RL33241 -- FY2006 Homeland Security Grant Distribution Methods: Issues for the 109th Congress


January 20, 2006






CONTENTS

<font size="+1">List of Tables</font>




Summary

Homeland security assistance to states and localities is available from three primary sources -- the State Homeland Security Grant Program (SHSGP), the Law Enforcement Terrorism Prevention Program (LETPP), and the Urban Area Security Initiative (UASI). In FY2006, the Department of Homeland Security (DHS) intends to allocate grants from these programs as follows:

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." The former members of the 9/11 Commission, acting as private citizens conducting the 9/11 Discourse Project, gave Congress and DHS, in their final report dated December 5, 2005, a failing grade on the distribution of homeland security funding.

Given this criticism, DHS's development of a risk- and needs-based formula for SHSGP, LETPP, and UASI, and its determination to allocate a guaranteed base to states raise some policy questions that Congress may wish to address through oversight of DHS's administration of FY2006 Homeland Security Grant Program (HSGP) grants. Some of the questions include the following:

This report will be updated when congressional or executive branch actions warrant.



Introduction

Homeland security assistance to states and localities is available from three primary sources -- the State Homeland Security Grant Program (SHSGP), the Law Enforcement Terrorism Prevention Program (LETPP), and the Urban Area Security Initiative (UASI). In FY2006, the Department of Homeland Security (DHS) intends to allocate grants from these programs as follows:

The allocation method for FY2006 differs from that of earlier years. In FY2003 and FY2004, Congress required DHS to allocate 0.75%(1) of total appropriations for SHSGP and LETPP(2) to each state, with remainder of total appropriations to be allocated at the discretion of DHS.(3) DHS chose to use the state's population percentage of the national population as the basis for this secondary distribution, and to distribute a base amount of 0.25% to U.S. insular areas. Congress required DHS to allocate FY2005 SHSGP and LETPP grants in the same manner as in FY2004.(4)

DHS is also changing the distribution method for UASI in FY2006. In FY2003-FY2005, UASI discretionary allocations were distributed using credible threat, presence of critical infrastructure, vulnerability, population, population density, law enforcement investigative and enforcement activity, and the existence of formal mutual aid agreements as funding formula factors.(5) In FY2006, DHS intends to allocate UASI funding using a risk- and needs-based formula. DHS also intends to group major jurisdictions into single urban areas, requiring grouped jurisdictions to determine allocations within the urban areas. Eleven urban areas that received UASI funding in FY2005 are not eligible to apply for funding for new homeland security projects, but they may apply for sustainment funding to complete homeland security projects begun in previous years (see Table 2, note). Finally, DHS intends to authorize urban areas to apply for funding for homeland security projects that have dual-use ( for terrorist incidents or natural disasters) capabilities, such as evacuations, and search and rescue teams.(6)

FY2006 Distribution Methods

In October 2005, for FY2006, Congress appropriated $550 million for SHSGP, $400 million for LETPP, $740 million for high-threat, high-risk urban areas -- part of $1.2 billion for UASI -- and amounts for other state and local homeland security assistance programs.(7) Congress required DHS to allocate 0.75% of total funds appropriated for SHSGP and LETPP to each state, DC, and Puerto Rico. The distribution method for the remainder of appropriations for SHSGP and LETPP is at the discretion of DHS. Additionally, Congress authorized the allocation of UASI funding to be at the discretion of DHS.(8) On December 2, 2005, DHS issued its Fiscal Year 2006 Homeland Security Grant Program: Program Guidance and Application Kit to provide information and guidance on state and local homeland security grant programs.

