planning agencies governed by local offi-
cials, both within its jurisdictional borders
and with neighboring States;
‘‘(F) with respect to the emergency pre-
paredness of first responders, addresses the
unique aspects of terrorism as part of a com-
prehensive State emergency management plan;
and
‘‘(G) provides for coordination of response
and recovery efforts at the local level, including
procedures for effective incident command in
conformance with the National Incident Man-
agement System.
‘‘(2) CONSULTATION.—The State plan sub-
mitted under paragraph (1) shall be developed in
consultation with and subject to appropriate com-
ment by local governments and first responders
within the State.
‘‘(3) APPROVAL
BY
SECRETARY.—The Sec-
retary may not award any covered grant to a State
unless the Secretary has approved the applicable
State homeland security plan.
‘‘(4) REVISIONS.—A State may revise the appli-
cable State homeland security plan approved by the
Secretary under this subsection, subject to approval
of the revision by the Secretary.
‘‘(d) CONSISTENCY WITH STATE PLANS.—The Sec-
retary shall ensure that each covered grant is used to sup-
plement and support, in a consistent and coordinated
manner, the applicable State homeland security plan or
plans.
‘‘(e) APPLICATION FOR GRANT.—
‘‘(1) IN GENERAL.—Except as otherwise pro-
vided in this subsection, any State, region, or di-
rectly eligible tribe may apply for a covered grant by
submitting to the Secretary an application at such
time, in such manner, and containing such informa-
tion as is required under this subsection, or as the
Secretary may reasonably require.
‘‘(2) DEADLINES
FOR
APPLICATIONS
AND
AWARDS.—All applications for covered grants must
be submitted at such time as the Secretary may rea-
sonably require for the fiscal year for which they are
submitted. The Secretary shall award covered grants
pursuant to all approved applications for such fiscal
year as soon as practicable, but not later than
March 1 of such year.
‘‘(3) AVAILABILITY
OF
FUNDS.—All funds
awarded by the Secretary under covered grants in a
fiscal year shall be available for obligation through
the end of the subsequent fiscal year.
‘‘(4) MINIMUM CONTENTS OF APPLICATION.—
The Secretary shall require that each applicant in-
clude in its application, at a minimum—
‘‘(A) the purpose for which the applicant
seeks covered grant funds and the reasons why
the applicant needs the covered grant to meet
the essential capabilities for terrorism prepared-
ness within the State, region, or directly eligible
tribe to which the application pertains;
‘‘(B) a description of how, by reference to
the applicable State homeland security plan or
plans under subsection (c), the allocation of
grant funding proposed in the application, in-
cluding, where applicable, the amount not
passed through under section 1806(g)(1), would
assist in fulfilling the essential capabilities for
terrorism preparedness specified in such plan or
plans;
‘‘(C) a statement of whether a mutual aid
agreement applies to the use of all or any por-
tion of the covered grant funds;
‘‘(D) if the applicant is a State, a descrip-
tion of how the State plans to allocate the cov-
ered grant funds to regions, local governments,
and Indian tribes;
‘‘(E) if the applicant is a region—
‘‘(i) a precise geographical description
of the region and a specification of all par-
ticipating and nonparticipating local gov-
ernments within the geographical area
comprising that region;
‘‘(ii) a specification of what govern-
mental entity within the region will admin-
ister the expenditure of funds under the
covered grant; and
‘‘(iii) a designation of a specific indi-
vidual to serve as regional liaison;
‘‘(F) a capital budget showing how the ap-
plicant intends to allocate and expend the cov-
ered grant funds;
‘‘(G) if the applicant is a directly eligible
tribe, a designation of a specific individual to
serve as the tribal liaison; and
‘‘(H) a statement of how the applicant in-
tends to meet the matching requirement, if any,
that applies under section 1806(g)(2).
‘‘(5) REGIONAL APPLICATIONS.—
‘‘(A) RELATIONSHIP TO STATE APPLICA-
TIONS.—A regional application—
‘‘(i) shall be coordinated with an ap-
plication submitted by the State or States
of which such region is a part;
‘‘(ii) shall supplement and avoid dupli-
cation with such State application; and
‘‘(iii) shall address the unique regional
aspects of such region’s terrorism pre-
paredness needs beyond those provided for
in the application of such State or States.
