Order Code RL33050
CRS Report for Congress
Received through the CRS Web
Risk-Based Funding in Homeland Security Grant
Legislation: Analysis of Issues for the 109th
Congress
August 29, 2005
Shawn Reese
Analyst in American National Government
Government and Finance Division
Congressional Research Service ˜ The Library of Congress
Risk-Based Funding in Homeland Security Grant
Legislation: Analysis of Issues for the 109th Congress
Summary
Conferees are expected to meet in late August or early September to resolve
differences between the House and Senate versions of H.R. 2360, making
appropriations for the Department of Homeland Security (DHS) for the fiscal year
FY2006. The House version would appropriate $2.365 billion for state and local
homeland security assistance programs in FY2006; the Senate version would
appropriate $2.283 billion. The House and Senate also take different approaches to
allocating homeland security grants to states and territories. The House version is
silent on the matter, although another House-passed bill proposes a risk-based
method for allocating grants. The Senate version would provide a base to each state
and territory, with the remainder of appropriations allocated based on risk. This CRS
report does not address House and Senate differences in the amounts that would be
appropriated for homeland security grants; it addresses selected policy questions
raised by the grant allocation methods proposed in the two chambers.
Since FY2003, DHS has not allocated any federal homeland security assistance
to states and localities based on risk, other than the Urban Area Security Initiative
(UASI) program allocations. In the FY2005 DHS appropriations (P.L. 108-334),
Congress directed DHS’s Office for Domestic Preparedness (ODP) to allocate
funding for the State Homeland Security Grant Program (SHSGP), the Law
Enforcement Terrorism Prevention Program (LETPP), the Emergency Management
Performance Grant Program (EMPG), and Citizen Corps Programs (CCP) in the
same manner as the FY2004 allocations. In the absence of statutory or other
congressional guidance, DHS allocated the remaining FY2005 homeland security
assistance funding in direct proportion to the ratio of each state’s population to the
total national population.
This CRS report addresses the following three policy questions that may
confront the conferees as they consider how homeland security funds are to be
allocated to the states:
! What is the difference between a guaranteed base allocation and a
guaranteed minimum allocation? What is the conceptual difference?
How would the difference affect the amount of money states would
receive?
! What risk factors might be included in a risk-based funding
formula?
! Who should determine the risk factors?
Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Legislative Context . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Current DHS Practice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
9/11 Commission Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
H.R. 1544 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Legislation in the 109th Congress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Grant Allocation Methods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
H.R. 1544 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
H.R. 2360, as Amended and Passed by the Senate . . . . . . . . . . . . . . . . 5
Policy Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Guaranteed Minimum Versus Guaranteed Base . . . . . . . . . . . . . . . . . . . . . . . 6
Risk-Based Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Evaluating Potential Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Authority to Select of Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Appendix A: Potential Risk Factors — A Discussion . . . . . . . . . . . . . . . . . . . . . 12
Threat . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Homeland Security Capability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Population . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Critical Infrastructure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Transportation Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Other Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
List of Tables
Table 1. H.R. 1544 Guaranteed Minimum and Risk-Based Allocations . . . . . . . . 7
Table 2. Senate Passed H.R. 2360 Guaranteed Base and Risk-Based
Allocations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Table 3. Senate Passed H.R. 2360 Guaranteed Base and H.R. 1544
Guaranteed Minimum State Allocations Assuming the FY2005
Appropriation of $2.7 BillionA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Risk-Based Funding in Homeland Security
Grant Legislation: Analysis of Issues for the
109th Congress
Introduction
Conferees are expected to meet in late August or early September to resolve
differences between the House and Senate versions of H.R. 2360, making
appropriations for the Department of Homeland Security (DHS) for the fiscal year
FY2006. The House version would appropriate $2.365 billion for state and local
homeland security assistance programs in FY2006; the Senate version would
appropriate $2.283 billion1. The House and Senate also take different approaches to
allocating homeland security grants to states and territories. The House version is
silent on the matter, although another House-passed bill (H.R. 1544) proposes a risk-
based method for allocating grants. The Senate version would provide a base to each
state and territory, with the remainder of appropriations allocated based on risk. This
CRS report does not address House and Senate differences in the amounts that would
be appropriated for homeland security grants; it addresses selected policy questions
raised by the grant allocation methods proposed in the two chambers.
Legislative Context
The context within which conferees will consider the two versions of H.R. 2360
includes three additional elements — first, concern about current DHS practices in
allocating homeland security assistance grants to states based on arguably minimal
guidance from the USA PATRIOT Act; second, the recommendation of the 9/11
Commission that homeland security assistance supplement state and local resources
based on risk and vulnerability; and third, the provisions of H.R. 1544, passed by the
House on May 12, 2005, which would establish a risk-based method for distributing
grants.
