Risk-Based Funding in Homeland Security Grant Legislation: Issues for the 109th Congrress

CRS Report for Congress
Risk-Based Funding in Homeland Security Grant
th
Legislation: Issues for the 109 Congress
Updated October 21, 2005
Shawn Reese
Analyst in American National Government
Government and Finance Division

Congressional Research Service ˜ The Library of Congress

Risk-Based Funding in Homeland Security Grant
Legislation: Issues for the 109^th Congress
Summary
P.L. 109-90, signed by the President on October 18, 2005, appropriates funding
for the Department of Homeland Security (DHS) for FY2006. P.L. 109-90
appropriates a total of $2.97 billion for state and local homeland security grant
programs. This is $645 million less than was appropriated for these programs in
FY2005 ($3.61 billion). P.L. 109-90 does not alter the funding formula for SHSGP
and LETPP.
Conferees are expected, however, to meet in October to resolve differences
between the House and Senate versions of H.R. 3199, re-authorization of sunset
provisions in the USA PATRIOT Act (P.L. 107-56). The House version of this
measure addresses risk-based funding for homeland security grants.
The House version of H.R. 3199, passed July 21, 2005, would direct DHS to
allocate 100% of funds appropriated for homeland security assistance to states based
on risk, and it would establish a mechanism for doing so. The Senate version, passed
July 29, 2005, is silent on the matter.
This CRS report addresses the following four policy issues that may confront
the conferees as they consider how homeland security funds are to be allocated to the
states:
^!What is the difference between a guaranteed base allocation and a
guaranteed minimum allocation? What is the conceptual difference,
and how would the difference affect the amount of money states
would receive?
^!What risk factors should be included in a risk-based funding
formula?
^!Should natural and technical disaster risks be considered as factors?
^!Who should determine the risk factors?
This report will be updated as congressional action warrants.

Contents
In troduction ......................................................1
Legislative Context............................................1
Current DHS Practice......................................1
9/11 Commission Recommendation...........................2
H.R. 3199................................................2
Legislation in the 109^th Congress......................................3
P.L. 109-90...............................................3
H.R. 3199................................................3
Grant Allocation Methods.......................................4
House-Passed H.R. 3199....................................4
P.L. 109-90...............................................5
Policy Questions..................................................5
Guaranteed Minimum Versus Guaranteed Base.......................5
Comparison of Funding and Base Amounts.....................6
Risk-Based Factors...........................................10
Natural and Technical Disaster Risks.........................11
Federal Homeland Security Assistance Programs............12
All-Hazards .........................................13
Evaluating Potential Risk Factors............................15
Authority to Select Risk Factors.................................16
Appendix A. Potential Risk Factors — A Discussion....................17
Threats .....................................................17
Homeland Security Capability...................................17
Population ..................................................18
Critical Infrastructure..........................................18
Transportation Assets..........................................20
Other Factors................................................20
List of Tables
Table 1. FY2005 Appropriations and FY2006 Appropriations for State and Local
Homeland Security Assistance....................................6
Table 2. State Homeland Security Grant Program and Law Enforcement Terrorism
Prevention Program Base Allocations: FY2005 and Estimated FY2006...8
Table 3. State Homeland Security Grant Program, Law Enforcement Terrorism
Prevention Program, and Discretionary Base and Risk Amounts: FY2005 and
Estimated FY2006.............................................8
Table 4. House-Passed H.R. 3199 Guaranteed Minimum Allocations, Assuming the
FY2006 Appropriation of $2.1 Billion: By State......................9
Table 5. House-Passed H.R. 3199 and P.L. 109-90: Risk Factors...........12
Table 6. Natural and Technical Disaster and Terrorist Attack Similarities....13

Risk-Based Funding in Homeland Security
Grant Legislation: Issues
th
for the 109 Congress
Introduction
P.L. 109-90, signed by the President on October 18, 2005, appropriates funding
for the Department of Homeland Security (DHS) for FY2006. P.L. 109-90
appropriates a total of $2.97 billion for state and local homeland security grant
programs. This is $645 million less than was appropriated for these programs in
FY2005 ($3.61billion). P.L. 109-90 does not alter the funding formula for SHSGP
and LETPP.
Conferees are expected, however, to meet in October to resolve differences
between the House and Senate versions of H.R. 3199, re-authorization of sunset
provisions in the USA PATRIOT Act (P.L. 107-56). The House version of this
measure addresses risk-based funding for homeland security grants.
The House version of H.R. 3199, passed July 21, 2005, would direct DHS to
allocate 100% of funds appropriated for homeland security assistance to states based
on risk, and it would establish a mechanism for doing so. The Senate version, passed
July 29, 2005, is silent on the matter.
This CRS report addresses several policy questions raised by the grant allocation
method proposed in the House version of H.R. 3199 and the method in P.L. 109-90.
It does not focus on the differences in the amounts appropriated for homeland
security grants and re-authorization of USA PATRIOT Act provisions.
Legislative Context
The context within which conferees will consider the two versions of H.R. 3199
includes three elements: first, concern about current DHS practices in allocating
homeland security assistance grants to states based on arguably minimal guidance
from the USA PATRIOT Act; second, the recommendation of the 9/11 Commission
that homeland security assistance supplement state and local resources based on risk
and vulnerability; and third, the provisions of H.R. 3199, as passed by the House,
which would establish a risk-based method for distributing grants.¹
Current DHS Practice. Since FY2003, DHS has allocated funds based on
risk through only one of its state and local homeland security assistance programs —

¹ The House originally passed the grant formula provisions as a separate bill, H.R. 1544, on
May 12, 2005.

the Urban Area Security Initiative (UASI) program.² Other grant allocations were
based on a statutorily guaranteed share of available funds or on state population. In
FY2003 and FY2004, DHS’s Office for Domestic Preparedness (ODP) allocated
funds from the other programs³ using a formula that guaranteed each state and the
District of Columbia a base of 0.75% of total appropriations (0.025% for territories),
with the remainder of total appropriations allocated in proportion to the ratio of the
recipient jurisdiction’s population to the total national population.⁴ In the FY2005
Department of Homeland Security (DHS) appropriations (P.L. 108-334), Congress
directed ODP to allocate funding for the State Homeland Security Grant Program
(SHSGP), the Law Enforcement Terrorism Prevention Program (LETPP), the
Emergency Management Performance Grant Program (EMPG), and Citizen Corps
Programs (CCP) in the same manner as the FY2004 allocations.⁵ In the absence of
statutory or other congressional guidance, DHS allocated the remaining FY2005
homeland security assistance funding in direct proportion to the ratio of each state’s
population to the total national population.⁶
9/11 Commission Recommendation. 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.”⁷ While
acknowledging that “every state and city needs to have some minimum infrastructure
for emergency response,” the 9/11 Commission recommended that state and local
homeland security assistance should “supplement state and local resources based on
the risks or vulnerabilities that merit additional support.” The 9/11 Commission
offered two high-risk, vulnerable cities as examples, saying, “Now, in 2004,
Washington, D.C., and New York City are certainly at the top of any such list.”⁸
H.R. 3199. This bill, as passed by the House, includes provisions directing
DHS to allocate 100% of funds appropriated for homeland security assistance to
states based on risk, and it would establish a mechanism for doing so. House