The FY2006 guidance states that DHS elected to provide the 0.75% of total appropriations as a base (instead of as a minimum) to states, DC, and Puerto Rico under SHSGP and LETPP.(9)

Table 1. State Homeland Security Grant Program and Law Enforcement Terrorism Prevention Program Base Allocations: FY2005 and Estimated FY2006(amounts in millions)

States and U.S. Insular Areas FY2005 Base Allocations FY2006 Estimated Base Allocations
Each state, DC, and Puerto Rico $11.25 $7.13
U.S. Virgin Islands, American Samoa, Guam, and the Northern Mariana Islands $1.20 $0.80
Total base amount $589.80 $374.00

Source: Amounts based on CRS calculations of FY2005 (P.L. 108-334) and FY2006 (P.L. 109-90) DHS appropriations for SHSGP and LETPP.

Additionally, DHS has chosen to allocate the remainder of total appropriations based on risk and need. The guidance also states that UASI funds will be allocated based on risk and need; in FY2003, FY2004, and FY2005, UASI funds were allocated based on risk only.(10)

State and local risk will be determined by DHS using a risk and needs formula developed by the Office of Grants and Training (G&T) -- formerly the Office for State and Local Government Coordination and Preparedness -- in conjunction with other DHS and federal entities. Distribution of SHSGP, LETPP, and UASI funding will be based on this risk and needs formula. The exact formula, however, is not publicly available at this time and may not be available in the future due to its possible security classification.

Risk. As defined by DHS, its risk calculations are based upon:

The DHS risk formula is to consist of two risk calcualtions:

Need. State and urban-area homeland security needs will be assessed through a capability review, which is currently underway. The review is intended to help states and urban areas determine their own homeland security capabilities as compared against criteria identified and explained in the National Preparedness Goal.(12) Each state and urban area is to evaluate its homeland security program and its ability to meet its own homeland security needs.(13) Following the review, each state and urban area is to submit a Program and Capability Enhancement Plan and an Investment Justification with its FY2006 Homeland Security Grant Program (HSGP) application.

The Program and Capability Enhancement Plan is a multi-year management plan that identifies state and urban-area homeland security objectives that are additional to G&T homeland security program objectives and funding. The Investment Justification is to identify specific homeland security needs from the enhancement plan that states and urban areas wish to address using FY2006 HSGP funds. Additionally, the Investment Justification is to outline implementation plans that will assist the states and urban areas in enhancing and developing their homeland security capabilities.(14)

DHS will evaluate and score state and urban-area applications through a peer review process based on the likely effectiveness of each state and urban area's enhancement plan in addressing its needs and the plan's reduction of the state and urban area's overall risk. DHS will notify states and urban areas of their total risk- and needs-based funding allocations at the time of the awards.(15)

Issues

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."(16) The former members of the 9/11 Commission, acting as private citizens conducting the 9/11 Discourse Project, gave Congress and DHS, in their final report dated December 5, 2005, a failing grade on the distribution of homeland security funding:

<blockquote>Congress has still not changed the underlying statutory authority for homeland security grants, or benchmarks to insure that funds are used wisely. As a result, homeland security funds continue to be distributed without regard for risk, vulnerability, or the consequences of an attack, diluting the national security benefits of this important program.(17)</blockquote>

Given this criticism, DHS's development of a risk- and needs-based formula for SHSGP, LETPP, and UASI, and its determination to allocate a guaranteed base to states raise some policy questions that Congress may wish to address through oversight of DHS's administration of FY2006 HSGP grants. Some of the questions include:

Minimum Versus Base.(18) DHS has decided to provide a guaranteed base to every state, DC, and each U.S. insular area from SHSGP and LETPP funding. Congress authorized DHS discretion in determining if the 0.75% of total appropriations guaranteed to states, DC, and Puerto Rico is to be either a minimum or a base.(19)

If DHS were to use a 100% risk-based formula in determining state allocations, a minimum is the smallest allocation each state would receive. Were the risk-based calculations to result in any state allocation less than the statutorily defined minimum, the allocations for states receiving more than the minimum would be reduced proportionally, so that all states would receive at least the minimum.

A base is an amount guaranteed to each state without regard to risk or need. After allocation of base amounts, states might receive further funding based on risk and need.