Current DHS Practice. Since FY2003, DHS has allocated funds from only
one of its state and local homeland security assistance programs based on risk — the
1 The House version of H.R. 2360 proposes to appropriate $750 million for the State
Homeland Security Grant Program, $1,215 million for the Urban Area Security Initiative,
and $400 million for the Law Enforcement Terrorism Prevention Program; the Senate
version of H.R. 2360 proposes to appropriate $1,518 million for “state and local assistance
grants,” $365 million for the Targeted Infrastructure Protection Program, and $400 million
for the Law Enforcement Terrorism Prevention Program.
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Urban Area Security Initiative (UASI) program.2 Other grants were allocated based
on a statutorily guaranteed share of available funds or on state population. In
FY2003 and FY2004, DHS’s Office for Domestic Preparedness (ODP) allocated
funds from the other programs3 using on a formula that guaranteed each state and the
District of Columbia a base of 0.75% of total appropriations (0.025% for territories),
with the remainder of total appropriations allocated in proportion to the ratio of the
recipient jurisdiction’s population to the total national population.4 In the FY2005
Department of Homeland Security (DHS) appropriations (P.L. 108-334), Congress
directed ODP to allocate funding for the State Homeland Security Grant Program
(SHSGP), the Law Enforcement Terrorism Prevention Program (LETPP), the
Emergency Management Performance Grant Program (EMPG), and Citizen Corps
Programs (CCP) in the same manner as the FY2004 allocations.5 In the absence of
statutory or other congressional guidance, DHS allocated the remaining FY2005
homeland security assistance funding in direct proportion to the ratio of each state’s
population to the total national population.6
9/11 Commission Recommendation. In August 2004, the National
Commission on Terrorist Attacks Upon the United States (9/11 Commission)
criticized the allocation of federal homeland security assistance and recommended
that the distribution not “remain a program for general revenue sharing.”7 While
acknowledging that “every state and city needs to have some minimum infrastructure
for emergency response,” the 9/11 Commission recommended that state and local
homeland security assistance should “supplement state and local resources based on
the risks or vulnerabilities that merit additional support.” The 9/11 Commission
offered two high-risk, vulnerable cities as examples, saying, “Now, in 2004,
Washington, D.C., and New York City are certainly at the top of any such list.”8
H.R. 1544. This bill would direct DHS to allocate 100% of funds appropriated
for homeland security assistance to states based on risk, and it would establish a
2 The UASI program includes grants to high-threat, high-risk urban areas, port security
grants, rail security grants, intercity bus security grants, trucking industry security grants,
and buffer zone protection program grants.
3 The programs include the State Homeland Security Grant Program, the Law Enforcement
Terrorism Prevention Program, Citizen Corps Programs, and the Emergency Management
Performance Grant Program.
4 P.L. 107-56 (USA PATRIOT Act), Sec. 1014. Sec. 1014 guarantees each state a base of
0.75% of total appropriations for domestic preparedness; however, it is silent on how the
remaining appropriations were to be allocated to states and localities.
5 Ibid.
6 U.S. Department of Homeland Security, Office for Domestic Preparedness, Fiscal Year
2005 Homeland Security Grant Program: Program Guidelines and Application Kit,
(Washington: Nov. 2004), p. 1.
7 National Commission on Terrorist Attacks Upon the United States, The 9/11 Commission
Report (Washington: GPO, July 2004), p. 396.
8 Ibid.
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mechanism for doing so. House conferees are likely to take into account the
provisions of this bill, which the House passed on May 12, 2005.
This CRS report addresses the following three policy questions that may
confront the conferees as they consider how homeland security funds are to be
allocated to the states:
! What is the difference between a guaranteed base allocation and a
guaranteed minimum allocation? What is the conceptual difference?
How would the difference affect the amount of money states would
receive?
! What risk factors might be included in a risk-based funding
formula?
! Who should determine the risk factors?