² The UASI program includes grants to high-threat, high-risk urban areas, port security
grants, rail security grants, intercity bus security grants, trucking industry security grants,
and buffer zone protection program grants.
³ The programs include the State Homeland Security Grant Program, the Law Enforcement
Terrorism Prevention Program, Citizen Corps Programs, and the Emergency Management
Performance Grant Program.
⁴ P.L. 107-56 (USA PATRIOT Act). Section 1014 guarantees each state a base of 0.75%
of total appropriations for domestic preparedness; however, it is silent on how the remaining
appropriations are to be allocated to states and localities.
⁵ Ibid.
⁶ 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.
⁷ National Commission on Terrorist Attacks Upon the United States, The 9/11 Commission
Report (Washington: GPO, July 2004), p. 396.
⁸ Ibid.

conferees are likely to take into account these provisions, which were included as
well in another House-passed bill, H.R. 1544.
This CRS report addresses the following four policy issues that may confront
the conferees as they consider how homeland security funds are to be allocated to the
states:
^!What is the difference between a guaranteed base allocation and a
guaranteed minimum allocation? What is the conceptual difference,
and how would the difference affect the amount of money states
would receive?
^!What risk factors should be included in a risk-based funding
formula?
^!Should natural and technical disaster risks be considered as factors?
^!Who should determine the risk factors?
Legislation in the 109^th Congress
A conference, to resolve the differences between the House and Senate versions
of H.R. 3199, could possibly determine a new homeland security assistance
distribution formula. Additionally, Congress passed the FY2006 DHS appropriations
and the conference on the act addressed the distribution formula. It did not, however,
alter the formula.
P.L. 109-90. P.L. 109-90 maintains the current formula in which states, DC,
and Puerto Rico are to receive 0.75% of total appropriations, and U.S. insular areas
are to receive 0.08% of total appropriations.⁹ It does require, however, states to
update their State Homeland Security Strategies in accordance with the Interim
National Preparedness Goal to be eligible for federal homeland security assistance.
Additionally, the act does not specify what risk factors the Office for Domestic
Preparedness (ODP) is to consider in determining the remainder of appropriations
following the distribution of state base amounts.
P.L. 109-90 requires the Government Accountability Office (GAO) to review
the threats and risk factors used by the DHS Secretary in determining discretionary
grant allocations — the Urban Area Security Initiative (UASI) and sub-grants¹⁰ —
and report to Congress on the review no later than November 17, 2005.
H.R. 3199. H.R. 3199, as passed by the House, proposes to change the
distribution of DHS homeland security assistance to states and localities. The

⁹ P.L. 107-56, Section 1014.
¹⁰ The sub-grants include port security, trucking industry security, intercity bus security,
intercity passenger rail transportation security, and buffer zone protection grants.

Senate-passed version is silent on the manner. The House version of H.R. 3199
proposes to allocate total appropriated funds for DHS homeland security assistance
based on risk, and proposes to establish a First Responder Grants Board to review
state homeland security plans and to assist the DHS Secretary in determining state
risk-based allocations.
Grant Allocation Methods
A discussion of the House version of H.R. 3199 and P.L. 109-90 formulas and
other grant allocation provisions follows.
House-Passed H.R. 3199. This bill proposes to allocate 100% of
appropriations for DHS federal homeland security assistance programs at the
discretion of the DHS Secretary (based on risk) and in consultation with a First
Responder Grants Board’s evaluation and prioritization of state homeland security¹¹
applications. The First Responder Grants Board would be established to evaluate
and prioritize state homeland security applications based on the following risk
criteria: “the variables of threat, vulnerability, and consequences with respect to the
Nation’s population (including transient, commuting, and tourist populations) and¹²
critical infrastructure.”
The bill would guarantee a minimum amount to each state — 0.25% of total
appropriated funds for SHSGP, LETPP, and UASI — without a significant
international border or not adjoining a body of water through which an international
boundary line extends.¹³ States with a significant international border¹⁴ or adjoining
a body of water through which an international boundary line extends would be
guaranteed a minimum of 0.45% of total appropriations for SHSGP, LETPP, and¹⁵
UASI. U.S. possessions and territories, and eligible tribes (collectively), would be
guaranteed a minimum of no less than 0.08% of total appropriations for SHSGP,¹⁶
LETPP, and UASI.
A state would receive the guaranteed minimum if, after DHS allocates funding
based on the discretion of the DHS Secretary and the First Responder Grants Board’s
evaluation and prioritization of applications, the state is not in line to receive 0.25%
or 0.45%, respectively, of total appropriations. As an example, if Wyoming received
an amount that equaled 0.20% of total appropriations based on the discretion of the
DHS Secretary and the evaluation and prioritization by the First Responder Grants
Board, Wyoming would be given an additional 0.05% to reach the guaranteed
minimum or “floor” of 0.25% (Wyoming does not have an international border or

¹¹ H.R. 3199, Section 128, “Sec. 1803.”
¹² H.R. 3199, Section 128, “Sec. 1804(a).”
¹³ H.R. 3199, Section 128, “Sec. 1804(c)(5)(A).”
¹⁴ H.R. 3199 proposes the determination of “significant international border” be at the
discretion of the DHS Secretary.
¹⁵ H.R. 3199, Section 128, “Sec. 1804(c)(5)(B).”
¹⁶ H.R. 3199, Section 128, “Sec. 1804(c)(5)(C)-(D).”

adjoin a body of water through which an international boundary extends). Wyoming
would not receive any additional funding after receiving the guaranteed minimum.
P.L. 109-90. P.L. 109-90 does not alter the funding formula DHS uses in
distributing state and local homeland security assistance. It maintains the
requirement of 0.75% of total appropriations for domestic preparedness guaranteed¹⁷
to states. The act is silent on which risk factors DHS should use in determining
state and local allocations of homeland security assistance. Since population could
be considered a risk factor, it is possible that DHS could allocate funding in FY2006
in the same manner as it allocated funding in FY2003, FY2004, and FY2005. DHS
Secretary Michael Chertoff testified, however, before the House Homeland Security
Committee in April 2005 that funding to states and localities for homeland security
assistance should be based on specific risks instead of a state’s population percentage
of the national population.¹⁸ DHS Secretary Chertoff, however, did not specify what
risk factors should be used.
Policy Questions
The development and implementation of a risk-based distribution formula,
including or excluding a guaranteed base and minimum amounts, raise some policy
questions that may confront conferees on H.R. 3199.
Guaranteed Minimum Versus Guaranteed Base
Both H.R. 3199, as passed by the House, and P.L. 109-90 would guarantee to
each state a certain percentage of the total appropriation. House-passed H.R. 3199
would guarantee each state a minimum; P.L. 109-90 guarantees each state a base. On
the surface, the two terms may appear to be similar, but they differ in that each is
associated with a distinctive allocation method.
A minimum, as defined in H.R. 3199, is the smallest amount each state would
receive after risk-based state allocations are determined. Were the risk-based
calculations to result in any state allocation less that the statutorily defined minimum,
the allocations of states receiving more than the minimum would be reduced
proportionally so that all states would receive at least the minimum.
A base, as defined in P.L. 109-90, is an amount guaranteed to each state without
regard to risk. After allocation of base amounts to states, P.L. 109-90 silent on how
the remainder of total appropriations is to be allocated.

