To improve the security of the Nation's ports by providing Federal grants to support Area Maritime Transportation Security Plans and to address vulnerabilities in port areas identified in approved vulnerability assessments or by the Secretary of Homeland Security.

Summary: Port Security Grants Act of 2005 - Requires the Secretary of Homeland Security, acting through the Office of State and Local Government Coordination and Preparedness, to establish a grant program to fairly and equitably allocate Federal financial assistance: (1) to help implement Area Maritime Transportation Security Plans; (2) to correct port security vulnerabilities; and (3) for non-Federal projects contributing to the overall security of an individual port or system of ports.

Directs the Secretary, in awarding grants under this Act, to: (1) take into account national economic and strategic defense considerations of individual ports; and (2) strongly encourage efforts to promote integration of port-wide security, information and intelligence sharing, and joint efforts.

Sets forth authorized and prohibited uses of grant funds.

Limits the Federal share of funding for eligible projects to 75 percent of the total cost, subject to specified exceptions.

Requires the Secretary to: (1) establish grant application procedures and requirements, subject to specified minimum standards; and (2) submit reports on security funding and compliance to specified congressional committees.

States that amounts authorized to be appropriated by this Act (for FY 2007 through 2012) shall originate from duties collected by U.S. Customs and Border Protection.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Port Security Grants Act of 2005''.

SEC. 2. PORT SECURITY GRANT PROGRAM.