Legislation in the 109th Congress
H.R. 2360, as passed by the House, is silent on how homeland security grants
are to be allocated. The committee report accompanying the bill, however, states that
until Congress passes a law changing the formula, ODP is to allocate funds to states
based on Section 1014 of the USA PATRIOT Act (P.L. 107-56), with the remainder
of appropriated funds allocated based on risks.9
H.R. 1544 and Senate-passed H.R. 2360 propose to change the distribution
formula that DHS uses in allocating federal homeland security assistance funding to
states and localities. Both bills propose that DHS use risk factors in determining the
allocations, but they differ with regard to amounts to be guaranteed to states and how
DHS would be instructed to allocate the remaining amounts based on risk. Among
the most salient differences are the following:
! H.R. 1544 proposes to allocate total appropriated funds for DHS
homeland security assistance based on risk; but the Senate-passed
version of H.R. 2360 proposes a statutory formula to allocate a base
amount to each state and locality with the remainder of total
appropriated funds based on risk;
! H.R. 1544 proposes to establish a First Responder Grants Board to
review state homeland security plans and to assist the DHS Secretary
in determining state risk-based allocations; but the Senate-passed
version of H.R. 2360 proposes to authorize the risk-based allocations
9 H.Rept. 109-79, available at
[http://www.congress.gov/cgi-lis/cpquery/R?cp109:FLD010:@1(hr079)], visited Aug. 25,
2005. The USA PATRIOT Act sets a base grant for states and the District of Columbia at
0.75% of the appropriated funds.
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to states and localities at the discretion of the DHS Secretary (based
on threats and risks).
Grant Allocation Methods
Discussions of the bills’ formula and other grant allocation provisions follow:
H.R. 1544. This bill proposes to allocate 100% of appropriations for DHS
federal homeland security assistance programs based on the discretion of the DHS
Secretary (based on threat and risk) and in consultation with a First Responder Grants
Board’s evaluation and prioritization of state homeland security applications.10 The
First Responder Grants Board would be established to evaluate and prioritize state
homeland security applications based on the following risk criteria: “the variables of
threat, vulnerability, and consequences with respect to the Nation’s population
(including transient commuting and tourist populations) and critical infrastructure.”11
The bill would guarantee a minimum amount to each state — 0.25% of total
appropriated funds for SHSGP, LETPP, and UASI to states without a significant
international border or not adjoining a body of water through which an international
boundary line extends.12 States with a significant international border13 or adjoining
a body of water through which an international boundary line extends would be
guaranteed a minimum of 0.45% of total appropriations for SHSGP, LETPP, and
UASI.14 U.S. possessions and territories, and eligible tribes (collectively) would be
guaranteed a minimum of no less than 0.08% of total appropriations for SHSGP,
LETPP, and UASI.15
A state would receive the guaranteed minimum if, after DHS allocates funding
based on the discretion of the DHS Secretary and the First Responder Grants Board’s
evaluation and prioritization of applications, the state does not receive 0.25% or
0.45% of total appropriations. As an example, if Wyoming received an amount that
equaled 0.20% of total appropriations based on the discretion of the DHS Secretary
and the evaluation and prioritization by the First Responder Grants Board, Wyoming
would be given an additional 0.05% to reach the guaranteed minimum or “floor”of
0.25% (Wyoming does not have an international border or adjoin a body of water
through which an international boundary extends). Wyoming would not receive any
additional funding after receiving the guaranteed minimum. The House report
accompanying H.R. 2360 (as amended and passed by the House) states that until
Congress passes a law changing the formula, ODP would allocate funding to states
10 H.R. 1544, Sec. 3, “Sec. 1803”.
11 H.R. 1544, Sec. 3, “Sec. 1804(a)”.
12 H.R. 1544, Sec. 3, “Sec. 1804(c)(5)(A)”.
13 H.R. 1544 proposes the determination of “significant international border” be at the
discretion of the DHS Secretary.
14 H.R. 1544, Sec. 3, “Sec. 1804(c)(5)(B)”.
15 H.R. 1544, Sec. 3, “Sec. 1804(c)(5)(C)-(D)”.
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based on Section 1014 of the USA PATRIOT Act (P.L. 107-56), with the remainder
of appropriated funds allocated based on risks.16
H.R. 2360, as Amended and Passed by the Senate. H.R. 2360 would
allow states, U.S. possessions, and territories to select either of two options that
yields the highest funding level. First, a guaranteed base of 0.55% of total
appropriations for SHSGP, LETPP, and UASI would be guaranteed to states, and the
District of Columbia (DC). U.S. possessions and territories would receive a base of
0.055% (including Puerto Rico).17 Second, each state could alternatively choose to
receive an amount based on a “sliding scale baseline allocation” calculated by
multiplying 0.001 times the sum of (1) its normalized population ratio and (2) its
normalized population density ratio.18 After the funds are distributed, the remainder
would be distributed by DHS through the risk assessment process, with a maximum
of 50% to be distributed to high-threat urban areas, and the remainder to the states.
