[Congressional Record Volume 147, Number 162 (Wednesday, November 28, 2001)]
[Senate]
[Pages S12101-S12106]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mrs. CLINTON (for herself, Ms. Mikulski, Mrs. Feinstein, Mr. 
        Durbin, and Mr. Schumer):
  S. 1737. A bill to provide for homeland security block grants; to the 
Committee on the Judiciary.
  Mrs. CLINTON. Madam President, I rise today to offer a helping hand 
to communities in New York and around the country experiencing fiscal 
distress as they struggle to respond to the heightened security needs 
of our country.
  Although the terrorists responsible for the September 11 attacks 
targeted two of our cities, communities thousands of miles away from 
Ground Zero now find themselves on the front lines in the war against 
terrorism. Since the attacks, towns and cities, both large and small, 
all across America have been overwhelmed by calls about potential 
biological or chemical attacks or threats to infrastructure. Along with 
this new responsibility comes a heavy burden that these communities 
should not be forced to shoulder alone.
  That is why today I am introducing legislation to provide relief to 
State and local governments in their efforts to improve emergency 
response and public safety locally. This Federal aid will ensure that 
local communities will not have to bear the burden of a strong homeland 
defense alone. Tomorrow, mayors from all around New York State will 
meet in New York City to address these very concerns. The legislation 
I'm introducing today, along with my colleagues Senators Feinstein, 
Mikulski, Durbin, and Schumer, will go a long way in helping them and 
communities across the country meet these needs.
  Since the unimaginable acts of terrorism against American civilians 
on U.S. soil that took place a few months ago, we have been forced to 
reevaluate virtually every aspect of our homeland security. One 
immediate change to emerge in post-September 11 America has been that 
local communities are now charged with an enormous responsibility: 
plugging in the gaps in our public safety system and securing our 
homeland defense.
  Our entire country witnessed it on September 11 when hundreds of 
brave men and women in uniform went rushing towards burning buildings 
to save peoples' lives. These courageous individuals were public safety 
officers and emergency response personnel, and, on that day, America 
and its towns and cities were forever changed.
  Mayor Joseph Griffo of Rome, New York described this new phenomenon, 
saying,

       The mayors have become the leaders, the first responders in 
     this new war on terrorism. The police, the firefighters and 
     the emergency personnel are the first responders. We have a 
     role and a responsibility in being more keenly aware of what 
     potentially could happen to our communities.

  Already, towns and cities in New York, and municipalities across the 
country, have seen a glimpse of what homeland security's price tag 
looks like and they are deeply concerned about how they will pay for 
it. Rome Mayor Griffo has said,

       The finances, of providing security, are going to be very 
     difficult. I think it may be tough to recoup all the costs 
     that we've incurred to date. . . . Beyond that, we have to 
     see where we can work in partnership with the feds and the 
     state.

  Bills from skyrocketing police and fire fighter overtime costs are 
saddling many local governments with unanticipated costs. Local law 
enforcement agencies are struggling with expenses from a wide range of 
security needs, including: properly securing major transportation 
infrastructure, like tunnels and bridges; stepping up security at 
facilities that store hazardous materials or drinking water; and 
providing local health personnel with the resources

[[Page S12102]]

