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covered 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) PERFORMANCE OF FEDERAL DUTY.—An 
applicant for a covered grant may petition the Sec-
retary for the reimbursement of the cost of any ac-
tivity relating to prevention (including detection) of, 
preparedness for, response to, or recovery from acts 
of terrorism that is a Federal duty and usually per-
formed by a Federal agency, and that is being per-
formed by a State or local government (or both) 
under agreement with a Federal agency. 
‘‘(f) 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. 
‘‘(g) 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 
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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. 
‘‘(h) 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 
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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). 
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‘‘(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 
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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 capabilities iden-
tified in the applicable State homeland security 
plan or plans were achieved, maintained, or en-
hanced as the result of the expenditure of grant 
funds during the preceding fiscal year. 
‘‘(E) The extent to which capabilities iden-
tified in the applicable State homeland security 
plan or plans remain unmet. 
‘‘(6) INCLUSION OF RESTRICTED ANNEXES.—A 
recipient of a covered grant may submit to the Sec-
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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. 
‘‘(i) 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 
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‘‘(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 
2003(e)(5)(E) or paragraph (1) for an additional 
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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). 
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‘‘(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 
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‘‘(ii) shall not prejudice consideration 
of a request for payment under this para-
graph that is submitted by another local 
government. 
‘‘(D) DEADLINE
FOR
ACTION
BY
SEC-
RETARY.—The Secretary shall approve or dis-
approve each request for payment under this 
paragraph by not later than 15 days after the 
date the request is received by the Department. 
‘‘(j) REPORTS TO CONGRESS.—The Secretary shall 
submit an annual report to Congress by January 31 of 
each year covering the preceding fiscal year— 
‘‘(1) describing in detail the amount of Federal 
funds provided as covered grants that were directed 
to each State, region, and directly eligible tribe in 
the preceding fiscal year; 
‘‘(2) containing information on the use of such 
grant funds by grantees; and 
‘‘(3) describing— 
‘‘(A) the Nation’s progress in achieving, 
maintaining, and enhancing the capabilities es-
tablished by the Secretary as a result of the ex-
penditure of covered grant funds during the 
preceding fiscal year; and 
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‘‘(B) an estimate of the amount of expend-
itures required to attain across the United 
States the essential capabilities established by 
the Secretary.’’. 
TITLE 
II—ENSURING 
COMMU-
NICATIONS 
INTEROPER-
ABILITY 
FOR 
FIRST 
RE-
SPONDERS 
SEC. 201. IMPROVE COMMUNICATIONS FOR EMERGENCY 
RESPONSE GRANT PROGRAM. 
(a) ESTABLISHMENT.—Title V of the Homeland Se-
curity Act of 2002 (6 U.S.C. 311 et seq.) is amended by 
adding at the end the following new section: 
‘‘SEC. 522. IMPROVE COMMUNICATIONS FOR EMERGENCY 
RESPONSE GRANT PROGRAM. 
‘‘(a) 
ESTABLISHMENT.—The 
Secretary, 
acting 
through the Director of the Office of Grants and Training 
and in coordination with the Director for Emergency Com-
munications, shall establish the Improve Communications 
for Emergency Response Grant Program to make grants 
to States and regions to carry out initiatives to improve 
interoperable emergency communications, including initia-
tives to achieve solutions to statewide, regional, national, 
and, where appropriate, international interoperability. 
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‘‘(b) USE OF GRANT FUNDS.—A State or region re-
ceiving a grant under this section may use the grant for 
short-term or long-term goals for improving interoperable 
emergency communications, including interoperability 
within that State or region, and to assist with— 
‘‘(1) statewide or regional communications 
planning; 
‘‘(2) design and engineering for interoperable 
emergency communications systems; 
‘‘(3) procurement and installation of interoper-
able emergency communications equipment; 
‘‘(4) interoperable emergency communications 
exercises; 
‘‘(5) modeling and simulation exercises for 
operational command and control functions; 
‘‘(6) technical assistance and training for inter-
operable emergency communications; and 
‘‘(7) other activities determined by the Sec-
retary to be integral to interoperable emergency 
communications. 
‘‘(c) REGION DEFINED.—For the purposes of this 
section, the term ‘region’ means any combination of con-
tiguous local government units, including such a combina-
tion established by law or mutual aid agreement between 
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two or more local governments or governmental agen-
cies.’’. 
(b) AUTHORIZATION OF APPROPRIATIONS.—There is 
authorized to be appropriated to the Secretary of Home-
land Security for grants under section 522 of the Home-
land Security Act of 2002, as added by subsection (a)— 
(1) such sums as may be necessary for the first 
fiscal year that begins after the later of— 
(A) the date on which the Secretary of 
Homeland Security completes and submits to 
Congress the National Emergency Communica-
tions Plan required under section 1802 of the 
Homeland Security Act of 2002 (6 U.S.C. 572); 
(B) the date on which the Secretary of 
Homeland Security completes and submits to 
Congress the first baseline interoperability as-
sessment required under section 1803 of such 
Act (6 U.S.C. 573); or 
(C) the date on which the Secretary of 
Homeland Security, after consultation with the 
Director of Emergency Communications, deter-
mines and notifies Congress that substantial 
progress has been made towards the develop-
ment and promulgation of voluntary consensus- 
based interoperable communications standards 
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pursuant to section 1801(c)(11) of such Act (6 
U.S.C. 571(c)(11)); and 
(2) such sums as may be necessary for each 
subsequent fiscal year. 
