Congressional Record: September 7, 2006 (Senate) Page S9209-S9212 FEDERAL FUNDING ACCOUNTABILITY AND TRANSPARENCY ACT OF 2006 Mr. FRIST. Mr. President, I ask unanimous consent that the Senate proceed to the immediate consideration of Calendar No. 576, S. 2590. The PRESIDING OFFICER. The clerk will report the bill by title. The assistant legislative clerk read as follows: A bill (S. 2590) to require full disclosure of all entities and organizations receiving Federal funds. There being no objection, the Senate proceeded to consider the bill which had been reported by the Homeland Security and Governmental Affairs Committee with an amendment to strike out all after the enacting clause and insert the part printed in italic. S. 2590 Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, [SECTION 1. SHORT TITLE. [This Act may be cited as the ``Federal Funding Accountability and Transparency Act of 2006''. [SEC. 2. FULL DISCLOSURE OF ENTITIES RECEIVING FEDERAL FUNDING. [(a) In General.-- [(1) Website.--Effective beginning January 1, 2007 and subject to paragraphs (2) and (3), the Office of Management and Budget shall ensure the existence and operation of a single updated searchable database website accessible by the public at no cost that includes for each entity receiving Federal funding-- [(A) the name of the entity; [(B) the amount of any Federal funds that the entity has received in each of the last 10 fiscal years; [(C) an itemized breakdown of each transaction, including funding agency, program source, and a description of the purpose of each funding action; [(D) the location of the entity and primary location of performance, including the city, State, congressional district, and country; [(E) a unique identifier for each such entity and parent entity, should the entity be owned by another entity; and [(F) any other relevant information. [(2) Initial data.--Effective January 1, 2007, the website shall include data for fiscal years 2006 and 2007. [(3) Previous fiscal years.--Not later than January 1, 2009, information required by this section shall be posted on the website for fiscal years 1999 through 2005. [(b) Definitions.--In this section: [(1) Entity.--The term ``entity''-- [(A) includes-- [(i) a corporation; [(ii) an association; [(iii) a partnership; [[Page S9210]] [(iv) a limited liability company; [(v) a limited liability partnership; [(vi) any other legal business entity; [(vii) grantees, contractors, and, on and after October 1, 2007, subgrantees and subcontractors; and [(viii) any State or locality; and [(B) does not include-- [(i) an individual recipient of Federal assistance; [(ii) a Federal employee; or [(iii) a grant or contract of a nature that could be reasonably expected to cause damage to national security. [(2) Federal funding.--The term ``federal funding''-- [(A) means Federal financial assistance and expenditures that include grants, contracts, subgrants, subcontracts, loans, awards and other forms of financial assistance; and [(B) does not include credit card transactions or minor purchases. [(3) Searchable database website.--The term ``searchable database website'' means a website that allows the public to-- [(A) search Federal funding by name of entity, parent entity, or type of industry, geography, including location of the entity and the primary location of the performance, amounts and types of federal funding, program sources, type of activity being performed, time factors such as fiscal years or multiple fiscal years, and other relevant information; and [(B) download data included in subparagraph (A) including outcomes from searches. [(c) Website.--The database website established by this section-- [(1) shall not be considered in compliance if it links to FPDS, Grants.gov or other existing websites and databases, unless each of those sites has information from all agencies and each category of information required to be itemized can be searched electronically by field in a single search; [(2) shall provide an opportunity for the public to provide input about the utility of the site and recommendations for improvements; and [(3) shall be updated not later than 30 days after the award of any assistance requiring a posting. [(d) Agency Responsibilities.--The Director of OMB shall provide guidance to agency heads to ensure compliance with this section. [(e) Report.--The Director of OMB shall annually report to the Senate Committee on Homeland Security and Government Affairs and the House Committee on Government Reform on implementation of the website that shall include data about the usage and public feedback on the utility of the site, including recommendations for improvements. The annual report shall be made publicly available on the website.] SECTION 1. SHORT TITLE. This Act may be cited as the ``Federal Funding Accountability and Transparency Act of 2006''. SEC. 2. FULL DISCLOSURE OF ENTITIES RECEIVING FEDERAL FUNDING. (a) Definitions.--In this section: (1) Entity.--The term ``entity''-- (A) includes, whether for profit or nonprofit-- (i) a corporation; (ii) an association; (iii) a partnership; (iv) a limited liability company; (v) a limited liability partnership; (vi) a sole proprietorship; (vii) any other legal business entity; (viii) any other grantee or contractor that is not excluded by subparagraph (B) or (C); and (ix) any State or locality; (B) on and after January 1, 2009, includes any subcontractor or subgrantee; and (C) does not include-- (i) an individual recipient of Federal assistance; or (ii) a Federal employee. (2) Federal award.