¹⁷ P.L. 1090-90, Title III.
¹⁸ U.S. Department of Homeland Security, Office of the Press Secretary, “Testimony of DHS
Secretary Michael Chertoff Before the House Homeland Security Committee,” press release,
Apr. 13, 2005, available at [http://www.dhs.gov/dhspublic/display?content=4460], visited
Oct. 20, 2005.

The present allocation of federal homeland security assistance (and the
allocation method in P.L. 109-90) — which includes a base — was criticized by the
9/11 Commission, which referred to the base as revenue sharing without regard to a
state’s risk of terrorist attacks. Some, however, argue that the base allocation is a
way to ensure that each state receives some sort of homeland security funding and is
prepared at some level for terrorist attacks.
As conferees negotiate to resolve House and Senate differences on H.R. 3199,
they may opt to consider whether to legislate the grant allocation method with a
guaranteed base or guaranteed minimum. That is, they may choose to decide
whether: (A) to provide every state with the same amount of base funding, and then
allocate the remainder of total appropriations based on risk; or (B) to allocate total
appropriations based on risk, 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 a proportional reduction of funding to the other states.
Comparison of Funding and Base Amounts. Table 1 compares the
actual FY2005 appropriations with the House and Senate versions of H.R. 2360, and
P.L. 109-90. Table 2 compares state, DC, and U.S. insular area SHSGP and LETPP
base amounts received in FY2005, and estimated base amounts calculated from the
recommended P.L. 109-90 allocations for these programs. Table 3 compares base
and risk amounts and percentages for FY2005 and P.L. 109-90 allocations for
SHSGP, LETPP, and discretionary grants. Table 4 depicts amounts states, DC,
Puerto Rico, and U.S. insular areas could receive based on the House version of H.R.

3199.

Table 1. FY2005 Appropriations and FY2006 Appropriations for
State and Local Homeland Security Assistance
⁽^a^{ll am}^o^uⁿ^t^{s in}^m^illioⁿ^s⁾
^FY^{2006 D}^H^S^A^p^p^r^op^ri^ati^oⁿ^s
^FY²⁰⁰⁶^P^a^sse^d^P^a^sse^d
^FY²⁰⁰⁵^B^udg^et^by^by^P.L^.
^Program^Appro^p^.^Request^Hou^s^e^Sena^t^e^109-90
^{State and L}^o^{cal As}^sⁱ^s^t^ance^—^—^—^$¹^,⁵¹⁸^a^—
^Gr^aⁿ^t^s
^{State Hom}^e^{land Security G}^r^ant^$1,100^$1,020^b^$750^—^$550
^Program
^{Equipment, tr}^{aining, exer}^cis^e^s^,^[$1,100]^[$816]^[$750]^—^[$550]
^pl^anni^ng
^La^{w e}ⁿ^fo^rc^e^m^eⁿ^{t te}^rro^rism^—^[$204]^—^—^—
^pr^evention
^T^a^{rgeted I}ⁿ^fras^tructure^—^$600^c^—^$365^d^—
^Protection
^Dis^{cretionary G}^r^ants^$1,200^$1,020^$1,215^—^$1,155
^Ur^{ban Ar}^{ea Secur}^{ity Initiative}
⁽^e^{quipment, tr}^{aining, exer}^cis^e^s^,^[$860]^[$816]^[$850]^—^[$740]

^pl^anni^ng)

^FY^{2006 D}^H^S^A^p^p^r^op^ri^ati^oⁿ^s
^FY²⁰⁰⁶^P^a^sse^d^P^a^sse^d
^FY²⁰⁰⁵^B^udg^et^by^by^P.L^.
^Program^Appro^p^.^Request^Hou^s^e^Sena^t^e^109-90
^Ur^{ban Ar}^{ea Secur}^{ity Initiative}
^(la^w^eⁿ^fo^rc^e^m^eⁿ^{t te}^rro^rism^—^[$204]^—^—^—
^pr^evention)
^Por^t^Securⁱ^t^y^[$150]^—^[$150]^—^[$175]
^Rai^l^Securⁱ^t^y^[$150]^—^[$150]^—^[$150]
^T^r^ucki^{ng Indus}^t^r^{y Secur}ⁱ^t^y^[$5]^—^[$5]^—^[$5]
^Int^e^r^cⁱ^t^y^Bus^Securⁱ^t^y^[$10]^—^[$10]^—^[$10]
^N^on-gover^nm^ent^a^l^[$25]^—^—^—^[$25]
^O^r^gani^z^a^tⁱ^ons^Securⁱ^t^y
^Bu^{ffer Zo}ⁿ^e^Pro^t^ectioⁿ^—^—^[$50]^—^[$50]
^L^a^w^Eⁿ^forcem^{ent T}^erroris^m^$400^[$408]^e^$400^$400^$400
^Prevention
^As^sⁱ^s^t^{ance to Firefighters}^$715^$500^$600^$615^$655
^E^m^{ergency M}^a^nagem^e^nt^$180^$170^f^$180^$180^$185
^Perform^a^{nce G}^r^ants
^{Citizen Corps}^$15^$50^g^$40^$25^$20
^St^a^t^{e a}^{nd Lo}^ca^{l H}^o^m^e^la^nd^$3,610^$3,360^$3,185^$3,103^$2,965
^{Security T}^o^tal
^Source:^P.L^.^108-^{334 (F}^Y²⁰⁰⁵^D^H^S^appropri^a^tⁱ^oⁿ^s^);^U^.^S^.^O^f^fⁱ^{ce of}^Man^a^g^e^m^eⁿ^t^an^{d Bu}^dg^et^,^Fis^c^al
^Y^e^ar²⁰⁰⁶^Budget^of^t^h^{e U}ⁿⁱ^t^e^{d St}^at^es^G^o^ver^nm^ent^(Was^hⁱⁿ^g^t^on^:^G^P^O^,^F^e^b.^2005),^A^ppen^dⁱ^x^,^pp.
^478-^480;^an^{d P.L}^.^109-^{90 (F}^Y^{2006 D}^H^S^appropri^a^tⁱ^oⁿ^s^).
^{a. Sen}^a^te-^p^as^s^e^{d H.R}^.^{2360 approv}^es^{$1.518 billion}^f^o^{r “}^s^{tate an}^{d local}^a^s^sⁱ^s^t^aⁿ^{ce g}^r^an^ts^{”; it does}
ⁿ^o^{t, h}^o^w^e^v^e^{r, s}^p^ecif^y^am^ouⁿ^t^s^f^o^{r th}^{e State Ho}^m^e^laⁿ^d^Secu^r^ity^Gr^an^{t P}^r^o^g^r^a^m^o^r^th^{e Ur}^b^aⁿ
^A^r^{ea Secu}^r^ity^Iⁿ^itiativ^e.
^b^.^T^h^{is am}^o^uⁿ^t^{is to}^b^e^allo^cated^oⁿ^rⁱ^sk^{s, th}^r^{eats, v}^u^lⁿ^e^r^a^b^{ilities, an}^d^uⁿ^m^{et f}ⁱ^r^s^{t r}^e^sp^oⁿ^d^e^r
^cap^ab^{ilities as d}^e^termⁱⁿ^ed^b^y^th^{e DHS Secretary}^,^p^r^o^v^id^ed^th^{at each}^{state an}^d^territo^ry^receiv^e^s
ⁿ^o^{less th}^an⁰^.²⁵^%^o^f^f^uⁿ^d^{s ap}^p^r^o^p^r^iated^f^o^r^th^{is p}^r^o^g^r^a^m^.^A^d^d^itioⁿ^a^lly^{, 2}⁰^%^o^f^th^{is am}^o^uⁿ^t
^{is to}^b^e^u^s^ed^f^o^r^law^en^f^o^r^cem^en^{t ter}^r^o^r^ism^p^r^ev^en^tioⁿ^activ^ities.
^{c. T}^h^{is am}^o^uⁿ^t^{is to}^b^e^allo^ca^t^e^d^a^t^t^h^{e d}ⁱ^sc^retion^of^th^{e DHS Secretary}^an^{d is}^f^o^{r as}^sⁱ^s^t^an^{ce in}
^s^ecu^rin^g^ports^{, tran}^s^{it s}^y^s^t^em^s^,^an^{d oth}^e^{r in}^f^r^as^tru^c^tu^{re determ}ⁱⁿ^{ed by}^th^{e DHS Secretary}^.
^A^ddition^a^lly^{, $50 m}^illion^is^{to be u}^s^ed^f^o^{r bu}^f^f^e^{r zon}^e^protection^plan^s^.
^{d. T}^h^is^am^ouⁿ^tⁱⁿ^clu^d^es^{: $200 m}^illion^f^o^{r port s}^ecu^ri^t^y^g^r^an^ts^{; $100 m}^illion^f^o^{r rail an}^{d tran}^sⁱ^t
^s^ecu^rity^g^r^an^ts^;^{$50 m}^illion^f^o^{r bu}^f^f^e^{r zon}^e^protec^tion^;^{$10 m}^illion^f^o^{r in}^tercity^bu^s^s^ecu^rity^;^an^d
^$⁵^m^illioⁿ^f^o^r^tr^u^c^kⁱⁿ^gⁱⁿ^d^u^str^y^secu^r^ity^.
^{e. T}^h^{is am}^o^uⁿ^t^coⁿ^s^titu^{tes 2}⁰^%^o^f^th^{e $}¹^.⁰²^b^illioⁿ^r^e^q^u^ested^f^o^r^th^{e State Ho}^m^e^lan^d^Secu^r^ity^Gr^an^t
^P^r^o^g^r^a^m^an^d²⁰^%^o^f^th^{e $}¹^.⁰²^b^illioⁿ^f^o^r^th^{e Ur}^b^aⁿ^A^r^{ea Secu}^r^ity^Iⁿ^itiativ^{e f}^o^r^law^en^f^o^r^cem^en^t
^ter^r^o^rⁱ^sm^p^r^ev^en^tioⁿ^activ^ities.
^f^.^T^h^is^am^ouⁿ^t^is^{to be}^allocated^bas^e^d^on^P^.^L^.^107-^56,^S^ection^{1014, w}^h^ich^g^u^a^ran^t^ees^each^s^t^{ate a}
^mⁱⁿⁱ^m^u^m^of^0.75%^of^t^o^t^a^l^appropri^a^t^e^{d f}^uⁿ^d^s^.
^g.^I^bⁱ^d^.