‘‘(B) STATE REVIEW AND SUBMISSION.—
To ensure the consistency required under sub-
section (d) and the coordination required under
subparagraph (A) of this paragraph, an appli-
cant that is a region must submit its applica-
tion to each State of which any part is included
in the region for review and concurrence prior
to the submission of such application to the
Secretary. The regional application shall be
transmitted to the Secretary through each such
State within 30 days of its receipt, unless the
Governor of such a State notifies the Secretary,
in writing, that such regional application is in-
consistent with the State’s homeland security
plan and provides an explanation of the reasons
therefor.
‘‘(C) 
DISTRIBUTION
OF
REGIONAL
AWARDS.—If the Secretary approves a regional
application, then the Secretary shall distribute
a regional award to the State or States submit-
ting the applicable regional application under
subparagraph (B), and each such State shall,
not later than the end of the 45-day period be-
ginning on the date after receiving a regional
award, pass through to the region all covered
grant funds or resources purchased with such
funds, except those funds necessary for the
State to carry out its responsibilities with re-
spect to such regional application: Provided,
That in no such case shall the State or States
pass through to the region less than 80 percent
of the regional award.
‘‘(D) CERTIFICATIONS
REGARDING
DIS-
TRIBUTION OF GRANT FUNDS TO REGIONS.—
Any State that receives a regional award under
subparagraph (C) shall certify to the Secretary,
by not later than 30 days after the expiration
of the period described in subparagraph (C)
with respect to the grant, that the State has
made available to the region the required funds
and resources in accordance with subparagraph
(C).
‘‘(E) DIRECT PAYMENTS TO REGIONS.—If
any State fails to pass through a regional
award to a region as required by subparagraph
(C) within 45 days after receiving such award
and does not request or receive an extension of
such period under section 1806(h)(2), the re-
gion may petition the Secretary to receive di-
rectly the portion of the regional award that is
required to be passed through to such region
under subparagraph (C).
‘‘(F) REGIONAL LIAISONS.—A regional li-
aison designated under paragraph (4)(E)(iii)
shall—
‘‘(i) coordinate with Federal, State,
local, regional, and private officials within
the region concerning terrorism prepared-
ness;
‘‘(ii) develop a process for receiving
input from Federal, State, local, regional,
and private sector officials within the re-
gion to assist in the development of the re-
gional application and to improve the re-
gion’s access to covered grants; and
‘‘(iii) administer, in consultation with
State, local, regional, and private officials
within the region, covered grants awarded
to the region.
‘‘(6) TRIBAL APPLICATIONS.—
‘‘(A) SUBMISSION
TO
THE
STATE
OR
STATES.—To ensure the consistency required
under subsection (d), an applicant that is a di-
rectly eligible tribe must submit its application
to each State within the boundaries of which
any part of such tribe is located for direct sub-
mission to the Department along with the appli-
cation of such State or States.
‘‘(B) OPPORTUNITY
FOR
STATE
COM-
MENT.—Before awarding any covered grant to
a directly eligible tribe, the Secretary shall pro-
vide an opportunity to each State within the
boundaries of which any part of such tribe is lo-
cated to comment to the Secretary on the con-
sistency of the tribe’s application with the
State’s homeland security plan. Any such com-
ments shall be submitted to the Secretary con-
currently with the submission of the State and
tribal applications.
‘‘(C) FINAL
AUTHORITY.—The Secretary
shall have final authority to determine the con-
sistency of any application of a directly eligible
tribe with the applicable State homeland secu-
rity plan or plans, and to approve any applica-
tion of such tribe. The Secretary shall notify
each State within the boundaries of which any
part of such tribe is located of the approval of
an application by such tribe.
‘‘(D) TRIBAL
LIAISON.—A tribal liaison
designated under paragraph (4)(G) shall—
‘‘(i) coordinate with Federal, State,
local, regional, and private officials con-
cerning terrorism preparedness;
‘‘(ii) develop a process for receiving
input from Federal, State, local, regional,
and private sector officials to assist in the
development of the application of such
tribe and to improve the tribe’s access to
covered grants; and
‘‘(iii) administer, in consultation with
State, local, regional, and private officials,
covered grants awarded to such tribe.
‘‘(E) LIMITATION ON THE NUMBER OF DI-
RECT GRANTS.—The Secretary may make cov-
ered grants directly to not more than 20 di-
rectly eligible tribes per fiscal year.
