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108th Congress                                                   Report
                                 SENATE
 2d Session                                                     108-408
_______________________________________________________________________

                                     

                                                       Calendar No. 797


                      HIGH RISK NONPROFIT SECURITY

                        ENHANCEMENT ACT OF 2004

                               __________

                              R E P O R T

                                 of the

                   COMMITTEE ON GOVERNMENTAL AFFAIRS

                          UNITED STATES SENATE

                              to accompany

                                S. 2275

                             together with

                             MINORITY VIEWS

 AMENDING THE HOMELAND SECURITY ACT OF 2002 (6 U.S.C. 101 ET SEQ.) TO 
   PROVIDE FOR HOMELAND SECURITY ASSISTANCE FOR HIGH-RISK NONPROFIT 
                 ORGANIZATIONS, AND FOR OTHER PURPOSES




               November 10, 2004.--Ordered to be printed

 Filed, under authority of the order of the Senate of October 11, 2004
                   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
                    Johanna L. Hardy, Senior Counsel
      Joyce A. Rechtschaffen, Minority Staff Director and Counsel
               Laurie Rubenstein, Minority Chief Counsel
                   Beth M. Grossman, Minority Counsel
                      Amy B. Newhouse, Chief Clerk


                            C O N T E N T S

                                                                   Page
  I. Purpose & Summary................................................1
 II. Background.......................................................1
III. Legislative History..............................................7
 IV. Section-by-Section Analysis......................................8
  V. Estimated Cost of Legislation...................................11
 VI. Evaluation of Regulatory Impact.................................14
VII. Changes in Existing Law.........................................14
VIII.Minority Views..................................................15

                                                       Calendar No. 797
108th Congress                                                   Report
                                 SENATE
 2d Session                                                     108-408

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



 
          HIGH RISK NONPROFIT SECURITY ENHANCEMENT ACT OF 2004

                                _______
                                

               November 10, 2004.--Ordered to be printed

 Filed, under authority of the order of the Senate of October 11, 2004

                                _______
                                

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

                              R E P O R T

                         [To accompany S. 2275]

    The Committee on Governmental Affairs, having considered 
the original bill (S. 2275) to amend the Homeland Security Act 
of 2002 (6 U.S.C. 101 et seq.) to provide for homeland security 
assistance for high-risk nonprofit organizations, and for other 
purposes, reports favorably thereon, with amendments and 
recommends that the bill do pass.

                          I. PURPOSE & SUMMARY

    The purpose of S. 2275, the High Risk Nonprofit Security 
Enhancement Act of 2004, is to amend the Homeland Security Act 
of 2002 to provide for homeland security assistance for 
nonprofit organizations at high risk of international terrorist 
attacks, and for other purposes.

                 II. BACKGROUND & NEED FOR LEGISLATION

The Threat to Nonprofit Organizations

    International terrorist organizations have increasingly 
demonstrated their willingness to attack ``soft targets.'' As 
the 2003 Patterns of Global Terrorism Report concludes, attacks 
continue against ``the international community, humanitarian 
organizations, and people dedicated to helping mankind.'' \1\ 
Last year, the Baghdad International Committee for the Red 
Cross was bombed; the Catholic Relief Services headquarters in 
Nassiryah was bombed; explosions occurred near Save the 
Children USA's offices in Kabul; five apparently coordinated 
bomb attacks occurred in Casablanca, Morocco at or near a 
restaurant, hotel, Jewish cemetery, Jewish Community Center, 
and the Belgian Consulate; in India, grenades exploded at a 
crowded community kitchen, a bomb exploded near a Hindu temple, 
militants opened fire on a Christian school, and a grenade was 
thrown at a Christian missionary school; and vehicle bombs 
exploded at the Beth Israel synagogue and at the Neve Shalom 
synagogue in Turkey.\2\ ``Churches, synagogues, and mosques 
were all targeted by terrorists in 2003.'' \3\
---------------------------------------------------------------------------
    \1\ Patterns of Global Terrorism 2003, April 2004, Revised June 22, 
2004, United States Department of State, Introduction, p. iii.
    \2\ Patterns of Global Terrorism 2003, April 2004, Revised June 22, 
2004, United States Department of State, Introduction p. iii and 
Appendix A--Chronology of Significant International Terrorist 
Incidents, 2003 (Revised 6/22/04).
    \3\ Patterns of Global Terrorism 2003, April 2004, Revised June 22, 
2004, United States Department of State, Introduction, p. iii.
---------------------------------------------------------------------------
    In testifying before the Select Committee on Intelligence, 
Robert S. Mueller, Director of the Federal Bureau of 
Investigation, noted that:

          We must not assume, however, that al-Qaeda will rely 
        only on tried and true methods of attack. As attractive 
        as a large-scale attack that produced mass casualties 
        would be for al-Qaeda and as important as such an 
        attack is to its credibility among its supporters and 
        sympathizers, target vulnerability and the likelihood 
        of success are increasingly important to the weakened 
        organization. Indeed, the types of recent, smaller-
        scale operations al-Qaeda has directed and aided 
        against a wide array of Western targets--such as in 
        Mombassa, Bali and Kuwait and against the French oil 
        tanker off Yemen--could readily be reproduced in the 
        U.S.\4\
---------------------------------------------------------------------------
    \4\ Testimony of Robert S. Mueller, III, Director, FBI, Before the 
Select Committee on Intelligence of the United States Senate, February 
11, 2003.

    Mr. Mueller went on to note that multiple, smaller-scale 
attacks against soft targets would be easier to execute and 
would require minimal communication with the central leadership 
of the terrorist organization and, therefore, would lower our 
ability of detecting such an attack.\5\
---------------------------------------------------------------------------
    \5\ Ibid.
---------------------------------------------------------------------------
    The Director of the Central Intelligence Agency echoed this 
threat by stating that ``[a]l-Qa'ida is still dedicated to 
striking the U.S. homeland, and much of the information we've 
received in the past year revolves around that goal.'' \6\ The 
Director further noted that ``[u]ntil al-Qa'ida finds an 
opportunity for the big attack, it will try to maintain its 
operational tempo by striking `softer' targets . . . `softer' 
[targets] are simply those targets al-Qa'ida planners may view 
as less well protected.'' \7\
---------------------------------------------------------------------------
    \6\ DCI's World Threat Briefing (As Prepared for Delivery), The 
Worldwide Threat in 2003: Evolving Dangers in a Complex World, February 
11, 2003.
    \7\ Ibid.
---------------------------------------------------------------------------
    Nonprofit organizations are valuable assets to the country. 
They provide services important to communities in a wide array 
of areas related to homelessness, the arts, education, culture, 
religion, human services, and health. Unfortunately, some of 
these organizations may also provide ideal targets for those 
who want to harm the U.S., either because they are where many 
people gather on a regular basis or because of the nature of 
the mission of the particular nonprofit. Since some nonprofit 
organizations may be at high risk of an international terrorist 
attack and because these organizations carry out activities 
that are intended to serve the public good, providing some 
security assistance to protect them is justified.

The High Risk Nonprofit Security Enhancement Act of 2004 as Introduced

    S. 2275, as introduced, would authorize the Secretary of 
Homeland Security to provide inFY 2005 up to $100 million in 
security assistance to 501(c)(3) organizations demonstrating a high 
risk of international terrorist attack. The Secretary would make this 
determination based on specific threats of international terrorist 
organizations; prior attacks against similarly situated organizations; 
the vulnerability of the specific site; the symbolic value of the site 
as a highly recognized American institution; or the role of the 
institution in responding to terrorist attacks.
    The funds could be used for security enhancements, such as 
concrete barriers, and hardening of windows and doors, as well 
as technical assistance to assess needs, develop plans, and 
train personnel. After funds have been expended for the highest 
risk institutions, Federal loan guarantees would be available 
to make loans to qualifying nonprofit organizations. Funds 
would be administered by a new office in the Department of 
Homeland Security, the Office of Community Relations and Civic 
Affairs, dedicated to working with high-risk non-profit 
organizations.
    The bill also authorizes $50 million in grant funds for 
local police departments to provide additional security in 
areas where there is a high concentration of high-risk non-
profit organizations.

