[House Report 111-663]
[From the U.S. Government Publishing Office]


111th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     111-663

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



 
           HOMELAND SECURITY GRANT MANAGEMENT IMPROVEMENT ACT

                                _______
                                

 November 30, 2010.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

 Mr. Thompson of Mississippi, from the Committee on Homeland Security, 
                        submitted the following

                              R E P O R T

                        [To accompany H.R. 5562]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Homeland Security, to whom was referred 
the bill (H.R. 5562) to amend the Homeland Security Act of 2002 
to prohibit requiring the use of a specified percentage of a 
grant under the Urban Area Security Initiative and State 
Homeland Security Grant Program for specific purposes, and for 
other purposes, having considered the same, report favorably 
thereon without amendment and recommend that the bill do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     2
Background and Need for Legislation..............................     2
Hearings.........................................................     4
Committee Consideration..........................................     5
Committee Votes..................................................     5
Committee Oversight Findings.....................................     5
New Budget Authority, Entitlement Authority, and Tax Expenditures     5
Congressional Budget Office Estimate.............................     5
Statement of General Performance Goals and Objectives............     6
Congressional Earmarks, Limited Tax Benefits, and Limited Tariff 
  Benefits.......................................................     6
Federal Mandates Statement.......................................     6
Advisory Committee Statement.....................................     6
Constitutional Authority Statement...............................     6
Applicability to Legislative Branch..............................     7
Section-by-Section Analysis of the Legislation...................     7
Changes in Existing Law Made by the Bill, as Reported............     7

                          Purpose and Summary

    The purpose of H.R. 5562 is to amend the Homeland Security 
Act of 2002 to prohibit requiring the use of a specified 
percentage of a grant under the Urban Area Security Initiative 
and State Homeland Security Grant Program for specific 
purposes, and for other purposes.