A state would receive the base of 0.55% or its “sliding scale allocation” if the
latter amount is higher than 0.55%, no matter the risk of terrorist attack. The
guaranteed base allocations and the state allocations determined by the population
and population density sliding scale together would account for 40% ($762.73
million) of the total appropriation if $1.918 billion (proposed appropriation amount
for SHSGP, LETPP, and UASI in H.R. 2360) is used. The remainder would be
available for allocation to states and metropolitan regions based on risk criteria
identified in the bill (Section 1804(f)(2)-(3)). Population and population density are
sometimes considered to be surrogates for risk variables. H.R. 2360 speaks of
population and population density, which the Homeland Security Secretary is to
consider in determining the risk-based portion of appropriated funds for high-threat
metropolitan areas. Under the provisions of H.R. 2360 (as amended and passed by
the Senate) they also figure in the determination of sliding scale allocations, which
the bill treats separately from the pool of funds available for risk- and vulnerability-
based allocation by the Secretary of Homeland Security.
The bill proposes to allocate 50% of the risk-based portion of homeland security
assistance funds to major metropolitan regions with the following attributes:
! “target of a prior terrorist attack;
! “had a higher Homeland Security Advisory System threat level than
the nation as a whole;
! “large population or high population density;
! “high threat and risk related to critical infrastructure;
! “international border or coastline;
16 H.Rept. 109-79.
17 H.R. 2360, Title VI, “Sec. 1804(f)(1).
18 H.R. 2360, Title VI, “Sec. 1804(f) sets out the alternatives as follows: (A) the value of a
state’s population relative to that of the most populous of the 50 states, where the population
of the 50 states has been normalized to a maximum value of 100; and (B) one-fourth of the
value of a state’s population density relative to that of the most densely populated of the 50
states, where the population density of the 50 states has been normalized to a maximum
value of 100.
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! “bordering at-risk sites or activities in a nearby jurisdiction;
! “unmet essential first responder capabilities; and
! “any other threat factors as determined by the DHS Secretary.”19
The bill proposes to allocate the remaining 50% of the risk-based portion of
homeland security assistance funds to states with the following attributes:
! “target of a prior terrorist attack;
! “had a higher Homeland Security Advisory System threat level than
the nation as a whole;
! “high percent of state’s population residing in a metropolitan
statistical area (as defined by the Office of Management and
Budget);
! “threat and risk related to critical infrastructure;
! “international border or coastline;
! “bordering at-risk sites or activities in a nearby jurisdiction;
! “unmet first responder essential capabilities; and
! “any other threat factors as determined by the DHS Secretary.”20
Policy Questions
The development and implementation of a risk-based distribution formula,
including or excluding a guaranteed base and minimum amounts, raise some policy
questions that may confront conferees on the conference on H.R. 1544 and H.R.
2360.
Guaranteed Minimum Versus Guaranteed Base
Both H.R. 1544, as passed by the House, and H.R. 2360, as passed by the
Senate, would guarantee to each state a certain percentage of the total appropriation.
H.R. 1544 would guarantee each state a minimum; H.R. 2360, as passed by the
Senate, would guarantee each state a base. On the surface, the two terms may appear
to be similar, but they differ in that each is associated with a distinctive method for
allocating funds to the states.
A minimum, as defined in H.R. 1544, is the smallest amount each state would
receive after risk-based state allocations are determined. Were the risk-based
calculations to result in any state allocation less that the statutorily defined minimum,
the allocations of states receiving more than the minimum would be reduced
proportionally so that all states would receive at least the minimum.
A base, as defined in the Senate version of H.R. 2360, is an amount guaranteed
to each state without regard to risk. After allocation of base amounts to states, H.R.
19 H.R. 2360, Title VI, “Sec. 1804(f)(2)”.
20 H.R. 2360, Title VI, “Sec. 1804(f)(3)”.
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2360, as passed by the Senate, would direct the Secretary of Homeland Security to
allocate the remainder to the states based on risk factors listed earlier in this report.
The present allocation of federal homeland security assistance — which
includes a base — was criticized by the 9/11 Commission, which referred to the base
as revenue sharing without regard to a state’s risk of terrorist attacks. Some,
however, argue that the base allocation is a way to ensure that each state receives
some sort of homeland security funding and is prepared at some level for terrorist
attacks.
As conferees negotiate to resolve House and Senate differences on homeland
security grant funding, they may want to consider whether to legislate the grant
allocation method with a guaranteed base or guaranteed minimum. That is, they may
want to decide whether (A) to provide every state with the same amount of base
funding, and then allocate the remainder of total appropriations based on risk; or (B)
to allocate total appropriations based on risk, and then if a state would not receive a
certain amount or percentage (minimum), provide additional funding to the state to
meet this amount or percentage.