‘‘(F) TRIBES
NOT
RECEIVING
DIRECT
GRANTS.—An Indian tribe that does not receive
a grant directly under this section is eligible to
receive funds under a covered grant from the
State or States within the boundaries of which
any part of such tribe is located, consistent with
the homeland security plan of the State as de-
scribed in subsection (c). If a State fails to
comply with section 1806(g)(1), the tribe may
request payment under section 1806(h)(3) in
the same manner as a local government.
‘‘(7) EQUIPMENT STANDARDS.—If an applicant
for a covered grant proposes to upgrade or purchase,
with assistance provided under the grant, new equip-
ment or systems that do not meet or exceed any ap-
plicable national voluntary consensus standards es-
tablished by the Secretary, the applicant shall in-
clude in the application an explanation of why such
equipment or systems will serve the needs of the ap-
plicant better than equipment or systems that meet
or exceed such standards.
‘‘SEC. 
1804. 
RISK-BASED 
EVALUATION 
AND
PRIORITIZATION.
‘‘(a) FIRST RESPONDER GRANTS BOARD.—
‘‘(1) ESTABLISHMENT
OF
BOARD.—The Sec-
retary shall establish a First Responder Grants
Board, consisting of—
‘‘(A) the Secretary;
‘‘(B) the Under Secretary for Emergency
Preparedness and Response;
‘‘(C) the Under Secretary for Border and
Transportation Security;
‘‘(D) the Under Secretary for Information
Analysis and Infrastructure Protection;
‘‘(E) the Under Secretary for Science and
Technology;
‘‘(F) the Director of the Office for Domes-
tic Preparedness;
‘‘(G) the Administrator of the United
States Fire Administration; and
‘‘(H) the Administrator of the Animal and
Plant Health Inspection Service.
‘‘(2) CHAIRMAN.—
‘‘(A) IN GENERAL.—The Secretary shall be
the Chairman of the Board.
‘‘(B) EXERCISE OF AUTHORITIES BY DEP-
UTY
SECRETARY.—The Deputy Secretary of
Homeland Security may exercise the authorities
of the Chairman, if the Secretary so directs.
‘‘(b) FUNCTIONS
OF UNDER SECRETARIES.—The
Under Secretaries referred to in subsection (a)(1) shall
seek to ensure that the relevant expertise and input of the
staff of their directorates are available to and considered
by the Board.
‘‘(c) PRIORITIZATION OF GRANT APPLICATIONS.—
‘‘(1) FACTORS
TO
BE
CONSIDERED.—The
Board shall evaluate and annually prioritize all
pending applications for covered grants based upon
the degree to which they would, by achieving, main-
taining, or enhancing the essential capabilities of the
applicants on a nationwide basis, lessen the threat
to, vulnerability of, and consequences for persons
(including transient commuting and tourist popu-
lations) and critical infrastructure. Such evaluation
and prioritization shall be based upon the most cur-
rent risk assessment available by the Directorate for
Information Analysis and Infrastructure Protection
of the threats of terrorism against the United
States. The Board shall coordinate with State, local,
regional, and tribal officials in establishing criteria
for evaluating and prioritizing applications for cov-
ered grants.
‘‘(2) CRITICAL
INFRASTRUCTURE
SECTORS.—
The Board specifically shall consider threats of ter-
rorism against the following critical infrastructure
sectors in all areas of the United States, urban and
rural:
‘‘(A) Agriculture and food.
‘‘(B) Banking and finance.
‘‘(C) Chemical industries.
‘‘(D) The defense industrial base.
‘‘(E) Emergency services.
‘‘(F) Energy.
‘‘(G) Government facilities.
‘‘(H) Postal and shipping.
‘‘(I) Public health and health care.
‘‘(J) Information technology.
‘‘(K) Telecommunications.
‘‘(L) Transportation systems.
‘‘(M) Water.
‘‘(N) Dams.
‘‘(O) Commercial facilities.
‘‘(P) National monuments and icons.
The order in which the critical infrastructure sectors
are listed in this paragraph shall not be construed
as an order of priority for consideration of the im-
portance of such sectors.
‘‘(3) TYPES OF THREAT.—The Board specifi-
cally shall consider the following types of threat to
the critical infrastructure sectors described in para-
graph (2), and to populations in all areas of the
United States, urban and rural:
‘‘(A) Biological threats.
