Washington, DC – The Senate Homeland Security and Governmental Affairs
Committee today approved legislation authored by Senators Susan Collins (R-ME)
and Joseph Lieberman (D-CT) to authorize, for the first time, a federal
homeland security state and urban area grant funding formula to target
billions of dollars toward high risk states and cities while ensuring that
first responders in all states receive necessary equipment and training to
prevent and be prepared for potential terrorist acts. The Collins-Lieberman
Homeland Security Grant Enhancement Act of 2005 (S.21) was approved today by
the Committee by unanimous voice vote and reported to the Senate.

“This bill considerably improves the homeland security state grant
process so the entire nation will be better prepared to respond to the next
terrorist attack. It distributes a greater percentage of funding to states
based on threat than the current process, ensures that all grants are awarded
only after states have completed an analysis of risk, threat, and
vulnerability, and recognizes that all states need certain essential
capabilities to prevent, prepare for, and react to terrorist attacks. In
addition, our legislation requires greater input from first responders, allows
greater flexibility for states and localities to put the funds to the best
use, and establishes strong accountability measures to ensure that homeland
security dollars are spent wisely,” said Senators Collins and Lieberman in a
joint statement. “This legislation achieves the dual and equally important
goals of addressing the needs of states with major metropolitan centers and
small and rural states. It doubles the amount of funds distributed according
to risk and vulnerability to terrorist attacks, while also providing states
with the predictable, steady stream of homeland security dollars they need to
defend themselves from terrorist threats.”

Highlights of the Collins-Lieberman legislation: authorizes $2.925
billion for state grant programs, doubles threat-based funding; allocates a
majority of funding to states and regions with highest risk, threat and
vulnerabilities; establishes a sliding scale baseline minimum to ensure that
states with greater population and population density receive a bigger
baseline and that every state receives at least .55% of appropriated funds;
instructs DHS Secretary to establish essential capabilities to tie each dollar
spend to the unique risk and preparedness needs of states and localities;
requires greater input from local first responders; strengthens accountability
of the state grant program. A full summary of the Collins-Lieberman Homeland
Security Grant Enhancement Act is attached below.
“The unanimous Committee vote shows that this legislation has struck the
balance needed to stop the corrosive competition for dollars pitting large
states against small. We expect broad support in the Senate and hope this
bill will be passed as soon as possible,” the Senators added.
Summary of Collins-Lieberman Homeland Security Grant Enhancement Act of 2005
(S. 21 Substitute)

Bringing the current State Homeland Security Grant Program, Law Enforcement
Terrorism Prevention Program and the Urban Area Security Initiative together
into a single program, S. 21, the Homeland Security Grant Enhancement Act of
2005, would help streamline and rationalize the state homeland security grant
process. It includes a funding formula that would significantly increase the
amount of money distributed based on terrorist threat, while preserving a
minimum level of funding for each state. It also adopts new accountability
measures to ensure that homeland security grants are spent effectively and

Funding Formula
Increased Threat-Based Funding. All funds beyond that necessary to cover the
baseline allocations are distributed based on the relative threat,
vulnerability, and consequences faced by an area from a terrorist attack. In
dollar amounts, this means that S. 21 would distribute twice the money based
on risk as was the case in FY05. From this funding pool, the Secretary can
make threat-based grants to both states and to metropolitan regions. Grants
to regions can comprise up to 50% of the total threat-based grant funding.

Sliding-Scale State Baseline. The bill provides a sliding-scale baseline
amount to each state, to promote a national level of preparedness and to
ensure some predictability for state planning purposes. Each state receives a
minimum baseline amount of 0.55% of the total funds appropriated under the
bill. States that are larger and/or more densely populated receive a higher
baseline amount, based on a formula that combines population and population

