Officials debate rule on liability for anti-terrorism tools

Lawmakers and industry officials on Friday expressed concern about the Homeland Security Department's plan to implement a law designed to limit the liability that companies might face for their counter-terrorism technologies.

"By passing the [law], Congress acted quickly to resolve uncertainty over liability concerns so that the full power of American technology could be unleashed in the war on terrorism," Virginia Republican Tom Davis, chairman of the House Government Reform Committee, said during an oversight hearing on the Support Anti-Terrorism by Fostering Effective Technologies (SAFETY) Act. "[The department] must be careful that its implementing regulations and processes are not so complicated that they defeat the very purpose of the SAFETY Act."

He said "bureaucratic delays" have resulted in "private firms waiting to submit applications until they have seen some finality in the application process and implementing regulations."

Homeland Security said it would begin taking applications in September but began the process on Thursday after issuing an interim rule late last week, Davis said. The law, which was enacted in January, provides limited liability protection for companies if their products or services fail to prevent terrorist attacks.

Parney Albright, a Homeland Security assistant secretary, said the delay was due to a review of public comments from more than 40 companies and associations. Albright also said the regulatory process typically takes 18 months, but Homeland Security "compressed" it to seven. The department plans to issue a final rule in about 90 days, he said.

Harris Miller, president of the Information Technology Association of America (ITAA), testified that changes to the applications process are necessary. The application, he said, would take companies an average of 1,000 hours to complete.

"We are concerned that the ... information requirements are so massive as to ignore the real-world business issues surrounding deployment of anti-terrorism technologies and urge the department to rethink the scope of information being required," he said.

The department, however, estimated that it would take 108 hours.

When asked by lawmakers if the process would prove burdensome and delay the use of anti-terrorism technologies, Albright argued that the requested data meets criteria established not by the department but by the law. Albright also said if the department believes it needs "statutory relief" in the future, it would work with Congress to make necessary changes.

Miller, along with the Professional Services Council and the Chamber of Commerce, also called the request for detailed financial data "unnecessary," arguing that it would deter companies from applying for liability limits and negate the purpose of the law.

"The information submitted to the [department] will necessarily contain very sensitive confidential and proprietary ... information," said John Clerici, a lawyer representing the chamber. "Without assurances of confidentiality, the need to supply this information alone will likely deter sellers."

Industry officials also cited "significant hurdles" that need to be addressed before finalizing the rule, including prioritizing applications and clarifying protections for proprietary information.

Davis agreed, saying, "The interim rule is not where we need to be."