and training they need to respond to biological and chemical attacks.
  Mayor Jerry Jennings of Albany, NY, estimates that increased patrols 
at Alcove Reservoir in Coeymans to ensure that the city's water supply 
is adequately protected will probably cost taxpayers $1 million. The 
city of Buffalo, New York, has received 139 terrorist threats since 
September 11. Buffalo Mayor Tony Masiello estimates these additional 
threats will cost the city approximately $700 an hour.
  Although the terrorist attacks of September 11 targeted New York and 
Washington, DC, every single community in our country has been affected 
by the attacks, Baltimore, for example, has incurred nearly $4 million 
in security costs since the September 11 attacks, and city budget 
officials predict that those costs could grow to $15.8 million for the 
fiscal year.
  New Orleans is contending with a $10 million budget gap due to 
security costs for the city and the New Orleans airport. Dallas, 
according to some estimates, has already spent $2 million on security 
and could end up spending $6 million by the end of the year. In 
Massachusetts, Acting Governor Jane Swift has approved $26 million for 
homeland defense related spending, which includes state police 
overtime.
  According to the National Governors' Association, over the next six 
months expenses resulting from the September 11 attacks could end up as 
high as $10 billion in the 50 States, while the National League of 
Cities projects a 4 percent decline in revenues for cities--a projected 
$11.4 billion--from the disastrous effects the attacks have had on 
local employment and tourism.
  These figures point to what mayors have been saying for some time now 
and what I repeated on this floor a few weeks ago after meeting with 
mayors from all over the country: the cost of homeland security is 
causing our cities to bleed dollars.
  Of the 214 cities polled in late October, more than half said that 
they increased spending on security after September 11 and that they 
would have to dip into surpluses and cut programs as a result. It has 
even been reported that some states are considering using their state 
lottery funds to pay for the cost of bolstering local homeland defense 
efforts.
  Our homeland security cannot be left to chance and no city or town in 
America should have to choose between adequately protecting its 
citizens and funding important programs that benefit our children, the 
most vulnerable among us. It's the responsibility of the Federal 
Government to ensure our security and we must not let our cities and 
towns bear the brunt of homeland defense alone.
  These additional fiscal demands come at a time when we are already 
facing a nationwide economic downturn and people are already 
experiencing the pain of this economic uncertainty. Over the next 18 
months, New York State will face an estimated $10 billion shortfall in 
state revenues. To counter some of these pressures and help communities 
recover more quickly from this economic slump, we must provide local 
communities with the resources they need to meet these increased 
demands.
  Under the legislation I am introducing, cities, counties, and towns 
across America will be able to access Federal funds to help make up 
these anticipated revenue shortfalls. The Homeland Security Block Grant 
Act provides $3 billion in funding to communities, with 70 percent 
going directly to more than 1,000 cities and counties across the United 
States. The remaining 30 percent will be funneled to States to direct 
to smaller communities to help them improve security and public safety 
locally.
  Cities with a population of more than 50,000 and that are within 
metropolitan areas and counties within metropolitan areas, regardless 
of the size of the county, will receive funds directly. For example, 
both Syracuse and Onondaga County will be eligible to receive grant 
funds.
  Some of my colleagues have asked whether a small state provision can 
be included in the bill, one that would guarantee that less-populated 
states would receive a minimum level funding. I am very much looking 
forward to working with my colleagues on such a provision to include in 
this bill.
  This legislation gives local communities a lot of flexibility to 
determine how grant funds will be used because local communities are 
most knowledgeable about their security needs. For example, funds can 
be used for overtime expenses for law enforcement, fire, and emergency 
personnel incurred as a result of terrorist threats or to purchase 
personal protective equipment for fire, police, and emergency 
personnel.
  Communities could also use these federal funds to acquire state-of-
the-art technology to improve communication between the first 
responders, based at myriad local agencies, so that they can work 
together closely and efficiently while responding to attacks. In 
addition, funds could also be used to improve security or water 
treatment plants, nuclear power plants, tunnels and bridges, and 
chemical plants.
  Towns and cities may also decide to use the funds to improve the 
communication system used to provide information to the public in a 
timely manner about the facts of any threat and the precautions the 
public should take.
  Finally, to encourage communities to use the homeland security block 
grants effectively, communities will be required to match by 10 percent 
the funds received from the Federal Government. Financially distressed 
communities, however, will receive a waiver from the matching 
requirement.
  I'm proud that this legislation has the support of the International 
Association of Firefighters, the International Association of Fire 
Chiefs, the National Association of Police Organizations, the National 
League of Cities, and U.S. Conference of Mayors.
  Just as our Federal Government pays for defense overseas, it is our 
duty to fund our defense at home. Our homeland defense can only be as 
strong as the weakest link at the State and local level. By providing 
our communities with the resources and tools they need to bolster 
emergency response efforts and provide for other homeland security 
initiatives, we will have a better-prepared home front and a stronger 
America.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1737

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Homeland 
     Security Block Grant Act''.
       (b) Table of Contents.--

Sec. 1. Short title; table of contents.
Sec. 2. Findings.
Sec. 3. Definitions.
Sec. 4. Grants to States, units of general local government and Indian 
              tribes; authorizations.
Sec. 5. Statement of activities and review.
Sec. 6. Activities eligible for assistance.
Sec. 7. Allocation and distribution of funds.
Sec. 8. Nondiscrimination in programs and activities.
Sec. 9. Remedies for noncompliance with requirements.
Sec. 10. Reporting requirements.
Sec. 11. Consultation by Attorney General.
Sec. 12. Interstate agreements or compacts; purposes.
Sec. 13. Matching requirements; suspension of requirements for 
              economically distressed areas.

     SEC. 2. FINDINGS.

       Congress makes the following findings:
       (1) In the wake of the September 11, 2001, terrorist 
     attacks on our country, communities all across American now 
     find themselves on the front lines in the war against 
     terrorism on United States soil.
       (2) We recognize that these communities will be forced to 
     shoulder a significant portion of the burden that goes along 
     with that responsibility. We believe that local governments 
     should not have to bear that responsibility alone.
       (3) Our homeland defense will only be as strong as the 
     weakest link at the State and local level. By providing our 
     communities with the resources and tools they need to bolster 
     emergency response efforts and provide for other emergency 
     response initiatives, we will have a better-prepared home 
     front and a stronger America.