Amendments Adopted in Committee

    An amendment offered by Senators Collins and Lieberman and 
adopted by the Committee altered several of the bill's 
provisions. First, it struck the provisions in the bill, as 
introduced, which would have limited qualifying nonprofit 
organizations to those that host gatherings of at least 100 
persons at least once per month or those that provide services 
to at least 500 people each year at the site. The purpose of 
this change was to ensure that smaller nonprofit organizations 
are eligible to apply for assistance.
    Second, the amendment added ``the likelihood of physical 
harm to persons at the site or in the area surrounding the 
site'' as one of the criteria for determining eligibility for 
assistance.
    Third, S. 2275 as introduced would have required States to 
establish a State Homeland Security Authority to assist in the 
evaluation of applications from high risk non-profit 
organizations. Not all States have established separate 
Homeland Security agencies, and requiring them to create one 
solely in response to this program could potentially add an 
undue burden on certain States. The amendment would allow 
States simply to designate an existing agency to be the entity 
involved with this program.
    The Committee also adopted an amendment offered by Senator 
Durbin removing specific requirements in S. 2275 regarding the 
favorable repayment terms for the loan guarantee program. The 
bill, as introduced, would have required that lending 
institutions under the loan guarantee program provide non-
profit organizations with favorable repayment terms. Nonprofit 
organizations would already benefit from the loan guarantees 
themselves and the Committee believes that the additional 
benefit of requiring favorable terms is not necessary.

Constitutional Analysis

    Because religious institutions would potentially be among 
those nonprofit organizations eligible for financial assistance 
under the legislation, some Committee members raised concerns 
about the bill's Establishment Clause ramifications. The First 
Amendment of the Constitution states, in part, ``Congress shall 
make no law respecting an establishment of religion, or 
prohibiting the free exercise thereof . . .''. During Committee 
consideration of S. 2275, some raised questions regarding 
whether the participation of religious nonprofit organizations 
in the program would pass constitutional scrutiny.\8\ The 
majority of the Committee believes that it would. Indeed, an 
opinion by the American Law Division of the Congressional 
Research Service concurs in that conclusion.\9\
---------------------------------------------------------------------------
    \8\ The church-state constitutional issues arise primarily in the 
context of active religious institutions with religious functions. 
Synagogues and religious day schools, for example, are plainly 
religious institutions. Providing financial assistance to such 
institutions at least implicates the Establishment Clause, since the 
primary purpose of such institutions is religious teaching, worship, 
and observance. On the other hand, some institutions, although 
affiliated with religious groups, have little or no religious content. 
These may include hospitals, nursing homes, vocational services, and 
the like, although issues could arise if such institutions contain a 
chapel or other area of worship within its facilities. In between are 
institutions which are largely secular but which have a substantial 
religious component. Establishment Clause issues are most likely to be 
triggered with regard to generally applicable Federal programs when the 
Federal benefit goes to an active place of worship or to improve 
facilities that may be used, in part, to actively promote religion.
    \9\ Memorandum from the American Law Division, Congressional 
Research Service to the Senate Governmental Affairs Committee, July 19, 
2004, Questions Regarding S. 2275, the High Risk Nonprofit Security 
Enhancement Act.
---------------------------------------------------------------------------
    Providing assistance, carefully limited to security 
technology and assistance, would serve a purely secular purpose 
of protecting potential and attractive terrorist targets. This 
is an important and valid secular purpose because the 
government has an interest in protecting the lives and property 
of its citizens, and because an attack on a religious 
institution is an attack on a significant part of American 
civil society. In addition to these wholly legitimate, indeed, 
urgent needs, providing security aid to particularly vulnerable 
institutions forestalls additional terrorist acts, acts which 
demoralize American citizens, spread fear and panic, and 
encourage further terrorist attacks. On similar reasoning, 
courts have upheld against Establishment Clause challenges 
statutes enhancing the penalties for vandalizing houses of 
worship.\10\
---------------------------------------------------------------------------
    \10\ See e.g., Todd v. State, 643 So 2d 625 (Fla App 1994); State 
v. Vogenthaler, 89 N.M. 150, 548 P. 2d 112 (Ct App 1976).
---------------------------------------------------------------------------
            The Lemon Test
    In Lemon v. Kurtzman,\11\ the Supreme Court articulated a 
three prong test to determine whether a statute is 
constitutional under the Establishment Clause. Specifically, 
the Court adopted the following test: (1) the statute must have 
a secular legislative purpose, (2) its principal or primary 
effect must be one that neither advances nor inhibits religion, 
and (3) the statute must not foster an excessive government 
entanglement with religion.\12\
---------------------------------------------------------------------------
    \11\ 403 U.S. 602 (1971).
    \12\ Ibid at 612-613.
---------------------------------------------------------------------------
    This bill meets each prong of the Lemon test. It has a 
clearly secular legislative purpose--to protect individuals who 
may be at or near nonprofit organizations determined to be at 
high risk of terrorist attack, by providing assistance for 
security enhancements to those nonprofit organizations. The 
bill does not have the primary effect of advancing religion, as 
recipients would be chosen from among all 501(c)(3) applicants 
based on neutral criteria of risk, and the assistance would be 
used for security enhancements, such as barriers and reinforced 
doors, that are not part of any religious activity. Finally, 
the bill does not foster an excessive government entanglement 
with religion, as the legislation provides no direct funding to 
religious institutions and would provide little or no 
opportunity for government involvement with the religious 
activities of any religious nonprofit organization selected for 
assistance.\13\
---------------------------------------------------------------------------
    \13\ The American Law Division of the Congressional Research 
Service concurs in this assessment. See Memorandum from the American 
Law Division, Congressional Research Service to the Senate Governmental 
Affairs Committee, July 19, 2004, Questions Regarding S. 2275, the High 
Risk Nonprofit Security Enhancement Act, at 2-3.
---------------------------------------------------------------------------
            Physical Improvements
    Nonetheless, some Committee members concerned about the 
Establishment Clause implications of S. 2275 point to the 
Supreme Court's decisions in Tilton v. Richardson,\14\ and 
Committee for Public Education & Religious Liberty v. Nyquist, 
Commissioner of Education of New York,\15\ in which the Court 
addressed the issue specifically of government aid related to 
physical improvements to property. Tilton was a challenge to a 
federal program that gave grants to colleges to build secular 
use facilities such as libraries, language laboratories, or 
classrooms. By statute, no funds could be given to buildings 
used even partially for religious purposes. However, the 
limitation on religious uses expired after 20 years and 
required the Federal government to actively enforce, during 
those years, the prohibition on the use of any of those 
facilities for religious purposes.
---------------------------------------------------------------------------
    \14\ 403 U.S. 672 (1971).
    \15\ 413 U.S. 756 (1973).
---------------------------------------------------------------------------
    In a plurality opinion, the Court upheld the program. The 
Court, however, unanimously struck down the provision limiting 
the ban on religious uses to 20 years, although the Justices 
differed on the reasoning. Some Justices believed that the 20 
years was not enough time, that even after 20 years there still 
would be value in the property and, therefore, there would be 
the potential of advancing religion, if after the 20 years the 
property was used for religious purposes. However, other 
Justices questioned whether the 20-years of continued 
enforcement violated the third prong of the Lemon test 
regarding excessive government entanglement with religion.
    In Nyquist, New York established a grant program for 
nonpublic schools that would provide for the ``maintenance and 
repair'' of school facilities. The Court struck down the 
program as unconstitutional based on the second prong of the 
Lemon test related to advancing religion. The Court noted in 
the Nyquist case that the ``maintenance and repair'' program 
made no attempts to restrict the use of funds to be exclusively 
used for secular purposes. The Court, for example, indicated 
that there was nothing in statute that would prevent a Catholic 
school from paying the salary of an employee who maintains the 
school chapel. The Court then said, ``[a]bsent appropriate 
restrictions on expenditures for these and similar purposes, it 
simply cannot be denied that this section has a primary effect 
that advances religion in that it subsidizes directly the 
religious activities of sectarian elementary and secondary 
schools.'' \16\
---------------------------------------------------------------------------
    \16\ Ibid. at 774.
---------------------------------------------------------------------------
    Tilton appears to stand for the proposition that the 
government may not contribute financially to the construction 
of buildings used for religious worship or instruction. That 
reading of Tilton would be an obstacle to granting aid to the 
physical structure of religious institutions such as houses of 
worship. However, the program created by S. 2275 can be 
distinguished. Unlike the Tilton program, in which funding 
could be used to construct an entire building that could 
eventually be used as a church, the program established in S. 
2275 (1) provides no direct funding, but rather offers 
contracts and loan guarantees to provide security enhancements; 
and (2) provides financial assistance for only a very narrow 
set of capital improvements--those aimed exclusively at 
enhancing the security of the citizens who use the facilities. 
Moreover, unlike both Tilton and Nyquist, where the Court 
appeared troubled by the fact that government assistance, at 
least in part or eventually, could be used for sectarian 
purposes, none of the enhancements supported by S. 2275--such 
as fences or other barriers or reinforced doors--could be 
diverted for use for religious purposes.
    The program established by S. 2275 is better analogized to 
Everson v. Board of Education \17\ and Board of Education v. 
Allen,\18\ in which the Court upheld the reimbursement to 
parents for bus transportation and the provision of secular 
textbooks, respectively, regardless of whether a student 
attended public or parochial school. The Court did not seem to 
raise issues about indirect benefits to religious institutions 
as long the funds provided were used for secular purposes. In 
fact, the Nyquist Court distinguished these cases thusly:
---------------------------------------------------------------------------
    \17\ 330 U.S. 1 (1947).
    \18\ Board of Education v. Allen, 392 U.S. 236 (1968) (The Court 
upheld a New York law providing secular textbooks for children 
attending public and nonpublic schools).