                  Background and Need for Legislation

    The Homeland Security Grant Program (HSGP) is a primary 
funding mechanism for building and sustaining National 
preparedness capabilities through supporting State and local 
government efforts to address the risks of terrorism. The HSGP 
is comprised of five interconnected grant programs: State 
Homeland Security Program (SHSP), Urban Areas Security 
Initiative (UASI), Operation Stonegarden (OPSG), Metropolitan 
Medical Response System (MMRS), and Citizen Corps Program 
(CCP). Together, these grants fund a range of preparedness 
activities, including planning, organization, equipment 
purchase, training, exercises, and management and 
administration.
    Section 2008 of the Homeland Security Act of 2002 [6 U.S.C. 
609] describes the purpose of the Homeland Security Grant 
Program (HSGP) as ``achieving target capabilities related to 
preventing, preparing for, protecting against, and responding 
to acts of terrorism, consistent with a State homeland security 
plan and relevant local, tribal, and regional homeland security 
plans.'' The Federal Emergency Management Agency (FEMA) 
requires that each State_as well as each urban area receiving 
Urban Areas Security Initiative homeland security funding_
develop a homeland security strategy that identifies the target 
capabilities they want to build and sustain using HSGP funding.
    In the past, FEMA has required State and local 
jurisdictions to use a percentage of their HSGP award for a 
specific capability even if the grant recipients have not 
identified it as a target capability that they need to build 
with Federal funding. For example, in 2008, FEMA required all 
HSGP grant recipients to spend 25 percent of their awards on 
improvised explosive device (IED) prevention and protection 
activities irrespective of whether a State or urban area was 
facing an IED threat or had previously spent other funds on 
such capabilities. The Committee believes that State and local 
governments, with guidance from Federal authorities, are in the 
best position to understand which homeland security target 
capabilities need additional resources. Seeking to prevent the 
imposition of blanket mandates, Representative Laura Richardson 
(D-CA), the Chairwoman of the Subcommittee on Emergency 
Communications, Preparedness, and Response, introduced H.R. 
5562 to prohibit FEMA from requiring HSGP grant recipients to 
spend a specific percentage of their awards on non-statutory 
set-asides. Statutory directives, such as the 25 percent for 
the Law Enforcement Terrorism Prevention Program required under 
Section 2006 of the Homeland Security Act of 2002 (6 U.S.C. 
607), are unaffected.
    Another aspect of the HSGP program that may need reform 
relates to management and administration of these grant funds 
on the State and local level. Specifically, prior to 2007, FEMA 
permitted States and local governments to retain up to 5 
percent of their grant award to manage and administer (M&A) the 
program. Eligible M&A expenses include managing the entire 3 
year life-cycle of the grant from procurement to close-out, 
financial and programmatic monitoring, technical assistance to 
subgrantees, and completing FEMA data-calls and requirements. 
Pursuant to the Implementing Recommendations of the 9/11 
Commission Act of 2007, the cap on eligible M&A expenses was 
lowered to not more than 3 percent of the award (Section 
2008(a)(1)/6 U.S.C. 609(a)(11)).
    In recent years, grantees have indicated that as a result 
of the change in the cap for M&A expense they do not have the 
resources to properly manage and administer HSGP. The National 
Governors Association, in testimony submitted at the 
Subcommittee on Emergency Communications, Preparedness, and 
Response hearing on October 27, 2009, stated that:
        ``The Implementing Recommendations of the 9/11 
        Commission Act of 2007 (P.L. 110-53) limited M&A to 
        only three percent of the grant award, which has put a 
        strain on the ability of states to fulfill their 
        management and oversight responsibilities and meet the 
        increasing reporting requirements of the grant 
        programs. The often short deadlines associated with the 
        grant programs further exacerbate the challenges facing 
        State Administrative Agencies and highlight the need 
        for additional resources. Given the increased emphasis 
        on accountability and to ensure the effective use of 
        grant funding, allowing five cents of every dollar to 
        support the planning, management and oversight of the 
        funds is a wise investment.''
    Further, in FEMA's January 2009 report, ``Analysis of State 
and Local Officials' Views on Federal Preparedness 
Requirements,'' State and local grant recipients suggested the 
M&A cap should be raised to 10 percent, the same level that 
exists in many Federal criminal justice grants to localities.
    To ascertain whether the M&A cap warrants adjustment, H.R. 
5562 directs FEMA, in consultation with the National Advisory 
Council, to evaluate whether State and local governments have 
the resources necessary to optimally manage their HSGP awards. 
Specifically, the bill would require FEMA to evaluate the 
historical trends in M&A expenditures and determine whether the 
percentage authorized under the Implementing Recommendations of 
the 9/11 Commission Act is adequate to ensure proper oversight, 
management, and administration of grant awards.
    Over the years, State and local governments have repeatedly 
expressed concern about the way that FEMA issues guidance for 
the program. According to FEMA's 2009 ``Analysis of State and 
Local Officials Views on Federal Preparedness Requirements,'' a 
majority of State and local governments expressed concern with 
the HSGP grant guidance and application process, including:
   The grant guidance is not as simple and understandable as 
        it should be to effectively support State efforts to 
        enhance levels of capability;
   The high volume of year-to-year changes in the grant 
        guidance limits a State's ability to ``conduct 
        effective, goal-oriented, multi-year planning;'' and
   FEMA regularly issues the grant guidance late or over the 
        holidays, making it harder for State and local 
        governments to submit quality applications within the 
        required timeframe.
    To streamline the guidance and application procedures for 
HSGP, H.R. 5562 requires FEMA, in consultation with the 
Department of Homeland Security's Chief Financial Officer, to 
evaluate the feasibility of issuing multi-year program guidance 
for HSGP.
    Multi-year guidance could help State and local governments_
who are the front-line of keeping our communities secure_
establish better long-range homeland security planning and 
ensure that HSGP funding supports only the most effective 
projects.

