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108th Congress                                                   Report
                                 SENATE
 2d Session                                                     108-225
_______________________________________________________________________

                                     

                                                       Calendar No. 276


            HOMELAND SECURITY GRANT ENHANCEMENT ACT OF 2003

                               __________

                              R E P O R T

                                 of the

         COMMITTEE ON GOVERNMENTAL AFFAIRS UNITED STATES SENATE

                              to accompany

                                S. 1245

TO PROVIDE FOR HOMELAND SECURITY GRANT COORDINATION AND SIMPLIFICATION, 
                         AND FOR OTHER PURPOSES

                             together with

                            ADDITIONAL VIEWS





               February 10, 2004.--Ordered to be printed
                   COMMITTEE ON GOVERNMENTAL AFFAIRS

                   SUSAN M. COLLINS, Maine, Chairman
TED STEVENS, Alaska                  JOSEPH I. LIEBERMAN, Connecticut
GEORGE V. VOINOVICH, Ohio            CARL LEVIN, Michigan
NORM COLEMAN, Minnesota              DANIEL K. AKAKA, Hawaii
ARLEN SPECTER, Pennsylvania          RICHARD J. DURBIN, Illinois
ROBERT F. BENNETT, Utah              THOMAS R. CARPER, Delaware
PETER G. FITZGERALD, Illinois        MARK DAYTON, Minnesota
JOHN E. SUNUNU, New Hampshire        FRANK LAUTENBERG, New Jersey
RICHARD C. SHELBY, Alabama           MARK PRYOR, Arkansas

           Michael D. Bopp, Staff Director and Chief Counsel
              Tim Raducha-Grace, Professional Staff Member
      Joyce A. Rechtschaffen, Minority Staff Director and Counsel
                       Beth M. Grossman, Counsel
              Michael L. Alexander, Minority Staff Member
                      Amy B. Newhouse, Chief Clerk


                            C O N T E N T S

                              ----------                              
                                                                   Page
  I. Purpose and Summary..............................................1
 II. Background.......................................................5
III. Legislative History.............................................14
 IV. Section-by-Section..............................................15
  V. Evaluation of Regulatory Impact.................................29
 VI. CBO Cost Estimate...............................................30
VII. Additional Views................................................33
VIII.Changes to Existing Law.........................................50

                                                       Calendar No. 276
108th Congress
                                 SENATE
                                                                 Report
 2d Session                                                     108-225

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



 
            HOMELAND SECURITY GRANT ENHANCEMENT ACT OF 2003

                                _______
                                

               February 10, 2004.--Ordered to be printed

                                _______
                                

Ms. Collins, from the Committee on Governmental Affairs, submitted the 
                               following

                              R E P O R T

                             together with

                            ADDITIONAL VIEWS

                         [To accompany S. 1245]

    The Committee on Governmental Affairs, to which was 
referred the bill (S. 1245) to provide for homeland security 
grant coordination and simplification, and for other purposes, 
having considered the same reports favorably thereon with 
amendments and recommends that the bill do pass.

                         I. Purpose and Summary

    The Senate Governmental Affairs Committee (the Committee) 
approved S. 1245, the Homeland Security Grant Enhancement Act 
of 2003 on June 17, 2003. This bill seeks to create a stronger, 
streamlined program of federal financial assistance to State 
and local governments and first responders responsible for 
protecting our homeland.
    On March first, our homeland security structure began to 
move into place, as Secretary Ridge incorporated nearly two-
dozen agencies into the Department of Homeland Security. While 
the Senate spent more than three months debating the Homeland 
Security Act, the law contains virtually no guidance on how the 
Department is to assist those at the State and local level with 
their homeland security needs. Congress wrote a 187-page law 
creating the Department, yet included but a single paragraph on 
grant programs for first responders. As a result, the 
Department has been left with little guidance from Congress as 
to how State and local grant decisions should be made.
    As with so many other issues, much of the front-line 
responsibility for homeland security has fallen squarely on the 
shoulders of our State and local officials and more than 9 
million first responders. Communities across America have risen 
to this challenge and developed scores of innovative homeland 
security strategies.
    Instead of encouraging these new ideas, however, the 
tangled web of federal homeland security grant programs has the 
potential to stifle the Department's ability to foster State 
and local innovation. Instead of providing a foundation on 
which States and localities can build homeland security 
strategies tailored to specific risks, federal programs present 
States and communities with a mountain of paperwork. Instead of 
giving communities the flexibility they need, State and local 
officials face an inflexible grant structure.
    This legislation would provide State and local governments 
and communities with the resources they need to protect their 
communities by providing a long term steady stream of funding 
to each and every State; making it easier to apply for grants; 
promoting flexibility in the use of homeland security funding; 
and protecting programs that work, such as the FIRE Act.

Departmental organization

    S. 1245 would reorganize the administrative process for 
obtaining selected first responder grant programs within the 
Department of Homeland Security (DHS). The legislation would 
move two DHS entities into the Office of State and Local 
Government Coordination (OSLGC): The Office for Domestic 
Preparedness (ODP), which is currently located in the Border 
and Transportation Security Directorate; and the Assistance to 
Firefighters Program. The bill requires that the Firefighters 
Grant Program remain a distinct program within the new 
organizational structure.
    In addition, S. 1245 establishes a Homeland Security 
Information Clearinghouse within the OSLGC, which would be 
maintained by the Office for Domestic Preparedness. The 
clearinghouse would be charged with providing States and 
localities with information on grant programs and the use of 
Federal funds. The clearinghouse would gather and publish 
information on best practices in homeland security and 
voluntary standards for training programs, equipment, and 
exercises.
    S. 1245 also creates an Interagency Committee to Coordinate 
and Streamline Homeland Security Grant Programs within DHS. 
Among its duties, the committee would identify all duplicative 
application, planning, and reporting requirements among the 
Federal assistance programs; assess State and local needs and 
capabilities; and advise DHS Secretary on implementing 
appropriate performance measures for grant recipients. In 
addition, the committee would provide recommendations to 
Federal agencies on the coordination of homeland security grant 
programs; specifically, recommendations on streamlining and 
standardizing application, reporting, and planning 
requirements.

Homeland security grants

    S. 1245 authorizes formula based and discretionary homeland 
security grants to States and localities for first responder 
preparation activities, such as emergency planning, risk 
assessments, mutual aid agreements, equipment, training, and 
exercises. Funding would be provided for overtime expenses 
incurred during periods of heightened alerts and, in limited 
amounts, for training activities. To be eligible for a homeland 
security grant, States would be required to complete a State 
Homeland Security Plan that addresses matters such as 
interoperable communications, training, incident command 
systems, regional coordination, response planning, and training 
exercises. The plan must also include a three-year strategy for 
allocating funding to localities based on risk, capability, and 
need, as well as an assessment of the shortfall between 
existing and needed response capabilities. The bill provides 
basic guidelines for States to use in developing their plans, 
including mandatory input from local officials, first 
responders, and the private sector.
    S. 1245 establishes three sets of criteria for State 
Homeland Security Grants. First, 10% of the SHSG funds would be 
allocated through direct discretionary grants to local 
governments in high threat areas, using criteria based upon an 
area's population, population density, the presence of threats, 
risks and vulnerabilities involving critical infrastructure or 
national assets, the need to guard international borders or 
coastlines, and other threat factors to be specified by the DHS 
Secretary. Second, each State would receive a base amount of 
0.75 percent of the remaining appropriated funds each fiscal 
year. The bill treats the District of Columbia and Puerto Rico 
as States. The U.S. territories of Guam, the Virgin Islands, 
American Samoa, and the Commonwealth of the Northern Marianas 
would receive a base amount of 0.25 percent. Altogether, the 
formula grants providing minimum funding levels for States 
would utilize about 40 percent of the remaining SHSG funds. The 
remaining 60 percent of the funds would be distributed among 
the States on a risk-based formula to be developed by DHS 
Secretary, using variables such as State population (including 
military and tourist populations); population density; the 
threat, risk and vulnerability of critical infrastructure or 
key national assets; international borders or coastlines; and 
other factors to be identified by DHS Secretary.
    Of the funds sent to the States, States would be required 
to distribute at least 80 percent of the funds to local 
governments within 45 days of receipt. Recipients would be 
required to match 25 percent of the grant funds with non-
Federal contributions, although the match would not apply 
during first two years of the program and could be waived for 
recipients experiencing economic distress. The bill also 
includes a maintenance-of-effort provision, which prohibits 
recipients from using grant funds to supplant their own funds 
allocated to on-going homeland security expenses or general 
protective measures.

National performance standards

    S. 1245 directs DHS Secretary to develop National 
Performance Standards based on the goals and objectives 
addressed in State Homeland Security Plans. These standards 
would define the expected level of capabilities in homeland 
security functions, including emergency response, 
communications interoperability, and prevention. Each State 
would be required to report annually on its progress in meeting 
these standards. DHS would be required to report annually to 
Congress on the status of meeting these goals and objectives, 
State and local adherence to performance standards, the total 
amount of resources provided to State and local governments, 
and how the funds were used. Until such standards are 
developed, DHS would assist States and localities in developing 
Interim Performance Measures.
    In addition to these overall performance standards, 
Congress has long recognized the importance of establishing, 
maintaining, and adopting certifiable uniform national training 
standards for first responders to strengthen basic and advanced 
preparedness and response capabilities. Current law establishes 
federal national training centers such as the Federal Law 
Enforcement Training Center and the National Fire Academy that 
promote effective basic core competencies and national 
standards for first responders.
    Congress has also provided resources for specialized 
training to State and local emergency responders through the 
National Domestic Preparedness Consortium. While the Consortium 
is an important part of a broad national domestic preparedness 
training infrastructure, a number of independent studies have 
identified a need for federal level national training centers 
to develop standardized training requirements and help train 
first responders to prepare for and respond to the consequences 
of terrorists' use of weapons of mass destruction.
    The Committee agrees with these assessments and directs 
that the Office for Domestic Preparedness designate a lead 
federal level national domestic preparedness training center, 
and consider designating additional regional federal level 
national domestic preparedness training centers. The lead 
center, along with the additionally designated regional federal 
level national domestic preparedness training centers 
designated by the Office for Domestic Preparedness, shall 
assist in developing, maintaining, and adopting certifiable 
training standards to help first responders prepare for and 
respond to the consequences of terrorists' use of weapons of 
mass destruction. The federal national training centers will 
possess recognized training expertise, staff, and facilities to 
assist the Secretary in creating training guidelines, 
conducting exercises, developing equipment, and identifying 
emerging training opportunities, such as distance learning, 
virtual and live training and mobile training teams. These 
training centers must work closely with the Department of 
Homeland Security's grant making office to maximize State and 
local training, equipment and exercise programs.

State and local flexibility

    The needs of our States, localities, and first responders 
vary widely across the nation. This legislation would ensure 
that federal homeland security assistance is sufficiently 
flexible to meet these diverse needs.
    Prior to the Emergency Wartime Supplemental Appropriations 
Act of 2003, the Office for Domestic Preparedness allocated the 
same percentage of each State's funds for training, equipment, 
exercises, and planning, thus leaving no room to accommodate 
different States' priorities. In each and every State, 70 
percent of the federal funds were required to be spent for 
equipment, 18 percent for exercises, 7 percent for planning, 
and 5 percent for training. In allocating funds this way, the 
federal government effectively said that Maine must spend 
exactly the same portion of its homeland security dollars on 
training as Ohio and Hawaii. Moreover, States cannot transfer 
surplus funds from one category to another to meet their needs.
    The inflexible structure of past homeland security funding, 
along with shifting federal requirements and increasing amounts 
of paperwork, poses a number of challenges to State and local 
governments as they attempt to provide these funds to first 
responders. These challenges may have contributed to the fact 
that a substantial amount of homeland security funds that have 
been appropriated still remain either unallocated by the 
federal government or unspent by State and local governments.
    The bill would give State and local governments greater 
flexibility with previously appropriated ODP grant funds by 
allowing grant recipients to request and the Secretary to 
approve funding transfers among different activities, including 
equipment, training, exercises, and planning. For new funding, 
State and local governments have even more flexibility in 
funding, provided that such spending is consistent with the 
State homeland security plan.

Smuggling weapons of mass destruction

    The bill would impede the smuggling of weapons of mass 
destruction into the United States using vehicles that carry 
municipal solid waste. About 180 municipal trash trucks from 
Canada cross the U.S. border every day, for example, to deposit 
cargo in Michigan landfills. Because the dense and variable 
cargo in these vehicles, sometimes including sludge, resists 
analysis using the mechanical inspection devices typically at 
U.S. border crossings, and because discovery last year of 
illegal drugs on one such Canadian vehicle confirmed the 
trucks' use in smuggling, serious questions have arisen about 
the effectiveness of current border screening procedures for 
detecting chemical, nuclear, biological or radiological 
materials that could be concealed on these vehicles.
    The bill would bar further entry of these vehicles into the 
United States unless and until the Secretary certifies to 
Congress that the methods and technologies being used to screen 
these vehicles for such weapons are as effective as the methods 
and technologies being used to screen for such weapons in other 
items of commerce entering the United States via other 
commercial vehicle transport. This provision is intended to 
prompt a thorough re-evaluation of the screening procedures now 
being used for vehicles carrying municipal solid waste, and to 
strengthen U.S. border protections against efforts to use these 
vehicles to secretly transport chemical, nuclear, biological or 
radiological materials into the country.

                             II. Background

    At present, State and local governments receive assistance 
for homeland security activities from a range of Federal 
departments and agencies as well as DHS. Despite the origin of 
funding, these Federal programs share a similar goal: To assist 
State and local governments in their efforts to enhance the 
capabilities of first responders to prepare for and respond to 
terrorist attacks, particularly attacks involving weapons of 
mass destruction.
    The vast majority of these activities fall into the 
categories of emergency planning, training, equipment, and 
exercises. Congress has also provided limited funding for 
personnel compensation and overtime expenses incurred during 
times of heightened alert through these entities and programs. 
Most of this Federal assistance originates from the following 
three sources within the Department of Homeland Security:
          The Office for Domestic Preparedness (ODP);
          The Assistance to Firefighters Program (FIRE grants); 
        and
          The Emergency Management Planning and Assistance 
        Account (EMPA).
    Federal assistance is also available from programs that are 
not specifically oriented to first responders or terrorism 
preparedness. State and local governments may seek emergency 
preparedness assistance in the form of block grants and 
categorical grants from programs administered by the 
Departments of Health and Human Services (HHS), Justice (DOJ), 
and Transportation (DOT), and the Environmental Protection 
Agency (EPA).
    Since the terrorist attacks of September 2001, both 
Congress and the President have given increased attention to 
the role of first responders in the nation's homeland security 
efforts. This attention is evident in the funding Congress 
provided in regular and supplemental appropriations in fiscal 
year 2003, which totaled $3.23 billion for ODP; $750 million 
for the FIRE grants; and $443.1 million for EMPA. The 
Administration and Congress have made numerous proposals to 
restructure existing first responder assistance programs. Thus 
far, none has been enacted into law.
    A wide range of policy concerns led to the development of 
S. 1245. These concerns are not limited to first responder 
preparedness programs. Rather, they are pertinent to the 
broader debate over Federal assistance for State and local 
homeland security efforts. Each policy concern is discussed 
briefly below.

Complexity of grant applications and planning requirements

    At present, State and local governments seeking Federal 
assistance for their homeland security efforts, and emergency 
preparedness in general, may apply to DOJ, DOT, EPA, and HHS, 
as well as to entities within DHS, such as ODP and the Federal 
Emergency Management Agency (FEMA). This multitude of programs 
presents a complex array of application requirements. Nearly 
all applications contain planning requirements that are 
intended to promote the effective use of funds, but they also 
create an overwhelming amount of paperwork for State and local 
officials. The various application and planning requirements 
are often duplicative, calling for similar assessments, 
analyses, and spending plans. State and local officials have 
told the Committee that each program requires numerous 
administrative steps. For example, to receive funds from ODP's 
State Homeland Security Grant Program, States must go through 
as many as 12 steps in order to obtain approval.
    S. 1245 would address this problem in two ways. First, the 
bill creates an Interagency Committee to identify duplicative 
application and planning requirements in emergency preparedness 
programs and make recommendations on streamlining those 
requirements. Second, the bill sets up a single, clear set of 
goals for ODP's State Homeland Security Grant Program, which 
has, in the past, subjected State and local governments to 
annual changes in planning and application requirements.

Coordination of emergency preparedness programs

    Federal programs provide much needed support to ensure a 
basic level of equipment and training among first responders. 
However, these programs lack the very coordination expected of 
State and local governments.
    In testimony before the Committee, DHS Secretary Tom Ridge 
emphasized the importance of integrating all preparedness 
programs into a single DHS office. He suggested that existing 
programs such as the Assistance to Firefighters Program could 
be moved within the Department, without decreasing the 
program's effectiveness. The Committee shares this view, but 
strongly believes the Department should administer the 
Assistance to Firefighters program in its current fashion, with 
grants peer reviewed by the firefighting community and with 
grants made directly to fire departments. The Department also 
should consider utilizing existing US Fire Administration staff 
that have successfully managed the Assistance to Firefighters 
Program.
    S. 1245 seeks to integrate these programs administered by 
DHS into a single office to create one-stop shopping within DHS 
for first responders, and for State and local governments to 
obtain grants, information, and other government wide homeland 
security assistance. S. 1245 would integrate selected programs 
into a single DHS entity--the Office for State and Local 
Government Coordination (OSLGC). ODP, in its entirety, would 
become part of OSLGC.
    The Assistance to Firefighters Program would be transferred 
to OSLGC, but it would be maintained as a distinct and separate 
program. Administering the Assistance to Firefighters Program 
in its current fashion is paramount to continuing the program's 
successes. Since its inception in 2001, the FIRE Act has made 
more than $1.2 billion dollars in federal funds available to 
local fire departments. As fire departments across the country 
grapple with increasing demands and responsibilities and 
decreasing local budgets, the Assistance to Firefighters 
Program is the most successful federal grant program that has 
provided funding directly to local fire departments.
    The bill also authorizes a formula grant program to States 
that would be administered by ODP, which would replace the 
existing State Homeland Security Grant Program.
    The Committee also supports coordination of programs and 
information within DHS. The Committee directs the Office for 
Domestic Preparedness to work with the Science and Technology 
Directorate and the Information Analysis and Infrastructure 
Protection Directorate to ensure State and local governments 
and first responders receive information regarding threat, 
vulnerability assessments, and mitigation technologies for high 
risk areas such as manufacturing facilities using chemicals and 
hazardous shipments.

