (e) Action by the Under Secretary. Within 30 days after receiving a 
recommendation from the Assistant Secretary pursuant to paragraph (d) 
of this section, the Under Secretary shall take one of the following 
actions: approve the Application and issue an appropriate Certification 
to the Seller; notify the Seller in writing that the technology is 
potentially eligible for a Certification, but that additional specified 
information is needed before a decision may be reached; or deny the 
Application, and notify the Seller in writing of such decision. The 
Under Secretary may extend the time period beyond 30 days upon notice 
to the Seller, and the Under Secretary is not required to provide a 
reason or cause for such extension. The Under Secretary's decision 
shall be final and not subject to review, except at the discretion of 
the Under Secretary.
    (f) Designation is a pre-condition. The Under Secretary may approve 
an Application for a Certification only if the Under Secretary has also 
approved an Application for a Designation for the same technology under 
Sec.  25.3.
    (g) Term of certification; renewal. A Certification shall be valid 
and effective for the same period of time for which the related 
Designation is issued, and shall terminate upon the termination of such 
related Designation. The Seller may apply for renewal of the 
Certification in connection with an application for renewal of the 
related Designation. An application for renewal must be made using the 
``Application for Certification of an Approved Product for Homeland 
Security'' form issued by the Under Secretary.
    (h) Application of certification to licensees. Any Certification 
shall apply to any other person or entity to which the Seller licenses 
(exclusively or nonexclusively) the right to manufacture and sell the 
technology, in the same manner and to the same extent that such 
Certification applies to the Seller, effective as of the date of 
commencement of the license, provided

[[Page 41432]]

that the Seller notifies the Under Secretary of such license by 
submitting, within 30 days after such date of commencement, a ``Notice 
of License of Approved Anti-terrorism Technology'' form issued by the 
Under Secretary. The Under Secretary shall make this form available at 
http://www.dhs.gov and by mail upon request sent to: Directorate of 
Science and Technology, SAFETY Act/room 4320, Department of Homeland 
Security, Washington, DC 20528. Such notification shall not be required 
for any licensee listed as a Seller on the applicable Certification.
    (i) Transfer of certification. In the event of any permitted 
transfer and assignment of a Designation, any related Certification for 
the same anti-terrorism technology shall automatically be deemed to be 
transferred and assigned to the same transferee to which such 
Designation is transferred and assigned. The transferred Certification 
will continue to apply to the transferor with respect to all 
transactions and occurrences that occurred through the time at which 
such transfer and assignment of the Certification became effective.
    (j) Issuance of certificate; approved product list. For anti-
terrorism technology reviewed and approved by the Under Secretary and 
for which a Certification is issued, the Under Secretary shall issue a 
certificate of conformance to the Seller and place the anti-terrorism 
technology on an Approved Product List for Homeland Security.


Sec.  25.8  Confidentiality and protection of intellectual property.

    The Secretary, in consultation with the Office of Management and 
Budget and appropriate Federal law enforcement and intelligence 
officials, and in a manner consistent with existing protections for 
sensitive or classified information, shall establish confidentiality 
protocols for maintenance and use of information submitted to the 
Department under the SAFETY Act and this Part. Such protocols shall, 
among other things, ensure that the Department will utilize all 
appropriate exemptions from the Freedom of Information Act.


Sec.  25.9  Definitions.

    Assistant Secretary--The term ``Assistant Secretary'' means the 
Assistant Secretary for Plans, Programs, and Budget of the Department 
of Homeland Security Directorate of Science and Technology, or such 
other official of such Directorate as may be designated from time to 
time by the Under Secretary.
    Certification--The term ``Certification'' means (unless the context 
requires otherwise) a certification that a qualified anti-terrorism 
technology for which a Designation has been issued will perform as 
intended, conforms to the Seller's specifications, and is safe for use 
as intended.
    Contractor--The term ``contractor'' of a Seller means any person or 
entity with whom or with which the Seller has entered into a contract 
relating to the manufacture, sale, use, or operation of anti-terrorism 
technology for which a Designation is issued (regardless of whether 
such contract is entered into before or after the issuance of such 
Designation), including, without limitation, an independent laboratory 
or other entity engaged in testing or verifying the safety, utility, 
performance, or effectiveness of such technology, or the conformity of 
such technology to the Seller's specifications.
    Designation--The term ``Designation'' means a designation of a 
qualified anti-terrorism technology under the SAFETY Act issued by the 
Under Secretary under authority delegated by the Secretary of Homeland 
Security.
    Loss--The term ``loss'' means death, bodily injury, or loss of or 
damage to property, including business interruption loss (which is a 
component of loss of or damage to property).
    Physical Harm--The term ``physical harm'' as used in the Act shall 
mean a physical injury to the body that caused, either temporarily or 
permanently, partial or total physical disability, incapacity or 
disfigurement. In no event shall physical harm include mental pain, 
anguish, or suffering, or fear of injury.
    SAFETY Act or Act--The term ``SAFETY Act'' or ``Act'' means the 
Support Anti-terrorism by Fostering Effective Technologies Act of 2002, 
enacted as Subtitle G of Title VIII of the Homeland Security Act of 
2002, Public Law 107-296.
    Seller--The term ``Seller'' means any person or entity that sells 
or otherwise provides anti-terrorism technology to Federal and non-
Federal Government customers for which a Designation has been issued 
under this Part (unless the context requires otherwise).
    Under Secretary--The term ``Under Secretary'' means the Under 
Secretary for Science and Technology of the Department of Homeland 
Security.

    Dated: July 7, 2003.
Tom Ridge,
Secretary of Homeland Security.
[FR Doc. 03-17561 Filed 7-8-03; 11:58 am]
BILLING CODE 4410-10-P