Table 2. State Homeland Security Grant Program and Law
Enforcement Terrorism Prevention Program Base Allocations:
FY2005 and Estimated FY2006
⁽^a^m^o^uⁿ^t^{s in}^m^illioⁿ^s⁾
States and U.S. InsularFY2005 BaseP.L. 109-90
Areas Allocations Allocations
All states, DC, and Puerto$11.25$7.13
Rico
U.S. Virgin Islands, American
Samoa, Guam, and the$1.20$0.80
Northern Mariana Islands
Total base amount$589.80$374.00
^Source:^A^m^ount^s^b^a^s^e^{d on}^C^R^S^calcu^lation^s^of^{FY2005 SHSGP}^{($1.1 billio}ⁿ⁾^an^{d L}^E^T^P^P^($400
^m^illion⁾^{appropriation}^am^ouⁿ^t^s^,^an^d,^f^o^{r FY2006, am}^ouⁿ^t^sⁱⁿ^P^.^L^.^109-^90.
Table 3. State Homeland Security Grant Program, Law
Enforcement Terrorism Prevention Program, and Discretionary
Base and Risk Amounts: FY2005 and Estimated FY2006
⁽^a^m^o^uⁿ^t^{s in}^m^illioⁿ^s⁾
FY2005 actualFY2006 estimated^a
P r ogram appropriation appropriation
SHSGP $1,100.0 $550.0
LET PP $400.0 $400.0
Discretionary Grants^b$1,200.0$1,155.0
Total $2,700.0 $2,105.0
Base amount$589.8 $374.0
(percentage) (22%) (18%)
Risk amount^c$2,700.0 $2,500.0
(percentage) (78%) (82%)
^{a. A}^ppropri^a^tⁱ^oⁿ^am^ouⁿ^t^sⁱⁿ^P.L^.^109-^90.
^b^.^Iⁿ^clu^d^{es g}^r^an^{t f}^uⁿ^dⁱⁿ^g^f^o^r^UA^SI^{, p}^o^r^{t secu}^r^ity^{, r}^a^{il secu}^r^ity^{, tr}^u^c^kⁱⁿ^g^secu^r^ity^{, in}^ter^c^ity^b^u^s
^s^ecu^ri^t^y^{, an}^{d bu}^f^f^e^{r zon}^e^prot^ectⁱ^oⁿ^prog^ram^s^.
^{c. In}^F^Y^{2005, D}^H^S^u^s^{ed a s}^t^at^e’^s^percen^t^a^g^e^of^t^h^{e n}^a^tⁱ^oⁿ^’^s^t^o^t^a^l^popu^l^a^tⁱ^oⁿ^as^t^h^e^on^l^y^ri^s^k^f^act^or.
^In^th^{e con}^f^eren^{ce report accom}^p^aⁿ^yⁱ^ng^H.R^.^{2360, th}^{e determ}ⁱⁿ^ation^of^ris^k^f^actors^is^{at th}^e
^dis^c^retion^of^th^{e DHS Secretary}^.