Distribution of funds

    Organizations representing State and local governments and 
first responders all support proposals to increase Federal 
funding. There is disagreement, however, among these 
organizations, and some policymakers, as to whether a new 
formula program should distribute funds initially to States or 
directly to local entities.
    A number of State and local organizations, including the 
National Conference of State Legislatures, the National 
Governors Association, the National League of Cities, the 
National Association of Counties, the Council of State 
Governments, and the International City/County Management 
Association have supported State coordination of the first 
responder grant program, with 80 percent of the resources being 
distributed by the States to units of local government. The 
Advisory Panel to Assess Domestic Response Capabilities for 
Terrorism Involving Weapons of Mass Destruction, established in 
accordance with Section 1405 of the National Defense 
Authorization Act for Fiscal Year 1999, Public Law 105-261, 
agreed with this approach. In its fourth annual report to 
Congress, the Advisory Panel, also known as the Gilmore 
Commission, concluded that States must have discretion over the 
use of grant funds to ensure the allocation of resources on the 
basis of assessed needs.
    In testimony before the Committee during the May 1, 2003 
hearing entitled, ``Investing in Homeland Security: 
Streamlining and Enhancing Homeland Security Grant Programs,'' 
Secretary Ridge supported the State-level approach, suggesting 
that distributing funds directly to localities might inhibit 
consistency with statewide homeland security and emergency 
preparedness plans. Ridge stated, ``we shouldn't distribute a 
dollar, a security dollar, unless it is consistent with a 
[homeland security] plan, an overarching plan brought to us by 
the States.''
    In testimony before the Committee during the April 9, 2003 
hearing entitled, ``Investing in Homeland Security, Challenges 
on the Front Line,'' Edward P. Plaugher, Fire Chief and 
September 11 Incident Commander at the Pentagon, Arlington 
County Fire Department, Virginia, also expressed his support 
for State coordination. He stated that, ``*  *  * the State 
coordination effort [that] is absolutely critical in homeland 
security.''
    The Committee agrees that state-wide coordination in 
homeland security planning is needed, but also wants to ensure 
that funding reaches the local level in a timely manner. 
Section 4 of S. 1245 would require 10 percent of funds to be 
allocated directly to local governments in a timely manner. It 
would further require States, consistent with their State 
Homeland Security Plan, to provide 80 percent of the remaining 
grant funds to local governments. This approach would allow 
States to coordinate their Homeland Security Plans with local 
entities while ensuring that the majority of homeland security 
funding is provided to localities. Furthermore, States would be 
required to distribute funds to localities within 45 days of 
receipt.
    The Committee recognizes that there is a category of 
private, not-for-profit institutions, as described in section 
501(c)(3) of the Internal Revenue Code of 1986, which provides 
services that are at high risk of being the target of terrorist 
attacks. The Committee recommends that in preparing their 3-
year State homeland security plans, States should specifically 
consider the threat to such institutions as part of their 
vulnerability and threat assessments. The Committee urges the 
Secretary to instruct States that they may utilize such grant 
funds to undertake measures to enhance security against 
terrorist attacks directed at such at-risk institutions.
    The Committee recognizes that Indian tribes, authorized 
tribal organizations, and Alaska Native villages play an 
important role in protecting our communities from terrorist 
incidents, and that the government to government relationship 
with the federal government must be preserved and respected. 
Accordingly, the Secretary and the States should include Indian 
tribes, authorized tribal organizations, and Alaska Native 
villages in statewide planning.
    In addition, the Committee intends that Indian tribes, 
authorized tribal organizations, and Alaska Native villages be 
eligible for discretionary grants if they otherwise meet the 
criteria set forth for high threat areas. The Committee further 
recognizes that because S. 1245 does not allocate any of the 
remaining homeland security grant funds to Indian tribes, 
authorized tribal organizations, or Alaska Native villages, 
States are responsible for ensuring that tribal communities are 
prepared for a terrorist incident and for allocating federal 
resources to those sovereign entities accordingly. As a result, 
Indian tribes, authorized tribal organizations, and Alaska 
Native villages will be eligible for funding directly from the 
States, rather than through any local government and shall 
enjoy the same opportunity to participate in statewide planning 
and receive funding as any other jurisdiction or other unit of 
government designated by the State to conduct needs assessments 
and allocate funding.
    In general, funds should be allocated based on the State 
Homeland Security Plan approved by the Secretary. The Committee 
believes, however, that State and local officials and first 
responders should be given some amount of discretionary 
authority to address security needs, such as those required to 
protect large public events, not foreseen during the 
development of the homeland security plan. The Secretary should 
ensure that State and local governments and first responders 
have sufficient flexibility to meet these immediate security 
needs, should they arise.
    The Committee recognizes that State and local governments 
face numerous challenges in developing their State Homeland 
Security Plan and seeking out homeland security best practices. 
In numerous cases, State and local governments have received 
unsolicited proposals, or sought assistance from, for-profit 
and non-profit firms to develop threat and vulnerability 
assessments. However, they often lack the expertise to 
adequately evaluate products from these firms. The Committee 
supports ODP's efforts to work on a national and regional basis 
to provide assistance to State and local governments and first 
responders. As part of this effort, the Committee directs ODP 
to assist State and local governments in identifying whether 
such firms have the necessary capacity to provide information, 
independent analysis, evaluation assistance and provide other 
management tools related to homeland security. The Committee 
also urges ODP to provide information to State and local 
governments and first responders regarding best practices for 
protecting the basic needs of the public, including, but not 
limited to, individual safety in public buildings and 
protection of air, water, food sources and infrastructure such 
as transportation, power, and communications.
    The bill requires the Secretary to set aside ten percent of 
the appropriated grant program funds for distribution directly 
to local governments in high-threat urban areas. This 
discretionary grant program builds upon the High Threat Urban 
Area grant program that has been earmarked for funds in DHS 
appropriations committee reports, but is not yet described 
explicitly in a statutory provision. The Secretary is directed 
to identify eligible high threat areas based upon specified 
criteria, consisting of an area's population, population 
density, the presence of significant threats, risks and 
vulnerabilities involving critical infrastructure or key 
national assets, the need to guard international borders or 
coastlines, and other threat factors to be specified in writing 
by the Secretary.
    The Secretary would also be required to issue grants that 
encourage neighboring local governments and mutual aid partners 
to coordinate their homeland security efforts, and should take 
into consideration core cities, contiguous jurisdictions, and 
development of a regional metropolitan approach to address 
threats. The bill language and the Committee favor grants with 
a regional metropolitan approach to address the unique 
equipment, training, planning, exercise, and operational needs 
of large urban areas, and assist these areas in building an 
enhanced and sustainable capacity to prevent, respond to, and 
recover from threats or acts of terrorism. Providing funding 
directly to local governments in the high-threat area is a 
shift in policy from the current Urban Area Security Initiative 
(UASI), under which the Secretary requires States to pass 
through 80 percent of the funding to the local level. The 
Committee believes that states need not serve as intermediaries 
for high-threat funding, provided that local governments commit 
to spending the funds in accordance and consistent with state 
plans.
    States, therefore, will continue to play a vital role in 
this program. The Committee directs the Secretary to ensure 
that the funding provided for high threat areas is coordinated 
with the State homeland security plan. The Committee also 
expects that the Department of Homeland Security will not 
provide funds under the high threat program without input from 
first responders in the high threat region.

Distribution formula

    At present, the largest grant program for emergency 
preparedness is ODP's State Homeland Security Grant Program. 
Funds are distributed to States with each State receiving a 
base amount of 0.75 percent of the total appropriation. ODP 
points to Sec. 1014 of the USA PATRIOT Act as the authorization 
for this base amount. Sec. 1014, however, gives little 
statutory guidance on the structure of assistance programs. 
After base amounts are determined, the remaining funds are 
distributed to States on the basis of per capita population.
    In testimony before the Committee during the May 1, 2003 
hearing, Secretary Ridge supported a formula that provides a 
base level of funding to each State. In response to a question 
posed by the Chairman, Secretary Ridge stated, ``* * * I do 
start with the notion that every State needs a minimum level of 
funding * * *.''
    The Committee agrees that each State needs a baseline level 
of funding in order to undertake heightened homeland security 
efforts. S. 1245 would preserve the 0.75 percent base amount, 
as currently applied by ODP in its State Homeland Security 
Grant Program. This base amount should ensure that every State 
would be able to achieve a minimum baseline of capability. 
Every State has homeland security needs and vulnerabilities. 
After all, each State must protect its critical infrastructure 
and address its vulnerabilities.
    Some have contended that the current formula is unfair 
because less populous States like Wyoming receive more per 
capita than densely populated areas like the District of 
Columbia. Others note that the Department of Homeland Security 
provides monetary assistance to larger, more populous States 
through a number of grant programs for high threat urban area 
security, transportation security, and port security. In 2003, 
for example, New York received an additional $211 million 
beyond its State allocation through urban area and port 
security grants.
    The Committee has attempted to strike a balance between 
those who support the current formula and those who would like 
less populous states to receive fewer homeland security 
dollars. To ensure that States with high risks and 
vulnerabilities receive sufficient homeland security funding, 
the Secretary would provide a baseline level of homeland 
security dollars to each State, but then distribute the 
remaining 60 percent of funding based on threat, risk, and 
vulnerability. High threat areas would receive a substantial 
amount of this funding since States must pass through 80 
percent to the local level. S. 1245 would also direct the DHS 
Secretary to reserve 10 percent of all funds for Section 4 
grants to assist high threat urban areas.
    Hence, the Committee believes that the terrorism 
preparedness formula program should distribute a significant 
portion of the funds available on the basis of risk rather than 
population. On May 1, 2003, Secretary Ridge agreed with this 
view in his testimony before the Committee. In response to 
written questions submitted during the May 1, 2003 Committee 
hearing, Secretary Ridge wrote, ``Starting in FY04, the 
Department will seek to make changes in how it distributes 
funding to the States. Each State and territory will continue 
to receive a base amount, but the balance of funds will utilize 
a multi-faceted formula, taking into account factors including 
threat and risk assessments, critical infrastructure of 
national importance, and population density.''
    Using a risk-based formula would reflect the threats and 
vulnerabilities in different regions of the country. Although 
population data are readily available for use in distribution 
formulas, the Committee believes that DHS must develop a risk-
based formula to direct additional Federal assistance to States 
and localities that face the highest threat and have the 
greatest vulnerability.
    Accordingly, S. 1245 would direct DHS to administer a risk-
based formula program. The Committee believes it is necessary 
to give DHS flexibility in designing the distribution formula 
within certain guidelines. The bill would provide DHS Secretary 
with guidance on factors to consider, but it would give the 
Secretary discretion in determining the relative weights of the 
factors. This approach would allow the Department to interpret 
legislative guidelines to fit changing risk conditions, reflect 
the latest intelligence information, and adapt to changing risk 
assessments.
    Allocations of first responder funding provided by the 
Secretary of Homeland Security should fully address all 
military and tourist populations residing in a State. DHS 
should work with the states and other organizations to 
accurately measure tourist populations. Currently, first 
responder grant funding is based on a State's population as 
defined by the U.S. Census Bureau, which does not include 
military and tourist populations. As a result, States with 
military and tourist populations are shortchanged because they 
receive federal funding to protect fewer people than those who 
are present at a given time in the State. In States with large 
military and tourist populations, the current system results in 
significant funding shortfalls for first responders. The bill 
corrects this inconsistency by ensuring that first responder 
funding addresses the entire State population, including 
military and tourist populations.

Flexibility of Homeland Security grant funds

    At present, terrorism preparedness programs generally fund 
four broad categories of assistance: planning, training, 
equipment, and exercises. In some instances, funding may also 
be used for personnel compensation, overtime, and construction. 
Prior to the Emergency Wartime Supplemental Appropriations Act 
of 2003, ODP's formula program, which is the largest grant for 
terrorism preparedness, gave recipients separate allocations 
for planning, training, equipment, and exercises, but did not 
give them discretion to transfer funds among these activities.
    Many State and local officials have told the Committee that 
the range of eligible activities should be expanded to give 
State and local recipients broad discretion in the use of 
funds. Specifically, they have asked for the flexibility to 
transfer past funds among different activities (i.e., planning, 
training, equipment, and exercises) and for overtime expenses 
incurred during times of heightened alert.
    During the May 1st Committee hearing, Secretary Ridge 
addressed the issues of funding for hiring and overtime costs, 
and the transfer of funds within the four categories of the 
ODP's State Homeland Security Grant Program. The Secretary said 
that Federal, State, and local governments should share 
responsibility for increasing preparedness levels, and that 
Federal funding for hiring and salaries would not be an 
appropriate activity. However, the Secretary stated that 
overtime costs, especially during times of heightened alerts, 
are a legitimate expense that merits Federal assistance. He 
also testified that allowing States, with DHS approval, to 
transfer funds from one grant program category to another to 
meet State homeland security needs is consistent with how he 
feels the country should address homeland security issues.
    The Committee agrees with this opinion. S. 1245 would give 
State and local governments greater discretion over the use of 
terrorism preparedness grant funds. Section 4 would allow 
grants to be used to fund overtime expenses relating to 
training activities and increased security during times of 
heightened alert status, as determined by the Secretary. Unless 
waived by the Secretary, recipients would not be permitted to 
use more than 5 percent of funds for overtime for training 
purposes. Section 5 would allow States, with DHS approval, to 
transfer funds from one State Homeland Security Grant Program 
category to another. The ability to use funds for different 
activities better ensures that grant funding will match the 
States' homeland security needs. This transfer authority does 
not supersede the requirement that states pass through 80% of 
the funds under this section to local jurisdictions.
    The Committee also recognizes that certain areas or 
geographic regions often face higher overtime costs associated 
with a specific threat or vulnerability. As the Secretary 
considers requests to waive the limitation on overtime expense, 
the Secretary should link waivers to specific threats as well 
as to national alerts. Where there has been a specific threat 
in a geographic area or where the threat level under the 
nationwide threat warning system currently being reviewed by 
the Secretary has been raised, the Secretary should give 
serious consideration to granting requests to waive the 
limitation on overtime expenses in selected areas.
    The Committee is concerned by testimony that local 
jurisdictions have been unable to take advantage of WMD 
training for first responders due to the cost of 
``backfilling'' positions of employees assigned to training. 
The Committee directs ODP to allow the use of formula grant 
funds for overtime costs that are directly attributable to 
participation in ODP-funded first responder training.

Timely distribution of funds

    State and local officials have emphasized that a timely 
distribution of funds must be a priority in all preparedness 
assistance programs. The House and Senate Appropriations 
Committees addressed this issue in their reports accompanying 
the Fiscal Year 2003 Emergency Wartime Supplemental 
Appropriations Act (P.L. 108-11). The Appropriations Committees 
recommended deadlines both for ODP to distribute funds to 
States, and for States to distribute funds to localities. The 
2003 Supplemental Appropriations Act required ODP to open the 
grant application process to States within 15 days of 
enactment. States were required to complete and submit their 
applications 30 days following enactment, and ODP was 
instructed to act on each application 15 days following the 
receipt of the State's application. Following a grant award, 
each State was required to provide the funds to local entities 
within 45 days of receipt.
    Section 4 of S. 1245 addresses the issue by requiring 
States to distribute funds or resources purchased with grant 
funds to local governments within 45 days of receipt of DHS 
grant funds. The bill also gives the Secretary authority to 
enforce these deadlines, to ensure that local governments 
receive homeland security grants as expeditiously as possible, 
by terminating, reducing or limiting the use of grant funds to 
the State and by permitting local governments to petition to 
receive such grant funds directly where a State has failed to 
provide the funds in a timely fashion.
    The Committee has listened to some concerns that new 
regional homeland security entities have caused certain law 
enforcement agencies to receive little homeland security 
funding. In many cases, these agencies are charged with 
protecting high risk areas. Because of these concerns, the 
Committee directs the Secretary to ensure that the creation of 
new regional homeland security entities does not cause 
inequitable distribution of homeland security dollars by 
utilizing allocation methods that do not take into account the 
relative responsibilities of local first responders and core 
jurisdictions within regions. To make sure those at the local 
level are able to express any concerns, S.1245 requires the 
Secretary to consider dissenting views of the homeland security 
advisory committee, and also requires both urban and rural 
representation on the homeland security advisory committee.

Soft match requirement

    The Committee believes that State and local governments 
should partner with the federal government by contributing non-
Federal resources to emergency preparedness efforts. This 
belief is shared by the Administration, which, in its fiscal 
year 2004 budget request, proposed that ODP formula grants be 
accompanied by a 25 percent matching requirement.
    The former U.S. Advisory Commission on Intergovernmental 
Relations (ACIR) published a number of reports on Federal 
grants-in-aid, many of which included observations on the 
potential benefits of matching requirements.
    The Committee recognizes these potential benefits, but does 
not believe states or localities should be required to commit a 
hard match, or cash spent for project-related costs. 
Accordingly, S. 1245 requires all recipients of grant funds 
under the Act to match 25 percent of the grant amount with non-
Federal in kind contributions. While S. 1245 presents a new 
financial requirement for States and localities, the match does 
not need to be a cash match, and may include, but is not 
limited to, the valuation of in-kind services. The Committee 
also recognizes that some recipients may have difficulty 
satisfying the match obligation. Hence, the bill gives DHS 
Secretary flexibility to waive the requirement for recipients 
experiencing economic distress. The requirement for matching 
funds would not take effect until two years after enactment of 
the Act.

