Senate Report 108-420 - TO ESTABLISH AN INTERGOVERNMENTAL GRANT PROGRAM TO IDENTIFY AND DEVELOP HOMELAND SECURITY INFORMATION, EQUIPMENT, CAPABILITIES, TECHNOLOGIES, AND SERVICES TO FURTHER THE HOMELAND SECURITY NEEDS OF THE UNITED STATES AND TO ADDRESS THE HOMELAND SECURITY NEEDS OF FEDERAL, STATE, AND LOCAL GOVERNMENTS

[Senate Report 108-420]
[From the U.S. Government Publishing Office]

108th Congress Report
SENATE
2d Session 108-420
_______________________________________________________________________

Calendar No. 818

TO ESTABLISH AN INTERGOVERNMENTAL GRANT PROGRAM TO IDENTIFY AND DEVELOP
HOMELAND SECURITY INFORMATION, EQUIPMENT, CAPABILITIES, TECHNOLOGIES,
AND SERVICES TO FURTHER THE HOMELAND SECURITY NEEDS OF THE UNITED
STATES AND TO ADDRESS THE HOMELAND SECURITY NEEDS OF FEDERAL, STATE,
AND LOCAL GOVERNMENTS

__________

R E P O R T

of the

COMMITTEE ON GOVERNMENTAL AFFAIRS

UNITED STATES SENATE

to accompany

S. 2635

November 20, 2004.--Ordered to be printed

COMMITTEE ON GOVERNMENTAL AFFAIRS

SUSAN M. COLLINS, Maine, Chairman
TED STEVENS, Alaska JOSEPH I. LIEBERMAN, Connecticut
GEORGE V. VOINOVICH, Ohio CARL LEVIN, Michigan
NORM COLEMAN, Minnesota DANIEL K AKAKA, Hawaii
ARLEN SPECTER, Pennsylvania RICHARD J. DURBIN, Illinois
ROBERT F. BENNETT, Utah THOMAS R. CARPER, Delaware
PETER G. FITZGERALD, Illinois MARK DAYTON, Minnesota
JOHN E. SUNUNU, New Hampshire FRANK LAUTENBERG, New Jersey
RICHARD C. SHELBY, Alabama MARK PRYOR, Arkansas
Michael D. Bopp, Staff Director and Chief Counsel
Jane Alonso, Professional Staff Member
Joyce A. Rechtschaffen, Minority Staff Director and Counsel
Holly A. Idelson, Minority Counsel
Arty B. Newhouse, Chief Clerk

Calendar No. 818
108th Congress Report
SENATE
2d Session 108-420

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

_______

November 20, 2004.--Ordered to be printed

_______

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

R E P O R T

[To accompany S. 2635]

The Committee on Governmental Affairs, to whom was referred
the bill (S. 2635) to establish an intergovernmental grant
program to identify and develop homeland security information,
equipment, capabilities, technologies, and services to further
the homeland security needs of the United States and to address
the homeland security needs of Federal, State, and local
governments, having considered the same reports favorably
thereon, with an amendment, and recommends that the bill do
pass.

CONTENTS

Page
I. Purpose and Summary..............................................1
II. Background.......................................................2
III. Legislative History..............................................2
IV. Section-by-Section Analysis......................................3
V. Estimated Cost of Legislation....................................4
VI. Evaluation of Regulatory Impact..................................6
VII. Changes in Existing Law..........................................6

I. PURPOSE AND SUMMARY

The purpose of S. 2635 is to establish a grant program to
promote joint ventures to identify and develop homeland
security information, equipment, capabilities, technologies,
and services to further the homeland security needs of Federal,
State, and local governments.

II. BACKGROUND

There are few nations with more experience confronting the
threat of terrorism than Israel. While terrorism within U.S.
borders is relatively new to the United States, Israelis have
confronted this danger for decades. Israel's long history of
fighting terrorism has spurred Israeli businesses, researchers
and academics to develop highly sophisticated homeland security
technologies, particularly with respect to border integrity,
transportation security, and first responder equipment.
Examples include low-tech solutions such as the driver-
controlled turnstiles now being installed on Tel Aviv buses,
and the high-tech facial-recognition software in use at
airports around the world. As the United States pursues new
approaches to protecting our nation, it makes sense that the
U.S. leverage Israel's extensive expertise in this area.
There are a number of highly successful public-private
partnerships between the United States and Israel that lay the
foundation for this bill. The Bi-National Industrial Research
and Development Foundation (or ``BIRD'' fund) has funded
industrial research and development partnerships between U.S.
and Israeli businesses for the past 27 years. BIRD was
authorized and funded by Congress in 1977. BIRD has provided
investments of $180 million in 600 projects that have
contributed to U.S. economic growth. In addition, a pilot
project administered by BIRD, the Trilateral Industrial
Development (TRIDE) program, supports joint ventures between
for-profit firms in the U.S., Israel, and Jordan. TRIDE grants
promote research and development, manufacturing, and marketing
of new products and technologies.
The Binational Agricultural Research and Development Fund
(or ``BARD'' fund) provides educational institutions with grant
opportunities to develop new technologies in drip irrigation,
pesticides, fish farming, livestock, poultry, disease control
and farm equipment. BARD was authorized and funded by Congress
in 1978.
The United States-Israel Binational Science Foundation
awards grants that promote research cooperation between
scientists from the United States and Israel. The Foundation
documented no less than 75 new discoveries that probably would
not have been possible without foundation-supported
collaboration. These ventures produce information and
technology that benefit broader U.S. economic and security
interests.
The U.S.-Israel Homeland Security Grant Program established
by this bill will provide funds not only to for-profit
ventures, but also to educational and non-profit,
nongovernmental institutions and between governmental entities.