Policy options for the method of grant allocation could include a guaranteed base, a guaranteed minimum, or neither. That is, policymakers may choose to decide whether (1) to provide every state with the same amount of base funding, and then allocate the remainder of total appropriations based on risk and need; (2) to allocate total appropriations based on risk and need, and then if a state does not receive a certain amount or percentage (minimum), provide additional funding to the state to meet this amount or percentage, with proportional reduction of funding to the other states; or (3) to allocate funding to states based 100% on risk and need. Congress, however, would not be addressing the critics (e.g., the 9/11 Commission) of its present funding formula by continuing to provide states with a guaranteed base or minimum.

Risk Versus Need. DHS has elected not to use a 100% risk-based formula for allocating the remainder of total appropriations for SHSGP and LETPP following the distribution of state base amounts, and total appropriations for UASI. Instead, DHS has developed a two-part approach to determining state and urban-area allocations. This approach consists of a DHS risk assessment and a state and urban area's justification of need for funding. DHS has not informed states and urban areas, through its FY2006 guidance, what percentage of funds will be allocated based on risk and what percentage of funds will be allocated based on need.

One could argue that by not allocating strictly on risk, DHS has not addressed the critics, such as the 9/11 Commission, in its 2004 report, who advocate a purely risk-based allocation of homeland security funding. By coupling need with risk, DHS might be providing funding to states and urban areas that do not have a high risk of terrorism. Additionally, some might argue that less UASI funding will be distributed based on risk. In FY2005, DHS distributed UASI funding based purely on risk, using credible threat, presence of critical infrastructure, vulnerability, population, population density, law enforcement investigative and enforcement activity, and the existence of formal mutual aid agreements as funding formula factors. In FY2006, DHS has added urban area homeland security needs to the UASI distribution formula. Conversely, by allocating funding based on both risk and need, DHS is arguably addressing not only terrorism risk, but also a state and urban area's capability to address that risk.

Congress may choose to address the issue of risk- and need-based funding by reviewing FY2006 state and urban-area allocations, once they have been announced by DHS at a later date, and determining if the new distribution formula meets the homeland security needs of the nation as a whole. If Congress were to determine that this new distribution method does not address the national needs, it might consider imposition of a distribution method beyond the present statutory requirement of a guaranteed amount of 0.75% to every state. This distribution method might include risk criteria and benchmarks for determining national homeland security needs.

Delayed Awarding of State and Urban Area Allocations. In FY2003-FY2005, states and urban areas were informed of their homeland security grant allocations early in the fiscal years.(20) States have been notified of their FY2006 base allocations (approximately $7.13 million each); however, because of DHS's decision to wait until states and urban areas complete their enhancement plans and justifications, states and urban areas will not be notified of their total grant allocations until sometime in the late spring of 2006.

It is possible that states and urban areas, lacking an indication of how much funding they will receive, will not know how to accurately plan or develop homeland security activities for FY2006. It is possible that a state or an urban area will develop an enhancement plan and investment justification that relies on a certain amount of federal homeland security funding, and then be notified -- following DHS's risks and needs assessment -- that it will not be receiving the desired amount of funding or any funding beyond its base SHSGP and LETPP allocation. This in turn might result in the state having to adjust or rework its homeland security planning and implementation activities. Additionally, if the announcement of state allocations is delayed, localities could be further delayed in being informed by states of any FY2006 SHSGP and LETPP funding they might receive.

Conversely, by delaying the announcement of state allocations, DHS might be afforded an extended period for more accurately determining state and urban-area homeland security risks and needs. DHS's requirement for an enhancement plan and investment justification could also result in states and urban areas more accurately determining their risks, capabilities, and needs, which could facilitate DHS's overall national risks and needs assessment.

Congress may choose to address the issue of delayed allocations by reviewing the FY2006 state and urban-area allocations following their announcement and the effect on state and urban-area homeland security plans. If Congress were to determine that this delay in allocations does not suit the states' and urban areas' needs, it might consider requiring DHS to announce allocation amounts early in the fiscal year for future DHS homeland security grant distributions.