The following tables display guaranteed base, minimum, and risk-based
amounts proposed in H.R. 1544 and the Senate version of H.R. 2360 assuming the
FY2005 appropriation of $2.7 billion for DHS homeland security assistance.21
Table 1. H.R. 1544 Guaranteed Minimum and Risk-Based
Allocations
(Millions of dollars)
Amount
Percentage
Assumed Total Funding
$2,700.00
100.0%
Amount to be allocated by DHS based on risk
$2,700.00
100.0%
Amount to Be Allocated by DHS Based on
$444.69
16.5%
Minimums
0.25% minimum to states without an international boundary or
$238.14
8.8%
bordering on a body of water with an international boundary
0.45% minimum to states with an international boundary or
$206.55
7.7%
bordering on a body of water with an international boundary
Note: CRS is unable to determine individual state risk-based amounts. Guaranteed minimum amounts
and percentages are based on the assumption that states would receive nothing more than the
guaranteed minimum; one could, however, assume the majority of states would receive risk-based
funding above the guaranteed minimum amount.
21 In FY2005, Congress appropriated $1.1 billion for SHSGP, $400 million for LETPP, and
$1.2 billion for UASI.
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Table 2. Senate Passed H.R. 2360 Guaranteed Base and
Risk-Based Allocations
(Millions of dollars)
Amount
Percentage
Assumed Total funding
$2,700.00
100.0%
Base amount allocated to states
$1,062.44
39.3%
Sliding scale amount
$290.12
10.7%
0.55% guaranteed base amount allocated to states
$772.32
28.6%
Remainder to be allocated by DHS based on risk
$1,637.56
60.7%
Note: CRS is unable to determine individual state risk-based amounts.
The following table depicts the estimated guaranteed amounts each state would
be allocated under the bills, assuming a $2.7 billion appropriation. Under H.R. 2360,
as amended and passed by the Senate, the majority of states would receive $14.85
million as a base, with some states receiving a larger base amount (for example
California would receive $81.07 million). Under H.R. 1544, states guaranteed a
minimum of 0.25% would receive at least $6.75 million, and the states guaranteed a
minimum of 0.45% would receive at least $12.15 million.
Table 3. Senate Passed H.R. 2360 Guaranteed Base and H.R.
1544 Guaranteed Minimum State Allocations Assuming the
FY2005 Appropriation of $2.7 BillionA
(All amounts in millions)
Senate Passed H.R. 2360
H.R. 1544
(Includes SHSGP, UASI, and
(Includes SHSGP, UASI, and
LETTP)B
LETTP)C
State
Fixed
Sliding
BaseD
Scale BaseE
0.25%F
0.45%G
Alabama
$14.85
—
$6.75
—
Alaska
$14.85
—
—
$12.15
Arizona
$14.85
—
—
$12.15
Arkansas
$14.85
—
$6.75
—
California
—
$81.07
—
$12.15
Colorado
$14.85
—
$6.75
—
Connecticut
—
$19.46
$6.75
—
Delaware
$14.85
—
$6.75
—
Florida
—
$42.77
$6.75
—
Georgia
—
$21.52
$6.75
—
Hawaii
$14.85
—
$6.75
—
Idaho
$14.85
—
—
$12.15
Illinois
—
$31.14
$6.75
—
Indiana
—
$16.29
$6.75
—
Iowa
$14.85
—
$6.75
—
Kansas
$14.85
—
$6.75
—
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Senate Passed H.R. 2360
H.R. 1544
(Includes SHSGP, UASI, and
(Includes SHSGP, UASI, and
LETTP)B
LETTP)C
State
Fixed
Sliding
BaseD
Scale BaseE
0.25%F
0.45%G
Kentucky
$14.85
—
$6.75
—
Louisiana
$14.85
—
$6.75
—
Maine
$14.85
—
—
$12.15
Maryland
—
$21.33
$6.75
—
Mass.
—
$27.30
$6.75
—
Michigan
—
$27.40
—
$12.15
Minnesota
$14.85
—
—
$12.15
Mississippi
$14.85
—
$6.75
—
Missouri
$14.85
—
$6.75
—
Montana
$14.85
—
—
$12.15
Nebraska
$14.85
—
$6.75
—
Nevada
$14.85
—
$6.75
—
New Hamp.
$14.85
—
—
$12.15
New Jersey
—
$38.05
$6.75
—
N. Mexico
$14.85
—
—
$12.15
New York
—
$48.10
—
$12.15
N. Carolina
—
$21.28
$6.75
—
N. Dakota
$14.85
—
—
$12.15
Ohio
—
$29.28
—
$12.15
Oklahoma
$14.85
—
$6.75
—
Oregon
$14.85
—
$6.75
—
Penn.
—
$31.27
—
$12.15
Rhode Is.
