(d) ALLOCATION TO STATES ON BEHALF OF NON-
QUALIFYING COMMUNITIES.—
(1) IN GENERAL.—Of the amount approved in
an appropriation Act under section 4 that remains
after allocations pursuant to paragraphs (1) and (2)
of subsection (a), 30 percent shall be allocated
among the States for use in nonqualifying areas.
The allocation for each State shall be based on the
population of that State, relative to the populations
of all States, excluding the population of qualifying
communities. The Director shall, in order to com-
pensate for the discrepancy between the total of the
amounts to be allocated under this paragraph and
the total of the amounts available under such para-
graph, make a pro rata reduction of each amount al-
located to the nonqualifying communities in each
State under such paragraph so that the nonquali-
fying communities in each State will receive an
amount that represents the same percentage of the
total amount available under such paragraph as the
percentage which the nonqualifying areas of the
same State would have received under such para-
graph if the total amount available under such para-
graph had equaled the total amount which was allo-
cated under such paragraph.
(2) DISTRIBUTION.—(A) Amounts allocated
under paragraph (1) shall be distributed to units of
general local government located in nonqualifying
areas of the State to carry out activities in accord-
ance with the provisions of this Act—
(i) by a State that has elected, in such
manner and at such time as the Director shall
prescribe, to distribute such amounts consistent
with the statement submitted under section
5(a); or
(ii) by the Director, in any case described
in subparagraph (B), for use by units of gen-
eral local government in accordance with para-
graph (3)(B).
(B) The Director shall distribute amounts allo-
cated under paragraph (1) if the State has not elect-
ed to distribute such amounts.
(C) To receive and distribute amounts allocated
under paragraph (1), the State must certify that it,
with respect to units of general local government in
nonqualifying areas—
(i) provides or will provide technical assist-
ance to units of general local government in
connection with homeland security initiatives;
(ii) will not refuse to distribute such
amounts to any unit of general local govern-
ment on the basis of the particular eligible ac-
tivity selected by such unit of general local gov-
ernment to meet its homeland security objec-
tives, except that this clause may not be consid-
ered to prevent a State from establishing prior-
ities in distributing such amounts on the basis
of the activities selected; and
(iii) has consulted with local elected offi-
cials from among units of general local govern-
ment located in nonqualifying areas of that
State in determining the method of distribution
of funds required by subparagraph (A).
(D) To receive and distribute amounts allocated
under paragraph (1), the State shall certify that
each unit of general local government to be distrib-
uted funds will be required to identify its homeland
security objectives, and the activities to be under-
taken to meet such objectives.
(3) MINIMUM AMOUNT.—Each State shall be
allocated in each fiscal year authorized under this
Act and under this section not less than .75 percent
of the total amount appropriated in one fiscal year
for grants made available to States under this sec-
tion, except that the American Samoa, Guam, and
the Northern Mariana Islands shall each be allo-
cated .25 percent.
(4) ADMINISTRATION.—(A) If the State re-
ceives and distributes such amounts, it shall be re-
sponsible for the administration of funds so distrib-
uted. The State shall pay from its own resources all
administrative expenses incurred by the State in car-
rying out its responsibilities under this Act, except
that from the amounts received for distribution in
nonqualifying areas, the State may deduct an
amount to cover such expenses and its administra-
tive expenses not to exceed the sum of $150,000
plus 50 percent of any such expenses under this Act
in excess of $150,000. Amounts deducted in excess
of $150,000 shall not exceed 2 percent of the
amount so received.
(B) If the Director distributes such amounts,
the distribution shall be made in accordance with de-
terminations of the Director pursuant to statements
submitted and the other requirements of section 5
(other than subsection (c)) and in accordance with
regulations and procedures prescribed by the Direc-
tor.
(C) Any amounts allocated for use in a State
under paragraph (1) that are not received by the
State for any fiscal year because of failure to meet
the requirements of subsection (a) or (b) of section
5 shall be added to amounts allocated to all States
under paragraph (1) for the succeeding fiscal year.
(D) Any amounts allocated for use in a State
under paragraph (1) that become available as a re-
sult of the closeout of a grant made by the Director
under this section in nonqualifying areas of the
State shall be added to amounts allocated to the
State under paragraph (1) for the fiscal year in
which the amounts become so available.
(5) SINGLE UNIT.—Any combination of units of
general local governments may not be required to
obtain recognition by the Director pursuant to sec-
tion 3(2) to be treated as a single unit of general
local government for purposes of this subsection.
(6) DEDUCTION.—From the amounts received
under paragraph (1) for distribution in nonquali-
fying areas, the State may deduct an amount, not to
exceed 1 percent of the amount so received, to pro-
vide technical assistance to local governments.