Regional Urban Area Security Initiative Allocations. DHS has announced its intention to group individual jurisdictions into "super" UASI groups and to reduce the number of jurisdictions from 50 urban areas to 35, with an additional 11 urban areas (that received funding in FY2005) eligible to apply for sustainment money for ongoing homeland security projects (see Table 2). Acting Director of G&T Mathew Mayer stated that it would be the responsibility of the individual jurisdictions within the "super" UASI regions to determine allocations within the regions. The UASI regional jurisdictions are required within 60 days to develop an enhancement plan and investment justification to be eligible to receive funding. Additionally, UASI regions can apply for funding to support some dual-use activities -- such as evacuations, and search and rescue operations -- which assist with not only terrorist incidents but also natural disasters. (21)

This grouping of individual jurisdictions into "super" UASI regions, coupled with the new needs portion of the method for distributing UASI funds, might result in jurisdictions with a higher threat of terrorism receiving less funding. Additional funding might be directed to the 11 urban areas eligible for sustainment funding, which could reduce the amounts for the other 35 "super" UASI regions. Also, UASI regions that have a greater need for dual-use capabilities might receive more funding than those with a higher terrorism threat.

On the other hand, the identification of UASI regions over individual jurisdictions -- urban areas, comprising numerous jurisdictions -- could increase the security of individual urban areas by increasing the security of the regions overall. Arguably, terrorists do not recognize political or geographical boundaries when planning attacks within the United States. DHS's intention to authorize dual use of UASI funding might make urban areas better able to respond to terrorist attacks, because whether the crisis is a terrorist attack or a natural disaster, an urban area could still need the ability to evacuate all or portions of its citizens, or conduct search and rescue operations. The UASI regions, however, seem not to reflect great change from the FY2005 UASI urban area designations, with such exceptions as the combination of Jersey City and Newark, and the inclusion of Yonkers with New York City.

Regional UASI allocations for FY2006 may not become a point of contention until DHS announces them late in the spring of 2006. At that time, Congress may choose to review the allocations and their effect on the UASI regions' homeland security plans. Should Congress determine that regional allocations do not address individual jurisdictions' requirements, it might consider directing DHS to allocate UASI funds to individual jurisdictions instead of regions.