Regional Grants. Encouraging regional cooperation and a regional perspective
on preparedness, S. 21 moves the focus of local funding from individual cities
to metropolitan regions. Unlike the current situation under UASI, moreover,
where DHS simply announces a list of cities it has selected to fund, S. 21
would establish an application process for metropolitan region funding. In
applying for funding, communities are given considerable flexibility in
forming regions that make the most sense locally: a region must simply be made
up of two or more contiguous municipalities, counties, parishes or Indian
tribes, and must include the largest city in the metropolitan area. To place
some limits on the number of regional applications DHS would have to review,
only regions within the 100 largest metropolitan statistical areas (MSAs)
would be automatically eligible to apply, though other regions could apply
with the consent of the Governor of the relevant state or states and of the
Secretary of DHS. Grants to regions would be prioritized based on threat,
vulnerability and consequences from a terrorist attack, with consideration to
be given to such factors as population, population density, proximity to
international borders and coastlines, and the proportion of the relevant
metropolitan area participating in the regional application.

Threat-Based State Grants. All funds beyond the baseline allocations that are
not given out in grants to regions would be distributed to states, based on
the threat, vulnerability and consequence faced by the state from a terrorist
attack. As with regional grants, there would be a competitive application
process. 80% of state grant funds would have to be passed through to local
governments within 60 days.

Authorization Amount. The bill authorizes $2.925 billion for grants in FY06
and FY07 and such sums as are necessary thereafter. This is the same level of
funding appropriated for the equivalent homeland security grants in FY04.

Essential Capabilities
Building on the national preparedness goal recently issued by DHS, the S. 21
substitute requires that the Secretary establish “essential capabilities” for
state and local governments. Essential capabilities are the levels and
competence of emergency personnel, planning and equipment that are needed to
prevent, prepare for, and respond to acts of terrorism and other catastrophic
events. The bill also provides for the creation of a First Responder Task
Force, made up of state and local first responders, to advise the Secretary on
the establishment and periodic updating of these essential capabilities.

The establishment of essential capabilities will provide important guidance to
states and localities trying to improve their terrorism preparedness, as well
as benchmarks for measuring both state and national progress in achieving that
preparedness. Essential capabilities, moreover, would be intimately tied to
the grant decision making process by requiring consideration of how funding
decisions will help accomplish key preparedness goals, and thereby providing a
basis for prioritizing among needs. The establishment of essential
capabilities also creates an important barrier to wasteful and inappropriate
spending, as states and regions, in applying for and allocating homeland
security grant funds, will have to demonstrate that the funds are being used
to achieve specific capabilities.

Beyond the establishment and use of essential capabilities – a key tool in
preventing wasteful spending – the substitute has a number of other provisions
designed to increase accountability and ensure the appropriate use of homeland
security grant funds. These include:

Annual Audit. S. 21 requires an annual GAO audit and report to Congress on
DHS homeland security grants.

Reporting requirements. S. 21 requires grant recipients to submit an annual
report on their use of grant funds and their progress in achieving essential
capabilities to the Secretary, and also requires the Secretary to submit an
annual report to Congress providing an accounting of how grants to states and
localities were spent and an evaluation of their progress in meeting essential

Penalties for Non-Compliance. Authorizes the Secretary of Homeland Security to
terminate or reduce grant payments if a state or region fails to comply with
requirements regarding eligible expenditures.

Other Provisions
Equipment and Training Standards. The bill requires that the Secretary
support the development of national voluntary consensus standards for first
responder equipment and training. Applicants for grant funds who want to

use those funds to purchase or upgrade equipment that did not meet these
standards would have the burden of explaining why such equipment would better
serve their needs than equipment that did meet the standards.

Interagency Coordinating Committee. The bill creates a federal interagency
committee to promote the coordination of homeland security grants throughout
the federal government. In particular, the interagency committee is to come
up with a proposal to eliminate redundant and duplicative application,
planning and reporting requirements faced by states, local governments and
first responders in applying for various different federal homeland security-
related grants.

DHS Organization. S. 21 codifies the Secretary’s transfer of DHS’s Office of
Domestic Preparedness (the primary office that handles state and local grants
at DHS) from the Border and Transportation Security Directorate to the Office
for State and Local Government Coordination and Preparedness.