                        III. Legislative History

    S. 1245, the Homeland Security Grant Enhancement Act, was 
introduced on June 12, 2003 by Senator Susan M. Collins of 
Maine, Senator Thomas R. Carper of Delaware, Senator John D. 
Rockefeller IV of West Virginia, Senator George Voinovich of 
Ohio, Senator Russell D. Feingold of Wisconsin, Senator Mark 
Pryor of Arkansas, Senator Norm Coleman of Minnesota, Senator 
John Sununu of New Hampshire, Senator Daniel K. Akaka of 
Hawaii, and Senator Wayne Allard of Colorado.
    Prior to the consideration of S. 1245, the Committee held a 
series of three hearings to examine how the federal government 
can more efficiently and effectively provide first responders 
with the federal assistance they need. The Committee's April 9, 
2003 hearing focused on the challenges of those on the front 
lines, our first responders. Secretary of Homeland Security Tom 
Ridge testified on the Department's efforts to better secure 
our communities at the second hearing, held on May 1, 2003. At 
the May 15, 2003 hearing, State and local elected officials 
discussed the challenges to developing effective homeland 
security strategies.
    The Senate Governmental Affairs Committee met on June 17, 
2003, to consider S. 1245. A manager's amendment was adopted by 
voice vote. The manager's amendment, offered by Chairman 
Collins and cosponsored by Ranking Member Joseph Lieberman of 
Connecticut, Senator Akaka, Senator Richard Shelby of Alabama, 
and Senator Carl Levin of Michigan, allows grants to be used to 
fund overtime expenses relating to increased security during 
times of heightened alert status and to training; provides the 
Secretary with the authority to waive the limitation on 
eligible overtime expenses; increases local participation in 
the homeland security planning process; requires the Secretary 
to consider dissenting views of the homeland security advisory 
committee; allows the Secretary to waive the State and local 
match for economically distressed communities; allows 
communities to apply directly to the Secretary if a State fails 
to comply with this legislation; clarifies the allocation of 
10% of all DHS state grant funds for grants to high threat 
areas; clarifies the definition of high threat areas; and 
creates an office to coordinate training activities within ODP.
    The Committee also adopted by voice vote an amendment 
offered by Senator Levin to increase border protections against 
the smuggling of weapons of mass destruction into the United 
States on vehicles carrying municipal solid waste. The 
amendment would bar entry of these vehicles into the United 
States unless and until the Secretary certifies to Congress 
that the methods and technologies being used to screen these 
vehicles for such weapons are as effective as the methods and 
technologies being used to screen for such weapons in other 
items of commerce entering the United States via other 
commercial vehicle transport.
    The Committee opposed, in a 9-8 rollcall [Vote 1], an 
amendment sponsored by Senator Lieberman to set a specific $10 
billion authorizing level for the first year of the grant 
program created by Section 4 of the legislation and for such 
sums as are necessary for each fiscal year thereafter. The 
Committee then ordered the bill reported on a 9-0 rollcall 
[Vote 2] and sent it to the Senate.

                         IV. Section-by-Section


                         SECTION 1. SHORT TITLE

    Section 1 sets the short title of S. 1245 as the ``Homeland 
Security Grant Enhancement Act of 2003.''

SECTION 2. INTERAGENCY COMMITTEE TO COORDINATE AND STREAMLINE HOMELAND 
                        SECURITY GRANT PROGRAMS

    At present, there are several grant programs in DHS and 
other departments including DOJ, HHS, DOT, and EPA. While all 
these programs are meant to enhance homeland security, they are 
not sufficiently coordinated among the different executive 
departments. According to congressional witnesses this 
proliferation of programs has led to duplication of 
administrative requirements and development of multiple State 
and local plans. These administrative difficulties cause 
confusion among State and local officials attempting to adapt 
Federal grant programs to State and local homeland security 
needs.
    The Interagency Committee to Coordinate and Streamline 
Homeland Security Grant Programs would ensure coordination of 
separate Federal department or agency grant programs. The 
Interagency Committee would also ensure coordination among all 
DHS grant programs for State and local preparedness.
    Subsection (a) would amend the Homeland Security Act of 
2002 (6 U.S.C. 101 et seq.) by inserting a new section 802 
following section 801.

Interagency Committee

    Subsection (a) of the new Section 802 would establish an 
Interagency Committee to Coordinate and Streamline Homeland 
Security Grant Programs. This Interagency Committee would 
report all findings to the information clearinghouse 
established under section 801 (c), and consult with State and 
local governments and emergency response providers regarding 
their homeland security needs and capabilities. This 
Interagency Committee would also advise DHS Secretary on the 
development of performance measures for homeland security grant 
programs, and the national strategy for homeland security. 
These performance measures would be the basis for measuring 
State accountability, which are based on the goals and 
objectives addressed in the State Homeland Security Plans (as 
established in Section 4).
    Paragraph (4) would, in subparagraph (A), require the 
interagency committee to, not later than 60 days after the 
enactment of this Act, compile a list of homeland security 
assistance programs and their reporting requirements. This list 
would include programs administered by such DHS entities as 
ODP, FEMA, and TSA, as well as other Federal departments, 
including DOJ, HHS, DOT, EPA, and any other related Federal 
assistance programs.
    Subparagraph (B) would require the Interagency Committee to 
identify all homeland security planning requirements of 
emergency preparedness, and public safety programs administered 
by Federal agencies to streamline and standardize planning 
requirements to eliminate duplication and promote coordination. 
Congressional witnesses testified before the Senate 
Governmental Affairs Committee that the multiple planning 
requirements in homeland security grants duplicate one another, 
draining State and local resources, personnel, and time. These 
witnesses also testified that these planning requirements were 
not coordinated and often duplicated requests for information. 
The plans the Interagency Committee would study include, but 
are not limited to, terrorism preparedness, all-hazard 
emergency preparedness, and any other plans required by 
homeland security grant programs.
    Paragraph (5) would require the Interagency Committee to 
report to Congress on the studies carried out under paragraph 
(4). The report would be due not later than 120 days after 
enactment of the Act.
    Paragraph (6) would instruct the Interagency Committee to 
provide, not later than 150 days after enactment of the Act, 
recommendations to the agencies identified in paragraphs (4)(A) 
and (4)(B). With regard to homeland security grants with 
planning, reporting, and application components, the 
Interagency Committee would make recommendations on 
streamlining, standardizing, reducing duplicative 
administrative requirements, and promoting coordination.
    Paragraph (7) would instruct the Interagency Committee, not 
later than 250 days after the enactment of this Act, to report 
to Congress on all actions taken under this subsection.
    Subsection (b) would establish the membership of the 
Interagency Committee. The Interagency Committee would be 
composed of representatives of departments and agencies with 
homeland security assistance programs. Specifically identified 
departments and agencies are DHS, HHS, DOT, DOJ, EPA, and any 
other department or agency determined necessary by the 
President.
    Subsections (c), (d) and (e) would require DHS to provide 
administrative support to the Interagency Committee, designate 
a chairperson, and establish the frequency of meetings.

Interagency Committee reports

    Subsection (b) of Section 2 amends the table of contents of 
the Homeland Security Act of 2002 (6 U.S.C. 101 et seq.) to 
reflect the inclusion of section 802. It also requires the 
Interagency Committee, not later than 120 days after the 
effective date of this Act, to review all applications, 
reporting and other administrative requirements contained in 
grant programs in ODP, FEMA, TSA, DOJ, HHS, and EPA and report 
all redundant and duplicative requirements to the appropriate 
committees of Congress and the agencies represented in the 
committee. The Interagency Committee would be required to 
review all homeland security planning and other administrative 
requirements required by such DHS entities as ODP, FEMA, and 
TSA, and other Federal departments, including DOJ, HHS, and 
EPA. The Interagency Committee would report all redundant and 
duplicate requirements to the appropriate committees of 
Congress and the agencies represented in the committee.
    Not later than 150 days after the effective date of this 
Act, the Interagency Committee would provide recommendations to 
the relevant Federal departments to streamline and standardize 
application, reporting, and administrative requirements. These 
recommendations would seek to eliminate duplication and promote 
coordination of homeland security planning grants.

        SECTION 3. STREAMLINING FEDERAL HOMELAND SECURITY GRANTS

    Section 3 amends section 801 of the Homeland Security Act 
of 2002 (6 U.S.C. 361 et seq.) by enhancing the role of DHS' 
Office of State and Local Government Coordination (OSLGC). This 
section would incorporate into the OSLGC the Assistance to 
Firefighters Program, but maintain it as a distinct grant 
program. The need to keep this program distinct was reinforced 
when congressional witnesses testified to the effective way the 
Assistance to Firefighters Program is administered. Section 3 
would also transfer ODP, in its entirety, out of the 
Directorate of Border and Transportation Security and into 
OSLGC. These two transfers would assist in making the OSLGC a 
one-stop shop for State and local officials seeking Federal 
assistance for first responders. This one-stop shop would 
reduce the cumbersome need for State and local governments to 
contact numerous agencies and departments, thus reducing the 
time, effort, and resources that State and local governments 
expend in coordinating their homeland security needs.
    Section 3 would also establish a Homeland Security 
Information Clearinghouse that would provide information on 
homeland security grants, technical assistance, best practices, 
and use of Federal funds to State and local governments. This 
clearinghouse would build on existing capacities such as ODP's 
existing resource center. This clearinghouse would further 
increase the coordination of Federal assistance for homeland 
security within DHS and establish a one-stop shop for 
information on homeland security and emergency preparedness 
grants and best practices.

Office for State and Local Government Coordination

    Subsection (a) of Section 3 would amend section 801 of the 
Homeland Security Act, to provide that the Office for State and 
Local Government Coordination (OSLGC) will be headed by a 
Director who is to be appointed by the President with the 
advice and consent of the Senate.

Assistance to Firefighters Program

    Paragraph (5) (also within Section 3(a)) would amend 
section 801 to place administering authority of the Assistance 
to Firefighters Program in OSLGC. Subparagraph (A) instructs 
OSLGC to coordinate the Firefighters program with emergency 
preparedness grants made under section 4 of this Act, and 
grants made under other Federal programs to enhance emergency 
preparedness. This transfer of administering authority is 
intended to not affect the process by which the program is 
administered and to ensure it is retained as a distinct 
program. This transfer would also further establish OSLGC as a 
``one-stop shop'' for State and local governments, ensuring 
that a single office within DHS coordinates all homeland 
security assistance programs.
    Subparagraph (B) would instruct OSLGC to award grants on a 
competitive basis directly to fire departments of a State, in 
consultation with the chief executive of the State (governor), 
to protect the health and safety of the public and firefighting 
personnel against fire and fire related hazards. This 
consultation would ensure that grants are coordinated with 
State level homeland security and emergency preparedness plans.
    Subparagraph (C) would instruct OSLGC to retain the current 
administrative requirements for the Firefighters program set 
forth in the United States Code (15 U.S.C. 2229) and Code of 
Federal Regulations (44 CFR 152).
    Subparagraph (D) instructs OSLGC to ensure that all 
equipment purchased with grant funds meet existing voluntary 
consensus standards.
    Paragraph (3) would amend section 801 of the Homeland 
Security Act by having all references to ``Director'' in 
section 33 of the Federal Fire Prevention and Control Act of 
1974 (15 U.S.C. 2229) refer to the Director of the OSLGC.

Office for Domestic Preparedness

    Subsection (b) of section 3 of this Act amends the Homeland 
Security Act of 2002 (6 U.S.C. 101 et seq.) by placing the 
Office for Domestic Preparedness (ODP) in OSLGC and having the 
ODP Director report directly to the OSLGC Director. ODP would 
manage the Homeland Security Information Clearinghouse 
established under section 801(c).
    Subsection (b) would also create within ODP an internal 
office to support all national domestic preparedness, training, 
education, and exercises within the OSLGC. The ODP Director 
would be instructed to appoint an office head with recognized 
expertise in first responder training and exercises.
    Subsection (c) of section 3 amends the table of contents of 
the Homeland Security Act of 2002 (6 U.S.C. 101 et seq.) by 
striking the reference of ODP in section 430 and inserting 
section 803, ODP, following the new section 802 of this Act.

Homeland Security Information Clearinghouse

    Subsection (d) of section 3 would amend section 801 of the 
Homeland Security Act of 2002 (6 U.S.C. 101 et seq.) by 
establishing a Homeland Security Information Clearinghouse. 
Paragraph (2) would have the clearinghouse assist State and 
local governments, and first responders by creating and 
maintaining a web site, a toll-free number, and a single 
publication containing information on homeland security grant 
programs.
    Paragraph (3) would have the clearinghouse, consulting with 
the interagency committee, coordinate any Federal agency's 
technical assistance to State and local governments to conduct 
threat and vulnerability assessments. It would also have the 
clearinghouse establish templates for conducting threat 
analyses and vulnerability assessments.
    Paragraph (4) would instruct the clearinghouse to work with 
State and local governments, first responders, the National 
Domestic Preparedness Consortium, and private organizations to 
gather and validate best practices in State and local homeland 
security. Under paragraph (5), information on equipment, 
training, and other services acquired with Federal funds under 
the homeland security grant programs would be gathered by the 
clearinghouse and made available to State and local 
governments, and first responders. Information regarding 
voluntary standards of training, equipment, and exercises would 
also be provided to State and local governments and first 
responders.
    Paragraph (6) instructs the clearinghouse to provide 
States, localities, and first responders with any other 
information the Secretary determines necessary.

               SECTION 4. HOMELAND SECURITY GRANT PROGRAM

    Section 4 would authorize a Homeland Security Grant 
Program. This section provides precise statutory authority for 
DHS to make grants to States and localities for emergency 
preparedness activities in general, and, specifically, for 
terrorism preparedness activities. This section would also 
provide legislative guidance for DHS to follow in designing the 
structure of emergency preparedness assistance programs.

Definition

    Subsection (a) would give the term ``State'' the same 
meaning given in section 2 of the Homeland Security Act of 
2002. That Homeland Security Act (P.L. 107-296) defines State 
as ``any State of the United States, the District of Columbia, 
the Commonwealth of Puerto Rico, the Virgin Islands, Guam, 
American Samoa, the Commonwealth of the Northern Mariana 
Islands, and any possession of the United States.'' The 
Committee intends that the term ``local government'' also be 
construed to have the same meaning as that given it in the 
Homeland Security Act.

General authority to award grants

    Subsection (b) would provide general authority to the 
Secretary to award grants to States for homeland security. The 
remaining subsections in section 4 provide guidance to the 
Secretary on the structure of homeland security grant programs 
authorized under this Act.

General guidance

    Subsection (c) would provide the Department of Homeland 
Security with basic guidance in how recipients should use grant 
funds. In general, State and local governments may use the 
funds to address emergency preparedness needs, including 
building response capacity, related to acts of terrorism. 
Recipients may not use funds to supplant ongoing first 
responder expenses or general protective measures. With some 
exceptions, Federal funds under this program are not intended 
to cover operating expenses.

Use of funds

    Paragraph 2 of Subsection (c) lists the allowable uses of 
State Homeland Security Grant Program funds.
    Subparagraph (A) permits funds to be used for the 
development of State plans or risk assessments, including State 
Homeland Security Plans that are required as part of the 
assistance program. The approach taken in developing plans 
funded through this program should be coordinated with the 
planning guidance set forth in section 201 of the Robert T. 
Stafford Disaster Relief Act (42 U.S.C. 5131). Planning and 
risk assessment activities should address all hazards emergency 
planning, including response to terrorist attacks, and should 
ensure that State plans are adequately coordinated with 
Federal, State, and local governments, first responders, and 
State and local health agencies. The Committee intends that 
these funds may be used to develop plans for the recovery from 
terrorist attacks or other emergencies, such as the restoration 
of essential services. The development of a State plan is 
intentionally listed first, since all preparedness activities 
should flow from well-formulated plans.
    Subparagraph (B) would allow funds to be used to develop 
State, regional, or local mutual aid agreements. Mutual aid 
agreements have been identified by many observers as an 
important aspect of emergency preparedness. Such agreements 
facilitate the sharing of resources and improved coordination 
of response.
    Subparagraph (C) would permit the purchase or upgrading of 
equipment. State and local acquisition of equipment should be 
based on the needs identified in the State Homeland Security 
Plan.
    Subparagraph (D) would allow recipients to use funds for 
exercises. Such exercises would include the emergency 
responders identified in the State Homeland Security Plan, 
including law enforcement, firefighters, and emergency medical 
service personnel. Exercises are critically important to 
emergency preparedness as they allow State and local 
governments to test and evaluate their response plans, 
training, incident command systems, and other elements of 
preparedness.
    Subparagraph (E) would allow funds to be used for overtime 
expenses under two conditions: (i) training activities 
consistent with the goals outlined in the State Homeland 
Security Plan, or (ii) as determined by the Secretary, 
activities relating to increased threat levels under the 
Homeland Security Advisory System. This paragraph is consistent 
with the current application of grant monies for overtime 
expenses related to training. At present, States and localities 
may use funds from ODP's State Homeland Security Grant Program 
for overtime during training activities. In FY2003, Congress 
also made funds available for overtime expenses through the 
High Threat Urban Area program and for critical infrastructure 
security grants (P.L. 108-7, P.L. 108-11). Through its 
administrative discretion, ODP is allowing recipients to use 
funds from these two programs for overtime expenses incurred 
during times of heightened alert.
    Subparagraph (F) allows funds to be used for homeland 
security training. Such training includes the use of equipment 
(including detection, monitoring, decontamination, and personal 
protective equipment) and for emergency response to a 
threatened use of a weapon of mass destruction. At present, 
grant recipients under the ODP State Homeland Security Grant 
Program may use funding for training.