     SEC. 3. DEFINITIONS.

       In this Act:
       (1) Attorney general.--The term ``Attorney General'' means 
     the United States Attorney General.
       (2) City.--The term ``city'' means--
       (A) any unit of general local government that is classified 
     as a municipality by the United States Bureau of the Census; 
     or
       (B) any other unit of general local government that is a 
     town or township and which, in the determination of the 
     Attorney General--
       (i) possesses powers and performs functions comparable to 
     those associated with municipalities;

[[Page S12103]]

       (ii) is closely settled; and
       (iii) contains within its boundaries no incorporated places 
     as defined by the United States Bureau of the Census that 
     have not entered into cooperation agreements with such town 
     or township to undertake or to assist in the performance of 
     homeland security objectives.
       (3) Extent of poverty.--The term ``extent of poverty'' 
     means the number of persons whose incomes are below the 
     poverty level. Poverty levels shall be determined by the 
     Attorney General pursuant to criteria provided by the Office 
     of Management and Budget taking into account and making 
     adjustments, if feasible and appropriate and in the sole 
     discretion of the Attorney General, for regional or area 
     variations in income and cost of living, and shall be based 
     on data referable to the same point or period in time.
       (4) Federal grant-in-aid program.--The term ``Federal 
     grant-in-aid program'' means a program of Federal financial 
     assistance other than loans and other than the assistance 
     provided by this Act.
       (5) Indian tribe.--The term ``Indian tribe'' means any 
     Indian tribe, band, group, and nation, including Alaska 
     Indians, Aleuts, and Eskimos, and any Alaskan Native Village, 
     of the United States, which is considered an eligible 
     recipient under the Indian Self-Determination and Education 
     Assistance Act (Public Law 93-638) or was considered an 
     eligible recipient under chapter 67 of title 31, United 
     States Code, prior to the repeal of such chapter.
       (6) Metropolitan area.--The term ``metropolitan area'' 
     means a standard metropolitan statistical area as established 
     by the Office of Management and Budget.
       (7) Metropolitan city.--The term ``metropolitan city'' 
     means--
       (A) a city within a metropolitan area that is the central 
     city of such area, as defined and used by the Office of 
     Management and Budget; or
       (B) any other city, within a metropolitan area, which has a 
     population of fifty thousand or more.

     Any city that was classified as a metropolitan city for at 
     least 2 years pursuant to the first sentence of this 
     paragraph shall remain classified as a metropolitan city. Any 
     unit of general local government that becomes eligible to be 
     classified as a metropolitan city, and was not classified as 
     a metropolitan city in the immediately preceding fiscal year, 
     may, upon submission of written notification to the Attorney 
     General, defer its classification as a metropolitan city for 
     all purposes under this Act, if it elects to have its 
     population included in an urban county under subsection (d). 
     Notwithstanding the second sentence of this paragraph, a city 
     may elect not to retain its classification as a metropolitan 
     city. Any unit of general local government that was 
     classified as a metropolitan city in any year, may, upon 
     submission of written notification to the Attorney General, 
     relinquish such classification for all purposes under this 
     Act if it elects to have its population included with the 
     population of a county for purposes of qualifying for 
     assistance (for such following fiscal year) under section 
     5(e) as an urban county.
       (8) Non-qualifying community.--The term ``nonqualifying 
     community'' means an area that is not a metropolitan city or 
     part of an urban county and does not include Indian tribes.
       (9) Population.--The term ``population'' means total 
     resident population based on data compiled by the United 
     States Bureau of the Census and referable to the same point 
     or period of time.
       (10) State.--The term ``State'' means any State of the 
     United States, or any instrumentality thereof approved by the 
     Governor; and the Commonwealth of Puerto Rico.
       (11) Unit of general local government.--The term ``unit of 
     general local government'' means any city, county, town, 
     township, parish, village, or other general purpose political 
     subdivision of a State; a combination of such political 
     subdivisions is recognized by the Secretary; and the District 
     of Columbia.
       (12) Urban county.--The term ``urban county'' means any 
     county within a metropolitan area.
       (b) Basis and Modification of Definitions.--Where 
     appropriate, the definitions in subsection (a) shall be 
     based, with respect to any fiscal year, 0on the most recent 
     data compiled by the United States Bureau of the Census and 
     the latest published reports of the Office of Management and 
     Budget available ninety days prior to the beginning of such 
     fiscal year. The Attorney General may by regulation change or 
     otherwise modify the meaning of the terms defined in 
     subsection (a) in order to reflect any technical change or 
     modification thereof made subsequent to such date by the 
     United States Bureau of the Census or the Office of 
     Management and Budget.
       (c) Designation of Public Agencies.--One or more public 
     agencies, including existing local public agencies, may be 
     designated by the chief executive officer of a State or a 
     unit of general local government to undertake activities 
     assisted under this Act.
       (d) Local Governments, Inclusion in Urban County 
     Population.--With respect to program years beginning with the 
     program year for which grants are made available from amounts 
     appropriated for fiscal year 2002 under section 4, the 
     population of any unit of general local government which is 
     included in that of an urban county as provided in subsection 
     (a)(6) shall be included in the population of such urban 
     county for three program years beginning with the program 
     year in which its population was first so included and shall 
     not otherwise be eligible for a grant as a separate entity, 
     unless the urban county does not receive a grant for any year 
     during such three-year period.
       (e) Urban County.--Any county seeking qualification as an 
     urban county, including any urban county seeking to continue 
     such qualification, shall notify, as provided in this 
     subsection, each unit of general local government, which is 
     included therein and is eligible to elect to have its 
     population excluded from that of an urban county, of its 
     opportunity to make such an election. Such notification 
     shall, at a time and in a manner prescribed by the Attorney 
     General, be provided so as to provide a reasonable period for 
     response prior to the period for which such qualification is 
     sought. The population of any unit of general local 
     government which is provided such notification and which does 
     not inform, at a time and in a manner prescribed by the 
     Attorney General, the county of its election to exclude its 
     population from that of the county shall, if the county 
     qualifies as an urban county, be included in the population 
     of such urban county as provided in subsection (d).