          In Everson, the Court found the bus fare program 
        analogous to the provision of services such as police 
        and fire protection, sewage disposal, highways, and 
        sidewalks for parochial schools . . . Such services, 
        provided in common to all citizens, are ``so separate 
        and so indisputably marked off from the religious 
        function,'' that they may fairly be viewed as 
        reflections of a neutral posture toward religious 
        institutions.\19\
---------------------------------------------------------------------------
    \19\ Ibid. at 781-782.

---------------------------------------------------------------------------
    The Court went on to state:

          Allen is founded upon a similar principle. The Court 
        there repeatedly emphasized that upon the record in 
        that case there was no indication that textbooks would 
        be provided for anything other than purely secular 
        courses.\20\
---------------------------------------------------------------------------
    \20\ Nyquist at 782.

    The security-related capital improvements funded by this 
bill are more like the bus service and police protection for 
sectarian institutions that the Court has approved than the 
whole-scale construction of a building, which it has not.
            Conclusion
    The legal precedent related to assistance that has the 
potential of benefitting religious organizations suggests that 
religious organizations need not be excluded from a program 
that is available to religious and non-religious entities alike 
and serves a purely secular purpose. Indeed, there have been 
other legislative and policy precedents for such programs. In 
1996, for example, Congress passed the Church Arson Prevention 
Act which was specifically in response to vandalism and other 
attacks on African-American churches. That act, through a loan 
guarantee program, provided Federal assistance to make actual 
repairs to houses of worship.
    S. 2275 has been carefully crafted to satisfy the 
constitutional requirement of separation of church and state. 
The assistance program is generally-applicable to all high-risk 
non-profit organizations who meet certain criteria. The 
security enhancements, technical assistance, and loan 
guarantees are for purely secular purposes (securing high-risk 
targets) and, like in Allen and Everson, for purely secular 
functions (fences, bollards). No funds are going directly to 
any religious institution to be used without restriction, such 
as in the Nyquist case. Finally, Federal funds will not go 
directly to any sectarian institution; rather, the Department 
of Homeland Security will be hiring the contractors to build 
the enhancements. For these reasons, the Committee believes 
that S. 2275 is consistent with the requirements of the First 
Amendment.

                        III. LEGISLATIVE HISTORY

    S. 2275 was introduced on April 1, 2004 by Senators 
Mikulski, Specter, Murray, Clinton, Landrieu, Schumer, 
Lieberman, Daschle, and Dayton. Since introduction additional 
co-sponsors of S. 2275 were added including Senators Collins, 
Baucus, Dodd, Reid, Smith, and Boxer. S. 2275 was referred to 
the Committee on Governmental Affairs. A companion bill, H.R. 
4108 was introduced on that same day by Congressmen Nethercutt 
and Nadler and has 65 co-sponsors. On July 21, 2004, the 
Committee considered S. 2275.
    Senator Durbin offered two amendments to S. 2275. The first 
amendment would have only allowed contracts for security 
enhancements to the extent that the real property to be 
improved would not be used for sectarian instruction or 
religious worship, unless and until the security enhancements 
have no value. The first amendment was not adopted by rollcall 
vote. The Senators voting in the negative were Senators 
Collins, Stevens, Voinovich, Coleman, Specter, Bennett, Sununu, 
Shelby, Lieberman, and Carper. The Senators voting in the 
affirmative were Senators Fitzgerald, Levin, Akaka, Durbin, 
Lautenberg, and Pryor.
    The second amendment offered by Senator Durbin removes the 
specific provisions in S. 2275, as introduced, that would have 
required favorable terms for the loan guarantees. This 
amendment was adopted by the Committee by voice vote.
    Senators Collins and Lieberman offered an amendment, which 
the Committee agreed to by voice vote. The amendment offered by 
Senators Collins and Lieberman strikes the provisions in the 
bill, as introduced, which would have limited qualifying 
nonprofit organizations to those that host gatherings of at 
least 100 persons at least once per month or those that provide 
services to at least 500 people each year at the site; adds 
``harm to persons'' as one criteria for determining eligibility 
for assistance; and allows States to designate an existing 
agency to help administer the program.
    The Committee ordered the bill reported, as amended, by 
voice vote.

