[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

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




               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

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

 
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

                                _______
                                

               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.