Prohibited use of funds

    Paragraph (3) of Subsection (c) places some prohibitions on 
the use of funds. Subparagraph (A) prohibits the use of grants 
under subsection (b) to construct buildings or other physical 
facilities, except for those described in section 611 of the 
Disaster Relief Act of 1974 (42 U.S.C. 5196), or to acquire 
land. The Committee understands that section 611 would cover 
construction to alter or remodel existing buildings for the 
purpose of making them secure against terrorist attack or able 
to withstand or protect against chemical, radiological or 
biological attack, such as by altering HVAC systems or 
providing secure testing and treatment facilities in public 
health laboratories or in hospitals; and grants under 
subsection (b) of this bill could therefore be used for such 
construction. Of course, when grants under this bill are used 
to construct buildings or facilities as described in section 
611, all of the terms of section 611 will be applicable and the 
Committee expects them to be fully complied with.
    Subparagraph (B) would limit to 5 percent the amount of 
funds that can be used for overtime expenses for training. The 
Secretary would have discretion, however, to waive this 
limitation if the Secretary determines that such funds are 
necessary to provide effective training or adequate protection 
in the event of an increase in the threat level under the 
Homeland Security Advisory System.
    The Committee recognizes that States and localities face a 
significant financial burden when they increase the level of 
security during times of heightened alert. The Committee also 
recognizes that the traditional purpose of Federal grants-in-
aid is to assist States and localities with long-term (or 
capital) improvements, not with operational expenses. During 
FY2003, selected amounts of ODP grants could be used for 
overtime expenses relating to an increase in the threat level 
under the Homeland Security Advisory System. This subparagraph 
seeks a compromise on this issue by allowing recipients to use 
a portion of grant funds for overtime expenses, while focusing 
funds on preparedness enhancements.
    Subparagraph (C) would not allow recipients to use grant 
funds to satisfy the Federal cost-share (or matching 
requirement) in another Federal grant program.

Application

    Subsection (d) would establish legislative guidance for 
grant applications. Paragraph (1) would require States to apply 
for grants by submitting an application to the DHS Secretary. 
The Secretary would have discretion to establish the 
application timeframe and required information. Paragraph (2) 
would allow States to revise their homeland security plans, 
authorized in subsection (e), at the time applications are 
submitted. Paragraph (3) would instruct the DHS Secretary not 
to award a grant unless the State application includes a 
homeland security plan meeting the requirements of subsection 
(e). Paragraph (4) instructs the DHS Secretary to release grant 
funds to States with approved plans and approved applications.

Homeland Security Plan

    Subsection (e) would establish guidance for the State-level 
Homeland Security Plans required under the grant program. Such 
guidance addresses plan contents, development process, 
intergovernmental coordination, scope, approval, and other 
attributes. State and local officials have observed that there 
are too many application steps and much duplication in the 
planning requirements of various Federal assistance programs. 
This subsection of the bill would address this problem by 
establishing legislative guidelines for DHS' programs for State 
and local preparedness.
    Paragraph (1) of Subsection (e) generally requires State 
applications to include a certification that the State has 
prepared a three-year State Homeland Security Plan that has 
been approved by the Secretary.
    Paragraph (2) establishes the contents of the State 
Homeland Security Plans. The plans would contain measurable 
goals and objectives that:
          Establish a three-year strategy for allocating 
        funding to political subdivisions based on risk, 
        capabilities, and needs (specific guidance on these 
        attributes is addressed in paragraph (3)(C));
          Provide for interoperable communications;
          Provide for local coordination of response and 
        recovery efforts, including effective incident command 
        procedures that conform with the National Incident 
        Management System mandated in the Homeland Security Act 
        (P.L. 107-296, sec. 502);
          Ensure that first responders and other emergency 
        personnel have adequate training and equipment for the 
        threats that may occur;
          Provide for improved coordination and collaboration 
        among first responder disciplines, including police, 
        fire, and public health authorities at the State and 
        local levels;
          Coordinate emergency response and public health 
        plans;
          Mitigate risks to critical infrastructure that may be 
        vulnerable to terrorist attacks;
          Promote regional coordination among contiguous local 
        governments;
          Identify necessary protective measures by private 
        owners of critical infrastructure;
          Promote orderly evacuation procedures when necessary;
          Ensure support from the public health community for 
        measures needed to prevent, detect, and treat 
        biological, radiological, and chemical incidents;
          Increase the number of local jurisdictions 
        participating in local and statewide exercises;
          Meet preparedness goals as determined by the DHS 
        Secretary (preparedness goals are further addressed in 
        subsection (h)); and
          Include a report from the advisory committee 
        (established in paragraph (3)(D) of this subsection) 
        that documents the areas of support, disagreement, or 
        recommended changes to the plan before its submission 
        to the DHS Secretary.
    Paragraph (3) establishes guidance and criteria for the 
process States would use in developing State Homeland Security 
Plans.
    Subparagraph (A) would provide broad guidance, requiring 
each State to: (i) provide for the consideration of all 
homeland security needs; (ii) follow a process that is 
continuing, inclusive, cooperative, and comprehensive; and 
(iii) coordinate the development of the plan with the homeland 
security planning activities of local governments.
    Subparagraph (B) would require States to allow input from 
local stakeholders, including local officials, State 
legislators, first responders and emergency response providers, 
and private sector companies. Local government representation 
would include officials from rural, high-population, and high-
threat jurisdictions. This better ensures that States will 
accept ideas and suggestions from local government officials 
and first responders who will be the recipients of 80 percent 
of the State formula grants.
    Subparagraph (C) would establish guidance and criteria for 
the scope of State Homeland Security Plans. Each State would be 
required to complete a comprehensive risk assessment that will 
include a vulnerability assessment, threat assessment, and 
public health assessment (in coordination with the State 
bioterrorism plan). Risk analysis, which is advocated in the 
Administration's National Strategy for Homeland Security, 
assists decision makers by providing quantitative and 
qualitative estimates of the chance, and possible consequences 
of, an adverse event. This paragraph seeks to integrate risk 
analysis procedures that are currently required in grant 
programs administered by DHS and the Department of Health and 
Human Services.
    Subparagraph (C) also provides for an assessment of 
capabilities and needs, including the following three 
components:
          An evaluation of current preparedness, mitigation, 
        and response capabilities (using an assessment 
        mechanism determined by the DHS Secretary);
          An evaluation of the capabilities needed to address 
        the State's risks; and
          An assessment of the shortfall between the State's 
        current capabilities and capability needs.
    Subparagraph (D) would require each State preparing a plan 
to establish an advisory committee to receive comments from the 
public and local stakeholders. The advisory committee would 
include State legislators, local officials, local first 
responders, and emergency response providers that are 
representative of the counties and municipalities of all sizes 
within the State. Local government representation would include 
officials from rural, high-population, and high-threat 
jurisdictions. This paragraph further emphasizes the role of 
local input in developing the State Homeland Security Plans, 
and builds on the input requirements established in 
subparagraph (B).
    Paragraph (4) of Subsection (e) would provide the DHS 
Secretary with basic guidance in approving State plans. The 
Secretary shall approve a plan upon finding that the plan meets 
the requirements set forth in paragraphs (2) and (3) of 
subsection (e). Approved plans must also meet the 
accountability requirements established in subsection (h), as 
well as any other criteria determined necessary by the 
Secretary.
    Paragraph (5) would require the Secretary to review the 
recommendations made by the advisory committee report 
incorporated into a plan, including any dissenting views of 
advisory commission members, to ensure cooperation and 
coordination between local and State jurisdictions in planning 
the use of grant funds under this section. This paragraph 
strengthens the role of the advisory committee in developing 
the State Homeland Security Plans.

Discretionary grant program

    Subsection (f) would create a discretionary grant program 
to provide funding directly to local governments in high threat 
areas. The bill requires the Secretary to set aside ten percent 
of all appropriated funds for homeland security state grants 
for these discretionary grants. The Secretary is directed to 
identify eligible high threat areas based upon specified 
criteria, consisting of an area's population, population 
density, the presence of significant threats, risks and 
vulnerabilities involving critical infrastructure or key 
national assets, the need to guard international borders or 
coastlines, and other threat factors to be specified in writing 
by the Secretary.
    The Secretary would also be required to ensure that the 
grants encourage neighboring local governments and mutual aid 
partners to coordinate their homeland security efforts, and 
should take into consideration core cities, contiguous 
jurisdictions, and development of a regional metropolitan 
approach to address threats. The bill language and the 
Committee favor grants with a regional metropolitan approach to 
address the unique equipment, training, planning, exercise, and 
operational needs of large urban areas, and assist them in 
building an enhanced and sustainable capacity to prevent, 
respond to, and recover from threats or acts of terrorism. 
Providing funding directly to local governments in the high-
threat area is a shift in policy from the current Urban Area 
Security Initiative (UASI), under which the Secretary requires 
States to pass through 80 percent of the funding to the local 
level. The Committee believes that states need not serve as 
intermediaries for high-threat funding, provided that local 
governments commit to spending the funds in accordance and 
consistent with state plans.
    States, therefore, will continue to play a vital role in 
this program. The Committee directs the Secretary to ensure 
that the funding provided for high threat areas is coordinated 
with the State homeland security plan. The Committee also 
expects that the Department of Homeland Security will not 
provide funds under the high threat program without input from 
first responders in the high threat region.
    Paragraph (1) instructs the DHS Secretary to use 10 percent 
of the funds appropriated under this section for grants to 
local governments for use in high threat areas.
    Paragraph (2) establishes the criteria to be used in 
awarding discretionary grants. Discretionary grants awarded 
under subsection (f) shall go to localities that:
          Have a large population and high population density;
          Have a high degree of threat, risk, and vulnerability 
        related to critical infrastructure or key national 
        assets, as identified in the State Homeland Security 
        Plan;
          Have an international border with Canada or Mexico, 
        or coastline bordering international waters of Canada, 
        Mexico, the Atlantic Ocean, or the Pacific Ocean; and
          Are subject to other threat factors specified in 
        writing by the DHS Secretary.
    Paragraph (2) gives the Secretary basic criteria to use in 
awarding grants, but would give the Secretary discretion in how 
the listed factors are applied, and flexibility to use other 
criteria if necessary. Secretary Ridge testified before the 
committee on May 1, 2003 that DHS used the factors of 
population density, location of critical infrastructure, and 
threat and vulnerability assessments to determine FY2003 grants 
under the High Threat Urban Area program. This approach allows 
Congress to rely upon the expertise of DHS in designing 
specific aspects of the formula, without giving up oversight 
over how funds are distributed. It also gives DHS a degree of 
discretion to change formula factors depending on risk 
conditions and threat assessments.
    Paragraph (3) would require grant funds awarded under 
subsection (f) to supplement and support, in a consistent and 
coordinated manner, those activities and objectives described 
in State Homeland Security Plans.
    Paragraph (4) requires the DHS Secretary to ensure that all 
discretionary grant awards made under subsection (f) encourage 
multiple contiguous units of local government and mutual aid 
partners to coordinate any homeland security activities.

Formula grants

    Subsection (g) lays out the method for distributing the 90 
percent of funds remaining after 10 percent is set aside for 
discretionary grants under subsection (f). This section is 
intended to provide superceding statutory authority for the 
formula grant program now administered by ODP under section 
1014 of the USA Patriot Act. The formula grant laid out in 
subsection (g) is similar to the existing ODP formula program, 
but with a revision to specify more risk factors than 
population in awarding some of the funds. Subsection (g) would 
distribute funds to states under two formulas, one providing a 
per-state minimum and the other using a formula that specifies 
various risk factors rather than the population-based formula 
currently used by ODP.
    Paragraph (2) would provide a base amount of funding for 
all the States and territories. Each State with an approved 
application, including the District of Columbia and Puerto 
Rico, would receive a base amount of 0.75 percent of the 
appropriated funds in any fiscal year. The United States 
territories of American Samoa, Commonwealth of Northern Mariana 
Islands, Guam, and the U.S. Virgin Islands would receive a base 
amount of 0.25 percent of appropriated funds. This approach to 
providing States with a base amount is the one currently taken 
in ODP's State Homeland Security Grant Program. The primary 
purpose of the base amount is to allow each State to maintain a 
baseline level of capability. Approximately, forty percent of 
formula funds under subsection (g) would be distributed through 
the base amounts.
    Paragraph (3) would direct the Secretary to distribute all 
remaining funds on the basis of specified risk factors, 
including a state's population, population density, the 
presence of significant threats, risks or vulnerabilities 
involving critical infrastructure or key national assets, the 
need to guard international borders or coastlines, and other 
factors designated by the Secretary. The specified criteria 
that the Secretary should use to distribute formula funds to 
States are as follows:
          Population, including tourist and military 
        populations, and population density;
          Threat, risk, and vulnerability related to critical 
        infrastructure or key national assets, as identified in 
        the State Homeland Security Plan;
          International borders with Canada or Mexico, or 
        coastline bordering international waters of Canada, 
        Mexico, the Atlantic Ocean, or the Pacific Ocean; and
          Other factors specified in writing by the DHS 
        Secretary.
    This approach to the formula establishes basic criteria, 
but would give the Secretary discretion to determine the 
weighting of the factors or to add other factors.
    Paragraph (4) would require State recipients to distribute 
not less than 80 percent of formula funds (or resources 
purchased with such grant funds) to local governments, first 
responders, and other local groups, consistent with the State 
Homeland Security Plan. States would be required to distribute 
funds to the local level within 45 days after receiving formula 
grant funds.
    Paragraph (5) would require all recipients of grant funds 
under Section 4 to match 25 percent of the grant amount with 
non-Federal contributions. State and local governments may 
count in-kind contributions as part of their cost share. The 
match, however, would not take effect until two years after 
enactment of the act. In addition, the matching requirement 
would not apply to any grant recipient deemed economically 
distressed.
    With this language, the committee requires States and 
localities to contribute non-Federal resources, including in 
kind contributions, to preparedness efforts. This would be a 
departure from current practice, as the ODP State Homeland 
Security Grant Program, the largest grant program for first 
responder preparedness, does not have a matching requirement. 
While this provision represents a new requirement for States 
and localities, the committee agrees that grant recipients 
would be obligated to commit non-Federal resources to homeland 
security activities.
    The committee also recognizes that some recipients may have 
difficulty meeting this requirement, thus, the bill's language 
gives DHS flexibility in applying the matching requirement--the 
Secretary would have discretion in determining the criteria for 
economic distress.
    Paragraph (6) would require all grant recipients to report 
annually on the distribution and use of funds. Specifically, 
States and localities would report: the amount of State and 
local funds spent on homeland security activities under the 
applicable State Homeland Security Plan; and, information 
regarding the use of grant funds by units of local government 
as required by the Secretary. DHS, as well as Congress, would 
find such information useful in assessing both State and local 
contributions to homeland security and their use of Federal 
grant funds.
    Paragraph (7) would prohibit recipients from using grants 
under this section to supplant other State and local public 
funds dedicated to homeland security purposes. This provision, 
typically called a maintenance-of-effort provision, ensures 
that Federal funds would be used to supplement State and local 
funds and lead to preparedness enhancements, rather than just 
maintenance of the status quo.
    It is the intent of the Committee that grant funds shall 
not be used to replace previously obligated State or local 
funds. It is not the intent of the Committee to require that 
State or local government maintain the same overall level of 
expenditure from year to year, which they may not be able to do 
because of fiscal constraints. Many State and local governments 
have increased expenditures in anticipation of promised Federal 
assistance and the Committee does not want to penalize them. In 
addition, the Committee intends that the funds under the bill 
would be available to assist in announced plans, such as for 
training, as long as the funds for those plans have not been 
obligated.

Accountability

    Subsection (h) would create mechanisms for achieving 
accountability in the grants awarded under this section.
    Paragraph (1) would instruct the Secretary to assist States 
in establishing Interim Performance Measures based on the goals 
and objectives set in State Homeland Security Plans and any 
other factors determined by the Secretary. These interim 
measures are intended to serve as temporary indicators of State 
and local performance until the Secretary establishes the 
National Performance Standards under paragraph (2) in this 
subsection. Each State with an approved plan shall submit to 
the Secretary a report detailing the State's progress meeting 
the interim performance measures.
    Paragraph (2) would require the Secretary to establish 
National Performance Standards based in part on the goals and 
objectives in State Homeland Security Plans and any other 
factors the secretary determines relevant. Once established, 
the Secretary shall also ensure that State plans are in 
conformance with these standards. States with approved plans 
shall annually report to the Secretary on their progress in 
meeting such standards.
    Several observers, including Administration officials, 
State and local emergency managers, and scholars, have noted 
the importance of establishing standards for emergency 
preparedness. Among other potential benefits, such standards 
would provide a gauge for measuring the level of preparedness 
of particular localities, States, and the nation as a whole.
    Paragraph (3) would require all grant recipients, as well 
as DHS, to make available to the U.S. General Accounting Office 
(GAO) all information regarding the activities carried out 
under this section. This strengthens the ability of GAO to 
evaluate the grant program's effectiveness and efficiency.
    Paragraph (4) would require all grant recipients that 
expend $300,000 or more in Federal funds during any fiscal year 
to submit to the Secretary an organization wide financial and 
compliance audit report. This provision meets the financial 
reporting requirements established in chapter 75 of title 31 of 
the United States Code and OMB circular A-133.

Remedies for non-compliance

    Subsection (i) would provide the DHS Secretary with 
authority to enforce the various requirements established in 
this grant program. Paragraph (1) gives the Secretary options 
for remedies if, after reasonable notice and an opportunity for 
a hearing, the Secretary finds that a recipient has failed to 
substantially comply with any provision in this section. 
Remedies may include the following: termination of payment of 
grant funds; reduction in the amount of grant funds by an 
amount equal to the amount of grant funds not expended by the 
recipient in accordance with this section; or, limitation of 
the use of grant funds to programs, projects, or activities not 
affected by the failure to comply. Paragraph (2) would instruct 
the Secretary to apply an appropriate penalty under paragraph 
(1) until such time as the Secretary determines that the grant 
recipient is in full compliance with this section.
    Paragraph (3) would permit local governments to petition 
the Secretary for funds or resources to be provided directly to 
the local government. This could be done if a State fails to 
substantially comply with any provision of this section, 
including failing to distribute grant funds in a timely 
fashion.