                    IV. SECTION-BY-SECTION ANALYSIS

    Section 1 titles the bill as the High Risk Nonprofit 
Security Enhancement Act of 2004.
    Section 2 contains a congressional finding that there is a 
public interest in protecting high-risk nonprofit organizations 
from inter-national terrorist attacks.
    Section 3 states that purposes of the Act are to (1) 
establish within the Department of Homeland Security a program 
to protect U.S. citizens at or near high-risk nonprofit 
organizations from international terrorist attacks through loan 
guarantees and Federal contracts for security; (2) establish a 
program with the Department to provide grants to local 
governments to assist with incremental costs associated with 
law enforcement in areas in which there are a high 
concentration of high-risk nonprofit organizations; and (3) 
establish an Office of Community Relations and Civic Affairs 
within the Department of Homeland Security to focus on the 
security needs of high-risk nonprofit organizations.
    Section 4 adds at the end of the Homeland Security Act of 
2002 the following provisions:
          Section 1801 contains definitions of ``contract,'' 
        ``nonprofit organization,'' ``security enhancements,'' 
        and ``technical assistance.''
          Section 1802(a) authorizes the Secretary of Homeland 
        Security to enter into contracts with certified 
        contractors for security enhancements and technical 
        assistance for nonprofit organizations and issue 
        Federal loan guarantees to financial institutions in 
        connection with loans made to nonprofit organizations 
        for security enhancements and technical assistance.
          Section 1802(b) authorizes the Secretary of Homeland 
        Security to guarantee loans under the Act only to the 
        extent provided for by appropriations, under such 
        conditions as the Secretary considers appropriate and 
        consistent with section 503 of the Federal Credit 
        Reform Act of 1990, and only to the extent that the 
        terms and conditions include a requirement that the 
        decision to provide a loan guarantee to a financial 
        institution does not in any way depend on the purpose, 
        function, or identity of the beneficiary organization.
          Section 1803(a) requires the Secretary to designate 
        nonprofit organizations as high-risk nonprofit 
        organizations eligible under the program based on the 
        vulnerability of the specific site of the nonprofit 
        organizations to international terrorist attacks.
          Section 1803(b) establishes criteria for assessing 
        vulnerability to international terrorist attacks 
        including threat of international terrorist 
        organizations against any group who operate or are the 
        principle beneficiaries or users of the nonprofit 
        organization; prior attacks by international terrorist 
        organizations against the nonprofit organization or 
        entities associated with or similarly situated as the 
        nonprofit organization; the symbolic value of the site 
        as a highly recognized United States cultural or 
        historical institution; the role of the nonprofit 
        organization in responding to international terrorist 
        attacks, recommendations of the applicable designated 
        State agency established under section 1806 or Federal, 
        State, and local law enforcement authorities; and the 
        likelihood of physical harm to persons at the site or 
        in the area surrounding the site.
          Section 1803(c) states that two or more nonprofit 
        organizations that create a nonprofit to provide 
        technical assistance may be eligible to receive 
        security enhancements and technical assistance under 
        this Act based upon the collective risk.
          Section 1804 states that funds borrowed under the 
        loan guarantees may be used for technical assistance 
        and security enhancements.
          Section 1805(a) requires nonprofit organizations 
        applying for assistance to submit separate applications 
        for each specific site needing security enhancements or 
        technical assistance.
          Section 1805(b) requires each application to include 
        a detailed request for security enhancements and 
        technical assistance; a description of the intended 
        uses of funds to be borrowed under the loan guarantees; 
        and other information as the Secretary shall require.
          Section 1805(c) states that two or more nonprofit 
        organizations located on contiguous sites may submit a 
        joint application.
          Section 1806(a) requires each state to designate a 
        State agency to carry out this Act.
          Section 1806(b) requires applications to be submitted 
        to the designated State agency, requires the State 
        agency to evaluate all applications and transmit all 
        qualifying applications to the Secretary ranked by 
        severity of risk, and allows an applicant to appeal the 
        finding by the State agency to the Secretary.
          Section 1807(a) states that the Secretary shall 
        select applications for execution giving preference to 
        nonprofit organizations determined to be at the 
        greatest risk based upon criteria in section 1803.
          Section 1807(b) states that the Secretary shall 
        execute security enhancements and technical assistance 
        contracts for the highest priority applicants until 
        available funds are expended and to make loan 
        guarantees available for additional applicants up to 
        the authorized amount.
          Section 1807(c) states that special preference shall 
        be given to joint applications.
          Section 1807(d) requires the Secretary to issue 
        assistance in such amounts as to maximize the number of 
        high-risk applicants receiving assistance.
          Section 1807(e) requires notification to the 
        applicant upon selection of that nonprofit organization 
        for assistance.
          Section 1807(f) establishes the process for selecting 
        certified contractors to carry out security 
        enhancements and technical assistance.
          Section 1807(g) establishes a process to ensure the 
        availability of contractors by allowing the nonprofit 
        organization to submit a contractor to the Secretary 
        for review.
          Section 1807(h) requires the nonprofit organization 
        to notify the Secretary upon selecting a certified 
        contractor and requires the Secretary to deliver a 
        contract to such contractor within 10 days of 
        notification.
          Section 1807(i) permits nonprofit organizations to 
        enter into contracts for additional work with the 
        certified contractor, using their own funds, and makes 
        it clear such contracts are separate contracts between 
        the nonprofit organization and the contractor.
          Section 1807(j) establishes procedures to expedite 
        assistance to nonprofit organizations.
          Section 1808(a) authorizes the Secretary to provide 
        grants to units of local government to offset 
        incremental costs associated with law enforcement in 
        areas where there is a high concentration of nonprofit 
        organizations.
          Section 1808(b) restricts the use of the grant funds 
        to personnel costs or equipments needs.
          Section 1808(c) requires the Secretary to award 
        grants in such amounts as to maximize the impact of 
        available funds.
          Section 1809(a) establishes within the Department of 
        Homeland Security the Office of Community Relations and 
        Civic Affairs to administer the programs for nonprofit 
        organizations and local law enforcement.
          Section 1809(b) establishes additional 
        responsibilities for the Office of Community Relations 
        and Civic Affairs including coordinating community 
        relations efforts of the Department, serving as the 
        official liaison of the Secretary to the nonprofit, 
        human and social services, and faith-based communities, 
        and assisting in coordinating the needs of those 
        communities with the Citizen Corps program.
          Section 1810(a) authorizes $100 million for fiscal 
        year 2005 and such sums as necessary for fiscal years 
        2006 and 2007 for the nonprofit organizations program.
          Section 1810(b) authorizes $50 million for fiscal 
        year 2005 and such sums as necessary for fiscal years 
        2006 and 2007 for the local law enforcement assistance 
        grants.
          Section 1810(c) authorizes $5 million for fiscal year 
        2005 and such sums as necessary for fiscal years 2006, 
        and 2007 for the Office of Community Relations and 
        Civic Affairs.
          Section 1810(d) authorizes such sums as may be 
        necessary for fiscal years 2005, 2006, and 2007 for the 
        loan guarantee program but limits the authorization to 
        $250 million for each of those fiscal years.
    Section 5 makes technical and conforming amendments.

                    V. ESTIMATED COST OF LEGISLATION

S. 2275--High Risk Nonprofit Security Enhancement Act of 2004

    Summary: Assuming appropriation of the necessary amounts, 
CBO estimates that implementing S. 2275 would cost $504 million 
over the 2005-2009 period. Enacting this bill would not affect 
direct spending or revenues.
    S. 2275 would authorize the Department of Homeland Security 
(DHS) to contract with appropriate companies to improve 
security at those 501(c)3 nonprofit organizations that are 
determined to be most vulnerable to potential terrorist 
attacks. In addition, the bill would establish a new loan 
guarantee program for all nonprofit organizations that might 
need additional security enhancements to protect them from 
terrorist attacks. The bill also would establish a grant 
program for local law enforcement agencies to offset costs 
associated with increased security in areas with a high 
concentration of nonprofit organizations. Finally, the bill 
would establish a new Office of Community Relations and Civic 
Affairs to administer the new security program for nonprofit 
organizations, among other duties.
    S. 2275 contains an intergovernmental mandate as defined in 
the Unfunded Mandates Reform Act (UMRA). CBO estimates the cost 
for state governments to comply with that mandate would be well 
below the threshold established in that act ($60 million in 
2004, adjusted annually for inflation). State and local law 
enforcement agencies would benefit from the assistance grants 
authorized by the bill; any costs to those governments in 
connection with those grants would be incurred voluntarily. The 
bill contains no new private-sector mandates as defined in 
UMRA.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of S. 2275 is shown in the following table. 
The costs of this legislation fall within budget function 450 
(community and regional development).