—
$19.36
$6.75
—
S. Carolina
$14.85
—
$6.75
—
S. Dakota
$14.85
—
$6.75
—
Tennessee
—
$15.06
$6.75
—
Texas
—
$49.83
—
$12.15
Utah
$14.85
—
$6.75
—
Vermont
$14.85
—
—
$12.15
Virginia
—
$19.16
$6.75
—
Washington
$14.85
—
—
$12.15
W. Virginia
$14.85
—
$6.75
—
Wisconsin
$14.85
—
—
$12.15
Wyoming
$14.85
—
$6.75
—
DC
$14.85
—
$6.75
—
Puerto Rico
$9.45
—
$6.75
—
Virgin Is.
$1.49
—
$2.16
—
Guam
$1.49
—
$2.16
—
Am. Samoa
$1.49
—
$2.16
—
N. Marianas
$1.49
—
$2.16
—
Total
$505.46
$559.67
$238.14
$206.55
A In the FY2005 DHS appropriations (P.L. 108-334), Congress appropriated $1,100 million for SHSGP and $400
million for LETPP. SHSGP and LETPP were distributed to states based on a guaranteed minimum base of
0.75% of total appropriations for the programs. Actual FY2005 minimum allocation, including SHSGP and
LETPP, was $11.25 million for States and $3.75 million for territories.
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B Senate passed H.R. 2360, Title VI, Sec. 4 consolidates SHSGP, UASI, and LETPP into a single program —
TBHSGP. In the FY2005 DHS appropriations, Congress appropriated $1,100 million for SHSGP, $1,200
million for UASI, and $400 million for LETPP.
C H.R. 1544, Sec. 3 does not consolidate SHSGP, UASI, and LETPP into a single covered grant.
D States and D.C. receive 0.55% of TBHSGP; Puerto Rico receives 0.35%; and other U.S. territories and
possessions receive 0.055% of total appropriations.
E States choose to receive either the sliding scale baseline minimum (explained in Appendix A) or the 0.55%
minimum.
F 0.25% is not a base, but an amount a state is guaranteed if it does not have a “significant international border”
or does not border on a body of water through which an international boundary runs. H.R. 1544 authorizes DHS
to determine what constitutes a “significant international border.”
G 0.45% is not a base, but an amount a state is guaranteed if it has a “significant international border” or borders
on a body of water through which an international boundary runs. H.R. 1544 authorizes DHS to determine what
constitutes a “significant international border.”
Risk-Based Factors
A fundamental policy question associated with risk-based funding is what risk
factors to use in determining the allocation of federal homeland security assistance.
Examples of possible risk factors include such factors as threats, homeland security
capabilities, population, critical infrastructure assets, transportation assets, and other
factors. To accurately assess the risk factors, one would need to determine the threat
to the population factors, critical infrastructure, transportation, and the like, and
determine the consequences of such a threat. Additionally, the homeland security
capabilities needed to prevent, respond to, and recover from terrorist attacks, and
natural and technical disasters would need to be assessed. The methods of threat and
vulnerability assessment suggest a variety of factors that might be used in devising
a risk-based funding formula for allocating homeland security assistance to states and
localities. See Appendix A for a list of possible threat, homeland security
capability, population, critical infrastructure, transportation, and other factors that
might be considered in a risk assessment.
Evaluating Potential Risk Factors. In considering such factors, however,
Congress is faced with a question of what criteria to use when assessing potential
risk-based formula variables. Risk factors include threats, the entity threatened, and
the consequences of the threat to the specified entity. The agreement of potential risk
factors is appropriately considered against the following criteria: 22
1. Validity. Do the factors serve as measures or indicators of threats, the
vulnerability of the potential target, or potential consequence if catastrophe strikes
the target? For example, does higher population density indicate greater vulnerability
to an attack involving a weapon of mass destruction? What attributes associated with
22 For a discussion of criteria for evaluating the suitability of quantitative indicators see, for
example, Raymond A. Bauer, Social Indicators (Cambridge, MA: MIT Press, 1966). See
also Anona Armstrong, “Difficulties of Developing and Using Social Indicators to Evaluate
Government Programs: A Critical Review.” Paper presented at the 2002 Australasian
Evaluation Society Conference, Nov. 2002, Wollongong, Australia.
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densely populated areas (e.g., numbers of law enforcement personnel on duty, the
presence of sensors, cameras, and other technology) would reduce the validity of the
factor?
2. Relevance. What is the relationship between the factors and the identified
items or characteristics? Is the relationship straightforward, or is it murky? For
example, the total number of vehicles traveling through a mid-city tunnel would
probably not be pertinent to a consideration of the risk of a hazardous material
accident. The number of commercial trucks carrying hazardous material, however,
would be more relevant.