(c) CLERICAL AMENDMENT.—The table of contents 
in section 1(b) of that Act is amended by inserting after 
the item relating to section 521 the following: 
‘‘Sec. 522. Improve Communications for Emergency Response Grant Pro-
gram.’’. 
TITLE III—STRENGTHENING USE 
OF A UNIFIED INCIDENT COM-
MAND DURING EMERGENCIES 
SEC. 301. NATIONAL EXERCISE PROGRAM DESIGN. 
Section 648(b)(2)(A) of the Department of Home-
land Security Appropriations Act, 2007 (Public Law 109– 
295) is amended by striking clauses (iv) and (v) and in-
serting the following: 
‘‘(iv) designed to provide for system-
atic evaluation of readiness and enhance 
operational understanding of the Incident 
Command System and relevant mutual aid 
agreements; 
‘‘(v) designed to address the unique 
requirements of populations with special 
needs; and 
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‘‘(vi) designed to include the prompt 
development of after-action reports and 
plans for quickly incorporating lessons 
learned into future operations; and’’. 
SEC. 302. NATIONAL EXERCISE PROGRAM MODEL EXER-
CISES. 
Section 648(b)(2)(B) of the Department of Home-
land Security Appropriations Act, 2007 (Public Law 109– 
295) is amended by striking so much as precedes clause 
(i) and inserting the following: 
‘‘(B) shall include a selection of model ex-
ercises that State, local, and tribal governments 
can readily adapt for use, and shall provide as-
sistance to State, local, and tribal governments 
with the design, implementation, and evaluation 
of exercises, whether a model exercise program 
or an exercise designed locally, that—’’. 
SEC. 303. RESPONSIBILITIES OF REGIONAL ADMINISTRA-
TORS OF THE FEDERAL EMERGENCY MAN-
AGEMENT AGENCY. 
Section 507(c)(2) of the Homeland Security Act of 
2002 (enacted by section 611 of the Department of Home-
land Security Appropriations Act, 2007 (Public Law 109– 
295)) is amended by striking ‘‘and’’ after the semicolon 
at the end of subparagraph (H), by redesignating subpara-
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graph (I) as subparagraph (J), and by inserting after sub-
paragraph (H) the following: 
‘‘(I) assisting State, local, or tribal govern-
ments, where appropriate, to pre-identify and 
evaluate suitable sites where a multi-jurisdic-
tional unified command system can be quickly 
established if the need for such a system arises; 
and’’. 
TITLE IV—STRENGTHENING 
AVIATION SECURITY 
SEC. 401. INSTALLATION OF IN-LINE BAGGAGE SCREENING 
EQUIPMENT. 
Not later than 30 days after the date of enactment 
of this Act, the Secretary for Homeland Security shall 
submit to the appropriate congressional committees the 
cost sharing study described in section 4019(d) of the In-
telligence Reform and Terrorism Prevention Act of 2004 
(118 Stat. 3722), together with the Secretary’s analysis 
of the study, a list of provisions of the study the Secretary 
intends to implement, and a plan and schedule for imple-
mentation of such listed provisions. 
SEC. 402. AVIATION SECURITY CAPITAL FUND. 
(a) IN GENERAL.—Section 44923(h)(1) of title 49, 
United States Code, is amended in the second sentence 
by striking ‘‘2007’’ and inserting ‘‘2011’’. 
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(b) DISCRETIONARY GRANTS.—Section 44923(h)(3) 
of such title is amended by striking ‘‘for a fiscal year, 
$125,000,000’’ and inserting ‘‘, $125,000,000 for each of 
fiscal years 2004, 2005, and 2006 and such sums as may 
be necessary for each of fiscal years 2007 through 2011’’. 
SEC. 403. AIRPORT CHECKPOINT SCREENING EXPLOSIVE 
DETECTION. 
Section 44940 of title 49, United States Code, is 
amended— 
(1) in subsection (d)(4) by inserting ‘‘, other 
than subsection (i),’’ before ‘‘except to’’; and 
(2) by adding at the end the following: 
‘‘(i) CHECKPOINT SCREENING SECURITY FUND.— 
‘‘(1) ESTABLISHMENT.—There is established in 
the Department of Homeland Security a fund to be 
known as the ‘Checkpoint Screening Security Fund’. 
‘‘(2) DEPOSITS.—In fiscal year 2008, after 
amounts are made available under section 44923(h), 
the next $250,000,000 derived from fees received 
under subsection (a)(1) shall be available to be de-
posited in the Fund. 
‘‘(3) FEES.—The Secretary of Homeland Secu-
rity shall impose the fee authorized by subsection 
(a)(1) so as to collect at least $250,000,000 in fiscal 
year 2008 for deposit into the Fund. 
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