‘‘(B) Nuclear threats.
‘‘(C) Radiological threats.
‘‘(D) Incendiary threats.
‘‘(E) Chemical threats.
‘‘(F) Explosives.
‘‘(G) Suicide bombers.
‘‘(H) Cyber threats.
‘‘(I) Any other threats based on proximity
to specific past acts of terrorism or the known
activity of any terrorist group.
The order in which the types of threat are listed in
this paragraph shall not be construed as an order of
priority for consideration of the importance of such
threats.
‘‘(4) CONSIDERATION
OF
ADDITIONAL
FAC-
TORS.—The Board shall take into account any other
specific threat to a population (including a transient
commuting or tourist population) or critical infra-
structure sector that the Board has determined to
exist. In evaluating the threat to a population or
critical infrastructure sector, the Board shall give
greater weight to threats of terrorism based upon
their specificity and credibility, including any pat-
tern of repetition.
‘‘(5) MINIMUM
AMOUNTS.—After evaluating
and prioritizing grant applications under paragraph
(1), the Board shall ensure that, for each fiscal
year—
‘‘(A) each of the States, other than the
Virgin Islands, American Samoa, Guam, and
the Northern Mariana Islands, that has an ap-
proved State homeland security plan receives no
less than 0.25 percent of the funds available for
covered grants for that fiscal year for purposes
of implementing its homeland security plan in
accordance with the prioritization of needs
under section 1803(c)(1)(D);
‘‘(B) each of the States, other than the
Virgin Islands, American Samoa, Guam, and
the Northern Mariana Islands, that has an ap-
proved State homeland security plan and that
meets one or both of the additional high-risk
qualifying criteria under paragraph (6) receives
no less than 0.45 percent of the funds available
for covered grants for that fiscal year for pur-
poses of implementing its homeland security
plan in accordance with the prioritization of
needs under section 1803(c)(1)(D);
‘‘(C) the Virgin Islands, American Samoa,
Guam, and the Northern Mariana Islands each
receives no less than 0.08 percent of the funds
available for covered grants for that fiscal year
for purposes of implementing its approved State
homeland security plan in accordance with the
prioritization 
of 
needs 
under 
section
1803(c)(1)(D); and
‘‘(D) directly eligible tribes collectively re-
ceive no less than 0.08 percent of the funds
available for covered grants for such fiscal year
for purposes of addressing the needs identified
in the applications of such tribes, consistent
with the homeland security plan of each State
within the boundaries of which any part of any
such tribe is located, except that this clause
shall not apply with respect to funds available
for a fiscal year if the Secretary receives less
than 5 applications for such fiscal year from
such tribes under section 1803(e)(6)(A) or does
not approve at least one such application.
‘‘(6) ADDITIONAL HIGH-RISK QUALIFYING CRI-
TERIA.—For purposes of paragraph (5)(B), addi-
tional high-risk qualifying criteria consist of—
‘‘(A) having a significant international
land border; or
‘‘(B) adjoining a body of water within
North America through which an international
boundary line extends.
‘‘(d) EFFECT OF REGIONAL AWARDS ON STATE MIN-
IMUM.—Any regional award, or portion thereof, provided
to a State under section 1803(e)(5)(C) shall not be consid-
ered in calculating the minimum State award under sub-
section (c)(5) of this section.
‘‘SEC. 1805. TASK FORCE ON TERRORISM PREPAREDNESS
FOR FIRST RESPONDERS.
‘‘(a) ESTABLISHMENT.—To assist the Secretary in
updating, revising, or replacing essential capabilities for
terrorism preparedness, the Secretary shall establish an
advisory body pursuant to section 871(a) not later than
60 days after the date of the enactment of this section,
which shall be known as the Task Force on Terrorism Pre-
paredness for First Responders.
‘‘(b) UPDATE, REVISE, OR REPLACE.—The Secretary
shall regularly update, revise, or replace the essential ca-
pabilities for terrorism preparedness as necessary, but not
less than every 3 years.
‘‘(c) REPORT.—
‘‘(1) IN GENERAL.—The Task Force shall sub-
mit to the Secretary, by not later than 12 months
after its establishment by the Secretary under sub-
section (a) and not later than every 2 years there-
after, a report on its recommendations for essential
capabilities for terrorism preparedness.