3. Reliability. The quality of the source of the information used in a risk
assessment process require consideration. For example, population data from the
U.S. Census Bureau are generally regarded as reliable and are used in a variety of
formulas for allocating aid grants.
4. Timeliness. The currency of the data affects the quality of the discussion on
potential risks. For example, daily intelligence reports that provide information on
current terrorist threats would be considered more timely than a monthly or quarterly
report.
5. Availability. Data necessary for the risk factor’s use as a formula variable
should arguably be readily and publicly available. Intelligence information that has
been classified by the federal government and not shared with state and local officials
would fail to satisfy this criterion.
Authority to Select of Risk Factors
Who should identify the risk factors that will determine funding is another
fundamental policy question. H.R. 1544 and H.R. 2360 propose risk factors that
DHS is to consider, but both bills propose to give a large degree of discretion to
DHS. Even though H.R. 1544 proposes a list of risk factors for the First Responders
Grants Board to evaluate and prioritize, it proposes that the DHS Secretary use
discretion in the final determination in risk-based funding allocations to states and
localities. H.R. 2360 provides a larger list of risk factors, but it does not specify what
threats are to be considered.
Given the importance of data availability as a criterion, Congress may not be in
a position to accurately determine specific risk factors, but because of its oversight
responsibilities, Congress might want to review DHS’ risk-based methodology and
risk-based distribution formula. The oversight could address the weights given to
risk factors, specific threats to key assets and critical infrastructure, and plausible
consequences to identified threats. On the other hand, by allowing a large degree of
discretion to DHS in allocating federal homeland security assistance, Congress may
not be able to determine in open hearings the reasoning behind the distribution of
funding to states and localities.
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Appendix A: Potential Risk Factors — A Discussion
Examples of possible risk factors include such factors as threats, homeland
security capabilities, population, critical infrastructure assets, transportation assets,
and other factors. In order to accurately assess the risk factors, one would need to
determine the threat to the population factors, critical infrastructure, transportation,
and the like, and determine the consequences of such a threat. Additionally, the
homeland security capabilities needed to prevent, respond to, and recover from
terrorist attacks, and natural and technical disasters would need to be assessed.
Threat
Homeland Security threats facing the nation can be divided into terrorist attacks,
and natural and technical (such as an accidental chemical spill) disasters. For a
terrorist threat to be valid, intelligence or other indicators would have to show the
plausibility of the threat. The risk criteria factor of availability of data, as stated
earlier in the report, may cause some to question the validity of the threat because of
the possible security classification of the intelligence.
Additionally, DHS is responsible for preparing for, responding to, and
recovering from natural and technical disasters. One could argue that history has
proven the nation is threatened more by natural and technical disasters than terrorist
attacks. The 67 major disaster declarations in 2004 lend validity to this argument.23
Potential terrorist threats include:
! biological and chemical agents;
! WMD incidents;
! sniper and shooting incidents; and
! car and suicide bombers.
Potential natural and technical disaster threats include:
! hurricanes;
! flooding;
! earthquakes;
! landslides; and
! accidental hazardous material incidents.
Homeland Security Capability
Homeland security capabilities are the abilities, plans, training, personnel, and
equipment of federal, state, and local government officials, first responders, and
entities to prevent, respond to, and recover from terrorist attacks, and natural and
technical disasters. In order to assess federal, state, and local homeland security
23 See Federal Emergency Management Agency, “2004 Major Disaster Declarations,”
available at [http://www.fema.gov/news/disasters.fema?year=2004], visited May 19, 2005.
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capabilities, one would need to identify threats, key assets and critical infrastructure,
vulnerabilities, and consequences of terrorist attacks, and natural and technical
disasters. Once the assessments are completed government officials, first responders,
and other key stakeholders can determine the necessary capabilities. Potential
homeland security capabilities might include:
! emergency management plans;
! homeland security plans;
! identified essential tasks needed for responding to terrorist attacks,
and disasters;
! counter-terrorism training;
! natural and technical disaster training;
! identified personnel with assigned prevention, response, and
recovery tasks;
! personnel protective equipment;
! interoperable communications equipment and plans;
! emergency medical response plans and equipment; and
! hospital mass casualty plans and equipment.
Population
! Population — Population, a number of people in each state relative
to the nation as a whole, is arguably a suitable factor since a larger
number of people can be considered a greater risk.
! Population Density — Population density, the average number of
persons per square mile in each state, can be considered a viable
factor since a weapon of mass destruction (WMD) attack in an area
with a high population density could result in a greater number of
casualties than in an area with a low population density.