    (a) Grants Authorized.--The Secretary of Homeland Security 
(referred to in this Act as the ``Secretary''), acting through the 
Office of State and Local Government Coordination and Preparedness, 
shall establish a grant program to fairly and equitably allocate 
Federal financial assistance--
            (1) to help implement Area Maritime Transportation Security 
        Plans required under section 70103(b) of title 46, United 
        States Code;
            (2) to correct port security vulnerabilities identified 
        through vulnerability assessments approved by the Secretary; or
            (3) to non-Federal projects contributing to the overall 
        security of an individual port or the system of ports in the 
        United States, as determined by the Secretary.
    (b) Grant Awards.--In awarding grants under this Act, the Secretary 
shall--
            (1) take into account national economic and strategic 
        defense considerations of individual ports; and
            (2) strongly encourage efforts to promote--
                    (A) integration of port wide security;
                    (B) information and intelligence sharing; and
                    (C) joint efforts, such as joint harbor operations 
                centers between all port stakeholders.
    (c) Use of Funds.--Grants awarded under this section may be used--
            (1) to help implement Area Maritime Transportation Security 
        Plans required under section 70103(b) of title 46, United 
        States Code;
            (2) to correct port security vulnerabilities identified 
        through vulnerability assessments approved by the Secretary;
            (3) for the salaries, benefits, overtime compensation, and 
        other costs of additional security personnel for State and 
        local agencies for activities required by the Area Maritime 
        Security Plan for a port area if--
                    (A) the Secretary increases the threat level under 
                the Homeland Security Advisory System to Code Orange or 
                Code Red;
                    (B) the Commandant of the Coast Guard raises the 
                Maritime Security level to MARSEC Level 2 or 3; or
                    (C) the Secretary otherwise authorizes such costs;
            (4) for the cost of acquisition, operation, and maintenance 
        of equipment that contributes to the overall security of the 
        port area, as identified in the Area Maritime Security Plan if 
        the need is based upon vulnerability assessments approved by 
        the Secretary or identified in the Area Maritime Security Plan;
            (5) to develop joint harbor operations centers that bring 
        together Federal, State, and local officials and stakeholders 
        into a common operation center that is focused on port area 
        security;
            (6) to conduct vulnerability assessments approved by the 
        Secretary; and
            (7) to conduct port wide exercises to strengthen emergency 
        preparedness of Federal, State, and local officials responsible 
        for port security, including law enforcement personnel, in 
        support of the Area Maritime Security Plan.
    (d) Prohibited Uses.--Grants awarded under this section may not be 
used to construct buildings or other physical facilities or to acquire 
land unless such use is specifically approved by the Secretary in 
support of subsection (c)(5).
    (e) Matching Requirements.--
            (1) Federal funding.--Except as provided in paragraph (2), 
        Federal funds for any eligible project under this section shall 
        not exceed 75 percent of the total cost of such project.
            (2) Exceptions.--
                    (A) Small projects.--Paragraph (1) shall not apply 
                to grants under this section for stand alone projects 
                costing not more than $25,000. The amount under this 
                subparagraph shall be indexed to the consumer price 
                index and modified each fiscal year after the annual 
                publication of the consumer price index.
                    (B) Reduction in matching requirement.--If the 
                Secretary determines that a proposed project merits 
                support and cannot be undertaken without a higher 
                percentage of Federal financial assistance, the 
                Secretary may award a grant for such project with a 
                lesser matching requirement than is described in 
                paragraph (1).
    (f) Application.--
            (1) In general.--The Secretary shall determine who, as an 
        eligible applicant, may submit an application, at such time, in 
        such form, and containing such information and assurances as 
        the Secretary, working through the Office of State and Local 
        Government Coordination and Preparedness, may require.
            (2) Minimum standards for payment or reimbursement.--Each 
        application submitted under paragraph (1) shall include--
                    (A) a comprehensive description of--
                            (i) the need for the project;
                            (ii) the methodology for coordinating the 
                        project into the security of the greater port 
                        area, as identified in the Area Maritime 
                        Security Plan;
                            (iii) any existing cooperation agreements 
                        with other port facilities, vessels, or 
                        organizations that benefit security of the 
                        entire port; and
                            (iv) the applicability of the project to 
                        the Area Maritime Transportation Security Plan; 
                        and
                    (B) a determination by the Captain of the Port that 
                the security project--
                            (i) addresses or corrects port security 
                        vulnerabilities identified by the Coast Guard, 
                        or through port security vulnerability 
                        assessments approved by the Secretary; and
                            (ii) helps to ensure compliance with the 
                        Area Maritime Transportation Security Plan.
            (3) Procedural safeguards.--The Secretary, in consultation 
        with the Office of the Inspector General, shall issue 
        guidelines to establish appropriate accounting, reporting, and 
        review procedures to ensure that--
                    (A) grant funds are used for the purposes for which 
                they were made available;
                    (B) grantees have properly accounted for all 
                expenditures of grant funds; and
                    (C) grant funds not used for such purposes and 
                amounts not obligated or expended are returned.
            (4) Project approval required.--The Secretary may not award 
        a grant under this section unless the Secretary determines 
        that--
                    (A) the project to be carried out with such grant 
                funding--
                            (i) is consistent with vulnerability 
                        assessments approved by the Secretary;
                            (ii) supports cooperation or integration of 
                        Federal, State, local, and industry 
                        stakeholders in the port area; and
                            (iii) helps to implement the Area Maritime 
                        Transportation Security Plan;
                    (B) sufficient funding is available to meet the 
                matching requirement described under subsection (d);
                    (C) the project will be completed without 
                unreasonable delay; and
                    (D) the recipient has authority to carry out the 
                proposed project.
    (g) Coordination and Cooperation.--The Secretary--
            (1) shall ensure that all projects that receive grant 
        funding under this section within any area defined in an Area 
        Maritime Transportation Security Plan are coordinated with 
        other projects in such area; and
            (2) may require cooperative agreements among users of the 
        port and port facilities with respect to projects funded under 
        this section.
    (h) Audits and Examinations.--All grantees under this section shall 
maintain such records as the Secretary may require and make such 
records available for review and audit by the Secretary, the 
Comptroller General of the United States, or the Inspector General of 
the Department of Homeland Security.
    (i) Reports on Security Funding and Compliance.--
            (1) Initial report.--Not later than 6 months after the date 
        of enactment of this Act, the Secretary shall submit an 
        unclassified report to the Committee on Homeland Security and 
        Governmental Affairs of the Senate and the Committee on 
        Homeland Security of the House of Representatives containing a 
        proposal to implement the port security grant program for 
        fiscal years 2007 through 2012.
            (2) Annual reports.--Not later than 1 year after the 
        submission of the report required by paragraph (1), and 
        annually through October 1, 2013, the Secretary shall submit an 
        unclassified report to the Committee on Homeland Security and 
        Governmental Affairs of the Senate and the Committee on 
        Homeland Security of the House of Representatives, regarding 
        the progress made in meeting the objectives described in 
        subparagraphs (A) and (B) of paragraph (1), that--
                    (A) identifies any funding modifications necessary 
                to meet the objectives described in such subparagraphs 
                (A) and (B);
                    (B) includes an assessment of progress in 
                implementing the grant program established under this 
                Act; and
                    (C) includes any recommendations the Secretary may 
                make to improve these programs.

SEC. 3. AUTHORIZATION OF APPROPRIATIONS.

            (1) In general.--There are authorized to be appropriated to 
        the Secretary $400,000,000 for each of the fiscal years 2007 
        through 2012 to carry out this Act.
            (2) Source of funds.--The amounts authorized to be 
        appropriated under paragraph (1) shall originate from duties 
        collected by United States Customs and Border Protection.