‘‘(2) CONTENTS.—Each report shall—
‘‘(A) include a priority ranking of essential
capabilities in order to provide guidance to the
Secretary and to the Congress on determining
the appropriate allocation of, and funding levels
for, first responder needs;
‘‘(B) set forth a methodology by which any
State or local government will be able to deter-
mine the extent to which it possesses or has ac-
cess to the essential capabilities that States and
local governments having similar risks should
obtain;
‘‘(C) describe the availability of national
voluntary consensus standards, and whether
there is a need for new national voluntary con-
sensus standards, with respect to first re-
sponder training and equipment;
‘‘(D) include such additional matters as
the Secretary may specify in order to further
the terrorism preparedness capabilities of first
responders; and
‘‘(E) include such revisions to the contents
of previous reports as are necessary to take into
account changes in the most current risk as-
sessment available by the Directorate for Infor-
mation Analysis and Infrastructure Protection
or other relevant information as determined by
the Secretary.
‘‘(3) CONSISTENCY
WITH
FEDERAL
WORKING
GROUP.—The Task Force shall ensure that its rec-
ommendations for essential capabilities for terrorism
preparedness are, to the extent feasible, consistent
with any preparedness goals or recommendations of
the Federal working group established under section
319F(a) of the Public Health Service Act (42 U.S.C.
247d–6(a)).
‘‘(4) COMPREHENSIVENESS.—The Task Force
shall ensure that its recommendations regarding es-
sential capabilities for terrorism preparedness are
made within the context of a comprehensive State
emergency management system.
‘‘(5) PRIOR MEASURES.—The Task Force shall
ensure that its recommendations regarding essential
capabilities for terrorism preparedness take into ac-
count any capabilities that State or local officials
have determined to be essential and have undertaken
since September 11, 2001, to prevent, prepare for,
respond to, or recover from terrorist attacks.
‘‘(d) MEMBERSHIP.—
‘‘(1) IN GENERAL.—The Task Force shall con-
sist of 25 members appointed by the Secretary, and
shall, to the extent practicable, represent a geo-
graphic (including urban and rural) and substantive
cross section of governmental and nongovernmental
first responder disciplines from the State and local
levels, including as appropriate—
‘‘(A) members selected from the emergency
response field, including fire service and law en-
forcement, hazardous materials response, emer-
gency medical services, and emergency manage-
ment personnel (including public works per-
sonnel routinely engaged in emergency re-
sponse);
‘‘(B) health scientists, emergency and in-
patient medical providers, and public health
professionals, including experts in emergency
health care response to chemical, biological, ra-
diological, and nuclear terrorism, and experts in
providing mental health care during emergency
response operations;
‘‘(C) experts from Federal, State, and local
governments, and the private sector, rep-
resenting standards-setting organizations, in-
cluding representation from the voluntary con-
sensus codes and standards development com-
munity, particularly those with expertise in first
responder disciplines; and
‘‘(D) State and local officials with exper-
tise in terrorism preparedness, subject to the
condition that if any such official is an elected
official representing one of the two major polit-
ical parties, an equal number of elected officials
shall be selected from each such party.
‘‘(2) COORDINATION WITH THE DEPARTMENT
OF HEALTH AND HEALTH SERVICES.—In the selec-
tion of members of the Task Force who are health
professionals, including emergency medical profes-
sionals, the Secretary shall coordinate such selection
with the Secretary of Health and Human Services.
‘‘(3) EX
OFFICIO
MEMBERS.—The Secretary
and the Secretary of Health and Human Services
shall each designate one or more officers of their re-
spective Departments to serve as ex officio members
of the Task Force. One of the ex officio members
from the Department of Homeland Security shall be
the designated officer of the Federal Government for
purposes of subsection (e) of section 10 of the Fed-
eral Advisory Committee Act (5 App. U.S.C.).
‘‘(e) APPLICABILITY OF FEDERAL ADVISORY COM-
MITTEE ACT.—Notwithstanding section 871(a), the Fed-
eral Advisory Committee Act (5 App. U.S.C.), including
subsections (a), (b), and (d) of section 10 of such Act,
and section 552b(c) of title 5, United States Code, shall
apply to the Task Force.
‘‘SEC. 1806. USE OF FUNDS AND ACCOUNTABILITY RE-
QUIREMENTS.