--The term ``Federal award''-- (A) means Federal financial assistance and expenditures that include grants, contracts, subgrants, subcontracts, loans, awards, cooperative agreements, purchase orders, task orders, delivery orders, and other forms of financial assistance; (B) does not include individual transactions below $25,000; and (C) before October 1, 2008, does not include credit card transactions. (3) Searchable website.--The term ``searchable website'' means a website that allows the public to-- (A) search Federal funding by any element required by subsection (b)(1); (B) ascertain through a single search the total amount of Federal funding awarded to an entity, by fiscal year; and (C) download data included in subparagraph (A) included in the outcome from searches. (b) In General.-- (1) Website.--Not later than January 1, 2008, the Office of Management and Budget shall, in accordance with this section and section 204 of the E-Government Act of 2002 (Public Law 107-347; 44 U.S.C. 3501 note), ensure the existence and operation of a single searchable website, accessible by the public at no cost to access, that includes for each Federal award-- (A) the name of the entity receiving the award; (B) the amount of the award; (C) information on the award including transaction type, funding agency, the North American Industry Classification System code or Catalog of Federal Domestic Assistance number (where applicable), program source, and an award title descriptive of the purpose of each funding action; (D) the location of the entity receiving the award and the primary location of performance under the award, including the city, State, congressional district, and country; (E) a unique identifier of the entity receiving the award and of the parent entity of the recipient, should the entity be owned by another entity; and (F) any other relevant information specified by the Office of Management and Budget. (2) Scope of data.--The website shall include data for fiscal year 2007, and each fiscal year thereafter. (3) Designation of agencies.--The Director of the Office of Management and Budget is authorized to designate one or more Federal agencies to participate in the development, establishment, operation, and support of the single website. In the initial designation, or in subsequent instructions and guidance, the Director may specify the scope of the responsibilities of each such agency. (4) Agency responsibilities.--Federal agencies shall comply with the instructions and guidance issued by the Director of the Office of Management and Budget under paragraph (3), and shall provide appropriate assistance to the Director upon request, so as to assist the Director in ensuring the existence and operation of the single website. (c) Website.--The website established under this section-- (1) may use as the source of its data the Federal Procurement Data System, Federal Assistance Award Data System, and Grants.gov, if all of these data sources are searchable through the website and can be accessed in a single search; (2) shall not be considered in compliance if it hyperlinks to the Federal Procurement Data System website, Federal Assistance Award Data System website, Grants.gov website, or other existing websites, so that the information elements required in subsection (b)(1) cannot be searched electronically by field in a single search; (3) shall provide an opportunity for the public to provide input about the utility of the site and recommendations for improvements; and (4) shall be updated not later than 30 days after the award of any Federal award requiring a posting. (d) Subaward Data.-- (1) Pilot program.-- (A) In general.--Not later than July 1, 2007, the Director of the Office of Management and Budget shall commence a pilot program to-- (i) test the collection and accession of data about subgrants and subcontracts; and (ii) determine how to implement a subaward reporting program across the Federal Government, including-- (I) a reporting system under which the entity issuing a subgrant or subcontract is responsible for fulfilling the subaward reporting requirement; and (II) a mechanism for collecting and incorporating agency and public feedback on the design and utility of the website. (B) Termination.--The pilot program under subparagraph (A) shall terminate not later than January 1, 2009. (2) Reporting of subawards.-- (A) In general.--Based on the pilot program conducted under paragraph (1), and, except as provided in subparagraph (B), not later than January 1, 2009, the Director of the Office of Management and Budget-- (i) shall ensure that data regarding subawards are disclosed in the same manner as data regarding other Federal awards, as required by this Act; and (ii) shall ensure that the method for collecting and distributing data about subawards under clause (i)-- (I) minimizes burdens imposed on Federal award recipients and subaward recipients; (II) allows Federal award recipients and subaward recipients to allocate reasonable costs for the collection and reporting of subaward data as indirect costs; and (III) establishes cost-effective requirements for collecting subaward data under block grants, formula grants, and other types of assistance to State and local governments. (B) Extension of deadline.