Table 4. House-Passed H.R. 3199 Guaranteed Minimum
Allocations, Assuming the FY2006 Appropriation of $2.1 Billion:
by State
⁽^a^m^o^uⁿ^t^{s in}^m^illioⁿ^s⁾
^Hou^s^e-p^a^s^s^e^d^H.R^.³¹⁹⁹
⁽ⁱ^{ncludes SH}^SG^P^,^{UASI, a}^{nd LETTP}⁾
^St^a^t^e^0.25%^a^0.45%^b
^A^l^abam^a^$5.26^—
^A^l^as^k^a^—^$9.47
^A^rⁱ^z^on^a^—^$9.47
^A^r^k^aⁿ^s^as^$5.26^—
^C^a^lⁱ^f^ornⁱ^a^—^$9.47
^C^o^l^o^rado^$5.26^—
^C^oⁿⁿ^ectⁱ^c^u^t^$5.26^—
^D^e^l^a^w^a^re^$5.26^—
^F^l^ori^d^a^$5.26^—
^G^e^orgⁱ^a^$5.26^—
^H^a^w^aⁱⁱ^$5.26^—
^Idah^o^—^$9.47
^I^llin^oⁱ^s^$⁵^.²⁶^—
^In^di^an^a^$5.26^—
^Iow^a^$5.26^—
^K^aⁿ^s^as^$5.26^—
^K^e^nt^uc^ky^$⁵^.²⁶^—
^L^o^uⁱ^sⁱ^an^a^$5.26^—
^Maiⁿ^e^—^$9.47
^Mary^l^aⁿ^d^$5.26^—
^Mas^s^ach^u^s^et^t^s^$5.26^—
^Mi^chⁱ^g^an^—^$9.47
^Miⁿⁿ^e^s^o^t^a^—^$9.47
^Mi^s^sⁱ^s^sⁱ^ppi^$5.26^—
^Mi^s^s^o^u^rⁱ^$5.26^—
^Mon^t^an^a^—^$9.47
^N^e^bras^k^a^$5.26^—
^N^e^v^a^da^$5.26^—
^N^e^w^H^a^m^p^s^hⁱ^r^e^—^$9.47
^N^e^w^Jers^ey^$5.26^—
^N^e^w^Mexⁱ^co^—^$9.47
^N^e^w^Y^o^rk^—^$9.47
^N^o^rt^h^C^a^rolⁱⁿ^a^$5.26^—
^N^o^rt^h^D^a^k^o^t^a^—^$9.47
^O^hⁱ^o^—^$9.47
^O^k^l^a^h^o^m^a^$5.26^—
^O^r^eg^on^$5.26^—
^P^e^nnsy^l^vaⁿⁱ^a^—^$⁹^.⁴⁷
^R^h^{ode Is}^l^aⁿ^d^$5.26^—
^S^o^u^t^h^C^a^rolⁱⁿ^a^$5.26^—
^So^ut^{h D}^a^ko^t^a^$⁵^.²⁶^—
^T^eⁿⁿ^e^s^s^e^e^$5.26^—

^Hou^s^e-p^a^s^s^e^d^H.R^.³¹⁹⁹
⁽ⁱ^{ncludes SH}^SG^P^,^{UASI, a}^{nd LETTP}⁾
^St^a^t^e^0.25%^a^0.45%^b
^T^e^x^a^s^—^$9.47
^U^t^ah^$5.26^—
^V^e^rm^on^t^—^$9.47
^Vⁱ^rgⁱⁿⁱ^a^$5.26^—
^Was^hⁱⁿ^g^t^on^—^$9.47
^Wes^t^Vⁱ^rgⁱⁿⁱ^a^$5.26^—
^Wi^s^c^on^sⁱⁿ^—^$9.47
^Wy^omⁱⁿ^g^$5.26^—
^Was^hⁱⁿ^g^t^on^{, D}^.^C^.^$5.26^—
^Pu^ert^o^Rⁱ^co^$5.26^—
^Vⁱ^rgⁱⁿ^Is^l^aⁿ^d^s^$1.68^—
^G^u^am^$1.68^—
^A^m^erican^Sam^o^a^$1.68^—
^N^o^rt^h^Mari^an^as^$1.68^—
^T^o^tal^185.56^170.46
^{a. 0.25%}ⁱ^s^no^t^{a bas}^e^{, bu}^{t an}^am^ouⁿ^t^{a s}^t^{ate is}^g^u^a^ran^t^{eed if}^{it does}ⁿ^o^{t h}^a^v^e^{a “}^s^igⁿⁱ^fⁱ^can^t
ⁱⁿ^t^e^rⁿ^a^tⁱ^o^na^l^b^o^r^d^e^r^”^o^r^d^o^e^{s no}^t^b^o^r^d^e^r^oⁿ^a^b^o^d^y^o^f^w^a^t^e^r^t^h^r^o^{ugh w}^hⁱ^c^{h a}ⁿⁱⁿ^t^e^rⁿ^a^tⁱ^o^na^l
^bouⁿ^d^ary^r^uns^.^H.R^.^{3199 au}^th^orizes^{DHS to determ}ⁱⁿ^{e w}^h^{at con}^s^titu^tes^{a “}^s^igⁿⁱ^fⁱ^can^t
ⁱⁿ^terⁿ^atioⁿ^a^{l b}^o^r^d^e^r^.^”
^b^.⁰^.⁴⁵^%^{is n}^o^{t a b}^a^{se, b}^u^{t an}^am^o^uⁿ^t^a^state^is^g^u^a^r^aⁿ^t^eed^if^it^h^a^{s a “}^s^igⁿⁱ^fⁱ^can^{t in}^terⁿ^atioⁿ^a^{l b}^o^r^d^e^r^”
^{or borders}^on^{a body}^of^w^a^t^e^{r t}^h^ro^{ugh w}^hⁱ^c^{h a}ⁿⁱⁿ^t^e^rⁿ^a^tⁱ^o^na^l^b^o^und^a^r^y^r^uⁿ^s^.^H^.^R.³¹⁹⁹
^au^th^o^r^{izes DHS to}^d^e^ter^mⁱⁿ^{e w}^h^{at co}ⁿ^s^titu^{tes a “}^s^igⁿⁱ^fⁱ^can^{t in}^terⁿ^atioⁿ^a^{l b}^o^r^d^e^r^.^”
Risk-Based Factors
A fundamental policy question associated with risk-based funding is what risk
factors to use in determining the allocation of federal homeland security assistance.
Examples of possible risk factors include perceived threats, homeland security
capabilities, population size, critical infrastructure assets, and transportation assets.
To accurately assess the risk factors, one would need to determine the threat to the
population, critical infrastructure, and transportation, and determine the
consequences of such a threat. Additionally, the homeland security capabilities
needed to prevent, respond to, and recover from terrorist attacks and natural and
technical disasters would need to be assessed. The methods of threat and
vulnerability assessment suggest a variety of factors that might be used in devising
a risk-based funding formula for allocating homeland security assistance to states and
localities. See Appendix A for a list of possible threat, homeland security capability,
population, critical infrastructure, transportation, and other factors that might be
considered in a risk assessment.
Natural and Technical Disaster Risks.¹⁹ Recent history highlights the
threats posed by natural and technical disasters, as evidenced by the 67 major disaster

¹⁹ Technical disasters are unintentional man-made emergencies such as an accidental
chemical spill.

declarations in 2004, and, most recently, by Hurricanes Katrina and Rita.²⁰ The DHS
Office for State and Local Government Coordination and Preparedness (SLGCP) is
currently tasked with developing and implementing a national program to enhance
the capacity of state and local agencies to respond to incidents of terrorism,
particularly those involving weapons of mass destruction (WMD), as well as natural
disasters, through coordinated training, exercises, equipment acquisition, and
technical assistance.²¹ SLGCP performs these functions through its administration
of DHS homeland security assistance programs. The assistance includes the State
Homeland Security Grant Program (SHSGP), the Urban Area Security Initiative
(UASI), the Local Law Enforcement Terrorism Prevention Program (LETPP), the
Assistance to Firefighters Grant Program (FIRE), the Emergency Management
Performance Grant Program (EMPG), and Citizen Corps Programs (CCP).²²
As indicated later in this report, some observers acknowledge that since the
terrorist attacks of September 11, 2001, DHS has been primarily focused on
terrorism, rather than on natural and technical disasters. The majority of DHS’s grant
programs emphasize preparing for, responding to, and recovering from terrorist
attacks.²³ As an example, the Administration’s FY2006 budget request proposed that
Assistance to Firefighters Grant Program (FIRE) applications that enhance terrorism
response capabilities should be given priority.²⁴
As conferees negotiate House and Senate differences on homeland security grant
funding, they may be asked to consider not only the grant allocation method, but also
the inclusion of specific natural and technical disaster risks in the funding
distribution formula. Possible issues in considering this type of change include (a)
potential implementation difficulties in adding natural and technical disaster risks to
the funding distribution formula; (b) whether DHS should be granted discretion in
determining natural and technical disaster risk factors associated with any risk-based
formula; and (c) whether it is advisable to change the status quo, or whether the DHS
terrorism emphasis should be retained without change.
The following table displays risk factors proposed in H.R. 3199, as passed by
the House, and P.L. 109-90. Neither specifically identifies natural and technical
disaster risks as funding formula factors, but H.R. 3199 proposes that “other” risks
or catastrophic risks be considered after priority is given to specific terrorism risks.