‘‘(a) IN GENERAL.—A covered grant may be used
for—
‘‘(1) purchasing or upgrading equipment, in-
cluding computer software, to enhance terrorism
preparedness;
‘‘(2) exercises to strengthen terrorism prepared-
ness;
‘‘(3) training for prevention (including detec-
tion) of, preparedness for, response to, or recovery
from attacks involving weapons of mass destruction,
including training in the use of equipment and com-
puter software;
‘‘(4) developing or updating State homeland se-
curity plans, risk assessments, mutual aid agree-
ments, and emergency management plans to enhance
terrorism preparedness;
‘‘(5) establishing or enhancing mechanisms for
sharing terrorism threat information;
‘‘(6) systems architecture and engineering, pro-
gram planning and management, strategy formula-
tion and strategic planning, life-cycle systems de-
sign, product and technology evaluation, and proto-
type development for terrorism preparedness pur-
poses;
‘‘(7) additional personnel costs resulting from—
‘‘(A) elevations in the threat alert level of
the Homeland Security Advisory System by the
Secretary, or a similar elevation in threat alert
level issued by a State, region, or local govern-
ment with the approval of the Secretary;
‘‘(B) travel to and participation in exer-
cises and training in the use of equipment and
on prevention activities; and
‘‘(C) the temporary replacement of per-
sonnel during any period of travel to and par-
ticipation in exercises and training in the use of
equipment and on prevention activities;
‘‘(8) the costs of equipment (including software)
required to receive, transmit, handle, and store clas-
sified information;
‘‘(9) protecting critical infrastructure against
potential attack by the addition of barriers, fences,
gates, and other such devices, except that the cost
of such measures may not exceed the greater of—
‘‘(A) $1,000,000 per project; or
‘‘(B) such greater amount as may be ap-
proved by the Secretary, which may not exceed
10 percent of the total amount of the covered
grant;
‘‘(10) the costs of commercially available inter-
operable communications equipment (which, where
applicable, is based on national, voluntary consensus
standards) that the Secretary, in consultation with
the Chairman of the Federal Communications Com-
mission, deems best suited to facilitate interoper-
ability, coordination, and integration between and
among emergency communications systems, and that
complies with prevailing grant guidance of the De-
partment for interoperable communications;
‘‘(11) educational curricula development for
first responders to ensure that they are prepared for
terrorist attacks;
‘‘(12) training and exercises to assist public ele-
mentary and secondary schools in developing and
implementing programs to instruct students regard-
ing age-appropriate skills to prevent, prepare for, re-
spond to, mitigate against, or recover from an act of
terrorism;
‘‘(13) paying of administrative expenses directly
related to administration of the grant, except that
such expenses may not exceed 3 percent of the
amount of the grant;
‘‘(14) paying for the conduct of any activity
permitted under the Law Enforcement Terrorism
Prevention Program, or any such successor to such
program; and
‘‘(15) other appropriate activities as determined
by the Secretary.
‘‘(b) PROHIBITED USES.—Funds provided as a cov-
ered grant may not be used—
‘‘(1) to supplant State or local funds;
‘‘(2) to construct buildings or other physical fa-
cilities;
‘‘(3) to acquire land; or
‘‘(4) for any State or local government cost
sharing contribution.
‘‘(c) MULTIPLE-PURPOSE FUNDS.—Nothing in this
section shall be construed to preclude State and local gov-
ernments from using covered grant funds in a manner
that also enhances first responder preparedness for emer-
gencies and disasters unrelated to acts of terrorism, if
such use assists such governments in achieving essential
capabilities for terrorism preparedness established by the
Secretary.
‘‘(d) REIMBURSEMENT OF COSTS.—(1) In addition
to the activities described in subsection (a), a covered
grant may be used to provide a reasonable stipend to paid-
on-call or volunteer first responders who are not otherwise
compensated for travel to or participation in training cov-
ered by this section. Any such reimbursement shall not
be considered compensation for purposes of rendering
such a first responder an employee under the Fair Labor
Standards Act of 1938 (29 U.S.C. 201 et seq.).
‘‘(2) An applicant for a covered grant may petition
the Secretary for the reimbursement of the cost of any
activity relating to prevention (including detection) of, pre-
paredness for, response to, or recovery from acts of ter-
rorism that is a Federal duty and usually performed by
a Federal agency, and that is being performed by a State
or local government (or both) under agreement with a
Federal agency.