     SEC. 4. GRANTS TO STATES, UNITS OF GENERAL LOCAL GOVERNMENT 
                   AND INDIAN TRIBES; AUTHORIZATIONS.

       The Attorney General is authorized to make grants to 
     States, units of general local government, and Indian tribes 
     to carry out activities in accordance with the provisions of 
     this Act. For purposes of assistance under section 7, there 
     is authorized to be appropriated $3,000,000,000 in fiscal 
     year 2002, and such additional sums as are authorized 
     thereafter.

     SEC. 5. STATEMENT OF ACTIVITIES AND REVIEW.

       (a) Application.--Prior to the receipt in any fiscal year 
     of a grant under section 7(b) by any metropolitan city or 
     urban county, under section 7(d) by any State, or under 
     section 7(d)(2) by any unit of general local government, the 
     grantee shall have indicated its interest in receiving funds 
     by preparing a statement of homeland security objectives and 
     projected use of funds and shall have provided the Attorney 
     General with the certifications required in subsection (b) 
     and, where appropriate, subsection (c). In the case of 
     metropolitan cities and urban counties receiving grants 
     pursuant to section 7(b) and in the case of units of general 
     local government receiving grants pursuant to section 
     7(d)(2), the statement of projected use of funds shall 
     consist of proposed homeland security activities. In the case 
     of States receiving grants pursuant to section 7(d), the 
     statement of projected use of funds shall consist of the 
     method by which the States will distribute funds to units of 
     general local government. In preparing the statement, the 
     grantee shall consider any view of appropriate law 
     enforcement, and emergency response authorities and may, if 
     deemed appropriate by the grantee, modify the proposed 
     statement. A copy of the final statement shall be furnished 
     to the Attorney General and the Office of Homeland Security 
     together with the certifications required under subsection 
     (b) and, where appropriate, subsection (c). Any final 
     statement of activities may be modified or amended from time 
     to time by the grantee in accordance with the same procedures 
     required in this paragraph for the preparation and submission 
     of such statement.
       (b) Certification of Enumerated Criteria by Grantee to 
     Secretary.--Any grant under section 7 shall be made only if 
     the grantee certifies to the satisfaction of the Attorney 
     General that--
       (1) it has developed a homeland security plan pursuant to 
     section 5 that identifies both short- and long-term homeland 
     security needs that have been developed in accordance with 
     the primary objective and requirements of this Act; and
       (2) the grantee will comply with the other provisions of 
     this Act and with other applicable laws.
       (c) Submission of Annual Performance Reports, Audits and 
     Adjustments.--
       (1) In general.--Each grantee shall submit to the Attorney 
     General, at a time determined by the Attorney General, a 
     performance and evaluation report concerning the use of funds 
     made available under section 7, together with an assessment 
     by the grantee of the relationship of such use to the 
     objectives identified in the grantee's statement under 
     subsection (a). The Attorney General shall encourage and 
     assist national associations of grantees eligible under 
     section 7, national associations of States, and national 
     associations of units of general local government in 
     nonqualifying areas to develop and recommend to the Attorney 
     General, within 1 year after the effective date of this 
     sentence, uniform recordkeeping, performance reporting, 
     evaluation reporting, and auditing requirements for such 
     grantees, States, and units of general local government, 
     respectively. Based on the Attorney General's approval of 
     these recommendations, the Attorney General shall establish 
     such requirements for use by such grantees, States, and units 
     of general local government.
       (2) Reviews and audits.--The Attorney General shall, at 
     least on an annual basis, make such reviews and audits as may 
     be necessary or appropriate to determine--
       (A) in the case of grants made under section 7(b), whether 
     the grantee has carried out its activities and, where 
     applicable, whether the grantee has carried out those 
     activities and its certifications in accordance with the 
     requirements and the primary