Critical Infrastructure
! Nuclear Power Plants and Non-Power Reactors — Nuclear power
plants have been identified by a number of observers as potential
terrorist targets. This includes decommissioned nuclear power
plants and non-power reactors, which are typically used in research
and training facilities.24
! Seaports — Given the possibility of WMD smuggling and the
consequent potential for disrupting the national economy, many
observers have identified seaports as a critical infrastructure that
should be a risk factor.
! Chemical Facilities — Due to the consequences of terrorist attacks
on chemical facilities, or the theft of toxic chemical agents, chemical
24 See Nuclear Regulatory Commission website [http://www.nrc.gov/reactors.htm], visited
May 18, 2005.
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facilities could be a risk factor, especially due to the location of
some chemical facilities in high population density areas.
! Military Facilities — Pointing to the September 2001 terrorist attack
on the Pentagon in Arlington, Virginia, some observers suggest that
miliary facilities should be included in a risk-based distribution
formula. Such facilities may contain large numbers of military
personnel, high-value equipment, and volatile chemicals and
explosives (such as ammunition).
! Federal Facilities — Some observers point to the 1995 bombing of
the Alfred P. Murrah Building in Oklahoma City as evidence that
civilian federal facilities are potential terrorist targets. The
consequences of terrorist attacks on federal facilities would increase
if the attacks were to disrupt the federal response to attacks or lead
to the disruption of vital federal government operations.
! Dams — Dams could be included in a risk-based distribution
formula, since a terrorist-caused explosion could potentially release
a high volume of water into populated areas, destroy any electrical
energy production at the dam, and cause significant economic
damage.
! Electrical Power Plants (Non-Nuclear) — The economic and
psychological consequences of terrorist attacks on electrical power
plants might be a consideration in designating power plants as a risk
factor.
! Food and Agricultural Centers — Terrorist attacks on the nation’s
food supply and agricultural production might be a risk, considering
the possible economic and psychological effects of the attacks.
! Oil and Natural Gas Refineries and Pipelines — Even though the
majority of oil and natural gas refineries (and the distribution
systems ‘pipelines’) are located in low population density areas,
terrorist attacks on them could cause severe economic and
environmental consequences.
! Financial Centers — One could point to the elevation of the
Homeland Security Advisory System to “high” in August of 2004
when financial institutions were identified as possible targets of
terrorist attacks as reason to identify the centers as risk factors.
Additionally, a distribution of operations in the nation’s financial
centers could have possible economic consequences.
Transportation Assets
! Rail and Mass Transit Systems — Arguably, the 2004 and the 2005
terrorist bombings of trains in Madrid, Spain, and London, could
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cause some to identify rail and mass transit systems as a risk factor.
! Bridges and Tunnels — Given of the vast number of bridges and
tunnels in the nation, considering every one of them as a risk factor
is not feasible. Major bridges and tunnels, such as the Brooklyn and
Golden Gate bridges and the Holland Tunnel, might be considered
risk factors due to their cultural significance. Additionally, bridges
and tunnels that are important links in a transportation route for large
number of persons might also qualify as a risk factor.
! Airports — One could point to the September 2001 terrorist attacks
and the use of commercial aircraft as a weapon as a valid argument
for considering airports as a risk factor. Not only are airports at risk
of terrorists boarding aircraft and using them as weapons, some may
argue that an attack on a crowded airport or the shooting down of
aircraft while landing or taking off further increases the risk and the
consequences of an attack.
Other Factors
! Stadiums and Arenas — Because of the large number of persons
concentrated in a relatively small location, stadiums and arenas —
especially during significant events such as sport championship
games — could be considered a risk factor.
! Educational Institutions — Arguably, the psychological
consequences of terrorist attacks would be greatly increased if
terrorists were to target educational institutions, at the elementary,
secondary, college level. Given the sense of vulnerability parents
would experience following such an attack, educational institutions
might be considered a risk factor; however, like bridges and tunnels,
the vast number of educational institutions in the nation may hamper
the risk assessment of such an attack.
! Skyscrapers and Large Commercial Buildings — As with the attack
on the Pentagon in September 2001, the attack on the World Trade
Center Towers arguably identifies skyscrapers and large commercial
buildings as valid risk factors. The economic and psychological
consequences give great weight to considering skyscrapers and large
commercial buildings as potential risk factors, and the economic and
psychological effects on the nation following the September 2001
attacks illustrate this.
! International Border and Coastline — It can be argued that states
with international borders and coastline face greater risk of terrorist
attacks, since terrorists may have greater access to the state.
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! Tourism — Due to the potential for mass casualty incidents and
economic damage due to terrorist attacks, tourist locations are a
possible risk factor. In addition to the location of tourist
destinations, the tourist population could possibly be considered an
additional risk factor.