----------------------------------------------------------------------------------------------------------------
                                                                       By fiscal year, in millions of dollars--
                                                                    --------------------------------------------
                                                                       2005     2006     2007     2008     2009
----------------------------------------------------------------------------------------------------------------
                                  CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Security Contracts for Nonprofit Organizations: \1\
    Estimated Authorization Level..................................      100      100      100        0        0
    Estimated Outlays..............................................       25       75      100       75       25
Loan Guarantees for Nonprofit Organizations:
    Estimated Authorization Level..................................       13       13       13        0        0
    Estimated Outlays..............................................        3       10       13       10        3
Law Enforcement Grants: \1\
    Estimated Authorization Level..................................       50       50       50        0        0
    Estimated Outlays..............................................       12       38       50       38       12
Office of Community Relations and Civic Affairs: \1\
    Estimated Authorization Level..................................        5        5        5        0        0
    Estimated Outlays..............................................        5        5        5        0        0
Total Changes:
    Estimated Authorization Level..................................      168      168      168        0        0
    Estimated Outlays..............................................       45      128      168      123       40
----------------------------------------------------------------------------------------------------------------
\1\ The 2006 and 2007 levels assume these programs continue at the bill's specific authorization level for 2005.

    Basis of estimate: For this estimate, CBO assumes that S. 
2275 will be enacted near the end of fiscal year 2004 and that 
the necessary amounts will be appropriated in each year 
starting in 2005. CBO estimates that implementing S. 2275 would 
cost $504 million over the 2005-2009 period.

Security Contracts for Nonprofit Organizations

    S. 2275 would authorize the DHS to contract with 
appropriate companies to improve security at those 501(c)3 
nonprofit organizations that are determined to be most 
vulnerable to potential terrorist attacks. S. 2275 would 
authorize the appropriation of $100 million in 2005 and such 
sums as are necessary in 2006 and 2007 for such contracts. For 
this estimate, CBO assumes that amounts authorized to be 
appropriated in 2006 and 2007 would be equal to the 2005 
authorization level. Assuming appropriation of the authorized 
funds, CBO estimates that entering into security enhancement 
contracts would cost $300 million over the 2005-2009 period.

Loan Guarantees for Nonprofit Organizations

    This legislation also would establish a new loan guarantee 
program to improve security at nonprofit organizations. Under 
this new loan guarantee program, the federal government would 
insure loans, with at least a 25-year repayment term, made to 
nonprofits to support physical security enhancements or to 
provide related training to employees. The legislation would 
not require any guarantee fees to be charged to the nonprofits 
and would not limit the percentage of the loan that would be 
insured by the federal government. Consequently, CBO assumes 
that DHS would insure up to 100 percent of the loan value and 
that the borrower would not be charged any guarantee fees.
    This legislation would authorize the appropriation of 
whatever amounts are necessary for the cost of loan guarantees 
over the 2005-2007 period and would authorize a $250 million 
limitation on the cumulative value of the loans that may be 
guaranteed for each fiscal year. The new loan program would be 
considered a discretionary federal credit program and would 
require appropriation action to establish this loan limitation 
and to provide a credit subsidy for the cost of such loan 
guarantees.
    Based on information from various nonprofit organizations, 
CBO assumes that nonprofit organizations face financial risks 
similar to those of small businesses. Using the Small Business 
Administration's 7(a) general business loan program as a guide, 
CBO assumes that, like small businesses, the default rate for 
loans made to nonprofit organizations would be about 10 percent 
and that recoveries on such losses would be about 50 percent. 
Using those assumptions, CBO estimates that the subsidy rate 
for the new loan guarantee program would be about 5 percent, 
and that establishing this program would cost $39 million over 
the next five years, assuming appropriation of the necessary 
amounts. (The 7(a) program has a smaller net subsidy because it 
includes up-front fees that offset some of the default costs.)

Law Enforcement Grants

    S. 2275 would authorize DHS to provide grants to local 
enforcement agencies in areas where there is a high 
concentration of nonprofit organizations. These grants would 
pay for increased costs associated with protecting such 
organizations. S. 2275 would authorize the appropriation of $50 
million in 2005 and such sums as is necessary in 2006 and 2007 
for these grants. For this estimate, CBO assumes that the 
amount authorized to be appropriated in 2006 and 2007 would be 
equal to the 2005 authorization level. Assuming appropriation 
of the authorized funds, CBO estimates that providing these 
grants would cost $150 million over the 2005-2009 period.

Office of Community Relations and Civic Affairs

    This bill would establish a new office within DHS to 
administer the new security enhancement program for nonprofit 
organizations. In addition, the office would coordinate 
community relations efforts for the department, serve as the 
liaison to nonprofit, social services, and faith-based 
organizations, and assist in coordinating the needs of 
communities for the department's Citizen Corps program. S. 2275 
would authorize the appropriation of $5 million in 2005 and 
such sums as necessary in 2006 and 2007 for this office. For 
this estimate CBO assumes that amounts authorized to be 
appropriated in 2006 and 2007 would be equal to the 2005 
authorization level. Assuming appropriations of the authorized 
funds, CBO estimates that this new office would cost $15 
million over the 2005-2009 period.
    Intergovernmental and private-sector impact: S. 2275 
contains an intergovernmental mandate as defined in UMRA 
because it would require state agencies to receive and evaluate 
applications from nonprofit organizations for security 
assistance. No funds are authorized for those administrative 
tasks. According to state government representatives, the 
administrative costs for assistance programs are typically 3 to 
5 percent of the monetary value of the assistance provided. 
Based on that information, CBO estimates that the cost for 
state governments to comply with that mandate would be less 
than $5 million annually, well below the threshold established 
in UMRA ($60 million in 2004, adjusted annually for inflation).
    State and local law enforcement agencies would benefit from 
a new grant program for the incremental costs of providing 
services to certain high-risk nonprofit organizations. Assuming 
appropriation of the authorized funds, CBO estimates that state 
and local law enforcement agencies would receive $150 million 
over the next five years; any costs of participating in the 
grant program would be incurred voluntarily.
    S. 2275 contains no new private-sector mandates as defined 
in UMRA.
    Previous CBO estimates: On June 21, 2004, CBO transmitted a 
cost estimate for H.R. 3266, the Faster and Smarter Funding for 
First Responders Act of 2004, as ordered reported by the House 
Committee on the Judiciary on June 16, 2004. In addition to 
grants for first responders, H.R. 3266 also includes the 
provisions concerning nonprofit organizations that are in S. 
2275. The estimated federal costs of these provisions are the 
same. CBO has determined that, unlike H.R. 3266, S. 2275 
contains an intergovernmental mandate.
    Estimate prepared by: Federal Costs: Julie Middleton and 
Susanne Mehlman. Impact on State, Local, and Tribal 
Governments: Melissa Merrell and Lauren McMahon. Impact on the 
Private Sector: Paige Piper/Bach.
    Estimate approved by: Robert A. Sunshine, Assistant 
Director for Budget Analysis.