III. LEGISLATIVE HISTORY

S. 2635 was introduced on July 8, 2004 by Senators Collins
and Lieberman and referred to the Committee on Governmental
Affairs. On July 21, 2004, the Committee considered S. 2635. An
amendment was offered by Senators Collins and Lieberman that
improved upon an earlier version of the bill. The earlier
version of the bill would have established a program to provide
funds to eligible joint homeland security ventures to develop
new or modify existing homeland security information,
equipment, capabilities, technologies, and services. The
substitute amendment specifically focuses on joint ventures
between the United States and Israel. The substitute amendment
was agreed to and the Committee ordered the bill, as amended,
reported by voice vote.

IV. SECTION-BY-SECTION ANALYSIS

Section 1 sets forth findings regarding Israel's extensive
experience in homeland security matters, the history of
cooperation between the United States and Israel in developing
mutually beneficial technologies, and the successes of grant
programs such as the BIRD Foundation in the development of
technologies and services applicable to the homeland security
of the United States.
Section 2(a) establishes a program between the United
States and Israel to identify, develop, or modify existing or
near term homeland security information, equipment,
capabilities, technologies, and services to further the
homeland security of the United States and to address the
homeland security needs of federal, state, and local
governments.
Section 2(b) directs the Secretary of Homeland Security to
conduct a needs assessment of federal, state, and local
governments and first responders to identify: the homeland
security needs of these governments and first responders; areas
where specific homeland security information, equipment,
capabilities, technologies, and services could address those
needs; and near term and existing homeland security
information, equipment, capabilities, technologies, and
services developed within the United States and Israel. This
section also directs the Secretary of Homeland Security to
provide grants, directly or through a non-profit,
nongovernmental organization, to eligible applicants to
develop, manufacture, sell, or otherwise provide homeland
security information, equipment, capabilities, technologies,
and services to address the needs identified by the needs
assessment.
Section 2(c) specifies that an applicant is eligible to
receive a grant under the program established by this bill if
the applicant addresses one or more needs of federal, state,
and local governments and first responders, as identified
through the needs assessment conducted under section 2(b) or
otherwise identified by the Secretary of Homeland Security. The
applicant must also be a joint venture between a for profit
business entity, academic institution or non-profit entity in
the United States and a for profit business entity, academic
institution or non-profit entity in Israel. The applicant could
also be a joint ventures between the government of the United
States and Israel. Applicants must also meet any other
qualification that the Secretary may require.
Section 2(d) specifies that each eligible applicant seeking
a grant must submit to the Secretary of Homeland Security, or
to the head of a nonprofit, nongovernmental organization
authorized by the Secretary to award the grants, an application
that contains: (1) the identification of the joint venture
applying for the grant and the identity of each entity
participating in the joint venture; (2) a description of the
product or service with applications related to homeland
security that the applicant is developing, manufacturing, or
selling; (3) the development, manufacturing, sales, or other
activities related to such product or service that the
applicant is seeking to carry out with grant funds; (4) a
detailed capital budget for such products or service, including
the manner in which the grant funds will be allocated and
expended; and (5) other information that the Secretary of
Homeland Security may require.
Section 2(e) directs the Secretary of Homeland Security to
establish an advisory board to monitor how grants made under
the program are awarded, if the grants are awarded through a
nonprofit, nongovernmental body. The advisory board must be
comprised of an appropriate representative of the government of
the United States, as designated by the Secretary of Homeland
Security, and an official designated by the Government of
Israel.
Section 2(f) authorizes the Secretary of Homeland Security
to impose a condition that the Government of Israel contribute
an amount that the Secretary determines appropriate towards a
project to be funded by a grant before the disbursement of the
proceeds of a grant. The contribution sought towards the
project from the government of Israel may not be in an amount
in excess of the amount of the grant awarded.
Section 2(g) directs the Secretary of Homeland Security to
give priority to those applicants who propose to market the
homeland security information, equipment, capabilities,
technologies, and services developed or modified with grant
funds to federal, state, and local governments and first
responders.
Section 2(h) authorizes the Secretary of Homeland Security
to require a grant recipient to make available non-federal
matching contributions in an amount equal to up to 50 percent
of the total proposed cost of the project for which the grant
was awarded.
Section 2(i) authorizes the Secretary of Homeland Security,
as appropriate, to require a grant recipient to repay the
Secretary, or the nonprofit nonprofit, nongovernmental
organization authorized by the Secretary, the amount of the
grant, interest at an appropriate rate, and such charges for
administration of the grant as the Secretary determines
appropriate. The Secretary may not require repayment that is
more than 150 percent of the amount of the grant, adjusted for
inflation.
Section 2(j) authorizes $25 million for fiscal year 2005,
and such sums as may be necessary for fiscal year 2006, to
carry out the grant program created by this legislation.