--For subaward recipients that receive Federal funds through State, local, or tribal governments, the Director of the Office of Management and Budget may extend the deadline for ensuring that data regarding such subawards are disclosed in the same manner as data regarding other Federal awards for a period not to exceed 18 months, if the Director determines that compliance would impose an undue burden on the subaward recipient. (e) Exception.--Any entity that demonstrates to the Director of the Office of Management and Budget that the gross income, from all sources, for such entity did not exceed $300,000 in the previous tax year of such entity shall be exempt from the requirement to report subawards under subsection (d), until the Director determines that the imposition of such reporting requirements will not cause an undue burden on such entities. (f) Construction.--Nothing in this Act shall prohibit the Office of Management and Budget from including through the website established under this section access to data that is publicly available in any other Federal database. (g) Report.-- (1) In general.--The Director of the Office of Management and Budget shall submit to the Committee on Homeland Security and Governmental Affairs of the Senate and the Committee on Government Reform of the House of Representatives an annual report regarding the implementation of the website established under this section. (2) Contents.--Each report submitted under paragraph (1) shall include-- (A) data regarding the usage and public feedback on the utility of the site (including recommendations for improving data quality and collection); [[Page S9211]] (B) an assessment of the reporting burden placed on Federal award and subaward recipients; and (C) an explanation of any extension of the subaward reporting deadline under subsection (d)(2)(B), if applicable. (3) Publication.--The Director of the Office of Management and Budget shall make each report submitted under paragraph (1) publicly available on the website established under this section. SEC. 3. CLASSIFIED INFORMATION. Nothing in this Act shall require the disclosure of classified information. Mr. FRIST. Mr. President, I am proud to be an original cosponsor of the Federal Funding Accountability and Transparency Act, S. 2590, that I have brought before the Senate this evening. This is a simple bill, yet a profound bill, designed to simply shine more sunlight, shine that light that we all know is so necessary, on Federal spending. I am absolutely convinced that this bill will go a long way in ultimately reflecting greater fiscal discipline and greater accountability. This is a simple bill but profound, profound in the sense of what it requires. One way to think of the bill is that it will create, for the very first time in the Executive Office of the President, the Office of Management and Budget, the equivalent of a Google search engine for all Americans to see how their Federal tax dollars are being expended. That is the simplicity of it all. I congratulate my colleagues, Senators Coburn and Obama--I just talked to Senator Coburn on the phone--who are the original sponsors of this very important, commonsense piece of legislation. I do congratulate the chairman and ranking member of the Homeland Security and Governmental Affairs Committee, Senators Collins and Lieberman, for their expeditious consideration and reporting of this legislation. Once this bill is enacted, taxpayers will have the ability to know exactly how their money is being spent and, with that greater transparency, will come greater accountability. The bill expands upon E-Government management tools that were enacted in 2002 by making all Federal funding awards, grants, contracts and loans, easily searchable on a public Web site. Only transactions under $25,000 would be exempt from this reporting requirement, as well as awards that are classified for national security purposes. This new tool will be a valuable asset in the continuing effort to spend the taxpayers' dollars wisely, without waste and without misuse. Again, congratulations to Senators Coburn and Obama for their untiring work on this bill. It is my honor to join them as an original cosponsor of this simple, commonsense but important piece of legislation. Mr. LAUTENBERG. Mr. President, I am proud to support S. 2590, the Federal Funding Accountability and Transparency Act. This important legislation requires the Office of Management and Budget to create an online searchable Web site to allow Americans to understand who is getting Federal money. This legislation has broad support from across the political spectrum. Whether we believe we spend too much or we should be doing more to help people in need, we can all agree that we ought to get value from the dollars we spend. Transparency is the first step in that process. I believe that S. 2590 is only the first step. I am excited that Senators Coburn and Obama have endorsed the concept of creating a similar database for targeted tax benefits that go to companies or industries who are adept enough at Washington politics to get them enacted. Like the spending to be disclosed in S. 2590, many targeted tax