Reports to Congress

    Subsection (j) would direct the Secretary to report 
annually to Congress on the grant program established in this 
Act. Specifically the report would include:
          Findings related to the performance standards 
        established under subsection (h);
          The status of preparedness goals and objectives;
          An evaluation of how States and local governments are 
        meeting preparedness goals and objectives;
          The total amount of resources provided to the States;
          The total amount of resources provided to units of 
        local government; and,
          A list of how these resources were expended.
    Congress needs this information to accurately evaluate the 
effectiveness of the grant program authorized under this Act, 
as well as national homeland security efforts in general.

Authorization of appropriations

    Subsection (k) would authorize to be appropriated such sums 
as are necessary to carry out this section.

       SECTION 5. FLEXIBILITY IN UNSPENT HOMELAND SECURITY FUNDS

    Guidelines for ODP's formula grant in past appropriations 
did not allow internal transfer of funds from its funding 
tracks (equipment acquisition, exercise planning, planning 
support, and training assistance). This inability to move 
appropriations within the ODP forced States to fund activities 
and programs that may not necessarily match their homeland 
security needs or plans.
    Subsection (a) would allow States to request reallocation 
of State Homeland Security Grant Program to meet their homeland 
security needs. This reallocation would be among the four 
categories of equipment, training, exercises, and planning.
    Subsection (b) would allow the Director ODP to approve this 
request by States for reallocation of State Homeland Security 
Grant Program funds. This approval would be in accordance to 
State plans and any other relevant factors that the DHS 
Secretary deems necessary.
    Subsection (c) would ensure the requirement of 80 percent 
of funds for homeland security needs pass through to 
localities.

 SECTION 6. CERTIFICATION RELATIVE TO THE SCREENING OF MUNICIPAL SOLID 
                WASTE TRANSPORTED INTO THE UNITED STATES

    This section is intended to strengthen border protections 
against the smuggling of weapons of mass destruction into the 
United States on vehicles carrying municipal solid waste. This 
section would require the Secretary to deny entry into the 
United States any commercial motor vehicle (as defined in 49 
U.S.C. 31101(1)) carrying municipal solid waste unless and 
until the Secretary certifies to Congress that the methods and 
technology being used to inspect such vehicles for the presence 
of chemical, nuclear, biological, and radiological weapons are 
as effective as the methods and technology being used to 
inspect for such weapons in other items of commerce entering 
the United States by commercial vehicle transport. In this 
section, the term ``municipal solid waste'' includes sludge (as 
defined at 42 U.S.C. 6903). This provision is intended to 
prompt a thorough evaluation of the screening procedures now 
being used for these vehicles and to strengthen U.S. border 
security against efforts to smuggle chemical, nuclear, 
biological or radiological materials into the country.

                   V. Evaluation of Regulatory Impact

    Paragraph 11(b)(1) of rule XXVI of the Standing Rules of 
the Senate requires that each report accompanying a bill 
evaluate the ``regulatory impact which would be incurred in 
carrying out this bill.'' Carrying out S. 1245 would have no 
regulatory impact.

                         VI. CBO Cost Estimate

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, July 16, 2003.
Hon. Susan M. Collins,
Chairman, Committee on Governmental Affairs,
U.S. Senate, Washington, DC.
    Dear Madam Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 1245, the Homeland 
Security Grant Enhancement Act of 2003.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Julie 
Middleton.
            Sincerely,
                                       Douglas Holtz-Eakin,
                                                          Director.
    Enclosure.

S. 1245--Homeland Security Grant Enhancement Act of 2003

    Summary: S. 1245 would authorize the Department of Homeland 
Security (DHS) to make administrative changes in order to 
improve the coordination of homeland security grants across the 
federal government and would establish an interagency committee 
to coordinate and streamline homeland security grants and an 
information clearinghouse for homeland security assistance. In 
addition, this bill would establish a homeland security grant 
program within DHS and would authorize the appropriation of 
such sums as are necessary for that program.
    Assuming appropriation of the necessary sums, CBO estimates 
that implementing the bill would cost about $1.5 billion over 
the 2004-2008 period. Enacting S. 1245 would not affect direct 
spending or revenues.
    S. 1245 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA). 
The bill would provide several benefits to state, local, and 
tribal governments.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of S. 1245 is shown in the following table. 
The costs of this legislation fall within budget function 750 
(administration of justice).

----------------------------------------------------------------------------------------------------------------
                                                                  By fiscal year, in millions of dollars--
                                                           -----------------------------------------------------
                                                              2003     2004     2005     2006     2007     2008
----------------------------------------------------------------------------------------------------------------
                                        SPENDING SUBJECT TO APPROPRIATION

Spending under current law:
    Estimated Authorization Level \1\.....................    3,230    3,287    3,310    3,405    3,506        0
    Estimated Outlays.....................................    1,357    2,253    2,859    3,206    3,413    1,989
Proposed changes:
    Estimated Authorization Level.........................        0        *        *        *        *    3,600
    Estimated Outlays.....................................        0        *        *        *        *    1,512
Spending under S. 1245:
    Estimated Authorization Level \1\.....................    3,230    3,287    3,310    3,405    3,506    3,600
    Estimated Outlays.....................................    1,357    2,253    2,859    3,206    3,413    3,501
----------------------------------------------------------------------------------------------------------------
\1\ The 2003 level is the amount appropriated for that year; the 2004-2007 levels assume the grants program
  continues at the 2003 level, adjusted for anticipated inflation.

Notes.--* = Costs of less than $500,000 for administrative changes that would be made by the bill.

    Basis of estimate: For this estimate, CBO assumes that S. 
1245 will be enacted near the start of fiscal year 2004 and 
that the necessary funds will be appropriated for each year. 
CBO estimates that implementing S. 1245 would cost about $1.5 
billion over the 2004-2008 period.
    S. 1245 would authorize a homeland security grant program 
that is almost identical to the grant program that the Office 
of Domestic Preparedness (ODP) within the Department of 
Homeland Security is implementing under current law. The ODP 
derives its primary authority to distribute grants to states 
and localities to prepare and respond to terrorism from the USA 
Patriot Act (P.L. 107-56). The agency also cites the 
Antiterrorism and Effective Death Penalty Act of 1996 (P.L. 
104-132) and the Defense Authorization Act of 1997 (P.L. 104-
201) as additional sources of its authority to distribute such 
grants. The grant programs authorized by the USA Patriot Act 
will expire in 2007. Therefore, CBO assumes that the authority 
to provide homeland security grants that would be provided by 
this bill would not affect spending until 2008. The estimated 
2008 authorization level--$3.6 billion--is the amount provided 
in 2003 for grants, adjusted for anticipated inflation.
    CBO estimates that implementing the administrative 
provisions in this bill, including establishing a committee to 
coordinate and streamline homeland security grants and an 
information clearinghouse for homeland security assistance, 
would cost less than $500,000 in each year.
    Intergovernmental and private-sector impact: S. 1245 
contains no intergovernmental or private-sector mandates as 
defined in UMRA. Section 6 of the bill would deny entry of 
commercial motor vehicles carrying municipal solid waste into 
the United States unless the methodologies and technologies to 
screen for weapons are certified to the Congress to be as 
effective as the screening of other commerce materials entering 
the United States by commercial motor vehicle transport. Based 
on information from the Bureau of Customs and Border Protection 
of the Department of Homeland Security indicating that such 
certification would likely be forthcoming, CBO has determined 
that this requirement would not be a mandate.
    Several provisions in the bill would benefit state and 
local governments by reorganizing offices within the Department 
of Homeland Security to coordinate and simplify security grant 
programs. For example, the bill would create an information 
clearinghouse for grant assistance and planning requirements. 
It also would create an interagency committee to recommend ways 
to streamline grant processes and make resources more readily 
available to state and local governments. Further, the bill 
would create the Homeland Security Grant Program. These grants 
would provide funding for states to strengthen their capacity 
to respond to homeland security threats. States would have to 
meet several requirements in order to be eligible for these 
grants, and they would have to provide a 25 percent state or 
local match of federal funds. Any costs would result from 
complying with conditions of aid.
    Estimate prepared by: Federal Costs: Julie Middleton. 
Impact on State, Local, and Tribal Governments: Melissa 
Merrell. Impact on the Private Sector: Paige Piper/Bach.
    Estimate approved by: Robert A. Sunshine, Assistant 
Director for Budget Analysis.