                  VI. EVALUATION OF REGULATORY IMPACT

    Pursuant to the requirements of paragraph 11(b) of rule 
XXVI of the Standing Rules of the Senate, the Committee has 
considered the regulatory impact of this bill. CBO states that 
there is an intergovernmental impact as defined in the Unfunded 
Mandates Reform Act (UMRA). CBO estimates the cost for state 
governments to comply with that mandate would be well below the 
threshold established in that act. State and local law 
enforcement agencies would benefit from the assistance grants 
authorized by the bill; any costs to those governments in 
connection with those grants would be incurred voluntarily. The 
bill contains no new private-sector mandates as defined in 
UMRA. The legislation contains no other regulatory impact.

                      VII. CHANGES IN EXISTING LAW

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, there are no changes in existing 
law made by the bill as reported.

           VIII. MINORITY VIEWS OF SENATORS DURBIN AND LEVIN

                            A. Introduction

    Nonprofit organizations make valuable contributions to our 
society by providing social, religious, educational, and 
cultural services. A terrorist attack--either international or 
domestic--on these institutions would disrupt these vital 
services and threaten the lives and well-being of the American 
citizens who operate, utilize, live, or work in proximity to 
such organizations. While we agree there is a public interest 
in protecting the lives and property of our citizens, we have 
many concerns regarding this legislation, from constitutional 
to practical.

                       B. Constitutional Concerns

    This legislation, as introduced, raised two major 
constitutional concerns: (1) the provision of loan guarantees 
with favorable repayment terms and (2) the provision of 
physical security enhancements on buildings used for religious 
worship and instruction. Although the first issue was addressed 
by the Durbin-Levin amendment that was adopted by the 
Committee, the second issue was not resolved, and it 
unconstitutionally violates the First Amendment's separation 
between church and state.
    We do not wish to suggest that all aid to religious 
organizations raises constitutional concerns. On the contrary, 
we agree with the majority report that there is no 
constitutional question regarding this bill's authorization of 
contracts for technical assistance. Similarly, we support the 
local law enforcement grants to offset incremental costs 
associated with law enforcement in areas where there is a high 
concentration of nonprofit organizations.
    However, a laudable purpose does not sanction an 
unconstitutional government act. The issues discussed below 
reflect an area of law that certainly would have been worthy of 
a hearing so that the Committee could have heard testimony from 
expert witnesses on both sides before taking action affecting 
one of the most important principles on which our nation was 
founded.
1. Loan Guarantees
    The legislation as introduced provided loan guarantees with 
favorable repayment terms. However, loan guarantees for 
construction or capital improvements in buildings where there 
is religious worship or instruction lead us to questionable 
constitutional territory, and proponents of this legislation 
have not clearly demonstrated that this aid is constitutional.
    As the majority report notes, nonprofit organizations 
benefit from loan guarantees, and some argue that this would be 
an unconstitutional subsidy to religious organizations--with or 
without favorable repayment terms. At the same time, others 
note that Congress provided similar loan guarantees when we 
responded to a series of church arsons by enacting the Church 
Arson Prevention Act of 1996 (104 P.L. 155).
    Without specifically addressing the constitutionality of 
loan guarantees for religious organizations, Senators Durbin 
and Levin sought to ensure that this legislation would follow 
the model established in 1996 more precisely.
    The legislation as introduced would have required that all 
loan guarantees be made under favorable repayment terms, 
defined as at least one full percentage point below market 
rate, with a repayment term of no less than 25 years. The 
Church Arson Prevention Act of 1996, on the other hand, did not 
specify any requirements for the interest rate or term of 
repayment. Instead, it had more neutral requirements. 
Therefore, the Durbin-Levin amendment removed the provisions of 
S. 2275 that would have required favorable repayment and 
replaced them with exactly the same loan terms Congress 
authorized in 1996.
    In adopting this amendment, the Committee sought to address 
this constitutional concern by following previous Congressional 
precedent; however, it is unclear whether these changes would 
be sufficient to withstand a constitutional challenge to the 
overall issue of loan guarantees to religious organizations.
2. Physical Security Enhancements on Structures Used for Religious 
        Worship and Instruction
    The second constitutional concern, which remains 
unaddressed, is this legislation's authorization for the 
federal government to enter into contracts to purchase and 
install physical security enhancements on the real property of 
nonprofit organizations.
    The majority report focuses on the purpose of this 
legislation, which is ``protecting potential and attractive 
terrorist targets,'' and we agree this is ``an important and 
valid secular purpose.'' However, the federal courts must 
examine more than a law's purpose to determine whether it is 
constitutional. For example, although the majority report notes 
that courts have upheld the constitutionality of enhanced 
criminal penalties based on legislative purposes similar to 
those of S. 2275, those cases have limited relevance here 
because they address criminal statutes and not government aid 
to religious organizations.
    The majority report analyzes the constitutionality of S. 
2275 by using three lines of Supreme Court cases: Lemon v. 
Kurtzman (403 U.S. 602), Everson v. Board of Education (330 
U.S. 1), and Tilton v. Richardson (403 U.S. 672). However, two 
of these cases--Lemon and Everson--are not appropriately 
analogous to S. 2275; this legislation is more properly 
examined in light of Tilton, which addressed government aid for 
the physical improvement of property owned by religious 
institutions. Based on the Supreme Court ruling in Tilton (and 
in the subsequent, related case of Committee for Public 
Education & Religious Liberty v. Nyquist, Commissioner of 
Education of New York (413 U.S. 756)), S. 2275 is clearly 
unconstitutional. Since the majority report fails to 
distinguish this legislation from these cases, we conclude that 
S. 2275 violates the First Amendment's separation between 
church and state.
            A. Tilton is the most appropriate case to examine the 
                    constitutionality of S. 2275
    The majority report asserts that S. 2275 is constitutional 
because it meets the three prongs of the Lemon test. The Lemon 
test was established in a case regarding government aid to 
churchrelated educational institutions, and although this test 
may be useful in determining the constitutionality of some 
statutes, it does not directly address the physical improvement 
of structures used for religious worship and instruction. On 
the same day the Supreme Court decided Lemon--June 28, 1971--it 
also decided Tilton, which the majority report acknowledges 
``addressed the issue specifically of government aid related to 
physical improvements to property.'' Since the focus of Tilton 
is more analogous to S. 2275, it is a more persuasive case than 
Lemon for examining this legislation's constitutionality.
    The majority report also attempts to analogize S. 2275 with 
the cases of Everson v. Board of Education and Board of 
Education v. Allen. The report states that ``[t]he security-
related capital improvements funded by this bill are more like 
the bus service and police protection for sectarian 
institutions that the Court has approved than the whole-scale 
construction of a building, which is has not.''
    As we noted above, we agree that police protection is 
constitutionally permissible, and we support the local law 
enforcement grants provided by this legislation. Although the 
physical security enhancements provided by S. 2275 are 
dedicated to the same purpose as police protection, namely 
safety and security, these capital improvements are not 
analogous to the assistance considered by the Court in Everson. 
That Court discussed police protection in the context of 
``general government services [such] as ordinary police and 
fire protection, connections for sewage disposal, public 
highways and sidewalks (emphasis added).'' (Everson at 17.) 
These are public services that the government provides 
generally for all citizens. George Washington University Law 
School Professors Ira Lupu and Robert Tuttle, who analyze 
churchstate law and developments for the Roundtable on Religion 
and Social Welfare Policy, characterize these services as 
``matters of common right, available to all without regard to 
status in the community.'' (Lupu and Tuttle, ``New Federal 
Policies on Grants for Disaster Relief or Historic Preservation 
at Houses of Worship and Places of Religious Instruction,'' 
June 1, 2003,  at 5.)
    On the other hand, the capital improvements provided by S. 
2275 would be far more limited and would aid only select groups 
of citizens and institutions. Professors Lupu and Tuttle also 
note that the scarcity of government aid for construction 
raises the danger of religious favoritism in allocating that 
aid. (Id.) Finally, the capital improvements provided by S. 
2275 could hardly be classified as ``ordinary police 
protection.'' Indeed, the purpose of this legislation is to 
provide extraordinary protection to certain institutions.
    Therefore, we believe that S. 2275 is more analogous to the 
decisions in Tilton and Nyquist, which addressed government aid 
for the physical improvement of property owned by religious 
institutions, than it is to Everson, which addressed the 
provision of general government services.