[[Page S12104]]

     objectives of this Act and with other applicable laws, and 
     whether the grantee has a continuing capacity to carry out 
     those activities in a timely manner; and
       (B) in the case of grants to States made under section 
     7(d), whether the State has distributed funds to units of 
     general local government in a timely manner and in 
     conformance to the method of distribution described in its 
     statement, whether the State has carried out its 
     certifications in compliance with the requirements of this 
     Act and other applicable laws, and whether the State has made 
     such reviews and audits of the units of general local 
     government as may be necessary or appropriate to determine 
     whether they have satisfied the applicable performance 
     criteria described in subparagraph (A).
       (3) Adjustments.--The Attorney General may make appropriate 
     adjustments in the amount of the annual grants in accordance 
     with the Attorney General's findings under this subsection. 
     With respect to assistance made available to units of general 
     local government under section 7(d), the Attorney General may 
     adjust, reduce, or withdraw such assistance, or take other 
     action as appropriate in accordance with the Attorney 
     General's reviews and audits under this subsection, except 
     that funds already expended on eligible activities under this 
     Act shall not be recaptured or deducted from future 
     assistance to such units of general local government.
       (d) Audits.--Insofar as they relate to funds provided under 
     this Act, the financial transactions of recipients of such 
     funds may be audited by the General Accounting Office under 
     such rules and regulations as may be prescribed by the 
     Comptroller General of the United States. The representatives 
     of the General Accounting Office shall have access to all 
     books, accounts, records, reports, files, and other papers, 
     things, or property belonging to or in use by such recipients 
     pertaining to such financial transactions and necessary to 
     facilitate the audit.
       (e) Metropolitan City as Part of Urban County.--In any case 
     in which a metropolitan city is located, in whole or in part, 
     within an urban county, the Attorney General may, upon the 
     joint request of such city and county, approve the inclusion 
     of the metropolitan city as part of the urban county for 
     purposes of submitting a statement under section 5 and 
     carrying out activities under this Act.

     SEC. 6. ACTIVITIES ELIGIBLE FOR ASSISTANCE.

       Activities assisted under this Act may include only--
       (1) funding additional law enforcement, fire, and emergency 
     resources, including covering overtime expenses;
       (2) purchasing and refurbishing personal protective 
     equipment for fire, police, and emergency personnel and 
     acquire state-of-the-art technology to improve communication 
     and streamline efforts;
       (3) improving cyber and infrastructure security by 
     improving--
       (A) security for water treatment plants, distribution 
     systems, and other water infrastructure; nuclear power plants 
     and other power infrastructure;
       (B) tunnels and bridges;
       (C) oil and gas pipelines and storage facilities; and
       (D) chemical plants and transportation of hazardous 
     substances;
       (4) assisting Local Emergency Planning Committees so that 
     local public agencies can design, review, and improve 
     disaster response systems;
       (5) assisting communities in coordinating their efforts and 
     sharing information with all relevant agencies involved in 
     responding to terrorist attacks;
       (6) establishing timely notification systems that enable 
     communities to communicate with each other when a threat 
     emerges;
       (7) improving communication systems to provide information 
     to the public in a timely manner about the facts of any 
     threat and the precautions the public should take; and
       (8) devising a homeland security plan, including 
     determining long-term goals and short-term objectives, 
     evaluating the progress of the plan, and carrying out the 
     management, coordination, and monitoring of activities 
     necessary for effective planning implementation.

     SEC. 7. ALLOCATION AND DISTRIBUTION OF FUNDS.