                         VII. Additional Views

                              ----------                              


                 ADDITIONAL VIEWS OF SENATOR LIEBERMAN

    S. 1245 includes many constructive provisions to improve 
the homeland security grant process, which I support. I commend 
Chairman Collins for her hard work on this legislation, which 
will provide states and local governments more flexibility in 
the use of homeland security grants, better coordination of 
homeland security plans, and a one-stop shopping process for 
information about grants. S. 1245 also will embed into law the 
principle that more funds should be distributed based on real 
threats and actual vulnerabilities faced by states and 
localities. I am pleased that Chairman Collins joined me in a 
series of amendments, accepted by the Committee,which will 
significantly strengthen the role of local governments in many 
aspects of the grant process and expand the categories of 
eligible funding. These changes, which were achieved with the 
invaluable assistance of the conference of Mayors and the 
National League of Cities, will help local governments across 
the country better prepare to protect their citizens.
    Unfortunately, despite these important improvements, S. 
1245 still misses the mark in some critical areas. First, it 
does not authorize a specific amount of funding to meet the 
dire needs of our states, localities, and first responders and 
preventers for sufficient resources, which the Bush 
Administration has failed to provide. I offered an amendment to 
authorize $10 billion in the first year to fund the initiatives 
of the bill--a relatively modest amount still well below what 
experts believe is needed--but it was rejected along party 
lines. Second, only 10 percent of the funding provided for in 
the bill goes directly to where the most need exists: the local 
governments in high threat areas that train, employ, and 
recruit our nation's first responders. The Committee did not 
have an opportunity to consider may amendment to resolve this 
deficiency. Accordingly, I hope that this bill will be 
appropriately amended on the floor.
    During the markup, Senator Levin indicated that he had 
concerns that the bill's funding formula, whereby each state 
receives a base amount of .75% of funding, results in less 
homeland security funding going to those areas facing the 
gravest threats, either because of their populations and 
population density or other vulnerabilities. Senator Levin said 
he would be offering floor amendments on this issue, and I 
would expect this topic will be the subject of a thorough 
debate. There are legitimate issues raised on all sides that 
must be reviewed. Unfortunately, as I have noted, the Committee 
rejected my amendment to approve funding levels well above the 
President's budget proposals--which would result in more 
appropriate levels of funding for all states and thus mitigate 
some of the concerns about the effect of the bill's formula.
Adequate funding
    One of the federal government's primary responsibilities 
under the Constitution is to provide for a common defense. 
Today, in the face of the terrorist threat, that means more 
than building a mighty, well-equipped, and well-trained Army, 
Navy, Air Force, Marines, and Coast Guard. It means 
strengthening the shared of our fifty states and their cities 
and towns, as well as our territories. Today, the readiness of 
our firefighters and police officers and public health 
professionals is every bit as important to our national 
security as the readiness of our soldiers, sailors, and airmen.
    Homeland security is expensive. Because the war against 
terrorism is a national fight and a substantial portion of the 
responsibility falls to the federal government, we must invest 
in the people and technologies that can prevent or help respond 
to terrorism. We must employ, train, and equip top-flight first 
responders just as robustly as we have our soldiers, sailors 
and airmen for combat overseas. We must hire more border 
personnel, install information sharing networks, and develop 
biological and chemical testing and treatment capabilities. 
Securing the nation's ports as well as our chemical and nuclear 
plants must become a top priority. In transportation, we must 
improve aviation security and also secure mass transit, 
highways, rails, air cargo, pipelines, tunnels, and bridges. 
These tough jobs and countless others cannot be accomplished by 
placing an unfair share of the burden on state and local 
governments who are already facing the worst fiscal crises in 
decades. Even before we established the Department of Homeland 
Security (``DHS''), many of us were asking this Administration 
to provide adequate resources, to provide them quickly, and to 
target them ore effectively. But unfortunately, that hasn't 
happened.
    Across the country, states and localities are being spread 
thinner than ever at the moment they can least afford it. Only 
our firefighters can respond to attacks with chemical weapons 
or rescue families trapped in buildings. But in some cities and 
states around the country today, our first preventers and 
responders are actually being laid off because of budget 
cutbacks. That's like reducing your troop force in a time of 
warfare. It doesn't make sense and it must stop, and money from 
Washington is needed to make it stop. Yet, this Administration 
has failed to provide sufficient money to support the men and 
women who are our first line of defense in the war against 
terrorism.
    In February 2003, I proposed spending an additional $16 
billion on homeland security above the President's Fiscal Year 
2004 budget--$7.5 billion of which was for first responders. I 
argued that we must approach homeland security with the same 
urgency, and resources, that we would deploy against terrorists 
overseas.
    A recent report by an Independent Task Force sponsored by 
the Council on Foreign Relations--composed of distinguished 
former government officials, including a director of the CIA 
and the FBI, our former colleague Senator Warren Rudman, a 
White House terrorism adviser, and a former chairman of the 
Joint Chiefs of Staff--corroborates the conclusions I and 
others reached months ago. The report, entitled ``Drastically 
Underfunded, Dangerously Unprepared,'' (the ``Task Force 
report'') determined that ``the United States has not reached a 
sufficient national level of emergency preparedness and remains 
dangerously unprepared to handle a catastrophic attack on 
American soil,'' \1\ and warned ``If the nation does not take 
immediate steps to better identify and address the urgent needs 
of emergency responders, the next terrorist incident could have 
an even more devastating impact than the September 11th 
attacks.'' \2\ Indeed, the Task Force report found that the 
U.S. is on track to fall nearly $100 billion short of meeting 
critical emergency responder needs over the next five years.\3\ 
In order to meet this need, which was echoed by a number of 
state and local government witnesses in hearings before our 
Committee,\4\ the federal government would have to quintuple 
its expenditures for emergency responders from the current 
level of $5.4 billion per year to an annual expenditure of $25 
billion.\5\ This estimate does not even include some known 
needs--such as detection or protection gear for police--because 
the Independent Task Force could not obtain reliable estimates 
for those areas.
---------------------------------------------------------------------------
    \1\ Warren Rudman, Richard Clark, Jaime Metzl, et al., 
``Drastically Underfunded, Dangerously Unprepared: Report of an 
Independent Task Force Sponsored by the Council on Foreign Relations,'' 
Council on Foreign Relations (2003), available at http://www.cfr.org/
pdf/Responders_TF.pdf, at 7.
    \2\ Id. at 2.
    \3\ Id. at 13.
    \4\ For example, at the Committee hearing on April 9, 2003, Captain 
Chauncey Bowers of the Prince George's County, Maryland, Fire 
Department testified on behalf of the International Association of Fire 
Fighters that, ``in the current environment, fire departments are 
facing the dual pressures of homeland security and reduced resources 
caused by local budget deficits. This is a receipe for disaster. We 
need a national commitment to homeland security preparedness. We must 
work to ensure that every fire department in America has the resources 
to protect our citizens.'' Investing in Homeland Security, Challenges 
on the Front Line, Hearing Before the Senate Governmental Affairs 
Committee, 108th Cong., S. Hrg. 108-82 (April 9, 2003), at 
15.
    \5\ This assumes that the Federal government would provide all of 
the additional funding identified by the Task Force, which includes 
funds to improve public health preparedness, support first responders, 
and meet other needs.
---------------------------------------------------------------------------
    S. 1245 does not authorize any specific amount of funding, 
only ``such sums as are necessary.'' Given this 
Administration's inadequate commitment to providing enough 
resources to meet the homeland security needs of this nation, I 
believe the Committee should have approved the funding amount 
in my amendment.
    The Task Force report listed a number of urgent needs left 
unmet due to lack of funding. Among them: to obtain 
interoperable communications for all emergency responder groups 
across the country so that those on the front lines can 
communicate with one another while on the scene of an attack; 
to enhance urban search and rescue capabilities of major 
cities; to extend the emergency 911 system nationally; to 
provide protective gear and weapons of mass destruction 
remediation equipment to first responders; and to increase 
public health preparedness and develop surge capacity on the 
nation's hospitals.\6\ The report's findings are sobering. For 
example, the report noted, ``On average, fire departments 
across the country have only enough radios to equip half the 
firefighters on a shift, and breathing apparatus for only one 
third. Only 10 percent of fire departments in the United States 
have the personnel and equipment to respond to a building 
collapse.'' \7\
---------------------------------------------------------------------------
    \6\ Warren Rudman, Richard Clarke, Jaime Metzl, et al., 
``Drastically Underfunded, Dangerously Unprepared: Report of an 
Independent Task Force Sponsored by the Council on Foreign Relations,'' 
Council on Foreign Relations (2003), available at http://www.cfr.org/
pdf/Responders_TF.pdf, at 14.
    \7\ Id. at 8.
---------------------------------------------------------------------------
    The Task Force report found cities without the means to 
determine whether terrorists had struck with dangerous 
chemicals or pathogens, and public health labs incapable of 
responding to a chemical or biological attack. For example, the 
report notes that even though cyanide is found both naturally 
and commercially in 41 states, only two states have the 
technology to test for the deadly compound. In fact, 75 percent 
of state laboratories reported being overwhelmed by too many 
testing requests.\8\
---------------------------------------------------------------------------
    \8\ Id.
---------------------------------------------------------------------------
    Local fire and police officials at our hearings also told 
us that they do not have the resources to pay for training or 
equipment that they need to prepare for a possible attack.\9\ 
First responders need equipment such as personal protective 
clothing, respirators, and devices for detection of chemical, 
biological, and radiological hazards, and they need training in 
using such equipment, and training in how in general to respond 
to an attack. Most emergency workers, however, still do not 
have the training or the equipment they require. The December 
2002 needs assessment of the U.S. Fire Service, conducted by 
the Federal Emergency Management Agency (FEMA) in conjunction 
with the National Fire Protection Association, found that about 
one-third of firefighters per shift are not equipped with self-
contained breathing apparatus, and nearly half of all fire 
departments have no map coordiante system.\10\ And with respect 
to training, the assessment found that 27 percent of fire 
department personnel involved in providing emergency medical 
services lacked any formal training even in those duties, and 
73 percent of fire departments failed to meet regulations for 
hazardous materials response training.\11\
---------------------------------------------------------------------------
    \9\ Captain Bowers told the Committee that approximately 57,000 
firefighters lack personal protective clothing and many fire 
departments do not have enough portable radios to equip more than half 
of the firefighters on shift. He recommended full funding for the Fire 
Act, which provides funds directly to local fire departments for basic 
needs, and first responder programs. Investing in Homeland Security, 
Challenges on the Front Line, Hearing Before the Senate Governmental 
Affairs Committee, 108th Cong., S. Hrg. 108-82 (April 9, 
2003), at 16.
    \10\ ``A Needs Assessment of the U.S. Fire Service: A Cooperative 
Study Authorized by U.S. Public Law 106-398,'' Federal Emergency 
Management Agency and National Fire Protection Association, December 
2002, available at http://www.usfa.fema.gov/downloads/pdf/publications/
fa-240.pdf, at vii.
    \11\ Id. at v, 24; see also Investing in Homeland Security, 
Challenges on the Front Line, Hearing Before the Senate Governmental 
Affairs Committee, 108th Cong., S. Hrg. 108-82 (April 9, 
2003), at 16 (Testimony of Chauncey Bowers, Captain, Prince George's 
County, Maryland Fire Department).
---------------------------------------------------------------------------
    The Administration's own budget documents estimate that 
only about 80,000 first responders were trained and equipped in 
2002 with funding at the federal level of $750 million.\12\ 
Unless this Administration provides significantly more funding, 
it will take us decades to train our first responders to cope 
with weapons of mass destruction.
---------------------------------------------------------------------------
    \12\ Department of Homeland Security, Budget of the United States 
for Fiscal Year 2004, Office of Management and Budget, GPO, Washington, 
D.C. 2003, at 150.
---------------------------------------------------------------------------
    Even if we could supply training and equipment to all of 
our first responders, there are simply not enough of them. A 
survey by the Democratic Leadership Council of 44 of the 
largest police departments found that 27 of them--nearly two-
thirds--are experiencing personnel shortfalls as a result of 
inadequate budgets and problems attracting new recruits.\13\ A 
report on the survey results concludes that, with the nation 
under unprecedented threat of attack and our police 
increasingly engaged in a two-front war on terrorism and crime, 
``many big city departments are actually losing officers faster 
than they can replace them.'' \14\ For example, the report 
notes that Los Angeles, with its police department more than 
1,000 police officers short of its authorized strength, suffers 
from one of the worst cop crunches in the country. According to 
the report, ``After growing more than 12 percent during the 
1990s, the LAPD shrank 6 percent between 2000 and 2002, and the 
number of officers leaving the department outpaced new recruits 
by an average of 189 each year.\15\ Other cities are facing 
similar crunches: the survey found that St. Louis had reduced 
its force by over 10% from 2000-2002 and that the size of New 
Orleans' police force had declined by almost 5% during the same 
period.\16\ This report is deeply disturbing at a time when we 
should be enhancing our first line of defense. It highlights 
the need to provide adequate funding to hire additional police 
officers and firefighters and makes clear the need for adequate 
funding for overtime related to training and elevated threat 
levels.
---------------------------------------------------------------------------
    \13\ See Jose Cerda III. ``Special Report: Cop Crunch,'' Blueprint: 
Ideas for a New Century, March/April 2003 at 8.
    \14\ Id. at 7.
    \15\ Id. at 8.
    \16\ Id.
---------------------------------------------------------------------------
    Indeed, according to the Conference of Mayors, cities 
across America spent $70 million per week when the homeland 
security alert was raised to orange--much of it for overtime 
expenses.\17\ Most recently, when the terror alert level was 
raised to orange between December 21, 2003 and January 9, 2004, 
the city of Los Angeles reported spending some $2 million per 
week during the alerts, at a time when the city already faces a 
multimillion-dollar budget deficit. Since September 11, 2001, 
the city has spent between $15 million and $20 million in costs 
directly related to alert level increases, but has only 
received promises of $4.5 million from the federal 
government.\18\
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    \17\ U.S. Conference of Mayors, ``Survey on Cities' Direct Homeland 
Security Cost Increases Related to War/High Threat Alert,'' March 27, 
2003, at 1.
    \18\ Jack Weiss, Op-Ed, ``Orange Crunch,'' New York Times, January 
14, 2004, at A19.
---------------------------------------------------------------------------
    Finally, even if local police and fire departments had 
sufficient personnel, they lack the ability to communicate 
effectively in a time of emergency. In most areas of the U.S., 
police, firefighters, and emergency technicians in the same 
jurisdiction have no way to communicate in the field because 
their equipment is not compatible. Lack of interoperability in 
communications systems has been cited as contributing to the 
deaths of 343 firefighters in New York City on September 11, 
2001, because police could not reach them prior to the collapse 
of the World Trade Center towers.\19\ A number of local 
officials told the Committee that solving this problem should 
be a priority.\20\
---------------------------------------------------------------------------
    \19\ National Task Force on Interoperability, ``Why Can't We Talk? 
Working Together to Bridge the Communications Gap to Save Lives: A 
Guide for Public Officials,'' February 2003, available at http://
www.agileprogram.org/ntfi/ntfiguide_pdf, at 4.
    \20\ Captain Bowers of the Prince George's County, Maryland Fire 
Department testified that even though he was sitting next to Chief 
Plaugher from nearby Arlington County, Virginia, ``if we had to go to 
the Pentagon today, we do not necessarily have a reliable way of 
communicating with his agency. We have to institute patchwork measures 
to try to get that to occur, so that [interoperability] is absolutely a 
key factor that needs to be addressed, not only in this area but across 
the country.'' Chief Horvath of Delaware testified that, because of the 
state's small size, they have installed an 800-megahertz system that 
would allow police and firefighters to communicate. However, he said 
the concern is that in the event of an attack with weapons of mass 
destruction, the system will likely be knocked out, and ``there is no 
high-band backup to it any more.''Investing in Homeland Security, 
Challenges on the Front Line, Hearing Before the Senate Governmental 
Affairs Committee, 108th Cong., S. Hrg. 108-82 (April 9, 2003), at 30.
---------------------------------------------------------------------------
    Achieving this goal, however, will be expensive, and the 
Administration's funding commitment is simply insufficient. The 
Public Safety Wireless Network, a joint Treasury and Justice 
Department policy group, has estimated it could cost up to $18 
billion.\21\ According to the National Task Force on 
Interoperability, at the state level, replacing basic radio 
systems for a single public safety agency can cost between $100 
million and $300 million.\22\ Meanwhile, Secretary Ridge 
testified before the Committee on May 1, 2003, that $40 million 
had been appropriated to run ``some demonstration projects with 
regard to interoperability of communications.'' \23\
---------------------------------------------------------------------------
    \21\ Public Safety Wireless Network, ``LMR Replacement Cost Study 
Report,'' June 1998, at 5.
    \22\ National Task Force on Interoperability, ``Why can't We Talk? 
Working Together to Bridge the Communications Gap to Save Lives; A 
Guide for Public Officials,'' February 2003, available at http://
www.agileprogram.org/ntfi/ntfiguide_ pdf., at 25.
    \23\ Investing in Homeland Security: Streamlining and Enhancing 
Homeland Security Grant Programs, Hearing Before the Senate 
Governmental Affairs Committee, 108th Cong., S. Hrg. 108-84 (May 1, 
2003), at 24-25.
---------------------------------------------------------------------------
    In December 2003, Project SAFECOM, (Wireless Public SAFEty 
Interoperable COMmunications), the umbrella initiative now run 
out of DHS to coordinate all federal, state, local, and tribal 
users to achieve national wireless communications 
interoperability, issued a report on interoperability efforts. 
The report notes that due to budget constraints at all levels 
of government many agencies plan based on only their own needs 
with little concern for multi-jurisdictional or multi-
disciplinary interoperability requirements.\24\ The report also 
states that there are almost no ``life-cycle funding strategies 
at any level of government'' to solve the interoperability 
problem quickly.\25\ This is an inadequate response to a long-
standing and expensive problem, and will leave our first line 
of defense without the basic equipment they need for many years 
to come.
---------------------------------------------------------------------------
    \24\ A Report Submitted to the U.S. House of Representatives 
Appropriations Committee for the Department of Homeland Security On the 
Current State of the Government's Response to Federal, State and Local 
Interoperable Efforts, Including the Current Total Estimated Cost, 
Scope and Schedule of the SAFECOM Program and to outline the Necessary 
Steps to Improve Response and Coordination. Department of Homeland 
Security, December 15, 2003, at 3.
    \25\ Id. at 4.
---------------------------------------------------------------------------
    Because they lack sufficient funds, first responders find 
themselves both hampered in their homeland security work and 
struggling to keep up with the other day-to-day critical 
services they provide to their communities. One police chief 
told the Committee that he had to eliminate or cut back 
community police, drug enforcement, traffic enforcement, and 
programs in schools in order to station most of his force at 
the airport.\26\ These concerns were echoed by other police 
chiefs in testimony before the Committee.\27\ In light of the 
Administration's failure to provide for adequate resources to 
state and local governments, authorizing an initial $10 billion 
to meet the basic needs of our first preventers and responders 
is particularly important. As they labor under tight budgets 
due to the poor economy, states and localities desperately need 
financial help to support the critical missions of their first 
preventers and first responders and other homeland security 
needs.
---------------------------------------------------------------------------
    \26\ Investing in Homeland Security, Challenges on the Front Line, 
Hearing Before the Senate Governmental Affairs Committee, 108th Cong., 
S. Hrg. 108-82 (April 9, 2003), at 26 (Testimony of Michael J. 
Chitwood, Chief of Police, Portland, Maine, Police Department).
    \27\ Jeffrey Horvath, Dover, Delaware, Chief of Police told a 
similar story, saying his force is taking away from normal police 
duties to cover homeland security issues. Investing in Homeland 
Security, Challenges on the Front Line, Hearing Before the Senate 
Governmental Affairs Committee, 108th Cong., S. Hrg. 108-82 (April 9, 
2003), at 27. Edward P. Plaugher, Fire Chief, Arlington County, 
Virginia, Fire Department said that the stress of protecting the 
homeland without adequate resources is also affecting the morale of 
first responders. He said, ``They see their chief out doing national 
efforts to make resources available, but they are seeing nothing coming 
out the end of the stream, and so the frustrations just continue to 
mount, from their perspective, and again I am at the highest injury 
level ever in the history of my department, and that is an enormous 
cost to my community. So it is eroding other basic services.'' 
Investing in Homeland Security, Challenges on the Front Line, Hearing 
Before the Senate Governmental Affairs Committee, 108th Cong. S. Hrg. 
108-82 (April 9, 2003), at 28.
---------------------------------------------------------------------------