(7) APPLICABILITY.—Any activities conducted
with amounts received by a unit of general local gov-
ernment under this subsection shall be subject to the
applicable provisions of this Act and other Federal
law in the same manner and to the same extent as
activities conducted with amounts received by a unit
of general local government under subsection (a).
(e) QUALIFICATIONS AND DETERMINATIONS.—The
Director may fix such qualification or submission dates
as he determines are necessary to permit the computations
and determinations required by this section to be made
in a timely manner, and all such computations and deter-
minations shall be final and conclusive.
(f) PRO RATA REDUCTION AND INCREASE.—If the
total amount available for distribution in any fiscal year
to metropolitan cities and urban counties under this sec-
tion is insufficient to provide the amounts to which metro-
politan cities and urban counties would be entitled under
subsection (b), and funds are not otherwise appropriated
to meet the deficiency, the Director shall meet the defi-
ciency through a pro rata reduction of all amounts deter-
mined under subsection (b). If the total amount available
for distribution in any fiscal year to metropolitan cities
and urban counties under this section exceeds the amounts
to which metropolitan cities and urban counties would be
entitled under subsection (b), the Director shall distribute
State and local level, including law enforcement, fire,
and emergency personnel.
(b) ALLOCATIONS.—Funds under this section to be
awarded to States shall be allocated among the States
based upon the population for each State relative to the
populations of all States. The ‘‘minimum amount’’ provi-
sion set forth in section 7(a)(3) shall apply to funds
awarded under this section to States. With respect to sub-
section (a)(4), at least 30 percent of the funds awarded
must be used for the development and maintenance of
local communications systems.
(c) REGIONAL COOPERATIONS.—Funds under this
section to be awarded to regional cooperations shall be al-
located among the regional cooperations based upon the
population of the areas covered by the cooperations.
SEC. 9. NONDISCRIMINATION IN PROGRAMS AND ACTIVI-
TIES.
No person in the United States shall on the ground
of race, color, national origin, religion, or sex be excluded
from participation in, be denied the benefits of, or be sub-
jected to discrimination under any program or activity
funded in whole or in part with funds made available
under this Act. Any prohibition against discrimination on
the basis of age under the Age Discrimination Act of 1975
(42 U.S.C. 6101 et seq.) or with respect to an otherwise
qualified handicapped individual as provided in section
504 of the Rehabilitation Act of 1973 (29 U.S.C. 794)
shall also apply to any such program or activity.
SEC. 10. REMEDIES FOR NONCOMPLIANCE WITH REQUIRE-
MENTS.
If the Director finds after reasonable notice and op-
portunity for hearing that a recipient of assistance under
this Act has failed to comply substantially with any provi-
sion of this Act, the Director, until he is satisfied that
there is no longer any such failure to comply, shall—
(1) terminate payments to the recipient under
this Act;
(2) reduce payments to the recipient under this
Act by an amount equal to the amount of such pay-
ments which were not expended in accordance with
this Act; or
(3) limit the availability of payments under this
Act to programs, projects, or activities not affected
by such failure to comply.
SEC. 11. REPORTING REQUIREMENTS.
(a) IN GENERAL.—Not later than 180 days after the
close of each fiscal year in which assistance under this Act
is furnished, the Director shall submit to Congress a re-
port which shall contain—
(1) a description of the progress made in ac-
complishing the objectives of this Act;
(2) a summary of the use of such funds during
the preceding fiscal year; and
(3) a description of the activities carried out
under section 7.
(b) REPORTS TO THE DIRECTOR.—The Director is
authorized to require recipients of assistance under this
Act to submit to him such reports and other information
as may be necessary in order for the Director to make
the report required by subsection (a).
SEC. 12. CONSULTATION BY ATTORNEY GENERAL.
In carrying out the provisions of this Act including
the issuance of regulations, the Director shall consult with
the Attorney General, the Office of Homeland Security,
and other Federal departments and agencies admin-
istering Federal grant-in-aid programs.
SEC. 13. INTERSTATE AGREEMENTS OR COMPACTS; PUR-
POSES.
The consent of the Congress is hereby given to any
two or more States to enter into agreements or compacts,
not in conflict with any law of the United States, for coop-
erative effort and mutual assistance in support of home-
land security planning and programs carried out under
this Act as they pertain to interstate areas and to localities
within such States, and to establish such agencies, joint
or otherwise, as they may deem desirable for making such
agreements and compacts effective.
SEC. 14. MATCHING REQUIREMENTS; SUSPENSION OF RE-
QUIREMENTS 
FOR 
ECONOMICALLY 
DIS-
TRESSED AREAS.
(a) REQUIREMENT.—Grant recipients shall con-
tribute from funds, other than those received under this
Act, 10 percent of the total funds received under this Act.
Such funds shall be used in accordance with the grantee’s
statement of homeland security objectives.
(b) ECONOMIC DISTRESS.—Grant recipients that are
deemed economically distressed shall be waived from the
matching requirement set forth in this section.
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