       (a) Allocation and Distribution of Funds; Set-Aside for 
     Indian Tribes.--
       (1) Allocation.--For each fiscal year, of the amount 
     approved in an appropriation Act under section 4 for grants 
     in a year (excluding the amounts provided for use in 
     accordance with section 6), the Attorney General shall 
     reserve for grants to Indian tribes 1 percent of the amount 
     appropriated under such section. The Attorney General shall 
     provide for distribution of amounts under this paragraph to 
     Indian tribes on the basis of a competition conducted 
     pursuant to specific criteria for the selection of Indian 
     tribes to receive such amounts. The criteria shall be 
     contained in a regulation promulgated by the Attorney General 
     after notice and public comment.
       (2) Remaining allocation.--Of the amount remaining after 
     allocations pursuant to paragraph (1), 70 percent shall be 
     allocated by the Attorney General to metropolitan cities and 
     urban counties. Except as otherwise specifically authorized, 
     each metropolitan city and urban county shall be entitled to 
     an annual grant, to the extent authorized beyond fiscal year 
     2002, from such allocation in an amount not exceeding its 
     basic amount computed pursuant to paragraph (1) or (2) of 
     subsection (b).
       (b) Computation of Amount Allocated to Metropolitan Cities 
     and Urban Counties.--
       (1) In general.--The Attorney General shall determine the 
     amount to be allocated to each metropolitan city based on the 
     population of that metropolitan city.
       (2) Urban counties.--The Attorney General shall determine 
     the amount to be allocated to each urban county based on the 
     population of that urban county.
       (3) Exclusions.--In computing amounts or exclusions under 
     this section with respect to any urban county, there shall be 
     excluded units of general local government located in the 
     county the populations that are not counted in determining 
     the eligibility of the urban county to receive a grant under 
     this subsection, except that there shall be included any 
     independent city (as defined by the Bureau of the Census) 
     which--
       (A) is not part of any county;
       (B) is not eligible for a grant pursuant to subsection 
     (b)(1);
       (C) is contiguous to the urban county;
       (D) has entered into cooperation agreements with the urban 
     county which provide that the urban county is to undertake or 
     to assist in the undertaking of essential community 
     development and housing assistance activities with respect to 
     such independent city; and
       (E) is not included as a part of any other unit of general 
     local government for purposes of this section.

     Any independent city that is included in any fiscal year for 
     purposes of computing amounts pursuant to the preceding 
     sentence shall not be eligible to receive assistance under 
     subsection (d) with respect to such fiscal year.
       (4) Inclusions.--In computing amounts under this section 
     with respect to any urban county, there shall be included all 
     of the area of any unit of local government which is part of, 
     but is not located entirely within the boundaries of, such 
     urban county if the part of such unit of local government 
     which is within the boundaries of such urban county would 
     otherwise be included in computing the amount for such urban 
     county under this section, and if the part of such unit of 
     local government that is not within the boundaries of such 
     urban county is not included as a part of any other unit of 
     local government for the purpose of this section. Any amount 
     received by such urban county under this section may be used 
     with respect to the part of such unit of local government 
     that is outside the boundaries of such urban county.
       (5)Population.--(A) Where data are available, the amount 
     determined under paragraph (1) for a metropolitan city that 
     has been formed by the consolidation of one or more 
     metropolitan cities with an urban county shall be equal to 
     the sum of the amounts that would have been determined under 
     paragraph (1) for the metropolitan city or cities and the 
     balance of the consolidated government, if such consolidation 
     had not occurred. This paragraph shall apply only to any 
     consolidation that--
       (i) included all metropolitan cities that received grants 
     under this section for the fiscal year preceding such 
     consolidation and that were located within the urban county;
       (ii) included the entire urban county that received a grant 
     under this section for the fiscal year preceding such 
     consolidation; and
       (iii) took place on or after January 1, 2002.
       (B) The population growth rate of all metropolitan cities 
     referred to in section 3 shall be based on the population 
     of--
       (i) metropolitan cities other than consolidated governments 
     the grant for which is determined under this paragraph; and
       (ii) cities that were metropolitan cities before their 
     incorporation into consolidated governments. For purposes of 
     calculating the entitlement share for the balance of the 
     consolidated government under this paragraph, the entire 
     balance shall be considered to have been an urban county.
       (c) Reallocation.--
       (1) In general.--Except as provided in paragraph (2), any 
     amounts allocated to a metropolitan city or an urban county 
     pursuant to the preceding provisions of this section that are 
     not received by the city or county for a fiscal year because 
     of failure to meet the requirements of subsections (a) and 
     (b) of section 5, or that otherwise became available, shall 
     be reallocated in the succeeding fiscal year to the other 
     metropolitan cities and urban counties in the same 
     metropolitan area that certify to the satisfaction of the 
     Attorney General that they would be adversely affected by the 
     loss of such amounts from the metropolitan area. The amount 
     of the share of funds reallocated under this paragraph for 
     any metropolitan city or urban county shall bear the same 
     ratio to the total of such reallocated funds in the 
     metropolitan area as the amount of funds awarded to the city 
     or county for the fiscal year in which the reallocated funds 
     become available bears to the total amount of funds awarded 
     to all metropolitan cities and urban counties in the same 
     metropolitan area for that fiscal year.
       (2) Transfer.--Notwithstanding the provisions of paragraph 
     (1), the Attorney General may upon request transfer 
     responsibility to any metropolitan city for the 
     administration of any amounts received, but not obligated, by 
     the urban county in which such city is located if--
       (A) such city was an included unit of general local 
     government in such county prior