Table 2. FY2006 Urban Area Security Initiative Eligible Urban Areas

State  Eligible Urban Area  Geographic Area   Previously Designated Urban Areas
Arizona Phoenix Area* Chandler, Gilbert, Glendale, Mesa, Peoria, Phoenix, Scottsdale, Tempe, and a 10-mile buffer extending from the borders of the combined area Phoenix
California Anaheim/Santa Ana Area Anaheim, Costa Mesa, Garden Grove, Fullerton, Huntington Beach, Irvine, Orange, Santa Ana, and a 10-mile buffer extending from the borders of the combined area Anaheim and Santa Ana
Bay Area Berkeley, Daly City, Fremont, Hayward, Oakland, Palo Alto, Richmond, San Francisco, San Jose, Santa Clara, Sunnyvale, Vallejo, and 10-mile buffer extending from the borders of the combined area San Francisco, San Jose, and Oakland
Los Angeles/Long Beach Area Burbank, Glendale, Inglewood, Long Beach, Los Angeles, Pasadena, Santa Monica, Santa Clarita, Torrance, Simi Valley, Thousand Oaks, and a 10-mile buffer extending from the borders of the combined area Los Angeles and Long Beach
Sacramento Area* Elk Grove, Sacramento, and a 10-mile buffer extending from the borders of the combined area Sacramento
San Diego Area* Chula Vista, Escondido, San Diego, and a 10-mile buffer extending from the borders of the combined area San Diego
Colorado Denver Area Arvada, Aurora, Denver, Lakewood, Westminster, Thronton, and a 10-mile buffer extending from the borders of the combined area Denver
DC National Capital Region District of Columbia; Maryland counties of Montgomery and Prince George's; Virginia counties of Arlington, Fairfax, Prince William, and Loudon; the Virginia cities of Falls Church, Manassas, Manassas Park, Fairfax, and Alexandria; and a 10-mile buffer extending from the borders of the combined area National Capital Region
Florida Fort Lauderdale Area Fort Lauderdale, Hollywood, Miami Gardens, Miramar, Pembroke Pines, and a 10-mile buffer extending from the borders of the combined area N/A
Jacksonville Area Jacksonville and a 10-mile buffer extending from the city borders Jacksonville
Miami Area Hialeah, Miami, and a 10-mile buffer extending from the borders of the combined area Miami
Orlando Area Orlando and a 10-mile buffer extending from the borders of the combined area Orlando
Tampa Area* Clearwater, St. Petersburg, Tampa, and a 10-mile buffer extending from the borders of the combined area Tampa
Georgia Atlanta Area Atlanta and a 10-mile buffer extending from the borders of the city Atlanta
Hawaii Honolulu Area Honolulu and a 10-mile buffer extending from the borders of the city Honolulu
Illinois Chicago Area Chicago and a 10-mile buffer extending from the borders of the city Chicago
Indiana Indianapolis Area Indianapolis and a 10-mile buffer extending from the borders of the city Indianapolis
Kentucky Louisville Area* Louisville and a 10-mile buffer extending from the borders of the city Louisville
Louisiana Baton Rouge Area* Baton Rouge and a 10-mile buffer extending from the borders of the city Baton Rouge
New Orleans Area New Orleans and a 10-mile buffer extending from the borders of the city New Orleans
Massachusetts Boston Area Boston, Cambridge, and 10-mile buffer extending from the borders of the combined area Boston
Maryland Baltimore Area Baltimore and a 10-mile buffer extending from the borders of the city Baltimore
Michigan Detroit Area Detroit, Sterling Heights, Warren, and a 10-mile buffer extending from the borders of the combined area Detroit
Minnesota Twin Cities Area Minneapolis, St. Paul, and a 10-mile buffer extending from the borders of the combined area Minneapolis and St. Paul
Missouri Kansas City Area Independence, Kansas City (MO), Kansas City (KS), Olathe, Overland Park, and a 10-mile buffer extending from the borders of the combined area Kansas City
St. Louis Area St. Louis and a 10-mile buffer extending from the borders of the city St. Louis
North Carolina Charlotte Area Charlotte and a 10-mile buffer extending from the borders of the city Charlotte
Nebraska Omaha Area* Omaha and a 10-mile buffer extending from the borders of the city Omaha
New Jersey Jersey City/Newark Area Elizabeth, Jersey City, Newark, and a 10-mile buffer extending from the borders of the combined area Jersey City and Newark
Nevada Las Vegas Area* Las Vegas, North Las Vegas, and a 10-mile buffer extending from the borders of the combined area Las Vegas
New York Buffalo Area* Buffalo and a 10-mile buffer extending from the borders of the city Buffalo
  New York City Area New York City, Yonkers, and a 10-mile buffer extending from the borders of the combined area New York
Ohio Cincinnati Area Cincinnati and a 10-mile buffer extending from the borders of the city Cincinnati
Cleveland Area Cleveland and a 10-mile buffer extending from the borders of the city Cleveland
Columbus Area Columbus and a 10-mile buffer extending from the borders of the city Columbus
Toledo Area* Oregon, Toledo, and a 10-mile buffer extending from the borders of the combined area Toledo
Oklahoma Oklahoma City Area* Norman, Oklahoma City, and a 10-mile buffer extending from the borders of the combined area Oklahoma City
Oregon Portland Area Portland, Vancouver, and a 10-mile buffer extending from the borders of the combined area Portland
Pennsylvania Philadelphia Area Philadelphia and a 10-mile buffer extending from the borders of the city Philadelphia
Pittsburgh Area Pittsburgh and a 10-mile buffer extending from the borders of the city Pittsburgh
Tennessee Memphis Area Memphis and a 10-mile buffer extending from the borders of the city Memphis
Texas Dallas/Fort Worth/Arlington Area Arlington, Carrollton, Dallas, Fort Worth, Garland, Grand Prairie, Irving, Mesquite, Plano, and a 10-mile buffer extending from the borders of the combined area Dallas, Fort Worth, and Arlington
Houston Area Houston, Pasadena, and a 10-mile buffer extending from the borders of the combined area Houston
San Antonio Area San Antonio and a 10-mile buffer extending from the borders of the city San Antonio
Washington Seattle Area Seattle, Bellevue, and a 10-mile buffer extending from the borders of the combined area Seattle
Wisconsin Milwaukee Area Milwaukee and a 10-mile buffer extending from the borders of the combined area Milwaukee