²⁰ See Federal Emergency Management Agency, “2004 Major Disaster Declarations,”
available at [http://www.fema.gov/news/disasters.fema?year=2004], visited Sept. 28, 2005.
²¹ U.S. Department of Homeland Security, Office for State and Local Government
Coordination and Preparedness, Fiscal Year 2005 Homeland Security Grant Program:
Program Guidelines and Application Kit (Washington: Nov. 2004), p. ii.
²² For a summary of these grant programs, see CRS Report RL32348, Selected Federal
Homeland Security Assistance Programs: A Summary, by Shawn Reese.
²³ Ibid.
²⁴ U.S. Office of Management and Budget, Fiscal Year 2006 Budget of the United States
Government (Washington: GPO, Feb. 2005), Appendix, p. 480.

Table 5. House-Passed H.R. 3199 and P.L. 109-90: Risk Factors
^Hou^s^e-p^a^s^s^e^d^H.R^.³¹⁹⁹^P.L^.^109-90
^Propos^es^t^o^es^t^a^blⁱ^s^h^{a F}ⁱ^rs^t^R^e^s^pon^{der G}^r^an^t^s^No^rⁱ^sk^f^acto^r^{s id}^en^tif^ied^.
^B^o^ard^to^ev^alu^a^{te an}^{d prioritize s}^t^{ate h}^o^m^e^lan^d
^s^ecur^ity^as^sⁱ^s^t^an^{ce application}^s^{, bas}^e^{d on}
^cu^rren^t^ri^s^k^as^s^e^s^s^m^en^t^of^t^e^rrori^s^t^t^h^reat^s
^ag^ain^s^{t critical in}^f^r^a^s^t^r^u^c^tu^{re s}^ectors^.^{It als}^o
^p^r^o^pos^es^th^{e B}^o^{ard s}^p^ecifⁱ^cally^con^s^{ider th}^e
^f^o^llo^wⁱⁿ^g^th^r^{eats: b}ⁱ^o^l^o^g^ica^l^th^r^{eats, n}^u^c^lear
^th^reats^,^radiolog^{ical th}^reats^,ⁱⁿ^cen^diary^th^reats^,
^ch^em^{ical th}^reats^,^ex^plos^iv^es^,^s^u^{icide bom}^bers^,
^cy^{ber th}^reats^,^an^{d an}^y^oth^e^{r th}^reats^.^[Section
^{1804 (c)(3)]}
^P^r^opos^es^th^{e Board tak}^eⁱⁿ^to^accouⁿ^t^an^y^oth^e^r
^s^p^ecifⁱ^{c th}^{reat to popu}^lation^{or cr}^itical
ⁱⁿ^fr^a^s^t^r^uc^t^u^r^e^,^gi^viⁿ^g^gr^e^a^t^e^r^w^eⁱ^ght^t^o^t^h^r^e^a^t^s
^of^t^e^rrori^s^m^{. [S}^ectⁱ^oⁿ^{1804 (c)(4)]}
Federal Homeland Security Assistance Programs. Whether DHS
homeland security assistance programs are suitable for addressing natural and
technical disasters is another policy question conferees may be asked to consider.
Congress appropriated $2.97 billion for DHS homeland security assistance in
FY2006.²⁵ Three assistance programs — the State Homeland Security Grant
Program (SHSGP), the Urban Area Security Initiative (UASI), and the Law
Enforcement Terrorism Prevention Program (LETPP) — focus specifically on
preparing for, responding to, and recovering from terrorist attacks. These programs
were appropriated $2.11 billion in FY2005 — 71% of total funding for DHS
assistance programs. Three assistance programs are considered “all-hazard” focused:
the Emergency Management Performance Grant Program (EMPG), Citizen Corps
Programs (CCP), and Assistance to Firefighters (FIRE). These grant programs were
appropriated $860 million in FY2005 — 29% of the total funding for DHS assistance
programs. SHSGP, UASI, and LETPP specifically identify training and equipment
that are developed to respond to terrorist attacks, including WMD incidents.
It could be argued that the programs currently administered by DHS meet state
and local needs in preparing for, responding to, and recovering from natural and
technical disasters, because the training, equipment, planning, and exercises could
support response to a terrorist attack or to a natural or technical disaster. The
following table shows the similarities of natural and technical disasters and terrorist
attacks.

²⁵ P.L. 109-90 (FY2005 DHS appropriations).

Table 6. Natural and Technical Disaster and
Terrorist Attack Similarities
Natural and technical disastersTerrorist attacks
FiresArson
Explosions Bombings
Plane/Train CrashesAviation/Rail Terrorism
FloodsDam/Dike Sabotage
Chemical SpillsChemical Terrorism
Radiological AccidentsDirty Bombs
Nuclear AccidentsNuclear Terrorism
Epidemics, Biological AccidentsBiological Terrorism
^Source:^GA^O,^H^o^m^e^l^{and Secur}ⁱ^t^y^{: D}^H^S^{’ Ef}^f^o^r^t^s^t^o^{Enhance Fi}^r^s^t^Res^ponder^s^’^Al^l^-^H^a^z^a^r^d^s
^C^apabilities^C^onti^{nue to Evolve}^{, G}^A^O^-^05-^{652 (Was}^hⁱⁿ^g^t^on^:^Ju^l^y^{2005), p. 27.}
One could argue that most first responder capabilities in the areas of protection,
response, and recovery are similar across all emergency events. These similar
capabilities are reflected in such activities as controlling entry to emergency areas,
recovering victims, treating casualties, providing basic living needs for survivors,²⁶
restoring essential services, and maintaining law and order.
On the other hand, some might argue that the programs’ focus on terrorism
inhibits state and local governments’ ability to adequately respond to natural and
technical disasters. As examples, the State Homeland Security Grant Program
(SHSGP) funds are to be used to enhance the capability of state and local
governments to prepare for and respond to acts of terrorism, including those
involving the use of weapons of mass destruction (WMD); the Urban Area Security
Initiative (UASI) funds are to be used to enhance high-threat, high-risk urban area
governments’ ability to prepare for and respond to threats and terrorist attacks
involving WMD; and the Law Enforcement Terrorism Prevention Program (LETPP)
funds are available to assist state and local law enforcement agencies in activities to
prevent terrorism. States and localities might maintain that they do not receive
enough funding to prepare for, respond to, and recover from natural and technical
disasters because 71% of DHS homeland security assistance is terrorism-focused.
All-Hazards. Some favor shifting governments’ focus to one on all hazards
— capabilities, assistance, and funding that support states and localities in preparing
for, responding to, and recovering from any emergency, whether a natural and