Direct funding

    Ensuring that the money goes where it is most needed is 
just as essential as ensuring there is enough of it. S. 1245 
provides for 10 percent of the amounts allocated pursuant to 
the bill to go directly to local governments in high threat 
areas, and requires 80 percent of the remaining amount, which 
is set to go to the states, to be provided to localities within 
45 days. I believe that is not enough. While the Committee 
adopted my amendment to speed up the pass-through process to 
get the money to local governments more quickly, the Committee 
did not have an opportunity to consider my other amendment, 
which would have increased the amount going directly to local 
governments in high threat areas.
    The simple fact is that funds to protect the American 
people are not getting to the front lines with sufficient 
dispatch. This fact was underscored most recently in a January 
2004 report by the U.S. Conference of Mayors which found that 
76 percent of cities are still ``left empty-handed and have not 
received any money from the largest homeland security program 
designed to assist first responders, such as police, fire, and 
other local officials.'' \28\ The report was based on responses 
from 215 cities, representing all 50 states and Puerto Rico. 
Forty-five percent of cities had neither received funds nor 
been notified that they would. In addition, in 59 percent of 
the cities, officials said they had not been given an adequate 
opportunity to influence their states regarding how funds could 
be used in their cities. A prior survey, released in September, 
found that 90 percent of the 168 cities surveyed had not 
received any funding. The most recent survey found that five 
months after the release of the first one, some cities had 
received FY 2003 funding through some of the programs, but most 
had not.\29\
---------------------------------------------------------------------------
    \28\ ``Mayors Release New Homeland Security Survey at 72nd Winter 
Meeting of the U.S. Conference of Mayors,'' United States Conference of 
Mayors, Press Release, January 22, 2004; see also United States 
Conference of Mayors Homeland Security Monitoring Center, ``Second 
Mayors' Report to the Nation: Tracking Federal Homeland Security Funds 
Sent to the 50 State Governments, A 215-city/50-state Survey,'' January 
2004, at 2.
    \29\ ``Mayors Release New Homeland Security Survey at 72nd Winter 
Meeting of the U.S. Conference of Mayors,'' United States Conference of 
Mayors, Press Release, January 22, 2004; see also United States 
Conference of Mayors Homeland Security Monitoring Center, ``Second 
Mayors' Report to the Nation: Tracking Federal Homeland Security Funds 
Sent to the 50 State Governments, A 215-city/50-state Survey,'' January 
2004, at Foreword and 1-2.
---------------------------------------------------------------------------
    In releasing the report, Mayor Martin O'Malley of 
Baltimore, Maryland, pointed out that cities are on the 
frontline of homeland security, but ``in the back of the line 
for funding.'' He added, ``The Administration and Congress 
should act now to direct appropriate homeland security funds to 
cities and eliminate the bureaucracy of a middle man.'' \30\ 
Sugar Land, Texas Mayor David Wallace said the analysis 
``clearly shows that cities of all sizes--small, medium, and 
large--are not getting the money they need to prepare their 
first responders and protect residents.'' \31\ Gary, Indiana 
Mayor Scott King said, ``Not only are we last in line for 
funding, we are last in line to be consulted about what it 
takes to protect our residents. More than half of the cities 
say they have not been at the table to influence decisions and 
coordinate response efforts. Cities know their needs best.'' 
\32\ Hempstead, New York Mayor James A. Garner, President of 
the Conference of Mayors, said ``Today's survey shows that 
there are still too many cities that have not received funds. 
As leaders of cities which must be prepared to move at any time 
to higher terrorism threat levels--just as we did one month 
ago--this is completely unacceptable.'' \33\ We should listen 
to what the mayors, police chiefs, and fire chiefs of our major 
localities have been telling us for months.
---------------------------------------------------------------------------
    \30\ ``Mayors Release New Homeland Security Survey at 72nd Winter 
Meeting of the U.S. Conference of Mayors,'' United States Conference of 
Mayors, Press Release, January 22, 2004.
    \31\ Id.
    \32\ Id.
    \33\ Id.
---------------------------------------------------------------------------
    The United States Conference of Mayors also registered its 
concern on this subject in a letter, dated June 13, 2003, to 
Chairman Collins regarding S. 1245, in which the mayors 
``strongly reaffirm'' their call for direct funding to local 
governments and their first responder groups: ``Simply stated, 
mayors are extremely concerned that simply sending funding to 
the states with no sub-allocation formula or guidance will 
result in major population centers, high-risk communities, and 
cities with critical infrastructure not receiving adequate or 
timely assistance.'' \34\ Indeed, witnesses from local police 
and fire departments told the Committee that they were getting 
``very little, if any, monies'' at the local level from federal 
homeland security funding, and that the amounts they were 
getting were substantially delayed due to bureaucratic 
hurdles.\35\
---------------------------------------------------------------------------
    \34\ Letter dated June 13, 2003 to the Honorable Susan Collins from 
the United States Conference of Mayors, signed by the Honorable James 
Garner (Mayor of Hempstead, New York, President of U.S. Conference of 
Mayors), the Honorable Martin O'Malley (Mayor of Baltimore, Maryland, 
Chair, Homeland Security Task Force), the Honorable J. Christian 
Bollwage (Mayor of Elizabeth, New Jersey, Chair, Criminal and Social 
Justice Committee), and J. Thomas Cochran (Executive Director, U.S. 
Conference of Mayors).
    \35\ Investing in Homeland Security, Challenges on the Front Line, 
Hearing before the Senate Governmental Affairs Committee, 108th Cong., 
S. Hrg. 108-82 (April 9, 2003), at 18 (Testimony of Edward P. Plaugher, 
Fire Chief, Arlington County, Virginia, Fire Department). See also id. 
at 19 (Testimony of Chauncey Bowers, Captain, Prince George's County, 
Maryland, Fire Department and Testimony of Jeffrey Horvath, Chief of 
Police, Dover, Delaware).
---------------------------------------------------------------------------
    The way to deal with bureaucratic obstacles is to eliminate 
them where possible. We should take a page from the success 
story of the COPS program, which Portland, Maine Police Chief 
Michael Chitwood described in his testimony before the 
Committee as ``one of the best things for law enforcement that 
I have ever seen in my 38 years'' because it allowed ``local 
police departments to articulate a particular need directly to 
the federal government.'' \36\ We would give local governments 
the same opportunity to obtain assistance with their homeland 
security needs.
---------------------------------------------------------------------------
    \36\ Id. at 20 (Testimony of Michael J. Chitwood, Chief of Police, 
Portland, Maine, Police Department).
---------------------------------------------------------------------------
    In many cases, direct funding is the most efficient method 
of distributing homeland security funds. Unless states 
distribute these funds based on the level of threats 
communities face, some particularly vulnerable areas may be 
left without sufficient financial help. In fact, the nation's 
mayors have expressed concern that factors other than threats 
and vulnerabilities can guide decisions by states on how 
homeland security funds are distributed. For example, Mayor 
Kwame Kilpatrick of Detroit, testifying on behalf of the 
Conference of Mayors, told the Committee that homeland security 
funding often becomes ``political and partisan'' in state 
capitals around the country and urged the Congress to provide 
funding in a manner which allows for consideration of unique 
issues in localities around the country.\37\
---------------------------------------------------------------------------
    \37\ Investing in Homeland Security: Challenges Facing State and 
Local Governments, Hearing Before the Senate Governmental Affairs 
Committee, 108th Cong., S. Hrg. 108-83 (May 15, 2003), at 15.
---------------------------------------------------------------------------
    According to Mayor Dick Murphy of San Diego, California, 
large cities, in particular, may receive much less from the 
state than they would if permitted to apply directly to the 
federal government.\38\ A large city--despite its comprising a 
good chunk of the region's population--is but one of many 
jurisdictions within a county or a state, all of which will 
have some claim on the state's homeland security funding. Mayor 
Murphy told the Committee in written testimony that the city of 
San Diego received only 24 percent of the region's share of 
funding, despite the fact that it represents 43 percent of the 
population and has unique responsibilities for the entire 
region, such as providing hazardous material response 
actions.\39\ Mayor Murphy noted that with respect to a city as 
large as San Diego--which has a population larger than Rhode 
Island or New Hampshire and has a large city government--the 
extra layer of bureaucracy involved in going through the state 
can mean significant delays.\40\
---------------------------------------------------------------------------
    \38\ Id. at 104 (Written Testimony of the Honorable Dick Murphy, 
Mayor, Dan Diego, California.
    \39\ Id.
    \40\ Id.
---------------------------------------------------------------------------
    These concerns have been echoed by mayors across the 
country and reflect the political reality that governors as 
well as mayors face. We should listen to these concerns. 
Congress must acknowledge that, just like Members of Congress, 
governors also face competing pressures when distributing 
federal homeland security dollars to multiple jurisdictions. 
Providing adequate funding directly to local governments in 
high threat areas will alleviate the mayors' legitimate 
concerns and make sure that funding flows faster to where it is 
needed most.
    Nor is this to say that the states do not have an important 
role in the funding process and that some funding should not be 
distributed through the states. States clearly have a key role 
in the planning, coordination, and cooperation that we all want 
to promote. For this reason, I am pleased that the legislation 
includes adequate incentives for local governments to 
coordinate and work cooperatively with surrounding 
jurisdictions and state governments. The bill makes clear that 
local governments that receive direct funding will still be a 
critical part of the state's overall homeland security plan. 
Localities must use their direct funding under the bill only to 
``supplement and support, in a consistent and coordinated 
manner with, those activities and objectives'' of their states' 
homeland security plans (Section (4)(f)(3)).
    For their part, the nation's mayors are also keenly aware 
of the benefits of coordinating with surrounding jurisdictions 
and state governments. For example, at the Committee hearing on 
May 15, 2003, Mayor Kilpatrick testified that he wholeheartedly 
agrees that cities need to sit at the table with their state 
governments to figure out how to best coordinate homeland 
security funding. He pointed out that Detroit has already begun 
to work on interoperable communications systems, and told the 
Committee that ``we do not believe that should be done in a 
vacuum * * *. We believe now more than ever that efforts need 
to be coordinated so all of us are able to talk to one another 
in the event of an emergency.'' \41\ Mayor Kilpatrick testified 
that the city of Detroit is working cooperatively with 
surrounding jurisdictions and, for example, as ``brought all of 
[the] hospital systems in the entire southeastern Michigan 
region together.'' \42\ But mayors also know that when an 
emergency happens, the local police officers and local 
firefighters will be the first in and the last to leave.
---------------------------------------------------------------------------
    \41\ Investing in Homeland Security: Challenges Facing State and 
Local Governments, Hearing Before the Senate Governmental Affairs 
Committee, 108th Cong., S. Hrg. 108-83 (May 15, 2003), at 14.
    \42\ Id. at 29.
---------------------------------------------------------------------------
    We must offer faster and fuller funding to the front lines 
of our domestic war on terror so that our nation's first 
responders will be prepared in the face of another major 
attack. The American people expect and believe that we are 
doing our utmost to ensure that sufficient funds are provided, 
but in too many communities the reality is unlikely to meet the 
expectations. The Administration simply has not provided 
sufficient homeland security funds to those who need it most: 
the local firefighters, police officers, emergency technicians, 
and public health workers who protect and serve us every day.
    Despite the lack of authorized funding and the failure to 
provide sufficient direct grants to high threat localities, S. 
1245 represents steps forward for the nation's security in a 
number of ways that I mentioned earlier. The six amendments I 
advocated, which were accepted by the Committee as part of a 
package of amendments introduced with the Chairman, further 
strengthened the bill by expanding the uses for federal 
homeland security funding, enhancing the role of local 
officials in the state planning process, and protecting and 
expediting the funds for local governments and first 
responders.
    The first amendment addressed the critical need for funding 
to help pay overtime expenses for first responders. In hearings 
before the Committee last year, state and local leaders 
expressed their concern about the costs of overtime for 
firefighters and police due to the additional vigilance 
required for homeland security.\43\ Secretary Ridge testified 
before the Committee on May 1, 2003, that the overtime expense 
incurred by state and local governments during heightened 
threat levels ``is a legitimate cost that we should help them 
absorb.'' \44\ Thus I proposed an amendment, which is now part 
of the bill, to ensure that funding will be available to states 
and local governments for overtime expenses related to an 
increase in the threat level under the Homeland Security 
Advisory System.
---------------------------------------------------------------------------
    \43\ Jeffrey Horvath, Chief of Police of Dover, Delaware, 
emphasized to the Committee in a hearing on April 9, 2003, that federal 
resources ``cannot be used to hire new police, they cannot be used to 
pay overtime expenses that we incur each and every time Secretary Ridge 
changes the threat level.'' Investing in Homeland Security, Challenges 
on the Front Line, Hearing Before the Senate Governmental Affairs 
Committee, 108th Cong., S. Hrg. 108-82 (April 9, 2003), at 12. 
Moreover, according to Massachusetts Governor Mitt Romney, the federal 
government provided funding to support the Salt Lake City Olympics not 
only for officers who were directly involved in the effort, but also 
for those who had to work overtime to cover local needs because so many 
local officers were diverted to secure the games. He noted, ``[I]n this 
circumstance, I think, we have an unusual setting, and that is that the 
homeland security challenge has been unanticipated and unplanned. And 
cities and towns and the states have not put in place a structure for 
being able to deal financially with this sudden post-9/11 financial 
crisis. And therefore, the prospect of receiving support or 
reimbursement for not only equipment but also personnel I think is 
appropriate in these kinds of unplanned, unanticipated emergencies.'' 
Investing in Homeland Security: Challenges Facing State and Local 
Governments, Hearing Before the Senate Governmental Affairs Committee, 
108th Cong., S. Hrg. 108-83 (May 15, 2003), at 28-29.
    \44\ Investing in Homeland Security: Streamlining and Enhancing 
Homeland Security Grant Programs, Hearing Before the Senate 
Governmental Affairs Committee, 108th Cong., S. Hrg. 108-84 (May 1, 
2003), at 23.
---------------------------------------------------------------------------
    Similarly, Prince George's County, Maryland Fire Department 
Captain Chauncey Bowers, on behalf of the International 
Association of Fire Fighters, testified before the Committee on 
April 9, 2003, that overtime costs related to training, one of 
the most significant training expenses for local governments 
and first responders, can be prohibitive for many fire 
departments.\45\ Thus I proposed an amendment, also now part of 
S. 1245, that would allow the Secretary of DHS to waive the 
five percent cap on the amount of funds that can be used for 
overtime related to training. Although it is my belief that the 
cap is unwise and should be eliminated entirely, this is a step 
in the right direction.
---------------------------------------------------------------------------
    \45\ Investing in Homeland Security, Challenges on the Front Line, 
Hearing Before the State Governmental Affairs Committee, 108th Cong., 
S. Hrg. 108-82 (April 9, 2003), at 16.
---------------------------------------------------------------------------
    Due to another amendment I proposed, the bill now takes the 
important step of strengthening the role of local officials in 
the planning process. The legislation originally provided that 
the states would ``allow'' input from local stakeholders in 
developing state homeland security plans. The amendment I 
proposed requires states to seek and include this input and 
expands the definition of local stakeholders to include rural 
as well as high-population and high-threat jurisdictions, areas 
whose residents are most likely to be at risk. It also gives 
local officials the opportunity to be heard about their state's 
homeland security plans by allowing them to provide dissenting 
views directly to the Secretary of DHS, who will be required to 
review their concerns.46
---------------------------------------------------------------------------
    \46\ The importance of this was made clear by Chief Edward Plaugher 
of the Arlington County, Virginia Fire Department, who testified before 
the Committee on April 9, 2003 that Virginia, in a pre-9/11 assessment 
program at the Justice Department, gave the Pentagon an inappropriately 
low rating on the list of target hazards in the state. Officials in 
Arlington County, where the Pentagon is located, did not agree, but 
were given no opportunity to influence funding decisions at the federal 
level. Investing in Homeland Security, Challenges on the Front Line, 
Hearing Before the Senate Governmental Affairs Committee, 108th Cong., 
S. Hrg. 108-82 (April 9, 2003), at 19.
---------------------------------------------------------------------------
    At the April 9, 2003 Committee hearing, Dover, Delaware 
Police Chief Jeffrey Horvath said that one of his top concerns 
is that ``we are not receiving funds in a timely fashion,'' 
despite being expected to do so much more since September 11, 
2001.47 To address this fundamental problem, I 
proposed an amendment, accepted by the Committee, to require 
states to pass through funds to local communities within 45 
days, which is the time frame adopted by current regulations 
promulgated by the Office of Domestic Preparedness (``ODP'') 
and required by the FY 2003 Supplemental Appropriations bill. 
The bill as drafted would have lengthened that time frame to 60 
days.
---------------------------------------------------------------------------
    \47\ Investing in Homeland Security, Challenges on the Front Line, 
Hearing Before the Senate Governmental Affairs Committee, 108th Cong., 
S. Hrg. 108-82 (April 9, 2003), at 12.
---------------------------------------------------------------------------
    Another amendment I proposed, which is also now part of S. 
1245, ensures that if a state fails to comply with the 
requirements of the bill, local governments within that state 
may petition the federal government directly for homeland 
security funds. As initially drafted, the bill would have 
allowed the Secretary simply to reduce, restrict, or terminate 
the funding to a state that failed to comply; such penalties 
might unfairly diminish the amounts available to localities, 
which had no part in the non-compliance and employ the first 
responders on the front lines protecting the American people.
    Another amendment I proposed that was accepted would allow 
the Secretary to waive the 25 percent matching requirement in 
the bill, which goes into effect two years following enactment, 
in order to protect funding for economically distressed local 
governments. Already, some local communities and first 
responder organizations do not even apply for homeland security 
funding because of burdensome matching requirements. The 
amendment ensures that those who cannot afford the match will 
not be left out in the cold.
    Our police officers, firefighters, emergency management 
officials, and public health officals--those we call first 
responders and first preventers in the fight against 
terrorism--are struggling to protect us from unprecedented 
dangers. They need more information, better training, more 
personnel, better technology, and more guidance and leadership 
in providing effective security in these dangerous times. S. 
1245 will make some much-needed improvements in the grants 
process. But administrative changes in the grants process will 
not have the necessary impact if the funds do not go where they 
are needed, or if there are not enough funds to meet critical 
needs. Those funds must come from Washington because this is a 
national fight, and budgets are tight and getting tighter in 
state and local governments across our nation. Unfortunately, 
most of my pleas and those of my colleagues--along with those 
of independent, bipartisan experts and state and local 
governments--have not succeeded in persuading this 
Administration.

Training

    Finally, the report accompanying S. 1245 ``directs'' ODP to 
designate a lead federal level national domestic preparedness 
training center, and consider designating additional regional 
federal level national domestic preparedness training centers. 
According to the report, the lead center, along with the 
additionally designated regional federal level national 
domestic preparedness training centers designated by ODP, 
``shall assist in developing, maintaining, and adopting 
certifiable training standards to help first responders prepare 
for and respond to the consequences of terrorists' use of 
weapons of mass destruction.''
    Despite the language in the Committee report, I must note 
that S. 1245 does not include language ``directing'' ODP to 
establish a lead domestic preparedness training center, nor was 
this issue debated during the mark up of the legislation. I 
believe that the issue of training, and training centers, 
deserves the full attention of the Committee. I also believe 
that training and education for first responders must be made 
part of a broader framework developed by DHS to educate and 
train its personnel, its partners and counterparts in state and 
local government and the private sector, as well as first 
responders. Consequently, I do not think it wise to essentially 
legislate on this important issue through language in the 
Committee report before this issue has been adequately 
considered by the full Committee.

                  ADDITIONAL VIEWS OF SENATOR SPECTER

    The Homeland Security Grant Enhancement Act, S. 1245, 
proposes many useful improvements to the Department of Homeland 
Security (DHS) grant process for states, localities and first 
responders/first preventers. For example, this legislation 
provides a mechanism for streamlining and providing flexibility 
to homeland security grant programs. It is vital in high threat 
states like Pennsylvania that first responder/first preventer 
funding gets to intended recipients as quickly and efficiently 
as possible. Therefore, I support your efforts to streamline 
the pass-through of funds by states to localities. This is 
especially important as we move toward a more dynamic, threat-
based approach to funding.
    However, as I stated prior to the Government Affairs 
Committee mark-up of this legislation, I believe that setting 
aside only 10 percent of total funds for a ``high threat, high 
density'' program would undermine needed efforts to increase 
funding for the Urban Area Security Initiative (UASI). I fear 
that S. 1245 will divert homeland security funding away from 
UASI, which deviates from my position and that of Secretary 
Ridge and the Administration.
    Also, limitation of reimbursable overtime expenses related 
to training to not more than 5 percent of Homeland Security 
Grant Program funds would likely dramatically impact on 
Pennsylvania's ability to offset the overtime and backfill 
costs associated with training. It is my understanding that the 
DHS Office of Domestic Preparedness (ODP) does not cap overtime 
costs in this fashion.
    Finally, Pennsylvania's Governor Edward Rendell has raised 
a continuing objection to the minimum state funding formula 
contained in S. 1245. The minimum state funding formula 
provides each state with a base amount of 0.75 percent of the 
appropriated state and local grant funds allocated through ODP 
each fiscal year. Approximately 40 percent of those funds are 
distributed pursuant to this formula under S. 1245. Because 
Governor Rendell informs me that this ``inequitable'' 
distribution of homeland security funds is ``unfair'' to 
Pennsylvania, and that this may in turn unduly impact upon 
funding to other high threat areas of Pennsylvania, I abide by 
his request for a modification reducing the state funding 
minimum levels contained in S. 1245. This position appears to 
find support in the Administration Budget for Fiscal Year 2005.

        ADDITIONAL VIEWS OF SENATOR LEVIN AND SENATOR LAUTENBERG

    Maintaining an adequate level of funding for first 
responders and streamlining the first responder grant process 
at the Department of Homeland Security (DHS) are critical to 
protecting our country from terrorist attack. The Homeland 
Security Grant Enhancement Act, S. 1245, proposes many useful 
improvements to the DHS grant process for states, localities 
and first responders. For example, this legislation begins the 
process of streamlining and providing flexibility to homeland 
security grant programs so that our first responders begin to 
get the funding they need. The legislation also directs the 
Secretary of the Department of Homeland Security to develop 
National Performance Standards. Further, this legislation 
directs the Office of Domestic Preparedness to consider 
designating additional regional federal level domestic 
preparedness centers, which will help coordinate state and 
local officials as they work to coordinate homeland security 
efforts with the DHS. It remains vitally important that DES 
proceed with its efforts to create a plan for the location of 
its regional centers.
    However, S. 1245 is seriously flawed. It imposes a minimum 
state funding formula (``small state provision'') which 
requires a disproportionately large portion of the grant funds 
to go to small states, regardless of need. The small state 
formula arbitrarily benefits approximately 30 so-called small 
population states and uses a state minimum that was nearly 
unprecedented when first established in the USA Patriot Act two 
years ago.
    Other federal grant programs provide a minimum state 
funding level to ensure funds reach all areas of the country. 
These small state guarantees have in many instances resulted in 
some real distortion and unfairness. For instance, in the 
highway bill, for 50 years states with small populations and 
small size have benefited from a skewed formula. The remaining 
20 states are known as donor states and have historically sent 
more money to the Highway Trust Fund than were returned in 
transportation infrastructure funding. It is one thing to say 
that all states should receive a minimum amount of funding to 
support their homeland security goals, but the issue is how to 
balance per state funding with grants that will protect all 
Americans by targeting funds to address the greatest terrorist 
threats. S. 1245 fails to strike the right balance.
    S. 1245 establishes three types of homeland security grants 
for states and localities. First, it allocates 10 percent of 
all funding for direct grants to local governments in high 
threat urban areas. Second, it establishes a minimum state 
funding formula grant which provides each state with a base 
amount of 0.75 percent of the remaining appropriated funds each 
fiscal year. This formula uses up about 40 percent of those 
funds. Third, the bill distributes remaining funds to states 
using a risk-based formula to be developed by DHS, using 
variables such as state population and population density, 
threats to critical infrastructure or key national assets, the 
need to guard international borders or coastlines, and other 
threat factors.
    The 0.75 percent minimum state funding formula is taken 
from the USA Patriot Act of 2001. Because this statute was 
enacted quickly, in the aftermath of the 9-11 tragedy, Congress 
did not have adequate time to debate this unusually high 
minimum, which significantly exceeds the normal state minimum 
of 0.25 to 0.50 percent. A leading organization that analyzes 
federal grants, the Federal Funds for Information for States 
(FFIS) has stated: ``The structure of the 0.75% minimum as a 
base represents a departure from traditional small state 
minimums, which are typically 0.50% or less.'' A search of 
other federal grant programs found that the 0.75 percent 
formula was nearly unprecedented for a state minimum when 
enacted in 2001. With the help of the Congressional Research 
Service, my staff identified only one other program with a 
minimum of 0.75 whereas all other federal grant programs (more 
than 50 in all) contain a state minimum funding level of 0.50 
percent or less.
    The consequence of the 0.75 percent formula is that states 
with smaller populations receive far more, per capita, than 
more populated states. For example, using the 0.75 percent base 
for Office of Domestic Preparedness grants in FY 2004, Texas 
will receive $4.04 per capita, whereas Wyoming will receive 
$28.72 per capita. The result is that while Texas has 42 times 
the population of Wyoming, it receives approximately one 
seventh of what Wyoming receives per capita. Allocating scarce 
federal dollars disproportionally to states with the fewest 
persons, and often less risk, is not an effective or fair use 
of federal homeland security grant programs.
    In a 2003 report titled Emergency Responders: Drastically 
Underfunded, Dangerously Unprepared, the Council on Foreign 
Relations writes that ``Congress should work to establish a 
system for distributing funds based less on politics and more 
on threat.'' Homeland Secretary Tom Ridge testified before the 
Senate Commerce Committee last year that ``[T]he Office of 
Domestic Preparedness * * * had a formula that we don't believe 
* * * provides the appropriate distribution for counter 
terrorism, anti-terrorism, prevention dollars * * * [W]e hope 
to achieve some bipartisan support and get it done * * * so we 
make a permanent change so that distribution reflects the 
reality of the needs of communities to combat terrorism.''
    In addition to policy experts and the Administration, the 
Governors of some of our most populous states, with significant 
vulnerabilities, oppose the formula in S. 1245. Governor 
Jennifer Granholm of Michigan, Governor James E. McGreevey of 
New Jersey, Governor Rick Perry of Texas, Governor Edward 
Rendell of Pennsylvania, Governor Bob Taft of Ohio, and 
Governor Mark R. Warner of Virginia have written letters 
opposing the 0.75 percent formula in S. 1245. According to 
Texas Governor Perry, ``Because basic formula grants awarded by 
the Office of Domestic Preparedness are currently distributed 
disproportionately to states with small populations, full 
consideration is not given to key risk factors within our 
state.'' According to Ohio's Governor Taft, ``Reducing the 
minimum funding percentage from 0.75% to a level more commonly 
used is appropriate. While all levels of government have major 
work to accomplish, assigning higher percentages of assistance 
to areas believed to have lower threat levels is not 
justified.''
    The basic problem is that by setting the per state minimum 
so high, S. 1245 makes less funds available for programs needed 
to counter the highest priority terrorist threats. The bill 
attempts to address this problem in two ways: by devoting 10 
percent of all state, local and first responder funds to a 
discretionary grant program for high threat urban areas, and by 
distributing other funds according to a risk-based formula to 
be developed by DHS. While helpful, these risk-based grant 
programs do not make up for the fact that the S. 1245 seeks to 
set aside a disproportionately large percentage of all homeland 
securities funds for use by small population states, regardless 
of need.
    While there is a disagreement over this unusual formula, we 
want to express our appreciation for the Committee's acceptance 
of several clarifying amendments to S. 1245, and an amendment 
Senator Levin offered during markup to strengthen U.S. border 
protections against attempts to smuggle weapons of mass 
destruction on vehicles carrying municipal solid waste into the 
United States.
    This bill represents significant progress in many areas and 
hopefully there can be an equitable solution found to its 
arbitrary and excessive allocation of funds to small states.