                                Hearings

    No legislative hearings were held on H.R. 5562.
    However, on October 27, 2009, the Subcommittee on Emergency 
Communications, Preparedness, and Response held a hearing 
entitled, ``Preparedness: What Has $29 Billion in Homeland 
Security Grants Bought and How Do We Know?'' The Subcommittee 
received testimony on H.R. 3837 and FEMA's new equipment 
maintenance policy for the Homeland Security Grant Program from 
Hon. Timothy Manning, Deputy Administrator for National 
Preparedness, Federal Emergency Management Agency, Department 
of Homeland Security; Ms. Kathy Crandall, Director of Homeland 
Security and Justice Programs Franklin County, Ohio; and Mr. 
David Maxwell, Director, Arkansas Department of Emergency 
Management. In addition, statements from the National Emergency 
Management Association and the National Governors Association 
were entered into the record. The National Governors 
Association statement emphasized the need for FEMA to provide 
States with greater flexibility to target federal homeland 
security grants to their most pressing needs, and encouraged 
Congress to provide grantees with additional funding for grant 
management and administrative purposes.
    Further, on June 29, 2010, the Subcommittee on Emergency 
Communities, Preparedness, and Response held a hearing 
entitled, ``The Future of FEMA's Grant Programs Directorate.'' 
The subcommittee received testimony from Hon. Elizabeth Harman, 
Assistant Administration for Grant Programs Directorate, 
Federal Emergency Management Agency, U.S. Department of 
Homeland Security; Ms. Anne Richards, Assistant Inspector 
General for Audits, Office of the Inspector General, U.S. 
Department of Homeland Security; Chief Alan Patalano, Fire 
Chief, City of Long Beach, California; and Ms. MaryAnn Tierney, 
Managing Deputy Director, Office of Emergency Management, City 
of Philadelphia, Pennsylvania. Chief Patalano and Ms. Tierney 
reiterated the need for Congress and FEMA to reevaluate the 3 
percent statutory limit on management and administrative 
activities for the Homeland Security Grant Program. Ms. 
Richards, testifying on the results of an Inspector General 
Audit, ``Efficacy of DHS Grant Programs,'' suggested that FEMA 
could take steps to streamline grant guidance.

                        Committee Consideration

    The Committee met on June 23, 2010, to consider H.R. 5562, 
and ordered the measure to be reported to the House with a 
favorable recommendation, without amendment, by voice vote.

                            Committee Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the recorded 
votes on the motion to report legislation and amendments 
thereto.
    No votes were requested during consideration of H.R. 5562.

                      Committee Oversight Findings

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee has held oversight 
hearings and made findings that are reflected in this report.

   New Budget Authority, Entitlement Authority, and Tax Expenditures

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee finds that H.R. 
5562, the Homeland Security Grant Management Improvement Act, 
would result in no new or increased budget authority, 
entitlement authority, or tax expenditures or revenues.

                  Congressional Budget Office Estimate

    The Committee adopts as its own the cost estimate prepared 
by the Director of the Congressional Budget Office pursuant to 
section 402 of the Congressional Budget Act of 1974.

                                                      July 1, 2010.
Hon. Bennie G. Thompson,
Chairman, Committee on Homeland Security,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 5562, the Homeland 
Security Grant Management Improvement Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Daniel 
Hoople.
            Sincerely,
                                              Douglas W. Elmendorf.
    Enclosure.

H.R. 5562--Homeland Security Grant Management Improvement Act

    H.R. 5562 would prohibit the Federal Emergency Management 
Agency (FEMA) from requiring that a specific proportion of 
grant funds from the State Homeland Security Program (SHSP) and 
Urban Area Security Initiative (UASI) be spent on any 
particular authorized activity. The legislation also would 
require FEMA to conduct two studies related to the SHSP and 
UASI. CBO estimates that implementing H.R. 5562 would have no 
significant cost. Enacting this legislation would not affect 
direct spending or revenues; therefore, pay-as-you-go 
procedures would not apply.
    H.R. 5562 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would impose no costs on state, local, or tribal governments.
    The SHSP provides grants to states to prepare for, protect 
against, and respond to acts of terrorism and other 
catastrophic events. The UASI provides grants to high-threat, 
high-density urban areas for similar purposes. H.R. 5562 would 
prohibit FEMA from requiring that state and local governments 
use a percentage of SHSP and UASI grant funds on a particular 
authorized activity, unless otherwise directed by law. The 
legislation would not affect the authority of FEMA to restrict 
funding for grant administration. CBO estimates that 
implementing this provision would not significantly alter the 
expenditures of the grant programs.
    H.R. 5562 also would require FEMA to examine the use of 
SHSP and UASI funds for administrative expenses and the 
feasibility of issuing multiyear program guidance for each 
program. The agency would report to the Congress on its 
findings within 180 days of enactment. CBO estimates that 
undertaking those studies would have an insignificant cost in 
2011. Such spending would be subject to the availability of 
appropriated funds.
    The CBO staff contact for this estimate is Daniel Hoople. 
The estimate was approved by Peter H. Fontaine, Assistant 
Director for Budget Analysis.