‘‘(e) ASSISTANCE REQUIREMENT.—The Secretary
may not require that equipment paid for, wholly or in part,
with funds provided as a covered grant be made available
for responding to emergencies in surrounding States, re-
gions, and localities, unless the Secretary undertakes to
pay the costs directly attributable to transporting and op-
erating such equipment during such response.
‘‘(f) FLEXIBILITY IN UNSPENT HOMELAND SECU-
RITY GRANT FUNDS.—Upon request by the recipient of
a covered grant, the Secretary may authorize the grantee
to transfer all or part of funds provided as the covered
grant from uses specified in the grant agreement to other
uses authorized under this section, if the Secretary deter-
mines that such transfer is in the interests of homeland
security.
‘‘(g) STATE, REGIONAL, AND TRIBAL RESPONSIBIL-
ITIES.—
‘‘(1) PASS-THROUGH.—The Secretary shall re-
quire a recipient of a covered grant that is a State
to obligate or otherwise make available to local gov-
ernments, first responders, and other local groups,
to the extent required under the State homeland se-
curity plan or plans specified in the application for
the grant, not less than 80 percent of the grant
funds, resources purchased with the grant funds
having a value equal to at least 80 percent of the
amount of the grant, or a combination thereof, by
not later than the end of the 45-day period begin-
ning on the date the grant recipient receives the
grant funds.
‘‘(2) COST SHARING.—
‘‘(A) IN GENERAL.—The Federal share of
the costs of an activity carried out with a cov-
ered grant to a State, region, or directly eligible
tribe awarded after the 2-year period beginning
on the date of the enactment of this section
shall not exceed 75 percent.
‘‘(B) INTERIM RULE.—The Federal share
of the costs of an activity carried out with a
covered grant awarded before the end of the 2-
year period beginning on the date of the enact-
ment of this section shall be 100 percent.
‘‘(C) IN-KIND MATCHING.—Each recipient
of a covered grant may meet the matching re-
quirement under subparagraph (A) by making
in-kind contributions of goods or services that
are directly linked with the purpose for which
the grant is made, including, but not limited to,
any necessary personnel overtime, contractor
services, administrative costs, equipment fuel
and maintenance, and rental space.
‘‘(3) CERTIFICATIONS
REGARDING
DISTRIBU-
TION OF GRANT FUNDS TO LOCAL GOVERNMENTS.—
Any State that receives a covered grant shall certify
to the Secretary, by not later than 30 days after the
expiration of the period described in paragraph (1)
with respect to the grant, that the State has made
available for expenditure by local governments, first
responders, and other local groups the required
amount of grant funds pursuant to paragraph (1).
‘‘(4) QUARTERLY REPORT ON HOMELAND SECU-
RITY SPENDING.—The Federal share described in
paragraph (2)(A) may be increased by up to 2 per-
cent for any State, region, or directly eligible tribe
that, not later than 30 days after the end of each
fiscal quarter, submits to the Secretary a report on
that fiscal quarter. Each such report must include,
for each recipient of a covered grant or a pass-
through under paragraph (1)—
‘‘(A) the amount obligated to that recipient
in that quarter;
‘‘(B) the amount expended by that recipi-
ent in that quarter; and
‘‘(C) a summary description of the items
purchased by such recipient with such amount.
‘‘(5) ANNUAL
REPORT
ON
HOMELAND
SECU-
RITY SPENDING.—Each recipient of a covered grant
shall submit an annual report to the Secretary not
later than 60 days after the end of each Federal fis-
cal year. Each recipient of a covered grant that is
a region must simultaneously submit its report to
each State of which any part is included in the re-
gion. Each recipient of a covered grant that is a di-
rectly eligible tribe must simultaneously submit its
report to each State within the boundaries of which
any part of such tribe is located. Each report must
include the following:
‘‘(A) The amount, ultimate recipients, and
dates of receipt of all funds received under the
grant during the previous fiscal year.
‘‘(B) The amount and the dates of dis-
bursements of all such funds expended in com-
pliance with paragraph (1) or pursuant to mu-
tual aid agreements or other sharing arrange-
ments that apply within the State, region, or di-
rectly eligible tribe, as applicable, during the
previous fiscal year.
‘‘(C) How the funds were utilized by each
ultimate recipient or beneficiary during the pre-
ceding fiscal year.