²⁶ U.S. Government Accountability Office, Homeland Security: The Department of
Homeland Security’s Efforts to Enhance First Responders’ All-Hazards Capabilities
Continue to Evolve, GAO-05-652 (Washington: July 2005), p. 30.

technical disaster, or terrorism. For example, as stated by the Government
Accountability Office (GAO) in a report dated July 2005:
Prior to September 11, 2001, the federal government’s role in supporting
emergency preparedness and management was limited primarily to providing
guidance and grants for planning, mitigation, and equipment before large-scale
disasters like floods, hurricanes, and earthquakes, and response and recovery
assistance after such disasters. Since September 11, 2001, the federal
government has awarded billions of dollars to state and local governments for
planning, equipment, and training to enhance the capabilities of first responders
to respond to terrorist attacks and, to a lesser extent, natural and accidental²⁷
disasters.
The GAO report stated as well that officials from four first responder agencies
reported that DHS required too much emphasis on terrorism-related activities in
requests for equipment and training. The first responder agencies also reported that
they had a greater need for assistance in preparing for natural and technical disasters
than for terrorist attacks.²⁸
Also, the National Commission on Terrorist Attacks Upon the United States
recommended in The 9/11 Commission Report that DHS should make homeland
security funding contingent on adoption by emergency response agencies of an all-²⁹
hazards Incident Command System (ICS). On September 14, 2005, the 9/11
Commission issued a status report on its recommendations and stated, “In the event
of a terrorist attack or natural disaster, clear lines of command and control for
responding authorities are essential to minimize civilian and responder casualties.”³⁰
Further, all-hazards emergency planning was emphasized by President Bush in
a televised speech on September 15, 2005. He said:
Our cities must have clear and up-to-date plans for responding to natural
disasters, and disease outbreaks, or a terrorist attack, for evacuating large
numbers of people in an emergency, and for providing the food and water and³¹
security they need.
The conferees might be urged to review the purpose and authorized activities
of the DHS homeland security assistance programs. Specific proposals that could be
put forward might include (A) the authorization of SHSGP and UASI funding for
preparing for, responding to, and recovering from natural and technical disasters; or

²⁷ Ibid., p. 43.
²⁸ Ibid., p. 39.
²⁹ The 9/11 Commission Report, p. 397.
³⁰ National Commission on Terrorist Attacks Upon the United States, Report on the Status
of 9/11 Commission Recommendations: Part I: Homeland Security, Emergency
Preparedness and Response, Sept. 14, 2005, p. 2, available at [http://www.9-11pdp.org],
visited Sept. 16, 2005.
³¹ Available at [http://www.whitehouse.gov/news/releases/2005/09/20050915-8.html],
visited Sept. 16, 2005.

(B) increased funding to EMPG, FIRE, and CCP because these programs provide
“all-hazards” protections. On the other hand, the conferees might opt to maintain the
current focus of the majority of DHS homeland security assistance programs on
terrorism threats.
The inclusion of natural and technical disaster factors in a funding formula
might result in states and localities being better prepared for all hazards, not just
terrorism. An all-hazards funding approach could allow states and localities to train,
conduct exercises, and purchase equipment that is suited equally to natural and
technical disasters and terrorist attacks.
This all-hazards approach, however, might arguably result in a funding formula
that provides a disproportionate amount of funding to states and localities that have
a low threat of terrorism, but a high threat of natural and technical disasters. If
Congress were to include natural and technical disaster risks in the funding formula,
it might consider prioritizing state and local recipients based on risks (natural and
terrorist) that threaten highly populated states and cities, economic sectors, and
critical infrastructure of national importance. The objective of this prioritization
would be to ensure that homeland security funding considers not only natural and
terrorism risks, but also the national consequences of the risks.
Evaluating Potential Risk Factors. In considering risk factors, however,
Congress is faced with a question of what criteria to use when assessing potential
risk-based formula variables. Risk factors include threats, the entity threatened, and
the consequences of the threat to the specified entity. The assessment of potential
risk factors is appropriately considered against the following criteria: ³²
1. Validity. Do the factors serve as measures or indicators of threats, the
vulnerability of the potential target, or potential consequence if catastrophe strikes
the target? For example, does higher population density indicate greater vulnerability
to an attack involving a weapon of mass destruction? What attributes associated with
densely populated areas (such as numbers of law enforcement personnel on duty, the
presence of sensors, cameras, and other technology) would reduce the validity of the
factor?
2. Relevance. What is the relationship between the factors and the identified
items or characteristics? Is the relationship straightforward, or is it murky? For
example, the total number of vehicles traveling through a mid-city tunnel would
probably not be especially pertinent to a consideration of the risk of a hazardous
material accident. The number of commercial trucks carrying hazardous material,
however, would be more relevant.

³² For a discussion of criteria for evaluating the suitability of quantitative indicators, see,
for example, Raymond A. Bauer, Social Indicators (Cambridge, MA: MIT Press, 1966).
See also Anona Armstrong, “Difficulties of Developing and Using Social Indicators to
Evaluate Government Programs: A Critical Review,” paper presented at the 2002
Australasian Evaluation Society Conference, Nov. 2002, Wollongong, Australia.

3. Reliability. The quality of the source of the information used in a risk
assessment process requires consideration. For example, population data from the
U.S. Census Bureau are generally regarded as reliable and are used in a variety of
formulas for allocating aid grants.
4. Timeliness. The currency of the data affects the quality of the discussion on
potential risks. For example, daily intelligence reports that provide information on
current terrorist threats would be considered more timely than a monthly or quarterly
report.
5. Availability. Data necessary for the risk factor’s use as a formula variable
should arguably be readily and publicly available. Intelligence information that has
been classified by the federal government and not shared with state and local officials
would fail to satisfy this criterion.
Authority to Select Risk Factors
Who should identify the risk factors that will determine funding is another
fundamental policy question. House-passed H.R. 3199 proposes risk factors that
DHS is to consider, but it proposes to give a large degree of discretion to DHS. Even
though the House version of H.R. 3199 proposes a list of risk factors for the First
Responders Grants Board to evaluate and prioritize, it proposes that the DHS
Secretary use discretion in the final determination of risk-based funding allocations
to states and localities. P.L. 109-90 does not identify any risk factors for DHS
consider, thus providing DHS with complete discretion in determining what factors
to use in allocating homeland security assistance. One might argue that this
discretion could result in DHS using population as the only risk factor in determining
SHSGP and LETPP state allocations.
Given the importance of data availability and timeliness as criteria, Congress
may not be in a position to accurately determine specific risk factors. However,
because of its oversight responsibilities, Congress might opt to review DHS’s risk-
based methodology and risk-based distribution formula. The oversight could address
the weight given to risk factors, specific threats to key assets and critical
infrastructure, and plausible consequences to identified threats. On the other hand,
by allowing a large degree of discretion to DHS in allocating federal homeland
security assistance, Congress may not be able to determine, at least in open hearings,
the reasoning behind the distribution of funding to states and localities.