breaks are good policy. But the American people deserve to know who is paying less in taxes and causing them to pay more. They have a right to know who is getting benefits from Congress. I look forward to working with my colleagues to have a bill, hold hearings, bring the bill to the floor, and make information on tax benefits public and easily accessible. Mr. COBURN. Mr. President, Senators Barack Obama, Tom Carper, John McCain, and I earlier this year introduced S. 2590, the Federal Funding Accountability and Transparency Act of 2006, to bring increased transparency to the way the Federal Government spends taxpayer money. Transparency means allowing citizens to access accurate information on Federal spending decisions in a timely fashion for the purpose of keeping their elected officials accountable. Outside of protecting national security and individual privacy, there is no reason why the operations of all Federal agencies should not be widely known by as many as would like to know. It is because this belief is widely shared by the American people as well as many in this body that S. 2590 has gained the cosponsorship of dozens of Senators. I believe, though, that transparency in Government decisionmaking should not be limited simply to spending, but should also be extended to the decisions Congress makes about the Tax Code. The Tax Code is currently tens of thousands of pages in length and far too confusing for even IRS customer service agents to understand, let alone the average citizen with far less expertise. Because I believe that transparency is one of the best tools we have to curb wasteful behavior, I look forward working with Senator Frank Lautenberg to develop bipartisan legislation like S. 2590 that will bring increased transparency to the Tax Code by allowing the American public to understand the real world effects of the Tax Code. Tax Code matters are extremely complex and the American public has a right to know how the Tax Code affects them. American taxpayers also deserve to know if they are paying higher taxes in order to offset the loss of revenue due to special treatment for special interest groups. This is a complex issue that will require careful study. It is my intention to address this issue in a future hearing of the Subcommittee on Federal Financial Management, Government Information, and International Security. I believe that a hearing addressing this issue will help us all to better understand the ultimate effects of targeted tax expenditures. Further study will also help to inform us on how to fully address the issue of greater transparency. I thank Senator Lautenberg for his attention to this issue and I look forward to working with him and Senator Obama to promote increased Government transparency. As Thomas Jefferson wrote back in 1802, ``We might hope to see the finances of the Union as clear and intelligible as a merchant's books, so that every member of Congress and every man of any mind in the Union should be able to comprehend them, to investigate abuses, and consequently to control them.'' Mr. OBAMA. Mr. President, I thank my distinguished colleagues from New Jersey and Oklahoma. It has been a pleasure to work with them on important legislation to improve Federal financial transparency and accountability. The American people have a right to know how Federal resources are being used. Congress and the President should make it as easy as possible for taxpayers to see how well we are doing our jobs as stewards of Federal revenues and administrators of Federal spending. All of us should have adequate tools to monitor and evaluate how departments and agencies are performing their important functions. The Web site our legislation calls for will be an important tool in reducing wasteful earmarks and unjustified pork barrel spending. Transparency of spending is an important step in improving accountability and performance. I agree with Senators Lautenberg and Coburn that we also need transparency in Federal tax policy. The same way taxpayers should be able to see which companies and organizations receive Federal grants or contracts or other forms of financial assistance, Americans should be able to see which companies and organizations are receiving narrowly targeted tax credits and deductions. A tax break for one taxpayer often means higher taxes for everybody else. It is our duty to make sure that tax breaks that only benefit a few taxpayers at the expense of everybody else are legitimate and appropriate. I have no doubt that greater transparency of targeted tax benefits can help us simplify and improve the fairness of the Federal Tax Code. I look forward to the opportunity to develop bipartisan legislation to address this issue, and I thank my colleagues for their wonderful leadership. [[Page S9212]] Mr. FRIST. Mr. President, I ask unanimous consent that the committee- reported amendment be agreed to, the bill, as amended, be read a third time and passed, the motion to reconsider be laid on the table, and that any statements relating to the bill be printed in the Record. The PRESIDING OFFICER. Without objection, it is so ordered. The committee amendment in the nature of a substitute was agreed to. The bill (S. 2590), as amended, was ordered to be engrossed for a third reading, was read the third time, and passed. ____________________