                     VIII. Changes to Existing Law

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, changes in existing laws made by 
S. 1245 as reported are shown as follows (existing law proposed 
to be omitted is enclosed in brackets, new matter is printed in 
italic, an existing law in which no changes is proposed is 
shown in roman):

                           UNITED STATES CODE

                       TITLE 6--DOMESTIC SECURITY

                CHAPTER 1. HOMELAND SECURITY ORGANIZATION

    Subchapter IV--Directorate of Border and Transportation Security

                    PART C--MISCELLANEOUS PROVISIONS

Sec.
[238. Office for Domestic Preparedness.]

           *       *       *       *       *       *       *


  Subchapter VIII--Coordination with Non-Federal Entities; Inspector 
 General; United States Secret Service; Coast Guard; General Provisions


             PART A--COORDINATION WITH NON-FEDERAL ENTITIES


SEC. 361. OFFICE FOR STATE AND LOCAL GOVERNMENT COORDINATION

    (a) Establishment.--
          (1) In general._There is established within the 
        Office of the Secretary the Office for State and Local 
        Government Coordination, to oversee and coordinate 
        departmental programs for and relationships with State 
        and local governments.
          (2) Director.--The Office established under paragraph 
        (1) shall be headed by the Director of State and Local 
        Government Coordination, who shall be appointed by the 
        President, by and with the advice and consent of the 
        Senate.
    (b) Responsibilities.--The Office established under 
subsection (a) of this section shall--
          (1)  coordinate the activities of the Department 
        relating to State and local government;
          (2) assess, and advocate for, the resources needed by 
        State and local government to implement the national 
        strategy for combating terrorism;
          (3) provide State and local government with regular 
        information, research, and technical support to assist 
        local efforts at securing the homeland; [and]
          (4) develop a process for receiving meaningful input 
        from State and local government to assist the 
        development of the national strategy for combating 
        terrorism and other homeland security activities[.]; 
        and
          (5) administering the firefighter assistance grant 
        program established under section 33 of the Federal 
        Fire Prevention and Control Act of 1974 (15 U.S.C. 
        2229) by--
                  (A) coordinating grant making activities 
                with--
                          (i) emergency preparedness and 
                        response personnel;
                          (ii) grants made under section 4 of 
                        the Homeland Security Grant Enhancement 
                        Act of 2003; and
                          (iii) grants made under other Federal 
                        programs to enhance emergency 
                        preparedness.
                  (B) awarding grants on a competitive basis 
                directly to fire departments of a State, in 
                consultation with the chief executive of the 
                State, for the purpose of protecting the health 
                and safety of the public and firefighting 
                personnel against fire and fire-related 
                hazards: and
                  (C) complying with the administrative 
                requirements set forth in section 33 of the 
                Federal Fire Prevention and Control Act of 1974 
                (15 U.S.C. 2229) and retaining the 
                administrative requirements set forth under 
                part 152 of title 44, Code of Federal 
                Regulations; and
                  (D) ensuring that all equipment purchased 
                with grant funds for which there are voluntary 
                consensus standards meet such standards; and
    (c) Reference.--All references to ``Director'' in section 
33 of the Federal Fire Prevention and Control Act of 1974 (15 
U.S.C. 2229) shall be deemed to refer to the Director for State 
and Local Government Coordination.
    (d) Homeland Security Information Clearinghouse.--
          (1) Establishment.--There is established within the 
        Office for State and Local Government Coordination a 
        Homeland Security Information Clearinghouse (referred 
        to in this section as the ``Clearinghouse''), which 
        shall assist States, local governments, and first 
        responders in accordance with paragraphs (2) and (5).
          (2) Homeland security grant information.--The 
        Clearinghouse shall create and maintain a web site, a 
        toll-free number, and a single publication containing 
        information regarding the homeland security grant 
        programs identified under section 802(a)(4)(A).
          (3) Technical assistance.--The Clearinghouse, in 
        consultation with the Interagency Committee established 
        under section 802, shall--
                  (A) coordinate technical assistance provided 
                by any Federal agency to States and local 
                governments to conduct threat analyses and 
                vulnerability assessments; and
                  (B) establish templates for conducting threat 
                analyses and vulnerability assessments.
          (4) Best practices.--The Clearinghouse shall work 
        with States, local governments, emergency response 
        providers and the National Domestic Preparedness 
        Consortium, and private organizations to gather, 
        validate, and disseminate information regarding 
        successful State and local homeland security programs 
        and practices.
          (5) Use of federal funds.--The Clearinghouse shall 
        compile information regarding equipment, training, and 
        other services purchased with Federal funds provided 
        under the homeland security grant programs identified 
        under section 802(a)(4)(A), and make such information, 
        and information regarding voluntary standards of 
        training, equipment, and exercises, available to 
        States, local governments, and first responders.
          (6) Other information.--The Clearinghouse shall 
        provide States, local governments, and first responders 
        with any other information that the Secretary 
        determines necessary.

                     HOMELAND SECURITY ACT OF 2002


                           Public Law 107-296


SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

           *       *       *       *       *       *       *


       TITLE IV--DIRECTORATE OF BORDER AND TRANSPORTATION SECURITY

     * * * * * * *

                  Subtitle C--Miscellaneous Provisions

     * * * * * * *
[Sec. 430. Office for Domestic Preparedness.]
     * * * * * * *

 TITLE VIII--COORDINATION WITH NON-FEDERAL ENTITIES; INSPECTOR GENERAL; 
      UNITED STATES SECRET SERVICE; COAST GUARD; GENERAL PROVISIONS

           Subtitle A--Coordination With Non-Federal Entities

Sec. 801. * * *
Sec. 802. Interagency Committee To Coordinate and Streamline Homeland 
          Security Grant Programs.
Sec. 803. Office for Domestic Preparedness.
     * * * * * * *

SECTION 4. EFFECTIVE DATE. * * *

TITLE I--DEPARTMENT OF HOMELAND SECURITY

           *       *       *       *       *       *       *


TITLE VIII--COORDINATION WITH NON-FEDERAL ENTITIES; INSPECTOR GENERAL; 
     UNITED STATES SECRET SERVICE; COAST GUARD; GENERAL PROVISIONS

           Subtitle A--Coordination with Non-Federal Entities

SEC. 801. * * *

           *       *       *       *       *       *       *


SEC. 802. INTERAGENCY COMMITTEE TO COORDINATE AND STREAMLINE HOMELAND 
                    SECURITY GRANT PROGRAMS.

    (a) Establishment.--There is established an Interagency 
Committee to Coordinate and Streamline Homeland Security Grant 
Programs (in this subtitle referred to as the ``Interagency 
Committee''), which shall--
          (1) report all findings to the Information 
        Clearinghouse established under section 801(c);
          (2) consult with State and local governments and 
        emergency response providers regarding their homeland 
        security needs and capabilities;
          (3) advise the Secretary on the development of 
        performance measures for homeland security grant 
        programs and the national strategy for homeland 
        security;
          (4) not later than 60 days after the effective date 
        of the Homeland Security Grant Enhancement Act of 
        2003--
                  (A) compile a list of homeland security 
                assistance programs and their reporting 
                requirements, including--
                          (i) those administered by the Office 
                        for Domestic Preparedness, such as--
                                  (I) the State Homeland 
                                Security Grant Program;
                                  (II) high threat urban area 
                                grants;
                                  (III) critical infrastructure 
                                security grants;
                                  (IV) research and development 
                                grant programs;
                                  (V) training and technical 
                                assistance grants; and
                                  (VI) other discretionary or 
                                and assistance grant programs;
                          (ii) Federal Emergency Management 
                        Agency assistance programs, such as--
                                  (I) the Assistance to 
                                Firefighters Grant Program;
                                  (II) Citizen Corps;
                                  (III) grants for emergency 
                                operations centers;
                                  (IV) interoperable 
                                communications grants;
                                  (V) Urban Search and Rescue 
                                task forces; and
                                  (VI) other Federal Emergency 
                                Management Agency assistance 
                                programs, except those grants 
                                intended to reimburse States, 
                                localities, and other 
                                applicants for costs resulting 
                                from disasters or emergencies 
                                declared under to the Disaster 
                                Relief Act of 1974 (42 U.S.C. 
                                5121 et seq.);
                          (iii) Transportation Security 
                        Administration assistance programs, 
                        such as port security grants;
                          (iv) Department of Justice assistance 
                        programs, such as--
                                  (I) the Local Law Enforcement 
                                Block Grant;
                                  (II) the Byrne Memorial 
                                Formula Grant Program; and
                                  (III) the Community Oriented 
                                Policing Services program;
                          (v) Department of Health and Human 
                        Services assistance programs, such as--
                                  (I) the Public Health 
                                Bioterrorism Preparedness 
                                program, administered by the 
                                Centers for Disease Control and 
                                Prevention; and
                                  (II) the Hospital 
                                Bioterrorism Program, 
                                administered by the Health 
                                Resources and Services 
                                Administration;
                          (vi) related Federal assistance 
                        programs, such as--
                                  (I) the Hazardous Materials 
                                Emergency Preparedness Program 
                                of the Department of 
                                Transportation; and
                                  (II) the water security 
                                assistance programs 
                                administered by the 
                                Environmental Protection 
                                Agency; and
                          (vii) any related grant or assistance 
                        program, as determined by the 
                        Interagency Committee; and
                  (B) identify all homeland security planning 
                requirements contained in homeland security 
                emergency preparedness, and public safety 
                programs administered by Federal agencies, 
                including--
                          (i) terrorism preparedness plans, 
                        such as those required by the Office 
                        for Domestic Preparedness and other 
                        entities within the Department;
                          (ii) all hazards emergency 
                        preparedness plans, such as those 
                        required in the Emergency Management 
                        Performance Grants administered by the 
                        Federal Emergency Management Agency;
                          (iii) bioterrorism response plans, 
                        such as those required in bioterrorism 
                        preparedness programs administered by 
                        the Department of Health and Human 
                        Services;
                          (iv) hazardous materials response 
                        plans, such as those required by the 
                        Environmental Protection Agency and the 
                        Department of Transportation;
                          (v) critical infrastructure security 
                        plans, such as those required by--
                                  (I) the Transportation 
                                Security Administration;
                                  (II) the Environmental 
                                Protection Agency;
                                  (III) the Department of 
                                Transportation; and
                                  (IV) the Nuclear Regulatory 
                                Commission;
                          (vi) law enforcement and public 
                        safety plans administered by the 
                        Department of Justice, such as those 
                        required by--
                                  (I) the Local Law Enforcement 
                                Block Grant;
                                  (II) the Byrne Memorial 
                                Formula Grant Program; and
                                  (III) the Community Oriented 
                                Policing Services program; and
                          (vii) any other planning requirement 
                        identified by the Interagency 
                        Committee;
          (5) not later than 120 days after the effective date 
        of the Homeland Security Grant Enhancement Act of 2003, 
        review--
                  (A) all application, reporting, and other 
                administrative requirements contained in grant 
                programs under paragraph (4)(A) and report all 
                redundant and duplicative requirements to the 
                appropriate committees of Congress and the 
                agencies represented in the Interagency 
                Committee; and
                  (B) all homeland security planning and other 
                administrative requirements under paragraph 
                (4)(B) and report all redundant and duplicative 
                requirements to the appropriate committees of 
                Congress and the agencies represented in the 
                Interagency Committee;
          (6) not later than 150 days after the effective date 
        of the Homeland Security Grant Enhancement Act of 2003, 
        provide recommendations to--
                  (A) the agencies with the requirements 
                identified under paragraph (4)(A) to streamline 
                and standardize application, reporting, and 
                administrative requirements to eliminate 
                duplication and promote coordination of 
                homeland security planning grants; and
                  (B) the agencies involved with the grant 
                programs under paragraph (4)(B) to streamline 
                and standardize planning requirements to 
                eliminate duplication and promote coordination; 
                and
          (7) not later than 250 days after the effective date 
        of the Homeland Security Grant Enhancement Act of 2003, 
        issue a report to Congress regarding its actions under 
        this subsection.
    (b) Membership.--The Interagency Committee shall be 
composed of a representative of--
          (1) the Department of Homeland Security;
          (2) the Department of Health and Human Services;
          (3) the Department of Transportation;
          (4) the Department of Justice;
          (5) the Environmental Protection Agency; and
          (6) any other department or agency determined to be 
        necessary by the President.
    (c) Administration.--The Department shall provide 
administrative support to the Interagency Committee, which 
shall include--
          (1) scheduling meetings;
          (2) preparing agenda;
          (3) maintaining minutes and records; and
          (4) producing reports.
    (d) Chairperson.--The Secretary shall designate a 
chairperson of the Interagency Committee.
    (e) Meetings.--The Interagency Committee shall meet--
          (1) at the call of the Secretary; or
          (2) not less frequently than once every 1 month.

[SEC. 430] SEC. 803. OFFICE FOR DOMESTIC PREPAREDNESS.

    (a) In General.--The Office for Domestic Preparedness shall 
be within [the Directorate of Border and Transportation 
Security] the Office for State and Local Government 
Coordination.
    (b) Director.--There shall be a Director of the Office for 
Domestic Preparedness, [who shall be appointed by the 
President, by and with the advice and consent of the Senate. 
The Director of the Office for Domestic Preparedness shall 
report directly to the Under Secretary for Border and 
Transportation Security.] who shall report directly to the 
Director of State and Local Government Coordination.
    (c) Responsibilities.--* * *
          (1) * * *

           *       *       *       *       *       *       *

          (7) assisting and supporting the Secretary, in 
        coordination with [other] the Directorates and entities 
        outside the Department, in conducting appropriate risk 
        analysis and risk management activities of State, 
        local, and tribal governments [consistent with the 
        mission and functions of the Directorate]; [and]
          (8) carrying out those elements of the Office of 
        National Preparedness of the Federal Emergency 
        Management Agency which relate to terrorism, which 
        shall be consolidated within the Department in the 
        Office for Domestic Preparedness established under this 
        section[.]; and
          (9) managing the Homeland Security Information 
        Clearinghouse established under section 801(c).
    (d) Training and Exercises Office Within the Office for 
Domestic Preparedness.--
          (1) In general.--The Secretary shall create within 
        the office for Domestic Preparedness an internal office 
        that shall be the proponent for all national domestic 
        preparedness, training, education, and exercises within 
        the Office for State and Local Government Coordination.
          (2) Office head.--The Secretary shall select an 
        individual with recognized expertise in first-responder 
        training and exercises to head the office, and such 
        person shall report directly to the Director of the 
        Office for Domestic Preparedness.
    [d](e) Fiscal Years 2003 and 2004.--During fiscal year 2003 
and fiscal year 2004, the Director of the Office for Domestic 
Preparedness established under this section shall manage and 
carry out those functions of the Office for Domestic 
Preparedness of the Department of Justice (transferred under 
this section) before September 11, 2001, under the same terms, 
conditions, policies, and authorities, and with the required 
level of personnel, assets and budget before September 11, 
2001.