Appendix A. Potential Risk Factors — A Discussion
Examples of possible risk factors include perceived threats, homeland security
capabilities, population size, critical infrastructure assets, and transportation assets.
In order to accurately assess risk, one would need to determine the threat to the
population, critical infrastructure assets, and transportation assets, among other
factors, and determine the consequences of such a threat. Additionally, the homeland
security capabilities needed to prevent, respond to, and recover from terrorist attacks
and natural and technical disasters would need to be assessed.
Threats
Homeland security threats facing the nation can be divided into terrorist attacks,
and natural and technical (such as an accidental chemical spill) disasters. For a
terrorist threat to be valid, intelligence or other indicators would have to show the
plausibility of the threat. The risk-assessment criterion of availability of data may
be crucial here. Restricted access to data due to, for example, security classification
of intelligence information, may cause some to question the validity of the threat.
Additionally, DHS is responsible for preparing for, responding to, and
recovering from natural and technical disasters. One could argue that recent history
has shown the nation is threatened more by natural and technical disasters than by
terrorist attacks. The 67 major disaster declarations in 2004, and Hurricanes Katrina
and Rita, lend credibility to this argument.³³
Potential terrorist threats include the following:
^!biological and chemical agents;
^!WMD incidents;
^!sniper and shooting incidents; and
^!car and suicide bombers.
Potential natural and technical disaster threats include the following:
^! hurri canes;
^! flooding;
^! earthquakes;
^!landslides; and
^!accidental hazardous material incidents.
Homeland Security Capability
Homeland security capabilities are the abilities, plans, training, personnel, and
equipment of federal, state, and local government officials, first responders, and other
entities to prevent, respond to, and recover from terrorist attacks, and natural and

³³ See Federal Emergency Management Agency, “2004 Major Disaster Declarations,”
available at [http://www.fema.gov/news/disasters.fema?year=2004], visited Sept. 28, 2005.

technical disasters. In order to assess federal, state, and local homeland security
capabilities, one would need to identify perceived threats, key assets and critical
infrastructure, vulnerabilities, and the consequences of terrorist attacks and natural
and technical disasters. Once the assessments are completed, government officials,
first responders, and other key stakeholders can determine the necessary capabilities.
Potential homeland security capabilities might include
^!emergency management plans;
^!homeland security plans;
^!identified essential tasks needed for responding to terrorist attacks
and disasters;
^!counter-terrorism training;
^!natural and technical disaster training;
^!identified personnel with assigned prevention, response, and
recovery tasks;
^!personnel protective equipment;
^!interoperable communications equipment and plans;
^!emergency medical response plans and equipment; and
^!hospital mass casualty plans and equipment.
Population
^!Population. Population — referring here to the number of people in
each state relative to the nation as a whole — is arguably a suitable
factor since a relatively larger number of people can be considered
a greater risk.
^!Population Density. Population density — here, the average number
of persons per square mile in each state — can be considered a
viable factor since a weapon of mass destruction (WMD) attack in
an area with a high population density could result in a greater
number of casualties than in an area with a low population density.
Critical Infrastructure
^!Nuclear Power Plants and Non-Power Reactors. Nuclear power
plants have been identified by a number of observers as potential
terrorist targets. These include decommissioned nuclear power
plants and non-power reactors, which are typically used in research
and training facilities.³⁴
^!Seaports. Given the possibility of WMD smuggling and the
consequent potential for disrupting the national economy, many
observers have identified seaports as a type of critical infrastructure
that should be a risk factor.
^!Chemical Facilities. Given the probable consequences of terrorist
attacks on chemical facilities, or the theft of toxic chemical agents,

³⁴ See Nuclear Regulatory Commission website [http://www.nrc.gov/reactors.htm], visited
May 18, 2005.

chemical facilities could be a risk factor, especially due to the
location of some chemical facilities in high population density areas.
^!Military Facilities. Pointing to the September 2001 terrorist attack
on the Pentagon in Arlington, Virginia, some observers suggest that
military facilities should be included in a risk-based distribution
formula. Such facilities may contain large numbers of military
personnel, high-value equipment, and volatile chemicals and
explosives (such as ammunition).
^!Federal Facilities. Some observers cite the 1995 bombing of the
Alfred P. Murrah Building in Oklahoma City as evidence that
civilian federal facilities are potential terrorist targets. The
consequences of terrorist attacks on federal facilities would worsen
if the attacks disrupted the federal response to attacks or led to the
disruption of vital federal government operations.
^!Dams. Dams could be included in a risk-based distribution formula,
since a terrorist-caused explosion could potentially release a high
volume of water into populous areas, destroy any electrical energy
production at the dam, and cause significant economic damage.
^!Electrical Power Plants (Non-Nuclear). The likely economic and
psychological consequences of terrorist attacks on electrical power
plants might be a consideration in designating power plants as a risk
factor.
^!Food and Agricultural Centers. Terrorist attacks on the nation’s
food supply and agricultural production might be a risk, considering
the possible economic and psychological effects of the attacks.
^!Oil and Natural Gas Refineries and Pipelines. Even though the
majority of oil and natural gas refineries (and pipeline distribution
systems) are located in low population density areas, terrorist attacks
on them could have severe economic and environmental
consequences.
^!Financial Centers. One could point to the elevation of the
Homeland Security Advisory System to “high” in August 2004,
when financial institutions were identified as possible targets of
terrorist attacks, as reason to consider the centers risk factors.
Additionally, an interruption of operations in the nation’s financial
centers could have possible economic consequences.
Transportation Assets
^!Rail and Mass Transit Systems. Arguably, the 2004 and 2005
terrorist bombings of trains in Madrid and London could cause some
to identify rail and mass transit systems as a risk factor.
^!Bridges and Tunnels. Given the nation’s vast number of bridges
and tunnels, considering every one of them a risk factor is not
feasible. Major bridges and tunnels, such as the Brooklyn and
Golden Gate Bridges and the Holland Tunnel, might be considered
risk factors due to their cultural significance. Additionally, bridges
and tunnels that are important links in transportation routes for large
numbers of persons might qualify as risk factors.

^!Airports. One could point to the September 2001 terrorist attacks
and the use of commercial aircraft as a weapon as a valid argument
for considering airports a risk factor. Not only are airports at risk of
terrorists boarding aircraft and using them as weapons, but also,
some may argue, an attack on a crowded airport or the shooting
down of an aircraft while it is landing or taking off further increases
the risk and the consequences of an attack.
Other Factors
^!Stadiums and Arenas. Because they conentrate large number of
persons in a relatively small location, stadiums and arenas —
especially during significant events such as sports championship
games — could be considered a risk factor.
^!Educational Institutions. Arguably, the psychological consequences
of terrorist attacks would be greatly increased if terrorists were to
target educational institutions, at the elementary, secondary, or
college level. Given the sense of vulnerability parents would
experience following any such attack, educational institutions might
be considered a risk factor; however, like bridges and tunnels, the
vast number of educational institutions in the nation might hamper
the assessment of risk to these institutions.
^!Skyscrapers and Large Commercial Buildings. As with the attack
on the Pentagon in September 2001, the attack on the World Trade
Center Towers — with its economic and psychological
consequences — arguably identifies skyscrapers and large
commercial buildings as valid risk factors.
^!International Borders and Coastlines. It can be argued that states
with international borders and coastlines face greater risk of terrorist
attacks, because terrorists may have greater access to such states.
^!Tourism. Due to the potential for mass casualty incidents and
economic damage from terrorist attacks, tourist locations are a
possible risk factor. In addition to the location of tourist
destinations, the tourist population could possibly be considered a
risk factor.