Source: U.S. Department of Homeland Security, Office of Grants and Training, available at http://www.dhs.gov, visited Jan. 5, 2006.

*FY2005 Urban Areas eligible for sustainment funding through the FY2006 UASI program.




Footnotes

1. (back) P.L. 107-56 (USA PATRIOT Act), Sec. 1014.

2. (back) For information on FY2006 appropriations for SHSGP and LETPP, see CRS Report RS22050, FY2006 Appropriations for State and Local Homeland Security, by [author name scrubbed].

3. (back) P.L. 108-7, P.L. 108-11, and P.L. 108-90.

4. (back) P.L. 108-334, Title III.

5. (back) 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.

6. (back) U.S. Department of Homeland Security, Homeland Security Secretary Michael Chertoff, press conference, Jan. 3, 2006, available at http://homeland.cq.com, visited Jan. 4, 2006. The term "dual-use" refers to homeland security projects or activities that are primarily for terrorism response but could be used in the event of a natural or technical disaster, whereas the term "all-hazards" refers to a project or activity that is not primarily for terrorism or disasters.

7. (back) P.L. 109-90 (FY2006 DHS appropriations), Title III. Other grant programs include Assistance to Firefighters, Emergency Management Performance Grants, and Citizen Corps. Other UASI programs include port, rail, intercity bus, and trucking security grants. These other UASI programs are by application; there is no distribution formula.

8. (back) P.L. 109-90 (FY2006 DHS appropriations), Title III.

9. (back) U.S. Department of Homeland Security, Office of Grants and Training, Fiscal Year 2006 Homeland Security Grant Program: Program Guidance and Application Kit (Washington: Dec. 2005), p. 52.

10. (back) Ibid.

11. (back) Ibid., p. 53.

12. (back) For information on the National Preparedness Goal, see CRS Report RL32803, The National Preparedness System: Issues for the 109th Congress, by [author name scrubbed].

13. (back) Fiscal Year 2006 Homeland Security Grant Program: Program Guidance and Application Kit, p. 53.

14. (back) Ibid.

15. (back) Ibid.

16. (back) National Commission on Terrorist Attacks Upon the United States, The 9/11 Commission Report (Washington: GPO, July 2004), p. 396.

17. (back) 9/11 Public Discourse Project, Final Report on 9/11 Commission Recommendations, p. 1, available at http://www.9-11pdp.org, visited Jan. 4, 2006.

18. (back) For an in-depth discussion on minimum versus base, see CRS Report RL33050, Risk-Based Funding in Homeland Security Grant Legislation: Issues for the 109th Congress, by [author name scrubbed].

19. (back) P.L. 109-90, Title III.

20. (back) In FY2003, allocations were announced in Jan. 2003; in FY2004, allocations were announced in Dec. 2003; and in FY2005, allocations were announced in Nov. 2004.

21. (back) U.S. Department of Homeland Security, Homeland Security Secretary Michael Chertoff, press conference, Jan. 3, 2006, available at http://homeland.cq.com, visited Jan. 4, 2006.




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