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     to the qualification of such city as a metropolitan city;
       (B) such amounts were designated and received by such 
     county for use in such city prior to the qualification of 
     such city as a metropolitan city; and
       (C) such city and county agree to such transfer of 
     responsibility for the administration of such amounts.
       (d) Allocation to States on Behalf of Non-qualifying 
     Communities.--
       (1) In general.--Of the amount approved in an appropriation 
     Act under section 4 that remains after allocations pursuant 
     to paragraphs (1) and (2) of subsection (a), 30 percent shall 
     be allocated among the States for use in nonqualifying areas. 
     The allocation for each State shall be based on the 
     population of that State, factoring in the population of 
     qualifying communities in that State, and the population of 
     qualifying communities of all States. The Attorney General 
     shall, in order to compensate for the discrepancy between the 
     total of the amounts to be allocated under this paragraph and 
     the total of the amounts available under such paragraph, make 
     a pro rata reduction of each amount allocated to the 
     nonqualifying communities in each State under such paragraph 
     so that the nonqualifying communities in each State will 
     receive an amount that represents the same percentage of the 
     total amount available under such paragraph as the percentage 
     which the nonqualifying areas of the same State would have 
     received under such paragraph if the total amount available 
     under such paragraph had equaled the total amount which was 
     allocated under such paragraph.
       (2) Distribution.--(A) Amounts allocated under paragraph 
     (1) shall be distributed to units of general local government 
     located in nonqualifying areas of the State to carry out 
     activities in accordance with the provisions of this Act--
       (i) by a State that has elected, in such manner and at such 
     time as the Attorney General shall prescribe, to distribute 
     such amounts consistent with the statement submitted under 
     section 5(a); or
       (ii) by the Attorney General, in any case described in 
     subparagraph (B), for use by units of general local 
     government in accordance with paragraph (3)(B).
       (B) The Attorney General shall distribute amounts allocated 
     under paragraph (1) if the State has not elected to 
     distribute such amounts.
       (C) To receive and distribute amounts allocated under 
     paragraph (1), the State must certify that it, with respect 
     to units of general local government in nonqualifying areas--
       (i) provides or will provide technical assistance to units 
     of general local government in connection with homeland 
     security initiatives;
       (ii) will not refuse to distribute such amounts to any unit 
     of general local government on the basis of the particular 
     eligible activity selected by such unit of general local 
     government to meet its homeland security objectives, except 
     that this clause may not be considered to prevent a State 
     from establishing priorities in distributing such amounts on 
     the basis of the activities selected; and
       (iii) has consulted with local elected officials from among 
     units of general local government located in nonqualifying 
     areas of that State in determining the method of distribution 
     of funds required by subparagraph (A).
       (D) To receive and distribute amounts allocated under 
     paragraph (1), the State shall certify that each unit of 
     general local government to be distributed funds will be 
     required to identify its homeland security objectives, and 
     the activities to be undertaken to meet such objectives.
       (3) Administration.-- (A) If the State receives and 
     distributes such amounts, it shall be responsible for the 
     administration of funds so distributed. The State shall pay 
     from its own resources all administrative expenses incurred 
     by the State in carrying out its responsibilities under this 
     Act, except that from the amounts received for distribution 
     in nonqualifying areas, the State may deduct an amount to 
     cover such expenses and its administrative expenses not to 
     exceed the sum of $150,000 plus 50 percent of any such 
     expenses under this Act in excess of $150,000. Amounts 
     deducted in excess of $150,000 shall not exceed 2 percent of 
     the amount so received.
       (B) If the Attorney General distributes such amounts, the 
     distribution shall be made in accordance with determinations 
     of the Attorney General pursuant to statements submitted and 
     the other requirements of section 5 (other than subsection 
     (c)) and in accordance with regulations and procedures 
     prescribed by the Attorney General.
       (C) Any amounts allocated for use in a State under 
     paragraph (1) that are not received by the State for any 
     fiscal year because of failure to meet the requirements of 
     subsection (a) or (b) of section 5 shall be added to amounts 
     allocated to all States under paragraph (1) for the 
     succeeding fiscal year.
       (D) Any amounts allocated for use in a State under 
     paragraph (1) that become available as a result of the 
     closeout of a grant made by the Attorney General under this 
     section in nonqualifying areas of the State shall be added to 
     amounts allocated to the State under paragraph (1) for the 
     fiscal year in which the amounts become so available.
       (4) Single unit.--Any combination of units of general local 
     governments may not be required to obtain recognition by the 
     Attorney General pursuant to section 3(2) to be treated as a 
     single unit of general local government for purposes of this 
     subsection.
       (5) Deduction.--From the amounts received under paragraph 
     (1) for distribution in nonqualifying areas, the State may 
     deduct an amount, not to exceed 1 percent of the amount so 
     received, to provide technical assistance to local 
     governments.
       (6) Applicability.--Any activities conducted with amounts 
     received by a unit of general local government under this 
     subsection shall be subject to the applicable provisions of 
     this Act and other Federal law in the same manner and to the 
     same extent as activities conducted with amounts received by 
     a unit of general local government under subsection (a).
       (e) Qualifications and Determinations.--The Attorney 
     General may fix such qualification or submission dates as he 
     determines are necessary to permit the computations and 
     determinations required by this section to be made in a 
     timely manner, and all such computations and determinations 
     shall be final and conclusive.
       (f) Pro Rata Reduction and Increase.--If the total amount 
     available for distribution in any fiscal year to metropolitan 
     cities and urban counties under this section is insufficient 
     to provide the amounts to which metropolitan cities and urban 
     counties would be entitled under subsection (b), and funds 
     are not otherwise appropriated to meet the deficiency, the 
     Attorney General shall meet the deficiency through a pro rata 
     reduction of all amounts determined under subsection (b). If 
     the total amount available for distribution in any fiscal 
     year to metropolitan cities and urban counties under this 
     section exceeds the amounts to which metropolitan cities and 
     urban counties would be entitled under subsection (b), the 
     Attorney General shall distribute the excess through a pro 
     rata increase of all amounts determined under subsection (b).