         Statement of General Performance Goals and Objectives

    Pursuant to clause 3(c)(4) of rule XIII of the Rules of the 
House of Representatives, H.R. 3837 contains the following 
general performance goals and objectives, including outcome 
related goals and objectives authorized.
    H.R. 5562 amends the Homeland Security Act of 2002 in order 
to improve the Federal Emergency Management Agency and State 
and local governments' management of the Homeland Security 
Grant Program.

   Congressional Earmarks, Limited Tax Benefits, and Limited Tariff 
                                Benefits

    In compliance with rule XXI of the Rules of the House of 
Representatives, this bill, as reported, contains no 
congressional earmarks, limited tax benefits, or limited tariff 
benefits as defined in clause 9(e), 9(f), or 9(g) of rule XXI.

                       Federal Mandates Statement

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                   Constitutional Authority Statement

    Pursuant to clause 3(d)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee finds that the 
Constitutional authority for this legislation is provided in 
Article I, section 8, clause 1, which grants Congress the power 
to provide for the common Defense of the United States.

                  Applicability to Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

             Section-by-Section Analysis of the Legislation


Section 1.  Short title

    The short title of this bill is the ``Homeland Security 
Grant Management Improvement Act.''

Section 2.  Prohibition on requiring use of grants under Urban Area 
        Security Initiative and State Homeland Security Grant Program 
        for Specific Purposes

    This section would prohibit the Administrator of the 
Federal Emergency Management Agency (FEMA) from requiring 
recipients of Homeland Security Grant Program awards--
authorized under Sections 2003 and 2004 of the Homeland 
Security Act of 2002 (6 U.S.C. 604 and 6 U.S.C. 605 
respectively)--to spend a specific percentage of their award on 
non-statutory set-asides.

Section 3.  Study of percentage of grant funds authorized for 
        administration expenses

    This section would require the FEMA Administrator, in 
consultation with the National Advisory Council, to (1) study 
the historic management and administration expenditures of 
Homeland Security Grant Program recipients; and (2) evaluate 
and determine whether the current cap on Management and 
Administration (M&A) expenses is adequate to ensure proper 
oversight, management, and administration of the grant awards. 
The FEMA Administrator is required to submit the evaluation to 
Congress not later than 180 days after enactment of the Act to 
inform legislative adjustments to ensure proper oversight, 
management, and administration of grant awards.

Section 4.  Study of feasibility of multi-year grant program guidance

    This section requires the FEMA Administrator, in 
consultation with the National Advisory Council and the 
Department of Homeland Security's Chief Financial Officer, to 
evaluate the feasibility of issuing multi-year program guidance 
for the Homeland Security Grant Program and to report back to 
Congress on the findings of the feasibility study not later 
than 180 days after enactment of the Act.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (new matter is 
printed in italic and existing law in which no change is 
proposed is shown in roman):

HOMELAND SECURITY ACT OF 2002

           *       *       *       *       *       *       *



TITLE XX--HOMELAND SECURITY GRANTS

           *       *       *       *       *       *       *


Subtitle A--Grants to States and High-Risk Urban Areas

           *       *       *       *       *       *       *


SEC. 2008. USE OF FUNDS.

  (a) * * *
  (b) Limitations on Use of Funds.--
          (1) * * *

           *       *       *       *       *       *       *

          (3) Limitations on discretion.--
                  (A) * * *

           *       *       *       *       *       *       *

                  (C) Prohibition on requiring use of grants 
                for specific purposes.--Unless required by 
                statute, the Administrator may not require the 
                recipient of a grant under section 2003 or 2004 
                to use a specific percentage of the amount of 
                the grant for any one of the permitted uses 
                described in paragraphs (1) through (10) or 
                (12) through (13) of section 2008(a).

           *       *       *       *       *       *       *


                                  
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