‘‘(D) The extent to which essential capa-
bilities identified in the applicable State home-
land security plan or plans were achieved, main-
tained, or enhanced as the result of the expend-
iture of grant funds during the preceding fiscal
year.
‘‘(E) The extent to which essential capa-
bilities identified in the applicable State home-
land security plan or plans remain unmet.
‘‘(6) INCLUSION OF RESTRICTED ANNEXES.—A
recipient of a covered grant may submit to the Sec-
retary an annex to the annual report under para-
graph (5) that is subject to appropriate handling re-
strictions, if the recipient believes that discussion in
the report of unmet needs would reveal sensitive but
unclassified information.
‘‘(7) PROVISION OF REPORTS.—The Secretary
shall ensure that each annual report under para-
graph (5) is provided to the Under Secretary for
Emergency Preparedness and Response and the Di-
rector of the Office for Domestic Preparedness.
‘‘(h) INCENTIVES TO EFFICIENT ADMINISTRATION
OF HOMELAND SECURITY GRANTS.—
‘‘(1) PENALTIES
FOR
DELAY
IN
PASSING
THROUGH LOCAL SHARE.—If a recipient of a cov-
ered grant that is a State fails to pass through to
local governments, first responders, and other local
groups funds or resources required by subsection
(g)(1) within 45 days after receiving funds under
the grant, the Secretary may—
‘‘(A) reduce grant payments to the grant
recipient from the portion of grant funds that
is not required to be passed through under sub-
section (g)(1);
‘‘(B) terminate payment of funds under
the grant to the recipient, and transfer the ap-
propriate portion of those funds directly to local
first responders that were intended to receive
funding under that grant; or
‘‘(C) impose additional restrictions or bur-
dens on the recipient’s use of funds under the
grant, which may include—
‘‘(i) prohibiting use of such funds to
pay the grant recipient’s grant-related
overtime or other expenses;
‘‘(ii) requiring the grant recipient to
distribute to local government beneficiaries
all or a portion of grant funds that are not
required to be passed through under sub-
section (g)(1); or
‘‘(iii) for each day that the grant re-
cipient fails to pass through funds or re-
sources in accordance with subsection
(g)(1), reducing grant payments to the
grant recipient from the portion of grant
funds that is not required to be passed
through under subsection (g)(1), except
that the total amount of such reduction
may not exceed 20 percent of the total
amount of the grant.
‘‘(2) EXTENSION OF PERIOD.—The Governor of
a State may request in writing that the Secretary
extend 
the 
45-day 
period 
under 
section
1803(e)(5)(E) or paragraph (1) for an additional
15-day period. The Secretary may approve such a
request, and may extend such period for additional
15-day periods, if the Secretary determines that the
resulting delay in providing grant funding to the
local government entities that will receive funding
under the grant will not have a significant detri-
mental impact on such entities’ terrorism prepared-
ness efforts.
‘‘(3) PROVISION
OF
NON-LOCAL
SHARE
TO
LOCAL GOVERNMENT.—
‘‘(A) IN
GENERAL.—The Secretary may
upon request by a local government pay to the
local government a portion of the amount of a
covered grant awarded to a State in which the
local government is located, if—
‘‘(i) the local government will use the
amount paid to expedite planned enhance-
ments to its terrorism preparedness as de-
scribed in any applicable State homeland
security plan or plans;
‘‘(ii) the State has failed to pass
through funds or resources in accordance
with subsection (g)(1); and
‘‘(iii) the local government complies
with subparagraphs (B) and (C).
‘‘(B) SHOWING REQUIRED.—To receive a
payment under this paragraph, a local govern-
ment must demonstrate that—
‘‘(i) it is identified explicitly as an ul-
timate recipient or intended beneficiary in
the approved grant application;
‘‘(ii) it was intended by the grantee to
receive a severable portion of the overall
grant for a specific purpose that is identi-
fied in the grant application;
‘‘(iii) it petitioned the grantee for the
funds or resources after expiration of the
period within which the funds or resources
were required to be passed through under
subsection (g)(1); and
‘‘(iv) it did not receive the portion of
the overall grant that was earmarked or
designated for its use or benefit.
‘‘(C) EFFECT OF PAYMENT.—Payment of
grant funds to a local government under this
paragraph—
‘‘(i) shall not affect any payment to
another local government under this para-
graph; and
‘‘(ii) shall not prejudice consideration
of a request for payment under this para-
graph that is submitted by another local
government.