     SEC. 8. NONDISCRIMINATION IN PROGRAMS AND ACTIVITIES.

       No person in the United States shall on the ground of race, 
     color, national origin, religion, or sex be excluded from 
     participation in, be denied the benefits of, or be subjected 
     to discrimination under any program or activity funded in 
     whole or in part with funds made available under this Act. 
     Any prohibition against discrimination on the basis of age 
     under the Age Discrimination Act of 1975 (42 U.S.C. 6101 et 
     seq.) or with respect to an otherwise qualified handicapped 
     individual as provided in section 504 of the Rehabilitation 
     Act of 1973 (29 U.S.C. 794) shall also apply to any such 
     program or activity.

     SEC. 9. REMEDIES FOR NONCOMPLIANCE WITH REQUIREMENTS.

       If the Attorney General finds after reasonable notice and 
     opportunity for hearing that a recipient of assistance under 
     this Act has failed to comply substantially with any 
     provision of this Act, the Attorney General, until he is 
     satisfied that there is no longer any such failure to comply, 
     shall--
       (1) terminate payments to the recipient under this Act;
       (2) reduce payments to the recipient under this Act by an 
     amount equal to the amount of such payments which were not 
     expended in accordance with this Act; or
       (3) limit the availability of payments under this Act to 
     programs, projects, or activities not affected by such 
     failure to comply.

     SEC. 10. REPORTING REQUIREMENTS.

       (a) In General.--Not later than 180 days after the close of 
     each fiscal year in which assistance under this Act is 
     furnished, the Attorney General shall submit to Congress a 
     report which shall contain--
       (1) a description of the progress made in accomplishing the 
     objectives of this Act;
       (2) a summary of the use of such funds during the preceding 
     fiscal year; and
       (3) a description of the activities carried out under 
     section 7.
       (b) Reports to the Attorney General.--The Attorney General 
     is authorized to require recipients of assistance under this 
     Act to submit to him such reports and other information as 
     may be necessary in order for the Attorney General to make 
     the report required by subsection (a).

     SEC. 11. CONSULTATION BY ATTORNEY GENERAL.

       In carrying out the provisions of this Act including the 
     issuance of regulations, the Attorney General shall consult 
     with the Office of Homeland Security and other Federal 
     departments and agencies administering Federal grant-in-aid 
     programs.

     SEC. 12. INTERSTATE AGREEMENTS OR COMPACTS; PURPOSES.

       The consent of the Congress is hereby given to any two or 
     more States to enter into agreements or compacts, not in 
     conflict with any law of the United States, for cooperative 
     effort and mutual assistance in support of homeland security 
     planning and programs carried out under this Act as they 
     pertain to interstate areas and to localities within such 
     States, and to establish such agencies, joint or otherwise, 
     as they may deem desirable for making such agreements and 
     compacts effective.

     SEC. 13. MATCHING REQUIREMENTS; SUSPENSION OF REQUIREMENTS 
                   FOR ECONOMICALLY DISTRESSED AREAS.

       (a) Requirement.--Grant recipients shall contribute from 
     funds, other than those received under this Act, 10 percent 
     of the total funds received under this Act. Such funds shall 
     be used in accordance with the grantee's statement of 
     homeland security objectives.

[[Page S12106]]

       (b) Economic Distress.--Grant recipients that are deemed 
     economically distressed shall be waived from the matching 
     requirement set forth in this section.
                                 ______