V. ESTIMATED COST OF LEGISLATION

S. 2635--A bill to establish an intergovernmental grant program to
identify and develop homeland security information, equipment,
capabilities, technologies, and services to further the
homeland security of the United States and to address the
homeland security needs of federal, state, and local
governments

Summary: S. 2635 would establish a new grant program
between the United States and Israel within the Department of
Homeland Security. The bill would require the Secretary of
Homeland Security to conduct an assessment of the needs of
federal, state, and local governments for security information,
equipment, capabilities, technology, or services and to make
grants to joint U.S. and Israeli ventures to develop, and
manufacture, products and services for those needs. The bill
would authorize the appropriation of $25 million in 2005 and
amounts necessary for such grants in 2006. CBO estimates that
implementing the program would cost $47 million over the 2005-
2009 period, assuming the appropriation of the necessary
amounts. Enacting the bill would not effect direct spending on
receipts.
The Secretary could require the Government of Israel to
contribute to any grants made under the bill. Any joint venture
between U.S. and Israeli entities would be eligible to apply
for the grants, including businesses, academic institutions, or
nonprofit organizations. The Secretary could require grant
recipients to contribute up to 50 percent of the total proposed
cost of any project. If appropriate, the Secretary could
require grant amounts to be repaid to the government, including
interest costs.
S. 2635 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA).
Public academic institutions may benefit from grants for
research and development of homeland security technology; any
costs to those institutions would be incurred voluntarily.
Estimated cost to the Federal Government: The estimated
budgetary impact of S. 2635 is shown in the following table.
The costs of this legislation fall within budget function 370
(commerce).

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

Estimated Authorization Level............................ 25 26 0 0 0
Estimated Outlays........................................ 0 8 25 11 3
----------------------------------------------------------------------------------------------------------------

Basis of estimate: For this estimate, CBO assumes the bill
will be enacted near the end of 2004, that the $25 million
authorized for 2005 will be appropriated near the start of the
fiscal year, and that the same amount (adjusted for anticipated
inflation) will be appropriated in 2006.
The bill would require Israel to provide matching funds for
grants under the new program. According to information from the
Department of State, the United States has not had any
discussions with Israel on matching funds. CBO expects that
having such discussions and reaching an agreement on funding
would delay the start of operations until 2006. Once the
program is established, CBO assumes spending would follow a
pattern similar to other cost shared partnership programs
operated by the National Institute of Standards and Technology.
If the Secretary of Homeland Security uses a
nongovernmental organization to manage the grant program, the
bill would require him to establish an advisory board to
monitor how the grants are awarded. Based on the cost of
similar advisory boards, CBO estimates the cost to administer
the program would be less than $100,000 each year.
Finally, the bill would authorize the Secretary to require
recipients to repay the grant if appropriate. Other programs
with similar repayment authority seldom use it and CBO
estimates that collections under this provision, if any, would
be insignificant.
Intergovernmental and private-sector impact: S. 2635
contains no intergovernmental or private-sector mandates as
defined in UMRA. Public academic institutions may benefit from
grants for research and development of homeland security
technology; any costs to those institutions would be incurred
voluntarily.
Estimate prepared by: Federal Costs: Joseph C. Whitehill;
Impact on State, Local, and Tribal Governments: Melissa
Merrell; and Impact on the Private Sector: Paige Piper/Bach.
Estimate approved by: Peter H. Fontaine, Deputy 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 are no intergovernmental or private-sector mandates as
defined in the Unfunded Mandates Reform Act and no costs on
state, local, or tribal governments. The legislation contains
no other regulatory impact.

VII. CHANGES IN EXISTING LAW

The enactment of S. 2635 results in no changes to existing
law.