            B. Based on the Supreme Court rulings in Tilton and 
                    Nyquist, S. 2275 is clearly unconstitutional
    The two major cases in this area of constitutional law are 
Tilton v. Richardson and Committee for Public Education & 
Religious Liberty v. Nyquist, Commissioner of Education of New 
York.
    Tilton involved a challenge to the constitutionality of a 
federal law that authorized grants and loans to institutions of 
higher education for the construction of libraries and other 
academic facilities. Although that law allowed such funds to be 
granted to religious institutions, it also contained a 
provision that expressly excluded funds from being used for 
``any facility used or to be used for sectarian instruction or 
as a place for religious worship.'' This prohibition for 
religious use of the structures was limited to the period of 
government interest, which was defined by the legislation as 20 
years.
    The Supreme Court determined that the 20-year limitation on 
the prohibition for religious use was unconstitutional, thus 
demonstrating that the prohibition was constitutionally 
necessary to uphold the program. In doing so, the Court ruled 
the following:

          Limiting the prohibition for religious use of the 
        structure to 20 years obviously opens the facility to 
        use for any purpose at the end of that period. It 
        cannot be assumed that a substantial structure has no 
        value after that period and hence the unrestricted use 
        of a valuable property is in effect a contribution of 
        some value to a religious body. (Tilton at 683.)

    In other words, if the government is going to fund the 
construction of a building, there must be a prohibition on 
religious use of the structure until that structure has no 
value.
    In Nyquist, the Supreme Court struck down a program that 
would have provided governmental maintenance and repair grants 
for nonpublic schools in the state of New York ``to ensure the 
health, welfare and safety of enrolled pupils.'' Despite the 
worthy goals of the New York state legislature, the Supreme 
Court ruled that ``the propriety of a legislature's purposes 
may not immunize from further scrutiny a law which either has a 
primary effect that advances religion, or which fosters 
excessive entanglements between Church and State.'' (Nyquist at 
774.)
    As the majority report quoted from the Nyquist decision, 
``Absent appropriate restrictions on expenditures for these and 
similar purposes, it simply cannot be denied that this section 
has a primary effect that advances religion in that it 
subsidizes directly the religious activities of sectarian 
elementary and secondary schools.'' (Id.) Importantly, the 
Court further said that ``[n]o attempt is made to restrict 
payments to those expenditures related to the upkeep of 
facilities used exclusively for secular purposes, nor do we 
think it possible within the context of these religion-oriented 
institutions to impose such restrictions (emphasis added).'' 
(Id.)
    Although there have been several major cases regarding the 
First Amendment and the separation between church and state 
since these decisions were handed down more than 30 yearsago, 
these two cases are still good--and binding--law. Professors Lupu and 
Tuttle wrote the following:

          Despite [recent] movement in federal constitutional 
        law, the rule of Tilton and Nyquist, which appears to 
        require exclusively secular use for publicly financed 
        buildings, has never been repudiated or even seriously 
        questioned in the Supreme Court. (Lupu and Tuttle at 
        3.)

    Based on this analysis of clear Supreme Court precedent, S. 
2275 is unconstitutional because it authorizes contracts for 
physical improvements on structures used for religious worship 
and instruction.
            C. The majority report fails to distinguish S. 2275 from 
                    Tilton and Nyquist
    The majority report attempts to distinguish the program 
established in S. 2275 from the Tilton-Nyquist line of cases 
through the following arguments: (1) S. 2275 provides no direct 
funding, but rather offers contracts and loan guarantees to 
provide security enhancements; (2) S. 2275 provides financial 
assistance for only a very narrow set of capital improvements 
which are aimed at enhancing the security of the citizens who 
use the facilities; and (3) none of the enhancements supported 
by S. 2275 could be diverted for use for religious purposes. 
These arguments echo those in the Memorandum from the American 
Law Division, which is cited in the majority report and 
concluded that S. 2275 ``could be distinguished'' from Tilton 
and Nyquist (emphasis added). (Memorandum at 3-4.) However, 
none of these arguments is persuasive.
    First, there is little constitutional significance to the 
legislation's requirement that security enhancements be 
provided through contracts with certified contractors, rather 
than through direct aid. If such contracts were sufficient to 
distinguish this program and address this constitutional 
concern, Congress could fund the entire construction of a house 
of worship, as long as the funds were paid to the construction 
company, rather than directly to the religious organization.
    Secondly, the legislation's requirement that financial 
assistance be used only for a narrow set of capital 
improvements--while important--is not a sufficient distinction 
from either Tilton or Nyquist. The majority report and the 
Memorandum from the American Law Division both miss a critical 
point about Tilton: the prohibition on the use of government-
financed structures for religious purposes was constitutionally 
necessary to uphold the program. Without such a restriction, a 
simple requirement that the capital improvements be used for 
security enhancements would not be sufficient to satisfy the 
Tilton rule. With respect to Nyquist, as noted above, but not 
addressed by the majority report or the Memorandum, the Court 
held that it is impossible within the context of certain 
religion-oriented institutions to impose restrictions on 
expenditures to exclusively secular purposes. Therefore, this 
argument and the Memorandum also miss a crucial aim of Nyquist, 
which was to prevent government expenditures from being used on 
structures that are not solely secular in their use.
    Finally, the majority report argues that S. 2275 can be 
distinguished from Tilton and Nyquist because none of the 
security enhancements can be diverted for religious purposes. 
This theory is similar to the American Law Division argument 
that S. 2275 could be distinguished from Tilton because S. 2275 
``does not include elements that would shift the primary effect 
from what is arguably constitutionally permissible--providing 
greater security for nonprofit organizations--to something that 
is constitutionally impermissible--advancing religion.'' 
(Memorandum at 3.) These analyses again miss a central part of 
the Supreme Court's ruling in Tilton. The provision identified 
in Tilton that would have unconstitutionally diverted the 
effect of the program to support religious purposes was the 20-
year limitation on using the structure built with government 
funds for sectarian instruction or religious worship. While it 
is accurate that S. 2275 does not have such a time limitation 
that could shift its effect, it fails the Tilton rule because 
it does not contain the prohibition at all.
    We agree with the majority report that: ``Tilton appears to 
stand for the proposition that the government may not 
contribute financially to the construction of buildings used 
for religious worship or instruction. That reading of Tilton 
would be an obstacle to granting aid to the physical structure 
of religious institutions such as houses of worship.'' However, 
the majority report's attempts to distinguish S. 2275 from 
Tilton and Nyquist fall short, and S. 2275 is unconstitutional 
because it clearly fails the Tilton rule that requires a 
specific restriction on the use of government-subsidized 
structures for religious activities.
            D. The Durbin-Levin Amendment would have satisfied the 
                    Tilton rule
    To address this constitutional concern, Senators Durbin and 
Levin offered an amendment to ensure that S. 2275 passed the 
Tilton rule. This amendment would have clarified that physical 
security enhancements only could be purchased and installed to 
the extent that the property to be improved would not be used 
for religious instruction or worship, unless and until the 
security enhancements had no value. In other words, when the 
security enhancements had depreciated to the point that they 
had no value, the building or land on which those enhancements 
were installed then--and only then--could be used for religious 
purposes. Although this amendment simply would have codified 
the Supreme Court ruling in Tilton, it was defeated by a vote 
of 6-10.
            E. Without the Durbin-Levin Amendment, there are many 
                    examples of possible constitutional violations
    From a practical perspective, consider the following 
examples that would be permissible under S. 2275 but would 
violate the Constitution and the precedents established by 
Tilton and Nyquist. First, a house of worship wants to deter a 
car bomber from attacking the main structure of its building, 
but instead of jersey barriers or bollards in front of the 
building, it obtains funds through this legislation to 
construct a vestibule at the front of the building. If the 
house of worship later decides to use that vestibule as a place 
for baptism, it clearly would have diverted the security 
enhancement to religious purposes. Although this is an unlikely 
possibility, nothing in this legislation would prohibit it from 
occurring.
    Another example would be if government funds were used to 
fortify stained glass windows that have religious depictions. 
These windows often play a role in the worship experience, 
andsome legal commentators believe it would be unconstitutional for the 
government to fund the maintenance or historic preservation of such 
windows because doing so would lead to excessive government 
entanglement with religion. We believe this legal analysis equally 
applies to the aid in S. 2275 for the security enhancement of windows 
with religious themes.
    Finally, consider the use of government funds to harden 
doors or install security cameras in buildings used for 
religious worship or instruction. Although this is not as 
obviously unconstitutional as the previous examples, it 
nonetheless fails the Tilton test because the buildings are 
being used for religious purposes.
            F. Because of these constitutional concerns, even 
                    organizations that would benefit from this 
                    legislation oppose it
    The Union for Reform Judaism and Jewish Reconstructionist 
Federation represent a combined 1,000 congregations and 1.5 
million Americans. On June 10, 2004, they wrote a letter to 
Congress regarding S. 2275, in which they recognized that 
``[n]on-profit institutions, particularly religious 
organizations, and most particularly Jewish ones, are at great 
risk from [terrorist] acts of violence and hatred.'' However, 
they oppose this legislation based on the following principle:

          The security needs of our nation's high-risk non-
        profit institutions deserve the fullest attention of 
        Congress, but not in a manner that dangerously 
        threatens the wall separating church and state, which 
        has been a bedrock of democracy and the foundation of 
        religious liberty in our country for over two hundred 
        years.

    Similarly, Michael Lieberman, Washington Counsel for the 
Anti-Defamation League, said, ``Jewish institutions really do 
have a special need for security. But government should not be 
involved in their funding. That approach is fraught with 
peril.'' (Rick Jervis, ``Bill proposes security for synagogues: 
Foes of funding cite church-state issues,'' Chicago Tribune, 
April 17, 2004.)
            G. The Bush Administration also recognizes that there is 
                    some limit to the use of government funds for the 
                    construction and physical improvement of structures 
                    used for religious purposes
    The Bush Administration--which itself has often blurred the 
separation between church and state--also has acknowledged that 
in certain contexts, there is a limit to the use of government 
funds for ``brick and mortar aid'' to religious institutions. 
On July 9, 2004, the Department of Housing and Urban 
Development (HUD) issued a final rule regarding the ``Equal 
Participation of Faith-Based Organizations.'' With respect to 
the acquisition, construction, and rehabilitation of 
structures, these regulations state the following: ``HUD funds 
may not be used for the acquisition, construction, or 
rehabilitation of structures to the extent that those 
structures are used for inherently religious activities.'' 
(Federal Register, Vol. 69, No. 131 at 41713.) Even more 
specifically, the rule further states: ``Sanctuaries, chapels, 
and other rooms that a HUD-funded religious congregation uses 
as its principal place of worship . . . are ineligible for 
HUDfunded improvements.'' (Id.)
    It is unclear if these provisions are sufficient to satisfy 
the Tilton rule, but it is important to note the S. 2275 does 
not even include these limitations.

3. Conclusion

    We applaud the purpose of this legislation, but a laudable 
secular purpose clearly is not enough to allay constitutional 
concerns. Although the majority report analogizes S. 2275 with 
the Church Arson Prevention Act of 1996, S. 2275 goes much 
further because it would actually authorize contracts for 
physical security enhancements to structures used for religious 
worship and instruction. Furthermore, the constitutionality of 
the loan guarantees authorized by the Church Arson Prevention 
Act is uncertain (although that legislation has not been 
challenged in court).
    In conclusion, we believe that S. 2275 does not pass 
constitutional muster. The most appropriate line of cases to 
examine the constitutionality of this legislation is the 
Tilton-Nyquist line, and the majority report has not 
sufficiently distinguished S. 2275 from these rulings. Without 
the Durbin-Levin amendment, S. 2275 does not satisfy the Tilton 
rule and therefore is unconstitutional.

                         C. Additional Concerns

    In addition to these constitutional concerns about S. 2275, 
we have questions regarding the scope and practical 
implementation of this legislation.
    First, we are concerned that establishing separate funding 
dedicated to the protection of high-risk nonprofit 
organizations may override or even ignore the security concerns 
that state and local governments already have prioritized. We 
agree with the majority report that nonprofit organizations are 
valuable assets to the country. At the same, we are facing 
dramatic reductions in homeland security funds in fiscal year 
2005, including a reduction of at least $235 million in overall 
spending for our first responders. This new stream of funding 
for nonprofit organizations may deplete funds that would 
otherwise be available to augment this shortfall for first 
responders or to improve the security of our ports, railways, 
and critical infrastructure.
    Furthermore, although S. 2275 requires a designated state 
agency to rank all applications by severity of risk of 
international terrorist attack, this ranking is only one of six 
criteria that the Secretary of Homeland Security will consider 
in selecting which applicants will receive federal contracts 
and loan guarantees. Especially since it is unclear if these 
factors should be weighed equally or if some are more critical 
than others, it is possible--if not likely--that the priorities 
of the state agency may be overridden.
    We also believe that the establishment of an Office of 
Community Relations and Civic Affairs seems contradictory to 
efforts to consolidate grant programs for state and local 
recipients within the Department of Homeland Security in order 
to make it easier to apply and help streamline the flow of 
funds. It is unclear why the purpose of this new Office could 
not be fulfilled by the State and Local Coordination Office 
currently established within DHS.
    There also is no provision in this legislation to require 
that the non-profit organizations that receive S. 2275 funds 
coordinate with state and local agencies or with the officials 
who are responsible for developing terrorism response plans, 
conducting exercises, and acquiring equipment, to ensure that 
there is no duplication and to engage in collaborative planning 
and prevention activities.
    Finally, if Congress does establish this separate funding 
stream to secure nonprofit organizations, it should not limit 
such protection to international terrorist attacks. We fail to 
see the distinction between domestic and international attacks 
on such organizations and believe it would be more appropriate 
to guard these organizations from all attacks that would 
disrupt the vital services they provide or threaten the lives 
and well-being of the citizens who operate, utilize, or live or 
work in proximity to such organizations.

                             D. Conclusion

    Although nonprofit organizations play a vital role in our 
society, we oppose S. 2275 because this legislation would 
unconstitutionally fund physical security enhancements to 
structures used for religious worship and instruction and 
because it may override or even ignore the security priorities 
set by state and local governments. Given these concerns, we 
support the provisions of this legislation that would provide 
technical assistance and local law enforcement assistance 
grants to help secure high-risk nonprofit organizations. We 
also would be willing to consider the loan guarantees 
authorized by S. 2275, if proponents of that approach could 
demonstrate clearly that such aid is constitutional.

                                   Richard J. Durbin.
                                   Carl Levin.